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+Appeal No. 101 of 1959.
+Appeal by special leave from the judgment and order dated November 8, 1957, of the Deputy Custodian General, Evacuee Property, Now Delhi Revision Petition No. 17 R/55 of 1955.
+Achhru Ram and K. L. Mehta for the appellants.
+B.K., Khanna and, T. M. Sen, for the respondent No. 1.
+N.S. Bindra and A. G. Ratnaparkhi, for the respondents Nos.
+March 15.
+The Judgment of the Court was delivered by MUDHOLKAR J.
+The appellants who are admittedly displaced persons from West Pakistan were granted quasi permanent allotment of 24 standard acres and 15 3/4 units in the village of Raikot in Ludhiana District in 1949.
+Their father Sardar Nand Singh who was 42 330 found entitled to quasi permanent allotment of 40 standard acres and 5 1/4 units of land was given quasipermanent allotment in another village named Humbran in the same district.
+The two villages are, however, 25 miles or so distant from each other.
+Nand Singh, therefore, made an application for consolidation of his lands with those of the appellants in the village Raikot.
+During the pendency of this application he died and after his death, the, application was continued by the appellants.
+This application was rejected by the Assistant Custodian on July 23, 1951 on the ground that no land was available in the village Raikot.
+A revision petition preferred by the appellants against the order of the Assistant Custodian was dismissed by the Additional Custodian on August 20, 1952.
+On October 7, 1952 the appellants preferred a revision application before the Custodian General.
+During the pendency of the revision application the Additional Custodian for the State of Punjab cancelled the allotment of fourteen quasi permanent allottees of the village Karodian in the same district on the ground that these persons were entitled to allotment of suburban land a had been wrongly fitted in the village Karodian.
+Acting suo motu the Additional Custodian made an order on October 31, 1952 cancelling the order of allotment of land in the village Raikot made in favour of the appellants in the year 1949 and instead allotted to them land in Karodian in substitution of :,the lands at Raikot and of the lands allotted to their father.
+The land allotted was out of the land released upon the cancellation of allotment of lands in favour of the aforementioned 14 allottees.
+These fourteen allottees preferred an application for review of the order cancelling their allotment on the ground that this cancellation was a result of misapprehension of the actual facts and that they were not entitled to allotment of suburban lands at all.
+The appellants also preferred an application for review of the order cancelling their quasi permanent allotment in the village Raikot.
+The Additional Custodian for the State of Punjab recommended to the Custodian General the restoration 331 of the land to the 14 allottees which had been taken away from them by reason of cancellation of the allotment in their favour by the order dated October 31, 1952.
+The Additional Custodian admitted that these persons were not entitled to allotment of suburban land and that consequently their allotment had been wrongly made but referred the matter back to the Additional Custodian for decision.
+The application made by the appellants was kept pending till the decision of the application of the 14 allottees of Karodian.
+The Additional Custodian, however, dismissed the application on the ground that r. 14(6) of the Evacuee Property Rules which came into force on July 22, 1952, stood in the way of cancellation of the allotment in favour of the appellant.
+On December 17, 1954, the Deputy Custodian General, before whom these allottees had preferred an application for revision, revised the order of the Additional Custodian and restored to the 14 allottees of Karodian the land which had been originally allotted to them.
+and allotment of which had been cancelled earlier.
+As a result of this order the allotment of Karodian land made in favour of the appellants automatically stood cancelled.
+On January 6, 1955, the appellants moved the Deputy Custodian General for calling up their review application and for revising the order of October 31, 1952 passed by the Additional Custodian cancelling the allotment of Raikot lands which had originally been made in their favour in the year 1949.
+Consequent upon the cancellation of the appellants ' allotment of the Raikot land they were allotted to respondents 2 to 4.
+These persons were, therefore, impleaded as parties to the proceedings before the Deputy Custodian General.
+By the order dated November 8, 1957 the Deputy Custodian General dismissed the appellants ' application.
+The appellants have, therefore, come up to this Court by way of appeal with special leave.
+The ground on which the appellants ' application was rejected by the Deputy Custodian General was that his jurisdiction to revise the order has been 332 taken away by virtue of the provisions of , (44 of 1954) and the notification issued thereunder on March 24, 1955.
+In taking this view he has relied upon the decision in Bal Mukund vs The State of Punjab (1).
+In that case the Court has held that the powers of the Custodian General to deal with matters of this kind have been taken away by the , and that these powers now vest in another authority and that there is no provision for continuing the pro ceedings which had been commenced under the , but had not been concluded.
+Mr. Achhruram for the appellants challenged the correctness of this decision.
+There is no specific provision in this Act to the effect that after its commencement the jurisdiction of the various authorities created by the , to deal with the allotment or cancellation of allotment of evacuee property shall cease.
+What is urged by Mr. Khanna on behalf of the Custodian General is that this is the effect of the provisions of sections 12(2) and 19 of the Act.
+Section 12 of the 1954 Act empowers the Central Government to acquire evacuee property for rehabilitation of displaced persons by publishing in the official gazette a notification to the effect that it has decided to acquire such evacuee property in pursuance of this provision.
+It is common ground that by notification section R. 0. 697 dated March 24, 1955 the Central Government decided to acquire all evacuee property allotted to displaced persons by the Custodian under the "Conditions" contained in the notification of the Government of Punjab in the Department of Rehabilitation, No. 4892 6 dated July 8, 1949, except certain categories of property specified in the schedule.
+The Raikot lands were allotted to the appellants under the aforesaid notification of the Government of Punjab.
+It is not disputed on their behalf that they do not fall within any of the excepted categories of property, set out in the schedule.
+Sub section 2 of section 12 of the Act (1) I.L.R. 1957 Punj.
+333 provides that on the publication of the notification under sub section 1 the right, title or interest of any evacuee in the property specified in the notification shall immediately stand extinguished and that property shall vest absolutely in the Central Government free from all encumbrances.
+The power of the Custodian under the , to allot any property to a person or to cancel an allotment existing in favour of a person rests on the fact that the property vests in him.
+But the consequence of the publication of the notification by the Central Government under section 12(1) of the with respect to any property or a class of property would be to divest the Custodian completely of his right in the property flowing from section 8 of the , and vest that property in the Central Government.
+He would, therefore, not be competent to deal with the property in any manner in the absence of any provision in either of these two enactments permitting him to do so.
+No provision was, however, pointed out to us in either of these Acts whereunder despite the Vesting of the property in the Central Government the Custodian was empowered to deal with it.
+Sub section
+4 of section 12 of the 1954 Act provides that all evacuee property acquired under that section shall form part of the compensation pool.
+Under section 16(1) of this Act the Central Government is empowered to take such measures as it considers necessary or expedient for the custody, management and disposal of the compensation pool.
+Sub section
+2 of section 16 empowers the Central Government to appoint such officers as it deems fit or to constitute such authority or corporation as it deems fit for the purpose of managing and disposing of the properties forming part of the compensation pool.
+Section 19 of the Act provides that notwithstanding anything contained in any contract or any other law for the time being in force but subject to the rules that may be made under the Act the managing officer or managing corporation may cancel any allotment etc., under which any evacuee property acquired under the Act is held or 334 occupied by a person whether such allotment or lease was granted before or after the commencement of the Act.
+This provision thus confers the power to deal with evacuee property acquired under the Act only on a managing officer appointed or managing corporation constituted under the Act and makes no mention whatsoever of the Custodian appointed under the .
+No doubt, under section 10 of the the Custodian is empowered to manage evacuee property and in exercise of his power he will be competent to allot such property to any person or to cancel an allotment or lease made in favour of a person.
+Apart from the fact that subsequent to the issue of the notification under section 12(1) of the , the property would cease to be evacuee property, the aforesaid powers of the Custodian would be in conflict with those conferred by section 19 of the 1954 Act on a managing officer or a managing corporation constituted under that Act.
+In other words, to that extent the provisions of section 10 of the 1950 Act and section 19 of the 1954 Act cannot stand together.
+As already stated the powers conferred by sub section
+(1) of section 19 of the 1954 Act are to prevail notwithstanding anything contained in any other law for the time being in force.
+Therefore, they must prevail over the provisions of B. 10 of the .
+It is true that there, is nothing on record to show that a managing officer was appointed with respect to the Raikot properties acquired under the notification dated March 24, 1955.
+But it is not necessary to ascertain that fact.
+The point is, who, after the coming into force of the 1954 Act could cancel an allotment.
+Section 10 says that only a managing officer or a managing corporation can do so.
+This means that no one else can do so even though some other law may have authorised another person or authority to cancel an allotment.
+Mr. Achhruram, however, contended that the appellants ' rights were protected by section 10 of the .
+Section 10 runs as follows: 335 "Special procedure for payment of compensation in certain cases.
+Where any immovable property has been leased or allotted to a displaced person by the Custodian under the conditions published (a)by the notification of the Government of Pun.
+jab in the Department of Rehabilitation No. 4892 S or 4892 S dated the 8th July, 1949, or (b)by the notification of the Government of Patiala and East Punjab States Union in the Department of Rehabilitation No. 8R or 9R, dated the 23rd July, 1949, and published in the official Gazette of that State dated the 7th August, 1949, and such property is acquired under the provisions of this Act and forms part of the compensation pool, the displaced person shall, so long as the property remains vested in the Central Government, continue in possession of such property on the same conditions on which he held the property immediately before the date of the acquisition, and the Central Government may, for the purpose of payment of compensation to such displaced person, transfer to him such property on such terms and conditions as may be prescribed.
+" It is followed by an explanation; but that explanation has no bearing upon the point urged by Mr. Achhruram.
+It is no doubt true that the Raikot lands were allotted to the appellants under the notification referred to in el.
+(a) of this section and, therefore, they would be entitled to the benefits conferred by this section provided they satisfied all the other requirements of this section, express or implied.
+It is implicit in this section that the displaced person to whom land was allotted "held" the land and was in possession of such property at the date of the notification.
+It is not disputed that the appellants ceased to hold and had lost possession of the Raikot lands before the publication of this notification.
+Even assuming that the order of the Custodian cancelling the allotment in their favour was erroneous there will be no difference in the result because what is essential is the facts of holding and possession of the land on the date of the notification.
+336 Mr. Achhruram then referred to the "Conditions" on which allotments of land may be made under the notification referred to in sub section
+10(a) and pointed out that under condition No. 6 the Custodian or rehabilitation authority would be competent to resume or cancel an allotment only on one of the grounds set out in that condition.
+He said that the cancellation of the allotment in favour of the appellants was impermissible inasmuch as it was not based upon any of the grounds set out in the 6th condition.
+That may or may not be so.
+We would repeat that the appellants had lost their possession before the publication of the notification and are thus not entitled to the protection of the section.
+Moreover, the Custodian, by reason of the divesting of the property, as from March 24, 1955, had become functus officio with respect to it and could not rectify any error made by him in the past in the matter of cancellation of allotment.
+It is true that had the appellants been in possession at the critical time they would have had the right to obtain a permanent transfer in their favour of the Raikot lands and by virtue of what happened and without any fault on their part they have been deprived 'of that right.
+That is indeed unfortunate but none of the authorities created by the could rectify the wrong that has been done by them to the appellant.
+The question whether it could be rectified by any of the authorities constituted by the or not was not canvassed before us and, therefore, there is no occasion for us to say anything about it.
+Mr. Achhruram contended that r. 74 of the Displaced Persons (Compensation and Rehabilitation) Rules, 1955 stood in the way of the Custodian allotting the Raikot property to the respondents during the pendency of the proceedings before the Custodian General.
+That rule reads as follows: "Allotments which are the subject matter of dispute.
+No property in a rural area in respect of which any case is pending in a Civil Court or before a Deputy Custodian, Custodian or Custodian General, shall be transferred to the allottee".
+337 The aforesaid rule is in Chapter X headed "Payment of compensation under section 10 of the Act" and deals with a transfer of property to an allottee by way of final settlement of his claim to compensation and does not deal with the question of allotment on a quasi permanent basis.
+Moreover, this rule applies to a proceeding before an authority created by the and not to an authority created by the .
+There is, therefore, no substance in this argument.
+Finally Mr. Achhruram referred to section 17 of the 1954 Act and to r. 102 of the Rules framed thereunder and said that the powers of the managing officers appointed under the Act are confined only to properties which are entrusted to them for management and not with respect to any other property.
+Section 17 deals with the function; and duties of managing officers and managing corporation.
+Sub section
+(1) provides that managing officers and managing corporations will perform such functions as may be assigned to them under the Act.
+Sub section
+(2) provides that subject to the provisions of the Act and the rules made thereunder, a managing officer or a managing corporation may, among other things, take such measures as he or it considers it necessary or expedient for the purpose of securing, administering, preserving, managing or disposing of any property in the compensation pool entrusted to him or it. etc.
+The argument is that unless there is such "entrustment" the managing officer or managing corporation has no function to perform with respect to evacuee property.
+His contention appears to be that there is nothing to show that this property was "entrusted" to a managing officer.
+In the first place the section confers the particular powers On managing officers or managing corporations only and no one else.
+Therefore, even if no managing officer or managing corporation was appointed with respect to that property no one else could exercise the power of cancellation of allotment.
+Further, there is no ground in the special leave petition or in the statement of the 43 338 case that there is no entrustment in fact of this property or this class of properties to a managing officer or managing corporation.
+He cannot, therefore, be permitted to make out a new case at this stage of argument.
+That apart, this argument assumes that the property, despite the publication of the notification under section 12(1) of the Act continues to be evacuee property.
+Again, this provision is a general provision and the particular provision regarding cancellation of allotment is section 19(1) of the Act which does not refer to entrustment at all and it is this provision which must prevail over the general provision.
+He then contends that the provisions of section 19(1) of the Act being subject to rules made under the Act must be read along with r. 102 which deals with cancellation of allotments of leases.
+That rule reads thus: "Cancellation of allotments and leases A managing officer or a managing corporation may sell any property in the compensation pool entrusted to him or to it, cancel an allotment or terminate a lease, or vary the terms of any such lease or allotment if the allottee or lessee, as the case may be (a)has sublet or parted with the possession of the whole or any part of the property allotted or leased to him without the permission of a competent authority, or (b)has used or is using such property for a purpose other than that for which it was allotted or leased to him without the permission of a competent authority, or (c) has committed any act which is destructive of or permanently injurious to the property, or (d) for any other sufficient reason to be recorded in writing; Provided that no action shall be taken under this rule unless the allottee or the lessee, as the case may be, has been given a reasonable opportunity of being heard.
+" He points out that in the first place, the rule speaks of land 'entrusted ' to the manager and, therefore would operate only if entrustment is established.
+What we have said in regard to section 17 would apply 339 here also.
+He then says that this rule restricts the powers of a managing officer or a managing corporation in the matter of cancellation of allotment in the sense that it permits cancellation only on certain specified grounds and, therefore, it cannot be said that section 19(1) of the Act is completely in conflict with section 10 of the in so far as the question of cancellation of allotment is concerned.
+We cannot accept the argument because, apart from the fact that the acquired properties have ceased to be evacuee properties, el.
+(d) of r. 102 permits the managing officer or managing corporation to cancel allotment "for any other sufficient reason to be recorded in writing".
+The only effect of r. 102 is to permit cancellation 'of an allotment for reasons stated.
+That is all.
+In our opinion, therefore, this rule does not help the appellants.
+Mr. Khanna had raised three other points but upon the view which we have taken as to the effect of sections 12 and 19 of the Act, it is not necessary to consider them.
+The appeal is accordingly dismissed.
+We, however, make no order as to costs because had there been no delay on the part of the Custodian General in dealing with the revision application the present situation would not have arisen.
+Appeal dismissed.

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+Appeal No. 52 of 1957.
+Appeal from the judgment and decree dated April 22, of 1953, of the Patna High Court in Appeal from Original Decree No. 162 of 1946.
+K.N. Bhattacharya and P. K. Chatterjee, for appellants.
+N.C. Chatterjee, A. V. Viswanatha Sastri, R. section Chatterji and D. N. Mukherjee, for respondents Nos. 2 to 6. 1961.
+March 22.
+The Judgment of the Court was delivered by SUBBA RAO, J.
+This appeal by certificate granted is directed against the judgment of the High Court of Judicature at Patna dated April 23, 1953, confirming that of the Subordinate Judge, Dhanbad, dated November 30, 1946.
+The plaintiffs and the defendant are adjoining colliery owners at Kujama.
+The plaintiffs ' land lies immediately to the south of the defendants ' land.
+On August 2, 1,894, Raja of Jharia granted mukarrari lease of the coal and coal mining rights in 300 bighas of land in village Kujama to Satya Karan Banerjee and Girish Chandra Samanta.
+On June 15,1900, his son, Raja Durga Prasad Singh, granted coal and coal 494 mining rights in respect of 400 bighas out of 592 bighas to one Jugal Kishore Lal.
+Samanta purchased the leasehold interest of Banerji, and thereafter on November 23, 1900, it appears that Samanta bad surrendered his rights under the previous lease in favour of the Raja and taken a fresh lease of the same 300 bighas on a reduced rent.
+On June 10, 1901, Jugal Kishore Lal granted a lease of 96 bighas out of his 400 bighas to one D. M. Mathews.
+On the very same day D. M. Mathews, in his turn, granted a lease to one Walji Kheta in respect of the said 96 bighas.
+Walji Kheta executed a kabuliat in favour of M. Mathews on October 11, 1901.
+Walji Kheta represented the defendants.
+By diverse transfers, the interest of Samanata vested in Bagdigi Kujama Collieries Limited.
+The plaintiffs case was that as a result of a letter written by the Inspector of Mines on August 18, 1941, the plaintiffs made an inquiry and came to know that the defendants had encroached upon their coal mines on the northern side and removed coal from the encroached portion and had rendered the remaining coal of the encroached portion unworkable.
+On those allegations, they asked for the following reliefs: (a)That the intermediate boundary line between the plaintiffs ' coal land and the defendants ' coal land be ascertained and fixed.
+(b)That the area encroached upon by the defendants be ascertained and the defendants be directed to vacate the same,.
+(c)That a permanent injunction be issued against the defendants restraining them from encroaching upon the plaintiffs ' coal land and cutting and removing coal therefrom.
+(d)That an enquiry be made and the quantity of coal cut and removed by the defendants from the plaintiffs ' coal land as also the quantity of the coal rendered unworkable be ascertained and a decree for the value thereof by way of damages be granted to the plaintiffs against the defendants.
+The defendants denied that they had encroached upon the plaintiff , ' coal land and stated that the suit was barred by limitation.
+They further pleaded that the 495 plaintiffs would not be entitled to any damages.
+The learned Subordinate Judge held that the defendant had encroached upon the plaintiff ' coal land, that the suit was not barred by limitations and that they would be entitled to the reliefs prayed for.
+On appeal, the High Court of Patna accepted all the findings of the learned Subordinate Judge and dismissed the appeal.
+Hence the present appeal.
+The first question that arises for consideration is whether the defendants had encroached Upon the plaintiffs ' coal land.
+The answer to this question depends upon the correct, delineation of the boundary line between the plaintiffs ' leasehold and the defendants ' leasehold.
+It is common case that the southern boundary of the appellants ' leasehold is conterminous with the northern boundary of the respondents ' lease hold.
+Learned counsel for the appellant contends that the said boundary should be fixed solely with reference to the boundaries given in the lease of 1894, whereas learned counsel for the respondents contends that no plan has been annexed to the said lease and, therefore, the boundary could more satisfactorily and definitely be fixed with reference to the plans annexed to the subsequent lease deeds executed in favour of the successors in interest of the appellant and the respondents.
+To appreciate the rival contentions it is necessary to consider the various lease deeds in some detail.
+On August 2, 1894, Raja Jaimangal Singh executed the lease deed (exhibit 1) in respect of 300 bighas in favour of the respondents ' predecessor in interest.
+In that lease deed the northern boundary is described to be the remaining portion of mauza Kujama and the western boundary is described as Chatkari Jorh.
+The foot note to the lease reads, "measuring 1101 feet in length running north and south by the side of the said Chatkari Jorh and area being 300 bighas by such measurement".
+No plan was annexed to this lease deed.
+On June 15, 1900, Jugal Kishore Lal, the predecessor in interest of the appellant, had obtained a lease (exhibit C) of 400 bighas 496 from Raja Durga Prasad Singh, the son of the previous Raja.
+The southern boundary of this leasehold is given as the northern boundary limit of the leasehold land of Girish Chandra Samanta and others and the western boundary is shown as the eastern boundary of Chatkari Jorh as per the map annexed.
+This lease deed clearly shows that the southern boundary of this plot is conterminous with the northern boundary of the leasehold land in favour of Samanta.
+It may also be noticed at this stage that the map annexed to this lease deed has not been filed by the appellants.
+It appears that Samanta purchased the interest of Banerji in the leasehold of 1894 and thereafter at the request of Samanta, on November 23, 1900, Durga Prasad Singh gave a fresh lease of the same holding to Samanta and incorporated a map in that lease, i.e., exhibit 3(b).
+There, the northern boundary of the leasehold is described as the leasehold of Rajkumar Jugal Kishore Lal Singh Bahadur.
+The plan, exhibit 3(b), annexed to this lease deed shows the boundary line between the two leaseholds.
+The said plan is drawn to scale and the boundary line is drawn between point A marked in the plan and point B marked therein.
+As the plan is a part of the lease deed, it is clear from the plan that the northern boundary of the leasehold of Samanta is the said line.
+On June 10, 1901, Jugal Kishore Lal, that is, the predecessor in interest of the appellant demised a plot of 96 bighas carved out from his leasehold to Mathews under a deed exhibit C(1).
+Mathews in turn demised under exhibit D the said land of 96 bighas to Walji Khetan representing the appellant.
+In both these documents the southern boundary is shown as the northern boundary of the leasehold land of Samanta.
+One interesting feature is that a map has been referred to in each of the documents and the said map shows that the line drawn from point A to point B is the boundary between the two leaseholds.
+It may be mentioned that the said boundary line is exactly the same as that found in exhibit 3(b).
+These documents to which the defendants ' predecessors were parties contain a clear admission that the boundary line between the two leaseholds i.e., between appellant 's and that of the respondents ' is the line between 497 A and B shown in plan exhibit 3(b).
+We have no doubt that if the plan annexed to exhibit C was produced by the appellant, it would have also established that the dividing line between the two leaseholds is that found in exhibit 3(b).
+The appellant, in our view, has suppressed the said plan and, therefore, in the circumstances, we are justified to draw an inference that, if produced, it would be against appellant 's contention.
+From the aforesaid documentary evidence we hold, agreeing with the courts below, that the southern boundary of the appellant 's holding, which is conterminous with the northern boundary of the respondents ' holding, is the line between points A and B shown in exhibit 3(b).
+The next question addressed by the courts below is how to ascertain the point A.
+The argument of learned counsel for the appellant is that the map translated into words indicates that the correct boundary should be a line drawn from the true meeting point of the four villages Pandebera, Jharia Khas, Lodhna and Kujama at a bearing of 82.15 ', whereas the contention of the respondents is that the line actually drawn on the lease map correctly lays down the northern boundary of the respondents ' leasehold.
+It is settled law that a map referred to in a lease should be treated as incorporated in the lease and as forming part of the document: see Darapali Sadagar vs Najir Ahamed (1).
+As in this case the map is drawn to scale and incorporated in the lease deed, it is not permissible to ignore the starting point of the boundary line and adopt instead any scientific point based on survey.
+The Commissioner appointed by the court tested the position of the six trijunction pillars shown in the map of lease dated November 23, 1900, and found that two of the trijunction pillars were in their correct positions.
+On the basis of these two trijunction pillars, the Commissioner relaid, by the process of superimposition, the northern boundary line of the leasehold property, The point A in the map so laid does not tally with the point where the aforesaid four villages actually meet.
+He pointed out that the correct (1)(1923) I.L.R 50 Cal 394 63 498 point where the said four villages met would be 1680 feet only from the trijunction pillar of Lodhna, Kujama and Madhuban, whereas the point A was at a distance of 1750 feet from the said trijunction pillar.
+But learned counsel for the appellant contends that according to exhibit 3 the western boundary should be according to the revenue plan and, therefore, point A should be fixed at a distance of 1680 feet from the trijunction pillar, as that is the distance according to the revenue plan.
+But a perusal of exhibit I shows that there is no reference in regard to the western boundary to revenue records.
+That apart, even if 1680 feet is taken as the distance between the injunction pillar and point A in 'the map, it demonstrates that the measurement given in exhibit 3 was incorrect, for, there the distance was shown only as 1101 feet.
+But a more serious objection to the argument is that it is not permissible for a court to reconstruct the plan with reference to revenue records when the plan is self contained and drawn to scale.
+To summarize: the question is whether the disputed extent is part of the respondents ' holding or that of the appellant 's holding.
+The map, exhibit 3(b), annexed to the lease deed executed in favour of the respondents ' predecessor in interest clearly demarcates the boundary line between the holdings of the appellant and the respondents, and according to that plan the disputed extent falls within the boundary of the respondents ' holding.
+The lease of the appellant 's predecessor, i.e., exhibit C, also refers to a map, but the appellant withheld it.
+In the sub leases created by the appellant, maps were annexed and the boundary therein is in accord with that in exhibit 3(b).
+Those documents contain clear admissions supporting the case of the respondents.
+No reliance can be placed upon the recitals in exhibit 1, as it is demonstrated that the extent given in respect of the western boundary is incorrect.
+On the aforesaid material both the courts have held that the disputed extent of land is part of the holding of the respondents.
+It is well settled that a map referred to in a lease should be treated as incorporated in the lease and as 499 forming part of the said document.
+In this case the maps accepted by us are drawn to scale and the boundary is clearly demarcated.
+The courts were, therefore, certainly right in accepting the boundaries drawn in the plan without embarking upon an attempt to correct them with reference to revenue records.
+The question really is one of fact and we accept the finding.
+The next question is whether the suit was barred by limitation.
+The encroachment by the appellant on the respondents ' colliery and the removal of coal therefrom are alleged to have taken place in or about the year 1932.
+The respondents in the plaint averred that they came to know of the said encroachment and removal of coal by the appellant after they received the letter dated August 18, 1941, from the Inspector of Mines and before that they had absolutely no knowledge or information whatsoever regarding thereto.
+The appellant denied the said allegation and stated that the respondents all along knew and had been aware that the portion of coal land in question belonged to and was the property of the appellant.
+In particular the appellant alleged that the respondents must have the knowledge of it since 1932 when there was a survey by the Department of Mines.
+On the said pleadings issue 3 was framed which reads, "Is the suit barred by limitation?" The learned Subordinate Judge found, on the evidence, that the proceedings in 1932 had nothing to do with the delineation of the boundary line between the two holdings.
+He held that article 48 of the Limitation Act applied to the suit and that the appellant had failed to prove that the respondents had knowledge of the sinking of the quarries and pits in the encroached land.
+On appeal the High Court accepted the finding.
+Though the High Court held that the burden of proof to establish knowledge on the part of the respondents beyond the prescribed time was on the appellant, it has given the finding on the assumption that the initial burden was on the respondents to prove that they had knowledge of the said encroachment only within three years thereof.
+There are, therefore, concurrent findings of fact on the 500 question of knowledge.
+But learned counsel for the appellant contended that the finding is vitiated by the burden of proof having been wrongly thrown on the appellant.
+This submission is not accurate, for, as we have pointed out, the High Court arrived at the finding of fact on the assumption that the initial burden of proof was on the respondents.
+It is common case that article 48 of the Limitation Act governs the period of limitation in respect of the present suit.
+It reads: ___________________________________________________________ Period Time from Description of suit.
+of which period limitation begins to run.
+___________________________________________________________ For specific moveable When the per property lost, or son having acquired by theft, or the right to dishonest misappro the posses priation or conver Three sion of the sion, or for com years.
+property first pensation for wrong learns in ful taking or detain whose posses ing the same.
+sion itis.
+__________________________________________________________ The article says that a suit for recovery of specific movable property acquired by conversion or for compensation for wrongful taking or detaining of the suit property should be filed within three years from the date when the person having the right to the possession of the property first learns in whose possession it is.
+The question is, on whom the burden to prove the said knowledge lies? The answer will be clear if the article is read as follows: A person having the right to the possession of a property wrongfully taken from him by another can file a suit to recover the said specific moveable property or for compensation therefore within three years from the date when lie first learns in whose possession it is.
+Obviously where a person has a right to sue within three years from the date of his coming to know of a, certain fact, it is for him to prove that he had the knowledge of the said fact on a particular date, for 501 the said fact would be within his peculiar knowledge.
+That apart, section 3 of the Limitation Act makes it obligatory on a court to dismiss a suit barred by limitation, although limitation has not been set up as a defence, indicating thereby that it is the duty of a plaintiff to establish, at any rate prima facie, that the suit is within time.
+It is the obligation of the plaintiff to satisfy the court that his action is not barred by lapse of time: see Lalchand Marwari vs Mahanth Rampur Gir (1) and Rajah Sahib Perhlad Sein vs Maharajah Rajender Kishore Sing (2) .
+Looking from a different perspective, we arrive at the same result.
+Under the Evidence Act there is an essential distinction between the phrase "burden of proof" as a matter of law and pleading and as a matter of adducing evidence.
+Under section 101 of the Evidence Act, the burden in the former sense is upon the party who comes to court to get a decision on the existence of certain facts which he asserts.
+That burden is constant throughout the trial; but the burden to prove in the sense of adducing evidence shifts from time to time having regard to the evidence adduced by one party or the other or the presumption of fact or law raised in favour of one or the other.
+In the present case the burden of proof in the former sense is certainly on the respondents.
+But the question is whether they have adduced evidence which had the effect of shifting the onus of proof to the appellant.
+On behalf of the respondents, their Colliery Manager was examined as P. W. 2.
+He stated in his evidence that the appellant had encroached upon the South Kujamal Colliery in Seam Nos. 10, 11 and 12 and another special seam, known as 4 feet seam and that in August, 1941, be came to know about the encroachment for the first time when the Mines Department forwarded a plan of the joint workings of the two collieries of the parties.
+He also stated that he had no knowledge of the encroachment before.
+In the cross examination, two suggestions were made to him, namely, that in 1932 there was a survey of the plaintiffs ' and defendants ' coal land by the Mines Department and that Seam Nos. 11 and 12 were (1) Pat. 312.
+(2) (1869) 12 M.I.A. 292.
+502 worked by the appellant by open quarry system.
+He denied that he had any knowledge of the said two facts.
+The evidence of this witness has been accepted by the learned Subordinate Judge, and the High Court also accepted his evidence, though in its view it was not very satisfactory.
+This evidence, therefore, prima facie, proves that the respondents had knowledge of the encroachment only in 1941.
+Let us now consider some of the decisions cited at the Bar.
+A division beach of the Patna High Court in Sundarji Shivji vs Secretary of State for India (1) held that "when a defendant in an action based on tort seeks to show that the suit is not maintainable by reason of the expiry of the statutory period of limitation, it is upon him to prove the necessary facts".
+There the suit was for conversion of property, and the learned Judges applied article 48 of the Limitation Act to the said suit.
+After noticing the words in the last column of the article, the learned Judges proceeded to observe thus: " The starting date of limitation in the case of conversion is the date when the person who has the right to possession first learns of the act of conversion.
+" Adverting to the burden of proof, the learned Judges observed: "There is nothing in the pleadings which would show precisely at what period tile plaintiff or the plaintiff 's agent, which is the same thing, became aware of the sale and its wrongfulness, that is to say, became aware of the fact of conversion.
+The defendant was unable to provide us with any materials to fix that date and therefore his plea of limitation fails altogether, because he is unable to show a date outside the period of three years which would entitle him to succeed.
+" With great respect to the learned Judges, we hold that this case had not been correctly decided.
+The burden of proof, as we have explained earlier is on a plaintiff who asserts a right, and it may be, having regard to the circumstances of each case, that the (1) Pat, 752, 760.
+503 onus of proof may shift to the defendant.
+But to say that no duty is cast upon the plaintiff even to allege the date when they had knowledge of the defendant 's possession of the converted property and that the entire burden is on the defendant is contrary to the tenor of the article in the Limitation Act and also to the rules of evidence.
+A division bench of the Calcutta High Court in Kalyani Prasad Singh vs Borrea Coal Co. Ltd. (1) did not accept the view of the Patna High Court, but followed that of the Bombay High Court in the Bank of Bombay vs Fazulbhoy Ebrahim (2).
+In the context of the application of article 48 of the Limitation Act, the learned Judges of the Calcutta High Court observed thus: "The burden of proof rests upon the party who substantially asserts the affirmative of the issue. .
+We are of opinion that the onus is upon the plaintiff in these suits to prove that the knowledge of his father wag within three years of the suit.
+" In Talyarkhan vs Gangadas (3), Rangnekar, J., formulated the legal position thus: "The onus is on the plaintiff to prove that he first learnt within three years of the suit that the property which he is seeking to recover was in the possession of the defendant.
+In other words, he has to prove that he obtained the knowledge of the defendant 's possession of the property within three years of the suit, and that is all.
+If he proves this, then to succeed in the plea of limitation the defendant has to prove that the fact that the property was in his possession became known to the plaintiff more than three years prior to the suit.
+" We accept the said observations as representing the correct legal position on the subject.
+The appellant gave evidence to show that the encroachment was prior to 1932, but there is no acceptable evidence on their part to establish that the respondents came to know of the removal of coal by the appellant or their possession of the coal removed beyond three years prior to the suit.
+Learned counsel (1) A.I.R. 1946 Cal.
+123,127 (2) (3) Bom.
+848, 860.
+504 took us through the correspondence that passed between the parties and the Mining Department in 1932.
+But it does not prove that the respondents had knowledge of the fact that the appellant had encroached upon any portion of their coal mines.
+Emphasis is also laid upon the fact that there was quarry system of working in the mines and a contention is advanced that quarrying is done openly and, therefore, the respondents must have had knowledge of the said fact.
+But the courts found from Commissioner 's maps that in the encroached portion, there were only underground workings and that the quarries were mostly outside the encroached area.
+The learned Subordinate Judge and the High Court refused to base any finding on mere probabilities without clear evidence to sustain them.
+We cannot therefore hold that the findings of the courts are vitiated by an error of law by the burden of proof having been wrongly thrown on the appellant.
+We accept the findings of the High Court that the respondents had knowledge of the appellant 's encroachment of their coal mines only in the year 1941 which was within three years of the date of the filing of the suit.
+The only other outstanding question that remains for consideration is that covered by Issue No. 7.
+In paragraph 11 of the plaint, the plaintiffs allege that under the Indian Mines Act and the Rules and Regulations made thereunder the plaintiffs are bound to keep a barrier of 25 feet to the south of the defendant 's working and, therefore, the coal that is still left in the encroached area is not by any means accessible to the plaintiffs and being thus wholly unworkable is entirely lost to them for ever.
+In the written statement the defendants did not deny the fact that the coal still left in the encroached area was lost to the plaintiffs, but only stated that it was purely a question of statutory obligation on the part of the plain.
+tiffs with which the Defendant had nothing to do.
+The learned Subordinate Judge accepted the case of the plaintiffs and held that the coal that was left in the encroached area was entirely lost to them by being rendered unworkable.
+The High Court accepted the finding.
+Learned counsel for the appellant contends that under the Rules the respondents could request the mining authorities to exempt them from the operation of rule 76 of the Indian Coal Mines Regulation, 1946, and if exemption was granted, they could remove the coal left by the appellant in the encroached area.
+This possibility of the respondents getting an exemption from the operation of the rule was not raised either before the learned Subordinate Judge or before the High Court.
+Nor can we hold in favour of the appellant on the basis of such a possibility.
+We, therefore, accept the concurrent finding of fact arrived at by the courts below in respect to this issue.
+No other point was raised.
+The appeal fails and is dismissed with costs.
+Appeal dismissed.

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+Appeals Nos. 45 and 46 of 1959.
+Appeal by special leave from the judgment and order dated March 25, 1957, of the former Bombay High Court in Appeal No. 16 of 1957.
+Q. K. Daphtary, Solicitor General of India, H. J. Umrigar and D. Gupta, for the Apellant (In C. A. No. 45 of 59) and Respondent (In C. Appeal No. 46 of 59).
+H. N. Sanyal, Additional Solicitor General of India, section N. Andley and J. B. Dadachanji, for the respondents (in C. A. No. 45 of 59) and Appellants (In C. A. No. 46/59).
+926 1960.
+September 27.
+The Judgment of the Court was delivered by DAS GUPTA J.
+M/s.
+Daulatram Rameshwarlal, a firm registered under the Indian Partnership Act (referred to later in this judgment as "sellers ") are registered dealers under section 11 of the Bombay Sales Tax Act.
+In their return of turnover for the period from April 1, 1954 to March 31, 1955, they claimed exemption from Sales Tax in respect of sales of cotton of the total value of Rs. 68,493 2 6 and sales of castor oil of the total value of Rs. 6,47,509 1 6 on the ground that these sales were oil FOB contracts, under which they continued to be the owners of the goods till the goods had crossed the customs barrier and thus entered the export stream, and so no tax was realisable on these sales in view of the provisions of article 286 (1)(b).
+The Sales Tax Officer rejected this claim for exemption and assessed them to sales tax on a taxable turnover including these sales.
+He also assessed them to purchase tax under section 10(b) of the Bombay Sales Tax Act on their purchase of castor oil which they later sold for the sum of Rs. 6,47,509 1 6 as mentioned above.
+The notice of demand for the total sales tax and the purchase tax assessed was served on the sellers on September 30, 1956.
+The sellers thereupon moved the Bombay High Court under article 226 of the Constitu tion for the issue of appropriate writs for quashing the order of assessment and the notice of demand and for prohibiting the Sales Tax Officer from taking any steps pursuant to the order or the notice.
+The learned Judge who heard the petition rejected the sellers ' contention that the goods remained their property till these crossed the customs frontier and therefore held that the sellers were not entitled to the benefit of article 286(1)(b) of the Constitution.
+As regards the assessment to purchase tax also he rejected the sellers ' contention that the assessment in question was illegal.
+In this view the learned Judge dismissed the application under article 226.
+Against this decision the sellers appealed.
+The 927 learned Judges who heard the appeal held, disagreeing with the Trial Judge, that the goods remained the sellers ' property till the goods had been brought on board the ship and so the sales were exempted from tax under article 286(1)(b) of the Constitution.
+They however agreed with the Trial Judger that the sellers were liable to pay purchase tax under section 10(b) of the Bombay Sales Tax Act.
+Accordingly they directed the Sales Tax Officer not to enforce the demand for payment of sales tax with regard to the sales of cotton for Rs. 68,493 2 6 and sale of castor oil of the total value of Rs. 6,47,509 1 6.
+The Sales Tax Officer has, on the strength of special leave granted by this Court, preferred the appeal which has been numbered as Civil Appeal No. 45 of 1959 against the appellate court 's order directing him not to realise the sales tax in respect of sales of cotton and castor oil.
+Civil Appeal No. 46 of 1959 has been preferred by the sellers against the appellate court 's judgment in so far as it upheld the assessment of purchase tax under section 10(b).
+The only "question for our decision in the appeal by the Sales Tax Officer is whether property in the goods passed on shipment or at some point of time before shipment.
+The law is now well settled that if the property in the goods passes to the buyer after they have for the purpose of export to a foreign country crossed the customs frontier the sale has taken place "in course of the export" out of the territory of India.
+If therefore in the present sales the property in the goods passed to the buyers on shipment, that is, after they had crossed the customs frontier the sales must be held to have taken place "in the course of export" and the exemption under article 286(1)(b) will come into operation.
+The sellers ' case is that these were sales on FOB contracts.
+Though the learned Solicitor General appearing on behalf of the Sales Tax Officer tried to convince us that these were not really FOB contract sales, it appears that the averment in Paras.
+11 and 13 of the writ petition that these sales were made on FOB basis were not denied in the counter affidavit sworn by the Sales Tax Officer.
+It is also 928 worth noticing that in the assessment order itself the Sale Tax Officer referred to these sales as sales on FOB basis.
+The specimen contract produced also used the words " FOB delivered ".
+There can be no doubt therefore that these were sales under FOB contracts. ' The normal rule in FOB contracts is that the property is intended to pass and does pass on the shipment of the goods.
+In certain circumstances, e.g., if the seller takes the bill of , lading to his own order and parts with it to a third person the property in the goods, it has been held, does not pass to the buyer even on shipment.
+We are not concerned here with the question whether the passing of property in the goods was postponed even after shipment.
+The correctness of the proposition that in the absence of special agreement the property in the goods does not pass in the case of a FOB contract until the goods are actually put on board is not disputed before us.
+As has however been rightly stressed by the learned Solicitor General it is always open to the parties to come to a different agreement as to when the Dropert in the goods shall pass.
+The question whether there was such a different agreement has to be decided on a consideration of all the surrounding circumstances.
+He relies on three circumstances to convince us that the sellers and their buyers agreed in these sales that the property will pass to the buyer even before shipment.
+The first circumstance on which he relies is that the bill of lading was taken in the name of the buyer.
+Along with this fact we have to consider however the fact that the bill of lading was retained by the sellers, the contract being that payment will be made on the presentation of the bill of lading.
+It is not disputed that the term in the contract for "payment at Bombay against presentation of documents " means this.
+It was the sellers who received the bills of lading and it was on the presentation of these bills of lading along with the invoices that the buyer paid the price.
+When the bills of lading though made out as if the goods were shipped by the buyer, were actually obtained and retained by the sellers, that fact itself would ordinarily indicate an intention of 929 the parties that the property in the goods would not pass till after payment.
+The second circumstance to which our attention has been drawn is that the export was under the contract to be under the buyer 's export licence.
+This, in our opinion, shows nothing.
+The ordinary rule in FOB contracts is that it is the duty of the buyer to obtain the necessary export licence.
+That was laid down in Brandt 's case (1) and though in a later case in Hardy vs Pound (2) the Court of Appeal in England held that the judgment in Brandt 's case (1) does not cover every FOB contract and that in the special facts of the particular case before them it was for the sellers to obtain the licence and this view was approved by the House of Lords , it is in our opinion correct to state that the presumption in FOB contracts is that it is the duty of the buyers to obtain export licence, though in the circumstances of a particular case this duty may fall on the sellers.
+The third circumstance on which reliance is placed on behalf of the Sales Tax Officer is that the Export Control Order, 1954, which was passed in the exercise of powers conferred by Import & Export Control Act, 1947, contained a provision in its clause 5(2) in these words: " It shall be deemed to be a condition of that licence. . . that the goods for the export of which licence is granted shall be the property of the licensee at the time of the export ".
+It has been strenuously contended by the learned Solicitor General that it will be reasonable to think that the parties to the contract intended to comply with this condition and to agree as between themselves that the goods shall be the property of the licensee, that is, the buyer, at the time of the export.
+It is argued that the time of the export should be interpreted as the time when the customs frontier is crossed and that we must proceed on the basis that the buyer and the sellers intended that the goods shall be the buyer 's property at the point of time when they crossed this frontier.
+We see however no justification for thinking that in this clause "the time of the export " means the time (1) (2) 930 when the goods cross the customs frontier.
+Export has been defined in the Import & Export (Control) Act, 1947, as " taking out of India by sea, land or air ".
+In the Exports (Control) Order, 1954, the word must be taken to have the same meaning as in the Act.
+On that definition the time of the export is the time when the goods go out of the territorial limits of India.
+These territorial limits would include the territorial waters of India.
+Consequently the time of the export is when the ship with the goods goes be yond the territorial limits.
+At any rate, the export of the goods cannot be considered to have commenced before the ship carrying goods leaves the port.
+The intention of the parties that in compliance with the requirements of cl.
+5(2) of the Exports (Control) Order the goods shall be the property of the licensee at the time of the export would therefore mean nothing more than that the property in the goods shall pass immediately before the ship goes beyond the territorial waters of the country, or at the earliest when the ship leaves the port.
+Whichever view is taken there is nothing to indicate that the intention to comply with the requirements of el.
+5(2) of the Exports (Control) Order carries with it an intention that the property should pass to the buyer at the time the goods cross the customs frontier.
+It is true that in the United Motor '8 Case (1) and in other cases it has been held by this Court that the course of export commences to run when the goods cross the customs barrier.
+What the court had to consider in these cases was not however when export commences within the meaning of the Exports (Control) Order but when the course of export commences for the purpose of article 286(1)(b) of the Constitution.
+For the reasons which need not be detailed here it was decided that the course of export commences at the time when the goods cross the customs barrier.
+These decisions as regards the commencement of the course of export are of no assistance in deciding about the point of time when the export proper commences.
+As we have already pointed out when export has been defined in the Import & Export (1) (1953) 4 S.T.C. 133. 931 (Control) Act, 1947, as "taking out of India by land, sea, or air ", export in the Export Control Order, cannot be held to have commenced till at least the ship carrying the goods has left the port, though it may in some contexts be more correct to say that it does not commence till the ship has passed beyond the territorial waters.
+We have therefore come to the conclusion that there is no circumstance which would justify a conclusion that the parties came to a special agreement that though the sales were on FOB contracts property in the goods would pass to the buyer at some point of time before shipment.
+We think that the learned judges who heard the appeal in the Bombay High Court were right in their conclusion that the goods remained the sellers ' property till the goods had been brought and loaded on board the ship and so the sales were exempted from tax under article 286(1)(b) of the Constitution.
+In Civil Appeal No. 46 of 1959 the appellants ' contention is that on a correct interpretation of the provisions of section 10(b) of the Bombay Sales Tax Act no purchase tax was leviable from them.
+Section 10(b) provides for the levy of a purchase tax on the turnover of purchase of goods specified in column I of Schedule B, at the rates, if any, specified against such goods in column 4 of the said schedule, "where a certificate under cl.
+(b) of section 8 has been furnished in respect of such goods and the purchasing dealer does not show to the satisfaction of the Collector that the goods have been despatched by him or by a person to whom he has sold the goods to an address outside the State of Bombay within a period of six months from the date of purchase by the dealer furnishing such certificate ".
+Section 8(b) provides for the deduction from the turnover, of sale of goods to a dealer who holds an authorisation and furnishes to the selling dealer a certificate in the prescribed form declaring inter alia that the goods so sold to him are intended for being despatched by him or by registered dealers to whom he sells the goods to an address outside the State of Bombay.
+Admittedly such a certificate was furnished by 932 M/s. Daulatram Rameshwarlal in respect of the castor oil which they sold to others and that in respect of these sales to them their sellers were allowed deductions.
+It is equally undisputed that the persons to whom M/s. Daulatram Rameshwarlal sold the goods were sent to an address outside the State of Bombay within a period of six months from the date of purchase by M/s. Daulatram Rameshwarlal.
+These persons are however not registered dealers.
+The Sales Tax Officer as also the High Court of Bombay has held that the " person to whom he has sold the goods " in section 10(b) means " a registered dealer to whom he has sold the goods ".
+It is contended before us on behalf of the appellant dealers that the word " a person " is wide enough to include a registered dealer and an unregistered dealer.
+It is urged that the use of the word it a person " instead of the words " a registered dealer " is deliberate and that it was the intention of the Legislature to levy purchase tax on a person who has given such certificate under section 8(b) only if the goods were not 'despatched outside the State of Bombay within the prescribed period by anybody.
+It is therefore contended that " a person " in section 8(b) should be interpreted to include a registered dealer or anybody else.
+We are unable to agree.
+A close examination of sections 8 and 10 justifies the conclusion that the Legislature was anxious to secure that the declaration as regards intention of the goods being despatched outside the State of Bombay should be carried out by despatch by " a registered dealer " to whom he sells the goods.
+If such despatch outside the State of Bombay is by a person to whom the certifying dealer has sold the goods but who is not a registered dealer the certificate has not been complied with.
+It will be in our opinion unreasonable to think that though the Legislature insisted that the certificate should declare the goods purchased were intended 11 for being despatched by him or by a registered dealer to whom he sells the goods outside the State of Bombay ", the Legislature would be content to accept actual despatch outside the State of Bombay by one who is not a registered dealer as sufficient.
+Mr. Sanyal contended that the certificate 933 has to declare only an intention and that if ultimately the actual despatch is made by some person who is not a registered dealer, it cannot strictly be said that the declaration has not been carried out.
+It might very well be that if at the time a declaration of intention is made in the certificate the purchasing dealer had the intention as stated and ultimately he sells to a person who is not a registered dealer for despatch of the goods outside the State of Bombay, the purchasing dealer may not be liable for having made a false declaration ".
+Even though he has not made a false declaration of his intention, the fact remains that the intention declared has not been carried out.
+The scheme of the Legislature clearly is that where the intention as declared has not been carried out purchase tax should be levied.
+To hold otherwise would be to make the declaration of the intention useless.
+Our conclusion therefore is that the courts below have rightly interpreted the words " a person " in section 10(b) of the Bombay Sales Tax Act as a " registered dealer " and that the purchasing dealers have rightly been assessed to purchase tax under section 10(b).
+In the result, both the appeals are dismissed with costs.
+Appeals dismissed.

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+ION: Criminal Appeal 89 of 1961.
+Appeal by special leave from the judgment and order dated December 8, 1960, of the Allahabad High Court in Criminal Appeal No. 1782 of 60 and Referred No. 125 of 1960, section K. Kapur, for the appellant, G. C. Mathur and C. P. Lal, for the respondent.
+December 19.
+The Judgment of the Court was delivered by RAGUHBAR DAYAL, J.
+Ram Singh appeals, by special leave, against the order of the Allahabad High Court dismissing his appeal and confirming 204 his conviction and sentence of death, under section 302, I.P.C., by the Session Judge, Etawah.
+The prosecution case, in brief, is that due to enmity, the appellant caused injuries to Sheo Sahai, who was sleeping in his cattle shed in village Bhadurpur Ghar, with a sword at about mid night on the night between June 14 15, 1960.
+Sheo Sahai died of the injuries received.
+The appellant thereafter proceeded to the Canal Distributory at some distance from the village and had a bath there.
+Later on, he went to the Police Station, Ekdil, nine miles away and lodged a report.
+He delivered the sword which has been found by the Serologist to be stained with human blood.
+The appellant was taken in custody and as a result of the investigation was sent up for trial, The appellant denied the allegation that he had caused the death of Sheo Sahai and alleged that he was falsely accused of the offence.
+He also denied the other allegations for the prosecution.
+He alleged that one Paley Singh informed him about the murder of Sheo Sahai and asked him to go to the Police Station, Ekdil, and to inform the Station Officer orally about the murder.
+He did accordingly.
+He was detained at the Police Station till 11 a.m., the next day and was then put up in the lock up.
+The Sub Inspector took his thumb impression forcibly on three papers, but did not tell him the reason.
+The appellant adduced no evidence in support of his statement.
+The Courts below rightly did not accept his version.
+The evidence led by the prosecution consisted of the evidence relating to motive, to his extrajudicial confession to one Ujagar Singh when he was having a bath in the Canal, to his purchasing the sword and to his delivering it at the police Station after he had dictated the report.
+Both the Courts below rightly believed the evidence about the motive and purchase of the sword by the appellant.
+205 The learned Sessions Judge believed Ujagar Singh and acted on the extra judicial confession made by the appellant to him.
+The High Court, however, did not rely on this extra judicial confession.
+It relied on certain statements made by the appellant in his report dictated at the Police Station and considered those facts together with the motive and the evidence about the purchase of the sword sufficient to confirm the appellant 's conviction and sentence.
+The learned counsel for the appellant has argued that the entire report dictated by the appellant was inadmissible in evidence as its contents amounted to a confession of the offence by the appellant made to a Police Officer and that the evidence relied upon by the High Court was insufficient to establish that the appellant had murdered Sheo Sahai.
+On the other hand, learned Counsel for the respondent urged that the High Court was wrong in rejecting the statement of Ujagar Singh about the appellant 's extra judicial confession and that the extra judicial confession together with the circumstances relied on by the High Court, fully make out the prosecution case against the appellant.
+He also urges that such portions of the report which did not amount to a direct admission of the appellant 's striking Sheo Sahai with a sword and thereby causing his death were admissible in evidence.
+We do not consider it necessary to decide whether any portion of the report dictated by the appellant at the Police Station is admissible or not in evidence, as there is good independent evidence with respect to the four matters mentioned in the report and relied on by the High Court in considering the case against the appellant.
+These admissions of the appellant are (i) that he purchased a cycle from the deceased; (ii) that there was a quarrel in a play of cards; (iii) that he purchased a sword; and (iv) that he deposited the sword at the Police Station.
+206 Ajit Singh, P.W., 5 deposed about the purchase of the cycle and about a dispute taking place between Sheo Sahai and the appellant on account of the latter 's demanding the return of Rs. 10/ which had been paid towards the sale price as the balance of the sale price had not been paid and the deal was cancelled by Sheo Sahai in accordance with the oral contract.
+Ajit Singh bears no enmity with the appellant.
+In fact, none of the prosecution witnesses is alleged to bear enmity with the appellant.
+Paley Singh, P.W. 2, and Baij Nath P.W. 4, depose about the dispute during the game of cards played on June 12, 1960.
+Kehar Singh P.W.3.
+deposed about the selling of a sword to the appellant on June 13, 1960.
+A receipt about the sale was found on the person of the appellant when he was searched after his arrest.
+The appellant 's depositing the sword at the Police Station is deposed by Madho Ram P.W. 12, and by Sri Kishan Singh, Station Officer, Ekdil, (P.W. 16), in whose presence the appellant had dictated the report.
+It is therefore not necessary to rely on the admissions of the appellant in the report with respect to these facts deposed to by the various witnesses whose testimony has been rightly accepted.
+We need also consider whether the facts that the accused had a motive to harm Sheo Sahai and that he had purchased a sword a day before the incident and deposited it stained with human blood at the Police Station on the night of the murder are sufficient to establish that it must be the appellant who committed the murder of Sheo Sahai or not, as we are of opinion that the High Court erred in rejecting the statement of Ujagar Singh about the appellant 's confessing to him that he had murdered Sheo Sahai.
+207 In this connection, the High Court simply said: "A perusal of the statement of Ujagar Singh would show that it is very likely that this may have happened.
+To us, it seems that in the middle of June when the chari and sugar cane crop would not have been very high, it seems improbable that Ujagar Singh would have been sleeping in his field or that he should have met the appellant in the manner alleged.
+We do not feel sure of the extra judicial confession said to have been made by the appellant to Ujagar Singh, and consequently we do not place any reliance on his statement, though it has been relied upon by the court below.
+" With respect to the learned Judges, these observations are not very consistent.
+If Ujagar Singh 's statement made it very likely that what he stated did happen, there could not have appeared any improbability in Ujagar Singh 's sleeping in his field and meeting the appellant in the manner alleged, especially when the learned Judges believed, and there was evidence about it, that the fields had chari and sugarcane crop at the time.
+The learned Judges have not stated those considerations, if any, in addition to the improbability of Ujagar Singh 's presence in his field on account of the crops being not very high, which made them doubt the appellant 's confessing to Ujagar Singh.
+It may be mentioned that Ujagar Singh was on the field, according to his statement, for protecting the crop from the depradations of neel gais.
+They damage the leaves of the plants and have no partiality for tall plants alone.
+In fact, the smaller the plants, the easier it must be to graze.
+The learned Sessions Judge has discussed the criticism urged before him against the acceptance of the statement of Ujagar Singh and considered 208 it, for reasons given, not to justify the rejection of Ujagar Singh 's statement.
+We agree with those reasons.
+There is no enmity between Ujagar Singh and the appellant and therefore no good reasons existed for Ujagar Singh to state falsely.
+Extra judicial confessions are not usually considered with favour but that does not mean that such a confession coming from a person who has no reason to state falsely and to whom it is made in circumstances which tend to support his statement, should not be believed.
+The murder was committed in the month of June.
+Both on account of the temperature and on account of the culprit 's desire to wash of blood marks on his person, the appellant 's bathing in the Canal at that hour of the night cannot be said to be improbable.
+It is not stated by sub Inspector Kishan Singh, nor it is alleged that the appellant had on his person or on his clothes blood stains when he presented himself at the Police Station.
+This tends to support Ujagar Singh 's statement that the appellant had a bath in the Canal at that hour.
+Of course, this consideration springs out of the supposition that the appellant did commit the murder.
+The fact that he had the sword which was stained with human blood, leads to such a supposition, even if the mere possession of a sword so stained be not sufficient to establish conclusively that the person who possessed it so shortly after the murder of a person with whom he had enmity, had committed the murder.
+The Canal runs beside Ujagar Singh 's field.
+Ujagar Singh was on the field for the purpose of watching it against the neel gais trespassing and grazing the crop.
+It is not therefore a matter of surprise that he wakes up and proceeds to the spot from where the splashing sound which, is supposed to be due to the wading of the neel gais, came.
+On reaching the Canal bank, he observes 209 the person bathing and naturally asks him what.
+led him to have a bath at that hour at night.
+Taken by surprise, it is not unlikely that the appellant should have made a statement that he had committed the murder of Sheo Sahai and was, thereafter, having a bath.
+There is no reason to think that the appellant would not make such a statement when the appellant himself proceeds to the Police Station and hands over the blood stained sword.
+It is no doubt unusual, as urged for the appellant, that a person who commits a murder in pursuance of an enmity arising out of minor disputes, would be feeling so justified in his conduct as to openly admit it to the first person he met and to go to the Police Station and report about it.
+It is always difficult to find reasons for a person 's acting in a certain manner.
+It may be that having blurted out the truth to Ujagar Singh, when taken by surprise, the appellant thought the best thing to be to proceed to the Police Station and report the matter there.
+It is true that Ujagar Singh did not rush to the village at once and convey the news of the murder of Sheo Sahai.
+The learned Sessions Judge has considered the criticism against such a conduct and has held that there were good reasons for Ujagar Singh 's not leaving his field whose crops he was watching against the neel gais.
+We agree with the view of the learned Sessions Judge and do not consider Ujagar Singh 's conduct of continuing to remain on his field during the night to be so improbable as to affect his veracity.
+Ujagar Singh went to the village at about 5 a.m., and them told the people of what he had been told by the appellant.
+This statement of his, is supported impliedly by Paley Singh, P.W. 2, who states that the Sub Inspector was not present when Ujagar Singh related to them the fact which had taken place at night and by Bishram Singh, P.W. 13, who 210 deposed that Ujagar Singh stated that Ram Singh was taking his bath at night in the Canal Distributory and had said that he had come after committing the murder of Sheo Sahai and that the appellant had then proceeded towards the police station.
+We are therefore of opinion that Ujagar Singh 's statement about the appellant 's confessing to him that he had murdered Sheo Sahai has been erroneously rejected by the High Court.
+The extra judicial confession of the appellant to Ujagar Singh finds ample support from the facts that the appellant did purchase a sword a day before, that very sword was found to be stained with human blood shortly after the murder and that sword was handed over by the appellant himself to the Police Officer at the Police Station.
+The evidence of the appellant 's having enmity with Sheo Sahai, the appellant 's conduct in purchasing a sword and delivering it stained with human blood to the Police and the appellant 's confession to Ujagar Singh, fully establish that the appellant did commit the murder of Sheo Sahai.
+We are therefore of opinion that he has been rightly convicted of the offence under section 302, I.P.C., and has been awarded the proper sentence.
+We therefore dismiss the appeal.
+Appeal dismissed.

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+Civil Appeal No. 50 of 1961.
+Appeal by special leave from the Award dated March 10, 1959, of the Industrial Tribunal.
+Kozhikode, in I.D. No. 89 of 1958.
+A. V. Viswanatha Sastri and T. V. R. Tatachari, for the appellant, Janardan Sharma, for the resondents.
+January 29.
+The Judgment of the Court was delivered by WANCHOO.J.
+This is an appeal by special leave in an industrial matter.
+The brief facts necessary for present purposes are these.
+The appellant in a saw mill carrying on business in Kozihkode in 824 the State of Kerala.
+One Sankaran was in the employ of the appellant as a crosscutter.
+It is said that on June 21, 1958, Sankaran came drunk to they mill and abused the Engineer, the Secretary and others and threatened them with physical violence.
+He was caught hold of by other workmen and taken outside.
+It is said that he came again a short time later at 4 30 p.m. and abused the same persons again.
+Thereupon the appellant served a charge sheet on Sankaran on June 24, 1958 acting out the above facts and asked him to show cause why his services should not be terminated on account of his grave indiscipline and misconduct.
+Sankaran gave an explanation the same day denying the allegations of fact made against him, though he admitted that he had come to the mill at the relevant time for taking his wages for that week.
+On June 25, 1958 Sankaran was informed that in view of his denial, a departmental inquiry would be held and he was also placed under suspension pending inquiry.
+The same day Sankaran protested against his suspension and requested that in any case the departmental inquiry should be expedited.
+As no inquiry was held till July 2, 1958, Sankaran again wrote to the appellant to hold the inquiry as early as possible.
+On July 8, 1958, the appellant terminated the services of Sankaran under r. 18 (a) of the Standing Orders without holding any departmental inquiry and the order was communicated to Sankaran the same day.
+In that order the appellant informed Sankaran that the proposed inquiry, if conducted, would lead to further friction and deterioration in the rank and file of the employees in general and also that maintenance of discipline in the undertaking would be prejudiced if he was retained in the service of the appellant, and therefore it considered that no inquiry should be held.
+A dispute was then raised by the union which was referred to the industrial tribunal for adjudication by the Government of Kerala in October 1958.
+The tribunal held that 825 something seemed to have happened on the afternoon of June 21, 1958 but there was no evidence to prove what had actually happened.
+It further held that the appellant had intended to take disciplinary action against the workman but subsequently departmental proceedings were dropped and action was taken under r. 18(a) of the Standing orders.
+The tribunal was of the view that this was a colourable exercise of the power given under r. 18(a) to the appellant and therefore its action could not be upheld as a bona fide exercise of the power conferred.
+The tribunal also pointed out that no attempt was made before it to defend the action taken under r. 18 (a) by proving the alleged misconduct.
+Two witnesses were produced before the tribunal in connection with the alleged misconduct, but the tribunal did not rely on them on the ground that the important witnesses, namely, the Engineer, the Secretary and other members of the staff whose evidence would have been of more value had not been produced and no explanation had been given why they were not produced.
+The tribunal therefore held that on the facts it could not come to the conclusion that Sankaran had come drunk to the mill and abused or attempted to assault either the Engineer or the Secretary or other officers.
+In the result the order of discharge was set aside and Sankaran was ordered to be reinstated.
+The appellant thereupon applied for special leave which was granted; and that is how the matter has come up before us.
+The main contention of the appellant is that it is entitled under r. 18 (a) of the Standing Orders to dispense with the service of any employee after complying with its terms.
+Rule 18 (a) is in these terms: "When the management desires to determine the services of any permanent workmen 826 receiving 12 as.
+or more as daily wages, otherwise than under rule 21, he shall be given 14 days notice or be paid 12 days wages.
+" It may be mentioned that r. 21 deals with case of misconduct and provides for dismissal or suspension for misconduct and in such a case the workman so suspended is not entitled to any wages during the period of suspension.
+The claim thus put forward on behalf of the appellant is that it is entitled under r. 18(a) of the Standing orders which is a term of contract between the appellant and its employees to dispense with the service of any employee at any time by just giving 14 days notice or paying 12 days wages.
+We are of opinion that this claim of the appellant cannot be accepted, and it is too late in the day for an employer to raise such a claim for it amounts to a claim "to hire and fire" an employee as the employer pleases and thus completely negatives security of service which has been secured to industrial employees through industrial adjudication for over a long period of time now.
+As far back as 1952, the Labour Appellate Tribunal had occasion to consider this matter relating to discharge by notice or in lieu thereof by payment of wages for a certain period without assigning any reason: (see Buckingham and Carnatic Co. Ltd. Etg.
+vs Workers of the Company.
+etc.) (1).
+It was of opinion that even in a case of this kind the requirement of bona fides is essential and if the terminataton of service is a colourable exercise of the power or as a result of victimisation or unfair labour praction the industrial tribunal would have the jurisdiction to intervene and set aside such termination.
+Further it held that where the termination of service is capricious, arbitrary or unnecessarily harsh on the part of the employer judged by normal standards of a reasonable man that may be cogent evidence of victimisation or unfair labour practice.
+These observations 827 of the Labour Appellate Tribunal were approved by this Court in The Chartered Bank, Bombay vs The Chartered Bank Employees ' Union (1).
+and Assam Oil Company vs Its Workmen (2).
+Therefore if as in this case the employer wanted to take action for misconduct and then suddenly dropped the departmental proceedings which were intended to be held and decided to discharge the employee under r. 18 (a) of the Standing orders, it was clearly a colourable exercise of the power under that rule in as much as that rule was used to get rid of an employee instead of following the course of holding an inquiry for misconduct, notice for which had been given to the employee and for which a departmental inquiry was intended to be held.
+The reason given by the appellant in the order terminating the services of Sankaran of July 8, 1958, namely, that the proposed inquiry, if conducted, would lead to further friction and deterioration in the rank and file of the employees in general and also that maintenance of discipline in the undertaking would be prejudiced if Sankaran were retained in service, cannot be accepted at its face value; so that the necessity for an inquiry intended to be held for misconduct actually charged might be done away with.
+In any case even if the inquiry was not held by the appellant and action was taken under r. 18 (a) it is now well settled, in view of the decisions cited above, that the employer could defend the action under r. 18(a) by leading evidence before the tribunal to show that there was in fact misconduct and therefore the action taken under r. 18(a) was bona fide and was not colourable exercise of the power under that rule.
+But the tribunal has pointed out that the employer did not attempt to do so before it.
+It satisfied itself by producing two witnesses but withholding the important witnesses on this question.
+In the circumstances, if the tribunal did not accept the evidence of the two witnesses 828 who were produced it cannot be said to have gone wrong.
+Learned counsel for the appellant however urges that the employer was empowered to take action under r. 18 (a) of the Standing orders and having taken action under that rule, there was nothing for it to justify before the tribunal.
+We have already said that this position cannot be accepted in industrial adjudication relating to termination of service of an employee and has not been accepted by industrial tribunals over a long course of years now and the view taken by industrial tribunals has been upheld by this Court in the two cases referred to above.
+Learned counsel for the appellant, however, relies on the decision of this Court in Parshotam Lal Dhingra vs Union of India.
+(1) That was however a case of a public servant and the considerations that apply to such a case are in our opinion entirely different.
+Stress was laid by the learned counsel on the observations at p. 862 where it was observed as follows: "It is true that the misconduct, negligence inefficiency or other disqualification may be the motive or inducing factor which influences the Government to take action under the terms of the contract of employment or the specific service rule, nevertheless, if a right exists under the contract or the rule, to terminate the service, the motive operating on the mind of the Government is, as Chagla C. J. has said in Srinivas Ganesh vs Union of India (2) (supra), wholly irrelevant.
+It is urged that the same principle should be applied to industrial adjudication.
+It is enough to say that the position of government servants stands on an entirely different footing as compared to industrial employees.
+Articles 310 and 311 of the Constitution apply to government servants and it is in the 829 light of those Articles read with the Rules framed under article 309 that questions relating to termination of service of government servants have to be considered.
+No such constitutional provisions have to be considered when one is dealing with industrial employees.
+Further an employer cannot now press his right purely on contract and say that under the contract he has unfettered right "to hire and fire" his employees.
+That right is now subject to industrial adjudication and even a power like that granted by r. 18 (a) of the Standing orders in this case, is subject to the scrutiny of industrial courts in the manner indicated above.
+The appellant therefore cannot rest its case merely on r. 18 (a) and say that having acted under that rule there is nothing more to be said and that the industrial court cannot inquire into the causes that led to the termination of service under r. 18 (a).
+The industrial court in our opinion has the right to inquire into the causes that might have led to termination of service even under a rule like 18(a) and if it is satisfied that the action taken under such a rule was a colourable exercise of power and was not bona fide or was a result of victimisation or unfair labour practice it would have jurisdiction to intervene and set aside such termination.
+In this case the tribunal held that the exercise of power was colourable and it cannot be said that view is incorrect.
+The appellant failed to satisfy the tribunal when the matter came before it for adjudication that the exercise of the power in this case was bona fide and was not colourable.
+It could have easily done so by producing satisfactory evidence; but it seems to have rested upon its right that no such justification was required and therefore having failed to justify its action must suffer the consequences.
+Learned counsel for the appellant also drew our attention to another decision of this Court in 830 The Patna Electric Supply Co. Ltd. Patna vs Bali Rai(1).
+That case in our opinion has no application to the facts of this case because that case dealt with an application under section 33 of the Industrial Disputes Act while the present proceedings are under section 10 of the Act and the considerations which apply under section 33 are different in many respects from those which apply to an adjudication under section 10.
+The appeal therefore fails and is hereby dismissed with costs.
+Appeal dismissed.

1522.txt

@@ -0,0 +1,93 @@
+iminal Appeals Nos.
+160 to 162 of 1960.
+Appeals by special leave from the judgment and order dated January 20, 1960 of the Allahabad High Court in Criminal Government Appeals Nos.
+2011 to 2013 of 1958.
+B. C. Misra and P. K. Chakravarti, for the appellant.
+G. C. Mathur and C. P. Lal, for the respondent.
+September 27.
+The judgment of the Court was delivered by MUDHOLKAR, J.
+These three appeals arise out of three separate trials before the Additional Sessions judge, Bulandshahr, but were argued together as they arise identical questions.
+In all these trials, the appellant, who was a postman attached to the Bulandshahr post office was tried for offences under section 52 of the Indian Post Office Act, 1898 (VI of 1898) and in two of ' them, also for offences under sections 467 and 471 of the Indian Penal Code.
+Briefly stated the allegations against the appellant were that he either stole or secreted five registered letters and that he fabricated three receipts showing that the registered letters were received by the addressees.
+The learned Additional Sessions judge acquitted the appellant of all these offences.
+The State then preferred an appeal against his acquittal in these three cases to the High Court of Allahabad but restricted the appeal to the acquittal of the appellant in respect of offences under 410 section 52 of the Indian Post Office Act, 1898 (hereafter referred to as the Act).
+The High Court held that the appellant had secreted the five registered letters in question and on this finding set aside his acquittal and convicted him in each of the three appeals for offences under section 52 of the Act and sentenced him to undergo rigorous imprisonment for a period of one year in each case.
+The appellant has come up to this Court by special leave.
+Briefly stated the prosecution case is that when the house in which the appellant lives along with his father Diwan Singh, a retired Police Head Constable, was searched by the C.I.D. Inspector, S.N. Singh, along with Masood Murtaza, Sub Inspector of Police, Bulandshahr on May 12, 1956, in connection with a case against Messrs Greenwood Publicity, they accidentally discovered a large number of letters and postcards and also the five registered letters in question.
+At the time of the search the appellant who happens to be a trade union official, was not in Bulandshahr but was away on leave at Delhi in connection with a postal conference.
+These articles were found in an almirah, the key of which was produced by the appellant 's father.
+The articles were not listed at the spot but were taken to the Kotwali in a sealed packet and later on listed there.
+A number of other articles were also seized at that time but we are not concerned with them as they have no connection with the charges against the appellant.
+Briefly, the appellant 's defence in all these cases is that there are two factions in the Bulandshahr post office and that these articles were planted by the opposite party.
+According to him, the planting must have occurred in the Kotwali when the Sub Inspector purported to make a list of the articles seized from the house in which the appellant lives.
+Further, according to him, neither the house nor the almirah from which the articles are said to have been 411 seized was in his exclusive possession.
+He stated and that fact is not denied that the house which consists of two rooms only has been rented in his father 's name, that both of them live in those two rooms and that the almirah was in his father 's possession inasmuch as the key was produced by him.
+On behalf of the appellant Mr. B. C. Misra has raised the following six points: (1) That on the findings arrived at by the High Court no offence under section 52 of the Post Office Act has been made out.
+(2) That it has not been established that the five registered letters were in the exclusive possession of the appellant.
+(3) That the search was illegal inasmuch as it was in contravention of the provisions of sections 103 and 165 of the Code of Criminal Procedure.
+(4) That in examining the appellant the Ad ditional Session Judge did not comply with the requirements of section 342 of the Code of Criminal Procedure.
+(5) That the High Court has not found that there were compelling reasons for setting aside the appellant 's acquittal .
+(6) The sentences in the three cases having been ordered to run consecutively the total sentence is excessive.
+We will deal with the last four points first.
+So far as the alleged illegality of the search is concerned it is sufficient to say that even assuming that the search was illegal the seizure of the articles is not vitiated.
+It may be that where the provisions of ' sections 103 and 165, Code of Criminal Procedure, are 412 contravened the search could be resisted by the person whose premises are sought to be searched.
+It may also be that because of the illegality of the search the Court may be inclined to examine carefully the evidence regarding the seizure.
+But beyond these two consequences no further consequence ensues.
+The High Court has chosen to accept the evidence of the prosecution with regard to the fact of seizure and that being a question to be decided only by the Court of fact, this Court would not re examine the evidence for satisfying itself as to the correctness or otherwise of the conclusions reached by the High Court.
+In so far as the contravention of provisions of section 342, Code of Criminal Procedure, are concerned it is sufficient to point out that no grievance was made either before the Court of the Additional Sessions judge or before the High Court that there was such a contravention and the appellant was prejudiced and we cannot allow the point to be raised for the first time here, the reason being that whether there was prejudice is a question of fact and cannot be permitted to be agitated for the first time in an appeal under article 136 of the Constitution.
+As regards the fifth point, it is sufficient to say that this Court has held that an appeal from acquittal need not be treated differently from an appeal from conviction and if the High Court finds that the acquittal is not justified by the evidence on record it can set aside the acquittal without coming to the conclusion that there were compelling reasons for doing so.
+In so far as the sentence is concerned, bearing in mind the fact that the maximum sentence awarded under section 52 of the Act is seven years it would not be right to say that in ordering the sentences in the three cases to run consecutively the appellant is being very severely punished.
+In so far as section 52 of the Act is concerned the argument is that the prosecution having merely shown that the registered letters were recovered from an almirah in the house in which the appellant lives the 413 utmost that could be said is that he was in possession of letters, that is, assuming that he was in the exclusive possession of the house and the almirah.
+The mere fact of possession, according to learned counsel, does not suffice to show that the letters were secreted by the appellant.
+It is contended that for an officer of the post office to be found guilty for any of the acts specified in section 52 it has further to be shown that he was entrusted with the postal article with respect to which he is alleged to have committed any of those acts.
+Section 52 of the Act runs thus : "Penalty for theft, dishonest, misappropriation, secretion, destruction, or throwing away of postal articles.
+Whoever, being an officer of the Post Office, commits theft in respect of, or dishonestly misappropriates, or, for any purpose whatsoever, secretes, destroys or throws away, any postal article in course of transmission by post or anything contained therein, shall be punishable with imprisonment for a term which may extend to seven years, and shall also be punishable with fine.
+" The first act referred to in this section is theft.
+Surely it cannot be contended that any (entrustment ' is necessary with regard to that act.
+Indeed, if entrustment were proved and the article entrusted is not found to have been disposed of in the manner permissible under the Act, the offence committed would be not theft but criminal breach of trust.
+according to Mr. Misra, the appellant cannot be said to have secreted the letter just because it was found in the almirah which is said to have been in his exclusive possession.
+To secrete means, according to the dictionary "to hide".
+In connection with a postal article addressed to some person the fact that it is retained in his possession by an officer of the post office in an almirah and that too for an inordinately long period would be tantamount to hiding that 414 article.
+Of course, what act amounts to "secreting" would necessarily depend upon the facts of each case and in our opinion in a case like the present, what 'has been established by the prosecution would sustain an inference of secreting.
+Further, a perusal of section 55 makes it clear that where the entrustment of an article is made an ingredient of an offence, the legislature has used appropriate words to make the matter clear.
+If, therefore, it was the intention of ' the legislature that for an officer of the post office to be punished for secreting, destroying or throwing away a postal article in the oucrse of transmission by post, entrustment of that article to him was essential it would have used language similar to that used by it in section 55.
+It seems to us that bearing in mind the ' fact that an officer of the post office having in the course of his duties access to postal articles kept or lying in the post office, the legislature has deliberately enlarged the scope of section 52 so as to encompass secretion, destruction or throwing away of postal articles by an officer of the post office even though they may not have been entrusted to him or even though the are riot articles with which he is required or is competent to deal in the course of his duties.
+The object of the provision is to prevent postal articles 'in course of transmission by post ' from being tampered with, and so the secreting, destruction ' etc., of postal articles to which the provision is directed is to such secreting, destruction etc., as would frustrate or tend to frustrate their delivery to the addressees.
+Then Mr. Misra contended that it would not be correct to say that the five registered letters recovered from the almirah were in the course of transmission by post because that recovery was made 7 or 8 months after those letters had been despatched and that no complaint had ever been made regarding their nondelivery by the senders or the addressees of those letters.
+He further referred to the fact that at least in respect of three of the registered letters 415 acknowledgments purporting to be from the addressee were obtained and were with the post office.
+He admitted that the prosecution allegation was that those documents were fabricated but that case having failed before the Court of Sessions and the Government not having appealed against that part of the decision of that court it must be held that at least three of those letters were duly received by the addressees.
+The expression "in course of transmission by post" has been defined in section 3 (a) of the Act as follows : .lm15 " a postal article shall be deemed to be in course of transmission by post from the time of its being delivered to a Post Office to the time of its being delivered to the addressee or of its being returned to the sender or otherwise disposed of under Chapter VII.
+" The mere fact that there is even a delay of several months in delivering a postal article to the addressee would not mean that the article had ceased to be in course of transmission.
+It is common experience that delivery of postal articles is now and again delayed for a considerable length of time may be through accident or through the negligence of the postal employees.
+It is probably for this reason that the definition clearly lays down that until an article despatched by post is delivered or can be said to be delivered that it will be deemed to be in course of transmission.
+We cannot, therefore, accept the first part of this contention of Mr. Misra.
+As regards the other point, that is, based on the fact that there were acknowledgments in respect of three letters in the post office we may point out that the existence of these acknowledgments would no more than raise a presumption that those articles were delivered to the addressees.
+The addressees have been examined in this case and they have deposed that the letters in question were not received by them.
+Their 416 evidence has been believed by the High Court and therefore, there is an end to the matter.
+In the circumstances, therefore, we do not accept Mr. Misra 's contention that the act of an officer of the post office in being in possession of a postal article for an inordinate length of time has no significance and cannot justify the conclusion that he had secreted the article.
+The next and in our opinion the most important question to be considered is whether the prosecution has established that the five registered letters in question were recovered from the possession of the appellant.
+As already stated, all that the prosecution has been able to prove is this case is that these letters were found in an almirah of the house in which the appellant lives jointly with his father and of which the key was furnished by the father.
+Dealing with this question the High Court has observed as follows : "In the first place, the respondent alone had the opportunity and the means to secure such a large number of postal articles.
+(2) that at least nine of those postal articles were addressed to the respondent himself (vide exhibit Ka 9, serial No. 66), (3) that Dewan Singh, who, we are informed is a very old man, would not foist the said incriminating articles on his son and thus ruin his career for ever, and (4) that the respondent alone can be said to have had some motive for secreting and concealing the registered letters and other postal articles in question.
+" Before the High Court could take into consideration the circumstance that as between himself and his father the appellant had a better opportunity to 417 get at postal articles it had to find affirmatively that the almirah was in the exclusive possession of the appellant.
+We have not been able to discover anything in the judgment which directly bears on this question.
+As the key was produced by the appellant 's father and there is no evidence that it was ever with the appellant it would not be legitimate to infer that the almirah was even in the appellant 's joint, much less in his exclusive, possession.
+Tile circumstance that the almirah contained, apart from the registered letters in question, certain other articles belonging to the appellant cannot sustain an inference that the almirah was in the appellant 's possession exclusively or even jointly with his father.
+We may recall that the almirah contained a large number of articles belonging to the father and since he had the key with him it must be he who must be deemed to be in possession of the almirah and consequently of its contents including the registered letters in question.
+Apart from that, out of the four reasons given by it, the last, as pointed out by the High Court itself, is a speculative reason and must, therefore, be left out of consideration.
+The second 'reason ' is no reason at all because a very large number of articles found in the almirah admittedly belong to the father.
+The third reason that the rather would not foist articles to incriminate the son and thus ruin his career assumes that had the father kept the articles he could have done so only if he wanted to incri minate the son.
+We cannot understand why the father, if he happened to get possession of the articles from some source may not have kept them in the almirah in the same way in which he had kept the other articles belonging to him.
+That leaves, therefore, only the first reason.
+We doubt if on the basis of this reason alone the High Court could have held that though the locked almirah was not in the exclusive possession of the appellant, these articles were in his exclusive possession.
+If the point to be 418 established was whether the appellant had availed himself of the opportunity to procure the articles it could have been established by showing that he was in their exclusive possession.
+But to say that he must be deemed to be in exclusive possession of these articles and not merely in their joint possession along with his father because he had the opportunity to get at the articles and then infer that he must have utilized the opportunity and was therefore in their exclusive possession would be arguing in a circle.
+Moreover since entrustment of the articles has not been established, the taking away of the articles by the appellant from the post office (if that is how he came by the articles) would be theft but it has not been found that he committed any theft.
+Indeed, had it been so found he could have been convicted under section 52 without the Court having to consider whether he had secreted the articles.
+We may mention that Mr. Mathur who appears for the State does not even suggest that the articles were stolen by the appellant.
+Therefore, the contention that he had an opportunity to get at the articles loses all significance and can possibly have no bearing on the question as to the nature of possession attributable to the appellant.
+In the circumstances we must hold that the prosecution has failed to prove that these letters were in the exclusive possession of the appellant.
+No presumption can, therefore, be drawn against him that he had secreted them from the mere fact that they were found in the almirah which, at best, may be regarded as being in the joint possession of himself and his father.
+But, as already stated, even an, inference of joint possession would not be legitimate.
+For these reasons we allow the three appeals and set aside the conviction and sentences passed against the appellant.
+Appeal allowed.

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+l Appeals Nos.
+15 to 19 of 1962.
+Appeal from the Judgment and order dated October 10, 1958, of the Bombay High Court in Income tax Reference No. 22 of 1 958.
+H. N. Sanyal,, Additional Solicitor General of India, N. D. Karkhanis and R. N. Sachthey, for the appellant.
+701 A. V. Viswanatha Sastri, J. B. Dadachanji, O. C. Mathur and Ravinder Narain, for the respondents.
+October, 23.
+The judgment of the Court was delivered by KAPUR, J.
+These a peals pursuant to a certificate of the High Court of Bombay raise the question of interpretation of section 24B of the Income tax Act in an Income tax Reference.
+The question referred was answered in the negative and against the Commissioner of Income tax who is the appellant in these appeals, the respondents being the heirs and legal representatives of one Amarchand N. Shroff deceased.
+The appeals relate to the assessment years 1950 51, 1951 52, 1952 53, 1953 54 and 1954 55.
+Shortly stated the facts of the case are these Amarchand N. Shroff, Mangaldas and Hiralal were partners in a firm of solicitors.
+Amarchand died on July 7, 1949.
+Thereafter the partnership was carried on by Mangaldas and Hiralal up to November 30, 1949, and on December 1, 1949, Ramesh son of Amarchand who had by then qualified as a solicitor joined the firm as the third partner.
+After the death of Amarchand the arrangement between the various partners in regard to the realisations of the old outstandings was that in respect of the work done up to the death of Amarchand the realisations were to be divided amongst Amarchand, Mangaldas and Hiralal, in respect of the work between July 8, 1949, and November 30, 1919, the realisations were to be divided between Mangaldas and Hiralal 'and in respect of work done after December 1, 1949, the realisations were to be divided amongst Mangaldas, Hiralal and Ramesh.
+The firm kept its accounts on cash basis.
+For the five assessment years 1950 51 to 1954 55 the following amounts were received : Rs. 37,847/ , As.
+43,162/ , Rs. 34,899/ , Rs. 13,402/ and 702 Rs. 32,523/ by the heirs and legal representatives of Amarchand out of the outstandings.
+The Income tax Officer sought to tax these realisations.
+For the assessment years 1950 51 and 1951 52 he assessed the amounts in the hands of the heirs and legal representatives of Amarchand as a Hindu undivided family.
+Against that order an appeal was taken to the Appellate Assistant Commissioner and then to the Appellate Tribunal.
+The two members of the Tribunal agreed in holding, though for different reasons, that the amounts were not the income of the Hindu undivided family but merely represented inheritance or realisations of the assets of Amarchand.
+The matter was not pursued further by the Revenue but sometime later proceedings were started by the Income tax Officer under section 34 in respect of the same income in the hands of "Amarchand N. Shroff by his heirs and legal representatives".
+The status of that entity was taken to be that of an individual and not Hindu undivided family.
+The various amounts were assessed to income tax in the hands of the respondents under section 34(1) (b) read with section 24B of the Income tax Act.
+The assessments so made were for the assessment years 1950 51, 1951 52, 1952 53, 1953 54 and 1954 55: On appeal the Appellate Assistant Commissioner held that.
+the notice under section 34 could validly be served only for the assessment years 1950 51 and notices for the subsequent years were invalid.
+The assessments for 1951 52 to 1954 55 were therefore quashed.
+The Commissioner of Income tax took an appeal to the Appellate Tribunal and the Tribunal held that assessment could not be made on Amarchand and that section 24B had no application to the income received after the death of Amarchand and that it was capital receipt and not revenue receipt.
+The order of the Appellate Assistant Commissioner was therefore upheld, On the application of the Commissioner of 703 Income tax the following question of law was referred to the High Court : "Whether on the facts and in the circumstances of the case, the sums of Rs. 37,847/ , Rs. 43,162/ , Rs. 34,899/ , Rs. 13,402,/ and Rs. 32,523/ were assessable to income tax in the hands of the assessee "Amarchand N. Shroff by his legal heirs and representatives" in the five respective years under reference ?".
+The High Court answered the question in the negative.
+It held that apart from section 24E of the Income tax Act the amounts were not taxable and that the section had no application to the case.
+It was argued by counsel for the Commissioner of Income tax that on a correct interpretation of section 24B the amounts which were received by the heirs and legal representatives of Amarchand after his death should be deemed by the fiction incorporated in sub section
+(1) to be income received by Amarchand and liable to tax under section 24B (1) of the Income tax Act.
+In other words the respondents as heirs and legal representatives of the deceased Amarchand were liable to pay out of the estate of the deceased Amarchand on those amounts to the extent of the estate as the estate was liable for tax on the amounts received by the heirs and legal representatives just as the deceased Amarchand would have been had he not died.
+The emphasis was on words in section 24B (1) "or any tax which would have been payable by him under this Act if he had not died".
+Section 24B is as follows : section 24B 11,Tax of deceased person payable by represen tative (1) Where a person dies, his executor, administrator or other legal representative shall be liable to pay out of the estate of the deceased person to the extent to Which the estate 704 is capable of meeting the charge the tax assessed as payable by such person or any tax which would have been payable by him under this Act if he had not died.
+(2) Where a person dies before the publication of the notice referred to in sub section (1) of section 22 or before he is served with a notice under sub section (2) of section 22 or section 34, as the case may be, his executor, administrator or other legal representative shall, on the serving of the notice under sub section (2) of section 22 or under section 34, as the case may be, comply therewith and the Income tax Officer may proceed to assess the total income of the deceased person as if such executor, ad ministrator or other legal representative were the assessee.
+(3) Where a person dies, without having furnished a return which he has been required to furnish under the provisions of section 22, or having furnished a return which the Income tax Officer has reason to believe to be incorrect or incomplete, the Income tax Officer may make an assessment of the total income of such person and determine the tax payable by him on the basis of such assessment, and for this purpose may by the issue of the,, appropriate notice which would have had to be served upon the deceased person had he survived require any accounts, documents or other evidence which he might under the provisions of sections 22 and 23 have required from the deceased person.
+" Sub section (1) provides that where a person dies his heirs and legal representatives are liable to pay out 705 of the estate of the deceased the tax assessed as payable by the deceased or any tax which would have been payable under the Act by the deceased if he had not died.
+According to the 'submission of counsel for the Commissioner of Income tax the words of sub section
+(1) "or any tax which would have been payable by him under this Act if he had not died" mean that irrespective of the date of ' receipt of income receivable by a person, if the income is received by his heirs and legal representatives after his death, they are liable for payment of the tax just as the deceased would have been liable when the income was received had he been living.
+But this interpretation is not in accord with the language used in s.24B. All the sub sections have to be read together.
+Sub section (1) can be divided into two parts; (1) where the income of the deceased was assessed before his death and (2) where the income was not so assessed but it would have been liable to tax had he not died.
+The second part or the words above quoted when read with sub sections (2) and (3) show that they are confined to cases therein mentioned.
+They show that those words also have to be restricted to the income received by the deceased person before his death and to the income received after his death by his heirs and legal representatives but in the previous" year and which had not been assessed but would have been assessed as income received by him if death had not taken place.
+See Allen vs Trehearne(1) where the words "if he had not died" were interpreted.
+Sub section (2) provides that if a person dies before the publication of the public notice under s.22 (1) or before a notice is served on him under sub sections 2 of section 22 or section 34 then the Income tax Officer may proceed to compute or assess the total income of the deceased person as if the heirs and legal representatives were the assessees Sub section (3) provides that when a person dies before a return is furnished by him under the provisions of section 22 or dies after having furnished the return which the (1) (1938) 22 Tax.
+15, 706 Income tax Officer finds incorrect or incomplete then the Income tax Officer can make assessment on the total income of the deceased person and certain other consequences follow but in all the cases enumerated above the language used in sub sections 1, 2 and 3 of s.24B contemplates that the heirs and legal representatives of a deceased person are liable to pay income tax out of his estate (1) where assessment had already been made and (2) where he dies before the assessment but the income was received before his death or by his heirs and legal representatives after his death which occurs during the previous year.
+If he dies before the publication of the notice under S.22(1) or before the service under s.22(2) or after the service but before he has furnished a return or filed an incorrect or incomplete return then the Income tax Officer should make an assessment of the total income of such deceased person and determine the tax payable thereupon.
+Section 24B does not authorise levy of tax on receipts by the legal representatives of a deceased person in the years of assessment succeeding the year of account being the previous year in which such person died.
+Income tax is exigible in reference to a person 's total income of the previous year.
+The question before us is whether the income which was received subsequent to the previous year in which Amarchand died is liable to be assessed to income tax under section 24B as his income in the hands of his heirs and legal representatives.
+In the present case the accounts were kept on cash basis.
+The assessee under the Act has ordinarily to be a living person and cannot be a dead person because his legal personality ceases on his death.
+By section 24B the Legal personality of a deceased assessee is extended for the duration of the entire previous year in the course of which he died and therefore the income received by him before his death and that received by his heirs and legal representatives after his death but in that previous 707 year becomes assessable to income tax in the relevant assessment year.
+The section was enacted by the Legislature to bring to tax, after his death, income received during his lifetime, and fill up the lacuna which was pointed out by the High Court in Ellis C. Reid vs Commissioner of Income tax, Bombay(1).
+Any income received in the year subsequent to the previous or the account year cannot be called income received by the person deceased.
+The provisions of section 24B do not extend to tax liability of the estate of a deceased person beyond the previous or the account year in which that person dies.
+In support of his contention counsel for the Commissioner of Income tax relied upon the scheme of the Act as given in Additional Income tax Officer vs E. Alfred(2).
+There is nothing said in that case which supports the contention raised by the Commissioner of Income tax.
+Reliance was next placed on certain observations in a judgment of the Bombay High Court in re.
+B. M. Kamdar(3).
+Those observations also are of no assistance to the Commissioner of Income tax, Kania, J., as he then was) there observed that the question whether a particular amount was income or not had nothing to do with the time of its receipt and the question of receipt was material.
+only for the purpose of determining whether on that amount tax was to be levied under the Act in the year of assessment.
+That was a case where a consulting engineer discontinued his practice as such from February 15, 1938, and he received a sum of money representing the outstanding 'professional fees earned by him prior to the discontinuance of his practice but realised by him during the Calendar year which was the previous year.
+The assessee was keeping is accounts on cash basis and he contended that as he had discontinued his profession in the previous year the source had come to an nd and the amounts received by him were not liable to income tax.
+It was held that the income was assessable.
+The assessee in that case was still alive when the income (1) (2) , 445. (3) [1946] 14 l.
+T.R. 10.
+708 was received by him and section 24B had no application to the facts of the case.
+Counsel also relied on the observations of Derbyshire, C.J., in re Sreemati Usharani Shoudhurani(1).
+In that case the managing agent of a limited company died on May 12, 1938.
+At the time of his death there was a credit with the company of a sum of money on account of commission earned by him and due to him prior to the date of his death.
+This sum was paid after his death in the previous year 1938 39 and was sought to be taxed under section 24B of the Income tax Act.
+It was held that this income was taxable.
+Derbyshire, C.J., said at p. 205 that the assessee who was the widow had received the salary due to her husband; that the Income tax Officer was entitled to assess the total income of the deceased person as if the legal representatives were the assessees and the amount was liable to tax under section 24B (1), but in that case also the amount was received by the widow in the previous year and it was earned by the deceased during the previous year.
+The correct position is that apart from s.24B no assessment can be made in respect of the income of a person after his death.
+See Ellis C. Reid vs Commissioner of Income tax, Bombay(2).
+In that case, and that was a case before section 24B was enacted, a person was served with a notice under section 22(2) of the Income tax Act but no return was made within the period specified and he died.
+It was held that no assessment could be made under section 23(4) of the Act after his death.
+At p.106 it was observed : "The is to be noticed that there is through the Act no reference to the decease of a person on whom the tax has been originally charged, and it is very difficult to suppose the omission to have been unintentional It must have (1) (2) 709 been present to the mind of the legislature that whatever privileges the payment of income tax may confer, the privilege of immortality is not amongst them.
+Every person liable to pay tax must necessary die and, in practically every case, before the last instalment has been collected, and the legislature has not chosen to make any provisions expressly dealing with assessment of, or recovering payment from the estate of a deceased person".
+The individual assessee has ordinarily to be a living person and there can be no assessment on a dead person and the assessment is a charge in respect of the income of the previous year and not a charge in respect of the income of the year of assessment as measured by the income of the previous year.
+Wallace Brothers & Co. Ltd. v Commissioner of Income tax, Bombay City(2).
+By section 24B the legal representatives have, by fiction of law, become assessees as provided in that section but that fiction cannot be extended beyond the object for which it was enacted.
+As was observed by this Court in Bengal Immunity Co. Ltd. vs The State of Bihar(2) legal fictions are only for a definite purpose and they are limited to the purpose for which they are created and should not be extended beyond that legitimate: field.
+In the present case the fiction is limited to the cases provided in the three subsections of section 24B and cannot be extended further than the liability for the income received in the previous year.
+In the present case the amounts which are sought to be taxed and which have been held not to be liable to tax are those which were not received in the previous year and are therefore not liable to tax in the several years of assessment.
+It cannot be said that they were income which may be deemed by fiction to have been received by the dead person and therefore they are not liable to be taxed as income (1) , 244.
+(2) , 664.
+710 of the deceased Amarchand and are not liable to be taxed in the hands of the heirs and legal representatives who cannot be deemed to be assessees for the purpose of assessment in regard to those years.
+In our view the High Court rightly answered the question in the negative and against the Commissioner of Income tax.
+The appeals therefore fail and are dismissed with costs.
+Appeals dismissed.

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+Appeals, Nos. 275 276 of 1963.
+Appeals by special leave from the judgment and order dated May 2, 1960 of the Kerala High Court in Income tax Referred case No. 98 of 1955(M).
+section T. Desai, C. V. Mahalingam, B. Parthasarathi and J. B. Dadachanji, for the appellant (in both the appeals).
+K. N. Rajagopal Sastri and R. N. Sachthey, for the res pondent (in both the appeals).
+95 December 20, 1963.
+The Judgment of A. K. Sarkar and J. C. Shah, JJ. was delivered by Sarkar, J. M. Hidayatullah, J. delivered a Dissenting opinion.
+SARKAR J.
+These two appeals arise out of assessments of the appellant to income tax for the years 1948 49 and 1949 50.
+The question in these appeals is whether on the facts to be presently stated, the appellant was entitled to relief under section 25(4) of the Income tax Act, 1922.
+The appellant claimed relief under section 25(4) contending that it had transferred its business to a limited company with effect either from November 13.
+1947 or February 13, 1948, by an instrument executed on February 7, 1948.
+The claim was rejected by the Income tax Officer and by the Appellate Assistant Commissioner and also by the Income tax Appellate Tribunal on appeal to it.
+The appellant then moved the Tribunal to refer a, certain question to the High Court at Madras under section 66(1) of the Act but that application was rejected.
+It then moved the High Court under section 66 (2) of the Act and the High Court directed the Tribunal to refer the following question for determination by it: "Whether, on the facts and in the circumstances of the case, the assessee is not entitled to relief under section 25 (4) of the Indian Income tax Act, and to what extent?" The Tribunal duly drew up a statement of case and referred the question along with it to the High Court.
+There were really two references as there were two cases before the Tribunal.
+These however were heard together by the High Court and disposed of by one judgment.
+The High Court held that the appellant was not entitled to any relief under section 25 (4).
+The present appeals are from the judgment of the High Court.
+The facts have to be stated at some length but before we do that we think it would be profitable to set out the statutory provisions concerned.
+Though we are directly concerned with sub sec.
+(4) of section 25, a consideration of subsec.
+(3) of that section will throw useful light on the matter 96 in question and so we set both these sub sections out below: section 25 (3) Where any business, profession or vocation on which tax was at any time charged under the provisions of the Indian Income tax Act, 1918, . . is discontinued, then, unless there has been a succession by virtue of which the provisions of sub section (4) have been rendered applicable no tax shall be payable in respect of the income, pro fits and gains of the period between the end of the previous year and the date of such discontinuance. . (4) Where the person who was at the commencement of the Indian Income tax (Amendment) Act, 1939 carrying on any business, profession or vocation on which tax was at any time charged under the provisions of the Indian Income tax Act, 1918, is succeeded in such capacity by another person, the change not being merely a change in the constitution of a partnership, no tax shall be payable by the first mentioned person in respect of the income, profits and gains of the period between the end of the previous year and the date of such succession Both these sub sections gave a further right to the assessee but with that right we are not concerned and shall, there fore, make no more reference to it.
+Now it will be seen that under sub sec.
+(3) the discontinuance of the business gave rise to a relief from taxation in respect of its income provided however that there had not been a succession to the business as mentioned in sub sec.
+(4) which, as will later be seen, has to be a succession taking place after April 1, 1939.
+The succession contemplated in sub sec.
+(4) again must have taken place before the discontinuance for if the business is discontinued it ceases to exist and cannot be succeeded to.
+Sub section (4) requires certain conditions to be fulfilled before a claim to relief under it can be made.
+As the present appeals relate only to a business carried on by a 97 firm, in discussing these conditions we will omit all refer ences to the professions, vocations and owners of businesses other than firms.
+We would like to remind here that a firm is a taxable unit under the Income tax Act and it is a person as that word is used in the Act.
+Now the first condition of the applicability of sub sec.
+(4) of section 25 is that the business must have been charged to tax under the Indian Income tax Act, 1918.
+This Act was in force between 1918 and 1922 in which year it was replaced by the present Act.
+So the business must have been in existence sometime between 1918 and 1922.
+Under the Act of 1918 tax was assessed, computed and levied on the income of the year of assessment but under the Act of 1922 the scheme of assessment of income and tax was modified.
+By that Act tax was assessed on the income of the previous year and the result of the innovation was that the income of the year 1921 22 was assessed twice, once under the Act of 1918 and again under the Act of 1922 and it was because of this that relief was given by sub secs.
+(3) and (4) of section 25.
+The second condition of the applicability of section 25(4) is that business must have been carried on at the commencement of the Indian Income tax Act (Amendment) Act, 1939, that is, April 1, 1939, by the person claiming the relief.
+The third condition is that the person carrying on the business on April 1, 1939 has to be succeeded by another person as the owner carrying on the business.
+Obviously, the succession indicated must have been after April 1, 1939, as we have earlier stated, for a person carrying on a business on that date can only be succeeded in that business by another person on a date later than it.
+The fourth condition is that the succession was not merely a change in the constitution of the firm.
+This condition, of course, is applicable only where, as in the present case, the business was carried on by a firm.
+The appellant, who is the assessee in these cases, is a firm.
+It contends that it had been carrying on a business on April 1, 1939 from before and on that business tax had been charged under the Act of 1918 and that it was succeeded by a company as owner of the business as a result of a transfer by an instrument executed on February 7, 1948.
+The appellant further contends that its constitution has changed 134 159 S.C. 7. 98 from time to time but the firm has never been dissolved so that it has been the same firm continuing and carrying on the same business from before 1918 till the transfer afore said.
+It is on this basis that it claimed the benefit of section 25 (4) of the Act.
+We now proceed to set out the facts of the case in a chronological order.
+It appears that a firm bearing the same name as that of the appellant, that is, Sait (or Shah) Nagjee Purshotham and Company was started in 1902 and was reconstituted by an agreement of partnership dated December 6, 1918.
+On the last mentioned date it carried on business in piece goods, yarn, and other articles at Calicut with branches in Madras and Bombay.
+It also subsequently started a business of manufacture and sale of umbrellas but the precise date of the commencement of this business does not appear from the record.
+Sometime about 1932 it started another business of manufacture and sale of soap.
+For practical purposes the firm can be treated as having been constituted by this document of December 6, 1918.
+The partnership agreement of December 6, 1918 was between the following six persons, Purushotham, Nagjee, Narayanjee, Krishnajee, Maneklal and Bhagwanjee.
+Of these persons the last named was an outsider and the rest were members of a family.
+The agreement provided that the withdrawal of a partner for whatever reason, would not dissolve the partnership as between the remaining partners.
+Krishnajee died in 1933 and Bhagwanjee retired about that time.
+On January 2, 1934, the remaining four partners executed an instrument varying some of the terms of the agreement of December 6, 1918.
+The instrument, however, provided that subject to the variations made the agreement of December 6, 1918 was to remain effective.
+It is not in dispute that there was no dissolution of the firm by the instrument of January 2, 1934.
+Thereafter on April 27, 1934 Purusbotham died and the firm was then left with three partners, namely, Nagjee, Narayanjee and Maneklal.
+Then we get two instruments both dated May 30, 1939, each described as an agreement of partnership.
+One instrument, which is marked as annexure CI, was between Nagjee, Narayanjee, Maneklal and Hemchand.
+The other instrument, which is marked as annexure C II was between 99 Nagjee, Narayanjee and Maneklal.
+It will be necessary to set out later some of the terms of these instruments, for on them a large part of the arguments advanced in this case has turned.
+Briefly it may be stated here that the appellant contends that these agreements did not really create new partnerships dissolving the existing one.
+Its case is that under annexure C I an outsider Hemchand was admitted as partner in some of the businesses of the existing partner ship, namely, the umbrella and soap businesses and by the other instrument, annexure C 11, the other existing businesses of that partnership, e.g., in yarn, piece goods, money lending etc., were, continued by the subsisting partners mentioned above.
+The contention of the respondent, on the other hand, is that these two instruments show that the business of the existing firm had been split up into two and transferred to two different owners, namely, two newly constituted firms with different partners, some of whom were no doubt common, and this amounted to a discontinuance of the business of the old firm.
+It was contended that after such discontinuance it could not be said that the same business on which tax had been charged under the Act of 1918 was being carried on on April 1, 1939 and no question, therefore, of any subsequent succession to that business to make sub sec.
+(4) of section 25 applicable, could arise.
+We next have an instrument of October 30, 1943, also "Styled an agreement of partnership, to which Narayanjee, Maneklal, Jayanand, Leeladhar and Prabhulal were parties.
+It refers to the two "agreements of partnership of May 30, 1939" and certain retirements of partners and admission of new partners and provides that the parties to the instrument had agreed to carry on "as one single partnership" the busi nesses carried on previously by the two partnerships referred to in the instruments of May 30, 1939.
+One of the ,contentions of the respondent is that even if it was not right in its view of the instruments of May 30, 1939, this instrument of October 30, 1943 clearly evidenced a dissolution of the partnership then existing and the creation of an entirely ,new partnership to which the business of the old firm was transferred.
+It was said that this was a succession to business within the meaning of sub sec.
+(4) of section 25 and, therefore, the later succession, if any, by the transfer of Febru 100 ary 7, 1948 could not provide the basis for relief under section 25 (4).
+Whether relief could be granted under the earlier succession, it was said, is irrelevant for such relief had never been claimed.
+The last instrument to which we have to refer is the agreement of February 7, 1948 between Maneklal, Jayanand, Leeladhar and Prabhulal as partners of the appellant firm and a limited company formed to take over the business.
+of the firm.
+By this instrument the parties agreed that the business of the firm would be transferred to the company with effect from November 13, 1947, the transfer to be completed on February 13, 1948 by payment of the consi deration of Rs. 4 lacs by the vendee and delivery of posses sion of the assets of the business by the vendor.
+It is on this instrument that the appellant, which is the firm constituted by Maneklal, Jayanand, Leeladhar and Prabhulal, claimed relief under section 25(4) in its assessment for the years 1948 49 and 1949 50.
+There is no doubt that as a result of the instrument of February 7, 1948 the Company succeeded to the business that was being carried on by the firm of Nagjee, Purushotham and Company as then constituted as aforesaid, as bankers, piece goods and yarn merchants and as soap and umbrella manufacturers and sellers.
+The question, however is, was this firm a firm which had been carrying on a business on April 1, 1939 and which business had been charged to tax under the Act of 1918? The High Court took the view that it was not and we think, that view is correct.
+In our opinion, the business was discontinued in 1937 and what was subsequently carried on was not the same business.
+We now turn to annexures C 1 and C 11 dated May 30, 1939.
+Taking annexure C 1 first, the material portions of this document are as follows: "This agreement of Partnershipbetween (1)Nagjee. (2) Narayanjee(3) Maneklal and (4) Hemchand(hereinafter called the partners) witnesseth asfollows: Whereas Partners 1 to 4 have been carrying on a business as partners from the beginning of Samvat 1994 (=October November 1937) in 101 the manufacture and sale of Soaps under the name of 'The Vegetable Soap Works ' Proprietor Sait Nagjee Purushotham & Co., and in the manufacture and sale of umbrellas in Calicut with branches at Madras and Bombay under the name and style of Sait Nagjee Purushotham & Co., Soap and Umbrella Merchants at Calicut and Madras and in the name of Sha Nagjee Purushotham & Co., at Bombay hereinafter called the Firm; And whereas it is thought advisable to reduce the terms of the said partnership into writing for the proper and better conduct of the business; The Partners have agreed and also hereby agree to the following: (1) The Firm shall continue to be as of old namely Sait Nagjee Purushotham & Co., Soap and Umbrella Merchants.
+The Firm shall continue to do business in the manufacture and sale of soaps under the name of the 'Vegetable Soap Works ' and in umbrellas under the name of 'Sait Nagjee Purushotham & Co., S oap and Umbrella Merchants as aforesaid with Head Office at Calicut and branch at Madras under the same name and branch at Bombay under the name of 'Sha Nagjee Purushotham & Co. . . ' (4) The business of the Firm shall consist mainly in the manufacture and sale of soaps and umbrellas and such allied products and such other articles as all the partners or the majority of them may agree.
+(8)It is always understood by the Partners herein that the Firm of Sait Nagjee Purushotham 102 & Co., Bankers, Piece goods and Yarn mer chants, Calicut, the partners whereof are the: Partners 1 to 3 herein shall advance as, heretofore all funds that are necessary for the conduct of this Partnership Such advances shall be deemed as loan by the firm of Sait Nagjee Purushotham & Co., Bankers, Piece goods and Yarn Merchants to the., Firm . . . (9) Until otherwise determined by Partners.
+Nos. 1, 2 and 3 in writing the Partnership, shall not borrow any amount from any one other than the Firm Sait Nagjee Purushotham & Co., Bankers, Piece goods and Yarn merchants referred to in para 8 above.
+. . (25) All the Partners hereby agree that Partners.
+1 to 3 herein are the Partners of the Firm of Sait Nagjee Purushotham & Co., Bankers, Piece goods and Yam merchants, Calicut.
+" We now set out the material portions of annexure C 11. "This agreement of partnership between (1) Nagjee. (2) Narayanjee and Maneklal . hereinafter called the Partners witnesseth as follows: Whereas under the Agreement of Partnership dated the 6th day of December 1918 (1) Purushotham (2) Nagjee. (3) Narayanjee (4) Karsanjee. . (5) Bhagvanjee (6) Maneklal . have carried on a partnership trade in Piecegoods, Banking and other articles in Cali cut with branches at Madras and Bombay, and Whereas (1) Purushotham . (2) Karsanjee. and (3) Bhagvanjee .
+ceased to be partners either by retirement or death, and 103 Whereas the remaining partners (1) Nagjee. (2) Narayanjee. and (3) Maneklal. settled the claims in full of the partners who ceased to exist and agreed to carry on and continue and are continuing the existing partnership business under the name and style of 'Sait Nagjee Purushotham & Co. ' Bankers, Piece goods and Yarn Merchants, hereinafter called the 'Firm '; and Whereas it is thought advisable and prudent to reduce into writing the terms and conditions agreed upon orally by them the Partners agree and have agreed to the following terms and regulations stipulated hereunder.
+(2) The Agreement of Partnership dated the 6th day of December 1918 is hereby revoked and the affairs of the Firm shall be regulated and governed by the Regulations agreed upon orally and reduced into writing in this Deed and the terms and conditions of the revoked deed shall not in future apply to the 'Firm ' except such as have been repeated in this Deed.
+(20) All the partners hereby agree that they in their individual capacity are and shall be Partners also along with Hemchand Veerjee Sait in a Partnership business in Soaps and Umbrellas carried on in Calicut and Madras under the name and style of Sait Nagjee Purushotham and Co., Soap and Umbrella Merchants and in Bombay under the name and style of Shah Nagjee Purushotham & Co., the terms and conditions whereof are embodied in an Agreement of Partnership dated 30 5 1939 signed by all the Partners.
+104 It is clear that these two instruments recite events which had happened in 1937.
+Annexure C I shows that in Octo ber/November of that year a new partnership was started to do businesses of manufacture and sale of soap and umbrella between Hemraj and the remaining partners of the preexisting firm of the same name, that is, Nagjee, Narayanjee and Manecklal.
+This is clear from the terms of the instrument which we have earlier set out.
+We think it right especially to draw attention to the terms of cls.
+8, 9 and 25 of annexure C I.
+These indicate that there were two firms, namely, one, of which the constitution appeared from annexure C I and which carried on umbrella and soap busi nesses and the other, consisting of Nagjee, Narayanjee and Manecklal carrying on other kinds of businesses the constitution of which appeared from annexure C 11.
+Clauses (8) and (9) show that one firm was to lend money to the other.
+Such an agreement could not of course have been made unless the two firms were separate.
+By cl.
+(25) all the parties to annexure C I agreed that the firm constituted by Nagjee, Narayanjee and Maneklal was a different firm.
+Learned counsel relied on cl.1 of annexure C I and contended that itprovided for the continuance of the old firm, that is, thefirm constituted by the instrument of December 6, 1918 and hence no new firm had been created.
+We think that this contention is without foundation.
+There is no reference in annexure C I to the firm constituted by the instrument of December 6, 1918.
+The word "firm" in annexure C I refers to the partnership brought into existence by it.
+Clause 1 says that "The Firm shall continue to be of old".
+The word "old" refers to the partnership orally brought into existence in October/November 1937 to which reference is made in the first recital and to put down the terms of which in writing, annexure C I was executed.
+Likewise the provision in cl. 1 that "The Firm shall continue to do business" refers to the continuance of the business carried on prior to May 30, 1939 by the firm brought into existence in October/November 1937 by the oral agreement.
+The continuance cannot be a continuance of the firm or business of the partnership of 1918 for annexure C I makes no reference to that partnership at all.
+It may be 105 that the partnership of 1918 was carried on in the same name as the firm referred to in annexure C I but we are not ,aware that an identity of names establishes that the two firms are same.
+It seems to us beyond question that the partnership mentioned in annexure C I is different from the partnership which was brought about by the instrument of December 6, 1918 for the partners in the two firms were not the same.
+It has not been shown to us, neither do we think, that where different groups of persons, some of whom are common, carry on different businesses under different agreements, they can form one partnership.
+Further, as ,clearly appears from annexure C 11, the firm brought into existence by the 1918 instrument was dissolved and a new firm was started between Nagjee, Narayanjee and Manecklal after the retirement of Purushotham in 1934.
+If the 1918 firm was thus dissolved it could not, of course, be continued.
+So the firm created by annexure C I could not have been a ,continuation of the 1918 partnership.
+Therefore, the firm mentioned in annexure C I is a new firm and not the old 1918 firm reconstituted.
+This position is reinforced by the terms of annexure C 11.
+First it is called an agreement of partnership, that is, agreement creating a partnership.
+The recital provides that the remaining partners of the firm constituted by the instrument of 1918 agreed to carry on and continue the existing partnership business.
+Clause (2) states that the deed of December 6, 1918 is revoked and the affairs of the firm would be governed by the terms of annexure C 11 and the conditions of the revoked deed were not to apply.
+It is impossible after this to say that the partnership constituted by the instrument of December 6, 1918 was not dissolved.
+There is no warrant for the view for which the appellant contended, that only the terms on which the business under the document of December 6, 1918 was carried were revoked and not the head agreement to do business in partnership.
+The fact that an express agreement to carry on the business in partnership was made (for which see the third recital in annexure C 11) further indicates that the agreement to that effect in the instrument of December 6, 1918 was no longer subsisting.
+In this case the term providing for the continu 106 ance must refer to the continuance of the business and not to the continuance of the partnership agreement because that was expressly revoked.
+If this is not the correct view, then cl. 20 would be inexplicable.
+That clause states that the partners in their individual capacity would be partners with Hemchand in another business the terms of which partnership appear in another partnership agreement of the same date and which is annexure C 1.
+This would show that the old partnership of 1918 had given up doing some of its existing businesses and it was decided to carry them on under a new partnership agreement.
+This would support the view that the old partnership was dissolved for it would not have otherwise given up those businesses.
+The two instruments annexure C I and C 11, therefore, clearly establish that in October/November 1937 the business that was carried on by the firm of Sait Nagjee Purushotham and Co. till that date, was discontinued and its businesses were split up into two and carried on by two independent partnerships then brought into existence.
+When this happens it is impossible to say that the pre existing business was continued.
+This view finds support from section N. A. section A. Annamalai Chettiar vs Commissioner of Income tax, Madras(1) where it was held that when a business carried on in one unit is disintegrated and divided into parts, the parts are not the whole even though all the parts taken together constitute the whole.
+That was a case of a joint family business which on partition was split up between different members of the family. 'It was held that as a result of this splitting up there was a discontinuance of the original business at the date of the partition and on such discontinuance the family became entitled to relief under section 25(3) It is of some significance to point out that the partners constituting the appellant at the moment of the transfer in 1948 also thought that in 1937 the old firm ceased to exist and its business was carried on thereafter by two independent firms, for the document of October 30, 1943 has referred to annexures C 1 and C 11 as constituting two independent partnerships and proceeded to revoke them both and provided that the parties to the instrument "have (1) 107 agreed to carry on and continue as one single partnership business the existing partnership businesses of Sait Nagjee Purushotham and Co., Bankers, Piece goods and Yarn Mer chants, Sait Nagjee Purushotham and Co., Soap and Umbrella Merchants.
+" Now when the business on which tax was charged under the Act of 1918 which, it is not disputed, happened in this case was discontinued in 1937 it could not have been carried on April 1, 1939.
+What was then carried on must have been some other business.
+So one of the conditions on which relief under section 25(4) of the Act could be claimed was not satisfied and the claim would not be maintainable.
+Furthermore, for the reasons earlier stated, it must be held that on April 1, 1939 the business, assuming its identity to have continued in spite of the splitting up, was being carried on by two persons, namely, two firms with different partners.
+Now the person who transferred the business which caused the succession in 1948 on which the appellant relies for relief under section 25(4), was a single firm.
+This latter firm could not have been brought about by a change in the constitution of an existing firm, for there were two existing firms and they could not become one by simple changes in their constitution.
+Indeed the instrument of October 30, 1943 which brought the transferor firm, the appellant before us, into existence, expressly states that "The Agreements of Partnerships dated 30th May 1939. are hereby revoked".
+It follows that at the date the succession relied upon can, be said to have taken place, the business was being carried, on by a person different from those who carried it on on April 1, 1939.
+So another condition of the applicability of ' section 25(4) of the Act is not satisfied.
+The claim for relief under that section must fail on this ground also.
+If it were to be said that the partnerships were brought into existence on May 30, 1939 by annexures C I and C II instead of in October/November 1937, then also the appel lant 's claim must fail.
+Whenever the new partnerships were brought into existence, the result would, in our view, necessarily be that the business of the old partnership which was 108 taken over by the two new firms must be deemed to have been discontinued.
+On the principle stated in Annamalai ' Chettiar 's case,(1) there could not in such a case be a suc cession of the business from one to another.
+That being so, there can be no question of the succession to the business carried on at the commencement of the Indian Income tax (Amendment) Act, 1939, that is, April 1, 1939 and on which tax was charged under the Act of 1918 having taken place in 1948 as claimed by the appellant.
+What was discontinued could not be succeeded to.
+Even if it was held that on May 30, 1939, there was a succession to the business which we do not think is a correct view to take, that also would disentitle the appellant to relief under sub sec: (4) of section 25 in the years 1948 49 and 1949 50, for it should, in such an event, have claimed the relief in the year 1939 40.
+In the result we have come to the conclusion that the business which had been subjected to tax in 191.8 had been discontinued in October/November 1937 or on May 30, 1939 and it was not in existence in 1948 so as to permit a succession to it taking place under the instrument of February 7, 1948.
+The appeals, therefore, fail and they are accordingly dismissed with costs.
+HIDAYATULLAH J. I have had the advantage of reading the judgment just delivered by my learned brother Sarkar J. but I have the misfortune to disagree with him in his conclusion that these appeals must be dismissed.
+In my judgment, these appeals must be allowed.
+The facts have been set out in detail by my learned brother and I shall content myself with repeating only such facts as are necessary for the elucidation of my point of view.
+The appellant is a firm which in 1948 consisted of four partners namely Manecklal Purushotham, Liladhar Narayanjee, Jayanand Nagjee and Prabhulal Naranji.
+It was carrying on business mainly in piece goods, yarn, banking and manufacture and sale of umbrellas and soaps. 'Its head office was at Calicut but it had branches at Bombay and Madras.
+The history of the firm goes back to the year 1902.
+In that year, five members of a family by name Purushotham, Nagjee, Narayanjee, Krishnajee and Premchand along (1) 109 with one stranger Bhagwanjee started the appellant firm Sait Nagjee Purushottam & Co. Thereafter, there were changes in the constitution of the firm caused by the death or by the retirement of partners.
+Of the original partners, Premchand retired in 1912 and another member of the family Manecklal was taken in his place.
+In 1933 and 1934, two members (Krishnajee and Purushotham) died and Bhagwanjee retired.
+In that year, the firm consisted of Nagjee, Narayanjee and Manecklal who were members of the original family.
+We have on the record the partnership deed of December 6, 1918 by which the shares of the partners were adjusted after the retirement of Premchand and the admission of Manecklal and a deed of Januarv 1, 1934 after the death of Krishnajee and retirement of Bhagwanjee.
+In the deed of 1918, it was stated that this firm carried on business in Calicut, having branches at Madras and Bombay and though Manecklal was included as a new partner, the firm was to carry on and continue the existing partnership business under the same name and style.
+By the deed of 1918, the earlier partnership deed of April 4, 1902 was revoked and the affairs of the firm were to be regulated by the new deed.
+It was, however, provided that the withdrawal or death of a partner would not cause a dissolution of the partnership.
+When the deed of 1934 was entered into, the de Id of 1918 was not revoked but only amended; it was, however, provided that the principal deed of partnership to wit of 1918 would remain in force in so far as it was not inconsistent.
+Sometime in the year 1932 or thereabout, the firm had started the manufacture and sale of soaps under the name of "The Vegetable Soap Works" Proprietors Sait Nagjee Purushotham & Co. and perhaps the manufacture and sale of umbrellas in Calicut with branches at Madras and Bombay under the name and style, at Calicut and Madras, of "Sait Nagjee Purushotham & Co. Soap and Umbrella Merchants", and at Bombay of "Sha Nagjee Purushotham & Co.".
+It may be pointed out that the words "Sha" and "Sait" mean the same thing, and the names were not different.
+In 1937, one Hemchand a stranger to the family was admitted as a working partner.
+On May 30, 1939, two 110 deeds were executed.
+They are respectively marked C1 and C2.
+Cl was executed by Nagjee, Narayanjee, Manecklal and Hemchand.
+C2 was executed by Nagjee, Narayanjee and Manecklal.
+In Cl the preamble was as follows: "Whereas Partners 1 to 4 have been carrying on a business as Partners from the beginning of Samvat 1994 (Guzarathi Era) in the manufacture and sale of Soaps under the name of "The Vegetable Soap Works" Proprietors Sait Nagjee Purushotham & Co., and in the manufacture and sale of Umbrellas in Calicut with branches at Madras and Bombay under the name and style of Sait Nagjee Purushotham & Co., Soap and Umbrella Merchants at Calicut and Madras and in the name of Sha Nagjee Purushotham & Co. at Bombay hereinafter called the Firm.
+" The terms relevant to our purpose were: 1.
+The Firm shall continue to be as of old namely Sait Nagjee Purushotham & Co. Soap and Umbrella Merchants.
+The Firm shall continue to do business in the manufacture and sale of soaps under the name of the "Vegetable Soap Works" and in umbrellas under the name of "Sait Nagjee Purushotham & Co. Soap and Umbrella Merchants as aforesaid with I lead Office at Calicut and branch at Madras under the same name and branch at Bombay under the name of "Sha Nagjee Purushotham & Co." 2.
+"The business of the Firm shall be carried on by Partner No. 4 Hemchand Virjee Sait according to the directions of Partners 1 to 3 and the said Hemchand Virjee Sait is to manage work and assist the business of the firm and he shall be called hereinafter the Workinh Partner;" 14.
+"The working Partner Hemchand Virjee Sait may draw on the First of each month the monthly sum of Rs. 400 only from out of the Firm 's account on account of the share of his 111 profits for the current year, but if on taking the annual account it shall appear that the monthly sums drawn out by him exceed his share of profits he shall forthwith refund the excess." 15. "The Profits and Losses shall be divided and apportioned in the following proportion: Partner No. 1 shall have 3 annas 8 pies in the Rupee; Partner No. 2 shall have 3 annas 8 pies in the Rupee; Partner No. 3 shall have 3 annas 8 pies in the Rupee; and Partner No. 4 shall have 5 annas in the Rupee.
+On taking the accounts if it is found that the Finn has in curred a loss the aggregate of the monthly sums drawn by the Working Partner shall at once be refunded by the Working Partner to the Firm along with his share of the loss.
+"It is hereby agreed that the working Partner should invest a sum of Rs. 15,000 as deposit in the Firm of Sait Nagjee Purushotham & Co., Bankers, Piece goods and Yarn Merchants, Calicut and such money shall remain in deposit as long as he remains a Partner and such amount shall carry interest at such rates of interest as the Firm of Sait Nagjee Purushotham & Co., Bankers, Piecegoods and Yarn Merchants may agree from time to time.
+" In C2, the preamble was: " . . .
+Whereas the remaining partners (1) Nagjee Amersee Sait, (2) Narayanji Purushotham Sait and (3) Manecklal Purushotham Sait settled the claims in full of the partners who ceased to exist and agreed to carry on and continue and are continuing the existing partnership business under the name and style of "Sait Nagjee Purushotham & Co." Bankers, Piece goods and Yarn Merchants, hereinafter called the "FIRM" 112 The relevant terms were: "2.
+The Agreement of Partnership dated the 6th day of December 1918 is hereby revoked and the affairs of the Firm shall be regulated and governed by the Regulations agreed upon orally and reduced into writing in this Deed and the terms and conditions of the revoked deed shall not in future apply to the "Firm" ' except such as have been repeated in this Deed.
+All the partners hereby agree that they in their individual capacity are and shall be Partners also along with Hemchand Veerji Sait in a Partnership business in Soaps and Umbrellas carried on in Calicut and Madras under the name and style of Sait Nagjee Purushotham & Co., Soap and Umbrella Merchants and in Bombay under the name and style of Shah, Nagjee Purushotham & Co. the terms and conditions whereof are embodied in an Agreement of Partnership dated 30 5 1939 signed by all the Partners." ' Both deeds provided again that the partnerships would not be dissolved by the death or retirement of a partner.
+Nagjee died in August 1943 and Hemchand retired on October 31, 1943.
+On October 30, 1943, a fresh deed of partnership was executed by Narayanjee and Manecklal who were continuing as partners from 1918 and two other members of the family namely Liladhar and Prabhulal and to the benefits of partnership Jayanand Nagjee who was a minor, was admitted.
+The preamble was as follows: ". .
+And whereas partner No. 4 Hemchand Veerjee Sait: has decided to retire from the said partnership, business as from 31 10 1943. . .
+And whereas the remaining partners are willing and have agreed to take as new partners Leeladhar Narayanjee Sait and Prabhulal Narayanjee Sal , sons of Narayanjee Purushotham Sait as from 31 10 1943.
+113 And whereas the remaining partners along with the new partners now included in the Deed of Partnership, have agreed to carry on and con tinue as one, single partnership business, the existing partnership businesses of "Sait Nagjee Purushotham & Co., Bankers, Piece goods and Yarn merchants, "Sait Nagjee Purushotham & Co. Soap and Umbrella merchants".
+And whereas it is thought advisable and prudent to reduce into writing the terms and conditions agreed upon orally by them the partners agree and have agreed to the following terms and conditions stipulated hereunder : The operative terms relevant to our purposes were the following: "The Agreements of Partnerships dated 30th May 1939 entered into by (1) Nagjee Amersee Sait, (2) Narayanjee Purushotham Sait (3) Maneck lal Purushotham Sait and (1) Nagjee Amersee Sait (2) Narayanji Purushotham Sait (3) Manecklal Purushotham Sait and (4) Hemchand Veerji Sait and registered as 98 and 97 in the Joint 11 Sub Registrar 's Office, Calicut respectively, are hereby revoked and the affairs of the firm shall be regulated and governed by the regulations agreed upon orally and reduced into writing in this deed of Partnership; and the terms and conditions of the revo ked Deed shall not in future apply to the Firm except such as have been repeated in this Deed.
+The firm name shall be "Sait Nagjee Purushotham & Co. Bankers, Piece goods, Yarn, Soap and Umbrella merchants.
+" 2.The partners of the firm are (1) Narayanjee Purushotham Sait, (2) Manecklal Purshotham Sait, (3) Jayanand Nagjee Sait (Minor) represented by guardian Manecklal Purushotham Sait (4) Leeladhar Narayanjee Sait and (5) Prabhulal Narayanjee Sait." 134 159 S.C. 8.
+114 The rest of the terms followed the same pattern as before.
+In 1948, a limited liability company was formed under the name of Sait Nagjee Purushotham & Co., Ltd. and an agreement was made by which Sait Nagjee Purushotham & Co. represented by the then partners Manecklal, Liladhar, Jayanand and Prabhulal sold to the company the goodwill, assets etc.
+of the firm.
+The question in this case is whether the appellate firm was entitled to the benefits of section 25 (4) of the Income tax Act, and if so, to what extent.
+The answer to the question depends on (a) whether the business on which tax was paid under the provisions of the Indian Income tax Act, 1918 had discontinued at any time before 1948 or (b) whether there was a succession by another person for the person who was carrying on business on April 1, 1939.
+My learned brethren consider that there was a discontinuance in 1937 39 of the original business by reason of the division of the original business into two divisions and the admission of Hemchand as a partner in one of the divisions.
+The Department as respondent contends that there was a succession in 1939 and again in 1943, because in those years a different person succeeded to the person carrying on business on April 1, 1939.
+The contention of the Department has so far succeeded and I need not give the details of the decisions of the various Tribunals under the Indian Income tax Act and the High Court, because my learned brother 's judgment gives all such details.
+I shall therefore address myself to the questions (a) whether there was a succession in 1948 for the first time when the company succeeded the firm, to entitle the firm to the benefits of section 25 (4): (b) whether there was, prior to 1948, a discontinuance of the business on which tax was charged under the provisions of the Indian Income tax Act and (c) whether there was, prior to 1948, succession by another person to the person who had paid the tax under the provisions of the Income Tax Act, 1918 after April 1, 1939? If the answers to (b) and (c) be in the negative, (a) must be answered in the affirmative, but if the answer to either (b) or (c) be in the affirmative,(a) must be answered in the negative.
+It is necessary at this stage to read section 25 which deals with assessment in case of discontinued business.
+The first two 115 sub sections deal with cases to which sub section
+3 is not applicable.
+The first sub section lays down how the business is to be assessed when it is discontinued in any year and sub section 2 provides that any person discontinuing business must give a notice on pain of a penalty.
+We are not concerned with these sub sections.
+Sub section
+(3) and sub section
+(4) in so far as it is relevant for our purpose, are as follows: Sub section
+(3) "Where any business, profession or vocation on which tax was at any time charged under the provisions of the Indian Income tax Act, 1918 (VII of 1918), is discontinued, then unless there has been a succession by virtue of which the provisions of sub section (4) have been rendered applicable no tax shall be payable in respect of the income, profits and gains of the period between the end of the previous year and the date of such discontinuance, and the assessee may further claim that the income, profits and gains of the previous year shall be deemed to have been the income, profits and gains of the said period.
+Where any such claim is made, an assessment shall be made on the basis of the income, profits and gains of the said period, and if an amount of tax has already been paid in respect of the income, profits and gains of the previous year exceeding the amount payable on the basis of such assessment, a refund shall be given of the difference.
+" Sub section (4) "Where the person who was at the commencement of the Indian Income tax(Amendment) Act, 1939 (VII of 1939), carrying on any business, profession or vocation on which tax was at any time charged under the provisions of the Indian Income tax Act, 1918, is succeeded in such capacity by another person, the change not being merely a change in the constitution of a partnership, no tax shall be payable by the 116 first mentioned person in respect of the income, profits and gains of the period between the end of the previous year and the date of such succession, and such person may further claim that the income, profits and gains of the previous year shall be deemed to have been the income, profits and gains of the said period.
+Where any such claim is made, an assessment shall be made on the basis of the income, profits and gains of the said period, and, if an amount of tax has already been paid in respect of the income, profits and gains of the previous year exceeding the amount payable on the basis of such assessment, a ref und shall be given of the difference: Provided. . . .
+Sub section
+(4) was inserted by the Indian Income tax (Amendment) Act, 1939 (VII of 1939), which also introduced the words underlined in sub section
+Sub section
+(4) and the amendment to sub section
+(3) were to come into force from April 1, 1939 by virtue of notification No. 7 of the Central Government dated March 18, 1939.
+Under section 3 of the Indian Income tax Act, 1918, the subject of the tax was not the income of the previous year of assessment, but the income of the assessment year.
+By the.
+Act of 1922, a change was introduced and the tax was payable on the income of the previous year in the following year which was the year of assessment.
+Any business which was in existence and earning profits in the year 1921 and continued in the year 1922 was required to pay tax on its profits of 1921, once under the Act of 1918 and again under the Act of 1922.
+In the 1922 Act, a provision was made to give relief to any business which had paid such double tax when it discontinued busi ness.
+When the 1939 amendment was made, relief was given by sub section
+(4) to a person who had paid tax under the Act of 1918 when he was succeeded in his business by another person.
+It will, however, be noticed that the two sub sections were mutually exclusive.
+If there was a succession, then, sub section
+(4) was applicable.
+Sub section
+(3) was only applicable when the business was discontinued.
+It will further be noticed that the term "succession" was not 117 to include a change in the constitution of a partnership.
+In this case, the claim to the benefit of sub section
+(4) was made by the company on the basis of a succession either on November 13, 1947 or on February 13, 1948.
+The Income tax Officer held that a succession had taken place in 1943 when on the retirement of Hemchand, the two separate businesses formed under exhibit Cl and C2 were amalgamated.
+The Appellate Assistant Commissioner agreed with this conclusion.
+The Tribunal also held that the business in soap and umbrella was different from the business of banking, piece goods and yarn, and the amalgamation of these two businesses in 1943 amounted to a succession by a newly constituted firm.
+The High Court held on reference that the firm constituted under the deed of 1918 was dissolved in 1939 and the firms constituted under the two deeds of 1939 were dissolved in 1943.
+The High Court, therefor,, held that succession had taken place in 1939 and again in 1943 and the claim on the basis of the transfer to the limited liability company in 1948 was too late.
+In coming to the conclusion that the firm constituted under the deed of 1918 was dissolved, the High Court relied upon cl. 2 of the deed exhibit C2.
+The two sub sections which have been quoted apply differently, because in sub section
+(3) the emphasis is on the discontinuance of the business which had paid tax under the 1918 Act while the emphasis in sub section
+(4) is on succession to a person who, on April J., 1939, was carrying on any business on which tax was at any time charged under the Act of 1918.
+The former regards the continuity of the business which had paid tax under the Act of 1918 and the latter the continuance of the person who, on April 1, 1939, was carrying on the business which had paid such tax.
+There cannot, therefore, be a case in which both the sub sections apply at the same time, because the intention is obviously to keep them separate and when sub section
+(4) was added, sub section
+(3) was amended by the addition of the words "unless there has been a succession by virtue of which the provisions of sub section
+(4) have been rendered applicable.
+" The main idea is the continuance of business unless there has been a succes sion.
+The question that arises is whether there was at any time a dissolution of the partnership and if so, whether; it 118 amounted to "discontinuance" of business for the application of sub section
+(3) or a succession by the formation of an entirely new firm for the application of sub section
+For this purpose, I shall first discuss what is the position of a partnership under the ordinary law of partnership and under the Income tax Act.
+At the outset, I must draw attention to a few fundamental facts.
+It was pointed out by this Court in Charandas vs Haridas(1) that those whose duty it is to apply the provisions of the Income tax Act must bear in mind that what may be the resulting position under the law of partnership and/or the Hindu Law is not necessarily the resulting position under the Income tax Act.
+This case is another example of the difference of approach to the same facts under the law of partnership and the Income tax law.
+In Dulichand vs The Commissioner of Income tax, Nagpur (2) , it was pointed out by this Court that commercial men and accountants are apt to look upon a firm in the light in which lawyers look upon a corporation, that is, as a body distinct from the members composing it, and such a separate existence has been recognised under the Scottish law.
+But under the English Common Law, a firm is not regarded as a separate entity from the members composing it.
+The Indian Partnership Act has accepted the English Common Law though mercantile usages have crept into business accountancy and the Civil Procedure Code allows a firm to sue or be sued in the firm 's name provided the names of the partners are disclosed.
+Under the Income tax Act, however, a firm is by section 3 made a unit or assessment, but this personality does not make the firm a person in every sense of the word.
+It only makes it an assessable unit.
+A firm is not a "person" and cannot enter into partnership with an individual, with another firm or with Hindu Undivided family.
+Section 26 recognises the existence of a firm as an asses sable unit and provides for taxation in the event of changes in the constitution of firms.
+The first sub section deals with a change in the constitution of the firm or where a firm has been newly constituted and the second sub section where there is a succession to the person (which includes a firm) (1) (2) [1956] section C. R. 154. 119 by another person.
+This sub section deals with all cases of succession except those dealt with under sub section (4) of section 25 already set out.
+Section 25 provides for discontinu ance of business.
+Discontinuance is thus not a mere change in the constitution of the firm nor even succession where, though the business changes hands, the business itself is carried on.
+It was recently pointed out by us in Shivram Poddar vs Income tax Officer, Calcutta and another(1) thus: "Under the ordinary law governing partnerships, modification in the constitution of the firm in the absence of a special agreement to the contrary amounts to dissolution of the firm and reconsitution thereof, a firm at common law being a group of individuals who have agreed to share the profits of a business carried on by all or any of them acting for all, and supersession of the agreement brings about an end of the rela tion.
+But the Income tax Act recognises a firm for purposes of assessment as a unit independent of the partners constituting it; it invests the firm with a personality which survives reconstitution.
+A firm discontinuing its business may be assessed in the manner provided by section 25 (1) in the year of account in which it discontinues its business; it may also be assessed in the year of assessment.
+In either case it is the assessment of the income of the firm.
+Where the firm is dissolved, but the business is not dis continued, there being change in the constitu tion of the firm, assessment has to be made under section 26 (1), and if there be succession to the business, assessment has to be made under section 26 (2).
+" Therefore when in sub section
+(4) the word 'person ' is used, it is intended to include not only an individual but also a firm.
+This is also clear from the words "not being merely a change in the constitution of a partnership." Since the In come tax Act assesses a partnership as a unit and such units (1) Civil Appeal NO.
+455 of 1963 decided on Dec. 13, 1963.
+120 must, in the past, have been assessed to tax under the Act of 1918, sub section
+(4) allows a partnership to obtain the benefits of sub section
+(4) when there is a succession and a partnership does not loose this benefit if there has been a mere change in the constitution of the partnership without there being a succession.
+The business, if it continues, obtains a similar benefit when it is discontinued.
+In this way all cases of discontinuance of business are treated under the 3rd sub section and all cases of succession under the fourth sub section and all cases of mere change in the constitution of the firm, are neither cases under the third nor under the fourth subsections.
+In this case, we have, therefore, to find out firstly what is meant by discontinuance of a business.
+Next, we have to find out what is comprehended within the expression "a change in the constitution of a partnership".
+It is only if there was a discontinuance of the business before 1948 or a succession not amounting to a mere change in the constitu tion of the partnership between 1939 and 1948 that the appellants can be denied the benefit of section 25.
+The expressions, that is to say, "discontinuance" and "succession not amounting to a change of the constitution of a firm" have received exposition in the past.
+It is hardly necessary to refer to the large number of cases in which the matter has been discussed, because the leading case on the subject of discontinuance is Commissioner of Income tax, Bombay vs P. E. Polson(1) and on the subject of succession Commissioner of Income tax, West Bengal vs A. W. Figgies & Co. and others 2 It will be sufficient to refer to these two cases.
+To begin with, it must be remembered that the soap business commenced in the year 1932 and did not pay tax under the Act of 1918.
+Though there is nothing to show when the umbrella business commenced, it is almost certain that it did not pay tax under the Act of 1918.
+In any event the burden was on the assessee firm to ?rove this before claiming relief.
+These facts are fundamental, because, if the umbrella and soap business were never assessed to tax under the Act of 1918, they are out of the picture and in respect of these businesses, the assessee firm was not at all entit (1) (2) ; 121 led to relief.
+Section 25 (3) and (4) do not apply where the business was not in existence before the Act of 1922 came into force.
+A clear authority for this proposition is to be found in the decision of the Bombay High Court in Ambalal Himatlal vs Commissioner of Income tax and Excess Profits Tax, Bombay North(1).
+In that case, a Hindu Un divided family was carrying on three separate businesses, namely money lending, running a ginning factory and a share business.
+This family disrupted in 1943 and divided the business among its members, and claimed the benefit of section 25(4) in respect of all the three businesses.
+It was found that only the money lending business had paid tax under the Indian Income tax Act of 1918.
+It was held by Chagla C.J. and Tendolkar J. that the assessee was entitled to the bene fit mentioned in section 25 (4) only in respect of the money lending business.
+Chief Justice Chagla observed at p. 287 thus: "But before us we have a clear and categorical finding that the three businesses of the assessee were distinct businesses and, therefore, it cannot be stated that the relief which was intended for the money lending business which was carried on by the assessee and which was subjected to tax under t he Act of 1918 should be extended to the business of running the ginning factory and the share business which were not in existence and which were not subjected to tax under the Act of 1918.
+The answer, therefore, to the question put to us will be that the assessee is entitled to the benefit mentioned in section 25(4) only in respect of the money lending business." No finding in the present case is necessary, because the clear fact is that the soap business was not even in contemplation, much less in existence before 1922 and the same is true of the umbrella business also.
+The relief could therefore be claimed only in respect of the remaining businesses namely in piece goods, yarn and banking which were started in 1902 and which admittedly continued without break till 1948.
+Since no claim in respect of the business of umbrellas and soaps could at all be entertained, any dealing with that part (1) 122 of the business by the assessee firm would not affect the questions in this case.
+Indeed, the agreement to separate the umbrella and soap business when Hemchand was admitted as a partner in 1939 was in keeping with the continuance of the original business as an entity by itself and emphasised its separate character.
+From the record it appears that the old and the new businesses were also separately assessed.
+It is only this one entity to which the provisions of section 25 must be applied and in respect of which it must be considered whether there was a discontinuance or a succession at an earlier period.
+I shall first examine the question of discontinuance.
+The Judicial Committee in Polson 's case considered what was the meaning of the word "discontinuance '.
+In that case, Polson who was carrying on business assigned it to a limited com pany on January 1, 1939.
+He had paid tax in respect of the business under the Act of 1918.
+In the assessment year 1939 40, he claimed that in view of the provisions of section 25 (3) of the Act of 1922, as amended in 1939, his income from the business made during the year 1938 was not taxable.
+It was held that he was not entitled to the benefit of section 25 (3) as the business was not discontinued.
+The High Court of Bombay upheld the contention of Polson, but the Privy Council reversed the decision approving the decision of the Madras High Court in Meyyappa vs Commissioner of Income tax, Madras(1).
+Lord Simonds pointed out that on January 1, 1939, Polson had ceased to be the owner of the business and therefore he was not carrying it on "at the commencement of" the amending Act.
+Since those words meant the date when the Act came into force on April 1, 1939, they could not be carried back to a date anterior to April 1, 1939 and on that date Polson ceased to be the owner of the business.
+As regards the words "discontinued" and "discontinuance" in section 25, Lord Simonds pointed out that they had been the subject of numerous decisions and that it had been uniformly decided that the words did not cover a mere change of ownership but referred only to complete cessation of the business.
+Lord Simonds further observed "Their Lordships entertain no doubt of the correctness of these decisions, which appear to be in accord with the plain (1) ; I.L.R. 123 meaning of the section and to be in line with similar deci sions upon the English Income Tax Acts.
+" It would therefore follow that by discontinuance in sub section
+(3) is meant complete cessation of the business.
+This cannot be said to have taken place in the present case in respect of all the businesses and a fortiori in respect of the business in piece ,goods, yarn and banking.
+These businesses might have been managed by persons other than those who had paid the tax under the Act of 1918 a matter to be considered under the fourth sub section but they were not discontinued for the application of sub section
+The Judicial Committee was not required to consider the matter from the point of view of succession, because sub section
+(4) did not then exist.
+The Privy Council case has been approved of by this Court in Figgies 's case to which I shall refer presently.
+From this, it follows that there was no discontinuance of the business at any time between 1921 and 1948 or even thereafter.
+The next question to consider is whether there has been a succession or a mere change in the constitution of the assessee firm in the years 1939 and 1948.
+If we were to go by the original business, excluding the newly started busi ness of manufacture of umbrella and soap, I must say at once that there has been no succession and this case falls squarely within the rule of this Court in Figgies 's case.
+But even if one were to include the umbrella and soap business, I am of opinion that this case does not cease to be covered by Figgies 's case.
+I shall examine both the aspects of the matters separately.
+I shall pass on immediately to the facts of Figgies 's case.
+In that case, a partnership was formed in 1918 between Figgies, Mathews and Notley.
+In 1924, Mathews retired.
+In 1926, one Squire was taken as partner.
+In 1932, Figgies retired.
+In 1939, one Hillman was taken as a partner.
+In 1943, Notley retired.
+In 1945, one Gilbert was taken as a partner.
+By that time, all the original partners had ceased to be partners and new ones had come in their place.
+At every change, new deeds of partnership were executed and the shares were readjusted.
+No doubt, the later deeds did not say that the earlier deeds were revoked but a glance at those deeds (which I have seen in the original brief of the 124 case) shows that they could not have existed side by side.
+In any case, there was no incorporation of the earlier docu ments by reference and they must be taken to have been superseded.
+In this case there is a definite statement that the earlier documents were 'revoked '.
+But whether the word ,revoked ' is used or not, the resulting position is the same.
+Some partners went out and others came in till the identity of the original partners was completely lost.
+The question was whether, in these circumstances, there was a succession within the meaning of sub section
+(4) of section 25.
+This court observed: "The section does not regard a mere change in the personnel of the partners as amounting to succession and disregards such a change.
+It follows from the provisions of the section that a mere change in the constitution of the partnership does not necessarily bring into existence a new assessable unit or a distinct assessable entity and in such a case there is no devolution of the business as a whole." This court pointed out that though under the law of Partner ship a firm has no legal existence apart from its partners and it is merely a name to describe its partners compendiously, it is equally true that under that law also there is ordinarily no dissolution of the firm by the mere incoming or outgoing of partners.
+This Court also pointed out that the position is a little different under the Income tax Act where a firm is charged as an assessable entity distinct from its partners who can also be assessed individually.
+It was for this reason that sub section
+(4) of section 25 expressly mentioned that a case of succession was not to be found where there was a mere change in the constitution of the firm.
+In other words, though a firm was to be regarded as an entity for the purpose of the Income tax Act, that entity was not to be taken to be disturbed by the coming in or going out of partners any more than that entity could be disturbed under the law of Partnership.
+Applying this test to the present case, it is quite clear that the identity of the entity was never lost and there was never a succession till the year 1948.
+It must be remember ed that this was initially a business of a family but not in the 125 sense in which a Hindu Joint Family is said to have a business.
+From the very start, certain members of the family alongwith a stranger (Bhagwanjee) carried on the business in piece goods etc.
+In 1918, and in 1934 different deeds were executed but the basic deed was that of 1918.
+By that time, Bhagwanjee had retired and the business was in the hands of only the members of the family.
+Hemehand was then taken on in 1937 and in 1939, the original business was separated from the businesses newly started after 1922.
+Hemchand was given a share only in the newly started businesses to which section 25 could not possibly apply.
+When Hemchand retired, those businesses were also taken over and merged with the original business.
+In other words, the original business continued till 1943 in the hands of Narayanjee and Manecklal who were partners as far back as 1918 and three younger members of the family.
+In 1948, Manecklal and those three other members of the family sold this business to the company.
+It cannot be said these changes were not covered by the expression "a change in the constitution of the firm" and were comprehended in the term 'succession '.
+No question of the dissolution of the firm Sait Nagjee Purushotham & Co. ever arose.
+It continued right through; even the newly started businesses were owned by, it and though for a time the newly started businesses and the other business were kept distinct so that the stranger Hemchand could not get the benefit of partnership in the Head Finn, it cannot be said that the old firm had either discontinued or had been succeeded to by another person.
+Hemchand was merely taken on as a working partner.
+His rights in the firm were extremely ,slender; he had to make a deposit of Rs. 15,000 with the head firm and he was to get a remuneration of Rs. 400 p.m. which was to go up or down according to the profits.
+In other words, he was a mere employee though described as a working partner.
+As was pointed out by Chagla C.J. in .,Commissioner of Income tax, Bombay City vs Kolhia Hirdagarh Co. Ltd., Bombay(1) and again in Commissioner of Income tax, Bombay City vs Sir Homi Mehta 's Executors (2), such documents must be interpreted not in a legalistic way (1) (2) 126 but on their true business aspect.
+Says the learned Chief ' Justice in the former case: "It is open to us not merely to look at the documents themselves, but also to consider the surrounding circumstances so as to arrive at a conclusion as, to what was the real nature of the transaction from the point of view of two businessmen who were carrying out this transaction.
+In all taxation matters more emphasis must be placed upon the business aspect of the transaction rather than on the purely legal and technical aspect;. " ' Judged from this standpoint, the entry of Hemchand was not a dissolution of the firm of Sait Nagjee Purushotham and Co. He was brought in merely to do the business at one of the branches and to receive remuneration for doing the work.
+No doubt he was described as a working partner, but this, term did not mean much.
+The very fact that he was not taken on in the original business also shows that the original business in respect of which alone the benefit of section 25(3) and (4) can be claimed, continued uninterrupted.
+The changes, in 1939 and 1943 therefore had no effect upon this claim.
+Reliance was placed upon a decision of the Madras High Court in S.N.A.S.A. Annamalai Chettiar vs Commissioner of Income tax, Madras(1) as to the meaning of the word "dis continuance".
+In that case, a Hindu Undivided family con sisting of a father and son were carrying on money lending business under different vilasams.
+On March 28, 1939, there was a family partition and some vilasams were allotted to the father and the rest to the son, and he was the assessee ' In the assessment year 1939 40, the son claimed that there was a discontinuance of the business within the meaning of section 25(3) of the Income tax Act, 1922 and claimed the benefit of that sub section on the ground that the business of them joint family was taxed under the Act of 1918 and he was not liable to pay tax for the period between April 13, 1938 and March 28, 1939.
+It was held by Satyanarayana Rao and Raghava Rao JJ.
+that as the joint family was split up, the (1) (1951) 20 I.T.R.38.
+127 business no longer continued in existence, but was terminat ed and there was a "discontinuance" within the meaning of section 25(3) and the family was entitled to the benefit of that sub section.
+Satyanarayana Rao, J. held that as the unit had disintegrated into its component parts so as to annihilate the unity of the business, each part which was thus divided was not identical with the whole, even though all the parts taken together constituted the whole and that, when the unifying principle of that whole no longer existed, the parts gained their individuality and became separate and distinct.
+The learned Judge held that there was discontinuance.
+Looked at from the point of view of Hindu Law, all these results may be said to follow.
+But, looked at from the point of view of section 25(3), the business could be said to have ceased.
+The Income tax Act thinks, not in terms of joint family business, but in terms of business in a business sense, and it is the business which was taxed under the Act of 1918 which must cease to exist before the benefit of section 25(3) can be obtained.
+It is possible that the decision might be justified on the ground that the benefit was being claimed by one of the members of the erstwhile family and not by the whole family, though I express no opinion upon it, but even so that would be a case of succession rather than of discontinuance.
+The Madras case cannot, however, be made applicable to the present facts, because, as pointed out already by me, there was no cessation of business in so far as the original business of piece goods, yarn and banking was concerned.
+That business continued in the hands of the same person who had paid tax under the Act of 1918 though there were changes in the constitution of the partnership in the years that passed.
+I may refer here to a case decided by the Rangoon High Court in Commissioner of Income tax Burma vs A.L.V.R.P. Firm(1).
+In that case, a Hindu undivided family of Rangoon which consisted of two brothers carried on moneylender business under a single vilasam but with shops at several places including a shop at Rangoon.
+The shops at each of these places had separate capital and there were separate agents to manage the shops but there was a central system of accounts at one place showing the financial position of (1) ; 128 the family.
+In 1938 1939, the two brothers effected a partition and the Rangoon shop was thereafter conducted by the two brothers in partnership.
+On these facts, it was held by a Full Bench of the Rangoon High Court that there was no succession within the meaning of section 26(2) of the In come tax Act.
+It was pointed out that the family did not carry on separate businesses at each of the five places but had only a number of branches at these places of the same business and in order that there, might be a succession, it was necessary that the person succeeding should have succeeded his predecessor in carrying on the business as a whole.
+The case was under section 26(2) and slightly different considerations govern section 25 (4) which have induced the legislature to keep the two sections separate.
+While it is possible that there may be a succession only to the business which had paid tax under the Act of 1918 for purposes of section 25(4), as is the case here, a complete change of ownership of all the businesses is necessary for purposes of section 26(2) before it can be said that there is succession.
+In both sections, change does not mean that every one who owned the former business should leave it and go away.
+The identity of the person who owned it before and the identity of the person who owned it later must, however, be distinct.
+In the present case this has not happened.
+All the facts have, perhaps, not come on the record with that clarity with which they should have, but as pointed ,out by Chagla C.J. in Jesingbhai Ujamshi vs Commissioner of Income tax, Bombay Moffusil(1), there is nothing in law to preclude common partners constituting two entirely separate firms in respect of different businesses carried on by them for the purpose of the Indian Income tax Act.
+Where they do this, it is mainly a question of fact whether there has been a succession to one of such partnership or not, whether for the purpose of section 26 or for the purpose of section 25 (4).
+But it must be remembered that under section 25(4), a mere change in the constitution of the partnership does not count and sections 25 (4) and 26 (2) do not apply at the same time.
+I am not prepared to say that in this case in respect of +the original business there was anything more than a mere change in the constitution of the partnership.
+The business of (1) 129 umbrella and soap which never paid tax under the Act of 1918 could be dealt with by the partners as they liked without affecting the question of relief under section 25 in respect ,of the head business.
+In my judgment, these appeals must be allowed anD the question answered in favour of the assessee firm but only in respect of the business in piece goods, yarn and banking which alone had paid tax under the Income tax Act of 1918.
+I would therefore allow the appeals with costs here and in the High Court.
+ORDER BY COURT In accordance with the opinion of the majority the appeals are dismissed with costs.

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+Appeals Nos. 884 887 of 1962.
+Appeals from the judgment and decree dated May 2, 1960, of the Rajasthan High Court in Civil Second Appeal Nos.
+268 of 1954, 203 of 1955, 4 of 1954 and 27 of 1954.
+section K. Kapur and B. R. G. K. Achar, for the appellant 'in allthe appeals).
+R. P. Modi and R. K. Garg, for the respondents (in C.A. No. 887/1962).
+March 12, 1964.
+The Judgment of the Court was delivered by WANCHOO, J.
+These four appeals arise out of four certi ficates granted by the High Court of Rajasthan and raise a common question.
+We therefore, propose to set out facts in one of the present appeals (No. 887), as the facts in other appeals are similar, except that the commodity involved was different and so was the amount in dispute.
+The suit out 'of which appeal No. 887 has arisen was filed by the respondent against the State of Rajasthan.
+The respondent was a resident of the former Dholpur State and the dispute which led to the suit related to a time before the merger of former Dholpur State into the Matsya Union.
+The case of the respondent was that in 1947 certain commodities including chuni with which appeal No. 887 is concerned could only be exported from the former Dholpur State on export permits issued by the customs department of the said State.
+It was also the practice in that State that when permits for export were issued, export duties had to be paid in advance, though the actual export was made later.
+Consequently, in June 1947 the respondent applied for and was granted a permit for export of 15,000 maunds of chuni, and in connection therewith he deposited Rs. 30,000/as export duty in advance.
+This permit had been granted on June 28, 1947 and remained in force upto December 2, 1947.
+The respondent however was not able to export the entire quantity of 15,000 maunds for which the permit was granted; he could only export 4,572 maunds and 20 seers of chuni before December 2, 1947.
+Thereafter he could not export further as his permit was not extended.
+It was alleged on behalf of the respondent that the reason why he failed to export the entire 176 quantity of the commodity before December 2, 1947 was due to market conditions and inability to get allotment of railway wagons.
+The respondent 's case further was that as he could not export the entire quantity of 15,000 maunds for which he had paid export duty in advance at the rate of Rs. 2/ per maund, he was entitled to refund of the proportionate export duty for the quantity of 10,427 maunds and 20 seers, which he could not export.
+His case further was that though he asked the State for refund of this advance duty, the State did not pay back the same to him.
+In the meantime, rapid constitutional changes took place after August 15, 1947.
+By May 15, 1949, the United State of Rajasthan was formed including the Matsya Union into which the former State of Dholpur had merged on March 17, 1948.
+The United State of Rajasthan eventually became the Part B State of Rajasthan on January 26, 1950 when the Constitution came into force.
+Eventually when the State refused to refund the amount, the suit was filed, out of which appeal No. 887 has arisen, in January 1952.
+The respondent claimed refund of Rs. 20,855/ along with interest and costs.
+The suits were resisted by the State of Rajasthan on various grounds; but we are concerned now only with one ground which alone has been urged before us, namely, that the State of Rajasthan was not bound by any liability which might have arisen against the former State of Dholpur.
+It was a new sovereign and was not bound by any obligation against the old sovereign of the former State of Dholpur unless it chose to recognise the obligation.
+As the United State of Raja sthan into which the former State of Dholpur came to be merged in 1949 never recognised the obligations of the former State of Dholpur it was not bound to refund the amount due to the respondents.
+In reply to this contention of the State, the respondent relied on article 295(2) of the Constitution and other provisions made during the period when mergers were taking place after August 15, 1947 and contended that in view of article 295(2) of the Constitution the State of Rajasthan was bound by the obligation of the former State of Dholpur.
+Before we refer to the decisions of the courts below with regard to this controversy it would be convenient to clear the ground by indicating the admitted position, which resulted in the inclusion of the former Dholpur State into the Part B State of Rajasthan, which came into existence on January 26, 1950 and which would be bound by article 295(2) of the Constitution.
+The former Dholpur State remained a separate entity till March 17, 1948, though it had acceded to the Dominion of India after August 15, 1947 with respect to three subjects, namely, communications, defence and external affairs.
+In 1948, however, the process of merger in Rajasthan began and the 177 first merger that took place was of the former States of Alwar, Bharatpur, Dholpur and Karauli, which formed the Matsya Union as from March 18, 1948 by a Covenant entered on February 28, 1948.
+It is not in dispute that on this merger, provision was made for the continuance of the laws in the covenanting State till such time as they were modified by the new State.
+Provision was also made in the Covenant that all the assets and liabilities of the covenanting States shall be the assets and liabilities of the new State of Matsya.
+Then came another union of certain other Rulers in Rajasthan in March 1948 by which these Rulers united under the Ruler of Udaipur to form what later came to be known as the Former State of Rajasthan.
+In March 1949, the United State of Rajasthan was formed by Covenant entered into by fourteen Rulers of Rajasthan, including these who had formed the Former State of Rajasthan.
+and this State came into existence from April 7.
+It may be mentioned here that when this State came into existence on April 7, 1949, it provided for the continuance of all laws till they were repealed or amended by the new State.
+There was also a provision in the Covenant by which the assets and liabilities of the covenanting States became the assets and liabilities of the new State.
+In this State of United State of Rajasthan, the State of Matsya, merged in May 1949, and thus the former State of Dholpur came to be included in the United State of Rajasthan through the Matsya Union.
+When this merger took place it is not in dispute that the exis ting laws were to continue till they were repealed or altered by the new State.
+It is also not in dispute that the assets and liabilities of the Matsya Union were taken over as the assets and liabilities of the United State of Rajasthan in which the Matsya Union merged.
+Finally the United State of Rajasthan in which the State of Sirohi was also merged became the Part B State of Rajasthan on January 26, 1950.
+At this time also article 372 of the Constitution continued the existing laws subject to their being altered or repealed by the new State.
+Further article 295(2) provided that the Government of each State specified in Part B of the First Schedule shall, as from the commencement of the Constitution, be the successor of the Government of the corresponding Indian State as regards all property and assets and all rights, liabilities and obligations.
+whether arising out of any contract or otherwise, other than those referred to in cl.
+This was subject to any agreement entered into in that behalf by the Government of India with the Government of the State concerned.
+This completes the narration of the political changes that took place till the Constitution came into force on January 26, 1950.
+We have already indicated that a number of defences were raised on behalf of the State of Rajasthan and these de fences were negatived by the trial court in three suits.
+One 178 of the suits, out of which appeal No. 886 has arisen, was ismissed by the trial Court.
+The State went in appeal in two of the suits to the District Judge and in one (out of which appeal No. 887 has arisen) to the High Court direct in view of the valuation.
+In the fourth suit, the plaintiff went in appeal to the District Judge.
+The appeals of the State to the District Judge were substantially dismissed while the appeal in the fourth suit by the plaintiff was substantially allowed.
+Then followed three second appeals to the High Court by the State.
+These second appeals were heard along with the first appeal in the High Court.
+It seems that in the High Court for the first time a point was raised that the liability of the former Dholpur State did not fasten on the State of Rajasthan as it emerged on January 26, 1950.
+The High Court permitted the point to be raised as it was a pure question of law.
+AU the appeals came before a Division Bench of the High Court.
+The two learned Judges composing the Division Bench disagreed on this question of the liability of the State of Rajasthan under article 295(2) in respect of the liability of the former State of Dholpur.
+Thereupon there was a reference to a Full Bench on the question of liability which was formulated by the learned Judges thus: "Whether the expression 'Government of the corresponding State ' used in article 295(2) of the Constitution with reference to Rajasthan properly means the Government of the United State of Rajasthan which was the only Indian State in existence at the time of the commencement of the Constitution or it also includes the Government of any of the Covenanting States which had integrated with the United State before the Constitution came into operation.
+" The three learned Judges who heard the reference were unanimously of the opinion that the expression "Government of the corresponding State" used in article 295(2) of the Constitution with reference to Rajasthan meant not only the Government of the United State of Rajasthan, but also the United State of Rajasthan including its component units.
+The matter then went back to the Division Bench.
+The three second appeals were dismissed by the High Court.
+The first appeal out of which appeal No. 887 had arisen was also dismissed except that no interest was allowed upto the date of decree and the amount was reduced to the actual excess export duty, which had been deposited in advance and it was ordered to be refunded.
+The only question that has been raised before us on behalf of the appellant is about the liability of the State of Rajasthan under article 295(2) of the Constitution in respect of the obligations of the former State of Dholpur, which came to be 179 included in the State of Rajasthan on account of political changes to which we have already referred.
+In this connection, the appellant relies on the decision of this Court in M/s. Dalmia Dadri Cement Co. Ltd. vs The Commissioner of Incometax.
+(1)That case dealt with the Covenant creating the State of Pepsu and particularly article VI thereof The covenant in the State of Pepsu was more or less similar in terms to the Covenant in the United State of Rajasthan.
+This Court reviewed certain cases relating to the acquisition of territory by cession or by conquest, and held that it made no difference whether acquisition of new territory was by an existing State by conquest or by cession or a new State came into existence by agreement out of territories belonging to some former States.
+In either case, it was held that there was establishment of new sove reignty over the territory in question and that was an act of State.
+In consequence this Court further held that the Covenant by which the new State of Pepsu came into existence was in its entirety an act of State and that article VI therein could not operate to confer any right on the company as against the new State, for the principle was well settled that clauses in treaties entered into by sovereigns of independent States whereunder sovereignty in territories passed from one to the other providing for the recognition by the new sovereign of the existing rights of the residents of those territories must be regarded as invested with the character of an act of State and no claim based thereon could be enforced in a court of law.
+This Court also negatived the argument which was urged in that case that part of the Covenant was an interim Constitution and head that the Covenant was in whole or in part an act of State and could not be treated as an interim Constitution.
+Strong reliance is placed on behalf of the appellant on that decision in support of the contention that even if there was any liability of the former State of Dholpur to; refund the amount of tax collected in advance for no export was made, that liability did not devolve on the Part B State of Rajasthan under article 295(2) of the Constitution, as there was no recognition of this liability by the new State at any time and in that respect the present case was on all fours with that decision.
+After laying down the above principles, this Court proceeded to consider in that decision the particular point raised before it.
+That point was with respect to a clause in an agreement between the Ruler of the former Jind State and the Dalmia Dadri Cement Company with respect to income tax and certain concessions given to the company in that behalf.
+The question that arose in that connection was whether there had been any recognition of the concessions by the new sovereign; and this Court held that there was no recognition of the concessions.
+In that connection reference was made to Pepsu Ordinance No. 1 of 2005, dated August 20, 1948 by section 3 of which (1) [1959] section C. R. 729.
+180 all laws in all Covenanting States were repealed and the laws in force in the State of Patiala were to apply mutatis mutandis to the entire territories of the new State.
+This Ordinance was repealed and replaced by Ordinance XVI of Samvat 2006 which came into force on February 5, 1949 and which contained an exactly similar provision.
+This Court therefore held that if the agreement was treated as a special law, it must be deemed to have been repealed by section 3 of Ordinance No. 1.
+It further held that the repeal of all laws in the covenanting States other than Patiala and their replacement by the Patiala laws showed that the new sovereign did not recognise the rights of the subjects of the covenanting States arising from any law in force thereafter the State of Pepsu came into existence.
+There fore it was held in that case that the concessions in the agreement came to an end when Ordinance No. 1 was passed as they were never recognised by the new sovereign and could not be availed of by the company.
+It would be noticed that the decision that the new sovereign had not recognised the rights in States other than Patiala was based on the fact that Ordinance No. 1 repealed all laws in all States other than Patiala and applied the Patiala laws to the entire territory.
+This was the basis of the particular decision arrived at in that case (apart from the general principles laid down in connection with the cession of territory to which we have already referred), and we shall refer to it when dealing with the facts in the present case.
+Further though in that case it was held that article VI could not be enforced by citizens against the new sovereign as it was part of the Covenant, which was an act of State, this Court went on to point out that article VI of the Covenant would be valuable evidence from which affirmance of the rights mentioned therein could be inferred and added that such inference must relate to act or conduct of the new State after it came into existence.
+If there were any acts of the new State which were equivocal in character, it would have been possible to bold in the light of article VI of the Covenant that its intention was to assume the liabilities.
+In that case, however, this Court refused to treat article VI even as evidence because it pointed out that the first act of the new sovereign was the application of the Patiala State laws, including the Patiala Income tax Act, to the territories of Jind involving negation of the rights claimed in that case.
+But apart from the particular decision in that case, we have to proceed on the basis of the general proposition enunciated in that case as to the effect of the coming into existence of a new State even in the manner in which the State of Pepsu or the United State of Rajasthan came into existence after their respective Covenants, and it is to this aspect of the matter we shall now turn.
+We have already indicated when dealing with the history of the political changes which eventually culminated in the 181 Part B State of Rajasthan after the coming into force of the Constitution that two matters were always provided for there during all this process of merger.
+The first was that each time a merger took place the new State by a provision in the Covenant took over the assets and liabilities of the merging States.
+This provision in the Covenant could not be availed of by the subjects of the new State as, in view of the decisions in Dalmia Dadri Cement Co. 's case(1) the Covenant in whole or in part was an act of State.
+But according to the same decision the presence of such a clause in the Covenant throughout would be valuable evidence which would show that the new State assumed the liabilities of the merging State, if there are any acts of the new State which are equivocal in character.
+Now we find from the history we have already narrated above that every time there was a merger and formation of a new State, the old laws were always to continue till they were repealed, amended or altered by the new State.
+We are of opinion that when the new State continued all the old laws till they were altered or repealed, and there was specific provision in each Covenant that the assets and liabilities of the Covenanting States were to be the assets and liabilities of the Union the new State must have intended to respect all the rights flowing from laws so continued and assume all liabilities arising from the existence of those laws.
+Otherwise we see no sense or purpose in continuing the old laws till they are altered or repeated if the intention was that the obligations and liabilities flowing from the continuance of the old laws would notwithstanding the Covenant not be assumed by the new State.
+If the intention was otherwise, we should have found a provision similar to that in the Pepsu case by which all the old laws were repealed in the merging States except Patiala and the Patila laws were to continue in the entire territory giving rise to such rights only as the Patiala Laws recognised or conferred.
+But whereas in the present case the old laws were to continue till they were repealed or altered it follows in our opinion that the rights arising under the old laws in the subjects of the merging States would continue and these subjects would have the same rights against the new State as they would have under the old laws against the merging State.
+Thus by continuing the old laws, till they are repealed, altered or modified, the new State in effect undertook the liability which might arise against it by virtue of the continuance of the old laws, Even if there was some doubt about the new State undertaking the liabilities of the old State in view of the continuance of the old laws, we can in accordance with the decision in the Daltia Dadri Cement Co. 's case(1) look to article VI of the Covenant to come to the conclusion that on continuing the old laws, until they were altered, repealed or modified, the (1) [1959] S.C.R. 729.
+182 new State intended to affirm the rights of the subjects which they had against the merging State and to assume itself the liability if any arising against the merging State.
+This is the basic difference between the Dalmia Dadri Cement Company case(1) and the present case, for in that case the old laws were repealed and thus repudiated in areas other than Patiala State while in the present case the old laws were continued till they were repealed or altered; and in view of that basic difference between that case and the present case we can legitimately call in aid article VI of the Covenant and similar provisions which were always made throughout this process of merger in Rajasthan and treat them as evidence from which to come to the conclusion that the new State, by continuing the old laws, without change till they were repealed or altered, recognised that it was liable in the same way as would have been the merging State if there was any liability on the merging State.
+But this was of course subject to any law made by the new State repealing the old laws and the liabilities arising there under or even otherwise, provided the law so made was within the competence of the new State and after the Constitution came into force it did not transgress the constitutional limitations.
+The result would be that the new State would be bound by the liabilities of the merging States and as similar provisions were there always throughout till we reach the Part B State of Rajasthan, it follows that there was always recognition of the rights of the subjects and that the new State assumed liabilities of the old State, throughout this process.
+This was of course subject to any law passed by the New State provided that law was within its competence and after the Constitution came into force did not transgress the limitations contained therein.
+In these circumstances we are of opinion that the new sovereign throughout this process of integration from 1948 to 1950 must be taken to have recognised the rights of the subjects and undertaken the liability, if any, of the old States.
+It follows therefore that the State of Rajasthan will be liable under article 295(2) of the Constitution to meet the liabilities of all old States which eventually were included in it subject always to this that if the new State passed any law repealing the old law which would affect the liability or even otherwise that law would prevail and the liability may disappear provided the new law is within the competence of the State legislature and does not transgress the constitutional limitations after the Constitution came into force.
+We are therefore of opinion that there was recognition of liability by the new State throughout this process and under the circumstances the suit was main tainable against the Part B State of Rajasthan in view of article 295(2) of the Constitution.
+In this view of the matter we consider that it is unnecessary to decide whether the particular words used in article 295(2) include not only the United State of Rajasthan as it was just before January 26, 1950 but also the 183 old States which came to be merged into it through the process to which we have already referred.
+Whether that is so or not, it follows in view of the history to which we have referred that there was always recognition by the new State of its liability in the manner already referred to with respect to the liabilities of the merging States, and if there is any doubt about it that doubt in our opinion is resolved by the existence of article VI or similar provision throughout the process of these political changes.
+In this connection we may also refer to section 3 of the Raja sthan Administration Ordinance No. 1 of 1949, which conti nued existing laws of the old States till they were altered by the competent legislature or other competent authority in the new State.
+Section 3 further said that the old laws will continue in force in the State concerned subject to the modification that reference therein to the Ruler or Government of that State shall be construed as a reference to the Rajpramukh or, as the case may be, to the Government of Rajasthan.
+These words also indicate that whatever could be enforced under the laws in force in a State against the Ruler or the Government of the merging State could be enforced against the Rajpramukh or the Government of the new State.
+This further bears out the conclusion that the new State recognised the rights of the subjects of the old States flowing from the old laws and was prepared to undertake the liability that may lie on it in consequence thereof.
+We therefore agree with the Full Bench that the liability lay upon the State of Rajasthan because there was recognition of the liability even on the principles enunciate in the Dalmia Dadri Cement Company 's case(1).
+In this view of the matter we need not express any view on the question whether the expression "Government of the corresponding Indian State" used in Art 295(2) would mean only the United State of Rajasthan as it was on January 26, 1950 or would also include all the former States which came to be merged in the United State of Rajasthan as it was on January 26,1950.
+It only remains now to, refer to another decision of this Court in Maharaja Shree Umaid Mill Limited vs Union of India (2).
+In that case there was an agreement between the Ruler of the former State of Jodhpur and the Maharaja Shree Umaid Mills Limited by which certain exemptions from income tax and excise duty were granted to the Mills.
+Two questions arose for decision there.
+The first was whether excise could be levied on the cloth manufactured and the second was whether income tax could be levied on the income of the Mills, in view of the agreement between the Mills and the former Ruler of Jodhpur.
+The first question that was raised in that case was whether the agreement was a law; and this Court held that (1) [1959] S.C.R. 729.
+(2) ; 184 the agreement was not a law.
+With that aspect of the matter we are not concerned in the present appeals.
+The next question that arose was whether the agreement had been recognized by the new sovereign and reliance was placed on the continuance of laws and article VI of the Covenant in that connection, and it was urged that in view of article 295 of the Constitution the exemption as provided in the agreement continued.
+In that case, however, there was one vital difference; even though the old laws were continued for the time being by Rajasthan Ordinance No. 1 of 1949 the new State passed the Rajasthan Excise Duties Ordinance 1949 some time after.
+That Ordinance clearly applied to the Mills and there was no doubt as to the State 's competence to enact it.
+In view of that law, the exemption in the agreement was held not to have been affirmed by the new State of Rajasthan.
+The facts of that case are thus different from the facts in the present case, for there was a competent law which clearly negatived the recognition of such an agreement and which clearly provided for excise duties.
+So far as income tax was concerned it was imposed as from April 1, 1950 after the Constitution had come into force.
+Here again we find a law which was competently passed by Parliament and which did not transgress any of the constitutional limitations.
+Such a law therefore must prevail and in the presence of such a law there can be no question of recognition by the Union of the right to exemption, if any, under the agreement with the Ruler of the former Jodhpur State.
+Therefore, with respect to both the claims raised in that case there was a law which clearly applied to the Mills and it was held that there was no recognition by the new sovereign.
+In the present case we have only the continuance of the old laws and the valuable evidence afforded by article VI of the Covenant and there is nothing to show that the right to claim refund was taken away by any law competently passed.
+In this view of the matter we are of opinion that the appellant can derive no assistance from the case of Maharaja Shree Umaid Mills(1).
+The appeals therefore fail and are hereby dismissed.
+Res pondent in Appeal No. 887 will get his costs from the appel lant.
+Appeals dismissed.

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+Appeal No. 251 of 1963.
+Appeal by special leave from the judgment and order dated March 20, 1957, of the Patna High Court in Civil Revision No. 40 of 1956.
+M. C. Setalvad, and R. C. Prasad, for the appellants.
+The respondent did not appear.
+March 24, 1964.
+The short question which arises in this appeal is whether the term "wages" as defined by section 2(vi) of the (No. 4 of 1936) (hereinafter called 'the Act ') includes wages fixed by an award in an industrial dispute between the employer and his employees.
+This question has to be answered in the light of the definition prescribed by section 2(vi) before it was amended in 1958.
+The subsequent amendment expressly provides by section 2(vi) (a) that any remuneration payable under any award or settlement between the parties or order of a Court, would be included in the main definition under section 2(vi).
+The point which we have to decide in the present appeal is whether the remuneration payable under an award was not already included in the definition of wages before the said definition was amended.
+It is common ground that between the appellant, Sasamusa Sugar Works Ltd., and its workmen, the respondents, an award had been made by an Industrial Tribunal fixing the pay of the employees at Rs. 2/2/ per day, and in pursuance of the said award, the management of the appellant had entered into an agreement with the respondents that effect would be given to the wage structure, prescribed by the said award.
+This agreement was subsequently published in the Bihar Gazette as a part of the award.
+In spite of the award and the agreement, the appellant paid its employees only As.
+/ 10 / per day and that led to the present claim made by the respondents under section 15 of the Act.
+The respondents contended before the payment of wages authority that the refusal of the appellant to pay to them wages at the rate awarded, in substance, amounted to an illegal deduction from their wages and on that basis, they asked for an order from the authority directing the appellant to pay to the respondents the said prescribed wages.
+The appellant raised two pleas against the respondents ' claim.
+It urged that section 15 of the Act was inapplicable, because the rates of wages fixed by the award did not fall within the definition of wages prescribed by section 2(vi) and it also argue,, that the claim of the respondents was barred by limitation.
+421 The authority has found that section 2(vi) includes wages prescribed by the Industrial Tribunal, and so, it has rejected the appellants ' contention that the applications made by the respondents were incompetent under section 15 of the Act.
+In regard to the question of 'limitation, the authority did not decide the said question as a preliminary question, because it held, and, in our opinion, rightly, that it was a mixed question of fact and law, and so, it had to be tried after recording evidence.
+The appellant challenged the correctness of the conclusion of the authority that the applications made by the res pondents were competent under section 15 of the Act before the Patna High Court by filing a petition under article 226 of the Constitution.
+The High Court has affirmed the finding of the authority and held that section 15 was applicable to the case, because the wages prescribed by the award did amount to wages as defined by section 2(vi) of the Act.
+On that view, the writ petition filed by the appellant was dismissed.
+It is this order which the appellant seeks to challenge before us by its present appeal by special leave.
+Section 2(vi) as it stood at the relevant time, provides, inter alia, that wages means all remuneration, capable of being expressed in terms of money, which would, if the terms of the ,contract of employment, express or implied, were fulfilled, be payable.
+Mr. Setalvad for the appellant contends that before it is held that the wages prescribed by the award fall under section 2(vi), it must be shown that they constitute part of the terms of the contract of employment, either express or implied.
+The terms in question need not be express and can be implied; but they must be terms which arise out of the contract of employment, and since an award made by an Industrial Tribunal cannot be said to amount to a contract of employment, the wage structure prescribed by the award cannot fall within the definition prescribed by section 2(vi).
+That, in brief, is the substance of the argument raised by the appellant.
+We are not inclined to hold that even under the unamended definition of wages, rates of remuneration prescribed by an award could not be included.
+In dealing with the question of construing the unamended definition of the term "wages", it is essential to bear in mind the scope and character of the powers conferred on Industrial 'Tribunals when they deal with industrial disputes under the provisions of the Indus trial Disputes Act.
+It is now well settled that unlike ordinary civil courts which are bound by the terms of contract between the parties when they deal with disputes arising between them in respect of the said terms, Industrial adjudication is not bound to uphold the terms of contract between the employer and the employees.
+If it is shown to the satisfaction of Industrial adjudication that the terms of contract of employment, 422 for instance, need to be revised in the interests of social justice. it is at liberty to consider the matter, take into account all relevant factors and if a change or revision of the terms appears to be justified, it can, and often enough it does, radically change the terms of the contract of employment.
+The development of industrial law during the last decade bears testimony to the fact that on references made under section 10(1) of the Industrial Disputes Act, terms of employment have constantly been examined by industrial adjudication and wherever it appeared appropriate to make changes in them, they have been made in accordance with the well recognised principles of fair play and justice to both the parties.
+Therefore the basic assumption made by Mr. Setalvad in contending that section 2(vi) cannot take in the wages prescribed by the award, is not well founded.
+When an award is made and it prescribes a new wage structure, in law the old contractual wage structure becomes inoperative and its place is taken by the wage structure prescribed by the award.
+In a sense, the latter wage structure must be deemed to be a contract between the parties, because that, in substance, is the effect of industrial adjudication.
+The true legal position is that when industrial disputes are decided by industrial adjudication and awards are made, the said awards supplant contractual terms in respect of matters covered by them and are substituted for them.
+That being so, it is difficult to accede to the argument that the wages prescribed by the award cannot be treated as wages under section 2(vi) of the Act before it was amended.
+The amendment has merely clarified what, in our opinion, was included in the unamended definition itself.
+In this connection,we may incidentally refer to the decision of this Court in the South Indian Bank Ltd. vs A. R. Chacko(1), where it has been observed by this Court that the very purpose for which industrial adjudication has been given the peculiar authority and right of making new contracts between employers and workmen makes it reasonable to think that even though the period of operation of the award and the period for which it remains binding on the parties may elapse in respect of both of which special provisions have been made under sections 23 and 29 respectively the new contract would continue to govern the relations between the parties till it is replaced by another contract.
+This observation clearly and emphatically bring out that the terms prescribed by an award, in law, and in substance, constitute a fresh contract between the parties.
+This question appears to have been considered by the Bombay and the Calcutta High Courts.
+In Jogendra Nath (1) A.I.R. 1964 S.C. 15.
+423 Chatterjee and Sons vs Chandreswar, Singh(1), the Calcutta High Court appears to have taken the view which supports Mr. Setalvad 's argument, whereas in the Modern Mills Ltd. vs V. R. Mangalvedhkar(2), and in V. B. Godse, Manager, Prabha Mills Ltd., vs R. M. Naick, Inspector, under the Payment of Wages Act(3), the Bombay High Court has interpreted section 2(vi) to include wages directed to be paid by industrial adjudication.
+In our opinion, the Bombay view correctly represents the true legal position in the matter.
+The result is, the appeal fails and is dismissed.
+The matter will now go back to the authority under the Act for disposal in accordance with law.
+There would be no order as to costs.
+Appeal dismissed (1) A.I.R. 1951 Cal. 29.
+(2) A.I.R. 1930 Bom.

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+Appeal No. 513 of 1963.
+Appeal by special leave from the Award dated December 1961 of the Maharashtra Industrial Tribunal in Reference (I.T.) No. 48 of 1961.
+section V. Gupte, Additional Solicitor General, C. L. Dudhia, K. T. Sule, Atiqur Rahman and K. L. Hathi, for the appel lants.
+425 M. C. Setalvad, N. V. Phadke, J. B. Dadachanji, O. C. Mathur and Ravinder Narain, for the respondent No. 1.
+March 24, 1964.
+The Judgment of the Court was delivered by DAS GUPTA, J.
+This appeal arises out of an industrial dispute as regards the age of retirement.
+The first respondent, Shaw Wallace & Co., was incorporated in January, 1946 as a Private Limited Company to take over the business of the partnership firm of the Shaw Wallace & Co., which had been ,doing business in India for about 60 years.
+In July.
+1947 the Private Limited Company was converted into a Public Limited Company.
+The Head Office of the Company is at Calcutta.
+It has Branches in Bombay, Delhi and Via Madras.
+The general practice of the Company both at the Head Office and the Branch Offices appears to have been to retire its employees at the age of 55 though in certain cases the Company in its discretion permitted an employee to continue beyond that age.
+In September, 1959 an agreement was entered into between the Company and its employees at Calcutta under which the age of retirement was extended to 58 years subject to the employees passing a medical examination on reaching the age ,of 55.
+Shortly after this the Company 's employees at Bombay raised a dispute regarding their retirement age.
+They claimed that no workman should be retired from service before he bad completed 60 years of age.
+This dispute was ultimately referred to the Industrial Tribunal, Maharashtra.
+Before the Tribunal the Company resisted the workmen 's claim but submitted that it was agreeable to introduce for its Bombay employees provisions similar to those which had been introduced by agreement for the Calcutta employees retirement at the age of 58 subject to the employee passing a medical examination on reaching the age of 55.
+The Tribunal has directed that the age of retirement should be 58 but the Company may in its discretion and with the express or implied consent of the employee concerned continue an employee after he attains that age.
+It is against this decision that the present appeal has been filed by the workmen.
+As has already been noticed there is no dispute that the age of compulsory retirement should not remain at 55.
+The dispute is whether it should be fixed at 58 or at 60.
+It is interesting to refer in this connection to the information that has been collected by the Pay Commission (1957 59) as regards the pensionable ages prescribed under the Pension Insurance Schemes for employees generally or for industrial 426 employees and under social assistance or universal schemes in forty eight countries in 1954.
+According to this the pensionable age is 70 in two countries; 67 in another two; 65 in twenty four, 60 in seventeen, 55 in two and 50 in one.
+Thus out of 48 countries for which information was available it was found that in 45 countries the pensionable age was fixed at 60 or more.
+As the Pay Commission Report pointed out: "This is particularly remarkable, considering that the countries differ widely in demographic constitution, levels of economic development, and climatic and social condition; and it indicates a virtual unanimity of competent opinion that balancing the various factors physiological, economic and social that are relevant, the normal working life should continue up to the age of 60, and may well go on up to 65 years.
+It is undoubtedly more useful, however, and indeed essential for our present purpose to examine the trends in this matter in our own country and specially in the region in which the present dispute has arisen.
+In the delicate task of adjust ing needs of the employees to the interests of the employers and what is even more important to the general interests of the country at large, industrial adjudication has to pay special attention to the prevailing practice in the industrial region concerned.
+If in any particular region employees have been successful in their claim for fixing the age of retirement at 60 this very success is bound to raise in others in the region similar expectations.
+Refusal of similar relief to them is likely to create discontent.
+It is the endeavour of industrial adjudication to prevent this.
+That is why on questions of age of retirement and hours of work and other similar matters industrial tribunals attach much weight to what has been done in other industrial concerns in the neighbourhood in recent timeswhether by agreement or by adjudication.
+In support of their demand for fixing the age of retirement at 60 the workmen tried to show that in recent years at least the tendency in comparable concerns in Bombay region has been to fix the retirement age at 60.
+The Chart which is marked exhibit U 5 mentions 50 concerns in which the age of retirement is 60.
+In several of these this age had been fixed as far back as 1950 while in the rest the age was fixed in later years, that is, between 1952 and 1961.
+The workmen claim that these showed clearly a tendency in the Bombay region to fix the age of retirement in comparable concerns at 60.
+Special emphasis was naturally placed on some decisions of this Court which contained pronouncements as regards the existence of such a trend.
+In Imperial Chemical Industries 427 (India) Private Ltd., vs The Workmen(1) where the Tribunal had raised the age of retirement from 55 to 58 and both parties appealed, this Court pointed out that one of the documents on the record "would conclusively show that in Bombay the age of retirement is almost invariably fixed at 60 and not at 55".
+In an earlier decision of this Court in Dunzlop Rubber Co. Ltd., vs Workmen(2) it had been urged that the employer was an All India concern and that changing the terms and conditions of service in regard to the age of retirement in one place might unsettle the uniformity and might have serious repercussions in other branches.
+The Court pointed out that though this was a relevant consideration its effect had to be judged in the light of other material and relevant circumstances, and that one of the important material considerations in this connection would be that the age of retirement can be and often is determined on industry cum region basis.
+The Court then took into account the fact that the Tribunal had found that in all the awards in recent times in various concerns in Bombay region the trend had been to fix the age of retire ment at 60 years.
+It was mainly in view of this finding of the Tribunal that this Court refused to disturb the award fixing the age of retirement at 60 years.
+It is important to notice that the correctness of the Tribunal 's finding that in all the awards in recent times in the Bombay region the trend had been to fix the retirement age at 60 years, was not challenged before this Court In the present case an attempt appears to have been made on behalf of the respondent Company to show that it was not correct to say that the trend in Bombay region had been to fix the age of retirement at 60.
+Reliance was placed for this purpose on the Chart exhibit Cl.
+It appears that the res pondent company wrote to the Bombay Chamber of Commerce to ascertain from its member concerns as regards the age of retirement observed by them and the information received from some of them was incorporated in this Chart.
+The work men objected to this being received in evidence on the ground that the original letters had not been brought on the record.
+It is not however seriously disputed that the Chart correctly reproduces the information as regards the age of retirement given by the various concerns named there.
+We think therefore that the objection was rightly rejected by the Tribunal.
+This Chart shows the age of retirement for 75 concerns.
+In most of the cases the age of retirement is shown as 55 and in a few at 58.
+At first sight therefore it appears to afford impressive (1) ; (2) ; 428 testimony against the workmen 's case that the recent trend in Bombay has been to fix the age of retirement at 60.
+But on a closer examination it is clear that this document is of little assistance for finding out the recent trend.
+There is no indication at all as to how long ago the age of retirement in these concerns was fixed at 55 or at 58.
+The Statement filed by the workmen to explain this Chart shows that in two of these cases ' viz., Ingerzoll Band and Northern Assurance Co., the demand for fixing the age of retirement at 60 years is under negotiation.
+Exhibit U 6 also shows that in 25 of these concerns the clerical and subordinate staff were not organised into trade unions.
+There is thus good ground for thinking that the. reason why these concerns have kept the age of retirement at 55 or 58 are special to them and do not show any recent trend in the matter.
+In spite of these infirmities this document, exhibit Cl, appears to have impressed the Tribunal.
+The main diffi culty in accepting the Company 's case on this point, viz., the pronouncements of this Court, however, remained.
+So, the Tribunal considered it to be its duty to enquire whether the conclusion recorded by this Court in some of its earlier decisions as to the relevant trend in the Bombay region was accurate.
+Having embarked an this enquiry, the Tribunal, appears to have taken considerable pains to perform this duty and it has ultimately persuaded itself to hold that no such trend is established in fact.
+We ought to add in this connection, that the approach adopted by the Tribunal in dealing with this aspect of the problem is not very commendable, and that its present conclusion that what was said by itself on an earlier occasion and was confirmed by this Court in appeal, was in fact inaccurate, is on the whole unsound.
+If this Court had erred in making those pronouncements we would be the first to admit such mistakes and to correct the error.
+After careful consideration of all the materials placed on this record, we have, however, found nothing to justify any doubt about the correctness of what was said on the earlier occasion.
+On the contrary, the awards and agreements on the question of age of retirement about which information is furnished by the several documents on this record clearly show a consistent trend in the Bombay region to fix the retirement age of clerical and subordinate staff at 60.
+The very few departures from this practice which the Tribunal has mentioned are, in our opinion, wholly insufficient to indicate any slowing down of this trend.
+What the Tribunal has failed to notice is that instances which may justify a revision of the judicial opinion expressed on an earlier occasion about a particular trend must be strong and unambiguous and they must speak for the period both before and more particularly after the previous finding had been recorded in the matter.
+429 Notice has also to be taken in this connection of the Report of the Norms Committee in which the following opinion was expressed: "After taking into consideration the views of the earlier Committees and Commissions including those of the Second Pay Commission the report of which has been released recently, we feel that the retirement age for workmen in all industries should be fixed at 60.
+Accordingly, the norm for retirement age is fixed at 60".
+This considered opinion of a Committee on which both employers and employees were represented emphasised the fact that in the Bombay region at least there is a general agree ment that the age of retirement should be fixed at 60.
+The Tribunal has referred to these observations, but has brushed them aside in a way for which we find no justification.
+On a consideration of all the facts and circumstances disclosed by the oral and documentary evidence on this record, we have come to the conclusion that the age of retirement of the appellant workmen should be fixed at 60.
+Accordingly, we allow the appeal with costs, and in modi fication of the award made by the Tribunal direct that the age of retirement for the workmen of the respondent be fixed at 60.
+Appeal allowed.

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+Appeal No. 68 of 1964.
+Appeal from the judgment and decree dated July 27, 1959 of the Allahabad High Court in Income tax Reference No. 307 of 1957.
+S.V. Gupte, Solicitor General, R. Ganapathy Iyer and R.N. Sachthey, for the appellant.
+A.V. Viswanatha Sastri and S.P. Varma, for the respondent.
+The Judgment of the Court was delivered by Sikri, J.
+This appeal pursuant to a certificate granted by the Allahabad High Court under section 66A(2) of the Income tax Act (hereinafter referred to as the Act) is directed against the judgment of the High Court in a reference under the Act, answering the question referred to it in the negative.
+The question referred by the Appellate Tribunal is: "Whether on a true interpretation of clause (viii) of subsection 3 of section 4 of the indian Income tax Act the sum of Rs. 36,396/ received by the assessee as an allowance during the previous year of the assessment year 1949 50 is revenue income liable to tax under the Indian Income tax Act, 1922?" The relevant facts stated in the Statement of the case are as follows: The assessee is a Hindu undivided family headed by one Sri Trivikram Narain Singh who is a descendant of one Sri Babu Ausan Singh who was the original founder and owner of what is known as Ausanganj State in the district of Benaras.
+The district of Benaras was formerly a part of Oudh territory.
+By a Treaty between the East India Company Nawab Asfuddaula in or about the year 1775, the province of Benaras was ceded to the British Government.
+The British Government granted a sanad of Raj to Raja Chet Singh who in turn gave the Jagir of Parganas Seyedpore and Bhittery in perpetuity to Babu Ausan Singh.
+It appears that in 1796 there were some disputes between Babu Ausan Singh and the Zamindars in the district and the matter was referred by the Collector of Benaras to the Board of Revenue in Calcutta.
+The disputes between the Jagirdars and Zamindars ultimately ended in 1837 by a compromise between the British Government and the then Jagirdar Hat Narain Singh whereby the British Government 702 granted a pension of Rs. 36,322/8/ to Babu Hat Narain Singh anal his heirs in perpetuity.
+The quantum of this pension was calculated on the basis of 1/4th of the revenue of the Jagir.
+By this arrangement the revenue or land collections of Jagir became payable by the Zamindars direct to the Government and by the grant of the pension, Babu Hat Narain Singh and his successors no longer remained the proprietors of the Parganas or the Jagir and became entitled to merely a pension.
+The letter by which the amount of pension was determined at Rs. 36,322/8/ is dated 7th of July, 1837 and was from H. Elliot Esqr., the Secretary Sadar Board of Revenue N.W.P. Allahabad, to J. Thompson Esqr., Offg.
+Secretary to Lt. Government, N.W.P.".
+The pension was paid regularly from year to year by the Government to Babu Har Narain Singh and his heirs.
+During the previous year of the assessment year 1949 50, the assessee received a sum of Rs. 36,396/ on account of the aforesaid pension.
+The Income tax Officer, in spite of the objection of the assessee, held that it was a regular annual income of the assessee and did not fall within the category of agricultural income tax.
+He observed that "in fact this income arose from a statutory obligation of the Government to pay it, and although the Government recouped this from the person with whom the land was settled, land in the genealogical tree of Malikana appears in the second degree, its immediate and effective source is the Government 's statutory obligation to pay it, and this obligation is not land within the meaning of Income tax Act, vide C.I.T.v.
+Raja Bahadur Karnakhaya Harain Singh(1)".
+The assessee appealed to the Appellate Assistant Commissioner who held that "the alleged cash grant of varying and unspecified amount received by the appellant, in relation to land revenue of Seyedpur now Tehsil of District Ghazipur, clearly fell within the definition of agricultural income under Section 2(1) of the Incometax Act." The Income tax Officer appealed to the Income tax Appellate Tribunal.
+The Tribunal held that the sum of Rs. 36,396/ was chargeable to tax under the Act as the income was not agricultural income for "although the pension was determined with respect to the quantum of the rent collection the rent collections or the land could not be said to be the immediate source of the pension.
+The source of the pension was a liability undertaken by the Government for extinguishing the proprietary rights of the Jagirdar and when the immediate source of the income was not land or rent collections from land, it is difficult to hold that the receipt of the assessee was agricultural income within the meaning of Section 4(3)(viii) of the Income tax Act.
+" The High Court held that from the language of the letter of July 7, 1837, it was manifest that the right which was conferred 703 was a right to a share of one fourth in the net land revenue collections after deducting costs of Tahsil establishment.
+It relied on the fact that the amount which had been received by the successors of Babu Harnarain Singh varied from year to year.
+It observed that "the language of the letter and this conduct of the parties can only lead to the inference that, by this settlement contained in the letter of 7th July, 1837, Babu Har Narain Singh and his successors were granted in perpetuity a right to one fourth of the land revenue collections themselves and not merely a right to receive u sum of money calculated on that basis." The High Court accordingly answered the question in the negative.
+The learned Additional Solicitor General, on behalf of the appellant, contends that according to the true interpretation of the letter dated July 7, 1837, no right in the land revenue was granted to the assessee.
+He relies on the decision of this Court in State of Uttar Pradesh vs Kunwar Sri Trivikram Narain Singh(1).
+That case arose out of the writ petition filed by the present respondent in the High Court of Judicature at Allahabad for a writ in the nature of mandamus calling upon the State of Uttar Pradesh to forbear from interfering with his right to regular payment of the "pension, allowance or Malikana" payable in lieu of the hereditary estate of Harnarain Singh in respect of parganas "Syudpore Bhettree" and for an order for payment of the "pension, allowance or malikana" as it fell due.
+This Court interpreted the same letter, dated July 7, 1837, and came to the conclusion that the respondent did not acquire any interest in land or any land revenue.
+Shah, J., speaking for the Court, observed: "Because the annual allowance is equal to a fourth share of the net revenue of the mahals, the right of the respondent does not acquire the character of an interest in land or in land revenue.
+Under the arrangement, the entire land revenue was to be collected by the Government and in the collection Harnarain Singh and his descendants had no interest or obligation.
+As a consideration for relinquishing the right to the land and the revenue thereof, the respondent and his ancestors were given an allowance of Rs. 30,612 13 0.
+The allowance was in a sense related to the land revenue assessed on the land, i.e. it was fixed as a percentage of the land revenue; but the percentage was merely a measure, and indicated the source of the right in lieu of which the allowance was given.
+" The learned counsel for the respondent, Mr. A. Viswanatha Sastri urges that on its true interpretation the letter dated July 7, 1837, showed an arrangement for sharing collections.
+We are unable to agree with his contention.
+We respectfully adopt the reasoning and conclusion of this Court in the case of State of ; 704 Uttar Pradesh vs Kunwar Sri Trivikram Narain Singh(1) and hold that the respondent, under the arrangement, had no interest in land or in the land revenue payable in respect thereof.
+If this is the true interpretation of the arrangement arrived at, the question arises whether the pension or allowance is agricultural income. 'Agricultural income ' is defined in section 2 of the Act as follows: "(1) "agricultural income" means (a) any rent or revenue derived from land which is used for agricultural purposes and is either assessed to land revenue in British India or subject to a local rate assessed and collected by officers of the Crown as such: . " In Maharajkumar Gopal Saran Narain Singh vs Commissioner of Income tax, Bihar and Orissa(2), the facts were that the assessee had conveyed the greater portion of his estate.
+The consideration for the transfer was, inter alia, an annual payment of Rs. 2,40,000/to the assessee for life.
+The Privy Council held that this "annual payment was not agricultural income as it was not rent or revenue derived from land but money payable under a contract imposing a personal liability on the covenantor the discharge of which was secured by a charge on land." The Privy Council, in Commissioner of Income tax Bihar and vs Raja Bahadur Kamakhaya Narayan Singh and construed the word 'derived ' as :follows: "The word "derived" is not a term of article Its use in the definition indeed demands an enquiry into the genealogy of the product.
+But the enquiry should stop as soon as the effective source is discovered.
+In the genealogical tree of the interest land indeed appears in the second degree, but the immediate and effective source is rent, which has suffered the accident of nonpayment.
+And rent is not land within the meaning of the definition." This Court observed in Mrs. Bacha F. Guzdar, Bombay Commissioner of Income tax, Bombay(4) as follow: "Agricultural income as defined in the Act is intended to refer to the revenue received by direct association with the land which is used for agricultural purposes and not by indirectly extending it to cases where that revenue or part thereof changes hands either by way of distribution of dividends or otherwise." (1) ; (2) (3) 16 I.T.R.325 (4) 705 The same test was adopted by this Court in Maharajadhiraja Sir Kameshwar Singh vs Commissioner of Income tax, Bihar and Orissa(1) and the Court again looked to the source of the right in order to determine whether income was agricultural income or not.
+Shah, J., observed: "The appellant has no beneficial interest in the lands which are the subject matter of the trust: nor is he given under the trust a right to receive and appropriate to himself the income of the properties or a part thereof in lieu of any beneficial interest in that income.
+The source of the right in which a fraction of the net income of the trust is to be appropriated by the appellant as his remuneration is not in the right to receive rent or revenue of agricultural lands, but rests in the covenant in the deed to receive remuneration for management of the trust.
+The income of the trust appropriated by the appellant as remuneration is not received by him as rent or revenue of land; the character of the income appropriated as remuneration due is again not the same as the character in which it was received by the appellant as trustee.
+Both the source and character of the income are, therefore, altered when a part of the income of the trust is appropriated by the appellant as his remuneration, and that is so, notwithstanding that computation of remuneration is made as a percentage of the income, a substantial part whereof is derived from lands used for agricultural purposes.
+The remuneration not being received as rent or revenue of agricultural lands under a title, legal or beneficial in the property from which the income is received, it is not income exempt under section 4(3)(viii).
+" It follows from the decisions of the Privy Council and the judgments of this Court cited above that if it is held in this case that the source of the allowance or pension is the arrangement arrived at in 1837.
+then the income cannot be held to be derived from land within the meaning of the definition in section 2(1)(a) of the Act.
+It seems to us that in this case the source of income is clearly the arrangement arrived at in 1837 and, therefore, it is not agricultural income as defined in the Act.
+Mr. Sastri sought to distinguish those cases on the ground that the allowance here varied from year to year.
+Assuming that the allowance varied from year to year, the source of the income still remains the arrangement and not land.
+The next point that arises in this case is whether the allowance is taxable income at all.
+Mr. Sastri contends that it is capital receipt.
+He says that if the assessee 's predecessor had received ) 706 compensation for relinquishing his title to the lands in dispute, that would have been a capital receipt and not taxable.
+He further says that the allowance was in fact a payment of the compensation for relinquishing the title to those lands.
+He says that we must consider the quality of the income and not its periodicity.
+He refers to the following passage from the speech of Viscount Simon in Commissioner of Inland Revenue vs Wesleyan and General Assurance Society(1): "It may be well to repeat two propositions which are well established in the application of the law relating to Income tax.
+First, the name given to a transaction by the parties concerned does not necessarily decide the nature of the transaction.
+To call a payment a loan if it is really an annuity does not assist the taxpayer, any more than to call an item a capital payment would prevent it from being regarded as an income payment if that is its true nature.
+The question always is what is the real character of the payment, not what the parties call it.
+" He, therefore, asked us to disregard the word 'pension ' in the letter dated July 7, 1837, and determine the real character of the payment.
+Another passage from the speech of Viscount Simon is also relevant.
+Lord Simon observed: "Secondly, a transaction which, on its true construction, is of a kind that would escape tax, is not taxable on the ground that the same result could be brought about by a transaction in another form which would attract tax.
+As the Master of the Rolls said in the present case: 'In dealing with Income tax questions it frequently happens that there are two methods at least of achieving a particular financial result.
+If one of those methods is adopted tax will be payable.
+If the other method is adopted, tax will not be payable .
+The net result from the financial point of view is precisely the same in each case, but one method of achieving it attracts tax and the other method does not.
+There have been cases in the past where what has been called the substance of the transaction has been thought to enable the Court to construe a document in such a way as to attract tax.
+That particular doctrine of substance as distinct from form was, I hope, finally exploded by the decision of the House of Lords in the case of Duke of Westminster vs Commissioner of Inland Revenue(2)".
+It seems to us that where an owner of an estate exchanges a capital asset for a perpetual annuity, it is ordinarily taxable income in his hands.
+The position will be different if he exchanges (1) 30 T.C. II.
+(2) 707 his estate for a capital sum payable in installments.
+The installments when received would not be taxable income.
+Mr. Sastri, relying on Perrin vs Dickson(1) contends that an annuity is not always taxable as income.
+This is true, but in this case no material has been produced to show that the allowance was in fact a payment in instalments of the value of the disputed title of the assessee 's predecessor in 1837.
+In the result, we hold that the allowance is revenue income and not exempt from taxation as agricultural income.
+Therefore, we accept the appeal and answer the question referred in the affirmative.
+The appellant will have his costs here and in the High court.
+Appeal allowed.

2035.txt

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+ivil Appeal No. 325 of 1965.
+Appeal by special leave from the Award dated September 20, 1963 of the Central Government Industrial Tribunal, Bombay in Reference CG IT 25 of 1962.
+section V. Gupte, Solicitor General, M. Rajagopalan and K. R. Choudhuri, for the appellants.
+C. B. Agarwala, J. B. Dadachanji, O. C. Mathur and Ravinder Narain, for the respondents.
+The Judgment of the Court was delivered by Hidayatullah J.
+This is an appeal by special leave against an award dated September 20, 1963 made by the Presiding Officer of the Central Government Industrial Tribunal, Bombay in a reference made by the Government of India under section 10(2) of the .
+The appellants are the workmen of the Bombay Port Trust, who are and have been represented in this dispute by the Bombay Port Trust Employees ' Union.
+The respondents to this appeal are the trustees of the Port of Bombay.
+The reference was made on a joint application of the parties.
+and the matter in dispute was stated to be : "Whether the existing system of work of the shore crew of the Prince 's and Victoria Docks under which each shift consists of 8 hours ' normal duty, 2 hours ' variable recess and 12 hours ' overtime needs any modification? The Tribunal, by the award impugned here, held that the Union was not able to establish that the existing system of work needed any modification.
+The Port Trust had under its control several docks.
+Reference in this judgment will be made to the Prince 's and Victoria Docks, the Alexandra Docks, Butcher Island and the Flotilla Crew.
+These represent different areas of work where different groups of workmen were employed.
+From the facts appearing on the record it appears that the Trustees first introduced a two shift system of work in the Alexandra Docks on June 30, 1953 and the same system was extended to the Prince 's and Victoria Docks on December 15, 1953.
+Previously, the shore crew at all these places worked in a single shift and were liable to be called out at 634 any hour of the day or night.
+When the two shift system began, each shift of 12 hours was broken up into 8 hours ' duty, 2 hours ' variable recess and 2 hours ' overtime.
+The hours of rest were kept variable as they depended on the tides.
+In 1956 the workmen, who were then represented by the Port Trust General Workers ' Union, made a demand for a fixed recess of two hours.
+The Trustees apprehended that this was a device to get 4 hours ' overtime and rejected the demand.
+The General Workers Union was informed that if the demand was pressed a three shift system would be introduced.
+The workmen then retraced their steps and accepted a 2 hours ' variable recess but requested that it should be as near the middle of the shift as possible.
+The Trustees agreed to accept the hours of rest at fixed hours in the Alexandra Docks but at the Prince 's and Victoria Docks they kept it variable agreeing to fix it as near the middle of the duty hours as possible.
+Under this arrangement the shore crew working at the Prince 's and Victoria Docks were informed each day what the period of rest would be on the following day.
+In explanation of this difference it may be pointed out that the Alexandra Docks work on a system of lock gates which enables the depth of water at the docks to be artificially regulated but the Prince 's and Victoria Docks, being tidal, work only at high tide.
+It was thus possible to fix rest hours at the Alexandra Docks for half the crew different from the rest hours of the other half so that a part of the crew was always available on hand.
+As the lock gates control the depth of water in the Alexandra Docks, fixed hours of rest could be maintained from day to day except in the monsoon months when the, storm gates had some time to be closed.
+During these months recess time at the Alexandra Docks was also variable and was made to coincide with the closure of the storm gates.
+The workmen at the Alexandra Docks seemed to have accepted a variable recess of two hours but the Port Trust gave a notice under section 9A of the on June 25, 1960 announcing the introduction of variable recess although in the months other than the monsoon months recess was actually at fixed hours.
+The workmen opposed the change from fixed to variable recess.
+Meanwhile studies were being made and it was found that the work hours at the different Docks were not equal: they were heavier at the Alexandra Docks than at the other docks.
+The Trustees, therefore, resolved that the shore crew at the Alexandra Docks should work for 8 hours and that there should be a variable recess of one hour and overtime of three hours should be paid.
+Thus the 12 hours ' shift at the Alexandra Docks was 8 hours ' of duty, 3 hours ' overtime and one hour variable recess.
+This system was, however, 635 not extended to the prince 's and Victoria Docks and Butcher Island.
+At these docks 8 hours ' duty, 2 hours ' rest at variable times and 2 hours ' overtime were prescribed.
+The claim of the shore crew at the Prince 's and Victoria Docks and Butcher Island for reducing the hours of rest and increasing overtime to three hours was not accepted because the amount of work in the, opinion of the Trustees did not justify the change.
+The Union contended that this division of 12 hours ' shift into 8 hours ' work, 2 hours ' rest and 2 hours ' overtime violated the provisions of the and that the so called period of rest was illusory since, being variable, it was some times given right at the commencement of the shift and some times at the end, depending on the tides or the exigencies of the work.
+The Union claimed that a 12 hours ' shift should be divided into 8 hours ' work and 4 hours ' overtime as was the case with the Flotilla Crew.
+This claim was opposed by the Trustees.
+According to them, there was no breach of the provisions of the .
+They contended that, regard being had to the number of actual work hours, the case of shore crew at the Prince 's and Victoria Docks and the Butcher Island could not be compared with that of the crew at the Alexandra Docks or the Flotilla Crew.
+The Tribunal accepted the entire case put forward on behalf of the Trustees and the Union has appealed to this Court.
+On behalf of the Union the learned Solicitor General has argued the case almost entirely from the legal stand point and has attempted to establish that the break up of a 12 hours ' shift into 8 hours ' duty, 2 hours ' rest and 2 hours ' overtime offends the .
+He, has in addition submitted that the system of variable recess does not satisfy the requirements of rest which is the basis for fixing statutorily the hours of work in relation to wages.
+The was enacted to enable Government to fix minimum rates of wages in certain employments.
+Since fixation of minimum wages must take into account the work load also, provision must not only be made for prescribing the minimum wage but to correlate it to a specified amount of work.
+Any extra work beyond the specified work load must be paid for at a higher or what is known as "overtime" rate.
+Similarly, intervals of rest must punctuate suitably the hours of work and they must also be provided for in a scheme of the work day of a workman.
+The makes provision for all these matters either by itself or through Rules.
+The Central Government has framed the Minimum Wages (Central) Rules, 1950.
+The Act and the 636 Rules between them provide not only for fixation of minimum wages but also for the work load in relation to which the minimum wages are to be prescribed.
+They provide on the one hand for minimum wages, lay down the procedure for fixing or revising them and prescribe the rules in accordance with which the wages must be paid.
+On the other hand, the Act and the Rules fix the number of hours of work, payment of overtime and for hours of rest in the work day of the workman.
+The provisions of the Act and of the Rules are applicable to some employments only and they are shown in a Schedule appended to the Act.
+It is admitted that the present workmen come under the Schedule.
+The hours of work and the payment of overtime are, therefore, governed by the provisions of the and the Minimum Wages (Central) Rules, 1950 and the controversy in this case must be appreciated and resolved in accordance with them.
+We shall now turn to these provisions.
+We are concerned with two sections and two rules.
+The sections are Nos. 13 and 14 and the rules Nos. 24 and 25.
+The whole of the matter in dispute admittedly is governed by these, four provisions.
+We shall begin by setting out the relevant parts of these provisions : "13.
+Fixing hours for a normal working day, etc.
+(1) In regard to any scheduled employment minimum rates of wages in respect of which have been fixed under this Act, the appropriate Government may (a) fix the number of hours of work which shall constitute a normal working day, inclusive of one or more specified intervals; (b) provide for a day of rest in every period Of seven days which shall be allowed to all employees or to any specified class of em ployees and for the payment of remuneration in respect of such days of rest; (c) provide for payment of work on a day of rest at a rate not less than the overtime rate.
+(2) The provisions of sub section (1) shall, in relation to the following classes of employees, apply only to such extent and subject to such conditions as may be prescribed: (a). . . . . . 637 (b). . . . . . (c) employees whose employment is essentially intermittent; (d). . . . . . (e). . . . . . (3) For the purposes of clause (c) of sub section (2), employment of an employee is essentially intermittent when it is declared to be so by the appropriate Governmen t on the ground that the daily hours of duty of the employee, or if there be no daily hours of duty as such for the employee, the hours of duty, normally include, periods of inaction during which the employee may be on duty but is not called upon to display either physical activity or sustained attention.
+" 14. Overtime.
+(1) Where an employee, whose minimum rate of wages is fixed under this Act by the hour, by the day or by such a longer wage period as may be prescribed, works on any day in excess of the number of hours constituting a normal working day, the employer shall pay him for every hour or for part of an hour so worked in excess at the overtime rate fixed under this Act or under any law of the appropriate Government for the time being in force, whichever is higher.
+(2) Nothing in this Act shall prejudice the operation of the provisions of section 59 of the in any case where those provisions are applicable.
+" Rule 24.
+"Number of hours of work which shall constitute a normal working day (1) The number of hours which shall constitute a normal working day shall be: (a) in the case of an adult, 9 hours, (b) in the case of a child, 41 hours.
+(2) The working day of an adult worker shall be so arranged that inclusive of the intervals for rest, if any, it shall not spread over more than twelve hours on any day.
+638 (3) The number of hours of work in the case of an adolescent shall be the same as that of an adult or a child according as he is certified to work as an adult or a child by a competent medical practitioner approved by the Central Government.
+(4). . . . . . (4 A) No Child shall be employed or permitted to work for more than 4 1/2 hours on any day.
+(5) Nothing in this rule shall be deemed to affect the provisions of the ".
+Rule 25.Extra wages for overtime (1) When a worker works in an employment for more than nine hours on any day or for more than forty eight hours in any week, he shall, in respect of overtime work, be entitled to wages, (a) in the case of employment in Agriculture, at one and a half time the ordinary rate of wages; (b) in the case of any other scheduled employment, at double the ordinary rate of wages.
+Explanation The expression "ordinary rate of wages" means the basic wage plus such allowances including the cash equivalent of the advantages accruing through the concessional sale to the person employed of foodgrains and other articles as the person employed is for the time being entitled to but does not include a bonus.
+(2) A register showing overtime payment shall be kept in form IV.
+(3) Nothing in this rule shall be deemed to affect the provisions of the ." The controversy in the present case is a narrow one.
+It is whether the fixing of a two hours ' rest and two hours ' overtime involves a breach of the two sections of the Act and the two rules quoted here ? The workmen claim that under a scheme of 12hour shifts with 8 hours ' work, overtime should be at least 3 hours, if not 4, and by fixing only two hours ' overtime the Trustee are B guilty of the breach of the Act and the Rules.
+Unfortunately the provisions of the and the Minimum Wages 639 (Central) Rules, 1950, are not as clear as the corresponding provisions of the and they have led to long arguments before us.
+We shall refer to the provisions of the later because for the present we must consider the provisions of the Act and the Rules without drawing any assistance from the .
+Section 13 of the Act does not itself fix the hours of work or rest or overtime.
+That is done by the Rules.
+Section 13 only authorises Government to fix the number of hours which shall constitute a normal working day, inclusive of on, .
+or more specified intervals.
+The normal working day thus includes (a) hours of actual duty, and (b) one or more specified intervals.
+There may be one interval of rest or there may be more intervals but whatever their number, they must be specified.
+By interval under section 13 is obviously meant interval of rest and this is clear from Rule 24(2).
+There is no definition of interval either in the Act or the Rules but the provisions of section 13 (2) (c) read with section 13 (3) give us an indication of what is meant by an interval of rest.
+It means a break in the work during which a workman, though present on duty, is not called upon to display either physical activity or sustained attention.
+But it is not a period of more inaction because there is no work for him.
+If it is the latter, it is counted as actual work period: if the former, it is counted as a period of rest, provided the period is specified beforehand, and the workman is neither called upon to work nor expected to work.
+Having thus distinguished between period of work and interval of rest we may now turn to Rule 24 which prescribes the number of hours of work which is to constitute a normal working day.
+Sub rule (1) (a) provides that the number of hours constituting a normal working day for an adult shall be 9.
+As the heading of the Rule shows these are the hours of work.
+Sub rule (2) then lays down that the working day of an adult shall be so arranged that inclusive of intervals for rest it shall not spread over more than twelve hours on any day.
+The distinction between intervals of rest and hours of work is thus made clear.
+From this it follows that on any single day the number of hours of work must not exceed 9 and together with the hours of rest the total period of work and rest should not go beyond 12 hours.
+It is wrong to contend that the period of 9 hours must always include intervals of rest.
+It may or it may not.
+There is no provision in the Act and the Rules corresponding to section 55 of the Factories 640 Act to which reference will be made hereafter.
+In a 12 hour shift, the nine hours of work on any day can be spread over 12 hours and the extra hours will necessarily be hours of rest.
+The contention of the workmen is that section 13 fixes the number of hours in a normal working day and this number is inclusive of one or more specified intervals.
+They read Rule 24, which prescribes a normal working day of 9 hours, as including within the 9 hours one or more intervals of rest.
+We do not think this is a correct reading either of section 13 or of Rule 24.
+There is clear antinomy between hours of work and intervals of rest in sub rules (1) and (2) of Rule 24 and the phrase 'inclusive of one or more specified intervals ' governs the normal working day and not the number of hours of work.
+Under sub rule (2) of Rule 24 the working day of an adult can be so arranged that inclusive of intervals of rest it does not exceed 12 hours on any day.
+A working day may extend to 12 hours but the number of hours of work cannot exceed 9.
+A working day of 12 hours is thus made up of hours of work and hours of rest and the number of hours of work (which cannot exceed 9) is part of the normal working day which may also include one or more specified intervals of rest.
+This determines what is a normal working day and what is meant by an interval of rest.
+We now come to the question of overtime.
+If work on any day is taken which goes beyond 9 hours the provisions of section 14 apply.
+That action speaks of overtime.
+Overtime is payable for work in excess of the number of hours constituting a normal working day.
+From section 13 read with Rule 24 we know that the number of hours constituting a normal working day is 9.
+We shall now read into section 14 this number leaving out those provisions which have no bearing upon the matter.
+The section so read lays down : "Where an employee. . . works on any day in excess of 9 hours, the employer shall pay him for every hour or for part of an hour so worked in excess at the overtime rate. . . " Under Rule 25 (1) (b) this overtime rate is double the ordinary rate of wages.
+Therefore, an employer can take actual work on any day upto 9 hours in a 12 hour shift, but he must pay a double rate for any hour or part of an hour of actual work in excess of 9 hours.
+He need not, however, pay for any interval of rest provided it is specified beforehand.
+These provisions are subject to 641 one more check which we may now mention.
+The check is found in the latter part of Rule 25(1) which says that the maximum number of hours of work in a week shall not exceed 48 and for any work in excess of 48 hours a week overtime shall be payable.
+As there is a prescribed day of rest in a week we get a working week of six days with a maximum of 48 hours ' work.
+Average duration of actual work payable at ordinary rate of wages per day thus comes to 8 hours.
+Thus if an employer takes actual work for 8 hours per day on 6 days in a week he complies with all the provisions and need not pay overtime.
+He may go up to 9 hours on any day without paying any overtime provided he does not exceed 48 hours in the week.
+He can specify the intervals of rest and spread the 8 hours or 9 hours, as the case may be, together with intervals of rest over 12 hours in a twelvehour shift.
+These periods of rest must not be periods during which the workman is on duty and inaction is due to want of work for him, but they must be pre determined periods of inaction during which the workman is neither called upon nor expected to display physical activity or sustained attention.
+We have seen that an employer having a 12 hour shift can fix 48 hours of work per week of six days at 8 hours per day.
+He is not compelled to give overtime for the remaining four hours unless he takes work during those hours, provided he has specified those hours as intervals of rest.
+If he takes work during the extra 4 hours or fails to specify the hours of rest he must pay overtime.
+He can spread 8 hours with intervals of rest to 9, 10, 11 or 12 hours as he likes.
+For the hours of rest he is not required to pay overtime but he must specify those hours.
+Overtime under section 14 is only payable when the workman works in excess of the number of hours constituting a normal working day.
+That number is 9 hours for any day and work up to 9 hours on any day can be taken without paying overtime if the total number of hours in the week does not exceed 48.
+As in the present case the total number of hours of work in a week is 48 (8 hours per day for 6 days) overtime is payable for that hour or part of an hour beyond the 8 hours in which the workman is either made to work or the interval is not specified.
+The Port Trust can say that it will not take more than two hours extra work on any day and specify the remaining two hours as the intervals for rest.
+It is, not compelled to fix only one interval or to make the interval of one hour only.
+It can fix two or three or even four without in any way going against the provisions of section 13 or Rule 24.
+642 At this stage it is instructive to look into the provisions of the dealing with the daily hours of work, intervals for rest and spread over of the working time.
+Sections 54, 55 and 56 are the relevant provisions.
+Omitting the portions not necessary for the purpose of comparison, these sections read "54.
+Daily hours.
+"54.Daily hours Subject to the provisions of section 51, no adult worker shall be required or allowed to work in a factory for more than nine hours in any day Provided. . . "55.
+Intervals for rest.
+(1) The periods of work of adult workers in a factory each day shall be so fixed that no period shall exceed five hours and that no worker shall work for more than five hours before he has had an interval for rest of at least half an hour.
+(2). . . . "56.
+Spread over.
+The periods of work of an adult worker in a factory shall be so arranged that inclusive of his intervals for rest under section 55 they shall not spread over more than ten and a half hours in any day: Provided that the Chief Inspector may, for reasons to be specified in writing, increase the spread over to twelve hours.
+" Almost the same provisions are to be found in some other Acts of the State Legislatures controlling shops, establishments etc.
+It will be noticed that the arrangement of these sections is almost the same as the cognate provisions of the .
+Here too, the hours of work cannot be more than 9 in a day and taken with the intervals for rest these 9 hours may be spread over 10 1/2 hours.
+The only difference is that a worker must not be made to work for more than 5 hours at a stretch before he has had an interval for rest of half an hour at the least.
+There is no provision in the which breaks up the hours of work by interposing a compulsory period of rest as is done by the latter part of section 55 of the .
+The reason, perhaps, is that in some employments time for work depends on some 643 extraneous factors and hours of rest cannot always be fixed to, break up those hours.
+It is proverbial that time and tide do not wait for any man.
+Workers at a tidal dock must work when the tide is in and take their rest when the tide is out.
+It is for this reason that a variable recess is in force at the Prince 's and Victoria Docks and due.
+notice of the interval is given by specifying a day in advance the hours of rest.
+We do not think that the Trustees are guilty of infraction of the by keeping the recess variable so long as they specify in advance the recess on any particular day.
+It will also be noticed that the scheme of the compels the inclusion of an hour of rest in a normal working day.
+This is achieved by pres cribing that the hours of work in a six day week shall not exceed 48, although on any particular day the hours of work in a day may go up to 9.
+In this indirect way one hour of rest is included in a normal working day because the total number of work hours in a six day week cannot go beyond 48.
+What has not been done by the Act or the Rules is to specify that the interval for rest shall break up the hours of work.
+The Trustees cannot be compelled to break up the hours of work by interposing intervals for rest, if owing to the nature of the work there is difficulty in giving the intervals for rest in that manner on any particular day.
+According to their resolution the recess is fixed as near the middle of the work as possible, depending on the tides.
+The workmen compared the case of the Prince 's and Victoria Docks with the cases of the Alexandra Docks and the Flotilla Crew.
+They point out that in the former there is 3 hours ' overtime and in the latter there is 4 hours of overtime in the 12 hour shifts, but at the Prince 's and Victoria Docks there is 2 hours ' overtime only.
+They claim equal treatment.
+This is not possible.
+The crew at the Prince 's and Victoria Docks work in a different way and their case cannot be compared with that of the Flotilla Crew or the crew at the Alexandra Docks.
+The Flotilla Crew has to remain on duty for full 12 hours and they work as and when they are required.
+Although their hours of duty are only 8 they are entitled, if present for work, for overtime up to four hours.
+The crew at the Alexandra Docks get a specified interval of one hour for rest and this makes up their 9 hours which is 8 hours ' work and one hour interval for rest.
+They are, therefore, entitled to three hours ' overtime if required to work beyond the 9 hours on any day.
+There is no parallel in the work of the three different crew and we are satisfied that no conclusion can be based upon the practice existing at the Alexandra Docks or in 644 respect of the Flotilla Crew.
+We hold, therefore, that the decision of the Central Government Industrial Tribunal is right in a circumstances of this case.
+The appeal must therefore fail.
+It will be but in the circumstances of the case we make no order about costs.
+Appeal dismissed.

2052.txt

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+Appeals Nos. 1008 and 1009 of 1965.
+Appeals by special leave from the orders dated April 1, 1965 of the Central Government Labour Court, Jullundur, in cases Nos. 409 of 1963 respectively.
+C. K. Daphtary, Attorney General, section V. Gupte, Solicitor General, Niren De, Addl.
+Solicitor General, K. B. Mehta, V. Sagar, H. L. Anand and B. C. Das Gupta, for the appellants.
+M. K. Ramamurthi, for the respondents.
+The Judgment of the Court was delivered by Wanchoo, J.
+These two appeals by special leave raise a common question as to the interpretation of paragraph 5.356 of the National Industrial Tribunal (Bank Disputes) Award of June 1962 (popularly known as the Desai award) and will be dealt with together.
+It is unnecessary to set out the facts of the two appeals at this stage.
+It is sufficient to say that the respondents made applications under section 33 C(2) of the Industrial Disputes Act, No. 14 of 1947, praying for determination and computation of the benefit to which they were entitled under the Desai award as they were not satisfied with the fixation of their pay by the appellant bank under para 5.356.
+The Desai award dealt with the method of adjustment in the scales of pay fixed by it from para 5.329 onwards.
+It divided the employees of the banks with which it was concerned in two groups.
+The first group consisted of workmen who were drawing basic pay on January 1, 1962 according to scales of pay provided by the ALL India Industrial Tribunal (Bank Disputes) Award, 1953 (popularly known as the Sastry award) as modified by the Labour Appellate Tribunal Decision (Bank Disputes).
+The second group 900 consisted of workmen who on January 1, 1962 were employed in banks which were not governed by the provisions of the Sastry award as modified and were not thus drawing basic pay on the footing of scales of pay provided by that award.
+In the first case the Desai award provided that the workmen would be fitted in the new scales of pay from January 1, 1962 on stage to stage adjustment basis, i.e., workmen who were drawing basic pay at a particular stage in the time scale of the Sastry award as modified would draw basic pay at the same stage in the new scale applicable to them under the Desai award.
+Examples of how this would be done were given in para.
+5.348 of the Desai award.
+As to the second group, the Desai award provided that these employees would first be fitted in the appropriate scales provided in the Sastry award as modified as on January 1, 1962 and thereafter they would be fitted in the new scales of pay provided by the Desai award as laid down in para.
+5.348.
+Paragraph 5.356 then went on to provide how these workmen would be fitted in the Sastry award.
+Here again the workmen were divided into two groups, namely, those who entered service before January 1, 1959 and those who entered service on or after January 1, 1959.
+In the present appeals we are concerned with workmen who entered service before January 1, 1959, and the fitment of these workmen was dealt with in para.
+5.356 of the Desai award, and it is this paragraph which calls for interpretation in the present appeals.
+We may at this stage mention that a similar question of fit ment was considered by the Sastry award in para.
+292 and certain provisions were made thereunder.
+This paragraph was considered by the Labour Appellate Tribunal in appeal from the Sastry award and certain modifications were made thereunder by paras 164 and 166 of the Labour Appellate Tribunal decision in appeal.
+Paragraph 292 as modified by the Labour Appellate Tribunal decision came up for interpretation before this Court in State Bank of India vs Prakash Chand Mehra.
+(1) As the words of para 292 of the Sastry award as modified by the Labour Appellate Decision are almost the same as the words of para.
+5.356 of the Desai award, we may set out the two paragraphs in parallel columns for comparison: Sastry award as modified by the Labour Appellate decision For workmen who enterd service of the bank before 31st January, 1950 1.
+The workman 's basic pay as on 31st January 1960 shall not be reduced in any case.
+(1) Desai award For workmen who entered service of the bank before 1st January 1959 (i) The workman 's basic pay as on January 1, 1959 shall not be reduced in any case.
+Subject to rule (1) the adjusted basic pay in the new scale shall not exceed what point to point adjustment would give him or the maximum in the new scale.
+3.In the matter of adjustment all efficiency bars, whether in the previously existing or in the scales fixed by us should be ignored.
+4.Subject to rules (1) to (3) a workman 's basic pay in the new scales shall be fixed in the following manner (a) A workman shall first be fitted into the scale of pay fixed by our award (herein called the new scale) by placing him at the stage in the new scale equal to, or next above his basic pay as on 31st January 1950 in the pre Sen scale then in force (herein called the existing scale).
+(b) To the basic pay into which he is fitted under cl.
+(a) the annual increments in the new scale as from that stage onwards should be added at the rate of one increment for every completed three years of service in the same cadre as on 31st January 1950, up to a limit of 12 years ' service; hereafter one increment for every four years of service up to another 8 years service, and after that one increment for every five years of service.
+(c) Such increments shall not however exceed four in number.
+[NOTE : Omitted by the Labour Appellate Tribunal in view of change in cl.
+(b).] 4 A.
+After adjustments are made in accordance with clauses (a), (b) and (c) supra two further increments in the new scale will be added thereto for service for the two years 1951 and 1952.
+In addition the workman will be entitled to draw his normal increment for 1953on 1st April 1963.
+Thereafter each succeeding year 's annual increment shall take effect as and from 1st April of that year.
+901 (ii) Subject to rule (i), the adjusted basic pay in the scale provided in the Sastry award as modified shall not exceed what point to point adjustment would give him or the maximum in the scale provided by the Sastry award as modified.
+(iii) In the matter of adjustment, all efficiency bars, whether in the previously existing scales or in the scales provided by the Sastry award as modified should be ignored.
+(iv)Subject to rules (i) to (iii) a workman 's basic pay in the scale provided by the Sastry award as modified shall be fixed in the following manner (a)A workman shall first be fitted into the scale of pay of Sastry award as modified by placing him at the stage in the Sastry award scale as modified equal to, or next above his basic pay as on 1st January, 1959 in the scale then in force in the bank concerned (hereinafter called the Bank 's scale).
+(b)To the basic pay into which he is fitted under clause (a) annual increment or increment& in scale provided by the Sastry award as modified as from that stage onwards should be added at the rate of one increment for every completed three years of his service in the same cadre as on 1st January 1959.
+(c) Such increments shall not however exceed four in number.
+(d) After adjustments are made in, accordance with clauses (a),(b) and (c) supra, two further annual increments.
+in the scale provided by the Sastry award as modified will be added thereto for service for the two years of 1960 and 1961.
+902 We are not concerned with clauses (5) and (6) of para 292 of the Sastry award or with clauses (v) and (vi) of para 5.356 of the Desai award for purposes of the dispute between the parties and have not therefore set them out.
+It will be seen from the above comparison of the provisions in the two awards that the substantial provisions of the Desai award are exactly the same as the provisions of the Sastry award as modified except (i) for changes necessitated by the fact that the Desai award was being given in 1962 and (ii) the provision in the Sastry award corresponding to sub cl.
+(d) of cl.
+(iv) of para 5.356 of the Desai award was separated by the Labour Appellate Tribunal Decision from cl.
+(4) and made clause (4 A).
+"We have already referred to the fact that para.
+292 of the Sastry award as modified came up for consideration before this Court in the case of Prakash Chand Mehra( ') and this Court interpreted clauses (1) to (4 A) of the Sastry Award as modified thus :"We have therefore first to fix the basic pay in accordance with rule 4(a), and then allow annual increments in accordance with rule 4 (b).
+But this is subject to rules 1 and 2 above.
+We are unable to accept the contention raised on behalf of the respondent that the words "subject to" have not the effect of making what would otherwise follow from the application of rules 4(a) and 4(b) subject to "both the lim its" laid down in rule 2.
+Giving as we must natural meaning to the words used in rules 2 and 4, we are of opinion that in no case can the basic pay be fixed at a higher figure than what the point to point adjustment would give to the workman or the maximum in the new scale.
+" The dispute between the bank and the workmen in the present ,case was this.
+The bank claimed that under cl.
+(ii) of the Desai award, the adjusted basic pay in the new scale was not to exceed what point to point adjustment would give an employee on January 1, 1962.
+The bank further claimed that this being the maximum permissible under cl.
+(ii) and cl.
+(iv) being subject to cl.
+(ii) the method of fitment provided in cl.
+(iv) could not give to an employee more than the maximum arrived at under cl.
+Thus the bank 's case was that once the maximum arrived at by point to point adjustment as on January 1, 1962, was reached under cl.
+(ii), no further increments even under sub cl.
+(1) 903 (d) of cl.
+(iv) could be allowed.
+The, workmen on the other hand claimed that they were entitled to what was provided by sub cls.
+(a), (b) and (c) of cl.
+(iv) and the two increments under sub cl.
+(d) and that it did not matter whether what was thus arrived at exceeded the maximum provided under cl.
+The labour court has partially accepted the workmen 's contention and fixed the pay of the two workmen concerned accordingly.
+The bank contests the correctness of this view.
+We are of opinion that neither the stand taken by the bank nor the stand taken by the workmen is correct, and that the relevant clauses in para.
+5.356 of the Desai award must be interpreted in the same manner as the relevant provisions in the Sastry award as modified were interpreted in Prakash Chand Mehra 's case(1).
+In this connection it is brought to our notice that in para.
+5.356 of the Desai award it was stated that the award was giving directions similar to those provided under the Sastry award as modified subject to certain changes which were considered necessary having regard to the lapse of time after coming into force of the provisions of the Sastry award as modified.
+It is urged on behalf of the appellant that the Desai award made certain changes and therefore need not be interpreted in the same way as was done in Prakash Chand Mehra 's case(1).
+We see no force in this submission.
+It is true that the Desai award said that certain changes were being made; but these changes were considered necessary having regard to the lapse of time.
+However, the main intention of the Desai award was also to give directions similar to those provided in the Sastry award as modified.
+It is true that there are some verbal changes in the Desai award; but these verbal changes are only due to lapse of time and do not affect the substance of what was provided by the Sastry award as modified.
+We do not agree with the case of the appellant bank that in cl.
+(ii) the adjusted basic pay is to be as on January 1, 1962.
+We are of opinion that the adjusted basic pay in cl.
+(ii) has to be taken as on January 1, 1959.
+This follows from the fact that the workman 's basic pay as on January 1, 1959 cannot be reduced and therefore when cl.
+(ii) speaks of adjusted basic pay it must refer to the same date as in cl.
+Further cl.
+(iv) which provides for actual calculations starts with the words "subject to rules (i) to (iii)" and therefore the actual calculations made under cl.
+(iv) must be subject to clauses (i) and (ii).
+This means in (1) L8Sup.
+CI/66 11 904 effect that the actual fixation.
+under sub cls.
+(a), (b) and (c) of cl.
+(iv) will be subject to cl.
+(i) and cl.
+Under sub cl.
+(a) of cl.
+(iv) a workman will be placed in the Sastry award as modified by placing him at the stage in the Sastry award scale equal to or next above his basic pay as on January 1, 1959, in the scale then in force in the bank concerned.
+But in view of cl.
+(i) this cannot be less than the actual basic pay of the workman as on January 1, 1959.
+Where under cl.
+(i) the actual basic pay as on January 1, 1959, is more than what point to point adjustment will give under cl.
+(ii), it cannot be reduced for cl.
+(ii) is subject to cl.
+After this has been done the workman would be entitled to increments as provided in sub cl.
+(b) read with sub cl.
+(c) of cl.
+(iv), but this will be subject to cls.
+(i) and (ii) and the adjusted basic pay arrived at by giving the increments under sub cls.
+(b) and (c) cannot exceed the adjusted basic pay as arrived at by point to point adjustment in the Sastry award as modified or the maximum of that scale or the actual basic pay as on 1st January 1959, as the case may be.
+Thus sub cl.
+(a) is subject to cl.
+(i) and the basic pay to be fixed on January 1, 1959, has to be fixed by reading sub cls.
+(a) of cl.
+(iv) and cl.
+(i) together.
+Then increments under sub cl.
+(b) read with sub cl.
+(c) of cl.
+(iv) have to be added, but this is again subject to the provisions of cls.
+(i) and (ii).
+After this has been worked out, then comes sub cl.
+(d) of cl.
+(iv), and the main dispute in the present case is about this subclause.
+The appellant bank 's contention is that two further annual increments allowed under sub cl.
+(d) cannot be permitted in view of cl.
+(ii) as interpreted by the appellant.
+But as we, have held that in cl.
+(ii) the adjusted basic pay has to be fixed as on January 1, 1959, sub cl.
+(d) of cl.
+(iv) will take effect and give two annual increments for 1960 and 1961 which are beyond the date which we have accepted as the right date for purposes of cl.
+It is however urged on behalf of the appellant that sub cl.
+(d) is also subject to cls.
+(i) to (iii) and therefore these increments if they go beyond what cl.
+(ii) provides cannot be given.
+This argument has arisen because the Desai award did not separate sub cl.
+(d) as was done by the Labour Appellate Tribunal in its modification of the Sastry award.
+But as stated by the Labour Appellate Tribunal when dealing with the Sastry award, it was inherent in the Sastry award that increments for 1951 and 1952 should be provided after the basic pay was worked out as on January 31, 1950.
+The same applies to the Desai award.
+Once it is held and that we hold that basic pay under cl.
+(ii) has to be worked out as on January 1, 1959, the two increments provided by sub cl.
+(d) of cl.
+(iv) which are beyond that date must 905 be given over and above what has been worked out under sub cls.
+(a), (b) and (c) of el.
+(iv) of the Desai award.
+The fact that by oversight sub cl.
+(d) of el.
+(iv) was not made a separate clause would make no difference for sub cl.
+(d) provides for a period after the date up to which el.
+(ii) works.
+Therefore, two increments under sub cl.
+(d) have to be given after adjustments have been made under sub cls.
+(a), (b) and (c) of el.
+(iv) in accordance with what we have interpreted these sub clauses as well as cls.
+(i) and (ii) to mean.
+In effect the two increments provided in sub el.
+(d) must always be given.
+But it may happen that increments provided in sub cl.
+(b) read with sub cl.
+(c) may in some cases be not available where the actual pay as on January 1, 1959 which will not be reduced under el.
+(i) happened to coincide with or was more than the adjusted basic pay under el.
+This interpretation is in accord with what was decided by this Court in Prakash Chand Mehra 's case(1), and that decision in our opinion would govern the interpretation of para.
+5.356 of the Desai award also, which as we have indicated, is in substance the same as para.
+292 of the Sastry award as modified by the Labour Appellate decision.
+We now turn to the actual fixation of pay in each case.
+We shall first take the case of Ram Parkash (i.e. C.A. 1008).
+I le joined service on April 11, 1949.
+His basic pay as on January 1,1959 was Rs. 106.
+His place of posting was Phagwara in area ITT.
+Point to point adjustment as on January 1, 1959, would give him Rs. 106 in the Sastry award scale as modified.
+This is equal to his actual salary as on January 1, 1959.
+Therefore under sub cl.
+(a) of el.
+(iv) his salary has to be fixed as on January 1, 1959 at Rs. 106.
+He would not be entitled to any increments under sub cls.
+(b) and (c), because his actual salary coincided with the adjusted basic pay in the Sastry award scale as modified as on January 1, 1959.
+He would however be entitled to two increments under sub cl.
+(d) for the years 1960 and 1961 and his salary therefore as on January 1, 1962 under the Sastry award would come to Rs. 119.
+As Rs. 119 is the eleventh stage in the Sastry scale, Ram Parkash would be entitled to the eleventh stage in the Desai scale, which would be Rs. 170.
+The bank actually fixed him at Rs. 176 on its own interpretation of the award.
+In the circumstances, Ram Parkash was not entitled to any relief from the labour court.
+Tek Chand Sharma respondent in C.A. 1009 was appointed on November 15, 1950.
+His salary as on January 1, 1959 was Rs. 100 and his place of posting was Nakodar in area IV of the (1) 906 Sastry award.
+His salary according to point to point adjustment would come to Rs. 85.
+But under cl.
+(i) his salary cannot be fixed below Rs. 100, which he was actually getting.
+Under subcl.
+(a) of cl.
+(iv) his salary will be fixed at Rs. 100.
+He would not be entitled to any increments under sub cls.
+(b) and (c) of cl.
+(iv) because he was getting more than what would be his adjusted basic pay under cl.
+Therefore, for purposes of sub cl.
+(a) of cl.
+(iv) he would be fixed at Rs. 100 as on January 1, 1959, and would be entitled to increments under sub cl.
+(d) which will bring his salary to Rs. 112 as on January 1, 1962.
+This is the thirteenth stage in the Sastry scale.
+Nakodar is now in area III in the Desai award.
+The thirteenth stage in the Desai award scale is Rs. 182 for that area.
+So his salary as on January 1, 1962 would be fixed at Rs. 182.
+In addition he is entitled to two increments on account of being a graduate and one increment on account of his having passed the Indian Institute of Bankers ' examination.
+His actual salary in the Desai scale on January 1, 1962 will be Rs. 182 plus Rs. 33, i.e., Rs. 215.
+The bank fitted him on Rs. 193.
+The award of the labour court therefore in the case of Tek Chand Sharma is correct.
+We therefore allow C.A. 1008 and set aside the order of the labour court and dismiss the application of Ram Parkash.
+We make no order as to costs in the circumstances.
+C.A. 1009 is hereby dismissed.
+We make no order as to costs in the circumstances.
+C.A. 1008 allowed.
+C.A. 1009 dismissed.

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+Appeal No. 801 of 1963.
+Appeal by special leave from the judgment and decree dated September 2, 1959 of the Madras High Court in Second Appeal No. 774 of 1957.
+T. V. R. Tatachari, for the appellants.
+P. Raghaviah and R. Ganapathy Iyer, for the respondents.
+The Judgment of the Court was delivered by Gajendragadkar, C.J.
+The present appeal has been brought to this Court by special leave and it arises from a suit filed by the appellants against four respondents.
+The properties involved in the suit consist of agricultural lands situated in Eragudi village, Musiri taluk, Tiruchirappalli district.
+According to the appellants, the said lands had been granted in Inam to the ancestor of one Ambalathadum Pachai Kandai Udayavar by the Carnatic Rulers before the advent of the British power in India.
+The original grantdeeds are not available; but at the time of the settlement of the Inams in the sixties of the last century, Inam title deeds were issued in favour of the family of Pachai Kandai Udayavar.
+The appellants averred that the properties covered by the grant bad been granted in Inam to the original grantee burdened with the obligation of performing certain services in a Matam.
+The said properties were alienated from time to time, and as a result of the last alienation, the appellants became entitled to them.
+The appellants in the present litigation claimed a declaration about their title to the properties in suit and a permanent injunction restraining respondents 1 to 3, who claimed to be the trustees of an alleged Pachai Kandai Udayavar Temple at Eragudi, from interfering with their possession of the same.
+Respondent No. 4 is the Deputy Commissioner, Hindu Religious and Charitable Endowments, L9Sup.
+CI/66 9 122 Tiruchirappalli, and he has been impleaded because he has purported to appoint respondents 1 to 3 as trustees of the said alleged Temple on the 7th March, 1951.
+This suit (No. 103 of 1954) was instituted on the 13th September, 1954, under section 87 of the, Madras Hindu Religious and Charitable Endowments Act (No. XIX of 1951) (hereinafter called 'the Act '), in the Court of the District Munsif at Turaiyur.
+Respondents 1 to 3 who have been appointed as trustees of the said temple by respondent No. 4, obtained a certificate from him that the properties in question belonged to the Temple; and on the basis of the said certificate, they had filed an application before the Magistrate having jurisdiction in the area under section 87 of the Act for possession.
+Notice of this application was served on the appellants and they pleaded their own title to the properties.
+The Magistrate, however, over ruled the claim made by the appellants and directed them to deliver possession of the properties to respondents 1 to 3.
+Before this order could be executed and possession delivered to respondents 1 to 3, the appellants instituted the present suit.
+Respondents 1 to 3 resisted this suit and contended that the properties in suit had not been granted to the predecessor of Pachai Kandai Udayavar as alleged by the appellants.
+Their case was that the said properties had been granted to the Pachai Kandai Udayavar Temple and formed part of its properties.
+As trustees appointed by respondent No. 4, they claimed that they were entitled to the possession of the properties.
+On these pleadings, four substantive issues were framed by the learned trial Judge; they were : whether the grant of the Inam was a personal Inam; whether the grant of the Inam was a religious endowment; whether plaintiffs have title to the suit properties; and whether plaintiffs have acquired title by prescription ? On the first two issues, oral and documentary evidence was adduced by the parties.
+The learned trial Judge examined the whole evidence and came to the conclusion that the grant of the Inam was a personal Inam, and that it was not a grant in favour of the religious endowment within the meaning of the Act.
+That is how the first two issues were answered in favour of the appellants.
+In consequence, the learned trial Judge also held that the appellants had proved their title to the suit properties.
+The alternative plea made by the appellants that they had acquired title to the properties by prescription, was also upheld by the trial Judge.
+In the result, the appellants ' suit was decreed on the 14th February, 1955.
+123 Respondents 1 to 3 preferred an appeal (No. 129 of 1955) in the Court of the Subordinate Judge at Tiruchirappalli, challenging the correctness of the said decree.
+The lower appellate Court considered three main points; they were : whether the grant was in favour of Ambalathadum Pachai Kandai Udayavar; whether there is a temple; and whether the plaintiffs had prescribed their title to the suit properties by adverse possession.
+The lower appellate Court made a finding against respondents 1 to 3 on point No. 2.
+It held that the evidence adduced by the respondents did not prove the existence of any temple in favour of which the original grant had been alleged to have been made according to them.
+On that view, it thought it unnecessary to consider the first point.
+In regard to the third point based on the appellants ' claim that they had acquired title by adverse possession, the lower appellate Court found that "it was evident that from the very beginning, Pachai Kandai Udayavar and his family had been claiming beneficial interest in the property and they were not holding the same as managers of the trust.
+The alienations must, therefore, be regarded only as repudiation of the trust.
+" In the result, the lower appellate Court 's finding was that the appellants had established their claim of prescriptive title.
+The appeal preferred by respondents 1 to 3, therefore, failed and was dismissed with costs on March 29, 1957.
+This decision was challenged by respondents 2 & 3 before the Madras High Court in Second Appeal (No. 774 of 1957).
+Subrahmanyam, J., who heard this appeal, held that the original grant had been made in favour of the Temple.
+There was evidence to show that the properties originally granted had been resumed by the Collector; but the learned Judge took the view that the said resumption was only of the melwaram or assessment, and that since the lands had been granted in Inam to the deity and its matam, their title to the lands remained unaffected by the resumption proceedings.
+In other words, he negatived the appellants ' claim that the original grant was in favour of their predecessors intitle, though burdened with an obligation to render service to the matam.
+The learned Judge reversed the finding of the lower appellate Court that the existence of the Temple had not been proved.
+Having thus held that the properties belonged to the Temple, the learned Judge proceeded to consider the question of limitation by reference to the several alienations with which the present litigation is concerned.
+In dealing with the question of limitation, the learned Judge took the view that the present suit would be governed 124 by Article 134 B of the Indian Limitation Act.
+This article has been introduced in the said Act by Amending Act 1 of 1929 and came into force on 1 1 1929.
+It was conceded before the lower appellate Court that the new article was not retrospective in operation and that if the title of the alienees in regard to 'dharmadlayam properties had been acquired by adverse possession prior to 1 1 1929, it would not be affected by the provisions of article 134 B. Thus considered, the alienations in regard to items 1, 2, part of item 3, items 7 & 8, and a portion of the well in item 5 sold under Ext.
+A 2 in 1914 were held to be outside the mischief of article 134B.
+The possession of the vendees in regard to the properties covered by the said sale deed was held to have conferred title on them.
+Similarly, item 4 and a part of item 6 which had been sold in auction in execution of a decree in 1927 (vide Exts.
+A 7 and A 8), were also held to be outside the scope of article 134 B, because the said article does not cover auction sales.
+That left the alienations covered by Exts.
+A 3, A 6 and A 12 to be considered.
+These three alienations were effected on the 7th October, 1917, 2nd July, 1926, and 2nd July, 1926 respectively.
+The High Court held that the properties covered by these sale deeds fell within the purview of article 134 B, and the appellants ' title in respect thereof was open to challenge.
+In the result, the appellants ' claim in regard to the properties covered by these three sale deeds was rejected, whereas their claim in regard to the other ,prop erties.
+was upheld.
+In consequence the appeal preferred by respondents 2 & 3 was partly allowed and the decree passed by the lower appellate court in regard to Exts.
+A 3, A 6 and A 12 was set aside.
+This judgment was pronounced on the 2nd September, 1959.
+It is against this decision that the appellants have come to this Court by special leave.
+Mr. Tatachari for the appellants has raised before us an interesting question of law.
+He contends that article 134 B would not apply to the present case, because the alienations evidenced by Exts.
+A 3, A 6 and A 12 show that the alienors purported to transfer the properties not as Poojaris or managers of a temple, but in their individual character as owners of the said properties.
+The documents recite that the properties belonged to the alienors as their separate secular properties, though burdened with an obligation to render service to the Matam; and that shows that the transfer was effected not by the Poojaris of the temple, but by persons who claimed that the properties belonged to them.
+Such a case falls outside the purview of article 134 B and must be governed by article 144 of the First Schedule to the Limitation Act.
+125 Mr. Tatachari also argues that in applying article 144, we must assume that the possession of the alienees was adverse to the temple from the respective dates of the alienations when they were put in possession of the properties covered by the transactions in question.
+In support of this argument, Mr. Tatachari has relied on the statement of the law made by Mr. Justice Mukherjea in his lectures on.
+the Hindu Law of Religious and Charitable Trust.(1) Says Mr. Justice Mukherjea, "if the transfer (of debutter property) is not of ' particular items of property, but of the entire endowment with all its properties, the possession of the transferee is unlawful from the very beginning.
+The decisions in Gnanasambanda Pandara Sannadhi vs Velu Pandanam & Another(2) and Damodar Das vs A dhikari Lakham Das(3) are illustrations of this type of cases.
+" He also added that transfer would similarly be void 'and limitation would run from the date of the transfer, if the manager transfers the property as his own prop" and not as the property of the deity.
+The same statement has been made by the learned author in two other places in the course of his lectures.
+The argument is that in cases falling under article 134 B, the transfer made by the manager of a Hindu endowment is challenged by his successor on the ground that it was beyond the authority of the manager; and such a challenge necessarily postulates that the transfer was effected by the manager as manager purporting to deal with the property as belonging to the religious endowment.
+Where, however, the transfer is made by the manager not as manager, but as an individual, and he deals with the property not on the basis that it belongs to the religious endowment, but on the basis that it belongs to himself, considerations which would govern the application of limitation are substantially different; and in such a case, the transfer being void ab initio, the possession of the transferee is adverse from the date of the transfer.
+That is how Mr. Tatachari has attempted to avoid the application of article 134 B in the present case.
+There can be no doubt that if the assumption made by Mr. Tatachari is well founded, the appellants title to the three transactions in question would have to be upheld.
+It is well known that the law of limitation in regard to suits instituted to set aside unauthorised alienation of endowed property by a Shebait or a Mahant or a manager of a Hindu religious endowment was very uncertain prior to the decision of the Privy Council (1) Mr. Justice B. K. Mukherjea on 'Hindu Law of Religious and Charitable Trust ' II Edn.
+(1962) p. 282.
+(2) L.R. 27 I.A. 69.
+(3) L.R. 37 I.A. 147.
+126 in Vidya Varuthi Thirtha vs Balusami Ayyar & Others.(1) That is why subsequent to the said decision, any discussion about the question of limitation relating to such suits necessarily begins with a reference to the principles laid down by the Privy Council in Vidya Varuthi 's case.
+In that case, the Privy Council held that the endowments of a Hindu math are not "conveyed in trust", nor is the head of the math a "trustee" with regard to them, save as to specific property proved to have been vested in him for a specific object.
+The question which the Privy Council had to consider in that case was whether article 134 applied to a suit in which the validity of a permanent lease of part of the math property granted by the head of a math was challenged.
+Article 134 covers suits brought with a view to recover possession of immovable property conveyed or bequeathed in trust or mortgaged and afterwards transferred by the trustee or mortgagee for a valuable consideration.
+These words used in column 1 of article 134 necessarily raise the question as to whether the head of a math is a trustee within their meaning; and Mr. Justice Ameer Ali, who spoke for the Privy Council, answered that question in the negative.
+In con sequence, the argument that article 134 applied, was repelled, and it was held that article 144 would govern such a case.
+In fact, it is substantially because of this decision that Articles 134 A, 134 B and 134 C and Articles 48A and 48B came to be inserted in the First Schedule to the Limitation Act by Amending Act 1 of 1929.
+At the same time, section 10 of the Limitation Act was amended by addition of an explanatory clause which provided, inter alia, that for the purposes of section 10, any property comprised in a Hindu religious or charitable endowment shall be deemed to be property vested in trust for a specific purpose, and the manager of any such property shall be deemed to be the trustee thereof.
+As we have already noticed, these newly added provisions in the Limitation Act came into force on the 1st January, 1929.
+Reverting then to the question as to whether a transfer effected by the manager of a temple in regard to properties belonging to the temple falls outside the purview of article 134 B if it is shown to have been made on the basis that the transferor treated the properties as his own, it does appear that the two earlier Privy Council decisions in Gnanasambanda 's(2) and Damodar Das 's(3) cases lend some support to the contention.
+In Gnanasambanda 's case, it was held by the Privy Council that where hereditary trustees of a re ligious endowment sold their hereditary right of management (1) L.R. 48 I.A. 3 2.
+(2) L.R. 27 I.A. 69.
+(3) L.R. 37 I.A. 147.
+127 and transferred the endowed property, the sales were null and void, in the absence of a custom allowing them; and that the possession taken by the purchaser was adverse to the vendors and those claiming under them.
+In appreciating the effect of this decision, it is necessary to bear in mind that the plea of limitation with which the Privy Council was concerned in that case was based on article 124 of the Limitation Act.
+Article 124 relates to suits filed for possession of a hereditary office, and the limitation prescribed for such suits starts when the defendant takes possession of the office adversely to the plaintiff.
+It is clear that in that case, what had been sold was the hereditary office, as well as the properties belonging to the endowment; and so, it was plain that limitation began as soon as the purchaser took possession of the office under article 124.
+It is true that immovable properties belonging to the temple had also been sold; but the Privy Council expressly ruled that there was no distinction between the office and the property of the endowment.
+The one is attached to the other; but if there is, article 144 of the same Schedule is applicable to the property; and that bars the suit after 12 years ' adverse possession.
+It may be permissible to state that this latter observation was made in 1899 long before the Privy Council enunciated the true legal position in regard to the status of the managers of Hindu religious endowments in Vidya Varuthi 's case(1).
+Similarly in Damodar Das 's case(2), while dealing with the validity of an 'ikrarnama ' of a debuttar property executed by the manager of the property, the Privy Council observed that from the date of the ikranama, the possession of the transferee was adverse to the right of the idol and that led to the conclusion that the suit instituted against the transferee was barred by limitation.
+There is no discussion about the status and character of the Chela who made the transfer nor about the right of the succeeding Chela to challenge the validity of the transfer effected by his predecessor which was subsequently recognised by the Privy Council in Vidya Varuthi 's case(1).
+These two judgments have, no doubt been incidentally referred to by the Privy Council in Mahant Ram Charan Das vs Naurangi Lal and Others(3), and in Mahadeo Prasad Singh and Others vs Karia Bharti(4) though the decision in the said two cases proceeded in the light of the legal position enunciated by the Privy Council in Vidya Varuthi 's case(4).
+(1) L.R. 48 I.A. 302.
+(2) L.R. 37 I.A. 147.
+(3) L.R. 60 I.A. 124.
+(4) L.R. 62 I.A. 47.
+128 It would thus be seen that the observations made by Mr. Justice Mukhejea on which Mr. Tatachari relies, really purport to extend the principle which has apparently been mentioned by the Privy Council in Gnanasambanda 's case(1).
+It does appear that Mr. Justice Mukhejea had expressed this view as a Judge of the Calcutta High Court in the case of Hemanta Kumari Basu vs Sree Ishwar Sridhar Jiu, (2) and had relied on the two Privy Council 's decisions in Gnanasambanda 's(1) and Damodar Das 's cases In the case of Hemanta Kumari Basa(2), the attention of Mukherjea J. was drawn to the fact that in an earlier decision of the Calcutta High Court in Ronald Duncan Cromartic and Francis Arthur Shephard Sutherland, vs Sri Iswar Radha Damodar few and Others, (4) D. N. Mitter, J., had made observations which were inconsistent with the view which Mukhejea, J. was disposed to take; but the learned Judge commented on the said observations by saying that they were open to criticism.
+Thus, on the question raised by Mr. Tatachari before us, there does appear to be some divergence of opinion in the Calcutta High Court itself No other decision has been cited before us which has accepted the proposition that if any part of the property belonging to a Hindu religious endowment is transferred by its manager, the transfer is void and the possession of the transferee becomes adverse to the endowment from the very beginning.
+In fact, as we have already indicated, in the case of Gnanasambanda(1) what had been transferred unauthorisedly, was the religious office itself and all the properties appertaining thereto.
+It is open to doubt whether the said decision could lead to the inference that if a part of the property is transferred by the manager of a religious endowment on the basis that it belongs to him and not to the religious endowment, the transfer is void ab initio, with the result that the possession of the transferee is adverse to the religious endowment from the very beginning, and the succeeding manager 's right to challenge the said transfer would be lost if his predecessor who made the transfer lives for more than 12 years after effecting the transfer.
+In the words of Sir John Edge, who spoke for the Privy Council in Nainapillai Marakayar and of hers vs Ramanathan Chettiar and Others(5), " in the case of a Shebait a grant by him (1) L.R. 27 I.A. 69.
+(2) I.L.R. (3) L.R. 37 I.A. 147.
+(4) (5) L.R. 51 I.A. 83 at p. 97.
+129 in violation of his duty of an interest in endowed lands which he has no authority as Shebait to make may possibly under some circumstances be good as against himself by way of estoppel, but is not binding upon his successors.
+" It is not easy to see why the successor 's right to Challenge an unauthorised alienation made by his predecessor should be affected adversely if the alienation is made by his predecessor on the basis that the property belonged to him and not to the religious endowment.
+However, we do not think it necessary to decide this point in the present case, because, in our opinion, the plain words of article 134 B do not permit such a plea to be raised.
+Column 1 of article 134 B provides for suits brought, inter alia, by the manager of a Hindu religious or charitable endowment to recover possession of immovable property comprised in the endowment which has been transferred by a previous manager for a valuable consideration.
+The period prescribed for such suits is 12 years, and the time from which the period begins to run is the death, resignation or removal of the transferor.
+Confining ourselves to the first column of article 134 B at this stage, the question which we have to decide is : does this article permit any distinction to be made between transfers effected by a previous manager on the basis that the property transferred belongs to the religious endowment, and those made by him on the basis that the said property is his own private property ? If the property is transferred by the manager on the basis that it belongs to the endowment, article 134 B clearly applies; but does it make any difference to the application of article 134 B if the transfer is made on the other basis that the property belongs not to the endowment, but to the manager himself ? In either case, the successor who challenges the alienation, will have to prove that the property in fact belongs to the religious endowment.
+Once that is proved, is it necessary for him also to show that the transfer was made, on the basis that the property belonged to the religious endowment ? In our opinion, such a limitation cannot be read in the words used by the said article.
+Article 134 B applies to all cases where it is shown that the immovable property was comprised in the endowment and that it has been transferred by a previous manager for a valuable consideration.
+The successor has to prove three facts : (1) that the property belongs to the religious endowment; (2) that it was transferred by a previous manager; and (3) that the transfer was for a valuable consideration.
+The character of the representations made by the previous manager in regard to his relation with the property which is the subject matter of transfer, is irrelevant for the purpose of article 134 B. 130 All transfers made would fall within article 134 B if the three essential facts are proved by the successor of the transferor manager of the Hindu religious endowment.
+Therefore, we do not think that Mr. Tatachari is justified in contending that the transfers with which we are concerned in the present appeal fall outside the purview of article 134 B inasmuch as they are effected by the alienors, on the representations that the properties transferred belonged to them as their separate properties.
+On the findings recorded by the High Court, it is clear that the properties belonged to the temple; that they have been transferred by persons who must be deemed to be the previous managers of the temple; and that they have been transferred for valuable consideration.
+The present suit has been brought against respondents 1 to 3 who are appointed trustees of the temple by respondent No. 4; and so, all the ingredients prescribed by the first column of article 134 B are satisfied.
+That is why we must reject the ingenious argument urged before us by Mr. Tatachari that article 134 B does not apply to the present case.
+We may, in this connection, refer to the decision of the Privy Council in Mahant Sudarsan Das vs Mahant Ram Kirpal Das, and Others.
+(1) In that case, the question which arose for the decision of the Privy Council was whether article 134 B applied to a case where debuttar property had been sold in an execution sale, and the Privy Council held that it did not. "To apply article 134 B to an execution sale", observed Lord Radcliffe, "involves a reading of that article which would construe the words "transferred by a previous manager for a valuable consideration" as covering an execution sale under court process, and the word "transferor" as extending to the judgment debtor whose land is sold.
+It is not only that the words themselves do not properly bear that meaning.
+Apart from that, what is in all essentials the same question was considered on several occasions by courts in India before article 134A and 134B had been added to article 134.
+That Article contains the analogous phrase "transferred by the trustee or mortgagee for a valuable consideration", and there was a uniform current of decision to the effect that these words were incapable of applying to an execution sale.
+" What was said by the Privy Council about the impropriety of including an execution sale within the meaning of article 134B can, with equal justification, be said about introducing words of limitation in the said article which alone can exclude transfers made by the previous manager of the Hindu religious endowment on the basis that the property transferred belonged to (1) L.R. 77 I.A. 42 at pp.
+49 50.
+131 him.
+Therefore, we must deal with the present appeal on the basis that article 134 B applies to the facts of the present case.
+Mr. Tatachari then contends that even on the application of article 134 B, the decision of the High Court is erroneous, because on the facts proved in this case, the High Court should have drawn the legal inference that the transferor had been removed more than 12 years before the suit was filed.
+He contends that the question as to whether on facts proved in the present case, an inference can be drawn that the previous manager or trustee had been removed, is a mixed question of fact and law, and the High Court was in error in reversing the decisions of the courts below by holding that the title of the temple had not been lost by adverse possession before the suit was filed.
+For deciding this question, it is necessary to refer to some material facts.
+The transferor is Pachaikandaswamiar.
+The appellants ' case before the trial Court was that Pachaikandaswamiar had resigned his position about 27 years ago, and that even if article 134 B applied, limitation should be held to have commenced from the date when the alienor either resigned his office or was removed from it.
+In dealing with this aspect of the matter, the learned trial Judge has examined the oral evidence led on behalf of the parties.
+He assumed that Pachaikandaswamiar and his son were alive at the date of the suit.
+Even so, he found that they had left the village and had taken no part whatever in the management of the worship of the temple.
+In fact, almost all the properties belonging to the temple had in course of time, been a alienated and the alienors were no longer interested either in the temple or in staying in the village itself.
+Raju lyer, who was examined as a witness by the appellants, stated that he and Amirthalinga lyer had been performing the worship of the temple for the past 27 years, and he added that the alienor and his son had left the village more than 25 years ago, and but for very casual visits to the village, they had never taken any interest in the temple or in the management of its affairs.
+In fact, Ranga Raju Raddiar, whom the respondents examined, admitted in reply to the questions put by the Court that since 25 years or so neither Pachaikandaswamiar nor Chinnaswami lyer had performed any pooja in the temple.
+He substantially corroborated the statement of Raju lyer that Raju lyer and Amirthalinga lyer` had been performing the worship of the temple.
+Another witness, Chandrasekara lyer by name, whom the respondents examined, also admitted that Pachaikanda had sold away all his properties and had left the village.
+Besides, when respondents 1 to 3 were appointed as trustees of the temple, a notice was issued by the 132 office of Assistant Commissioner for Hindu Religious Endowments, Tiruchirappalli, on the 19th June, 1948, in which it was specifically averred that there were no legally constituted trustees for Sri Pachaikantha Udayavar Temple, Eragudi, and it was mismanaged; and so, it was proposed to appoint legally constituted trustees for the said temple.
+This notice was served on witness Raju lyer and Amrithalinga lyer, Chinnasamy Iyer, and Rangaraja Reddiar, who were performing the worship and acting as de facto managers of the temple.
+It is remarkable that this notice describes Amirthalinga Iyer and Chinnasamy lyer as de facto trustees of the temple.
+It is on these facts that the learned trial Judge held that the alienor must be deemed to have resigned his office or left it.
+The lower appellate Court does not appear to have considered or made any specific or clear finding on this aspect of the matter.
+It, however, held that the transferor and his family had been claiming beneficial interest in the properties all along and that they were not holding the same as managers of the trust.
+That is why he confirmed the finding of the trial Judge on the question of adverse possession, though on a somewhat different ground.
+The High Court has relied on the fact that the alienor is still alive, and so, it thought that the plea of adverse possession could not be sustained.
+Unfortunately, the question as to whether the facts proved in this case did not show that the alienor had been removed from office by other persons who were in management of the temple de facto, has not been discussed by the High Court.
+In our opinion, all the facts which have been brought on the record in relation to this aspect of the matter, clearly show not only that the alienor disposed of all the property and left the village ' but also that for the last 25 years or so, the management has been taken over by other persons who are acting as de facto managers of the temple.
+This evidence appears to us to show that the alienors had been removed from management of the temple, and other persons have taken up the position as de facto managers, and this position has lasted for more than 25 years.
+If that be so, there is no escape from the conclusion that more than 12 years have elapsed since the date of the removal of the previous manager who transferred the properties in question; and so, if a suit were brought by respondents 1 to 3 on the date when they were appointed trustees by respondent No. 4, it would be barred under article 134 B.
+On that view of the matter, we must hold that the trial Judge and 133 the lower appellate Court were right in decreeing the appellants ' suit in its entirety.
+We must accordingly set aside the decree passed by the High Court in regard to the transfers covered by Exts.
+A 3, A 6 and A 12, and restore that of the lower appellate Court.
+In the circumstances of this case, we direct that parties should bear their own costs.
+Appeal allowed.

2122.txt

@@ -0,0 +1,482 @@
+Appeal No. 381 of 1966.
+Appeal by special leave from the judgment and order dated October 7, 1965 of the Punjab High Court (Circuit Bench) at Delhi in Civil Writ No. 1626 C of 1965.
+M. C. Setalvad, R. K. Garg and section C. Agarwala, for the appellants.
+C. K. Daphtary, Attorney General, B. R. L. Iyengar, R. K. P. Shankardass and R. H. Dhebar, for respondents Nos. 1 and 3 to 7.
+section Mohan Kumaramangalam, C. Ramakrishna and A. V. V. Nair, for respondent No. 2.
+The dissenting Opinion Of SARKAR, C.J. and MUDHOLKAR.
+, J. was delivered by MUDHOLKAR, J HIDAYATULLAH.
+BACHAWAT and SHELAT JJ.
+delivered separate judgments allowing the Appeal.
+Mudholkar, J.
+On May 19, 1965 Mr. D. section Dang, Secretary of the Company Law Board issued an order on behalf of the Company Law Board made under section 237 (b) of the appointing 4 persons as Inspectors for investigating the affairs of the Barium Chemicals Ltd., appellant No. I before us, since its incorporation in the year 1961 and to report to the Company Law Board inter alia "all the irregularities and contravention in respect of the provisions of the or of any other law for the time being in force and the person or persons responsible for such irregularities and contravention.
+" The order was made by the Chairman of the Board, Mr. R. C. Dutt on behalf of the Board by virtue of the powers conferred on him by certain rules to which we shall refer later.
+On June 4, 1965 the Company preferred a writ petition under article 226 of the Constitution in the Punjab High Court for the issue of a writ of mandamus or other appropriate writ, direction or order quashing the order of the Board dated May 19, 1965.
+The Managing Director, Mr. Balasubramanian joined in the petition as petitioner No. 2.
+The writ petition is directed against 7 respondents, the first of which is the 318 Company Law Board.
+The second respondent is Mr. T. T. Krishnamachari, who was at that time Minister for Finance in the Government of India.
+The Inspectors: appointed are respondents 3 to 6 and Mr. Dang is the 7th respondent.
+Apart from the relief of quashing the order of May 19, 1965 the appellants sought the ' issue of a writ restraining the Company Law Board and the Inspectors from giving effect to the order dated May 19, 1965 and also sought some other incidental reliefs.
+The order of the Board was challenged on 5 grounds which are briefly as follows: (1) that the order was made mala fide; (2) that in making the order the Board had acted on material extraneous to the matters mentioned in section 237(b) of the ; (3) that the order having in fact been made at the instance of the shareholders is invalid and on a true construction of section 237 this could not be done; (4) that the order was invalid because it was made by the Chairman of the Board and not by the Board; and (5) that the provisions of section 237(b) are void as offending articles 14 and 19(1) (g) of the Constitution.
+The allegations of mala fides were denied on behalf of the respondents.
+They disputed the validity of all the other grounds raised by the petitioners.
+The High Court rejected the contentions urged before it on behalf of the appellants and dismissed the writ petition.
+The appellants thereafter sought to obtain a certificate of fitness for appeal to this Court; but the High Court refused to grant such a certificate.
+They have now come up to this Court by special leave.
+In order to appreciate the arguments addressed before us a brief statement of the relevant facts would be necessary.
+The Company was registered in the year 1961 and had an authorised capital of Rs. 1 crore divided into 1,00,000 shares of Rs. 100 each.
+Its primary object was to carry on business of manufacturing all types of barium compounds.
+Appellant No. 2 was appointed Managing Director of the Company from December 5, 1961 and his appointment and remuneration were approved by the Central Government on July 30, 1962.
+The erection of the plant was undertaken by M/s. L. A. Mitchell Ltd., of Manchester in pursuance of a collaboration agreement between it and the company entered in October, 1961 and approved by the Central Government in November of that year.
+Thereafter a permit for importing the requisite machinery was granted to the Company.
+The issued capital of the Company was Rs. 50, 00,000 and the public was invited to subscribe for shares in the Company.
+It is said that the issue was oversubscribed by March 12, 1962.
+319 It would see that soon after the collaboration agreement was entered into M/s. L. A. Mitchell Ltd., was taken over by a financial group (M/s. Pearwn, & Co. Ltd.), to which a. person named Lord Poole belonged.
+It would appear that as the work of setting up of the plant was being delayed the Company sent a notice to M/s Mitchell Ltd. , on April 2, 1965 in which the Company stated that if the plant was not completely installed and got into running order by June 1, 1965 the Company will have to make alternative arrangements and that it would hold M/s. L. A. Mitchell Ltd., liable to pay damages to the Company for the loss suffered by it.
+As a result of the notice Lord Poole visited India in April/May, 1965.
+In his opinion the design of the plant was defective.
+Certain negotiations took place between the Company and Lord Poole in the course of which an undertaking was given by Lord Poole on at behalf of the collaborators that the work would be completed with necessary alterations and modifications in accordance with the report of M/s. Humphrey & Co., and that the collaborators would spend an additional amount upto pound 250,000 as may be required for the purpose.
+It is said that the plaint was producing at that time only 25 per cent of its installed capacity but that according to the assurance given by Lord Poole it would yield full production by April, 1966.
+According to the appellants, before entering into a collaboration agreement with M/s. L. A. Mitchell Ltd., the appellant No. 2 Balasubramanian was negotiating with a German firm named Kali Chemie A. G. of Hanover for obtaining their collaboration.
+It is said that the firm of M/s. T. T. Krishnamachari & Sons were and still are the sole agents in India for some of the products of Kali Chemie.
+The firm of T. T. Krishnamachari & Sons approached appellant No. 2 for the grant of sole selling, agency of the products of the plant to be established in collaboration with Kali Chemie.
+Appellant No. 2 did not agree to this with the result that the company 's negotiations with Kali Chemie broke down.
+The appellants also say that T. T. Krishnamachari & Sonswere later a so granted a licence to set up a plant for manufacturing barium chemicals but that on appellant No. 2 bringing certainfacts: to the notice of Mr. Nehru the licence in favour of T. T. Krishnamachari & Sons was revoked.
+The relevance of these facts is in connection with the plea of mala fides.
+On this part of the case the appellant 's contention is that the Chairman of the Company Law Board Mr. R. C. Dutt made the order for investigation into the affairs of appellant No. 1 at the instance of Mr. T. T. Krishnamachari, the then Finance Minister and also because of his bias against appellant No. 2.
+The suggestion is that as the licence of M/s. T. T. Krishnamachari & Sons was revoked and as they were not even given sole selling agency for the sale of the products of barium chemicals Mr. T. T. Krishnaniachari wanted action to be taken under this provision either for penalising appellant No. 1 or putting pressure on it.
+320 A lengthy argument was addressed before us by Mr. Setalvad bearing on the question of mala fides in the course of which he referred us to certain documents.
+He also wanted us to bear in mind the sequence in which certain events occurred and said that these would indicate that the former Finance Minister must have been instrumental in having an order under section 237(b) made by the Chairman of the Board.
+We were, however, not impressed by this argument.
+Our learned brother Shelat has dealt with this aspect of the matter fully in his judgment and as we agree with him it is not necessary to say much on the point.
+We would, however, like to refer to and deal with one aspect of the argument bearing on the question of mala fides.
+Mr. Setalvad points out that the Company Law Board had decided in December 1964 to take action against appellant No. I under section 237(b) and had actually obtained approval of Mr. T. T. Krishnamachari to the proposed action.
+Therefore, according to him the real order is of Mr. Krishnamachari even though the order is expressed in the name of the Board.
+We find no substance in the argument.
+The decision to take action was already taken by the Chairman and there is nothing to indicate that in arriving at that decision he was influenced by the Finance Minister.
+If the decision arrived at by the Chairman was an independent one it cannot be said to have been rendered mala fide because it was later approved by Mr. Krishnamachari whose sons undoubtedly constitute the partnership firm of M/s. T. T. Krishnamachari & Sons.
+It is also suggested by Mr. Setalvad that the action approved of in December, 1964 was delayed till May, 1965 because in the interval some negotiations with Kali Chemie had been started and had they ended fruitfully M/s. T.T. Krishnamachari & Sons would have got the sole selling agency of the products of barium chemicals.
+Now it does seem from ,certain material brought to our notice that negotiations with Kali Chemie were revived by appellant No. 2 because of the difficulties which were being experienced in the working of the collaboration agreement with M/s. L. A. Mitchell Ltd. No material, however, is placed before us from which it could be reasonably inferred that had the negotiations with Kali Chemie fructified M/s. T. T. Krishnamachari & Sons would have secured the sole monopoly for sale of the products of barium chemicals.
+One more point was urged in connection with this aspect of the argument and it is that the appellants were not given an opportunity to cross examine Mr. T. T. Krishnamachari and Mr. Dutt.
+In our opinion, in a proceedingunder article 226 of the Constitution the normal rule is, as pointedout by this Court in The State of Bombay vs Purshottam Jog Naik to decide disputed questions on the basis of affidavits and that it is within the discretion of the High Court whether to allow a person who has sworn an affidavit before it as indeed Mr. Krishnamachari and Mr. Dutt have to be cross examined or not to permit it.
+In exercise of.
+its discretion the High Court has re 321 fused permission to cross examine them.
+In such a case it would not be appropriate for this Court while hearing an appeal by special leave to interfere lightly with the exercise of that discretion.
+Mr. Setalvad said that as the appellants had made out a prima facie case of mala fides in their affidavits, and as these allegations had been denied by the respondents, the High Court was in error in refusing permission to the appellants to cross examine the persons who swore the affidavits on the side of the respondents.
+We are not aware of the rule on which Mr. Setalvad bases himself.
+There is nothing to show that the High Court thought that a prima facie case of mala fides had been made out.
+Even in such a case a court might well hold that it has been demolished by the affidavits in answer.
+The court has to find the facts and if it finds that it can do so without cross examination it is not compelled to permit cross examination.
+We have no reason to think that the High Court could not have ascertained the facts on the affidavits themselves.
+Coming to the second point, it would be desirable to repro duce section 237 which reads thus: "Without prejudice to its powers under section 235 the Central Government (a) shall appoint one or more competent persons as inspectors to investigate the affairs of a company and to report thereon in such manner as the Central Government may direct, if (i) the company, by special resolution, or (ii) the Court, by order, declares that the affairs of the company ought to be investigated by an inspector appointed by the Central Government; and (b) may do so if, in the opinion of the Central Government, there are circumstances suggesting (i) that the business of the company is being conducted with intent to defraud its creditors, members or any other persons, or otherwise for a fraudulent or unlawful purpose, or in a manner oppressive of any of its members, or that the company was formed for any fraudulent or unlawful purpose; or (ii) that persons concerned in the formation of the company or the management of its affairs have in connection therewith been guilty of fraud, misfeasance or other misconduct towards the company or towards any of its members; or (iii) that the members of the company have not been given all the information with respect to its 322 affairs.
+which they might reasonably expect, including information relating to the calculation of the commission payable to a managing or other director, the managing agent, the secretaries and treasurers, or the manager of the company.
+" In view of the fact that the Central Government, by virtue of the powers conferred by sections 10 E and 637 delegated its powers under section 237 to them Company Law Board we shall read section 237 as if in place of the words "Central Government" there are the words "Company Law Board" or for brevity 'Board '.
+According to Mr. Setalvad, cl.
+(b) of section 237 requires two things: (1) the opinion of the Board and (2) the existence of circumstances suggesting one or more of the matters.
+specified in sub cls.
+(i) to (iii).
+He contends that though the opinion of the Board is subjective the existence of circumstances set out in the sub cls.
+(i) to (iii) is a condition precedent to the formation of the opinion.
+Therefore, according to him, the Court is entitled to ascertain whether in fact any of those circumstances exists.
+The Attorney General disputes this construction and contends that the clause is incapable of a dichotomy and that the subjective process embraces the formation of an opinion that circumstances suggestive of any of the matters comprised in sub cls.
+(i) to (iii) exist.
+Once it is conceded that the formation of an opinion by the Board is intended to be subjective and if the provision is constitutional which in our view it is the question would arise: what is that about which the Board is entitled to form an opinion? The opinion must necessarily concern the existence or non existence of facts suggesting the things mentioned in the several sub clauses of cl.
+An examination of the section would show that cl.
+(b) thereof confers, a discretion upon the Board to appoint an Inspector to investigate the affairs of a company.
+The words "in the opinion of" govern the words "there are circumstances suggesting" and not the words "may do so".
+The words 'circumstances ' and 'suggesting ' cannot be dissociated without making it impossible for the Board to form an 'opinion ' at all.
+The formation of an opinion must, therefore, be as to whether there are circumstances suggesting the existence of one or more of the matters in sub cls.
+(D to (iii) and not about any thing else.
+The opinion must of course not have been arrived at mala fide.
+To say that the opinion to be formed must be as to the necessity of making an investigation would be making a clear departure from the language in which section 237(b) is couched.
+It is only after the, formation of, certain opinion by the Board that the stage for exercising the discretion conferred by the provision is reached.
+The discretion conferred to order an investigation is administrative and not judicial since 323 its exercise one way or the other does not affect the rights of a company nor does it lead to any serious consequences as, for instance, hampering the business of the company.
+As has been pointed out by this Court in Raja Narayanalal Bansilal vs Maneck Phiroz Mistry & Anr.(1) the investigation undertaken under this provision is for ascertaining facts and is thus merely exploratory.
+The scope for judicial review of the action of the Board must, therefore, be strictly limited.
+Now, if it can be shown that the 'Board had in fact not formed an opinion its order could be successfully challenged.
+This is what was said by the Federal Court in Emperor vs Shibnath Banerjee(2) and approved later by the Privy Council.
+Quite obviously there is a difference between not forming an opinion at all and forming an opinion upon grounds, which, if a court could go into that question at all, could be regarded as inapt or insufficient or irrelevant.
+It is not disputed that a court can,not go into the question of the aptness or sufficiency of the grounds ,upon which the subjective satisfaction of an authority is based.
+But, Mr. Setalvad says, since the grounds have in fact been disclosed in the affidavit of Mr. Dutt upon which his subjective satisfaction was based it is open to the court to consider whether those grounds are relevant or are irrelevant because they are extraneous to the question as to the existence or otherwise of any of the matters referred to in sub cls.
+(i) to (iii).
+Let us now examine the affidavit of Mr. Dutt.
+Since this affidavit is in answer to the allegations made in the writ petition the two ;should be considered together.
+In paragraphs 1 to 19 of the writ petition certain facts and figures concerning the formation, registration etc.
+of the company, the activities of the company and other related matters have been set out.
+These were admitted by Mr. Dutt in paragraph 14 of the counter affidavit.
+Paragraph 20 onwards of the writ petition deals with the action taken by the Board and the various grounds on which according to the appellants the action of the Board is open to challenge.
+The first 4 paragraphs of the counter affidavit deal with certain formal matters.
+In paragraph 5 Mr. Dutt has set out that the petition is liable to be dismissed summarily being grounded on facts which are, false, speculative and lacking in material particulars.
+Thereafter he has set out what, according to him, are the true facts.
+In paragraphs 6 to 8 he has dealt with the legal aspects of the case.
+The 8th paragraph is the most important amongst them.
+Here Mr. Dutt has stated that it was not competent to the Court to go into the question of adequacy or otherwise of the material on the basis of which orders under section 237(b) are passed by the Board.
+Then he stated: 'However, if in spite of what has been stated and contrary to the submissions above, this Han 'ble Court still holds that it is necessary for the Court to examine the relevant material in (1)[1961] I S.C.R. 417.
+(2)[1944] F.C.R. 1.
+324 order to do justice, then the Board would have no objection to producing the same for the Court 's perusal provided it is not shown to the petitioners.
+" It may be mentioned that the Court did not call for this material at all nor did the appellants seek its production.
+In paragraph 9 Mr. Dutt has categorically stated that the order of May 19, 1965 was passed after careful and independent examination of the material by the Chairman and that it was issued in proper exercise of the powers conferred upon it.
+He has specifically denied that it was issued at the instance of the second respondent.
+In paragraph 10 Mr. Dutt has taken the plea that the petition was liable to be dismissed as it had not been made bona fide but for extraneous reasons and to create prejudice with a view to thwart statutory investigation.
+Then he has set out the circumstances upon which his contention is based.
+In paragraph 13 he has stated that without prejudice to his submissions in the earlier paragraphs he would reply to allegations contained in the various paragraphs of the writ petition.
+Then follows paragraph 14 upon which Mr. Setalvad has founded an argument that the grounds disclosed therein being extraneous the order is invalid.
+In this paragraph Mr. Dutt has admitted some of the facts stated in paragraphs 1 to 19.
+He has also said that the Board was aware of the fact that the company had entered into collaboration with M/s. L. A. Mitchell Ltd. He has then added:. . but it has no information of any of the other matters and/or negotiations with M/s. L. A. Mitchell Ltd., Manchester.
+However, from the Memoranda received by the Board referred to in paragraph 5 and other examination it appeared inter alia that: (i) that there had been delay, bungling and faulty planning of this project, resulting in double expenditure.
+for which the 'collaborators had put the responsibility upon the Managing Director, Petitioner No. 2: (ii) Since its flotation the company has been continuously showing losses and nearly 1/3rd of its share capital has been wiped off; (iii)that the shares of the company which to start with were at a premium were being quoted on the Stock Exchange at half their face value; and (iv)some eminent persons who had initially accepted seats on the Board of Directors of the company had subsequently severed their connections with it due to differences with Petitioner No. 2 on account of the manner in which the affairs of the company were being conducted.
+" In paragraph 5 it may be recalled Mr. Dutt has set out the grounds on which the writ petition deserved to be summarily 325 rejected.
+It will thus be clear that what are characterised by Mr. Setalvad as the grounds upon which the order of the Board is based are nothing more than certain conclusions drawn by the Boar& from some of the material which it had before it.
+Moreover the expression "inter alia" used by Mr. Dutt would show that the conclusions set out by him specifically are not the only ones which could be drawn from the material referred to by, him in paragraph 5 of his affidavit.
+Turning to paragraph 16 of the affidavit we find that Mr. Dutt has clearly reiterated that there was ample material before the Board on which it could and did form the opinion that there were circumstances suggesting that as stated in the order of May, 19, 1965, the business of the company was being conducted with intent to defraud creditors, members and other persons and further that the persons concerned in the management of the affairs of the company had in connection therewith been guilty of fraud, misfeasance and other misconduct towards the company and its members.
+This paragraph is in answer to paragraph 21 of the writ petition.
+It is in that paragraph alone that the appellants had specifically raised the contention that the recital in the order as to the existence of material is not correct and that in point of fact there was no material before the Board to form the said opinion.
+In this state of pleadings it would not be right to construe the affidavit of Mr. Dutt to mean that the only conclusions emerging from the material before the Board are those that are set out in paragraph 14 of his affidavit.
+Apart from this we do not think that the conclusions set out in paragraph 14 are extraneous to the matters indicated in the order of May 19, 1965.
+What is said therein is that there are circumstances suggesting that the business of the appellants is being conducted with intent to defraud its creditors, members and others, and that.
+the persons concerned with the management of the affairs of the company have been guilty of fraud, misfeasance and other misconduct towards the company and its members.
+it has to be borne in mind that what the Board is to be satisfied about is whether the circumstances suggest any of these things and not whether they establish any of these things.
+Now, the first of its conclusion is to the effect that the materials show that there was delay , bungling, faulty planning of the project and that this resulted in double expenditure for which the collaborators had put the responsibility upon the Managing Director, that is, appellant No. 2.
+Would it be farfetched to say that these circumstances could reasonably suggest to the Board that these happenings were not just pieces of careless conduct but were deliberate acts or omissions of appellant No. 2 done with the ulterior motive of earning profit for himself ? Similarly could not the fact that the company was continuously showing losses since its flotation and that 1/ 3rd of its 326 share : capital had ,been wiped out could have been suggestive of fraud to the Board.
+In 'this connection, we think it right to point out that the spirit of the section must be kept in mind in determining its interpretation.
+The section was enacted to prevent the Management of a company from acting in a manner prejudicial to the interests of the shareholders for whom it was difficult,to get together and take steps for the protection of their interests jointly.
+It was this difculty of the shareholders which is a reality which had led to the enactment of the section.
+There is no doubt that few share holders have the means or ability to act against the Management.
+It would furthermore be difficult for the shareholders to find out the facts leading to the poor financial condition of a company.
+The Government thought it right to take power to step in where there was reason to suspect that the Management may not have been acting in the interests of the shareholders who would not be able to take the steps against a powerful body like the Managementand to take steps for protection of such interests.
+As we have said, the section gives the exploratory power only.
+Its object is to find out the facts.
+, a suspicion having been entertained that all was not well with the company.
+The powers are exercised for ascertaining facts and, therefore, before they are finally known, all that is necessary for the exercise of the powers is the opinion ,of the Board that there are circumstances which suggest to it that fraud and other kinds of mismanagement mentioned in sub cls.
+(i) to (iii) of cl.
+(b) of the section may have been committed.
+If the facts do reasonably suggest any of these things to the Board, the power can be exercised,though another.
+individual might think that : the ;facts suggest otherwise It cannot be said that from a huge loss incurred by a company and the working of the company in a disorganised and un businegslike way, the only conclusion possible is that it was due to lack of capability.
+It is reasonably ,conceivable that the result had been produced by fraud and other varieties of dishonesty or misfeasance.
+The order does not amount to a finding of fraud.
+It is to find out what kind of wrong ,action has led to,the company 's ill fate that the powers under the sectional given.
+The enquiry may reveal that.the renovation or other similar kind of malfeasance.
+It would be destroying the beneficial effective use of the powers given by the section to say that the Board must first show that a fraud can clearly be said to have.been committed.
+It is enough that the facts show that it can be reasonably thought that the company 's unfortunate position might have been caused by fraud and other species of dishonest action.
+In our opinion, therefore, the argument of Mr. Setalvad about the circumstances being extraneous cannot be accepted.
+Coming to the third point of Mr. Setalvad pointed out that four ex Directors of the Company who had resigned submitted a 327 memorandum to Mr. T. T. Krishnamachari while he was holding the office of Finance Minister in which grave allegations were made concerning the affairs of the Company and the management of the Company by the second appellant.
+The investigation, according to Mr. Setalvad.
+was the outcome of this memorandum and that by ordering it the Board has in effect enabled the ex Directors who continue to be shareholders to circumvent the provisions of sections 235 and 236 of the .
+Section 235 deals with "Investigation of affairs of company on application by members or report by Registrar".
+Clause (a) of this section provides that in the case of a company having a share capital the investigation can be ordered either on the application of not less than 200 members or of members holding not less than one tenth of the total voting power therein.
+We are not concerned with cls.
+(b) and (c).
+Apparently the four ex Directors were not holding 10% of the voting power of the Company.
+At any rate the case was argued on this footing.
+Section 236 provides that such application has to be supported by such evidence as the Board (reading 'Board ' for 'Central Government ') may require.
+It also empowers the Board to require the applicants to furnish security for such amount, not exceeding one thousand rupees as it may think fit, for the payment of the costs of the investigation.
+The contention is that though the Board acted upon the memorandum submitted by four ex Directors it did not even require them to comply with the provisions of section 236.
+The contention is that the order of the Board appointing Inspectors is invalid.
+In other words the argument amounts to this that the provisions of section 237(b) have been utilised by the Board as a cloak for taking action under the provisions of section 235.
+In other words this is an argument that the order was made mala fide.
+It is true that a memorandum was presented to Mr. Krishna machari by four ex Directors containing grave allegations against the two appellants.
+But it was not solely on the basis of this memorandum that action was taken by the Board.
+It is clear from the counter affidavit of Mr. Dutt and particularly from paragraph 5 thereof that the Board had before it not only two sets of memoranda dated May 30, 1964 and July 9, 1964 respectively from four ex Directors of the Company alleging serious irregularities and illegalities in the conduct of the affairs of the Company but also other materials.
+The Board points out that over a long period beginning from September 1961 the Department had been receiving various complaints in regard to the conduct of the affairs of the Company.
+One complaint had also been received by the Special Police Establishment and forwarded by it to the Department in November, 1963.
+The matter was enquired into by the Regional Director of the Board at Madras and he, in his report, sent to the Board in September 1964 suggested an urgent and comprehensive investigation into the affairs of the Company.
+In his /S5SCI 23 328 affidavit the Chairman of the Board Mr. Dutt has stated further in paragraph 5(b) as follows: "The material on the file was further examined in the light of the Regional Director 's recommendation by the two Under Secretaries of the Board (Sarvashri M. K. Banerjee C. section section and K. C. Chand, I. R. section at the head.
+quarters of the Board in New Delhi and both of them endorsed the recommendation of the Regional Director to order an investigation.
+The matter was then considered by the Secretary of the Company Law Board in charge of investigation (Shri D. section Dang, I.A.S.) and he also expressed his agreement that there was need for a deeper probe into the affairs of the company.
+" Then again in paragraph 5(c) he has stated as follows: "Accordingly, the matter was put up to me at the end of November 1964 and after consideration of all the material on record, I formed the opinion that there were circumstances suggesting the need for action under section 237(b) of the ".
+It is abundantly clear from all this that the investigation cannot be said to have been ordered either at the instance of the four ex Directors or on the sole basis of the memoranda submitted by them.
+There is, therefore, no contravention of the provisions of SS. 235 and 236 of the Act.
+As a corollary to this it would follow that the order was not made mala fide or is otherwise invalid.
+As already stated the appellant had challenged the provisions of section 237(b) on the ground that they are violative of the fundamental rights under articles 14 and 19(1)(g) of the Constitution.
+Our brother Shelat has dealt with this attack on the provisions fully and we agree generally with what he has said while dealing with the contentions.
+We would, however, like to add that the com pany being an artificial legal person cannot, as held by this Court in The State Trading Corporation of India Ltd., vs Commercial Tax Officer Visakhapatnam & Ors.(1),claim the benefit of the provisions of article 19(1)(g) though appellant No. 2 Balasubramanian can do so.
+We agree with our learned brother that the action proposed under section 237(b) being merely, exploratory in character the fundamental right of Balasubramanian to carry on business is not affected thereby.
+Since that is so, the question whether the pro visions of the aforesaid section are a reasonable restriction on the exercise of the right under article 19(1)(g) does not arise for consideration.
+In the circumstances, therefore, we do not think that there is anything more that we need say.
+The last question is whether it was not competent to Mr. Dutt alone to take the decision that an investigation be ordered against the company.
+In taking the decision Mr. Dutt acted under a rule 1964] 4 S.C.R. 99. 329 of procedure prescribed in the order dated February 6, 1964.
+The validity of this rule is challenged, by Mr. Setalvad on the ground that this amounts to sub delegation of a delegated power and is ultra vires the Act.
+Clause (a) of sub section
+(1) of section 637 read with section 10(E)(1) empower the Central Government to delegate its powers under section 237 to the Company Law Board.
+By notification dated February 1, 1964 the Central Government has delegated, amongst other powers and functions, those conferred upon it by section 237 upon the Company Law Board.
+By another notification of the same date the Central Government has made and published rules made by it in exercise of its powers under section 642(1) read with section 10E(5) rule 3 of which reads thus: "Distribution of business; The Chairman may, with the previous approval of the Central Government, by order in writing, distribute the business of the Board, among himself and the other member or members, and specify the cases or classes of cases which shall be considered jointly by the Board.
+" By order dated February 6, 1964 the Chairman of the Company Law Board specified the cases and classes of cases to be considered jointly by the Board and distributed the remaining business between himself and other members of the Board.
+Amongst the matters allocated to the Chairman is the appointment of an Inspector under section 237 to investigate the affairs of a company.
+This, Mr. Setalvad says" could not be done in the absence of an express provision in the Act.
+In this connection he has referred us to sub section
+4A of section 10E which was subsequently added but not made retrospective by an amendment of the Act which confers an express power on the Central Government to enable the Chairman to distribute the powers and functions of the Board.
+According to the learned Attorney General this provision was enacted only to make what was implicit in section 10E(5) read with section 642(1) clear and that the distribution of the work of the Board being merely a matter of procedure the order of the Chairman allocating the power under section 237(b) to himself did not amount to sub delegation of the power of the Board.
+Bearing in mind the fact that the power conferred by section 237(b) is merely administrative it is difficult to appreciate how the allocation of business of the Board relating to the exercise of such power can be anything other than a matter of procedure.
+Strictly speaking the Chairman to whom the business of the Board is allocated does not become a delegate of the Board at all.
+He acts in the name of the Board and is no more than its agent But even if he is looked upon as a delegate of the Board and, therefore, a sub delegate vis a vis the Central Government he would be as much subject to the control of the Central Government as the Board itself.
+For sub section
+(6) of section 10E provides that the Board shall, in S5SCI 23(a) 330 the exercise of the powers delegated to it, be subject to the control of the Central Government and the order distributing the business was made with the permission of the Central Government.
+Bearing in mind that the maxim delegatus non potest delegare sets out what is merely a rule of construction, sub delegation can be sustained if permitted by an express provision or by necessary impli cation.
+Where, as here, what is sub delegated is an administrative power and control over its exercise is retained by the nominee of Parliament, that is, here the Central Government, the power to make a delegation may be inferred.
+We are, therefore, of the view that the order made by the Chairman on behalf of the Board is not invalid.
+To sum up, then, our conclusions may be stated thus: The discretion conferred on the Central Government by section 237(b) to order an investigation and delegated by it to the Company Law Board is administrative, that it could be validly exercised by the Chairman of the Board by an order made in pursuance of a rule enacted by the Central Government under section 642(1) read with section 10E(5), that the exercise of the power does not violate any fundamental right of the company, that the opinion to be formed under section 237(b) is subjective and that if the grounds are disclosed by the Board the Court can examine them for considering whether they are relevant.
+In the case before us they appear to be relevant in the context of the matter mentioned in sub cls.
+(i) to (iii) of section 237(b).
+Though the order could successfully be challenged if it were made mala fide, it has not been shown to have been so made.
+The attack on the order thus fails and the appeal is dismissed with costs.
+Hidayatullah, J. We are concerned in this appeal with the legality of an order of the Chairman, Company Law Board, May 19, 1965, (purporting to be under section 237(b) of the ) declaring that the affairs of the Barium Chemicals Ltd. be investigated.
+As a consequence Inspectors have been appointed and searches have been made.
+The Company and its Managing Director filed a petition under article 226 of the Constitution in the High Court of Punjab seeking to quash the order and on failure there, have filed this appeal by special leave of this Court.
+The action of the Chairman was and is challenged on diverse grounds but those which were presented before us were few and clear cut.
+The action is challenged as without jurisdiction because not the Board but the Chairman alone acted, as mala fide because no honest opinion was formed on the matters which under the section give rise to the power but on irrelevant and extraneous material, and further because the order was passed under the influence and malice of a Minister of Cabinet who was interested in another Company belonging to his sons and sought this means to oust a rival.
+The facts have been stated already in some detail by my brother Shelat and I need not take time in restating them.
+My 331 order proposed by him but as I view the matter a little differently on some of the aspects of the case, I wish to record my reasons briefly.
+Under the , a power of superintendence over the affairs of Companies is retained by the Central Government in much the same way as the Board of Trade in England exercise over Companies in that country.
+This power is of two kinds (a) calling for information or explanation from the Company and (b) ordering an investigation into the affairs of the Company by appointment of Inspectors for inspection, investigation and report.
+The power is not only varied but is capable of being exercised variously.
+The power to call for information is conferred on the Regisrar in two different ways.
+Firstly, jurisdiction is conferred on the Registrar by section 234 to call for information or explanation in relation to any document submitted to him, which information or explanation must be furnished on pain of penalties.
+If the information or explanation is not furnished or is unsatisfactory the Registrar can report to the Central Government for action.
+Secondly, if a contributory, creditor 'or other person interested places materials before the Registrar (a) that the business of the Company is being carried on in fraud of its creditors or of persons dealing with the Company or (b) otherwise for a fraudulent or unlawful purpose, the Registrar can, after hearing the Company, call upon it to furnish any information or explanation.
+A further power is conferred after December 28, 1960, on the Registrar, who may, after being authorised by a Presidency Magistrate or a Magistrate First Class, enter any place, search and seize any document relating to the Company, its managing agents, or Secretaries and treasurers or managing director or manager, if be has reason to believe that it may be destroyed or tampered with.
+Sections 235 251 provide for investigation of the affairs of a company and for sundry matters related to such investigations.
+They follow the scheme of sections 164 175 of the English Act of 1948.
+Section 235 enables the Central Government to appoint inspectors for investigation and report generally if the Registrar reports under section 234 and also if a stated number of shareholders or shareholders possessing a stated voting power apply.
+When ' members apply they must support their application by evidence and give security for costs of investigation.
+In the present case no action under any of the sections noted so far was taken but it was taken under section 237.
+This section is in two parts.
+The first part which is (a) compels the Central Government to appoint inspectors to investigate and report if the company by a special resolution or the court by order declares that the affairs be investigated.
+The second part which is (b) gives a discretionary power, As this dis 332 cretionary power was in fact exercised this is a convenient place to read part (b) of section 237.
+It reads: "237.
+Without prejudice to its powers under section 235, the Central Government (a) (b) may do so (i.e. appoint one or more competent persons as inspectors to investigate etc.) if, in the opinion of the Central Government, there are circumstances suggesting (i) that the business of the company is being conducted with intent to defraud its creditors, members or any other persons, or otherwise for a fraudulent or unlawful purpose, or in a manner oppressive of any of its members, or that the company was formed for any fraudulent or unlawful purpose; (ii) that persons concerned in the formation of the company or the management of its affairs have in connection therewith been guilty of fraud, misfeasance or other misconduct towards the company or towards any of its members; or (iii) that the members of the company have not been given all the information with respect to its affairs which they might reasonably expect, including information relating to the calculation of the commission payable to a managing or other director, the managing agent, the secretaries and treasurers, or the manager, of the company.
+By section 237(b) the power is conferred on the Central Government but under the Companies (Amendment) Act, 1963 a Board of Company Law,, Administration consisting of a Chairman and a member has been set up.
+This Board is constituted under section 10E which has been introduced in the parent Act.
+The section may be read here: "10E. Constitution of Board of Company Law Administration.
+(1) As soon as may be after the commencement of the Companies (Amendment) Act, 1963, the Central Government shall, by notification in the Official Gazette, constitute a Board to be called the Board of Company Law Admin istration to exercise and discharge such powers and functions conferred on the Central Government by or under this Act or any other law as may be delegated to it by that Government.
+333 (2) The Company Law Board shall consist of such number of members, not exceeding five, as the Central Government deems fit, to be appointed by that Government by notification in the Official Gazette.
+(3) One of the members shall be appointed by the Central Government to be the chairman of the Company Law Board.
+(4) No act done by the Company Law Board shall be called in question on the ground only of any defect in the constitution of, or the existence of any vacancy in, the Company Law Board.
+(5) The procedure of the Company Law Board shall be such as may be prescribed.
+(6) In the exercise of its powers and discharge of its functions, the Company Law Board shall be subject to the control of the Central Government.
+The Board was constituted on February 1, 1964 by a notification and by a notification of even, date in exercise of the powers conferred by cl.
+(a) of sub section
+(1) of section 637 read with sub section
+(1) of section 10E of the , the Central Government delegated its powers and functions to the Board under section 237(b) among others.
+Simultaneously acting in exercise of the powers conferred by sub section
+(1) of section 642 read with sub section
+(5) of section 10E the Central Government made the Company Law Board (Procedure) Rules, 1964 and one such rule dealt with distribution of business to the following effect: "3.
+Distribution of business The Chairman may, with the previous approval of the Central Government, by order in writing, distribute the business of the Board among himself and the other member or members, and specify the cases or classes of cases which shall be considered jointly by the Board.
+" The Chairman by an order dated February 6, 1964 specified the cases or classes of cases which are to be considered jointly by the Board and distributed the remaining business of the Board between the Chairman and the member each acting individually.
+The power under section 237 was placed among the powers exercisable by the Chairman singly.
+That is how action was taken in the name of the Board but by the Chairman and is the subject of challenge for the reason that a power delegated to the Board as a whole cannot be delegated to an individual member in the absence of a provision such as sub section
+(4A) added recently to section 10E enabling the solidarity of the Board to be broken.
+Sub section (4A) of section 10E, which has been added by an amending Act of 1965, after the events in this case, reads: "10E. (4A).
+The Board.
+with the previous approval of the Central Government, may, by order in writing, 334 authorise the chairman or any of its other members or its principal officer (whether known as secretary or by any other name) to exercise and discharge, subject to such conditions and limitations, if any, as may be specified in the order, such of its powers and functions as it may think fit; and every order made or act done in the exercise of such powers or discharge of such functions shall be deemed to be the order or act, as the case may be, of the Board.
+" This sub section enables the work of the Board to be distributed among members while sub section
+(5) merely enables the procedure of the Board to be regulated.
+These are two very different things.
+One provides for distribution of work in such a way that each constituent part of the Board properly authorised, becomes the Board.
+The other provides for the procedure of the Board.
+What is the Board, is not a question which admits of solution by procedural rules but by the enactment of a substantive provision allowing for a different delegation.
+Such an enactment has been framed in relation to the Tribunal constituted under section 10B and has now been framed under section 10E also.
+The new sub section involves a delegation of the powers of the Central Government to a member of the Board which the Act previously allowed to be made to the Board only.
+The statute, as it was formerly, gave no authority to delegate it differently or to another person or persons.
+When it spoke of procedure in sub section (5) it spoke of the procedure of the Board as constituted.
+The lacuna in the Act must have been felt, otherwise there was no need to enact sub section (4A).
+The argument of the learned Attorney General that sub section
+(4A) was ?lot needed at all, does not appeal to me.
+It is quite clear that its absence would give rise to the argument accepted by me, which argument is unanswerable in the absence of a provision such as the new sub section.
+My brother Shelat has dealt with this aspect of the case fully and I cannot add anything useful to what he has said.
+I agree with him entirely on this point.
+I shall now consider the question of mala fides.
+This arises in two different ways.
+There is first mala fides attributed to the chairman because he is said to have acted under the behest of a Minister of Cabinet interested in another rival Company.
+It is not necessary to go into it.
+The Chairman obtained the opinion of quite a few of his assistants (perhaps more than was altogether necessary) and this fact is stated to establish his fairness to and honest dealing with the Company.
+There is nothing to show that this was done on purpose to cover up a conspiracy to do harm to the Company.
+On the other hand I cannot overlook the fact that the rival Company itself had obtained a licence to manufacture Barium Chemicals which it allowed to lapse.
+This shows that rivalry between two manufacturing concerns was not the prime 335 motive.
+No doubt the rival Company had tried to obtain the sole selling rights of, and even a share in, this Company.
+This might have weighed with me but for the fact that the Company itself had done nothing even before action was taken, to establish itself.
+The whole project had hung fire and capital was eaten into a rapid rate because there were technical defects in the setting up of the plant and machinery.
+There was not much hope of profits as a sole selling agent or even as a partner.
+In these circumstances, I cannot go by the allegations made against the Chairman of the Board personally or those made against the Minister, and I find no evidence to hold that dishonesty on the part of the one or malice on the part of the other lies at the root of this action.
+This brings me to the third and the last question, namely, whether mala fides or the ultra vires nature of the action has been established in this case to merit interference at our hands.
+In view of my decision on the question of delegation it is hardly necessary to decide this question but since contradictory opinions have been expressed on it by my brethren Mudholkar and Shelat.
+I must give my views on this matter.
+The question naturally divides itself into two parts.
+The first is whether there was any personal bias, oblique motive or ulterior purpose in the act of the chairman.
+The second is what are the powers of the Board in this behalf and whether they have been exercised contrary to the requirements of the Act.
+The first ground has already been dealt with in part when I considered the malice and influence of the Minister.
+It may be said at once, that apart from that allegation, nothing has been said attributing to the Chairman any personal bias, grudge, oblique motive or ulterior purpose.
+Even in the arguments it was not suggested that the Chairman acted from improper motives.
+Therefore, all that I have to consider is whether the action of the Chairman can be challenged as done either contrary to the provisions empowering him or beyond those provisions.
+In dealing with this problem the first point to notice is that the power is discretionary and its exercise depends upon the honest formation of an opinion that an investigation is necessary.
+The words "in the opinion of the Central Government" indicate that the opinion must be formed by the Central Government and it is of course implicit that the opinion must be an honest opinion.
+The next requirement is that "there are circumstances suggesting etc.
+" These words indicate that before the Central Government forms its opinion it must have before it circumstances suggesting certain inferences.
+These inferences are of many kinds and it will be useful to make a mention of them here in a tabular form: (a) that the business is being conducted with intent to defraud (i) creditors of the company, or (ii) members, 336 or (iii) any other person; (b) that the business is being conducted (i) for a fraudulent purpose or (ii) for an unlawful purpose; (c) that persons who formed the company or manage its affairs have been guilty of (i) fraud or (ii) misfeasance or other misconduct to wards the company or towards any of its members.
+(d) That information has been withheld from the members about its affairs which might reasonably be expected including calculation of commission payable to (i) managing or other director, (ii) managing agent, (iii) the secretaries and treasurers, (iv) the managers.
+These grounds limit the jurisdiction of the Central Govern ment.
+No jurisdiction, outside the section which empowers the initiation of investigation, can be exercised.
+An action, not based on circumstances suggesting an inference of the enumerated kind will not be valid.
+In other words, the enumeration of the inferences which may be drawn from the circumstances, postulates the absence of a general discretion to go on a fishing expedition to find evidence.
+No doubt the formation of opinion is subjective but the existence of circumstances relevant to the inference as the sine qua non for action must be demonstrable.
+If the action is questioned on the ground that no circumstance leading to an inference of the kind contemplated by the section exists, the action might be exposed to interference unless the existence of the circumstances is made out.
+As my brother Shelat has put it trenchantly: "It is not reasonable to say that the clause permitted the government to say that it has formed the opinion on circumstances which it thinks exist. . . .
+Since the existence of "circumstances" is a condition fundamental to the making of an opinion, the existence of the circumstances.
+if questioned, has to be proved at least prima facie.
+It is not sufficient to assert that the circumstances exist and give no clue to what they are because the circumstances must be such as to lead to conclusions of certain definiteness.
+The conclusions must relate to an intent to defraud, a fraudulent or unlawful purpose, fraud or misconduct or the withholding of information of a particular kind.
+We have to see whether the Chairman in his affidavit has shown the existence of circumstances leading to such tentative 337 conclusions.
+If he has, his action cannot be questioned because the in reference is to be drawn subjectively and even if this Court would not have drawn a similar inference that fact would be irrelevant.
+But if the circumstances pointed out are such that no inference of the kind stated in section 237(b) can at all be drawn the action would be ultra vires the Act and void.
+Now the Chairman in his affidavit referred to two memoranda dated May 30, 1964 and July 4, 1964 presented by certain ex directors and also stated that from September 1961 complaints were being received in regard to the conduct of the affairs of the Company, and one such complaint was received from Special Police Establishment in November 1963.
+The nature of the complaints was not disclosed but in reference to the memoranda it was stated that "irregularities" and "illegalities" in the conduct of the affairs of the Company was alleged therein.
+It was also stated that the memoranda "were supported by documentary evidence and details of the impugned transactions and the signatories offered to produce witnesses with knowledge of these transactions".
+This was followed by an enquiry by the Regional Director of the Board at Madras (Shri R. section Ramamurthi, I.A.S.) who made a report in September 1964.
+The report was next considered by two Under Secretaries arid by the Secretary of the Company Law board who all agreed "that there was need for a deeper probe into the affairs of the Company".
+The matter was then placed before the Chairman who formed the opinion that there were circum stances suggesting the need for action under section 237(b).
+None of the reports was produced.
+Nor was there any indication in the affidavit what their drift was.
+There was considerable delay in taking up the matter and this was explained as occasioned by the language riots, and other more pressing occupation.
+It appears that in the High Court an offer was made to place the reports etc.
+in the hands of the Court provided they were not shown to the other side, but no such offer was made in this Court.
+The High Court did not look into the documents.
+Had the matter rested there it would have been a question whether this Court should interfere with a subjective opinion, when the affidavit showed that there were materials for consideration.
+It would then have been a question whether this Court could or should go behind the affidavit.
+I leave that question to be decided in another case where it arises.
+In this case it is not necessary to decide it because the affidavit goes on to state: ". . .
+However from the Memoranda received by the Board referred to in paragraph 5 and other examination it appeared inter alia that: (i) there had been delay, bungling and faulty planning of this project, resulting in double expenditure, for which the collaborators had put the responsibility upon the Managing Director, Petitioner No. 2, 338 (ii) Since its floatation the company has been continuously showing losses and nearly 1/3rd of its share capital has been wiped off; (iii) that the shares of the company which to start with were at a premium were being quoted on the Stock Exchange at half their fa ce value; and (iv) some eminent persons who had initially accepted seats on the Board of directors of the company had subsequently severed their connections with it due to differences with Petitioner No. 2 on account of the manner in which the affairs of the company were being conducted.
+" Paragraph 14 of the affidavit).
+It may be mentioned that in paragraph 16 of the affidavit the Chairman also stated: "With reference to paragraph 21 of the petition, I have already stated above that there was ample material before the Board on which it could and did form the opinion that there were circumstances suggesting that the business of the company was being conducted with intent to defraud its creditors, members and other persons and further that the persons concerned in the management of the affairs of the company had in connection therewith been guilty of fraud, misfeasance and other misconduct towards the company and its members.
+" The question thus arises what has the Chairman placed before the Court to indicate that his action was within the four corners of his own powers? Here it must be noticed that members are ordinarily expected to take recourse to the Registrar because there they have to be in a certain number or command a certain proportion of the voting power.
+They are also required to give evidence and the Company gets an opportunity to explain its actions.
+If section 237(b) is used by members, as an alternative to section 236, the evidence must unerringly point to the grounds on which alone action can be founded.
+In my opinion there is nothing to show that the, reports which were being received from September 1961, or the report of the Special Police Establishment indicated fraud.
+illegality or action or actions with intent to defraud, as contemplated by the section.
+The affidavit merely says that these reports indicated the need for a deeper probe.
+This is not sufficient.
+The material must suggest certain inferences and not the need for "a deeper probe".
+The former is a definite conclusion the latter a mere fishing expedition.
+A straight forward affidavit that there were circumstances suggesting any of these inferences was at least necessary.
+There is no such affidavit and the reason is that the Chairman completely misunderstood his own powers.
+This is indicated by the enumeration of the four circumstances, I have extracted from his affidavit and I proceed to analyse them.
+339 The first circumstance is "delay, bungling and faulty plan ning" resulting in "double expenditure" for which the collaborators had put the responsibility on the second appellant.
+None of these shows an intent to defraud by which phrase is meant something to induce another to act to his disadvantage.
+The circumstances mentioned show mismanagement and inefficiency which is not the same thing as fraud or misconduct.
+The second and the third circumstance merely establish that there was loss in making this project work and that a part of capital had been lost.
+This was admitted by the appellants who pointed out that after considerable negotiations they induced Lord Poole, the President of the collaborating firm, to invest a further sum of pound 25,000.
+This shows that the appellants were in a position to dictate to the collaborating company which they would not have been able to do if they were guilty of fraudulent conduct.
+The last circumstance does not also bear upon the subject of fraud and acts done with intend to defraud.
+that some directors have resigned does not establish fraud or misconduct.
+There may be other reasons for the resignation.
+In the other part of the affidavit the Chairman has merely repeated section 237(b) but has not stated how he came to the conclusion and on what material.
+In other words, he has not disclosed anything from which it can be said that the inference which he has drawn that the Company was being conducted with intent to defraud its creditors, members and other persons or persons concerned in the management of the affairs of the Company were guilty of fraud, misfeasance and misconduct towards the company and its members was based on circumstances present before him.
+In fact, paragraph 16 is no more than a mechanical repetition of the words of the section.
+Coming now to the affidavit of Mr. Dang I find that he merely repeats what was stated in the affidavit of the Chairman.
+He also said that he had seen the papers and agreed with his two Under Secretaries and the Regional Director that a "deeper probe" was necessary ' There is no hint even in this affidavit that the circumstances were such as to suggest fraud, intent to defraud or misconduct, this is to say, circumstances under which investigation can be ordered.
+The other affidavits also run the same way and it is not, therefore, necessary to refer to them.
+We are concerned really with the affidavits of the Chairman and Mr. Dang in relation to the exercise of the power conferred by section 237(b).
+Neither proves the existence of circumstances under which the power could be exercised.
+In my opinion, therefore, the action has not been proved to be justified.
+No doubt, the section confers a discretion but it sets its own limits upon the discretion by stating clearly what must be looked for in the shape of evidence before the drastic act of investigation into the affairs of a company can be taken.
+The affidavits which were filed in answer to the petition do not disclose 340 even the prima facie existence of these circumstances.
+On the other hand, they emphasise only that there was mismanagement and losses which necessitated a "deeper probe".
+In other words, the act of the Chairman was in the nature of, a fishing expedition and not after satisfaction that the affairs of the Company were being carried on even prima facie with the intent to defraud or that the persons incharge were guilty of fraud or other misconduct.
+As to the constitutionality of section 237(b) I agree with my brethren Bachawat and Shelat and have nothing to add.
+1, therefore.
+agree with my brother Shelat that the appeal must be allowed.
+There will be no order about costs.
+Bachawat, J.
+The order dated May 19, 1965 was passed by the Chairman of the Company Law Board Mr. Setalvad submitted that only the Board could pass an order under section 237, the Central Government could delegate its function under section 237 to the Board but it had no power to authorise the Chairman to sub delegate this function to himself and consequently, the Company Law Board (Procedure) Rules, 1964 made by the Central Government on February 1, 1964 and the Chairman 's order of distribution of business dated February 6, 1964 delegating the function of the Board under section 237 to the Chairman are ultra vires the and the impugned order is invalid.
+The learned Attorney General disputed these submissions.
+As a general rule, whatever a person has power to do himself, he may do by means of an agent.
+This broad rule is limited by the operation of the principle that a delegated authority cannot be redelegate, delegates non protest delegate.
+The naming of I delegate to, do an act involving a discretion indicates that the delegate was selected because of his peculiar skill and the confidence reposed in him, and there is a presumption that he is required to do the act himself and cannot redelegate his authority.
+As a general rule, "if the, statute directs that certain acts shall be done in a specified manner or by certain persons, their performance in any other manner than that specified or by any other person than one of those name is impliedly prohibited.
+" See Crawford on statutory Construction, 1940 Edn., article 195, p. 335: Normally, a discretion entrusted by Parliament to an administrative organ must be exercised by.
+that organ itself.
+If a statute entrusts an administrative function involving the exercise of a discretion to a Board consisting of two or more persons it is to be presumed that each member of the Board should exercise his individual judgment on the matter and all, the members of the Board should act together and arrive at a joint decision.
+Prima facie, the Board must act as a whole and cannot delegate its function to one of its members.
+The learned Attorney General submitted that a distribution of business among the members of the Company Law Board is not a delegation of its authority, and the maxim has no application in 341 such a case.
+I cannot accept this submission.
+In Cook vs Ward(1), the Court held that where a drainage board constituted by an Act of Parliament was authorised by it to delegate its powers to a committee, the powers so delegated to the committee must be exercised by them acting in concert and it was not competent to them to apportion those powers amongst themselves and one of them acting, alone, pursuant to such apportionment, could not justify his acts under the statute.
+Lord Coleridge, C. J. said at p. 262: "It was not competent to them to delegate powers, which required the united action of the three, to be exercised according to the unaided judgment of one of them." Again, in Vine vs National Dock Labour Board(1), the House of Lords, held that a local board set up, under the scheme embodied in the schedule to the Dock Workers (Regulation of Employment) Order, 1947 had no power to assign its disciplinary function under cls.
+15(4) and 16(2) of the scheme to a committee and the purported dismissal of a worker by the committee was a nullity.
+In my opinion, the distribution of the business of the Board among its members is a delegation of its authority.
+But the maxim "delegatus non potest delegare" must not be pushed too far.
+The maxim does not embody a rule of law.
+It indicates a rule of construction of a statute or other instrument conferring an authority.
+Prima facie, a discretion conferred by a statute, on any authority is intended to be exercised by that authority, and.
+by no other.
+But the intention may be negatived by any contrary indications in the language, scope or object of the statute.
+The construction that would best achieve the purpose and object of the statute should be adopted.
+Under sections 10E(1) and 637(1)(a), the Central Government has power to constitute a Company, Law Board and to delegate its functions to the Board.
+The Board can consist of such number of persons not exceeding five as the Government thinks fit.
+One of the members of the Board has to be appointed a Chairman and this necessarily implies that the Board shall consist of at least two members.
+As a matter of fact, the Government constituted a Board consisting of two members and appointed one of them as Chairman.
+To this Board the Government delegated its function under section 237.
+Section 637 shows that the function under section 237 can be delegated to the Board and to no other authority.
+The function under section 237(b) involves the exercise of a discretion.
+Prima facie, all the members of the Board acting together were required to discharge this function and they could not delegate their duty to the Chairman.
+However, under sections 10E(5) and 642(1), the Central Government may frame rules regulating the procedure of the Board and generally to carry out the purposes of the Act.
+In the context of section 10E, I am inclined to construe this rule making power liberally The Central Government has power to constitute the Company Law Board, to delegate its functions to the Board and to control (1) (2) 342 the Board in the exercise of its delegated functions.
+In this background, by conferring on the Central Government the additional power of framing rules regulating the procedure of the Board and generally to carry out the purposes of section 10E, the Parliament must have intended that the internal Organisation of the Board and the mode and manner of transacting its business should be regulated entirely by rules framed by the Government.
+The Government had, therefore, power to frame the Company Law Board (Procedure) Rules, 1964 authorising the Chairman to distribute the business of the Board.
+In the exercise of the power conferred by this rule, the Chairman assigned the business under section 237 to himself.
+The Chairman alone could, therefore, pass the impugned order.
+Act No. 31 of 1965 has now inserted sub section
+(4A) in section 10E authorising the Board to delegate its powers and functions to its Chairman or other members or principal officer.
+The power under sub section
+(4A) may be exercised by the Board independently of any rules framed by the Central Government.
+We find, however, that the Central Government had under sections 10E(5) and 642(1) ample power to frame rules authorising the Chairman to distribute the business of the Board.
+The wide ambit of this rule making power is not cut down by the subsequent insertion of sub section
+(4A) in section 10E. Sections 235, 237(a) and 237(b) enable the Central Govern ment to make an order appointing an inspector to investigate the affairs of a company in different sets of circumstances, and the contention that section 237(b) is discriminatory and is violative of article 14 must fail.
+I also think that section 237(b) is not violative of articles 19(1)(f) and 19(1)(g) of the Constitution.
+The company is not a citizen and has no fundamental right under article 19.
+Appellant No. 2 who is the managing director of the company is not a citizen, but even assuming that section 237(b) imposes restrictions on his right of property or his right to carry on his occupation as managing director, those restrictions are reasonable and are imposed in the interests of the general public.
+On the question of mala fides, I am inclined to think that the Chairman passed the order dated May 19, 1965 independently of and without any pressure from the Minister.
+I am all the more persuaded to come to this conclusion having regard to the fact that in paragraph 14 of his affidavit the Chairman has disclosed the circumstances which he took into account in passing the order.
+In paragraphs 5, 8 and 16 of his affidavit, the Chairman stated that he had various materials on the basis of which he passed the order.
+But, on reading this affidavit as a whole and the affidavit of Mr. Dang, I am satisfied that in paragraph 14 of his affidavit the Chairman has set out all the material circumstances which bad emerged on an examination of the various materials before him.
+Briefly put, those circumstances are delay, bungling and faulty planning by the management resulting in double expenditure, huge losses, sharp fall in the price of the Company 's shares and the resignation of some of the directors on account of differences in opinion with 343 the managing director.
+I think that these circumstances, without more, cannot reasonably suggest that the business of the company was being conducted to defraud the creditors, members and other persons or that the management was guilty of fraud towards the company and its members.
+No reasonable person who had given proper consideration to these circumstances could have formed the opinion that they suggested any fraud as mentioned in the order dated May 19, 1965.
+Had the Chairman applied his mind to the relevant facts, he could not have formed this opinion.
+I am, there fore, inclined to think that he formed the opinion without applying his mind to the facts.
+An opinion so formed by him is in excess of his powers and cannot support an order under section 237(b).
+The appeal is allowed, and the impugned order is set aside.
+I concur in the order which Shelat, J. proposes to pass.
+Shelat J.
+The appellant company is a public limited company registered on July 28, 1961 having its registered office at Ramavaram in Andhra Pradesh and the second appellant was at all material times and is still its managing director.
+On August 25, 1959 and September 23, 1960 appellant No. 2 obtained two licences for the manufacture of 2500 and 1900 tonnes of barium chemicals per year in the name of Transworld Traders of which lie was the proprietor.
+He then started negotiations with Kali Cliemle of Hannover, West Germany to collaborate with him in setting up a plant.
+While he was so negotiating, M/s., ,T. T. Krishnamachari & Co., who were the sole selling agents of the said German Company, approached the 2nd appellant for the sole selling agency of barium products of the plant proposed to be put up by the 2nd appellant.
+The 2nd appellant did not agree.
+On December 5, 1960 M/s. T. T. K. & Co., applied for a licence for manufacture of barium chemicals.
+On December 23, 1960 the 2nd appellant wrote a letter to the Minister of Commerce and Industry objecting to the grant of a licence to M/s. T. T. K. & Co. Both were considered by the Licensing Committee.
+The Committee rejected the application of M/s. T. T. K. & Co., but advised them to apply again after six months.
+On a representation by M / section T. T. K. &.Co., the Committee reconsidered the matter and recommended the grant of licence to M/s. T. T. K. Chemicals Private Limited.
+The second appellant once more protested, this time to the Prime Minister but that was rejected.
+On July 28, 1961.
+an agreement between the appellant company and L.A. Mitchell Ltd., of Manchester was signed where under the latter agreed to put up the plant on the appellant company agreeing to pay them pound 184,500.
+On November 27, 1961, the Government granted a licence to the company for the import of machinery.
+, In the mean time, respondent No. 2 was appointed a, Minister without portfolio and rejoined the Cabinet which lie had left ' earlier owing to certain circumstances which are not relevant for the present.
+From January, 1962 to March, 1963, he continued as a L/S5SCI 24 344 Minister without portfolio but from March, 1963 to September, 1963, he became the Minister for Defence and Economic Co ordination and thereafter the Finance Minister.
+On August 30, 1962, the licence granted to M / section T. T. K. Chemicals Ltd. was revoked as the company had decided to surrender it.
+It would seem that the appellant company was not faring as well as was hoped and though it had been incorporated as early as July, 1961 production had not commenced.
+There arose also disputes among its directors.
+On May 30, 1964 and July 9, 1964 four of its directors submitted two memoranda alleging irregularities and even illegalities in the conduct of the company 's affairs to the Company Law Board.
+According to the second appellant, the four directors were disgruntled directors, hostile to him and the Company.
+The company was not able to start work in full capacity not because of any irregularities but because of the faulty planning and designing by the collaborators.
+The company realised this fact only in June, 1964 when it received a survey report after the breakdown of the plant during that month from M/s. Humphreys and Glascow (Overseas) Ltd., Bombay.
+In September, 1964, a meeting was affanged in London between the company 's representatives and the representatives of L.A. Mitchell Ltd., of which Lord Poole was the Chairman.
+It was agreed that L. A. Mitchell Ltd., should depute M/s. Humphreys and Glascow Ltd., London,to go through the designs etc., and to make a report showing the causes of the repeated failures of the plant and suggesting remedies there for.
+Lord Poole also agreed that the factory would be commissioned without any further delay and that L.A. Mitchell Ltd., would carry out the necessary repairs at their cost.
+While these negotiations were going on, representatives of M/s. Kali Chemie of Hannover arrived in India to negotiate a collaboration agreement with the company.
+On April 4, 1965, a meeting of the company 's directors was held in New Delhi which was attended by one Kriegstein, a representative of Kali Chemie and also by the General Manager of M/s. T. T. K. & Co. Certain proposals were discussed and it was decided that the company should give notice to L. A. Mitchell Ltd. canceling the agreement with them.
+Accordingly, by a notice dated April 2. 1965 the agreement with the said L. A. Mitchell Ltd., was cancelled.
+On May 7, 1965 representatives of the appellant company and of Kali Chemie met at Stuttgart when proposals for an agreement were discussed.
+One of these proposals was that the company should be reorganised and its share capital should be distributed in the following proportions: 49 per cent to the appellant company, 26 per cent to Kali Chemie and 25 per cent to M/s. T. T. K. & Co. It was also proposed that Kali Chemie should take over the responsibility on the production side, the appellant company would be responsible for the management and M/s. T.T.K. & Co. should take over sales promotion.
+Before however these negotiations could take concrete shape, Lord Poole came over to India.
+A meet ing was held on May 10, 1965 between him and the directors of the 345 appellant company.
+Lord Poole agreed that the British company would put in pound 250,000 in addition to the amount already invested by it and that production would commence from June, 1965.
+On May It 1965 another meeting took place when it was decided that without prejudice to what was stated in the notice of April 4, 1965, the appellant company should withdraw para 9 thereof whereby the agreement between them was terminated.
+By May 11, 1965, the position therefore was that the collaboration agreement between the company and L. A. Mitchell Ltd. was agreed to be continued and consequently the negotiations with the German company and M/s. T. T. K. & Co., were not to proceed further.
+On May 19 1965 the first respondent passed the impugned order which inter alia stated: "In the opinion of the Company Law Board there are circumstances suggesting that the business of M/s Barium Chemicals Ltd is being conducted with intent to defraud its creditors, members and other persons; and further that the persons concerned in the management of the affairs of the company have in connection therewith been guilty of fraud, misfeasance and other misconduct towards the company and its members.

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+il Appeal Nos. 931 and 1149 of 1965.
+Appeals from the judgment and decree dated July 31, 1964 of the Calcutta High Court in Appeal from Original Decree No. 613 of 1962.
+N. C. Chatterjee, Janaradan Sharma, K. B. Rohtagi and section Balakrishnan, for the appellant (in C.A. No. 931 of 1965) and the respondent (in C. A. No. 1149 of 1965).
+D.N. Mukherjee, for the respondent (in C.A. No. 931 of 1965) and the appellant (in C.A. No. 1149 of 1965).
+The Judgment of the Court was delivered by Sarkar, C.J.
+These appeals arise out of an election to a seat in the West Bengal Legislative Assembly from the Khargram Murshidabad constitutency reserved for members of the Scheduled Castes.
+The contestants at this election were Abhoy Pada Saha and Sudhir Kumar Mondal.
+Sudhir is admittedly a member of a Scheduled Caste.
+Abhoy Pada described himself in the nomination paper as "a member of the Sunri caste which is a Scheduled Caste".
+Sudhir objected to this nomination contending that Abhoy Pada did not belong to any Scheduled Caste.
+The objection was rejected by the Returning Officer.
+At the election which 388 ensued, Abhoy Pada secured 16,730 votes and Sudhir, 15,523 and the former was consequently declared elected.
+Sudhir then filed a petition challenging the validity of Abhoy Pada 's election on various grounds.
+At the hearing of the petition by the Election Tribunal, however, he challenged the election only on the ground that Abhoy Pada was a member of the Saha caste and not a member of a Scheduled Caste.
+The Election Tribunal rejected this contention and dismissed the petition.
+Sudhir then appealed to the High Court at Calcutta which reversed the decision of the Tribunal and declared the election of Abhoy Pada invalid and set it aside on the ground that he did not belong to a Scheduled Caste.
+In his petition Sudhir had further claimed that he should be declared elected in the place of the appellant if the latter 's election was found to be invalid.
+This prayer, however, was rejected by the High Court.
+These two appeals are from the judgment of the High Court.
+Appeal No. 931 of 1965 is by Abhoy Pada.
+He challenges the validity of the order of the High Court setting aside his election.
+Appeal No. 1149 of 1965 is by Sudhir and he challenges the validity of the order of the High Court rejecting his prayer to be declared elected.
+We shall first deal with Appeal No. 931 of 1965 filed by Abhoy Pada and shall hereafter refer to him as the appellant and Sudhir as the respondent.
+article 332 of the Constitution provides that seats shall be reserved for the Scheduled Castes in the Legislative Assembly of every State.
+article 341 gives power to the President to specify by public notification the castes or parts of or groups within castes which shall for the purpose of the Constitution be deemed to be Scheduled Castes.
+The President, on August 10, 1950, passed the Constitution (Scheduled Castes) Order, 1950 under article 341 setting out in its schedule the various castes which were declared Sche duled Castes.
+This Order was amended from time to time by statutes passed by Parliament and it is agreed that at the relevant time Item 40 of Part 13 of the schedule to the Order which set out which were Scheduled Castes in West Bengal stood as follows: "Sunri excluding Saha".
+Item 40 and some other items of the schedule were made applicable to the State of West Bengal except the Purulia District and the territories transferred from Purnea District of Bihar and it is with this item that we are concerned.
+The question is, whether the appellant was a member of the Scheduled Caste specified in this item.
+In the election petition, the respondent had stated that the appellant, was a member of the Saha caste and not a member of any Schedule Caste.
+It was said that this showed that the respondent 's case was that the appellant belonged to an independent caste which had nothing to do with Sunri caste and that it was, therefore, not c open to him at the trial to contend, as he appears to have done.
+389 that the appellant was a Sunri by caste but was excluded from the Scheduled Caste group because he belonged to a smaller caste group of Sunirs known as Sahas.
+We are unable to take this strict view of the pleading.
+The petition may, in our opinion, be reasonably read as stating that the appellant was a member of the Saha caste, a smaller caste group within the bigger caste group of Sunirs and was for that reason not a member of the Scheduled Caste specified in item 40.
+We also observe that this reading of the petition which was accepted by the Election Tribunal, did not cause any surprise to the appellant at the trial or result in any injustice.
+The High Court also read the petition in the same way.
+In our view, it was open to the respondent to show that the appellant belonged to the Saha caste group within the Sunri caste group and did not, therefore, belong to the Schedule Caste specified in item 40 as he claimed.
+The Tribunal rejected the respondent 's case that the Sunri caste was divided into certain groups of which the Sahas formed one.
+It came to the conclusion that the Sahas originally belonged to the Sunri caste but for a long time past they had formed themselves into a different caste which had no connection with the Sunris.
+It is not very clear whether the Tribunal thought that the Sahas were originally a smaller caste group within the Sunri caste group or were only distinguished from the other Sunris by their surname.
+We are, however, inclined to think that the Tribunal thought that the Sahas were originally a smaller caste group within the Sunri caste because it rejected a contention advanced by the respondent that item 40 excluded from Sunirs those who bore the surname Saha observing that the names given in the schedule to the Order all referred to castes, subcaliber or groups.
+It found that the evidence clearly established that the appellant belonged to the Sunri caste a fact which appears to have been admitted by the respondent and, therefore, did not belong to the independent caste which according to the Tribunal, the Sahas have formed for a long time past.
+In that view of the matter, the Tribunal held the appellant to be a Sunri and a person belonging to the Schedule Caste specified in item 40 and, therefore, dismissed the election petition.
+It took the view that item 40 had excluded Sahas from Sunirs by way of abundant caution, so that the Sahas who had originally belonged to the Sunri caste but had long 'ago severed all connections with it and developed into a distinct and independent caste, might not claim, by virtue of their origin, to belong to the Sunri caste stated in the item.
+In the High Court P. N. Mookerjee, J. observed that the Tribunal had gone wrong in considering the Sahas as an independent caste.
+He said that the expression "excluding" denoted that the Sahas contemplated would, but for this word, have come within the Sunri caste.
+He held that the Sahas formed "a group within the Sunri caste be it a sub caste strictly so called or other 390 wise".
+He also held that the evidence did not establish that the Sahas formed a sub caste strictly so called within the Sunri caste of a caste wholly independent of the Sunri caste.
+His conclusion was that the expression "excluding Saba" referred to those Sunris who bore the surname Saha irrespective of whether they belonged to a sub caste strictly so called, of Sunris or not.
+The learned Judge, therefore, held that as the appellant bore the surname Saha, he did not belong to the Scheduled Caste specified in item 40 though he was a Sunri.
+The other learned Judge, Basu, J. held that the words "parts or groups within castes" in article 341 were wide enough to refer to any determinate part of a caste distinguished by a surname or otherwise and it was not necessary that such part must necessarily form a sub caste.
+He also held that the evidence broadly supported "the conclusion that the respondent 's family belongs to the Saba sub caste or group within the Sunri caste".
+The learned Judge however, appears to have set aside the decision of the Tribunal and directed the election of the appellant to be set aside on the ground that the appellant bore the surname Saha and was thereby excluded from the Scheduled Caste specified in item 40 for he said "these Saha families, within the fold of Sunri caste, distinguished themselves by their surname, whatever might be their other characteristics" and have come to form a class apart from the rest of the Sunris.
+Now, the point in issue is, whether the appellant satisfied the description "Sunri excluding Saha" in item 40 of the President 's Order.
+To decide that point, the description has first to be properly interpreted and understood.
+As we have said, the Tribunal thought that the Sahas formed a distinct caste wholly outside the Sunri caste and they had been specifically excluded in item 40 for greater safety o prevent them from claiming to be Sunris by reason of their origin.
+The learned Judges of the High Court thought that the effect of the item was to exclude from the Sunri caste those who belonged to that caste but bore the surname Saha.
+We are unable to agree with either of these interpretations.
+There is no doubt that Sunri is a caste.
+Nobody disputes that.
+That also follows from the fact that the Constitution (Scheduled Castes) Order, 1950 was promulgated to indicate those castes who are to be considered as Scheduled Castes for the purpose of the Constitution.
+"Sunri" in item 40, therefore.
+refers to a caste.
+If Sunri is a caste, the word 'Saha ' in the expression "excluding Saha" in the item must, without more.
+also refer to a caste group within the Sunri caste.
+It is legitimate to think that when a statute says that a thing is to be excluded from another, both things are of the same kind; if one is a caste.
+the other must be a caste.
+It follows that when the item excluded Sahas from Sunris, since Sunri is a caste group, Saha must equally be another caste group.
+The Tribunal appears to have taken the same view.
+Now a thing can be 391 excluded from another only if it was otherwise within it.
+Therefore, the correct interpretation of the item is that it indicates men of the Sunri caste but not those within that caste who formed the smaller caste group of Sahas.
+This is where the Tribunal went wrong.
+The Tribunal came to its conclusion that "Saha" in the item referred to a caste distinct from the Sunri caste because the evidence before it did not show that there was within the Sunri caste, a smaller caste group called Sahas.
+The error of the Tribunal lay in interpreting the Order in the light of the evidence before it.
+There was no justification for doing that.
+After all, the evidence led in a case may be imperfect.
+Suppose the evidence in another case led to the conclusion, as it might conceivably do, that there was a smaller caste group within the Sunri caste, called Sahas.
+In that case, if the reasoning applied by the Tribunal is right, it has to be held that the expression "excluding Saha" meant excluding a smaller caste group called Sahas.
+A method of interpreting a statutory provision which might lead to such uncertainty cannot be correct.
+If the correct interpretation of item 40 was, as we think it was, that Sahas were a caste group within the Sunri caste, no question of Sahas being a distinct class independent of Sunris ,could arise.
+The finding that Sahas were a wholly independent caste was altogether irrelevant to the point in issue.
+Evidence cannot alter the natural interpretation of the words in the Order.
+For the same reason, we are unable to agree with the interpretation of the High Court that the Sahas excluded were those Sunris who bore the surname Saha.
+We think the learned Judges of the High Court also interpreted item 40 in the light of the evidence in the case.
+If the intention was to exclude from Sunris those members of that caste who bore the surname Saha, the item would have said so; it would then have read "Sunri excluding those who bore the surname Saha".
+In the absence of such words "Saha" must, in the context, be understood as referring to a smaller caste group within the bigger caste group of Sunris.
+Surname is irrelevant as a test for applying item 40 unless it is shown that it indicated a smaller caste group of Sunris.
+It is nobody 's case that there is evidence to show that.
+It is of interest to remind in the connection that the Order provides that the Sunris in the Purulia District and those parts of the Purnea District which had been transferred to West Bengal were not to be considered as belonging to a Scheduled Caste.
+That would show that where the exclusion is by a test other than a caste group, the Order expressly says so.
+It is natural to think that if the excluded Sahas were those Sunris who bore the surname Saha, the Order would have made that clear.
+In our opinion, the learned Judges of the High Court were in error in interpreting the item on the evidence in the case as they appear to have done.
+L/S5SCI 27 392 If we are right in our interpretation of item 40, then the only question that has to be decided in this case is, whether the respondent has established that the appellant belonged to a smaller caste group called Sahas within the Sunri caste.
+This question presents no difficulty.
+The respondent called witnesses to establish that the appellant belonged to the smaller caste group of Sahas.
+These witnesses were disbelieved by the Tribunal which described them as unreliable.
+P.N. Mookerjee, J. said, "it has not been proved that the respondent (appellant here) belonged to any separate Saha caste or to any Saha Sunri sub caste of the Sunri caste".
+Though Basu, J. said that the appellant belonged to the Saha group of Sunris, it would appear that 'he was thinking of that group as consisting of those Sunris who bore the surname Saha.
+All the courts in West 'Bengal, therefore, came to the conclusion that it had not been prov ed in this case that the appellant belonged to the smaller caste group of Sahas.
+We have no reason to take a different view of the evidence.
+The result then is, that the appellant is a Sunri by caste and has not been proved to belong to the smaller caste group of Sahas.
+He must be held to belong to the Scheduled Caste specified in item 40.
+That being so, the election petition must fail.
+Accordingly, we allow Appeal No. 931 of 1965 and set aside the judgment of the High Court and restore that of the Election Tribunal dismissing the petition.
+The appellant will get the costs throughout.
+In the view that we have taken in Appeal No. 931 of 1965, the other appeal must necessarily be dismissed and we, therefore, dismiss it with costs.
+One set of hearing fees only.
+Appeal No. 931 of 1965 allowed.
+Appeal No. 1149 of 1965 dismissed.

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+Appeal No. 696 of 1966.
+Appeal by special leave from the judgment and order dated September 13, 1963 of the Madras High Court in Writ Appeal No. IO of 1962.
+P. Ram Reddy and A. V. Rangam, for the appellant.
+R. Ganapathy Iyer, for the respondent.
+The Judgment of the Court was delivered by Ramaswami, J.
+The question of law involved in this appeal is whether the purchaser of business carried on by a dealer as defined in the Madras General Sales Tax Act, 1939 (Madras Act No. IX of 1939), hereinafter called the 'Act ', can be made liable for arrears of sales tax due from the dealer in respect of transactions of sale which took place before the, transfer of the business under Rule 21 A of the Rules framed in exercise of the powers conferred on the State Government by section 19 of the Act.
+The respondent purchased, by a registered instrument dated October 5, 1956, the business carried on by one Purushottam Raju under the name All India Trading Company.
+Purushottam Raju was the sole proprietor of the business and had been assessed to sales tax in respect of his turnover for the years 1948 49 and 1949 50.
+The assessee paid some amounts towards sales tax thus determined, but there remained some arrears of sales tax i.e., Rs. 3836 4 0 for 1948 49 and Rs. 1218 1 9 for 1949 50.
+The Sales tax authorities attempted to recover the arrears of tax from the respondent as the purchaser of the business.
+The respondent 6 63 denied liability to pay sales tax but his contention was over ruled by the Deputy Commercial Tax Officer.
+The respondent appealed to the Commercial Tax Officer as well as to the Board of Revenue, but the appeals were dismissed.
+The respondent thereafter moved the Madras High Court under article 226 of the Constitution for the issue of a writ in the nature of certiorari to quash the orders of the Commercial Tax Officer and the Board of Revenue.
+Ganapatia Pillai, J. who heard the petition dismissed it.
+The respondent took the matter in appeal under the Letters Patent.
+The Division Bench consisting of section Ramachandra Iyer, C.J. and Ramakrishnan, J. reversed the judgment of the Single Judge, holding that Rule 21 A of the Sales Tax Rules was illegal and ultra vires and the respondent was not liable to pay the sales tax due from his predecessor in title, Purushottam Raju.
+This appeal is brought, by special leave, from the judgment of the Division Bench of the Madras High Court dated September 13, 1963 in Writ Appeal No. 10 of 1962.
+Rule 21 A was framed by the State Government under the rule making power granted to it under section 19(1) and (2) of the Act.
+Rule 21 A reads as follows : "When the ownership of the business of a dealer liable to pay the tax under the Act is entirely transferred, any tax payable in respect of such business and remaining unpaid at the time of the transfer shall be recoverable from the transferor or the transferee as if they were the dealers liable to pay such tax, provided that the recovery from the transferee of the arrears of taxes due prior to the date of the transfer shall be only to the extent of the value of the business he obtained by transfer.
+The trans feree shall also be liable to pay tax under the Act on the sales of goods effected by him with effect from the date of such transfer and shall within thirty days of the transfer apply for registration or licence, as the case may be, unless he already holds a certificate of registration or licence, as the case may be.
+" Section 19 ( 1 ) and 1 9 (2) (c) are to the following effect "19.
+(1) The State Government may make rules to carry out the purposes of this Act.
+(2) In particular and without prejudice to the generality of the foregoing power, such rules may provide for (c) the assessment to tax under this Act of businesses which are discontinued or the ownership of which has changed;" 664 The first question to be considered in this appeal is whether Rule 21 A is intra vires of the power of the State Government under sections 19(1) and (2) of the Act.
+Section 3(1) of the Act is the charging section.
+It imposes a liability to pay sales tax on every dealer for each year, and the tax is to be calculated on his total turnover for that year.
+Section 2(b) of the Act defines a "dealer" as "a person who carries on the business of buying, selling .
+goods".
+The word "turnover" is defined in section 2(i) of the Act to mean "the aggregate amount for which goods are either bought or sold by a dealer, whether for cash or for deferred payment or other valuable consideration. ".
+It is manifest that a person who purchases a business as a 'dealer ' can be assessed to sales tax only in respect of his turnover and under the scheme of the charging provision of the Act the purchaser of the business has nothing to do with the sales effected by the seller of the business.
+The turnover in respect of such sales remains therefore the turnover of the transferor and not of the transferee.
+By the amending Act of 1959 (Act 1 of 1959) an express provision was inserted by which the transferee of the business was made liable for the arrears of sales tax due from the transferor.
+But there is no such provision in the Act for the period with which we are concerned in the present case.
+The question is whether the State Government has authority under its rule making power under section 19 of the Act to create a legal fiction by which the transferee of the business is constituted as the dealer liable to pay the tax in respect of the turnover of the transferor.
+On behalf of the appellants Mr. Ram Reddy suggested that the State Government has power under section 19(1) and 19(2) (c) of the Act to frame the impugned rule.
+We are unable to accept this argument as correct.
+Section 19(1) of the Act empowers the State Government to make rules to carry out the purposes of the Act, but the section cannot be utilised to enlarge the scope of section 10 regarding recovery and payment of tax from some other person other than a "dealer" under the Act.
+We also consider that the State Government has no authority under section 19(2)(c) of the Act to enact the rule.
+Section 19(2)(c) deals with the assessment to tax of businesses which are discontinued or the ownership of which has changed.
+It is true that the word "assessment" in the scheme of sales tax and income tax legislation is a term of varying import.
+The word is used sometimes to mean the computation of income, sometimes the determination of the amount of tax payable, and sometimes the whole procedure laid down in the Income tax Act for imposing liability on the tax payer.
+As the Judicial Committee, however, said in Badridas Daga vs C.I.T (1), the words 'assess ' and 'assessment ' refer primarily to the computation of the amount.
+of income.
+In Chatturam vs C.I.T. Bihar(1), the Federal Court pointed out, relying upon the decision of the House of Lords in (1) , 21 1.
+(2) , 665 Whitney vs Commissioners of Inland Revenue("), that the liability to tax does not depend upon assessment.
+The liability is definitely created by sections 3 and 4 of the Income tax Act which are the charging sections and the assessment order under section 23 only quantifies the liability which has already been definitely and finally created by the charging sections and the provision in regard to assessment relates only to the machinery of taxation.
+In our opinion, the principle of these decisions applies to the interpretation of the Act in the present case.
+We consider that, in the context and background of other sections of the Act, the word 'assessment ' used in section 19(2)(c) does not include the power of recovering tax assessed from a person other than the assessee.
+It follows therefore that Rule 21 A is beyond the rule making power of the State Government either under section 19(1) or section 19(2)(c) of the Act.
+It was then submitted by Mr. Ram Reddy that Rule 21 A may be supported by the language of section 10(1) of the Act which states "10.
+Payment and recovery of tax. (1) The tax assessed under this Act shall be paid in such manner and in such instalments, if any, and within such time, as may be specified in the notice of assessment, not being less than fifteen days from the date of service of the notice.
+If default is made in paying according to the notice of assessment, the whole of the amount outstanding on the date of default shall become immediately due and shall be a charge on the properties of the person or persons liable to pay the tax under this Act.
+" It was contended that under this section the whole of the amount outstanding on the date of default is charged on the property of the person liable to pay the tax.
+In the present case, the business which was transferred to the respondent was hence charged with the payment of sales tax and it was open to sales tax authorities to proceed against the assets of the business for realising the amount of sales tax due.
+In our opinion, there is no justification for this argument.
+Section 10 of the Act as it stood before the Madras General Sales tax (3rd amendment) Act, 1956 (Act No. XV of 1956) read as follows "The tax assessed under this Act shall be paid in such manner and in such instalments, if any, and within such time, as may be specified in the notice of assessment, not being less than fifteen days from the date of service of the notice.
+In default of such payment, the whole of the amount then remaining due may be recovered as if it were an arrear of land revenue.
+" This section was amended by section 8 of the Madras General Sales tax (3rd amendment) Act, 1956 which reads as follows (1) 666 "Substitution of new section for section 10 in Madras Act IX of 1939.
+For section 10 of the principal Act, the following section shall be substituted, namely "10.
+Payment and recovery of tax. (1) The tax assessed under this Act shall be paid in such manner and in such instalments, if any, and within such time, as may be specified in the notice of assessment, not being less than fifteen days from the date of service of the notice.
+If default is made in paying according to the notice of assessment, the whole of the amount outstanding on the date of default shall become immediately due and shall be a charge on the properties of the person or persons liable to pay the tax under this Act. . .
+The 3rd Amendment Act, 1956 received the assent of the President on October 1, 1956 but it was published in the Madras Gazette on October 8. 1956.
+Section 5 of the Madras General Clauses Act (Madras Act No. 1 of 1891) provides as follows "5.
+(1) Where any Act to which this Chapter applies is not expressed to come into operation, on a particular day, then, it shall come into operation on the day on which the assent thereto of the Governor, the Gover nor General or the President, as the case may require, is first published in the Official Gazette.
+" In the present case, the Act is not expressed to come into operation on any particular date, but as it was published in the Madras Gazette on October 8, 1956, the Act came into operation on that date and not before.
+In the present case, the registered instrument by which the business was transferred to the respondent is dated October 5, 1956 and the amending Act has therefore no application.
+We accordingly reject the argument of the appellants on this aspect of the case and hold that Rule 21 A is ultra vires of the rule making power of the State Government under the, Act.
+It was next argued on behalf of the appellants that upon a true construction of the registered instrument dated October 5, 1956 the respondent undertook to pay not only Sch.
+I liabilities but also other liabilities like sales tax imposed in regard to the business.
+It was, however, disputed by Mr. Ganapathy Iyer on behalf of the respondent that there was any undertaking on the part of the respondent to discharge the liabilities in regard to arrears of sales tax.
+But even on the assumption that the respondent undertook to pay the arrears of sales tax due by the transferor, it does not follow 66 7 that there is a liability created inter se between the State Government on the one hand and the transferee on the other hand.
+To put it differently, it is not open to the State Government to rely on the instrument inter vivos between the transferor and the transferee and to contend that there is any contractual obligation between the transferee and the State Government who is not a party to the instrument.
+We accordingly reject the argument of the appellants on this aspect of the case also.
+For these reasons we hold that the judgment of the Division Bench of the High Court dated September 13, 1963 is correct and this appeal must be dismissed with costs.
+R.K.P.S. Appeal dismissed.

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+Appeal No. 1375 of 1966.
+Appeal from the judgment and order dated October 22, 1965 of the Bombay High Court Nagpur Bench in Special Civil Application No. 355 of 1964.
+M. N. Phadke and Naunit Lal, for the appellant.
+B. R. Agarwala and section B. Nerkar, for respondent No. 1.
+A. K. Sen, A. section Bobde, G. L. Sanghi, and O. C. Mathur, for respondent No. 2.
+M. section K. Sastri, R. N. Sachthey, section P. Nayar for R. H. Dhebar, for respondent No. 3.
+The appellant had in this petition prayed for the issue of a writ quashing the resolution dated April 6, 1964, passed by the Standing Committee, Zila Parishad, Nagpur, and for a writ of mandamus directing the Standing Committee not to interfere with the right of the appellant to impose and collect the octroi duty pursuant to its resolution dated February 25, 1963.
+In order to appreciate the points raised before us it is necessary to give the relevant facts and statutory provisions.
+The Village Panchayat of Kanhan Pipri, hereinafter referred to as the Panchayat, was originally constituted under the C.P. & Berar Panchayat Act, 1946 (C.P. & Berar Act No. 1 of 1947).
+On June 1, 1959, the Bombay Village Panchayat Act, 1958 (Bombay Act III of 1959) hereinafter referred to as the Act came into effect in Vidharba region, and by virtue of this Act the appellant was deemed to be a Panchayat under the Act.
+On July 14, 1961, the Panchayat passed resolution No. 2 with a view to levy octroi duty.
+The resolution, after reciting the need 215 for levying octroi duty and the relevant statutory provisions, concludes: ". . it passes the resolution to levy minimum octroi tax on the goods coming within its local limits as per the Schedule No. 1 of the Rules." On November 17, 1962, resolution No. 5 was passed which reads as follows: "5.
+The meeting considered the question of imposition of octroi duty.
+It has been unanimously resolved that by virtue of Grampanchayat Resolution No. 2, dated 14 7 61, that octroi duty shall be imposed on the goods coming into its local limits, the committee accepts the same.
+The matter of levying octroi duty shall be undertaken in accordance with the Panchayat Act and its rules.
+There fore matter of Octroi Rules, calling for objections for the tax and taking of decisions thereon after the consideration, number of the octroi posts and place etc.
+should be got decided by the appropriate authority.
+This matter may be taken into hand very urgently.
+It is so decided, by the majority.
+" On January 26, 1963, a public notice was issued under r. 3(b) of the Maharashtra Village Panchayats Taxes and Fees Rules, 1960 hereinafter referred to as the Fees Rules.
+On February 19, 1963, M/s Brooke Bond of India (Pr.) Ltd. hereinafter referred to as the Company respondent before us, preferred objections against the proposed levy of octroi.
+On February 25, 1963, resolution No.3 was passed.
+After setting out the previous resolutions and the publication of the notice by beat of drum, and the various objections received, it concludes: "Having considered all these above objections and suggestions and having given a satisfactory explanation for the same, this Committee unanimously resolves that as per the above resolution octroi should be levied on all the goods coming into the limits of the Panchayat,as per schedule I item 1,and levy the minimum octroi as per the rules in Schedule I item 2.
+This levy should come into fo rce from 1 4 1963 and its final publication be done on 1 3 1963 as per rules and by public notice and by announcement by beat of drums (through loudspeakers.)" On March 17, 1963, resolution No. 3 was passed fixing octroi limits and number of octroi nakas and their places.
+On March 18, 1963, the Panchayat wrote to the Collector, Nagpur, seeking his approval to the octroi limits, number of octroi nakas and their places.
+It appears that the Panchayat started collecting octroi from April 1, 1963.
+On May 29, 1963, the Company filed an appeal 216 under section 124(5) of the Act before the Panchayat Samiti, Parseoni.
+The Panchayat Samiti, however, rejected the appeal by its resolution dated September 4, 1963.
+This decision was communicated to the Company by letter dated September 19, 1963, stating that the appeal "has been rejected by the Samiti as per its resolution dated 4th September, 1963, because the same was not filed within limitation as per the provisions of Bombay Village Panchayat Act and Rule 5 of Taxes and Fees Rules of 1960.
+" The Company thereupon filed an appeal before the Standing Committee, Zila Parishad, Nagpur hereinafter, referred to as the Standing Committee on October 22, 1963.
+While the appeal was pending, the Tehsildar Ramtek on January 14, 1964, approved the octroi limits and the number and location of octroi nakas within the limits of the jurisdiction of the Panchayat under r. 21 of the Fees Rules.
+On April 6, 1964, the Standing Committee allowed the appeal of the Company on two grounds; first, that it was necessary for the Panchayat to have the octroi limits fixed with the approval of the Collector before levying octroi under r. 21; and secondly, that the Company was not importing tea within the limits of the Panchayat for consumption, use or sale.
+Thereupon, the Panchayat, as already stated, filed an application under article 226 of the Constitution before the High Court.
+The High Court held that the Panchayat Samiti could not dismiss the appeal of the Company as being barred by limitation because r. 5 of the Fees Rules was ultra vires the powers of the rule making authority.
+The High Court further held that the octroi duty was not validly levied by the Panchayat as it had failed to fix the octroi limits in accordance with law.
+The High Court did not deal with the question whether the company 's tea was imported into the limits of the Panchayat for consumption, use or sale because it felt that sufficient facts had not been found by the Standing Committee.
+The High Court felt that it would not be proper to determine facts for itself.
+The learned counsel for the appellant contends before us (1) that r. 5 of the Fees Rules was intraviress (2) that the Standing Committee had no jurisdiction to decide the appeal on merits as the appeal to the Panchayat Samiti was barred by limitation; (3) that the octroi duty has been levied in accordance with law; (4) that, at any rate, the levy was good after the octroi limits were fixed on January 14, 1964; (5) that the approval of the octroi limits on January 14, 1964, relates back to April 1, 1963; and (6) that the tea was imported into the Panchayat limits for consumption, use or sale.
+Before we deal with these points it is necessary to set out the relevant statutory provisions.
+Section 3(13) of the Bombay Village Panchayat Act, 1958 (Bombay Act III of 1959) defines "octroi" or "octroi duty" to mean "a tax on the 'entry of goods into a village 217 for consumption, use or sale therein".
+Section 124(1) empowers Panchayats to levy all or any of the taxes and fees mentioned therein, and reads as follows: "124(1).
+It shall be competent to a panchayat to levy all or any of the following taxes and, fees at such rates as may be decided by it (but subject to the minimum and maximum rates which may be fixed by the State Government) and in such manner and subject to such exemptions as may be prescribed, namely: . . . . . . . . . (ii) octroi. . . " Section 124(5) provides for appeals in these terms: "Any person aggrieved by the assessment, levy or imposition of any tax or fee may appeal to the Panchayat Samiti.
+A further appeal against the order of the Panchayat Samiti shall lie to the Standing Committee, whose decision shall be final." Section 176(1) enables the State Government to make rules for carrying into effect the purposes of the Act.
+Section 176(2)(xxvi) provides: "176(2) In particular but without prejudice to the generality of the foregoing provision, the State Government may make rules (xxvi)under section 124 laying down the maximum and the minimum rates and the manner in which and the exemption subject to which taxes and fees specified in the section shall be leviable;. . ." In exercise of the powers under s.176 of the Act, the State Government made the rules called the Maharashtra Village Panchayat Taxes and Fees Rules, 1960.
+Part I of the Fees Rules is headed "General", and apart from definitions it consists of three rules, which read as follows: "3.
+Procedure for levying tax or fee.
+Every panchayat before deciding to levy a tax or fee shall observe the following procedure, namely: (a) The Panchayat shall, by resolution passed at its meeting, select a tax or fee which it proposes to levy and in such resolution shall specify the rate at which it is to be levied.
+(b) The Panchayat shall then notify to the public the proposal together with that Part of these rules 218 which relates to that tax or fee by beat of drum in the village and by means of a notice affixed in the office of the panchayat and, at the village chavdi or chora, specifying a date, not earlier than one month after the date of such publication, on or after which the panchayat shall take the proposal into consideration.
+(c) Any inhabitant of the village objecting to the levy of the tax or fee proposed by the panchayat may send his objection or suggestion in writing on or before the date specified in the notice, published under clause (b).
+(d) On or after the date fixed under clause (b), the panchayat shall consider all objections and suggestions made under clause (c) and may finally select a tax or a fee and decide the rate at which it is to be levied.
+Final publication of rules relating to tax or fee to be levied.
+Where a panchayat finally decides to levy any tax or fee the rules in that Part, of these rules which relate to such tax or fee, together with a notice stating the tax or fee to be levied and the rate thereof, shall be published by the panchayat by affixing a copy thereof in the office of the panchayat.
+It shall also announce by beat of drum in the village the fact of such publication.
+The tax or fee shall accordingly be levied from.
+the date which shall be specified in the notice and which shall not be earlier than one month after the date of publication of the notice.
+Appeal against levy of any tax or fee A person desiring to make an appeal under sub section (5) of section 124, shall do so within sixty days from the date of publication of the notice under rule 4.
+The scheme of the Fees Rules is first to prescribe general rules and then to deal individually with various taxes.
+Part II deals with tax on Buildings and Lands; Part III with Octroi; Part IV with Pilgrim Tax; Part V with tax on Fairs, Festivals and Entertainments; Part VI with taxes on Bicycles and on Vehicles drawn by Animals; and so on.
+We are concerned with Part ITT.
+This Part consists of rules 21 to 35, and two Schedules.
+The important rules are rules 21, 22 and 23, and may be set out in full: "21.
+Fixing of octroi limits and nakas.
+A Panchayat shall, with the approval of the Collector or of any officer authorised by the Collector not below the rank of Mamlatdar Tehsildar, Naib Tehsildar or Mahalkari, fix octroi limits and the number and location of octroi Nakas within 219 the limits of its jurisdiction.
+Rate of octroi Octroi may be levied by a panchayat, after following the procedure prescribed in rules 3 and 4, on all or any of the goods specified in column 1 of Schedule 1, annexed, to this Part, which are imported into the octroi limits for consumption, use or sale therein and at such rates as may be decided by it but not below the minimum and not exceeding the maximum rates specified in columns 2 and 3, respectively, of that Schedule.
+Payment of octroi on introduction of goods, etc.
+The octroi shall be paid at the octroi Naka at the time when the articles in respect of which it is leviable are imported into the octroi limits of a panchayat.
+" Rules 30, 31, 32 and 33 deal with refund of octroi.
+We may first deal with the question of the validity of the levy of octroi duty.
+It seems to us that the octroi duty has been levied in accordance with law.
+It would be noticed that the rule which authorises the levy is r.22, but it enjoins that the procedure prescribed in rr.3 and 4 should be followed before the octroi duty can be levied.
+When we turn to rr.3 and 4, it would be noticed that these rules prescribe the procedure for levying tax or fee and are not confined to octroi duty only.
+Rule 7 which deals with tax on buildings and lands also prescribes that the panchayat shall follow the procedure prescribed in rr.3 and 4 before levying a tax on buildings and lands.
+Similarly, r.37 which deals with tax on pilgrims provides that the procedure prescribed in rr.3 and 4 should be followed.
+Again, in r.53, which deals with tax on vehicles, a reference is made to rr.
+3 and 4.
+Rule 71 which deals with tax on professions also contains a reference to rr. 3 and 4.
+Rule 84 which deals with fee on markets and weekly bazars has a reference to rr.3 and 4.
+Rule 93 which deals with fee on cartstands and tonga stands makes the procedure in rr.3 and 4 appli cable.
+The scheme of the Fees Rules accordingly seems to be that the general procedure for levying taxes or fees is laid down and then this procedure is made applicable to the levy of various taxes mentioned in the other parts of the Rules.
+Viewed in this background, it seems to us that r.3(b) does not require the Panchayat to fix the octroi limits in the resolution passed under r.3(a).
+It only deals with two items; (1) selection of the tax and the rate at which it is to be levied.
+Rule 3(c) has to be similarly read.
+The inhabitants of the village would be entitled to object only to these two matters, namely, (1) the tax or fee imposed and the rate at which it is levied.
+Under r.3(d) what the panchayat does is to consider objections and suggestions and then finally make the choice as regards two things, i.e., the tax or fee to be imposed and the rate at which it is to be levied.
+220 This interpretation is reinforced by a proper reading of r. 4.
+Rule 4 requires a notice stating two things; (1) the tax or fee to be levied and (2) the rate.
+But the learned counsel for the Company, Mr. Ashok Sen, argues that this interpretation is not correct because para 2 of r.4 says that the tax shall accordingly be levied from the date which shall be specified in the notice, and he says that if the octroi limits had not been approved of by the time the resolution is passed, how could the tax be levied from the date specified in the notice.
+But r.4 has to be read alongwith r.21, and if so read, it would mean that before the octroi duty can start being levied, r.21 must be complied with.
+In other words, para 2 of r.4.
+must be read to mean that the octroi will be levied from that date provided r.21 had been complied with.
+We are, however, unable to agree with the learned counsel for the appellant that before the octroi limits are approved octroi can be collected.
+We consider that the fixing of the octroi limits with the approval of the Collector is an essential condition precedent to the levy of octroi duty.
+The learned counsel for the appellant says that the approval of the Collector on January 14, 1964, relates back and, therefore, the levy of octroi from April 1, 1963, was regularised.
+We are unable to agree with this submission.
+Apart from the fact that it may in certain circumstances lead to illegal levies, there is nothing in the language of r.21 which indicates that the Collector can regularise an imposition made without the authority of law.
+The Collector may in particular cases enlarge the octroi limits or reduce the octroi limits and it would lead to great confusion if either of the things happens after the Panchayat had been collecting octroi duty within the octroi limits submitted by it to collector for approval.
+We may here deal with a minor point which was mentioned in the course of arguments.
+The High Court held that "r.3(b) must therefore be interpreted as requiring the Panchayat to notify to the public not only the the proposal about the tax selected by it for levy, but also the rules relating to that tax which must mean the action taken under the Act and the rules.
+" On the language of r.3(b) we are unable to appreciate how action taken under the Act and the rules is required to be notified to the public.
+There is nothing in the language to warrant such a construction.
+In conclusion we hold that the octroi duty was validly levied and that it could be imposed and collected with effect from January 14, 1964.
+Mr. Sen raised another point not dealt with by the High Court.
+He urges that there was no proper publication under r.4.
+We are unable to allow him to raise this point at this stage.
+He says that this point was raised before the High Court but it has not been 221 A dealt with by it.
+He points out a passage in the judgment of the High Court but we are unable to agree with him that the High Court has implied that this point was raised before it.
+He further says that this point was taken in the return filed on behalf of the Company.
+Para 2 of the return only alleged: "This respondent says that at that time no copy of the Rules required to be published by Rule 4 of the Rules was exhibited along with the said Notice.
+This respondent is not aware and, does not admit that the fact of publication of the Notice under Rule 4 was announced by beat of drum in the village.
+" This allegation is reiterated in para 9 of the return.
+No such specific point was taken in the grounds of appeal to the Panchayat Samiti.
+It was broadly stated that the procedure required to be followed for imposing octroi had not been followed in imposing the same.
+Similarly, in the grounds of appeal to the Standing Committee, vague allegations were made "that the village Panchayat has erred in law in not following the procedure contemplated by law in the matter of imposing the octroi and has acted contrary to the principles of natural justice on an assumption that the formalities contemplated by law were complied with." He relies on the notice which is on the record to show that as a matter of fact the publication was not in accordance with law.
+In the circumstances noted above we are unable to allow him to raise this point at this stage.
+Coming to the question of the vires of r.5, it seems to us that the High Court has placed a wrong interpretation on r.5.
+The High Court has held that as r. 5 applies to all appeals under s.124(5) of the Panchayat Act, the fixing of the commencement of the period of limitation as the date of publication of the notice under r.4 for all appeals is arbitrary and destructive of the right of appeal.
+But this interpretation, with respect is not correct, if r.5 is read in the setting in which it occurs.
+Rule 5 follows imme diately rr.3 and 4 and is headed "Appeal against levy of any tax or fee", and the period of sixty days of limitation commences from the date of the publication of the notice under r.4, i.e., the notice following the decision of a Panchayat to levy any tax or fee.
+This date shows that r.5 is dealing only with appeals against levy of any tax and not with the assessment or imposition of a tax or any further appeals to the Panchayat Simiti under section 124(5).
+It is true that the opening sentence makes a reference to an appeal under sub section
+(5) of section 124, and this opening sentence would cover all II appeals under sub section
+(5) of section 124, but in the context and setting, the heading of r. 5 brings out the scope of the rule.
+Accordingly.
+the appeal of the Company to the Samiti was wrongly dismissed as time barred.
+It follows from this that the Standing Committee was entitled to deal with the appeal on merits.
+222 The only point that remains is whether the Company brought tea into the octroi limits of the Panchayat for consumption, use or sale, therein.
+As we have pointed out, the High Court felt difficulty in dealing with the question because neither the Panchayat Samiti nor the Standing Committee had found sufficient facts to enable it to deal with the question.
+Mr. Sen says that he is willing to take the facts as stated at the bar by the learned counsel for the appellant.
+But we consider that it is an unsatisfactory way of dealing with questions of fact.
+Before this question can be dealt with satisfactorily, all the relevant facts must be found by the Standing Committee, It is true that the Standing Committee inspected the premises of the Company but in their order they have given very scanty facts, They do not say whether the tea is crushed, processed or treated chemically to convert it into a marketable commodity.
+The learned counsel for the Panchayat contends that these things are done and that the resultant product is completely different from the tea imported into octroi limits.
+It is also not quite clear whether the tea which is imported by the Company is known in trade circles as a different commodity from the tea actually sent out in boxes.
+In the circumstances we must also decline to deal with this point.
+In the result the appeal is allowed, and it is declared that the Panchayat could validly impose octroi duty from January 14, 1964, in accordance with the resolutions dated February 25, 1963, and March 17, 1963.
+The case is remanded to the High Court to deal with the question whether the Company imported tea for the purpose of consumption, use or sale within the octroi limits of the Panchayat.
+The High Court may either remand the case to the Panchayat Samiti or deal with it as it may consider best in accordance with law.
+Under the circumstances there will be no order as to costs in this appeal.
+G.C. Appeal allowed.

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+Appeal No. 787 of 1964.
+Appeal from the judgment and decree dated January 5, 1961 of the Calcutta High Court in Appeal from Appellate Decree No. 1012 of 1955.
+A.K. Sen and D. N. Mukherjee, for the appellant.
+Sukumar Ghose, for respondent No. 1.
+The Judgment of WANCHOO, C. J. and MITTER, J. was delivered by MITTER, J. BHAGAVA, J. delivered a separate Opinion.
+Mitter, J. This is an appeal by a certificate granted by the High Court at Calcutta from a judgment and decree in Second Appeal passed by that court in January, 1961.
+The question before us is, whether the respondent No. 1 was entitled.
+to the benefit of the Calcutta Thika Tenancy Act, 1949, as amended finally by an Act of 1953.
+The facts necessary for the disposal.
+of this appeal are as follows.
+On the 18th June 1948, the plaintiff, the appellant before us, instituted Suit No. 292 of 1948 for ejectment of three Persons, namely, Abdul Rahim, Abdul Hamid and Abdul Gaffur, from the property in suit (a parcel of land about 1 cottah 8 chittaks being part of premises No. 6 / 1, Shibtola Lane, Entally, Calcutta).
+In the notice to quit served on the 7th May, 1948 the first two persons were described as tenants under the plaintiff and the third as a person who had purported to purchase the structures on the land and the tenancy right therein.
+In the plaint itself, the first two defendants were described as thika tenants.
+No claim was made for rents or taxes although it was alleged that the same were in arrears.
+The suit was contested only by the third defendant who filed a written statement in September 1948 contending that the suit was bad for non joinder of parties.
+The suit was decreed by a Munsif of Sealdah court, 24 Parganas on March 18, 1949 after the Calcutta Thika Tenancy Act of 1949 had come into force on February 28, 1949.
+The appeal filed therefrom by the third defendant was dismissed by the Subordinate Judge.
+Fifth Additional 172 Court, Alipore on November 23, 1949.
+The decree holder put the decree in execution and recovered possession of the land on December 18, 1949.
+The Calcutta Thika Tenancy (Amendment Ordinance), 1952 was passed on October 21, 1952 introducing various changes in the Act and substituting a new definition of a thika tenant.
+On March 14, 1953 the Calcutta Thika Tenancy (Amendment Act), 1953 was passed amending the definition of thika tenant still further and introducing important changes in the Act of 1949.
+The effect of these provisions will be considered later on.
+Before the Subordinate Judge, a point was taken that after the coming into force of the Act of 1949, the Rent Controller alone had jurisdiction in respect of ejectment suits as the defendant appellant was a thika tenant.
+The Subordinate Judge dismissed the plea on the ground that the defendant appellant had not erected the structures on the land and was not a successor in interest of the tenant but only a transferee.
+Abdul Gaffur preferred a Second Appeal to the High Court and this was heard and disposed of by a single Judge of that court on July 21, 1954, long after the Thika Tenancy Ordinance of 1952 and the Amending Act of 1953 had come into force.
+The learned Judge held that at the time when the appeal of the defendant was disposed of by the Subordinate Judge, the rights of the parties were governed by the Thika Tenancy Act of 1949 and the definition of a thika tenant in that Act was not such as to afford any protection to the appellant.
+In view of the amendment of the Act in 1953 however.
+the learned Judge felt that the question whether the appellant was entitled to the benefit of that Act had to be re examined and consequently he remanded the matter to the lower appellate court with a direction that there should be a fresh decision of the case after considering the law applicable and taking further evidence if necessary.
+On remand, the Subordinate Judge, Seventh Court, Alipore rejected the plea of the landlord that the appellant Gaffur could not be regarded as a thika tenant inter alia on the ground that he had sold his interest by a registered sale deed dated April 12, 1949 to one Subasini.
+On a consideration of the provisions of the Act and the Ordinance, the Subordinate Judge held that the appellant, Gaffur, was not liable to ejectment in the absence of any grounds therefor in the notice to quit in accordance with section 3 of the Act as he was a thika tenant within the meaning of the Act as it was finally amended.
+He also observed that section 4 of the Act would be applicable.
+The landlord went up in appeal once more to the High Court.
+On this occasion, the main plank of the argument on behalf of the landlord was that with the omission of section 29 civil courts became unable to remit ejectment suits to the controller with the result that the Act as finally amended could not apply to pre Act suits and thika tenants could get no relief under the Act.
+The learned Judges of the Division Bench of the High Court found themselves unable to accept this argument and held that the only power vested in civil courts in respect of ejectment suits against 173 thika tenants like the present one was to be found in sections 28 and 29 of the original Act and by their omission from the statute "suits for eviction became infructuous before civil courts".
+In the result, they dismissed the appeal.
+We have now to trace the relevant changes in the law made from time to time and see whether the landlord was entitled to eject Abdul Gaffur notwithstanding the Act as amended from time to time.
+The first attempt to give relief to persons described as thika tenants was made by West Bengal Ordinance No. XI of 1948 promulgated on October 26, 1948.
+The Ordinance had only six sections.
+Section 2 defined a thika tenant ' as meaning any person who under the system commonly known as "thika" "thika masik utbandi", "thika masik", "thika bastu", or under and other like system held land under another person whether under a written lease or otherwise and was, or but for a special contract would be, liable to pay rent at a monthly or any other periodical rate, for that land to such other person and had erected any structure on such land and was entitled to use it for residential purposes or for manufacturing or business purposes and included the suc cessors in interest of such person.
+Section 3 Provided that notwithstanding anything contained in any other law for the time being in force, no decree or order for the ejectment of a thika tenant shall be executed during the continuance in operation of the Ordinance.
+We need not consider the proviso to the section as we are not concerned with the condition mentioned therein.
+It is to be noted that by the definition of thika tenant, a person could only get the protection of the Ordinance if he could establish that he was holding land under any of the systems expressly mention ed or any other like system.
+A comprehensive Act was later passed i.e., West Bengal Act II of 1949 which, as already noted, came into force on Feb ruary 28, 1949.
+The definition of a thika tenant was modified slightly but the change affected thereby need not be taken account of because the respondent Gaffur 's position was not improved thereby.
+The incidents of thika tenancy were mentioned in various sections from section 3 to section II contained in Chapter 11 of the Act.
+section 3 provided that notwithstanding anything contained in any other law for the time being in force or in any contract, a thika tenant shall, subject to the provisions of the Act, be liable to ejectment from his holding on one or more of the specified grounds and not otherwise.
+The six grounds mentioned are: (i) failure to pay an arrear of rent due to the landlord in respect of the holding; (ii) user of the land comprised in the holding in a manner when rendered it unfit for any of the purposes mentioned in cl.
+(5) of section 2 (the definition of a thika tenant) or violation of a condition consistent with the Act by a breach of which he was under the terms of a contract between himself and his landlord liable to be ejected; (iii) refusal to agree to pay rent at such enhanced rate as might be determined under section 25; (iv) requirement 174 of the land by the landlord for his own occupation or for the purpose of building on the land or otherwise developing the land except during any period limited by a registered lease under which the tenant might be holding; (v) failure on the part of the holding for his own residential, manufacturing or business purpose for more than six consecutive months (omitting the priviso); and (vi) on the expiry of a registered lease in favour of the tenant.
+S 4 provided: "It shall not be competent for a landlord to eject any thika tenant from his holding unless the landlord has given the thika tenant notice in the manner provided in section 106 of the : (a) in the case where he wishes to eject the thika tenant on any of the grounds specified in clauses (i), (ii), (iii) and (iv) of section .1 at least one month 's notice in writing expiring with the end of a month of the tenancy; and (b) in the case where he wishes to eject the thika tenant on the ground specified in clause (iv) of section 3 at least three months ' notice in writing expiring with the end of a month of the tenancy.
+" The section has two provisos one of which laid down that no thika tenant Shall be ejected from his holding on any of the grounds specified in cls. '(iv) and (v) of _. 3 except on payment to him or 0 deposit with the Controller for payment to him such compensations might be agreed upon 'or might be determined in ' 'the manner prescribed by"the Controller.
+5 enacted that: "(1) Notwithstanding anything contained in any other law for the time being in force, a landlord wishing to eject a thika tenant on one or more of the grounds specified in section 3 shall apply in the prescribedmanner to the Controller for an order in that behalf and,on receipt of such application, the Controller shall after giving the thika tenant a notice to show cause within thirty days from the date of service of the notice why the application shall not be allowed and after making an inquiry in the prescribed manner either allow the application or reject it after recording the reasons for making such order. " The section further provided that no ' order allowing an application was to be made unlesscompensation payable to the tenant was either deposited with the Controller or paid to the tenant Chapter IV of the Act, by several sections, provided for appeals, reviews etc.
+Under section 27 any person aggrieved by an order of the Controller might present an appeal in writing either to the Chief Judge of the Court of Small Causes in the Presidency town or to 175 the District Judge of a district in which the holding was situate.
+Sub section
+(5) of the section provided for reviews.
+Section 28 enactect that: "Where any decree or order for the recovery of possession of any holding from a thika tenant has been made before the date of commencement of this Act but the ' possession of such holding has not been recovered from the thika tenant by the execution of such decree or order, the Court by.
+which the decree or order was made may, if it is of opinion that the decree or order is not in conformity with any provision of this Act other than sub section (1) of section 5 or section 27, rescind or vary the decree or order in such manner as the Court may think fit for the purpose of giving effect to such provision and a decree or order so varied by any Court shall be transferred by such Court to the Controller for execution under this Act as if it were an order made under and in accordance with the, provisions of this Act".
+Section 29 ran as follows: "The provisions of this Act shall apply to all suits and proceedings, including 'proceedings _ in execution, for ejectment of a thika tenant which are pending at the date of commencement of this Act, and if any such suit or proceeding relates to any matter in respect of which the Controller is competent after the date of such commendment to pass orders under this Act, such suit or proceeding shall be transferred to the Controller who shall on, suit transfer 'deal with it in accordance with the provisions of this Act as if this Act had been in operation on, the date of institution of the suit or proceeding: Provided that in applying the provisions of the Act to any suit or proceeding instituted for the ejectment of a thika tenant so transferred, the provisions regarding notice in section 4 of this Act shall not apply".
+Section 33 provided that on the expiry of the Calcutta Thika Tenancy Ordinance, 1948, the provisions of section 8 of the Bengal General Clauses Act, 1899 would apply as if it were an enactment then repealed by a, West Bengal Act.
+It will be noted from the provisions of the Act that it was intended to benefit all thika tenants expressly covered thereby.
+Unfortunately, the Act did not afford any real protection to persons for whom it Was meant because of the peculiar definition of thika tenant in it.
+A series of decisions of the Calcutta High Court shows that the tenants failed to get any relief because they could not prove any system either of the kind specifically mentioned in section 2 sub section
+(5) or an other like system.
+It is however 'clear that the benefit of section 28 was available only if the decree or order for the recovery of possession had been made before the date of the commencement of the Act but 176 possession of such holding had not been recovered from him.
+Section 29 on the other hand was made applicable to all proceedings including proceedings in execution which were pending at the date of the commencement of the Act.
+No exception was made under section 29 to cases where possession of the holding had been recovered from the thika tenant.
+The consequence was that even if the tenant had lost possession but any proceeding even arising from an execution proceeding was pending, the provisions of the Act would be attracted.
+If any such pending suit or proceeding related to any matter in respect of which the Controller was competent to pass orders, the suit or proceeding would be transferred to the Controller who would deal with it in accordance with the provisions of the Act just as if the Act had been in operation on the date of the commencement of the suit or proceeding.
+The only qualification was that even if the suit had been filed before the Act but was riot disposed of by that date, the landlord had to establish that be was entitled to possession because of the existence of any of the grounds mentioned in section 3.
+He was however not to be bound he could not have done because of the passing of the Act after the filing of his suit.
+As already stated, the Act failed to achieve its object see Murari vs Prokash(1) and Mohammad Mateen vs Baijnath Bajoria.(2) To get over this difficulty, an Ordinance, namely, the Calcutta Thika Tenancy (Amendment) Ordinance, XV of 1952 was promulgated on October 21, 1952.
+By section 2 of this Ordinance, the definition of thika tenant in the Calcutta Thika 'Tenancy Act, 1949 was substituted by a new one, namely: "(5) thika tenant ' means any person who holds, whether under a written lease or otherwise, land under another person, and is but for a special contract would be liable to pay rent, at a monthly or at any other periodical rate, for that land to that another person and has erected any structure on such land for a residential, manufacturing or business purpose and includes the successor in interest .of such person, but does not include a, person: (a) who holds such land under that another person in perpetuity; or (b) who holds such land under that another person under a registered lease, in which the duration of the lease is expressly stated to be for a period of not less than twelve years; or (c) who holds such land under that another person and uses or occupies such land as a khattal".
+(1)A.I.R. 1950 Calcutta 230.
+(2)A.T.R. 1951 Calcutta 358.
+177 Other amendments were made in different sections of the Act.
+The most important one was however that contained in section 5 sub section
+(1) of this section which enatced that "Save as provided in sub section (2), the provisions of the said Act as amended by this Ordinance, shall apply to all cases pending before a Court or Controller on the date of the commencement of this Ordinance".
+Sub section
+(2) of section 5 provided as follows: "If, at any time between the commencement of the said , 'Act and of this Ordinance, a decree or order has been passed for the recovery of possession of any land and for other relief, if any, and delivery of possession has not been given, then on application made in this behalf by the person against whom the decree or order was passed, within three months of the commencement of this Ordinance, the Court which or the Controller who passed the decree or the order shall decide (after hearing the parties and after taking fresh evidence if necessary) whether the person is a thika tenant within the meaning of the said Act as amended by this Ordinance.
+If the Court or Controller holds that the person is not such a thika tenant.
+it or he shall dismiss the application.
+If the Court or Controller holds that the person is such a thika tenant.
+it or he shall set aside the decree or the order and annul the execution proceedings, if any, and (ii) where the proceedings are before a Court it shall remit the case to the Controller to be dealt with by him according to law.
+(iii)where the proceedings are before the Controller he shall reopen the case and pass a new order".
+Sub section
+(4) provided that the provisions of this section would have effect notwithstanding anything to the contrary in any other law or elsewhere in the said Act as amended by the Ordinance.
+The second Explanation to the section provided that the expression " court" would include a court exercising appellate or revisional jurisdiction and the expression 'controller ' meant the controller referred to in sub section
+(2) of section 2 of the Calcutta Thika Tenancy Act, 1949 for the time being in force or the person deciding an appeal under section 27 of the Calcutta Thika Tenancy Act, 1949 for the time being in force as the case may be.
+The effect of this was that a person who before the Ordinance would not come within the pale of the Act because he could not prove a system came within its protection because of the amendment of the definition of a thika tenant.
+Sub section
+(1) of section 5 made the Act, as amended by the Ordinance, applicable to all cases pending before a court or a controller.
+This was irrespective of the question whether the suit had been filed before the Act or 178 after the Act, or whether a decree had been passed before the Act or thereafter.
+Sub section
+(2) of section 5 made a special provision for cases where a decree or order for possession had been made between the commencement of the Act and of the Ordinance and delivery of possession had not been given to the decree holder.
+In such a case it became open to a person covered by the new definition of a thika tenant to make an application within three months of the commencement of the Ordinance either to the court or to the Controller as the case may be for relief on the basis that the applicant was a thika tenant.
+Such an application could be made even if, the decree for ejectment had become final and order, for recovery of possession made but actual delivery of possession had not been given.
+In such a case, if it was found that the person applying was a thika tenant, the court before whom the proceedings were pending had to remit the case to the controller and if the authority before whom the application was made was a controller, he had to re open the case and pass a new order.
+If the matter was in appeal, the appellate court had to exercise jurisdiction under this sub section, determine whether the tenant was a thika tenant and send the matter to the controller 'if it was found that the tenant was entitled to the benefit of the Act '.
+Even if no proceedings were pending in any court, it was open to the thika tenant to apply for relief provided delivery of possession had not been given.
+Finally came the Thika Tenancy (Amendment) Act (VI of 1953).
+It made important changes in the Act itself.
+It came into force on March 14, 1953 on which date the Calcutta Thika Tenancy (Amendment) Ordinance, 1952 ceased to operate.
+Sub section (2) of section 1 provided that the Act was to come into force immediately on the Calcutta Thika Tenancy (Amendment) Ordinance, 1952 ceasing to operate: provided that the provisions of the Calcutta Thika Tenancy Act, 1949 as amended by this Act were subject to the provisions of section 9 to apply and be deemed to have always applied to all suits, appeals and proceedings (a) before any court, or (b) before the Controller, or (c) before a person deciding an appeal under section 27 of the said Act, on the date of the commencement of the Calcutta Thika Tenancy (Amendment) Ordinance, 1952 i.e., 21st October, 1952.
+Section 2 of the Act amended the definition of 'thika tenant ' still further by giving the benefit of the Act to persons who had erected or acquired by pur chase or gift any structure on the land for a residential, manufacturing or business purpose and was to include the successors in interest of such person.
+The word 'successor in interest ' had not been defined in the Act or in the Ordinance but as words in the Act were under section 2 sub section
+(6) to have the same meaning as those used in the and the Bengal Tenancy Act, 1885 it would, but for the amendment of the definition of a thika tenant, have meant only those persons who inherited from tenants and 179 not those who acquired by purchase.
+Sections 3, 4 and 5 introduced changes with which we are not concerned, Section 8 laid down that sections 28 and 29 of the Act of 1949 shall be omitted.
+Under section 9 any proceedings commenced under sub section
+(2) of section 5 of the Calcutta Thika Tenancy (Amendment) Ordinance were to be continued as if such sub sections
+(2), (3) and (4) of that section and the Explanation to that section were in force.
+The net result seems to be that after the Amendment Act of 1953 came into force, the position of a tenant had to be examined in the light of the Act as it finally emerged.
+Sub section
+(2) of section 1 made the provisions of the Calcutta Thika Tenancy Act, 1949 as amended by the Act of 1953, applicable to all suits, appeals and proceedings pending on 21st October before any court or before the controller or before a person deciding an appeal under section 27 of the Act.
+No reference is made in this subsection to the date when the suit was instituted.
+Only suits which were pending on 21st October 1952 were to be decided in terms of the Act as finally amended.
+The question therefore arises, whether a tenant could claim the benefit of the Act in a. pre Act suit.
+It is a general principle of law that statutes are not to operate retrospectively so as to defeat vested rights, but such operation may be given by express enactment or by necessary implication from the language employed.
+According to Craies on Statute Law (Sixth Edition) at p. 391: "If it is a necessary implication from the language employed that the legislature intended a particular section to have a retrospective operation, the courts will give it such an operation".
+The learned author points out at p. 397: "It is a well recognised rule that statutes should be interpreted, if possible, so as to respect vested rights, and such a construction should: never be adopted if the words are open to another construction. . .
+For it is not to be presumed that interference with existing rights is intended by the, legislature, and if a statute be ambiguous the court should lean to the interpretation which would support existing rights.
+" Again at page 398, the learned author states: "In the absence of anything in an Act to show that it is to have a retrospective operation, it cannot be so construed as to have the effect of altering the law applicable to a slaim in litigation at the time when the Act is passed, . .
+Where, however, the necessary intendment of an Act is to affect pending causes of action, the Court will give effect to the intention of the legislature even though there is no express reference to pending actions".
+180 Reference may be made to the case of Knight vs Lee(1) where Parke B. in his judgment, said: "It seems a strong thing to hold that the legislature could have meant that a party who under a contract made prior to the Act had as perfect title to recover a sum of money as he had to any of his personal property, should be totally deprived of it without compensation".
+This was decided in terms of the Gaming Act, 1845, section 18 of which enacted that " no suit shall be brought or maintained for recovering any such sum of money " and the question was whether that enactment was retrospective so as to defeat an action already commenced.
+The Gaming Act,1922 enacted that "no action for the recovery of money under the said section (section 2 of the Gaming Act, 1835) shall be entertained by any court".
+In Headling vs Goll(1) it was held that the section was not retrospective and that the Act did not operate to put an end to pending actions.
+According to Halsbury 's Laws of England, third edition, Vol. 36, page 413, article 627: "Unless it is clearly and unambiguously intended to do so, a statute should not be construed so as to interfere with or prejudice established private rights under contracts or the title to property or so as to deprive a man of his property without his having an opportunity of being heard".
+The provisions of the Act of 1949 as finally amended by the Act of 1953 have to be examined to show how far they disturb the rights of landlord to recover possession of the property from a person who would be a thika tenant on 28th February, 1949.
+Section 3 of the Act which cuts down the right of the landlord to recover possession except on the grounds therein specified musi be held to apply to all suits even though filed before 28th February 1949.
+The language of the section leaves no room for doubt as to this.
+It expressly states that notwithstanding anything contained in any other law for the time being in force or in any contract, a thika tenant shall be liable to ejectment on ground specified and not otherwise.
+Consequently, a landlord who had filed a suit before the 28th October 1949 but was unable to ,establish any of the grounds mentioned in section 3 could not claim to eject his tenant.
+But the provisions of sections 4 and 5 of the Act are not couched in the same kind of language as section 3.
+The legislature clearly meant section 4 to be prospective because according to its language "the landlord who wishes to eject the thika tenant (1) (2) 39 Times Law Reporter 31. 181 must give at least one month 's notice in writing" or three months ' notice as the case may be.
+A landlord who had already filed the suit before the Act had evinced his intention and the question of his wishing to eject the thika tenant afresh after the Act or giving a notice for the purpose did not arise.
+Again section 5 lays down in clear terms that a "landlord wishing to eject a thika tenant" on one or more of the grounds specified in section 3 "shall apply in the prescribed manner to the controller".
+This is only consistent with the wish of a landlord after the Act has come into force.
+Before the Act had come into force, the landlord could not possibly know that his suit would be liable to be defeated unless he applied to the controller because there was no such authority functioning then.
+The section shows clearly that when a landlord wished to eject a thika tenant after the Act had come into force, he had to consider whether any of the grounds in section 3 was available to him, and if so, he did not have to file a suit but apply to the controller for an order in that behalf.
+The language of sections 4 and 5 leave no room for doubt that after the coming into force of the Act it was not open to the landlord to file a suit.
+He could only make an application under section 5 after giving notice under section 4.
+Sections 28 and 29 of the Act which were omitted as a result of the enactment of the Act of 1953 bring this out in clear terms.
+Section 28 was meant to give relief to a thika tenant in a case where a decree or order for recovery of possession of any holding from a thika tenant had been made before the date of commencement of the Act.
+It could not apply to the facts of a case like the present where the decree was made after the Act had come into force.
+Section 29, on the other hand, shows that it was to be applicable to all suits and proceedings which were pending at the date of the commencement of the Act of 1949.
+In other words, it was to apply to any suit or appeal or any proceeding in execution which was pending on 28th February, 1949.
+In any such case, the suit or proceeding wherever it was pending had to be transferred to the controller.
+The controller in his turn had to deal with the matter in accordance with the provisions of the Act of 1949 as if it had been in operation on the date of the institution of the suit or proceeding which might be before the commencement of the Act; but he was to deal with all pre Act suits on the basis that no notice under section 4 was necessary.
+If the legislature did not want to impose the bar of section 4 to pre Act suits in 1949 it does not stand to reason that the legislature should seek to impose it in the year 1953 to be operative in all suits pending not on February 28, 1949 but on 21st October, 1952.
+The logical conclusion is that the legislature always proceeded on the basis that section 4 was prospective.
+The language of section 5 being closely similar to that used in section 4 that section should also be held to be prospective only.
+182 We cannot speculate as to why the legislature thought fit to omit sections 28 and 29 from the Act of 1949.
+The effect of omission of section 28 has been considered by this Court in Mahadeolal Kanodia vs Administrator General of West Bengal(1) where it was held that a thika tenant against whom proceedings for execution of the decree for eviction were pending and who had applied for relief under section 28 lost the protection of that section as a result of the Amending Act of 1953.
+The effect of omission of section 29 is that we must measure the rights of the parties in the appeal before us on the 'basis that the section had never been on the statute book.
+The situation which arises as a result thereof is that we must deal with the rights of the parties to a suit filed before the Act of 1949 was enacted in terms of such provisions as were clearly applicable thereto.
+As Abdul Gaffur came under the definition of a thika tenant by the Amending Act of 1953 we have to proceed on the basis that he was such a tenant in 1949 with the result that he could claim the benefit of section 4 of the Act.
+As already noted, sections 4 and 5 could not be made to apply to such a suit which in the view expressed, were prospective and not retrospective.
+Consequently, the absence of a notice under section 4 would not stand in the way of the landlord nor could his suit be rejected on the ground that he had not applied to the controller.
+There being no provision for transfer of the proceedings of the suit to the controller, the court had to apply the Act as it found applicable to the facts of the case.
+It is open to the legislature to impose a bar or a qualification to the rights of the parties by the use of suitable words such as "notwithstanding any law to the contrary or in any agreement between the parties".
+In such a case, a litigant desiring to have relief in a suit must show that the bar does not affect his case.
+For instance, it is open to the legislature to enact that notwithstanding the rights which a landlord may have against a tenant under the ordinary law of the land, he shall not be entitled to eject the tenant unless he makes out a special ground for eviction, as has been done by section 3 in this case.
+Most of the Rent Control Acts all over India contain similar provisions and courts have always held such provisions applicable to pending proceedings.
+Whereas before the enactment of the Calcutta Thika Tenancy Act, 1949 it was not necessary for the landlord either to allege any of the grounds specified in section 3 or to prove the existence thereof at the hearing of the suit, he had to establish the existence of such a ground when the suit was heard.
+The ground need not be specified in the plaint, but nevertheless it had to be established in the suit.
+In this case, the learned Subordinate Judge, Seventh Court, Alipore who was directed by the remand order of the Calcutta High Court to take fresh evidence, if necessary, was not called upon by any of the parties to hear or record fresh evidence.
+He however directed his attention to the (1) [1960]3 S.C.R. 578.
+183 question as to whether the tenant appellant was entitled to press into service the provisions of sections 3 and 4 of the Act.
+According to him both these sections would apply to the facts of this case.
+The learned Subordinate Judge seems to have been of the opinion that it was necessary to state some ground under section 3 on the basis of which the landlord wanted to eject the tenant.
+Referring to the notice of ejectment served in this case, he said: "Not any one of the grounds as enumerated in section 3 was called in aid or could be called in aid".
+He was not right in his view that the grounds specified in section 3 could not be called in aid.
+Section 3 does not purport to lay down that the grounds mentioned therein had got to be stated in the notice of ejectment.
+All that the section lays down is that ejectment could not be had unless the existence of one of the grounds was proved.
+Such proof could have been adduced at the trial even if no mention of the grounds had been made before.
+As section 4 of the Act was prospective only, it could not apply to this case.
+The decision of the Subordinate Judge is however right inasmuch as the landlord made no attempt to establish any of the grounds for eviction mentioned in section 3.
+The decision of the High Court, when the matter was heard for the second time must be upheld on that ground.
+However, the. view expressed by the Calcutta High Court finally hearing the appeal that suits for eviction of thika tenants became infructuous before civil courts after the omission of section 29 is not correct.
+The correct view is that sections 4 and 5 being prospective and as such inapplicable to pre Act suits, the landlord had to establish the existence of one of the grounds specified in section 3 in order to succeed.
+There being no provision for transfer of pending suits and appeals, the court hearing the appeal would have to pass a decree for ejectment even if the defendant was a thika tenant after taking into account section 3.
+The tenant could not however ask for any compensation for the structures but could only remove them in terms of section 108(h) of the Transfer of Proper ty Act.
+For reasons we cannot speculate upon, the legislature limited the applicability of the Act only to suits and appeals pending on 21st October 1952 and not in February, 1949 i.e. the date of the commencement of the Act of 1949.
+It may be because before the Ordinance of 1952 no one could establish his rights as a thika tenant in view of the vague definition of "thika tenant" in the Act of 1949 which led to the decisions of the Calcutta High Court against persons who sought to establish their rights as such.
+The legislature cannot be taken to have imposed a ban on all pre Act suits by the circuitous process of sections 4 and 5 of the Act.
+It could then have said in clear terms that all pre Act suits shall be stayed.
+Clearly that never was the intention of the legislature as section 29 of the Act of 1949 amply demonstrates.
+In the result, as the landlord has not established any of the grounds specified in section 3 entitling him to ejectment, the appeal 184 must be dismissed.
+On the special facts of the case, we make no order as to costs.
+Bhargava, J. I agree with the judgment of my brother, Mitter, J. with the exception that I would like to reserve my opinion on the question whether section 4 of the Calcutta Thika Tenancy Act, 1949, as amended up to 1953, is prospective or not.
+On the view that this appeal must be dismissed because the respondent was entitled to the benefit of section 3, it does not appear to me to be necessary to express any opinion on whether compliance with section 4 was also required, or whether it being prospective only no such compliance by the appellant was needed.

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+ivil Appeals No. 625630 of 1967.
+Appeals by special leave from the judgment and order dated ' March 6, 1967 of the Orissa High Court in O.J.C. Nos.
+495 and 496 of 1966, and 3, 4, 27 and 28 of 1967 respectively.
+C.K. Daphtary, Attorney General, N.S. Bindra, G. Rath and R.N. Sachthey, for the appellant (in all the appeals).
+Sarjoo Prasad and S.N. Prasad, for respondents Nos. 8, 23, 8 ' and 5 (in C.As.
+Nos. 6.25; 627,629 and 630 of 1967 respectively).
+, N.M. Patnaik and Vinoo Bhagar, for respondents Nos.
+5 to 7 (in C.As.
+625 and 629 of 1967) and respondents Nos. 20 to 22 (in C.A. No. 627 of 1967).
+156 The Judgment of the Court was delivered by Hegde, J.
+These cases are the outcome of an unfortunate conflict between the High Court and the government of Orissa.
+The Orissa Superior Judicial Service (senior branch) is a combined cadre consisting of officers holding purely judicial posts as well as posts which are essentially administrative in character.
+It consists of eight district and sessions judges, two additional district and sessions judges, secretary to government in law department, superintendent and legal remembrancer, law department, deputy secretary to government in the law department, member administrative tribunal and the Registrar of the Orissa High Court, in all 15 in number.
+All these officers are the members of the Orissa '"Judicial Service" within the meaning of that expression in article 236(b) of the Constitution.
+Out of these, the district and sessions judges and additional district and sessions judges were discharging purely judicial functions.
+In view of article 229 of the Constitution.
+the power to appoint the Registrar of the High Court is exclusively that of the Chief Justice.
+Neither the High Court as such nor the Governor has any hand in his appointment.
+The power to appoint the secretaries to the government is that of the Governor.
+Under the Government of India Act 1935, the power to transfer a district judge from one post to another was that of the Governor though that power was always exercised in consultation with the High Court and by and large on the recommendation of the High Court.
+In Orissa, as in most of the other States, that practice continued till the decision of tiffs Court in the State of Assam vs Ranga Mahammad and others(1).
+Obviously when the Governor promulgated the Orissa Superior Judicial Service Rules 1963, he proceeded on the basis that the power to transfer the district judges and addl.
+district judges, from one post to another whether as a judge or to one of the posts in the secretariat was in his hands.
+It appears that for some time past there were differences between the High Court and the government about the posting of some of the judicial officers.
+The High Court was anxious that a judicial officer occupying one of the administrative posts enumerated above, should not, in the interest of judicial work, continue in that post for an unduly long time.
+The High Court insisted that ordinarily judicial officers should: not hold those posts for more than three years.
+The High Court was repeatedly requesting the government to send back judicial officers working in administrative posts as district judges or as addl.
+district judges as the case may be, after they had held those posts for three years or more.
+But those requests were not respected.
+On that account, there appears to have been some friction between the High Court and the gov ernment for some years past.
+(1) ; 157 Shri B.K. Patro one of the district and sessions.
+judges, was posted as superintendent and legal remembrancer in March 1962 Shri K.K. Bose, addl.
+district and sessions judge, was posted as joint secretary in the law department in the same month.
+He worked in that capacity till February 1965.
+Thereafter, he was, posted as superintendent and legal remembrancer.
+Shri P.C. Dey.
+a district and sessions judge, was posted as member sales tax tribunal on 31 1 62.
+That was a non cadre post.
+In February 1965, the High Court took a policy decision to the effect that as a general rule, judicial officers working in special posts whether cadre or non cadre, outside their regular line, should be recalled to the regular line after the completion of three years.
+in the interest of the service as well as the officers, so that "Officers may not deteriorate by remaining out of touch from regular judicial work for continuously long periods and the service will not suffer by being deprived of the services of senior and experienced officers in manning the posts in the regular judicial line.
+" It is of utmost importance that judicial officers should not be kept away from judicial work for a long time lest they should lose touch.
+with judicial work and even more than that should become indifferent to judicial approach.
+The above.
+policy decision was duly communicated to the government.
+The government by its letter of April 2, 1965, intimated that it had no objection to adhere to the principle of three years service in an appointment at a particular station against a special post.
+But when it came to the question of implementing that policy, the government was reluctant.
+Every time the High Court requested the government to release the three officers mentioned above for 'being posted as district and sessions judges or addl.
+district and sessions judges as the case may be, the government turned down those requests on one ground or the other.
+We do not think that it was proper for the government to do so.
+But at that stage the High Court felt helpless as it was under the impression that under law the Governor was the sole authority to effect the. necessary transfers.
+On September 21 1966, this Court rendered its decision in Ranga Mahammad 's(1) case.
+Therein this Court held that power to transfer judges presiding over courts vested with the High Court under article 235 of the Constitution.
+Soon after that decision was rendered and without any further dialogue with government in the ' light of that decision, the High Court took the precipitate step of transferring the aforementioned officers to other posts and in their place posted officers who were doing judicial work till then.
+By its order dated October 10, 1966, the High Court ordered the following transfers: (a) Shri K.B. Panda who was attached to the commission of enquiry in connection with students ' (1) ; 158 agitation, as law secretary to the government of Orissa, (b) Shri B.K. Patro, the then law secretary as district and sessions judge of Ganjam Boudh, (c) Shri T. Misra, district and sessions judge, Ganjam Boudh, as superintendent and legal remembrance and ex officio additional law secretary to the government of Orissa, (d) Shri K.K. Bose, the then superintendent and legal remembrance and additional law secretary as district and sessions judge of Mayurbhanj Keonjhar.
+(e) Shri P.K. Mohanti, district and sessions judge, Bolangir Kalahandi, as deputy secretary to the law department, a post which was vacant then, and (f) Shri P.C. Dey, member sales tax tribunal, as district and sessions judge, Bolangir Kalahandi.
+These orders were duly notified in the Orissa Gazette.
+In pursuance of those orders, Shri K.B. Panda, Shri T. Misra and Shri P. K. Mohanti handed over charge of the posts they were holding and reported themselves at the secretariat for assuming charge of the posts to which they were posted.
+But the government refused to accept them.
+Further it directed Shri Patro, Shri Bose and Shri Dey to continue in the posts they were holding.
+Those officers acted in accordance with the orders of the government.
+Consequently, the sessions divisions of Ganjam Boudh, Mayurbhanj Keonjhar and Bolangir Kalahandi were without district and sessions judges for several days.
+It is at this stage the petitions which have given rise to those appeals were filed by some of the advocates practising in one or the other of the sessions divisions mentioned above, praying for a writ of mandamus against the government as well as the concerned officers to implement the transfers ordered by the High Court on October 10, 1966 and also a writ of quo warranto against Shri B.K. Patro, Shri K.K. Bose and Shri P.C. Dey requiring them to show cause under what authority they were holding the posts of the law secretary the superintendent and legal remembrancer and member sales tax tribunal, respectively.
+In every one of those petitions, rule nisi was issued.
+The government as well as the concerned officers in the returns made by them justified the action taken by the government.
+On March 6, 1967 a special Bench of the High Court by majority allowed those petitions and made the rule absolute.
+The High Court overruled the prayer made on behalf of the government to stay the operation of its decision till necessary orders were obtained from this Court.
+It directed the government to imple 159 ment its orders forthwith.
+Having No. alternative before it, the government implemented the orders in question on March 6 1967, on the very day the decision of the High Court was rendered.
+The government 's prayer for necessary certificates for leave to appeal to this Court was rejected.
+Therefore, these appeals were filed after obtaining special leave from this Court.
+The order of the High Court consists of two parts, namely, (1) holding that Shri B.K. Patro, Shri K.K. Bose and Shri P.C. Dey had no authority to act as law secretary, superintendent and legal remembrancer and member sales tax tribunal, respectively, on and after October 10, 1966, and (2) commanding the State of Orissa, the Chief Secretary to the government of Orissa, the Home Secretary to the government of Orissa, Shri P.C. Dey, Shri K.K. Bose and Shri Patro to implement the transfers ordered by the High Court on October 10, 1966.
+It was not the case of the contesting respondents that Shri P.C. Dey, Shri K.K. Bose and Shri B.K. Patro had not the necessary qualifications to hold the posts they were holding.
+It was also not disputed that they had been validly appointed to those posts.
+In these circumstances we fail to see how the High Court could have held that they had no authority to hold the posts in question.
+Shri Sarjoo Prasad learned counsel for the High Court of Orissa at the very commencement of his arguments conceded that the order of the High Court holding that those officers had no authority to hold the posts in question is unsustainable.
+In view of that concession it is unnecessary for us to go into that question further.
+As mentioned earlier, member, sales tax tribunal, was an ex cadre post.
+Hence in the case of Shri P.C. Dey it must be assumed that his services were placed by the High Court at the disposal of the government for being posted as member sales tax tribunal.
+It is not the case of the parties that he was placed at the disposal of the government for any definite period.
+AS seen earlier, he was holding the post in question ever since 1962.In those circumstances, the High Court was entitled to recall him and post him as a district and sessions judge.
+Hence that part of the High Court 's order is unassailable.
+Before going into the validity of the orders of transfer relating to the other officers, it is necessary to ascertain the law bearing on the subject.
+As seen earlier, the cadre of the superior judicial service (senior branch) consisted of not only the posts of district and sessions judges and addl.
+district and sessions judges but also officers holding other posts.
+One of the officers included there is the Registrar of the High Court.
+Neither the government nor the High Court could have posted any officer as the Registrar of the High Court as that post can be filled only by 160 the Chief Justice.
+To hold otherwise would be to contravene article 229 of the Constitution.
+Similarly the posts of the law secretary, deputy law secretary and file superintendent and legal remembrancer cannot be considered as district courts or courts subordinate to district courts within the meaning of those words in article 235 of the Constitution.
+Those posts are similar to.
+the corresponding posts in other departments in the secretariat.
+Prima facie it is for the Governor to fill up those posts.
+It was conceded that if those posts had not been included in the cadre of superior judicial service the High Court would not have had any right to fill those posts.
+But we were told that in view of the decisions of this Court in State of West Bengal vs Nripendra Nath Bagchi(1) and State of Assam vs Ranga Mahammad(2) the High Court must be held to have that right as those posts are included in the cadre of superior judicial service.
+Before considering the correctness of that submission it is necessary to notice that this argument breaks down when we come to the question of filling up the post of the Registrar.
+If the argument advanced on behalf of the High Court is correct.
+the High Court must also have, the power to fill up the post of the Registrar as that is also Included in the cadre.
+Now let us consider the ratio of the decisions in Nripendra Nath Bagchi 's case (1), and Ranga Mahammad 's (2) case.
+In Bagchi 's case,(1), this Court laid down that the word "control" found in article 235 includes disciplinary jurisdiction as well.
+The only question that fell for decision in that case was whether the government of West Bengal was competent to institute disciplinary proceedings against an addl.
+district and sessions judge.
+This Court upheld the decision of the High Court of Calcutta holding that it had no such jurisdiction.
+That was the single question decided in that case.
+It is true that in the course of the judgment.
+this Court observed that the High Court is made the sole custodian of the control of the judiciary, but that observation was made only in the context of the question that arose for decision.
+In Ranga Mahammad 's case(2), the point that arose for decision was as to who was the authority to transfer a district judge.
+the State government or the High Court.
+In that case, the State government ordered the transfer of certain district judges without even consulting the High Court.
+The rule laid down in that decision is of no assistance in determining the question as to whether the High Court has power to fill up some of the posts in the secretariat.
+In the course of that judgment, this Court observed (at page 459 of the report): "The question we have posed resolves itself into a question of a very different but somewhat limited form.
+(1) ; (2) ; 161 namely, whether the power to transfer District Judges is included in the 'control ' exercisable by the High Court over District Courts under article 235, or in the power of 'appointment of persons to be and the posting and promotion, of district judges ' which is to be exercised by the Governor under article 233, albeit in consultation with the High Court.
+If the sense of the matter be the former, then the High Court and if the latter, the Governor, would possess that 'power.
+The right approach is, therefore, to enquire what is meant by 'posting ' and whether the term does not mean the initial posting of a District Judge on appointment or promotion to a vacancy in the cadre, permanent or temporary.
+If this be the meaning, as the High Court holds.
+then the transfer of District Judges already appointed or promoted and posted in the cadre must necessarily be outside the power of the Governor and fall to be made by the High Court as part of the control vested in it by article 235." After analysing articles 233 and 235 and noticing the development of the law on the subject this Court held that under article 233, the Governor is only concerned with the appointment, promotion and posting to the cadre of district judges but not with the transfer of district judges already appointed or promoted and posted to the cadre which power is vested in the High Court under article 235 as the control given to the High Court over the district courts under that Article includes control over the officers who preside over those courts.
+Proceeding further this Court observed: "This is, of course, as it should be, the High Court is in the day to day control of courts and knows the capacity for work of individuals and the requirements of a particular station or Court.
+The High Court is better suited to make transfers than a Minister.
+For however well meaning a Minister may be he can never possess the same intimate knowledge of the working of the judiciary as a whole and of individual Judges, as the High Court.
+He must depend on his department for information.
+The Chief Justice and his colleagues know these matters and deal with them personally.
+There is less chance of being influenced by secretaries who may withhold some vital information if they are interested themselves.
+It is also well known that all stations are not similar in climate and education, medical and 162 other facilities.
+Some are good stations and some are not so good.
+There is less chance of success for a person seeking advantage for himself if the Chief Justice and his colleagues, with personal information, deal with the matter, than when a Minister deals with it on notes and information supplied by a secretary.
+The reason of the rule and the sense of the matter combine to suggest the narrow meaning accepted by us.
+The policy displayed by the Constitution has been in this direction as has been explained in earlier cases of this Court.
+" Obviously relying on the observation of this Court that after a judicial officer is posted to the cadre, it is for the High Court to effect his transfers, the court below has come to the conclusion that as the posts of the law secretary, deputy law secretary and superintendent and legal remembrancer are included in the cadre, the High Court has the power to fill those posts by transfer of judicial officers.
+The cadre this Court was considering in Ranga Mahammad 's(1) case, namely, Assam Superior Judicial Services Cadre consisted of the Registrar of the Assam High Court and three district judges in the first grade and some additional district judges in grade II.
+In that cadre, no officer holding any post under the government was included.
+Hence the reference by this Court to the cadre is a reference to.a cadre consisting essentially ,of officers under the direct control of the High Court.
+It was in that context this Court spoke of the cadre.
+The question of law considered in that decision was as regards the scope of the expression "control over district court" in article 235.
+The reference to the cadre was merely incidental.
+A decision is only an authority for what it actually decides.
+What is of the essence in a decision is its ratio and not every observation found therein nor what logically follows from the various observations made in it.
+On this topic this is what Earl of Halsbury L.C. said in Quinn vs Leathem(2): "Now before discussing the case of Allen vs Flood and what was decided therein, there are two observations of a general character which I wish to make, and one is to repeat what I have very often said before, that every judgment must be read as applicable to the particular facts proved, or assumed to be proved, since the generality of the expressions which may be found there are not intended to be expositions of the whole law, but governed and qualified by the particular facts of the case in which such expressions are to.
+be found.
+The other is that a case is only an authority for what it actually decides.
+I entirely deny that it can (1) ; (2) [1901] A.C. 495.
+163 be quoted for a proposition that may seem to follow logically from it.
+Such a mode of reasoning assumes that the law is necessarily a logical code, whereas every lawyer must acknowledge that the law is not always logical at all.
+" It is not a profitable task to extract a sentence here and there from a judgment and to build upon it.
+Neither Bagchi 's case nor Ranga Mahammad 's case is of any assistance to us in deciding the question whether the High Court has competence to fill some of the posts in the secretariat by transfer judicial officers under Its control.
+Just as the executive cannot know the requirements of a particular court, the High Court also cannot know the requirements of any post in the secretariat.
+Just as the High Court resents any interference by the executive in the functioning of the judiciary, the executive has a right to ask the High Court not to interfere with its functions.
+It is for the executive to say whether a particular officer would meet its requirements or not.
+The High Court cannot, as contended by the learned Attorney General, foist any officer on the government.
+The cadre with which we are concerned in this case consists of three parts i.e., (1) presiding officers of district courts, (2) the Registrar of the High Court and (3) the judicial officers working in the secretariat.
+No doubt all these officers belong to the judicial service of the State and they were before 1962 presiding over district courts or courts subordinate to them and as such were under the control of the High Court.
+Hence without the consent of the High Court the government could not have posted them to administrative posts in 1962.
+It must be presumed that they were taken over by the government with the consent of the High Court.
+While sparing the service of any judicial officer to the government it is open to the High Court to fix the period during which he may hold any executive post.
+At the end of that period, the government is bound to allow him to go back to his parent department unless the High Court agrees to spare his services for some more time.
+In other words, the period during which a judicial officer should serve in an executive post must be settled by agreement between the High Court and the government.
+If there is no such agreement it is open to the government to send him back to his parent department at any time it pleases.
+It is equally open to the High Court to recall him whenever 'it thinks fit.
+If only there is mutual understanding and appreciation of the difficulties of the one by the other, there will be harmony.
+There is no reason why there should be any conflict between the High Court and the government.
+Except for very good reasons we think the High Court should always be 164 willing to spare for an agreed period the services of any of the officers under its control for filling up such executive posts as may require the services of judicial officers.
+The government, in its turn should appreciate the anxiety of the High Court that judicial officers should not be allowed to acquire vested interest in the secretariat.
+Both the High Court and the government should not forget the fact that powers are conferred on them for the good of the public and they should act in such a way as to advance public interest.
+If they act with that purpose in view as they should, then there is no room for conflict and no question of one dominating the other arises.
+Each of the organs of the State has a special role of its own.
+But our Constitution expects all of them to work in harmony in a spirit of service.
+As Shri K.K. Bose and Shri B.K. Patro had not been placed at the disposal of the government for any definite period, it was open to the High Court to recall them and post them as presiding officers of district courts.
+Hence, the High Court was within its powers in posting Shri B.K. Patro as district and sessions judge of Ganjam Boudh division, Shri K.K. Bose as district and sessions judge of Mayurbhanj Keonjhar division, and Shri P.C. Dey as district and sessions judge of Bolangir kalahandi division though it would have been graceful if it had effected those transfers after reasonable notice to the government.
+But it was beyond the powers of the High Court to post Shri K.B. Panda as the law secretary, Shri T. Misra as superintendent and legal remembrancer and Shri P.K. Mohanti as the deputy law secretary.
+That part of the High Court 's order is clearly unsustainable.
+But as mentioned earlier, the government has already implemented that part of the order as well.
+Those officers are now functioning in the posts to which they were transferred.
+The learned Attorney General told 'us that the government has no objection to those officers continuing in those posts for the present.
+We are sure if any change is required the same will be effected by mutual understanding between the High Court and the government.
+In the result these appeals are partly allowed and the order of the High Court holding that Shri B.K. Patro, Shri K.K. Bose and Shri P.C. Dey had no authority to hold the posts they were holding on or after October 10, 1966 is set aside.
+Though we hold that the orders of the High Court posting Shri B.K. Panda as law secretary, Shri T. Misra as superintendent and legal remembrancer and Shri P.K. Mohanti as deputy law secretary were excess of its powers, we do not set aside the mandamus issued by it for the reasons mentioned earlier.
+In other respects the judgment appealed against is upheld.
+The parties will bear their own costs in these appeals.
+R.K.P.S. Appeals allowed in part.

2392.txt

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+iminal Appeal No.112 of 1965.
+Appeal by special leave from the jurisdiction and order dated April 29, 1965 of the Allahabad High Court in Criminal Misc. 'Contempt Case No. 43 of 1965.
+A. section R. Chari, M. K. Ramamurthi, Vineet Kumar and Shyamala Pappu, for the appellants.
+O. P. Rana, for respondent No. 1.
+J. P. Goyal, V. C. Prasar and section P. Singh for respondent No. 2.
+The Judgment of the Court was delivered by Sikri, J.
+This appeal by special leave is directed against the judgment of the Allahabad High Court adjudging the five appellants guilty of contempt of court and sentencing each of them to pay a fine of Rs. 1,000/ and further ordering that in case of default they shall undergo simple imprisonment for two weeks.
+The High Court held that the five appellants had disobeyed an order of stay passed by it staying proceedings pending before the Nyaya Panchayat, Jokha Khas, District Deoria.
+The relevant facts are these.
+On September 2, 1963, Yashoda, son of Raj Kumar, filed a complaint before the Nyaya Panchayat, Jokha Khas, against Jagdeo, Mahabir and Laxmi alleging that he had been abused and be laboured and his property worth Rs. 40/ damaged.
+On September 10, 1963, the Nyaya Panchayat assembled and evidence was led before it.
+The case was adjourned to December 25, 1963.
+On October 11, 1963, Mahabir, accused, made an application under section 85 of the U.P. Panchayat Raj Act, 1947, to S.D.M., Deoria, to transfer the proceedings on the ground that the complainant Yashoda was father of Bunna Prasad, Sarpanch of Nyaya Panchayat, Jokha Khas.
+On November 28, 1963, the S.D.M. rejected this application.
+On December 13, 1963, a notice was issued to the five members of the Panchayat to assemble on December 25, 1963, and hear the case.
+On December 20, 1963, Mahabir moved an application under article 227 of the Constitution challenging the order of the S.D.M., dated November 28, 1963, and on the same day the High Court admitted the application and stayed further proceedings before the Nyaya Panchayat.
+An urgent copy of the order was applied for and obtained on that very day and the counsel sent a telegram in the following words "Allahabad He 20 Baldeopd cashier Trust Sdr GR Mahabir application admitted stay granted Banwarilal.
+" 117 It is alleged on the side of the applicant, Mahabir, that immediately after the receipt of the telegram an application accompanied by an affidavit and the telegram of his counsel in the High Court was presented before the Nyaya Panchayat with the prayer to stay further proceedings but the Sarpanch refused to take it.
+This fact was denied and the High Court seems not to have relied on this fact in its judgment.
+It seems to us that it is not proved on the evidence here that any such application was made before the Nyaya Panchayat.
+No application dated December 21, 1963, which was not accepted by the Nyaya Panchayat, has been produced.
+On December 23, 1963, Mahabir submitted an application in the Court of Shri R. Singh, S.D.M., Deoria, alleging that "writ petition has been admitted and a stay order has been issued.
+But notwithstanding my informing the Panchayat Adalat of that, I am not getting any hearing there, and when an application is made there, it is not entertained." He prayed that the Panchayat Adalat be directed to postpone proceedings pending the receipt of the stay order.
+He produced the telegram received from the Advocate before the S.D.M.
+In the affidavit accompanying the application, however, no mention was made about Mahabir having informed the Panchayat Adalat of the stay order or the fact that the order and the application was not being entertained by the Adalat.
+It happened that the S.D.M. was absent on December 23, 1963, and papers were put up before Shri section K. Srivas tava, Additional Sub Divisional Magistrate, who issued the order "Put up with records".
+Apparently he did not take any further action till December 26, 1963.
+But as the notice against Shri Srivastava has been discharged by the High Court, we need not give any further details about his various orders, On December 25, 1963, the Nyaya Panchayat met and proceeded to hear the case.
+The order sheet reads thus : "Put up today the 25th December, 1963.
+The complainant and the accused are present.
+The statements of the complainant and his witnesses, Bhabhuti and Damri, are recorded.
+The accused refused to make statements and put down their signatures.
+Today, the 25th December, 1963, Mahabir has made an applica tion to the Court and signed it before it.
+Hence judgment shall be given on 25 12 63.
+" This order was signed by three Panchas, Phagu Parsad, Jagat Dubey and Badri Yadav.
+On the same day a final order was made holding the accused guilty and imposing a fine of Rs. 3/ each on accused Nos. 1 and 3, and Rs. 9/ on accused No. 2.
+The application of Mahabir, referred to in the order, reads thus: 118 .lm15
+Sir, It is submitted that I have filed a writ petition in the above case, in the High Court.
+It has been admitted by the High Court which has stayed proceedings also in this case.
+It is, therefore, prayed that the proceedings in this case may be stayed." A document purporting to be an affidavit was also attached, in which it was stated "I make oath and say that in the above case I have filed a writ petition in the High Court, that it has been admitted, and that proceedings in the case have been stayed by the High Court.
+" We looked at this so called affidavit and found.
+that it has not been sworn to before any person authorised to administer oaths.
+On May 21, 1964, Mahabir filed an application under sections 4 and 5 of the , against the five appellants and section K. Srivastava, A.S.D.M.
+The main allegation, apart from reciting the facts which we have already detailed above, was that "in spite of the knowledge of the interim stay dated 20 12 63 passed by the Hon 'ble High Court the Sarpanch, the Opposite Party No. 1 and the members of the Bench, Opposite Parties Nos. 2 to 5 disobeyed the order of the Hon 'ble High Court and disposed of the case on 25 12 63 and thus they committed contempt of the Hon 'ble High Court.
+" Affidavits were filed in the High Court by Baldeo Prasad, pairokar of Mahabir, Burma Prasad, the Sarpanch, and Mahabir, and statements of Phagu Prasad and Bunna Prasad were recorded on oath.
+Bunna Prasad, in his affidavit, stated that as the Nyaya Panchayat was not satisfied for want of evidence by way of proper affidavit etc.
+, the Nyaya Panchayats proceeded with the case.
+Phagu Prasad.
+in his statement, stated "As the paper of Mahabir 's application and affidavit was not good, we had asked him to get them written on a proper paper obtained from the Tehsil.
+We had also told him to get the affidavit verified before some Tehsil authority.
+We had told Mahabir as above before we had read the application and affidavit presented before the Nyaya Panchayat.
+Mahabir told us that he is not prepared to go to Tehsil, but is presenting before the Panchayat whatever he has got in his possession." Phagu Prasad further stated that "no other affidavit had ever been filed before us, but we knew that in the law courts the 119 affidavits,which are filed, are verified by some authority."He further added that "the reason why we did not believe theaffidavit of Mahabir was that it did not contain any date of theHigh Court 's stay order." Bunna Prasad, in his statement, stated that he had told Mahabir to bring the affidavit on a good quality paper of full size, and Mahabir thereupon told him that he would present whatever he had.
+According to him, the Panchas did not tell Mahabir that his affidavit was not proper; they, however, told him to get it verified in Tehsil and that it should be duly sealed.
+The High Court, on examination of the evidence, came to the conclusion that it was the Sarpanch who bad initially declared that the affidavit of the applicant was not proper and that the matter should file a proper affidavit in support of his allegations, though the Sarpanch had admitted in his deposition that he had to authority to tell Mahabir that his affidavit was not proper.
+It appeared to the High Court that "the Sarpanch first wanted to avoid the petitioner 's affidavit being brought on the record by declaring that it was not proper because it did not fully evidence the fact that the High Court had passed an order staying proceedings before the Nyaya Panchayat." The High Court further held that "the Nyaya Panchas faithfully accepted the objections raised by the Sarpanch and dittoed him about the impropriety of the petitioner 's affidavit and inadequacy of the evidence contained therein regarding the stay order alleged to have been.
+passed by the High Court.
+" The High Court disbelieved the explanation of the Panchas given before it because no mention of these was made in the order sheet dated December 25, 1963.
+The High Court held : "There was no reasonable ground for the Panchas to have doubted the averments made in the application and affidavit of Mahabir that the High Court had stayed further proceedings before the Panchayat, nor is there any thing in the order sheet to show that the Panchas did not believe the contents of the application, and affidavit of Mahabir.
+However, if they wanted to ascertain the matter, they should have at best stayed the proceedings for a short while and should have asked the applicant to produce a certified copy of the stay order.
+In the alternative, they should have verified from the Sub Divi sional Magistrate whether Mahabir had really filed an application and affidavit before him along with the original telegram received from his counsel at Allahabad saying that the High Court had already stayed the proceedings before the Nyaya Panchayat.
+But the Panchas did nothing of the kind.
+The action of the Nyaya Panchas in not doing so was obviously not bona fide and 120 amounts to wilful disobedience of the High Court 's order.
+The learned counsel for the appellants, Mr. Chari, says that no contempt of court has been established because a Court is entitled not to act on an application which is not accompanied by an affidavit properly sworn to or a certified copy of the order He urges that the Nyaya Panchayats exercised judicial powers and, even if the Panchas erred in not staying proceedings, before finding them guilty of contempt of court it should be definitely proved that the order was passed deliberately to by pass the order of the High Court.
+This Court quoted with approval the following passage from Oswald 's Contempt of Court, in Hoshiar Singh vs Gurbachan.
+Singh(1): "The judgment or order should be served on the party personally, except in the following cases : (1) prohibitive orders, the drawing up of which is not completed;. .
+In order to justify committal for breach of a prohibitive order it is not necessary that the order should have been served upon the party against whom it has been granted, if it be proved that he had notice of the order aliunde, as by telegram, or newspaper report, or otherwise, and knew that it was intended to be enforced, or if he consented to the order, or if he was present in Court when the order Was pronounced, or *hen the motion was made, although he left before the order was pronounced.
+" We need not consider whether it makes any differnce in law if the order has been drawn up.
+We will for the purpose of this case assume that it does not make any difference.
+It is also clear that in such matters those who assert that a person had knowledge of the order must prove this fact beyond all reasonable doubt.
+If there is any doubt, the benefit ought to be given to the person charged with contempt of court.
+If a person bona fide comes to the conclusion on the material placed before him that the source of information is not authentic he cannot be held guilty of contempt of court for disobeying the order.
+The question then arises whether the Sarpanch and the Pan chas had knowledge of the existence of the order of the High Court dated December 20, 1963.
+The only material before them was the application dated December 25, 1963, which was not supported by any affidavit sworn to before a person authorised to (1) [1962] Supp. 3 S.C.R. 127,138.
+121 administer oaths.
+Further, the application did not contain the .date of the order; even a copy of the telegram was not attached to the application; and the application seems to have been made after the proceedings on that date had commenced and evidence taken.
+We are unable to appreciate how on this material the bona fides of the Panchas can be doubted if they refused to accept the mere statement of the party that the High Court had stayed proceedings before them.
+It seems to us that the High Court did not appreciate that the so called affidavit which was filed before the Panchas was in fact not an affidavit at all.
+it had not been sworn to before any person authorised to administer oaths.
+It was no part of the duty of the Panchas to enquire from the S.D.M. about the filing of the application before him.
+At any rate, he has apparently no jurisdiction to stay proceedings before the Nyaya Panchayats when no Proceeding is pending before him.
+It is true that in certain cases proceedings can be adjourned to enable the parties to file better proof, but a judicial officer is not bound to do so and, if he bona fide does not in his discretion adjourn proceedings, it cannot be said that he has committed contempt of court.
+It must also be borne in mind that Panchas are not well versed in law and procedure and the records maintained by them should not be judged in the same manner as that of ordinary courts.
+With respect, the High Court should not have drawn an adverse inference from the fact that the reasons for not accepting the prayer for stay were not recorded.
+Contempt of court is a serious matter and a High Court should be chary of finding a judicial officer guilty of contempt of court for disobeying its orders unless there is unimpeachable evidence that the judicial officer had knowledge of the order of the High Court.
+In our opinion, there is no such evidence in this case.
+The learned counsel for the State contends that we should not reappreciate the facts, but, with respects, it seems to us that the High Court, while dealing with the evidence, has not kept in mind the principles which we have mentioned above.
+In the result we allow the appeal and set aside the judgment and order of the High Court.
+R.K.P.S. Appeal allowed.

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+Appeal No. 390 of 1966.
+Appeal by special leave from the Award, dated January 11, 13, 1964 of the Industrial Tribunal, Orissa, Cuttack in Industrial Dispute Case No. 8 of 1962.
+D.L. Sengupta, Janardan Sharma, Anil Das Chowdhury and S.K. Nandy, for the appellants.
+H.R. Gokhale, K. Gobind Das, N.C. Shah, Krishna Sen and R. Gopalakrishnan, for the respondent.
+The Judgment of the Court was delivered by Bhargava, J.
+The. workmen of Orient Paper Mills Ltd., Brajrajnagar, have come up in this appeal by special leave against an award of the Industrial Tribunal, Orissa.
+An industrial dispute between these workmen and the management of Orient Paper Mills Ltd. (hereinafter referred to as "the Company") was referred by the State Government under section 10(1) (d) of the Industrial Disputes Act (hereinafter referred to as "the Act") for adjudication by the Tribunal enumerating 30 different items of dispute.
+The Tribunal gave its award on all the thirty items.
+The special leave in this Court was sought and granted in respect of two matters covering some of these items.
+The first matter related to fixation of wages, including minimum wages, and this was covered by items Nos. 1, 3, 4, 22 and 26 in the Schedule attached to the Order of Reference.
+The second matter in the appeal related to bonus covered by item No. 2 of that Schedule.
+In the course of the hearing of the appeal, learned counsel appearing on behalf of the workmen further gave up some of the points which were the subject matter of the items mentioned above, so that in this judgment we need deal with only those points which were argued by him in support of the appeal.
+The first and the main point argued with regard to wages was that the Tribunal, after holding that there was no identical industry in this region comparable with the Company, came to.
+the view that there were other industries in the region in which minimum wages were higher than the minimum wages paid by the Company, but failed to fix the minimum wages in the award in accordance with the minimum wages being paid in those industries.
+Instead, what the Tribunal did was to work out the minimum wages, which should be paid, on an entirely different basis.
+It was also urged in the alternative that, even in adopting the latter course, the Tribunal committed an error inasmuch as, in making the calculation, the Tribunal only tried to neutralise about 36 per cent of the cost of living 9n the basis of the rise in Price Index instead 669 of permitting neutralisation to the extent of at least 90%, which could have been done when fixing the minimum wages for the owest, class of workmen.
+The principle for fixation of minimum wages that should ordinarily be adopted was laid down by this Court in the case of French Motor Car Co. Limited.
+vs Workmen(1) where it was held : "It is now well settled that the principle of industry cum region has to be applied by an Industrial Court, when it proceeds to consider questions like wage structure, dearness allowance and similar conditions of service.
+In applying that principle, industrial courts have to compare wage scales prevailing in sinular concerns in the region with which it is dealing, and generally speaking similar concerns would be those in the same line of business as the concern with respect to which the dispute is under consideration.
+Further, even in the same line of business, it would not be proper to compare (for example) a small struggling concern with a large flourishing concern.
+" The Tribunal, in giving its decision, kept this principle in view, but came to the finding of fact that there were no other concerns in the same line of business as the Company in the region which could be compared with the Company.
+The Tribunal found that there are only two other paper mills in the region.
+They are Titaghur Paper Mill No. 3 situated at Chaudwar, and the J.K. Paper Mills at Rayagada.
+The Tribunal found that the Company is an old established business carrying on manufacture of paper on a very large scale.
+The Titaghur Paper Mill No. 3 started production only in April, 1960, while the J.K. Paper Mills at Rayagada started production in 1961 62.
+These two Paper Mills were, therefore, both of very recent origin compared with the Company.
+The strength of their labour force and the annual production were also very mueh lower.
+Even the profits earned were much smaller.
+On these facts, the Tribunal held that it would not be proper to compare the wage structure for these Paper Mills with that of the Company.
+TIffs is a finding of fact recorded by the Tribunal and nothing has been shown by learned counsel for the Company which would induce us to interfere with this finding of fact.
+In fact, learned counsel was unable to urge that this finding of fact suffered from any error at all.
+On this finding, it is clear that the region cure industry principle laid down in the ease of French Motor Car Co. Ltd. (1) could not have been applied by the Tribunal when fixing the wages in the Company.
+(1) [1963] Supp. 670 This Court in the same case of the French Motor Car Co. (x) further indicated what principles should be adopted in such a situation where there is no concern in the same industry in the region comparable with the concern in which wages have to be fixed.
+That situation was envisaged as occurring whenever the particular concern in question happens to be already paying the; highest wages in its particular line of business.
+It was held that such a case: "there should be greater emphasis on the region part of the industry cum region principle, though it would be the duty of the industrial court to see that for purposes of comparison such other industries in the region are taken into account as are as nearly similar to the concern before it as possible.
+Though, therefore, in a case where a particular concern is already paying the highest wages in its own line of business, the industrial courts would be justified in looking at wages paid in that region in other lines of business, it should take care to see that the concerns from other lines of business taken into account are such as are as nearly similar as possible, to the line of business carried on by the concern before it.
+It should also take care to see that such concerns are not so disproportionately large as to afford no proper basis for comparison.
+" In the light of these views which were brought to the notice of the Tribunal, the Tribunal proceeded to consider the minimum wages paid by three Collieries, Orient Colliery, Ibe Colliery and Himgiri Rampur Colliery, the Rourkela Steel Plant, the Cement Factory at Rajgangpur and the Indian Aluminum Company, Hirakud which the Tribunal found were situated not very far away from the place where the Company had its factory.
+The Tribunal mentioned that, according to the Coal Award, the minimum wage in the Collieries at the then existing Price Index was Rs. 93 7 0; in the Cement Factory Rs. 96.88; in the Steel Plant Rs. 95.00 and in the Aluminium Company Rs. 97.84 nP. The Tribunal then also took into account the minimum wages being paid by other Paper Mills situated outside the region and thereafter recorded its own decision in the following words : "The conclusion that flows from these figures is that the lowest paid worker in the Paper Mill at Brajrajnagar gets more than what is paid as minimum wage in the other two Paper Mills of Orissa, but it is less than what is paid to the lowest paid worker in some of the Paper Mills outside the State.
+In other industries, which are comparatively close to the paper industry at (1) [1963] Supp.
+671 Brajrajnagar, the minimum wage is above Rs. 90 in almost all the cases.
+" On the basis of this finding of fact, the Tribunal held that, if the minimum wage in the Company is to be fixed more on the basis of the minimum wage prevailing in other industries in that region which, in its opinion, would be appropriate under the circumstances of the case, then, a revision was really necessary.
+We think that the criticism of learned counsel for the workmen that the Tribunal committed an error at this stage in merely holding that the facts found by it justified a revision and in not proceeding to fix minimum wages on the basis of the other industries in the region, is fully justified.
+It is to be noted that there is no mention in the award of the Tribunal that the Company at any stage put forward the case that the Collieries, the Steel Plant, the Cement Factory, and the Aluminjure Company were concerns which were not comparable with the Company.
+In fact, in the course of arguments before us, we asked learned counsel for the Company to point out whether such a plea was taken at any stage by the Company and whether evidence was led to show that these concerns were not comparable with the Company.
+Learned counsel had to admit that no specific plea was taken by the Company in this behalf and at least no evidence at all was led to show that these concerns are not comparable with the Company.
+The workmen in their written statement had relied on the wage structure in these concerns obviously on the basis that they were comparable.
+Since the Company never took the plea that they were not comparable, no occasion arose for the workmen to give evidence of the concerns being comparable.
+In fact, the Tribunal also accepted them as being comparable 'and that is why, in its conclusion, the Tribunal held that, in its opinion, it would be appropriate under the circumstances of the case to fix the minimum wage in the Company on the basis of the minimum wage prevailing in other industries in that region.
+By the expression "other industries in the region" the Tribunal was obviously referring to these concerns.
+Having come to this view, it is clear that, to give full effect to the principle laid down by this Court the case of French Motor Car Co.(1), the Tribunal should have proceeded to fix the minimum wage in the Company on the basis of the average minimum wage prevailing in these concerns.
+We have already quoted the figures of the minimum wage prevailing these concerns.
+On their basis, it appears to us that there will be full justification for fixing the minimum wage in the Company at Rs. 95 per mensum which is about the average of the wages prevailing in all those concerns.
+In this connection, we may take notice of the fact that, in the written statement of the workmen, the minimum wages prevailing in these concerns were (1) [1963] Supp. 672 shown at figures lower than those mentioned by the Tribunal; but it appears that those lower figures were given, because the, wages mentioned in the written statement were based on a lower Price Index.
+The Tribunal considered the minimum wages in these concerns on the basis of the prevailing Price Index of 441 a ' Sambalpur taking 100 as the basic Price Index for the year 1939 Even when fixing the minimum wage ,for the Company on the basis of the alternative calculation made by the Tribunal, the Tribunal has proceeded on the assumption that the minimum wage is being fixed for the Price Index No. 441 prevailing at the time of the award taking 100 as the basic index for the year 1939 In these circumstances, we think that the minimum wage in the Company should have been fixed by the Tribunalmensera, following the principle laid down by this Court in the case of French Motor Car Co.(1).
+The Tribunal should not have proceeded to make the alternative calculation on some other basis so as to arrive at a lower figure of Rs. 73 p.m. as the wage covering the basic wage and the dearness allowance, in addition to Rs. 11 p.to.
+payable as production bonus.
+Learned counsel for the Company urged before us that the principle of fixation of wages on the basis of Comparison in the region laid down in the French Motor Car Co. 's case(1) is not rigid and, it is not.
+necessary that the minimum wage.
+in the Company must be fixed at the average level of 'wages in the other comparable industries in the region.
+According to him, note should be taken of the fact that, at least . in the paper industry in this.
+area, the other concerns are paying much lower wages.
+This point has to be 'rejected straightaway in view of the finding that.
+those concerns are very small and not comparable with the Company.
+It was also urged that, in fixing the minimum wage, the wages payable in the paper industry in other.
+parts of the country.
+should also be kept in view.
+We do.
+not think that such a consideration should be taken.
+into account.
+when applying the principle of fixing the minimum wage primarily on the basis of comparison.
+between.
+different industries.
+in the same region.
+Finally, it was argued that other amenities being provided by the Company should also be taken into account when fixing the minimum wage.
+In this case, however, there is nothing to show that the Company is providing any such amenities which are different from the amenities that are being provided by those concerns in the region which.
+are being.compared with the Company for the purpose of fixation of the minimum wage Consequently, we do not think that there is any justification for departing from the figure of Rs.95 which is the average minimum wage payable by those industries (1) [1963] Supp.
+673 We may, at this stage, take notice of the fact that, in con sidering the question of minimum wage, the Tribunal had in view the total wage packet to be received by each workman and, in the opinion of the Tribunal, it consisted of three elements.
+These elements are basic wage, dearness allowance and production bonus.
+The Tribunal, in its award, held that the minimum wage in so far as it consists of basic wage and dearness allowance,, should be fixed at Rs. 73 and there should be paid, in addition, production bonus to the extent of Rs. 11 in each case.
+Thus, the total minimum wage packet which a workman should be entitled to receive was fixed by the Tribunal at Rs. 84.
+It is for this figure of Rs. 84 that we think the Tribunal should have substituted the figure of Rs. 95.
+From the facts noted in the Award or appearing on the record, it appears that production bonus, in addition to the minimum wage, is payable in the case of Aluminium Company, Hirakud; but there does not appear to be any, production bonus payable in the three Collieties, in the Steel Plant and in the Cement Factory.
+In the majority of the industries, which are being compared with the Company in the region, consequently, the minimum wage is the total wage packet receivable by the workman and there is no extra amount received as production bonus.
+There is only an exception in the case of Indian Aluminium Company.
+That particular Company, it appears, has some special features which have been brought out in the evidence of the Management 's witness, B.B. Panda.
+He has stated that the Alumihium Factory at Hirakud carries on its work with the help of highly automatic machines and is ' supplied electricity by the Government at subsidised rates.
+The nature of work is such that the total number of workmen employed does not exceed 125 which is a very small number as compared ' with the number of workmen employed by the Company.
+It is clear that, in the Aluminium Factory, the number of workmen, who have to be paid production bonus is very small and almost insignificant as compared with the number in the Company 'In these circumstances, it would be more appropriate to compare the total wage packet of the Company with the wage packet received by the workmen of other industries in the region, viz., the three Collieries, the Rourkela Steel Plant, and the Cement Factory at Rajgangour.
+Comparing with them, there is justification for fixing the total wage packet of the workmen in the Company 'at Rs. 95 which would include production bonus.
+So far as annual profit bonus is concerned, it is payable in the Company also as in those other concerns.
+Consequently, in varying the award of the Tribunal we would direct that the 'total minimum wage packet of a workman in the Company shall be fixed ,at Rs. 95 consisting of ' the three elements of basic wage; dearness allowance and production bonus.
+The break up of this wage into the three 'elements is of some importance in this case because of the principle on which the 674 profit bonus is paid by tiffs Company.
+The profit bonus that is paid is three months ' basic wage and does not take into account the dearness allowance and the production bonus elements of the total wage.
+The Company has always treated the total wage of a workman as consisting of these three elements in the proportion of 3:3: 1.
+On behalf of the workmen, it was urged before the Tribunal that the proportion should be 3: 1: 1, so that the production bonus and the dearness allowance would both be equal and 1/3rd of the basic wage.
+This plea of the workmen was rejected by the Tribunal primarily on the ground that the other break up urged on behalf of the Company was the break up which had been accepted by mutual consent between the workmen and the Company in an earlier settlement which had been arrived at in the year 1959.
+We are unable to hold that the Tribunal committed any error in arriving at this decision and, consequently, the total minimum wage fixed by us must also be deemed to have the same break up.
+As a result, it would have to be held that the total minimum wage of Rs. 95 will consist of Rs. 41 as basic wage, Rs. 41 as dearness allowance and Rs. 13 as production bonus.
+In connection with the fixation of minimum wage, one point vehemently argued by learned counsel for the workmen was that at least the dearness allowance element of the wage should have been made variable with the Price Index, so that the labour could automatically be compensated for further rise in the cost of living subsequent to the making of the award.
+Learned counsel was, however, unable to show to us that this Court or any other Tribunal has ever laid down the principle that, where the dearness allowance forms a part of the consolidated wage fixed, there should be such linking so as to bring in continuous variation of the wage, depending on the variation in the Price Index.
+It appears to us that an Industrial Tribunal has the discretion, in appropriate cases, of making a direction linking the dearness allowance element of a wage to the Price Index; but, at the same time, the Tribunal is entitled to choose the alternative course of fixing the wage at the prevailing Price Index and leaving the labour to raise a fresh demand and, if necessary, a fresh industrial dispute for further rise in wages, in case there is marked variation in the Price Index and the wage fixed in the award becomes out dated.
+Reference in this connection may be made to the decision of this Court in Hydro (Engineers) Pvt. Ltd. vs The Workmen,(x) where also the Court did not hold that it was compulsory to link minimum wage with the cost of living index and only envisaged that such linking may be permissible by holding that : "It is thus clear that the concept of minimum wage, does take in the factor of the prevailing cost of essen (1) ; 675 tial commodities whenever such minimum wage is to be fixed.
+The idea of fixing such wage in the light of cost of living at a particular juncture of time and of neutralising the rising prices of essential commodities by linking up scales of minimum wages with the cost of living index cannot, therefore, be said to be alien to the concept of a minimum wage.
+" In the present case, the Tribunal chose the course of leaving it to the workmen to ask for increase in minimum wage on any further rise in Price Index and did not consider it advisable to link the wages with it.
+In fact, from the Award, it appears that, so far as the Tribunal was concerned, the workmen did not press for such linking when the award was being given.
+Consequently, we are unable to hold that the Tribunal has committed any error and that, in this respect, any interference by us is called for.
+The only 'other point argued before us in respect of wages by learned counsel was that casual workers should also be paid minimum wages on the same basis as the permanent workers for whom the minimum wage was fixed by the Tribunal which is being varied by us by increasing it to a total wage packet of Rs. 95.
+It appears that the Tribunal did not accept this demand primarily on the ground that the distinction between casual workers and ' the permanent workers was recognised by both the parties in the agreement of 1959.
+It may be noticed that, by the very nature of employment being casual, it can be presumed that a casual worker is on a lower footing and cannot expect the same wagesas a permanent employee.
+Therefore, the decision by the Tribunal not to equate the casual workers with the permanent employees.
+cannot be held to be incorrect and must be upheld.
+The Tribunal had directed that the increase of Rs. 12 p.m. in the total minimum wage packet allowed by it will enure to the benefit of the lowest paid female, badIi and permanent dailyrated workers also.
+This principle will remain effective with the modification that these workers will be entitled to the increase of Rs. 23 p.m. substituted by us for the increase of Rs. 12 allowed by the Tribunal.
+Learned counsel appearing for the Company drew our attention to the fact that the revised wages are payable with effect from 13th December, 1962 and, by this time, a period of 5 to 6 years has elapsed, so that the Company will have to pay arrears of wages for this long period.
+It was urged that this would cast a very heavy burden on the Company.
+We do not think that this reason advanced on behalf of the Company will justify our making a direction that the increase in wages should be effective from some later date.
+The previous agreement of 1959 was binding only up to 12th December, 1962 and we think that the Tribunal 213 Sup.
+C.I./68 12 676 was right in directing that the revised wages must take effect from 13th December, 1962.
+Even though arrears will have to be paid for about 6 years, it has to be kept in view that, since then, there has been a very considerable rise in the Price index and the labour has not so far raised a fresh dispute for a further revision of wages over and above the wages fixed by the Tribunal which are being now refixed by us.
+In all these circumstances, we think that the revised wages should take effect from 13th December, 1962.
+The only other dispute raised in this appeal related to the bonus for the year 1962 63.
+Initially, the workmen had challenged the decision of the Tribunal with regard to, bonus for all five years from 1959 60 to 1963 64, but, in the course.
+of arguments at the last stage before us, learned counsel for the workmen confined his arguments to the bonus for the year 1962 63 only.
+The main point urged by learned counsel was that, in giving the decision with regard to bonus for this year, the Tribunal committed the error of not making calculation of surplus available on the basis of the Full Bench Formula approved by this Court in the case of The Associated Cement Companies Ltd., Dwarka Cement Works, Dwarka vs Its Workmen and Another.(x) The Company is paying profit bonus equivalent to three months ' basic wage of each workman.
+The demand made by the workmen was for bonus equivalent to six months ' wages, and the argument was that, if the Tribunal had worked out the surplus available on the correct basis, that surplus would have certainly justified grant of profit bonus at the rate of six months ' wages.
+This argument fails, because it appears to us that the demand, as put forward before the Tribunal for bonus equivalent to six months ' wages, was, in fact, never made by the workmen on the basis that the surplus calculated under the Full Bench Formula would justify bonus being granted at that rate.
+The 'tribunal, in this connection, has quoted the pleading of the workmen in their written statement before it.
+The pleading makes it clear that the claim for six months ' wages was not based on the Full Bench Formula, but on the ground that certain clerical staff was being paid bonus which, in effect, amounted to about six months ' basic wages, because the bonus was calculated ;in their case by taking into account the consolidated wages, including dearness allowance, while in the case of the workmen, the dearness allowance element of the wages was being ignored and bonus was calculated only by taking into account basic wages.
+We agree with this interpretation of the pleadings of the workmen.
+Further, there is one very significant circumstance, viz. that this dispute was raised by the workmen 'before the expiry of the year 1962 63.
+Initially, there was an attempt that the dispute be referred to the Industrial (1)[1959] S.C.R. 925.
+677 Tribunal under section 10(2) of the Act on the basis of an agreed enumeration of subjects of dispute drawn up by the workmen and the Company together.
+That reference under section 10(2) of the Act, however, failed due to some technical defect.
+The reference was ultimately made by the Government under section 10(1) of the Act, but it was made in the same form in which the parties had agreed to.
+refer it.
+The reference was made by the Government on the 4th October, 1962.
+At that time, the year 1962 63 was still running and the accounts for that year could not possibly have been closed and made available.
+The balance sheet and the profit and loss.
+account of that year could only be prepared after the closure of the year on 31st March, 1963.
+In fact, the reference included a dispute even for the year 1963 64 which year had not even started running.
+On the face of it, at the time of the reference, there could be no question of applying the Full Bench Formula for calculation of surplus, because there were no completed accounts for the two years 1962 63 and 1963 64.
+This circumstance makes it clear that the claim for higher bonus could not, at the time of reference, have been based on the availability of surplus according to the Full Bench Formula.
+The Tribunal was, therefore, quite correct in not trying to work out the surplus according to the Full Bench Formula and in awarding bonus on that basis.
+In this connection, learned counsel for the workmen urged that, at least by the time when the Award was given, the completed accounts for the year 1962 63 were available; but it seems to us that this circumstance is of no assistance.
+The award had to cover the year 1963 64 also and at least for that year the accounts could not possibly have been completed, as that year was still running when the award was given by the Tribunal on the 11 th January, 1964.
+Further, the Tribunal was expected to decide the dispute only as referred to it and, at the time of reference at least, there was not and there could possibly not be a claim for higher bonus on the basis of the application of the Full Bench Formula.
+The claim was, in fact, based on the circumstances that, according to the workmen, the bonus in their case was being calculated as equivalent to three months ' basic wages, while, the case of some clerical staff, the calculation was made on the basis of their consolidated wages consisting of basic wages and dearness allowance.
+The argument is incorrect.
+In the case of even the lowest paid clerical staff, to whom dearness allowance is separately payable, the bonus is only calculated on the basis of basic wages, and the dearness allowance is ignored.
+There is some clerical staff which does not get any dearness allowance at all and it is only in those cases.
+that the bonus is worked out on the basis of the total wages paid.
+In such cases, the calculation is still on the basis of basic wage, because it cannot be assumed that their wage is a consolidated wage consisting of the two 678 elements of basic wage and dearness allowance lumped together.
+In fact, the principle which is being applied is the simple one of calculating the bonus payable at the rate of three months ' basic wage in each case and in no case is the dearness allowance taken into account.
+There is, therefore, no discrimination or inequality as urged on behalf of the workmen.
+Finally it was urged that even the casual and badIi workers should be allowed bonus on the same basis as the permanent workers.
+The Tribunal rejected this demand on the ground that, under the Agreement of 1959, the workmen and the Company had agreed specifically to exclude these classes of workers in regard to payment of bonus.
+We are unable to hold that the Tribunal committed any error of law, requiring interference by us, in basing its decision on the principle contained in the earlier Agreement of the parties and in holding that there was no justification to introduce a new element of payment of bonus to casual and badIi workers at this stage.
+The claim in this respect also fails.
+As a result, the appeal is only partly allowed inasmuch as the minimum wage fixed by the Tribunal in the Award is carried as indicated by us above.
+The rest of the Award of the Tribunal is upheld.
+Since, in this appeal, the principal dispute related to the fixation of minimum wage of the workmen and we are allowing the appeal of the workmen in that respect, we direct that the workmen will be entitled to their costs of this appeal from the Company.
+V.P.S. Appeal allowed in part.

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+Appeal No. 647 of 1966.
+Appeal by special leave from the judgment and decree dated June 19, 24, 1963 of the Gujarat High Court in Appeal No. 704 of 1960 from Appellate Decree.
+P. K. Chatterjee and section P. Nayar, for the appellant.
+I. N. Shroff, for respondent No. 1.
+section K. Dholakia and Vineet Kumar, for respondent No. 2.
+The Judgment of the Court was delivered by Sikri, J.
+This appeal by special leave arises out of the suit filed by Bhaishankar Avalram Joshi, hereinafter referred to as the plaintiff, for a declaration that the order of dismissal, dated February 2/4, 1955, passed by the Inspector General of Prisons, Saurashtra, was illegal and void on the ground that it contravened the provisions of article 311 (2) of the Constitution.
+The plaintiff also prayed for a decree for Rs. 2,690 being arrears of his pay from April 1, 1954 to May 7, 1956.
+The plaintiff failed before the Civil Judge, Rajkot, but on appeal succeeded before the District Judge, Central Saurashtra, inasmuch as he declared order dated February 2/4, 1955, illegal and void.
+The plaintiff appealed to the High Court claiming arrears of salary and the State of Bombay filed cross objections praying that the suit be dismissed.
+The second appeal was heard by the High Court of Gujarat (Miabhoy, J.) who directed that the decree passed by the lower appellate court "be varied so as to show that the appellant (plaintiff) continued to be in Government service till the date of the suit only and there will be a decree for Rs. 2,690 919 being arrears of pay due to the appellant (plaintiff) upto the date of the suit.
+There will be a further provision in the decree that the liability arising out of the declaration that the appellant is in Government service is the liability of the State of Gujarat and that the liability for the payment of the arrears of pay is the liability of the State of Maharashtra".
+The State of Maharashtra filed as application for leave to appeal under the Letters Patent but this ' was dismissed.
+The appeal is now before us.
+The learned counsel for the appellant the state of Maharashtra , contends ,first, that the High Court erred in holding that there had been a breach of article 311(2) of the Constitution, as, according to him, there was no duty to supply a copy of the report of the enquiry held against the plaintiff.
+Secondly, he contends that the High Court erred in fastening the liability in respect of the arrears of pay on the State of Maharashtra.
+Before we deal with the above points we may give a few facts.
+The plaintiff entered service in the Gondal State in 1927 as a jailor.
+The Gondal State merged with the United States of Saurashtra.
+On March 6, 1953, the plaintiff was appointed senior jailor, Surendranagar District Jail.
+On March 25, 1954, he was suspended, and at that time he was acting as Accountant at Rajkot Central Jail.
+On March 7, 1954, he was served with a charge sheet.
+In substance the charges were that while he was serving at Surendranagar he had committed certain acts of mis appropriation of food stuffs meant for prisoners, maltreatment of prisoners and acceptance of illegal gratification from them.
+The plaintiff filed a written statement on September 4, 1954, and an enquiry was held by Mr. Gangopadhyay.
+The plaintiff appeared before that officer and cross examined witnesses.
+He also examined himself and some witnesses.
+He was also allowed to appear through an Advocate in the enquiry proceedings.
+The Enquiry Officer made a report and on or about January 7, 1955, the following notice was issued to him calling upon him to show cause why he should not be dismissed from service "To Shri Bhaishanker A. Joshi, Accountant, Rajkot Central Prison (Under suspension) Charges framed against you under this office No. C/ 14 dated 27 3 54 and in particular the charges of having accepted illegal gratification from prisoner Ratilal Jivan have been established to the satisfaction of Government.
+You are hereby asked to show cause why the punishment of dismissal from service should not be inflicted upon You.
+920 You should please submit your reply to this office, through the Superintendent, Rajkot Central Prison,, within a week from the date of receipt of this letter without fail.
+Sd/ M. J. BHATT Inspector General of Prisons, Government of Saurashtra.
+" The plaintiff filed a written statement.
+He was dismissed by the Inspector General of Prisons by his order dated February 2/4, 1955.
+This order was amended on February 9, 1955, in which it was stated that "the aforesaid order should be read so as to show that the plaintiff was dismissed from service on account of charge of accepting, illegal gratification from prisoner Ratilal Jivan having been conclusively proved against him in the departmental inquiries conducted against him by the Government".
+In the plaint the plaintiff alleged that copy of the enquiry report was never supplied to him, and consequently he had not been given reasonable opportunity within the meaning of article 311 of the Constitution.
+The State of Bombay admitted that the plaintiff was not supplied with a copy of the report of the Enquiry Officer, but pleaded that the plaintiff had not asked for copy of the report and had not been prejudiced by the non supply of the copy of the report.
+The High Court held that the failure on the part of the competent authority to provide the plaintiff with a copy of the report of the Enquiry Officer amounted to denial of reasonable opportunity contemplated by article 311(2) of the Constitution.
+It seems to us that the High Court came to a correct conclu sion.
+The plaintiff was not aware whether the Enquiry Officer reported in his favour or against him.
+If the report was in his favour, in his representation to the Government he would have utilised its reasoning to dissuade the Inspector General from coming to a contrary conclusion, and if the report was against him he would have put such arguments or material as he could to dissuade the Inspector General from accepting the report of the Enquiry Officer.
+Moreover, as pointed out by the High Court, the Inspector General of Prisons had the report before him and the tentative conclusions arrived at by the Enquiry Officer were bound to influence him, and in depriving the plaintiff of a copy of the report he was handicapped is not knowing what material was influencing the Inspector General of Prisons.
+921 As observed by Gajendragadkar, J., as he then was, in Union of lndia vs H. C. Goel(1), "the enquiry report along with the evidence recorded constitute the material on which the Government has ultimately to act.
+That is the only purpose of the enquiry held by competent officer and the report he makes as a result of the said enquiry".
+It is true that the question whether reasonable opportunity has or has not been afforded to the Government servant must depend on the facts of each case, but it would be in very rare cases indeed in which it could be said that the Government servant is not prejudiced by the non supply of the report of the Enquiry Officer.
+In the result we must over rule the first contention urged on behalf of the appellant, the State of Maharashtra.
+The plaintiff is not concerned with the second contention but it is a dispute between the State of Maharashtra and the State of Gujarat.
+As is well known, the State of Bombay was reorganised into the above two States and the Bombay Reorganisation Act, 1960, contained various provisions for the apportionment of assets and liabilities between the two States.
+We are here concerned with sections 60 and 61 of the Bombay Reorganisation 1960, which read thus : "60.
+(1) Where, before the appointed day, the State of Bombay has made any contract in the exercise of its executive power for any purposes of the State, that contract shall be deemed to have been made in the exercise of the executive power, ( a) if such purposes are, as from that day, exclusively purposes of either the State of Maharashtra or the State of Gujarat, of that State; and (b) in any other case, of the State of Maharashtra; and all rights and liabilities which have accrued, or may accrue, under any such contract shall, to the extent to which they would have been rights or liabilities of the State of Bombay, be rights or liabilities of the State of Maharashtra or the State of Gujarat, as the case may be; Provided that in any such case as is referred to in clause (b), the initial allocation of 'rights and liabilities made by this sub section shall be subject to such financial adjustment as may be agreed upon between the State (1) ; ,728.
+922 of Maharashtra and the State of Gujarat, or, in default of such agreement, as the Central Government may by order direct.
+(2) For the purposes of this section there shall be deemed to be included in the liabilities which have accrued or may accrue under any contract (a)any liability to satisfy an order or award made by any court or other tribunal in proceedings relating to the contract; and (b any liability in respect of expenses incurred in or in connection with any such proceedings.
+(3)This section shall have effect subject to the other provisions of this Part relating to the apportionment of liabilities in respect of loans, guarantees and other financial obligations; and bank balances and securities shall, notwithstanding that they partake of the nature of contractual rights, be dealt with under those provisions.
+Where, immediately before the appointed day, the State of Bombay is subject to any liability in respect of any actionable wrong other than breach of contract, that liability shall, (a) if the cause of action arose wholly within the territories which, as from that day, are the territories of the State of Maharashtra or the State of Gujarat, be a liability of that State; and (b) in any other case, be initially a liability of the State of Maharashtra but subject to such financial adjustment as may be agreed upon between the States of Maharashtra and Gujarat or, in default of such agreement, as the Central Government may by order direct." The learned counsel for the State of Maharashtra contends that the liability to pay arrears of pay was not a liability arising out of a contract but was a liability in respect of an actionable wrong other than a. breach of contract.
+This Court in State of Bihar vs Abdul Majid(1) held "that the rule of English Law that a civil servant cannot maintain a suit against the Crown for the recovery of arrears of salary does not prevail in India and it has been negatived by the provisions of the statute law in India".
+Mahajan, C.J., speaking for the Court, observed at p. 802: "As regard torts of its servants in exercise of sovereign powers, the company was not, and the Crown in (1) ; 923 India was not, liable unless the act has been ordered or ratified by it.
+Be that as it may, that rule has no application to the case of arrears of salary earned by a public servant for the period that he was actually in office.
+The present claim is not based on tort but is based on quantum meruit or contract and the court is entitled to give relief to him.
+" It may be that these observations are not conclusive on the point under consideration.
+It seems to us, however, that some elements of relationship between a public servant and Government are based on contract within the meaning of section 60 of the Bombay Reorganisation Act, 1960.
+In particular, the liability to pay salary, when it has been fixed, arises out of a contract to pay salary.
+Authority is not lacking even in England where a special relationship exists between the Crown and its public servants.
+In Owner or section section Raphael v, Brandy(1) the head note reads A stoker on board a merchant ship, who was en titled to wages from the shipowners, and also as a stoker in the Royal Naval Reserve to 6 pound a year as a retainer, was injured by an accident on the ship which disabled him from continuing to serve in the Royal Naval Reserve Held, that the stoker was entitled under the Workmen 's Compensation Act, 1906, to compensation from the shipowners not only in respect of his wages but also of the retainer, which must be taken into account as earnings under a concurrent contract of service.
+" The Lord Chancellor in the course of the speech observed "A point was made before your Lordships which does not appear to have been made in the Court below, that there was no contract with the Crown at all here.
+The authorities cited_go no further than to say that when there is an engagement between the Crown and a military or naval officer the Crown is always entitled to determine it at pleasure, and that no obligation contrary to that would be recognized or valid in law.
+It was then said that there were not here concurrent contracts.
+I agree with Fletcher Moulton L.J. that this is almost a typical case of concurrent contracts, because the workman was being paid wages for his services on board a merchant ship, and at the same time he was earning his 6 pound a year by virtue of his engagement with the Crown; and he was giving an equivalent for that, (1) 924 because he was keeping himself fit and doing the work which he stipulated to do.
+" It is true that Lord Goddard, C.J., in Inland Revenue Commissioners vs
+Hambrook(1) observed : "If I may be bold enough to express a conclusion on a matter on which the Judicial Committee hesitated in Reilly vs R (2) , it is that an established civil servant is appointed to an office and is a public officer, remune rated by moneys provided by Parliament, so that his employment depends not on a contract with the Crown but on appointment by the Crown, though there may be as indicated in Reilly vs R. (2) exceptional cases, as for instance an engagement for a definite period where there is a contractual element in or collateral to his employment." But in the Court of Appeal nothing was said about these observations.
+It will be remembered that the Privy Council had said in Reilly vs R(2) that "their Lordships are not prepared to accede to this view of the contract, if contract there be.
+If the terms of the appointment definitely prescribe a term and expressly provide for a power to determine "for cause" it appears necessarily to follow that any implication of a power to dismiss at pleasure is excluded.
+" Even Lord Goddard, C.J., in Terrell vs Secretary of State for the Colonies(3) observed that "the case (Reilly vs R.) (2) shows that there may be contractual rights existing before determination of a contract at will which are not inconsistent with a power to determine," and he stuck to this in Hambrook 's case(1) by stating : "Although it is clear that no action for wrongful dismissal can 'be brought by a discharged civil servant, I may be allowed to say that I adhere to the opinion which I expressed in Terrell vs Secretary of State for the Colonies(1) that he could recover his salary for the time during which he has served.
+He would claim on a quantum mersuit and I am fortified in this view by Reilly vs R. (2), by R. vs Doultre(4) and by Bushe vs R(5) referred to in Robertson 's book at p, 338." (1)[1956] 1 All E.R. 807, 811 12.
+(2) ; 179.
+(3) [1953] 2Q.B.482,499.
+(4) (5) (May 29, We are here concerned with a choice between section 60 and section 61, which lay down two broad categories.
+It seems to us that the decree of the High Court decreeing payment of arrears of salary is truly a liability in proceedings relating to a contract within section 60(2)(a) of the Act.
+It is true, as held by this Court in the State of Tripura vs The Province of East Bengal(1), that the words ,actionable wrong other than breach of contract ' in this context are wide words and include something more than torts, but even so where a suit is brought by a Government servant for arrears of salary, the decree more properly falls under section 60 of the Act rather than under section 61.
+In the result the appeal fails and is dismissed with costs to the respondent, Baishankar Avalram Joshi.
+The State ' of Gujarat will bear its own costs in this appeal.
+R.K.P.S. Appeal dismissed.

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+No. 65 of 1969.
+Petition under article 32 of the Constitution of India for enforcement of fundamental rights.
+section V. Gupte, P. A. Choudhury and K. Rajendra Chaudhuri, for the petitioners.
+M. C. Setalvad, P. Ramachandra, Rao, Advocate General, Andhra Pradesh, A. Raghubir and A. V. Rangam, for respondent No. 1.
+M. C. Setalvad and R. N. Sachthey, for respondent No. 2.
+R. V. Pillai, H. section Gururai Rao and Subodh Markandeya, for respondents Nos. 3 to 45.
+Sardar Ali Khan, P. N. Duda and J. B. Dadachanji, for res pondent No. 46.
+P. A. Choudhury, K. Rajendra Chaudhuri and C. section Sreenivasa Rao, for the interveners.
+The Judgment of the Court was delivered by Hidayatullah, C.J.
+The petitioners are persons employed in the ministerial services of the Andhra Pradesh Government.
+All of them were working in various offices located in the cities of Hyderabad and Secunderabad.
+On January 19, 1969, leaders, of all political parties in the Legislature of the Andhra Pradesh State appeared to have met and reached the decision that to Implement what are called Telengana Safeguards ', the following measures should be taken : "All non domicile persons, who have been appointed either directly, by promotion or by transfer to posts reserved under the Andhra Pradesh Public Employment (Requirement as to Residence) Rules, 1959 for domiciles of Telengana region will be immediately relieved from service.
+The posts so rendered vacant will be filled by qualified candidates possessing domicile qualifications and in cases where such candidates are not available the posts shall be left unfilled till qualified domicile candidates become available Action on the above lines will be taken immediately.
+All non domicile employees so relieved shall be provided employment in the Andhra region without break in service and by creating supernumerary posts, if necessary.
+" 117 The Government of Andhra Pradesh then passed an order (G.O.Ms. 36, G.A. (SR) Dept.) on January 21, 1969 relieving before February 28, 1969 all non domicile persons appointed on or after November 1, 1956 to certain categories of posts reserved for domiciles of Telengana under the Andhra Pradesh Public Employment (Requirement as to Residence) Rules, 1959.
+Names of such incumbents were to be shown in a proforma and they were to be employed in the Andhra region without break in service by creating supernumerary posts, if necessary.
+These supernumerary posts were to be treated as temporary addition to the strength of the office concerned and were to be adjusted against future vacancies in corresponding posts as they arose.
+The action was based upon section 3 of the Public Employment (Requirement as to Residence Act, 1957 (44 of 1957) which was an Act of Parliament made in pursuance of cl.
+(3) of article 16 of the Constitution making special provision for requirement as to residence and brought into force on March 21, 1959.
+Section 3 of the Act gave the power to make Rules in respect of certain classes of employment in certain areas.
+It provided: "3.
+Power to make rules in respect of certain classes of public employment in certain areas. (1)The Central Government may, by notification in the Official Gazette, make rules prescribing, in regard to appointments to (a)any subordinate service or post under the State Government of Andhra Pradesh, or any requirement as to residence within the Telengana area or the said Union territory as the case may be, prior to such appointment.
+(2) In this section, (a). . . . . (b)"Telengana area" comprises all the territories specified in sub section (1) of section 3 of the ." Under section 4, the Rules had to be laid before each House of Parliament for a period of not less than 30 d s and Parliament could make such alterations as it liked.
+Under section 5 the Rules had a life of 5 years but by subsequent legislation the period was extended to 10 years.
+It is said that the period 118 is to be extended by another 5 years.
+The Rules were made on March 21, 1959.
+They are called the Andhra Pradesh Public Employment (Requirement as to Residence) Rules, 1959.
+Rule 3 provides : "3.
+Requirement as to residence Prior to Appointment : A person shall not be eligible for appointment to a post within the Telengana area under the State Government of Andhra Pradesh or to a post under a local authority (other than a cantonment board) in the said area unless (i)he has been continuously residing within the said area for a period of not less than fifteen years immediately preceeding the prescribed date; and (ii)he produces before the appointing authority ,concerned, if so required by it, a certificate of eligibility granted under these rules; Provided that in relation to posts in the Secretariat Departments and the Offices of the Heads of Departments of the State Government of Andhra Pradesh situated in the cities of Hyderabad and Secunderabad, the requirement as to residence laid down in this rule shall apply to the filling of only the second vacancy in every unit of three vacancies which are to be filled by direct requirement; Provided further that any period of temporary absence from Telengana area for the purpose of prosecuting his studies or for undergoing medical treatment or any period of such temporary absence not exceeding three months for any other reason shall not be deemed to constitute a break in the continuity of such residence, but for purpose of calculating the said period of fifteen years any such period of temporary absence shall be excluded.
+" The petitioners were appointed between December 27, 1956 and July 4, 1968.
+They challenge the Act, the Rules and the proposed action as ultra vires the Constitution.
+Their case is that article 16(3) under which the Act and the Rules purport to be made has been misunderstood as conferring a power to make, a law prescribing requirement as to residence in a part of a State.
+For this reason section 3 of the Act is challenged as ultra vires the Constitution.
+119 Article 16 on which the Act, the Rules and the present action are all based, reads : "16.
+Equality of opportunity in matters of public employment.
+(1)There shall be equality of opportunity for all citizens in matters relating to employment or appointment to any office under the State.
+(2) No citizen shall, on ground only of religion, race, caste, sex, descent, place of birth, residence or any of them, be ineligible for, or discriminated 'against in respect of, any employment or office under the State.
+(3)Nothing in this article shall prevent Parliament from making any law prescribing, in regard to a class or classes of employment or appointment to an office under the Government of, or any local or other authority within, a State or Union territory, any requirement as to residence within that State or Union territory prior to such employment or appointment.
+(4). . . . (5). . . .
+The question is one of construction of this article, particularly of the first three clauses, to find out the ambit of the law taking power of Parliament.
+The first clause emphasises that ware shall be in India equality of opportunity for all citizens in matters of employment or appointment to any office under the late.
+The word 'State ' here is to be understood in the extended use given to it by the definition of that word article 12.
+The second clause then specifies a prohibition against discrimination only on the grounds of religion, race, sex, descent, place of birth, residence or any of them.
+The intention here is make every office or employment open and available to every citizen, and inter alia to make offices or employment in one part India open to citizens in all other parts of India.
+The third pause then makes an exception.
+This clause was amended by the Constitution (Seventh Amendment) Act, 1956.
+For the original words of the clause 'under any State specified in the First schedule or any local or other authority within its territory any requirement as to residence within that State ', the present words from 'under the Government ' to 'Union territory ' have been substituted.
+Nothing turns upon the amendment which seeks to apply of the exception in the clause to Union territory and to remove ambiguity in language.
+120 The clause thus enables Parliament to make a law in a special case prescribing any requirement As to residence within a State or Union territory prior to appointment, as a condition of employment in the State or Union territory.
+Under article 35(a) this power is conferred upon Parliament but is denied to the Legislatures of the States, notwithstanding anything in the Constitution, and under (b) any law in force immediately before the commencement of the Constitution in respect to the matter shall subject to the terms thereof and subject to such adaptations that may be made under article 372 is to continue in force until altered or repealed or amended by Parliament.
+The legislative power to create residential qualification for employment is thus exclusively conferred on Parliament.
+Parliament can make any law which prescribes.
+any requirement as to residence within the State or Union territory prior to employment or appointment to an office in that State or Union territory.
+Two questions arise here.
+Firstly, whether Parliament ', while prescribing the requirement, may prescribe the requirement of residence in a particular part of the State and, secondly, whether Par liament can delegate this function by making a declaration and leaving the details to be filled in by the rule making power of the Central or State Governments.
+Mr. section V. Gupte, for the petitioners, points out that the ;Constitution is speaking of State and Union territory.
+It has already made a declaration that no person shall be disqualified for any office in the territory of India because of his residence in any particular part of India.
+The exception, therefore, must be viewed narrowly and not carried to excess by interpretation.
+The article speaks of residence in a State and means only that.
+If it chose to speak of residence in parts of State such as Districts, talauqas, cities, towns etc.
+more appropriate and specific language could have been used such as 'any requirement as to residence within that State or Union territory or part of that State or Union territory '.
+Having used the word State, the unit State is only meant and not any part thereof.
+Reference is made to the history of the drafting of the Article and the debates in the Constituent Assembly which bear out this contention.
+On the other hand, Mr. Setalvad bases his argument on two things.
+He contends that the power is given to Parliament to make any law and, therefore, Parliament is supreme and can make any law on the subject as the article says.
+He very ingeniously shifts the emphasis to the words 'any requirement ' and contends that the requirement may be also as to residence in the State or any particular part of state.
+121 The claim for supremacy of Parliament is misconceived.
+Par liament in this, as in other matters, is supreme only in so far as the Constitution makes it.
+Where the Constitution does not concede supremacy, Parliament must, act within its appointed functions and not transgress them.
+What the Constitution says is a matter for,construction of the language of the Constitution.
+Which is the proper construction of the two suggested? By the first clause equality of opportunity in employment or appointment to an office is guaranteed.
+By the second clause, there can be no discrimination, among other things, on the ground of residence.
+Realising, however, that sometimes local sentiments may have to be respected or sometimes an inroad from more advance States into less developed States may have to be prevented, and a residential qualification may, therefore, have to be prescribed, the exception in clause (3) was made.
+Even so,, that clause spoke of residence within the State.
+The claim of Mr. Setalvad that Parliament can make a provision regarding residence in any particular part of a State would render the general prohibition lose all its meaning.
+The words 'any requirement ' cannot be read to warrant something which could have been said more specifically.
+These words bear upon the kind of residence or its duration rather than its location within the State.
+We accept the argument of Mr. Gupte that the Constitution, as it stands, speaks of a whole State as the venue for residential qualification and it is impossible to think that the Constituent Assembly was thinking of residence in Districts, Taluqas, cities, towns or villages.
+The fact that this clause is an exception and came as an amendment must dictate that a narrow construction upon the exception should be placed as indeed the debates in the Constituent Assembly also seem to indicate.
+We accordingly reject the contention of Mr. Setalvad seeking to put a very wide and liberal construction upon the words 'any law ' and 'any requirement '.
+These words are obviously controlled by the words 'residence within the State or Union territory ' which words mean what they say, neither more nor less.
+It follows, therefore, that section 3 of the Public Employment (Requirement as to Residence) Act, 1957, in so far as it relates to Telengana (and we say nothing about the other parts) and Rule 3 of the Rules under it are ultra vires the Constitution.
+In view of our conclusion on this point it is not necessary to express any opinion whether delegation to the Central and/or State Governments to provide by rules for the further implementing of the law made by Parliament is valid or not.
+It was argued that the Mulki Rules existing in the former Hyderabad State must continue to operate by virtue of article 35(b) in this area.
+This point is not raised by the petitions under consideration and no expression of opinion by us 'is desirable.
+L12 Sup Cl/69 9 122 For the reasons given above we quash the orders passed and declare section 3 of the Public Employment (Requirement as to Residence) Act, 1957 as also Rule 3 of the Rules ultra vires the Constitution.
+The petitions shall be allowed but there shall be no order about costs.
+Y. P. Petitions allowed.

2627.txt

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+Appeal No. 1940 of 1967.
+Appeal by special leave from the judgment and order dated April 17, 27, 1967 of the Gujarat High Court in Civil Revision Application 328 of 1967.
+section T. Desai and I. N. Shroff for the appellants.
+M. P. Amin, P. M. Amin, P. N. Dua and J. B. Dadachanji, for respondent No. 1.
+R. P. Kapur, for respondents Nos. 2 and 3.
+The Judgment of the Court was delivered by Shah, J.
+By insistence upon procedural wrangling in a com paratively simple suit pending in the Court of Small Causes at Ahmedabad the parties have effectively prevented all progress in the suit during the last six years.
+A building in the town of Ahmedabad used as a cinematograph theatre belonged originally to Messrs. Popatlal Punjabhai.
+estate of the owners and on August 19, 1954, the receivers ,estate of the owners and on August 19, 1954, The receivers granted a lease of the theatre on certain terms and conditions to two persons, Raval and Faraqui.
+By an agreement dated November 27, 1954, between Raval and Faraqui on the one hand and Messrs. Filmistan Distributors (India) Private Ltd. hereinafter called "Filmistan on the other hand, right to exhibit cinematograph films was granted to the latter on certain terms and conditions.
+"Filmistan" instituted suit No. 149 of 1960 in the Court of the Civil Judge (Senior Division) at Ahmedabad against Raval and Faraqui and two other persons claiming a declaration that it 437 was entitled pursuant to the agreement dated November 27, 1954, to exhibit motion pictures in the theatre.
+By an order dated December 1, 1960 the suit was disposed of as compromised.
+It was inter alia agreed that Raval and Faraqui were bound and liable to allow Filmistan to exercise its "exhibition rights" in the theatre; that Raval and Faraqui, their servants and agents were not to have any right to exhibit any picture in contravention of the terms and conditions of the agreement dated November 27, 1954; and that Raval and Faraqui shall "execute and register" an agreement in writing incorporating the said agreement with the variation as to rental.
+Pursuant to this agreement, a fresh agreement was executed on December 1, 1960.
+On September 1, 1963, Filmistan filed suit No. 1465 of 1963 in the Court of Small Causes at Ahmedabad, inter alia, for a declaration that as sub lessee or as lessee under law it was entitled to obtain and remain in possession of the theatre and to exhibit cinematograph films and to hold "entertainment performances" etc.
+in the theatre, and that one Shabeer Hussain Khan Tejabwala had no right, title or interest in the theatre, that the defendants in the suit be ordered to hand over vacant and peaceful possession of the theatre, and the defendants, their servants and agents be restrained by an injunction from interfering directly or indirectly with its rights to obtain and remain in possession of the theatre or any part thereof and to exercise its right of exhibiting "motion pictures" and entertainment performances etc.
+This suit was filed against the receivers in insolvency of the owners of the theatre, against Raval and Faraqui, against Tejabwala and also against Baldevdas Shivlal who claimed to be the owner of the theatre.
+The suit was based on the claim by Filmistan as lessees or sub lessees of the theatre and was exclusively triable by the Court of Small Causes by virtue of section 28 of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947.
+Three sets of written statements were filed against the claim made by Filmistan, but no reference need be made thereto, since at this stage in deciding appeal the merits of the pleas raised by the defendants are not relevant.
+After issues were raised on June 20, 1966, the plaint was amended and additional written statements were filed by the Defendants.
+The learned Judge was then requested to frame three additional issues in view of the amended pleadings : the issues were: 1.
+Whether in view of the said consent decree in suit No. 149 of 1960 defendants Nos. 5 and 6 are debarred on principles of res judicata from agitating the question that the said document dated November 27, 1954 as confirmed by their letter dated January 31, L13 Sup.
+CI/69 17 438 1955 and further confirmed by document dated December 1, 1960 is not a lease? 12.
+Whether in view of the said consent decree, defendants 5 and 6 are estopped from contending and leading any evidence and putting questions in crossexamination of plaintiffs witnesses to show that the said document dated November 27, 1954 as confirmed by their letter dated January 31, 1955 and further confirmed by document dated December 1, 1960 is not a lease ? 13.
+Whether in respect of the terms of the said consent decree as also of the said document dated November 27, 1954, as confirmed by their letter dated January 31, 1955 and further confirmed by document dated December 1, 1960 defendants Nos. 5 and 6 are debarred from leading any evidence of the, plaintiffs witnesses in view of section 92 of the Evidence Act ?" In drawing up the additional issues not much care was apparently exercised : whether a party is entitled to lead evidence or to put questions in cross examination of the plaintiff 's witnesses cannot form the subject matter of an issue.
+Filmistan then applied to the Court of Small Causes for an order that issues Nos. 11, 12 & 13 be tried as preliminary issues.
+The learned Judge observed that the issues were not purely of law, that in any event the case or any part thereof was not likely to be disposed of on these issues, and that ordinarily in "appealable cases" the Court should, as far as possible, decide all the issues together and that piecemeal trial might result in protracting the litigation.
+He also observed that the issues were not of law going to the root of the case and were on that account not capable of being decided without recording evidence.
+A revision application against that order was dismissed in limine by the High Court of Gujarat.
+When the case reached hearing and the evidence of a representative of Filmistan was.
+being recorded, counsel for the defendants asked in cross examination the question whether the "agreement between the plaintiff and defendant Nos. 5 and 6 was a commercial transaction and was not a lease ?" The question was objected to by counsel appearing for Filmistan.
+Thereafter elaborate arguments were advanced and the Trial Judge passed an order disallowing the objection.
+The objection to the question raised by Filmistan was not that it related to a matter to be decided by the Court and on which the opinion of witnesses was irrelevant.
+The objection was raised as 439 an attempt to reopen the previous decision given by the Trial Judge refusing to try issues Nos. 11, 12 & 13 as preliminary issues.
+Counsel for Filmistan contended that an enquiry into the nature of the legal relationship arising out of the agreement dated December 1, 1960 "was barred by the principle of res judicata and estoppel under the provisions of section 92 of the Evidence Act", since the question was already concluded by the consent decree in suit No. 149 of 1960.
+The Trial Judge observed that he had carefully gone through the consent decree and the registered agreement dated December 1, 1960, and he found that the consent decree had not decided that the transaction between the parties of the year 1954 was in the nature of a lease; that in the plaint in the earlier suit it was not even averred that the rights granted were in the nature of leasehold rights; that suit No. 149 of 1960 was for declaration of the rights of Filmistan to exhibit motion pictures, in the theatre under the agreement dated November 27, 1954, and for an injunction restraining the defendants from violating the said rights of Filmistan under the agreement; and that the agreement dated December 1, 1960 was "not plain enough to exclude the oral evidence of the surrounding circumstances and conduct of the parties to explain its terms and language".
+Accordingly he held that the question asked in cross examination of the witnesses for Filmistan intended to secure disclosure of the surrounding circumstances and conduct of the parties in order to show in what manner the language of the document was related to the existing facts, could not be excluded.
+The Court also rejected the contention that there was any bar of estoppel, and held that evidence as to the true nature of the transaction was not inadmissible by virtue of section 92 of the Evidence Act.
+Filmistan feeling dissatisfied with the order invoked the revisional jurisdiction of the High Court of Gujarat under section 115 of ' the Code of Civil Procedure.
+The revision petition was entertained and elaborate arguments were advanced at the Bar.
+The High Court referred to a number of authorities and observed that the correctness of the findings of the Trial Court on issues Nos. 12 and 13 may not be examined in exercise of the powers under section 115 of the Code of Civil Procedure.
+The Court proceeded to, observe : "The question then arises for consideration whether in fact the subordinate Court has decided the question of res judicata", and that "it is true that the jurisdiction of the Court of mall Causes to decide disputes between a tenant and his landlord and falling within the purview of section 28 of the Bombay Rent Control Act is derived from section 28 of the said Act, but at the same time if an issue is in fact barred by res judicata, then the Court has no 440 jurisdiction on principles of res judicata to go into that question or to decide that question over again to the extent to which the Court, viz., the trial court in the instant case, proposed to go into that question and allow the whole question, that was closed once for all by consent decree of December 1, 1960, to be reopened, it is proposing to exercise the jurisdiction which is not vested in it by law.
+It is not open to any Court of law to try an issue over again or reopen the same if an earlier decision operates as res judicata.
+Once the jurisdiction of the Court has been taken away, any proposal to reopen the question closed by the earlier decision would be exercise of jurisdiction which is not vested in the Court by law and to that extent the decision would become revisable, even if it is the decision as to the res judicata of an issue", and concluded "It is not open to me in revision at this stage to express any opinion about the rights and contentions of the parties with reference to the agreement of December 1, 1960.
+But the only thing that can be said is that so far as the agreement of November 27, 1954, is con cerned, it must be held, in view of the consent decree of December 1, 1960, that that document of November 27, 1954, created a lease. .
+The consent decree must be held to create a bar of res judicata as far as the question of document of November 27, 1954, creatin g a lease is, concerned.
+The learned Judge will not proceed with the trial".
+By section 115 of the Code of Civil Procedure the High Court is invested with power to call for the record of any case decided by any Court subordinate to such High Court and in which no appeal lies thereo, if such subordinate court appears (a) to have exercised a jurisdiction not vested in it by law, or (b) to have failed to exercise a jurisdiction so vested, or (c) to have acted in the exercise of its jurisdiction illegally or with material irregularity, and to make such order in the case as it thinks fit.
+Exercise of the power is broadly subject to three important conditions (1) that the decision is of a Court subordinate to the High Court; (2) that there is a case which has been decided by the subordinate Court; and (3) that the subordinate Court has exercised jurisdiction not vested in it by law or to have failed to exercise a jurisdiction so vested, or to have acted in the exercise of its jurisdiction illegally or with material irregularity.
+441 In the present case the Court of Small Causes had only decided that a question seeking information about the true legal relationship arising out of the document could be permitted to 'be put to the witnesses for Filmistan.
+The Court gave no finding expressly or by implication on the issue of res judicata or any other issue.
+In the view of the Trial Court the question whether the legal relationship arising out of the agreement dated December 1, 1960 was in the nature of a lease or of other character had to be decided at the trial and the previous judgment being a judgment by consent , 'could not operate as res judicata", for, it was not a decision of the Court, and that the consent decree in suit No. 149 of 1960 had not decided that the agreement dated March 27, 1954, was of the nature of a lease, and that in the plaint in that suit it was not even averred that it was a lease.
+The Trial Judge in overruling the objection did not decide any issues at the stage of recording evidence : he was not called upon to decide any issues at that stage.
+The observations made by him obviously relate to the arguments advanced at the Bar and can in no sense be regarded even indirectly as a decision on any of the issues.
+But the High Court has recorded a finding that the agreement dated November 27, 1954, created a lease and that the consent decree operated as res judicata.
+A consent decree, accord ing to the decisions of this Court, does not operate as res judicata, because a consent decree is merely the record of a contract between the parties to a suit, to which is superadded the seal of the Court.
+A matter in contest in a suit may operate as res judicata only if there is an adjudication by the Court : the terms of section II of the Code leave no scope for a contrary view.
+Again it was for the Trial Court in the first instance to decide that question and there after the High Court could, if the matter were brought before it by way of appeal or in exercise of its revisional jurisdiction, have decided that question.
+In our judgment, the High Court had no jurisdiction to record any finding on the issue of res judicata in a revision application filed against an order refusing to uphold an objection to certain question asked to a witness under examination.
+The true nature of the order brought before the High Court and the dimensions of the dispute covered thereby apparently got blurred and the High Court proceeded to decide matters on which no decision was till then recorded by the Trial Court, and which could not be decided by the High Court until the parties had opportunity to lead evidence thereon.
+It may also be observed that by ordering that a question may properly to put to a witness who was being examined, no case was decided by the Trial Court.
+The expression "case" is not limited in its import to the entirety of the matter in dispute in an action.
+442 This Court observed in Major section section Khanna vs Brig.
+F. J. Dillon(1) that the expression "case" is a word of comprehensive import : it includes a civil proceeding and is not restricted by anything contained in section 115 of the Code to the entirety of the proceeding in a civil court.
+To interpret the expression "case" as an entire proceeding only and not a part of the proceeding imposes an unwarranted restriction on the exercise of powers of superintendence and may result in certain cases in denying relief to the aggrieved litigant where it is most needed and may result in the perpetration of gross injustice.
+But it was not decided in Major section section Khanna 's case(1) that every order of the Court in the course of a suit amounts to a case decided.
+A case may be said to be decided, if the Court adjudicates for the purposes of the suit some right or obligation of the parties in controversy; every order in the suit cannot be regarded as a case decided within the meaning of section 115 of the Code of Civil Procedure.
+The order passed by the High Court is set aside and the Trial Court is directed to proceed and dispose of the suit.
+We trust that the suit will be taken up early for hearing and disposed of expeditiously.
+We recommend that the form of the issues Nos. 11, 12 and 13 will be rectified by the learned Trial Judge.
+Filmistan will pay the costs of the appeal in this Court and in the High Court.
+G.C. Appeal allowed.

2649.txt

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+Appeal No. 949 of 1966.
+Appeal by special leave from the judgment and order dated September 11, 1964 of the Madras High Court in Tax Case No. 181 of 1962.
+M. C. Chagla and B. R. Agarwala, for the appellant.
+section T. Desai, R. N. Sachthey and B. D. Sharma, for the respondent.
+[The appeal was originally heard by J. C. Shah, Ag.
+C.J., V. Ramaswami and A. N. Grover, JJ.
+The case was twice re manded to the Tribunal.
+The first Order of the Court remanding the case to the Tribunal was delivered by] Shah, Ag. C. J. M/s Amarchand Sobhachand 'a firm registered under the Indian Income tax Act, 1922, carried on business at Madras in drugs, chemicals, mercury, camphor and silk yam and as money lenders.
+There were two partners of the firm Mohanlal Sagmal and Seshmal Sobhachand, and Ramniklal and Lakshmichand minors were admitted to the benefits of the partnership, each with 7/32 share in the profits.
+The appellants had for a long time business relations with a firm styled "Bhojaji Sobhachand" carrying on business at Bombay as importers of yam and also as agents and adathias.
+Sobhachand, one of the partners of Bhojaji Sobhachand with 16% share in the profit and loss is the father of Seshmal, Ramniklal and Lakshmichand, partners of the appellants.
+In the books of account of the appellants which were main tained according to the mercantile, system there was a current sarafi account in respect of their transactions with the Bombay firm in which were credited the funds transmitted from Bombay in respect of their business transactions.
+Entries relating to interest were posted till the end of Samvat Year 2006 in the account on the amount due at the foot of the account.
+The following is a table showing the balances at the end of the Samvat years 2003 Amount Interest At the end of the Samvat Year 2003 Cr.16,951 00 2004 Dr.1,02,188 4 5Dr.
+2633 9 3 2005 Cr.27,815 0 0Dr.
+483 1 9 2006 Cr.11,975 0 0Cr.
+1008 7 3 2007 Dr.2,02,823 12 3 2008 Dr.2,68,385 1 3 In the assessment for income tax of the appellants for the assessment year 1952 53 relevant to the account year Samvat 417 2007 all item of Rs. 2,03,147 8 O in the, account of the, Bombay was disallowed by the Income tax Officer, but in appeal the amount was allowed.
+in the return of income for the assessment year 1953 54 the appellants claimed allowance for Rs. 2,68,385/ due from the Bombay firm at the foot of their running account as a bad debt written off as irrecoverable.
+The Income tax Officer disallowed their claim holding that : "these transactions were mere accommodations which can have no bearing to the regular business carried on by the assessee.
+" The Appellate Assistant Commissioner agreed with the Income tax Officer.
+He held that the debt .
+did not arise, in the course of the appellants ' business as chemists and druggists nor in the course of their money lending business.
+The Income tax Appellate Tribunal accordingly confirmed the order of the Appellate Assistant Commissioner.
+The assessee firm then applied to the Tribunal to refer the following question to the High Court of Madras "Whether on the facts and in the circumstances of the case the disallowance of the bad debt of Rs. 2,68,385 is right in law ?" The Tribunal rejected the application, but pursuant to an order made by the High Court of, Madras under section 66(2) submitted a statement of the case on the following question "Whether on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the debt of Rs. 2,68,385/ was not one incurred in the course of money lending business of the assessee ?" In the opinion of the High Court the debt of Rs. 2,68,385/ due to the appellants was not a bad and doubtful debt in its money lending business not a debt representing loss sustained in the other business.
+The question referred was, therefore, answered in the affirmative and against the appellants.
+Section 10(2) (xi) of the Indian Income tax Act, 1922, as in force at the relevant time provided : "(2) Such profits or gains shall be computed after making the following allowances, namely : (xi) When the assessee 's accounts in respect of any part of his business, profession or vocation are not kept on the cash basis, such sum, in respect of bad and doubtful debts, due to the assessee in 807SupCI/71 418 respect of that part of his business, profession or vocation, and in the case of an assessee carrying on a banking or money lending business, such sum in respect of loans made in the ordinary course of such business as the Income tax Officer may estimate to be irrecoverable but not exceeding the amount actually written off as irrecoverable in the books of the assessee, Provided. . . . . " Clause (xi) was in two parts.
+A bad and doubtful debt due to the taxpayer, written off as irrecoverable in the books of account was properly allowable in computing the taxable profits from business, profession or vocation, where accounts were not kept on the cash basis, if the debt was in respect of a loan made in the course of the taxpayer 's business as a banker or money lender, or when the taxpayer was carrying on any other business the debt was in respect of that other business.
+debt written off relying upon both the branches of section 10 (2) (xi) and by the application under section 66(1) of the Income tax Act a question covering both the branches of the section was also sought to be raised.
+But the question on which the Tribunal was called upon to state the case was in form imprecise and in import somewhat vague.
+A bad and doubtful debt due to an assessee in respect of banking or money lending business is allowable under section 10(2) (xi) if it is in respect of loans made in the ordinary course of such business.
+A bad and doubtful debt in respect of a business other than banking or money lending is allowable even if it is not in respect of loan : but a debt due in the course of the business of a money lending is not allowable unless it is, in respect of loans made in the ordinary course of his business.
+We are of the view that the question should have been referred in the form suggested by the appellants in their application under section 66(1) with appropriate variations.
+In the interest of justice, we direct that the question be reframed as follows : "Whether on the facts and in the circumstances of the case the Tribunal erred in disallowing the debt of Rs. 2,68,385/ written off by the assessee in their books of account as irrecoverable.
+" The two branches of the question as reframed then are (1) Whether the debt or any part thereof is in respect of loans made 419 in the ordinary course of money lending business of the appellants; and (2) whether the debt or any part thereof is in respect of the other business of the appellants.
+We are of the view that before the question may be answered, it is necessary to call for a supplementary statement of the case from the Tribunal.
+The Tribunal 's order is very brief : it gives no reasons in support of the conclusions.
+The argument based on the first part of section 10(2) (xi) that the debts were due in respect of the business of the appellants other than money lending was not considered at all, and the Tribunal disposed of the second part of the case by merely observing that it was an "accommodation" account to enable the Bombay firm to tide over the "financial crisis" threatening it in Samvat Year 2007, and that the trans actions in the account were totally unconnected with the normal business of the appellants.
+An "accommodation" advance is a neutral expression : it may be of the nature of a loan advanced in the ordinary course of business by a money lender; it may be an advance the money lending or other business of the assessee but not in the nature of a loan; or it may be wholly unrelated to the business of the tax payer.
+The statement submitted by the Tribunal is also inadequate.
+It contains only a summary of the business relations between.
+the appellants and the Bombay firm, a statement as to the amounts due at the end of each year at the foot of the account, the interest if any charged and a summary of the orders made by the Income tax Officer, the Appellate Assistant Commissioner and the Tribunal.
+The statement of the case does not analyse the evidence and throws no light upon the two branches of the argument raised before the Tribunal and which, in our view, arose out of the question on which they were required to submit a statement of the case.
+Counsel for the Revenue, however, contended that there are three important circumstances which appear from the order of the Appellate Assistant Commissioner and the Income tax Officer from which it may be inferred that the advances made by the appellants to the Bombay firm were not in respect of loans in the ordinary course of the business of the appellants, nor in respect of their other business.
+Counsel said that (1) Sobhagchand Amarchand partner of the Bombay firm is the father of Seshmal one of the partners of the appellants and of the minors Ramniklal and Lakshmichand who are admitted to the benefits of partnership; (2) that large amounts of money were advanced shortly before the Bombay firm closed its business; and (3) that there was a consistant practice for paying or receiving interest on the 420 amounts due at the, foot of the account, but no interest was charged by the appellants in respect of the dues at the foot of the account at the end of Samvat Years 2007 and 2008.
+But the Tribunal has not raised any inference from these circumstances and has merely observed that charging of interest cannot make it a money lending account.
+We, therefore, direct that the Income tax Appellate Tribunal do submit a supplementary statement of the case on the, question reframed, on both the branches of section 10(2)(xi) of the Indian Income tax Act, 1922.
+The Tribunal will give opportunity to both the parties of being heard, but will restrict themselves to the ,evidence on the record.
+The supplementary statement to be submitted within three months from the date the papers reach the Tribunal.
+[After receipt of the supplementary statement of case from the Tribunal the appeal was heard by J. C. Shah, K. section Hegde and A. N. Grover, JJ.
+The order of the Court was delivered by] Shah, J.
+By our order dated July 29, 1969 we called for the light of the two branches of section 10(2) (xi) of the Indian In come tax Act, 1922.
+We have now received a statement of case from the Tribunal.
+The Tribunal has set out in great detail the arguments advanced before it by the assessee and by the Revenue but it has not set out the facts found by it from the evidence on the record in the light of the arguments advanced.
+The statement of case is intended to be a finding on facts and not a catalogue of the arguments advanced at the Bar.
+Since the Tribunal has not found the facts we are constrained to send back the case again to the Tribunal for submitting to this Court a supplementary statement on facts found by the Tribunal.
+The Tribunal will submit the statement within three months from the date on which the papers reach the Tribunal.
+[After receipt of the second supplementary statement of case from the Tribunal the appeal was finally heard by J. C. Shah, C.J., K. section Hegde and A. N. Grover, JJ.
+The Judgment of the Court was delivered 'by] Hegde, J.
+The appellant firm (which will hereinafter be referred to as the "assessee") carried on business in drugs, chemicals, mercury, camphor and art silk yam as also in money lending, over a number of years.
+The accounting year with which we are concerned in this appeal is Samvat year 2008 commencing from October 31, 1951 and ending on Oct. 18, 1952.
+The firm 421 consisted of two partners, Mohanlal Baginal and Sashmal Sobha Chand.
+Two minors, Ramniklal Sobhachand and Lakshmichand Sobhachand were admitted to the benefits of the partnership.
+The assessee had dealings for several years with a firm known as "Bhojaji Sobhachand" (to be hereinafter referred to as the Bombay firm).
+Sobhachand Amarchand, a partner of the Bombay firm, is the father of Seshmal, Ramaniklal and Lakshmichand and he was having sixteen percent share in the Bombay firm.
+That firm became insolvent in April 1952.
+The Bombay firm owed certain amount to the assessee.
+In the assessment of income tax of the appellant for the assessment year 1952 53, relevant to the account year Samvat 2008, the assessee claimed a deduction of Rs. 2,68,385/ as bad debt due from the Bombay firm, incurred by that firm in the course of business transactions.
+The Incometax Officer disallowed that claim holding that "these transactions were mere accommodations which can have no bearing to the regular business carried on by the assessee.
+In, appeal the Appellate Assistant Commissioner agreed with the Income tax Officer.
+He held that the debt did not arise in the course of the assessee 's business as Chemists and Druggists nor in the course of their money lending business.
+On a further appeal taken by, the assessee to the Income tax Appellate Tribunal, the tribunal confirmed the order of the Appellate Assistant Commissioner. 'The assessee thereafter applied to the tribunal under section 66(1) of the Indian Income tax Act, 1922 to submit a statement of the case with the question "whether on the facts and in the circumstances of the case the disallowance of the bad debt of Rs. 2,68,385/ is right in law" to the High Court of Madras for its opinion.
+The tribunal rejected that application but pursuant to an order of the High Court under section 66(2), the tribunal submitted a statement of the case on the following question "Whether on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the debt of Rs. 2,68,385/ was not one incurred in the course of money lending business of the assessee." The High Court opined that the debt in question was not a bad and doubtful debt in the assessee 's money lending business nor a debt representing loss sustained in the other business.
+The question referred was, therefore, answered in the affirmative and against the asses see.
+Thereafter the present appeal was brought after obtaining special leave from this Court.
+At the hearing of the appeal this Court found that the tribunal 's order was very brief and that it gave no reasons in support of its conclusions.
+It also found that the statement submitted by the tribunal was in adequate.
+This Court took the view that the question framed at 422 the instance of the High Court did not bring out the real question arising for decision.
+It accordingly .
+reframed the question as follows "Whether on the facts and in the circumstances of the case the Appellate Tribunal erred in disallowing a sum of Rs. 2,68,385/ written off by the assessee in their books of accounts as irrecoverable ?" By its order dated July 29, 1969 this Court called upon the Tribunal to submit a supplementary statement of case on the reframed question.
+The tribunal accordingly submitted a fresh statement of the case on the question referred.
+But that statement merely catalogued the arguments advanced at the bar.
+The tribunal did not give any findings on the points arising for decision.
+Hence by its order dated April 7, 1970, this Court directed the tribunal to submit a further statement.
+The tribunal has accordingly submitted a further statement.
+The facts found by the tribunal are found in paragraphs 11 ;and 12 of the statement.
+They read : " 11.
+We have taken into consideration the available materials and the rival submissions.
+The only facts in favour of the assessee are that incidental charges are debited to the Bombay firm in respect of some of the remittances and there is a flow of moneys to the Bombay firm up to 10 3 1952 when the last of the remittances was sent to it before the firm collapsed in about April 1952.
+On the other hand, the narrations in the entries, as they stand, the failure to adjust interest in the account of the Bombay firm at the stage at which it became a debtor in Samvat year 2007, the manner in which the partner of the appellant firm tried to explain the position in March, 1954 and the stand of the firm itself at all earlier stages support the case of the Department." "12.
+Having considered all the circumstances of the case, we are of the opinion that the sums in question were not sent to the Bombay firm as loans made in the ordinary course of the money lending business of the assessee nor in respect of any other business of the assessee.
+As this is the finding with regard to the whole of the amount of Rs. 2,68,385/ there is no question of ,#locating any portion thereof as between the business of money lending or for any other purpose as preferred to para 7 above.
+" 423 It is true as contended by the learned Counsel for the asstssee that the conclusions reached by the tribunal are not supported by proper discussion of the material before it.
+It is also true that the tribunal after catalogueing the arguments advanced at the bar, has come to certain abrupt conclusions, but all the tame it cannot be denied that the findings reached by the tribunal are findings of fact and those findings are supported by the evidence on record.
+The tribunal has found that the monies sent by the assessee to the Bombay firm were not loans made in the ordinary course of its money lending business, nor in respect of any other business of the assessee.
+This finding covers the entire amount sought to be deducted.
+In view of this finding, which is binding on this Court, our answer to the question reframed has to be in the negative and in favour of the Department.
+The appeal fails and is dismissed.
+No costs.
+G.C. Appeal dismissed.

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+l Misc.
+Petitions Nos.
+401/and 4012 of 1968.
+Applications by respondent No. 1 for revocation of the certificate granted by the Madras High Court on 15th October, 1968 under article 133(1)(a) & (b) of the Constitution of India.
+AND Civil Appeals Nos. 2183 and 2184 of 1968.
+Appeals from the judgment and order elated October 9, 1968 of the Madras High Court in O.S.A. No. 25 and 27 of 1968.
+M.C. Setalvad.
+V.P. Raman, D.N. Mishra, and J.B. Dadachanji, for the appellant.
+section Mohan Kumaramangalam.
+M.K. Ramamurthi, Shyamala Pappu and Vineet Kumar, for respondent No. 1.
+Rameshwar Nath and Mahinder Narain, for respondent No. 2.
+The Judgment of the Court was delivered by Shah, J.
+M/s. Tarapore & Company hereinafter called the plaintiffs applied in Suit No. 118 of 1967 for an interim injunction restraining the Bank of India Ltd. the first defendant in the suit from taking any steps in pursuance of a letter of credit opened in favour of M/s. V/O Tractors Export, Moscow, the second defendant.
+Ramamurthi, J., by order dated April 12, 1968, granted an interim injunction restraining encashment of the letters of credit pending disposal of the suit.
+In appeals under the Letters Patent preferred by the second defendant,.
+the High Court of Madras set aside that order.
+Against the orders passed in the two appeals, the plaintiffs applied for certificate under Arts.133(1)(a) and 133(1)(b) of the Constitution.
+The High Court observed that an order granting interim injunction "is a final order, as far as this Court is concerned, determining the rights of parties within this lit or proceeding, which is independent though ancillary to the suit", and they were competent to grant the certificate.
+By our order dated October 28, 1968, we ordered that the certificate granted by the High Court do stand revoked.
+We set out the reasons in support of that order.
+Article 133 (1) provides, insofar as it is material: "(1) An appeal shall lie to the Supreme Court from any judgment, decree or final order in a civil proceeding of a High Court in the territory of India if the High Court certifies (a) that the amount or value of the subject matter of the dispute in the court of first instance and still in dispute on appeal was and is not less than twenty thou sand rupees or such other sum as may be specified in that behalf by Parliament by law; or 701 (b) that the judgment, decree or final order involves directly or indirectly some claim or question respecting property of the like amount or value; or "(c) . . where the. judgment, decree or final order appealed from affirms the decision of the Court immediately below in any case other than a case referred to in sub clause (c), if the High Court further certifies that the appeal involves some substantial question of law.
+" The suit filed by the plaintiffs is a civil proceeding, and the suit involves some claim or question respecting property of not less than twenty thousand rupees.
+That is a matter not in dispute.
+The expression "judgment" in article 133 ( 1 ) in the context in which it occurs means a final adjudication by the Court of the rights of the parties, 'and that an interlocutory judgment even if it decides an issue or issues without finally determining the rights and liabilities of the parties is not a judgment, however cardinal the issue may be.
+In the present case not even an issue has been decided, and it is not contended that the order of the High Court amounts to a judgment or 'a decree.
+The expression "final order" it has been held by a long course of authorities, occurring in section 205 of the Government of India Act, 1935, section 109 of the Code of Civil Procedure and article 133(1) of the Constitution means a final decision on the rights of the parties in dispute in a suit or proceeding; if the rights of the parties in dispute in the suit or proceeding remain to be tried, after the order, the order is not final.
+In Ramchand Manjimal vs Goverdhandas Vishindas RatanChand(1), it was held by the Judicial Committee that an order of the Judicial Commissioner of Sind vacating an order of stay granted under section 19 o,f the Indian Arbitration Act, 1899, and refusing to stay a proceeding was not a final order within the meaning of section 109(a) of the Code of Civil Procedure.
+Viscount Cave referred to Salaman vs Warner(2); Bozson Altrincham Urban District Council(a) and Issacs vs Salbstein(4) and observed: "The effect of those and other judgments is that an order is final if it finally disposes of the rights of the parties.
+The orders now under appeal do not finally dispose of those rights, but leave them to be determined by the Courts in the ordinary way.
+" In Abdul Rahman vs
+D.K. Cassim & Sons(5) the Judicial Committee observed that the expression "final order" within the meaning of section 109(a) of the Code of Civil Procedure, 1908, is an (1) L.R. 47 I.A. 124.
+(2) (3) (4) (5) L.R. 60 I.A. 76.
+C.I./69 12 702 order which finally disposes of the rights of the parties in relation to the whole suit.
+In Abdul Rahman 's case(1) a suit was instituted by D.K. Cassim and Sons claiming damages against the appellant Abdul Rahman.
+Soon after the suit was instituted the plaintiff firm was adjudicated insolvent and the official assignee was impleaded as an additional plaintiff.
+The official assignee declined to proceed with the suit, and the suit was dismissed by the trial court.
+In appeal it was held by the High Court of Calcutta that the cause of action was personal to the insolvents and did not vest in the assignee, and accordingly they set aside the decree and remanded the suit for trial.
+Against that order an appeal was preferred to the Judicial Committee which was held not maintainable.
+Kuppusami Rao vs The King(2) The Federal Court held that the expression "final order" in section 205 (1 ) of the Government of India Act, 1935, means an order which finally determines the points in dispute and brings the case to an end.
+The test of finality, according to the court, is whether the order finally disposes of the rights of the parties, and not whether the order decides an important point or even a vital issue in the case.
+Mukherjea, J., in interpreting the expression "judgment, decree or final order" in section 205 of the Government of India Act, 1935, in Mohammad Amin Brothers Ltd. and others vs Dominion India and others ( 3 ) observed: "The expression "final order" has been used in contradistinction to what is known as "interlocutory order" . .
+If the decision on an issue puts an end to the suit, the order will undoubtedly be a final one, but if the suit is still left alive and has got to be tried in the ordinary way, no finality could attach to the order." In Mohammad Amin Brothers ' case(3) an issue was decided by the trial court in a petition for winding up of a Company as to the maintainability of a claim for recovery of income tax dues.
+In appeal the High Court overruled the objection raised by the Company about the maintainability of the claim, and finding that a bona fide dispute was pending before the Income tax authorities relating to a substantial part of the debt on which the application for winding up was made and that the solvency of the Company could not be determined before that dispute was decided, set aside the order of the Trial Judge and remanded the case to him.
+The Federal Court held that the order appealed against was not a "final order".
+In Sardar Syedna Taher Saifuddin Saheb vs The State of Bombay(4) a suit was filed for a declaration that the order of ex (1) L.R. 60LA.
+76 (2) (3) (4) 703 communication passed by the appellant religious head of a community was invalid.
+During the pendency of the suit them Bombay Prevention of Ex communication Act 42 of 1949 was enacted and one of the issues raised in the suit was whether the order of ex communication was invalid.
+This issue was tried as a preliminary issue and as it raised the question of the vires of the Bombay prevention 'of Ex communication Act, 1949, the State of Bombay was impleaded as a party defendant in the suit.
+The trial court decided the issue against the appellant and the order was confirmed in appeal by the High Court of Bombay.
+Against the order deciding the issue, an appeal was preferred to this Court with certificate granted by the High Court under article 132 and article 133 of the Constitution, and it was held that the appeal was not maintainable since the decision on the issue did not finally dispose of the dispute between the parties.
+In Srinivasa Prasad Singh vs Kesho Prasad Singh(1) an order deciding that circumstances had not been established such as would justify an order for stay of execution of a decree under appeal was not a 'final order" and was on that account not appealable to the judicial Committee.
+Similarly in Druva Coal Company vs Benaras Bank(2) it was held that an order by the High Court reversing the order of the Court of First Instance granting a temporary injunction was not a final order within the meaning of section 109 of the Code of Civil Procedure.
+There is, therefore, 'abundant authority in support of the view that an order is final within the meaning of article 133 of the Constitution, under section 109 Code of Civil Procedure or section 205 of the Government of India Act, 1935, if it amounts to final decision on the rights of the parties in dispute in the suit or proceeding; if after the order is made, the suit or proceeding still remains to be tried, and the rights in disputes have to be determined, the order is interlocutory.
+Counsel for the appellant strongly relied upon a recent judgment of this Court in Mohanlal Maganlal Thakkar vs State of Gujarat(3) and contended that the view expressed in the earlier cases is superseded.
+In Mohanlal Thakkar 's case(a) after an enquiry under section 476 Code of Criminal Procedure, 1898, a Magistrate ordered that a complaint be filed against a person in respect of offences under sections 205, 467 and 468 read with section 114 I.P. Code.
+In appeal the Additional Sessions Judge held that the complaint was competent only in respect of the offence under section 205 read with section 114.
+The High Court dismissed a revision application against the order of the Court of Session.
+Certificate was there (1) 13 C.L.J. 681.
+(2) (3) ; 704 after issued by the High Court under article 134(1)(c) of the Con stitution for leave to appeal against the order.
+The competence of the High Court to grant the certificate was challenged at the hearing of the appeal.
+This Court held (Bachawat & Mitter JJ., dissenting) that the order passed was a final order within the meaning of article 134(1) (c) since the controversy between the parties when the the complaint in respect of offences under sections 467 and 468 read with section 114 I.P. Code was disposed of by the order of dismissal and the proceeding regarding that question was finally decided It was observed that the finality of that order was not to be judged by co relating it with the controversy in the complaint, viz., when then the appellant had committed the offence charged ,against him therein.
+There is nothing in that judgment which supports the contention that this Court has departed from the principle of the earlier decisions or has suggested a different test for determining the finality of orders.
+The Court in that case was concerned merely with an order passed by the High Court which maintained the order of the Additional Sessions Judge that a complaint under section 205 read with section 114 I.P. Code could be filed against the appellant.
+The order of the High Court finally disposed of the proceeding in the Magistrate 's court relating to the expediency of instituting criminal proceedings against the appellant.
+It was thereafter for the court trying the complaint to decide whether the offence complained of was committed by the appellant.
+The proceeding for filing a complaint under section 476 of the Code of Criminal Procedure was a self contained proceeding and was finally disposed of by the order directing the filing of a complain under section 205 read with section 114 I.P. Code.
+The proceeding instituted on the complaint was not part of or incidental to the proceeding for an enquiry whether a complaint should be filed.
+The Court in that case expressly approved of the earlier view at p. 736 where after referring to Kuppusami Rao 's case(1) observed: Syedna Taher Saifuddin Saheb 's case(") observed: " . these were cases where the impugned orders were passed in appeals or revisions and since an appeal or a revision in continuation of the original suit or proceeding the test applied was whether the order disposed of the original suit or proceeding.
+If it did not, and the suit or proceeding was a live one, yet to be tried, the order was held not to be final.
+Different tests have been applied, however, to orders made in proceeding independent of the original or the main proceeding.
+" In our judgment an order passed by the High Court in appeal which does not finally dispose of a suit or proceeding and leave the rights and obligations of the parties for determination in the suit or proceeding from which appeal has arisen, is not final within (1) (2) E[1958] S.C.R. 1007.
+705 he meaning of article 133(1)(a) and (b).
+The order refusing to grant an interim injunction did not determine the rights and obligations of the parties in relation to the matter in dispute in the suit.
+We are unable to hold that, because the plaintiff 's suit as a result of the order of the High Court may become infructuous as framed and the plaintiffs may have to seek amendment of the plaint to get effective relief, an order which is essentially an interlocutory order may be deemed final for the purposes of article 133 (1) of the Constitution.
+In our judgment, Mohanlal Maganlal ThakKar 's case(1) makes no departure from the earlier judgments of the Judicial Committee, the Federal Court and this Court.
+The plaintiffs will pay the costs of the petitioners of the application for revocation of the certificate.
+G.C. Certificate revoked.

266.txt

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+o. 196 of 1954.
+Under article 32 of the Constitution of India for the enforcement of fundamental rights.
+P. R. Das and K. P. Khaitan, (B. Sen, A. K. Mukherjea and B. P. Maheswari, with them) for the petitioner.
+C. K. Daphtary, Solicitor General for lndia, (Porus A. Mehta and P. G. Gokhale, with ', him) for the respondents.
+May 28.
+The Judgment of the Court was delivered by I MEHR CHAND MAHAJAN C.J.
+The principal question canvassed in this case is whether certain sections of the Taxation on Income (Investigation Commission) Act, 1947, i.e., Act XXX of 1947, have become void from the date of the commencement of the Constitution of India by reason of article 14 of the ' Constitution.
+The petitioner, Suraj Mall Mohta & Co. Ltd., is a company registered under the Indian Companies Act.
+Suraj Mall Mohta is also the managing director of another company Messrs. Jute and Gunny Brokers Ltd. A reference had been made by the Central Government under the provisions of section 5(1) of the Act before 58 450 1st September, 1948, of the case of Messrs. Jute and Gunny Brokers Ltd. to the Investigation Commission appointed under Act XXX of 1947.
+During the investigation of that case which was numbered 831/30 in the records of the Commission, and during the investigation of some other cases similarly referred to the Commission, it was said to have been discovered that the petitioner company had made secret profits which it had not disclosed and had thus evaded taxa tion.
+On the 28th August, 1953, a report to this effect was made by the Commission to the Central Government under the provisions of section 5(4) of the Act requesting that the case of the petitioner along with the cases of Suraj Mall Mohta and other members of his family may be referred to the Commission for investigation.
+On the 9th September, 1953, the Central Government referred these cases to the Investigation Commission under the provisions of section 5(4) of the Act and these were numbered 831/64 69 on the records of the Commission.
+On the 15th of September, 1953, the Commission notified the petitioners that their cases had been referred for investigation and they were called upon to furnish certain material, as detailed in Annexure "B" of the petition, to the Commission.
+On the 12th April, 1954, the present petition under article 32 of the Constitution was filed for the issue of appropriate writs restraining the Commission from taking any action against the petitioner under the provisions of Act XXX of 1947, on the ground that the provisions of sections 5(1), 5(4),6,7 and 8 of Act XXX of 1947, had become void, being discriminatory in character after the coming into force of the Constitution of India.
+In order to appreciate the respective contentions raised and canvassed before us on behalf of the petitioner company and the State, it is necessary to set out some of the relevant provisions of the Act.
+The object of the Act as stated in its Preamble was to ascertain whether the actual incidence of taxation on income in recent years had been in accordance with 451 provisions of law and whether the procedure for assessment and recovery of tax, was adequate to prevent evasion thereof.
+Section 3 authorizes the Central Government to constitute a Commission, to be called the Income tax Investigation Commission, it,% duty, being (a) to investigate and report to the Central Government on all matters relating to taxation on income, with particular reference to the extent to which the existing law relating to, and procedure for, the assessment and collection of such taxation is adequate to prevent the evasion thereof; (b) to investigate in accordance with the provisions of this Act any case or points in a case referred to it under section 5.
+The composition of the Commission is set out in section 4.
+Section 5 of the Act reads as follows 5(1) The Central Government may at any time before the first day of September, 1948, refer to the Commission for investigation and report any case or points in a case in which the Central Government has prima facie reasons for believing that a person has to a substantial extent evaded payment of taxation on income, together with such material as may be available in support of such belief, and may at any time before the 1st day of September, 1948, apply to the Commission for the withdrawal of any case or points in a case thus referred. . (2). . . . . . . (3)No reference made by the Central Government under sub section, (1), at any time before the first day of September, 1948, shall be called in question, nor shall the sufficiency of the material on which such a reference has been made be investigated in any manner by any Court.
+(4)If in the course of investigation into any case or points in a case referred to it under sub section (1), the Commission has reason to believe (a) that some person other than the person whose case is being investigated has evaded payment of taxation on income, or (b)that some points other than those referred ' to it by the Central Government in respect of any case 452 also require investigation, it may make a report to the Central Government stating its reasons for such belief and, on receipt of such report, the Central Government shall, notwithstanding anything contained in subsection (1), forthwith refer to the Commission for investigation the case of such other person or such additional points as may be indicated in that report.
+" The powers possessed by the Commission while conducting an investigation are provided for in section 6 which is in these terms: "6(1) The Commission shall have power to require, any person or banking or other company to prepare and furnish on or before a specified date written statements of accounts and affairs verified in such manner as may be prescribed by the Commission and, if so required by the Commission, also duly verified by a qualified auditor, giving information on such points or matters as in the opinion of the Commission may, directly or indirectly, be useful for, or relevant to, any case referred to it, and any person or banking or other company so required shall be bound, notwithstanding any law to the contrary, to comply with such requirement.
+(2)The Commission shall also have power to administer oaths, and shall have all the powers of a civil court under the Code of Civil Procedure, 1908, for the purposes of taking evidence on oath, enforcing the attendance of witnesses and of persons whose cases are being investigated, compelling the production of documents and issuing commissions for the examination of witnesses.
+(3)If in the course of any investigation it 'appears to the Commission to be necessary to examine any accounts or documents or to interrogate any person or obtain any statements from any person, the Commission may authorize any income tax authority not below the rank of Income tax Officer in that behalf. (4)The authorized official shall subject to the direction of the Commission have the same powers as the Commission under sub sections (1) and (2), and 453 any person having charge or custody of accounts or documents required to be examined shall not withstanding anything in any law to the contrary be bound to produce them (5)If any person whose case or the points in whose case is or are being investigated by the Commission refuses or fails to attend in person in compliance with a notice in that behalf duly served upon him or to give any evidence or to answer questions or to produce documents or to prepare and furnish statements when called upon to do so, the Commission may, if satisfied that the refusal or failure was wailful, close the investigation of the case and proceed to draw up its report on the case or on the points to the best of its judgment and may in its discretion also direct that such sum as it may specify in the direction shall be recovered from the person by way of penalty for the refusal or failure, without prejudice to any penalty under the Indian Income tax Act, 1922 (6). . . . . . . . . (7)Where in the opinion of the Commission any person or banking or other company is likely to be in possession of any information or document which may, directly or indirectly be useful for, or relevant to, any case referred to it or any case likely to be reported by the Commission to the Central Government under the provisions of sub section (4) of section 5, the Commission and subject to the direction of the Commission any authorized official, may make enquiries in such manner as it or he may deem fit and obtain from such person or banking or other company statements on oath or ' otherwise on such points or matters as may be specified; and for the purpose of any such enquiry, the Commission and the authorized ' official shall have all the powers conferred on them by sub sections (1), (2), (2A), (3) and (4).
+(8) All materials gathered by the Commission or the authorised official and materials accompanying the reference under sub section (1) of section 6 may be brought on record at such stage as.
+the Commission may think fit.
+" 454 The procedure to be followed by the Commission is contained in section 7 which provides that subject to the provisions of this Act the Commission shall have power to regulate its own procedure and that the powers of the Commission under sub sections (1), (2), (3), (7) and (8) of section 6 and sub sections (2), (4) and (6) of this section, i.e. section 7 may be exercised by any member thereof authorised by the Commission in this behalf.
+Sub section (2) of section 7 provides as follows " 7(2) In making an investigation under clause (b) of section 3, the Commission shall act in accordance with the principles of natural justice, shall follow as far as practicable the principles of the , and shall give the person whose case is being investigated, a reasonable opportunity of rebutting any evidence adduced against him; and the power of the Commission to compel production of documents shall not be subject to the limitation imposed by section 130 of the , and the Commission shall be deemed to be a Court and its proceedings legal proceedings for the purposes of sections 5 and 6 of the .
+" Sub section (3) of section 7 is in these terms: "7(3) Any person whose case is being investigated by the Commission may be represented by a pleader, a registered accountant or an employee duly authorised to act on his behalf, provided that no person shall be entitled to be present or to be represented in the course of an enquiry under subsections (3) and (7) of section 6." The result of these provisions is that when the Commission is collecting the materials from different sources against the assessee he is not entitled to be present at those stages and take part in the enquiry, but after the material is ready and is placed on the record then he can be present and has to be given a reasonable opportunity of rebutting any evidence that may have been collected against him.
+Sub section (4) of section 7 which came in for considerable criticism provides as follows: 455 "7(4) No person shall be entitled to inspect, call for, or obtain copies of, any documents, statement or papers or materials furnished to, obtained by or produced before, the, Commission or any authorized official in any proceedings under this Act; but the, Commission and after the Commission has ceased to exist such authority as the Central Government may in this behalf appoint, may, in its discretion, allow such inspection and furnish such copies to any person .
+Provided that, for the purpose of enabling the person whose case or points in whose case is or are being investigated to rebut any evidence brought on the record against him, he shall, on application made in this behalf and on payment of such fees as may be prescribed by rules made under this Act, be furnished with certified copies of documents, statements, papers and materials brought on the record by the Commission.
+" Sub section (5) of section 7 is in these terms "7(5) Save in cases in which the Commission may exercise its powers under section 195 and Chapter XXXV of the Code of Criminal Procedure, 1898, (a)no suit, prosecution or other legal proceedings shall be instituted against any person in any civil or criminal Court for any evidence given or produced by him in any proceedings before the Commission, and , (b)no evidence so given or produced shall be admissible in evidence against such person in any suit, prosecution or other proceeding before such Court, except with the previous sanction of the Central Government.
+" The last section that came in for objection is section 8 which is in these terms: "8(1) Save as otherwise provided in this Act, the materials brought on record shall be considered by all the three members of the Commission sitting together and the report of the Commission shall be in accordance With the opinion of the majority.
+(2)After considering the report, the Central Government shall by order in writing direct that such 456 proceedings as it thinks fit under the Indian Income tax Act, 1922, the Excess Profits Tax Act, 1940, or any other law, shall be taken against the person to whose case the report relates in respect of the income of any period commencing after the 31st day of December , 1938; and upon such a direction being given, such proceedings may be taken and completed under the appropriate law notwithstanding the restrictions contained in section 34 of the Indian Income tax Act, 1922, or section 15 of the Excess Profits, Tax Act, 1940, or any other law and notwithstanding any lapse of time or any decision to a different effect given in the case by any Income tax authority or Income tax Appellate Tribunal.
+(3) . (4) In all assessment or reassessment proceedings taken in pursuance of a direction under sub section (2), the findings recorded by the Commission on the case or on the points referred to it shall, subject to the provisions of sub sections (5) and (6), be final; but no proceedings taken in pursuance of such direction shall be a bar to the initiation of proceedings under section 34 of the Indian Income tax Act,, 1922.
+(5) In respect of any order made in the course of proceedings taken in pursuance of a direction issued under sub section (2) the provisions of sections 30, 31, 33 and 33 A of the Indian Income tax Act, 1922, and the corresponding provisions of the Excess Profits Tax Act 1940, shall not apply so far as matters declared final, by sub section (4) are concerned; but the person concerned may, within 60 days of the date upon which he is served with a copy of such order, by application in the prescribed form accompanied by a fee of Rs. 100 require the appropriate Commissioner of Income tax to refer to the High Court any question of law arising out of such order, and thereupon the provisions of sections 66 and 66 A of the Indian Income tax Act, 1922, shall as far as may be apply, with the modifica tion that the reference shall be heard by a Bench of not less than three Judges of the High Court.
+(6) 457 (7) Notwithstanding anything to the contrary contained in this Act or in any other law for the time being in force, any evidence in the case admitted before the Commission or an authorized official shall be admissible in evidence in any proceedings directed to be taken under sub section (2).
+" It was not and could not be denied that the powers vested in the Commission and the procedure prescribed by the impugned Act is more comprehensive and drastic than those contained in the Indian Income tax Act.
+At the time when the impugned statute was passed there could possibly be taken no exception to its contents on the ground of constitutionality of it 's provisions, and the powers conferred on the Commission and the procedure it was authorized to follow were well within the ambit of the Legislative power of the Central Legislature.
+The impugned statute admittedly was good law till the coming into force of the Constitution.
+When India became a sovereign democratic Republic on 26th January, 1950, the validity of all laws had to be tested on the touchstone of the new constitution and all laws made before the coming into force of the Constitution have to stand the test for their validity on the provisions of Part III of the Constitution.
+The points that require consideration in the case are whether the provisions of section 5(1), sections 5(4), 6, 7 and 8 or any parts thereof contravene the guarantee of equal protection of the laws and of the equality before the law, or whether the impugned provisions of the Act are based on a valid classification which is rational in view of the objects of the Act.
+A further point is whether section 6(5)of the Act offends against article 20 (3) of the Constitution.
+Mr. P. R. Das for the petitioner attacked the provisions of section 5(1) of the Act on a two fold ground: (1) That the section was not based on any valid classification; the word "substantial" being vague and uncertain and having no fixed meaning, could furnish no basis for any classification at all; (2) That the Central Government was entitled by the, provisions of the section to discriminate between one person and another in the same class and it was authorized to pick and 59 458 choose the cases of persons who fell within the group of those who had substantially evaded taxation.
+It could, if it chose, send the case of one person to the Commission and show favoritism to another person ,,by not sending his case to the Commission though both of these persons be within the group of those who have evaded the payment of tax to a substantial extent.
+As regards sub section (4) of section 5, the learned counsel contended that this section had no independent existence and was bound to fall with subsection (1) Of section 5, if his contention regarding the invalidity of that section prevailed.
+In the alternative, he I contended that assuming that sub section (1) was valid even then sub section (4) had to be declared void because it gave arbitrary power to the Commission to pick and choose and secondly because the clause was highly discriminatory in character inasmuch as an evasion, whether substantial or insubstantial, came within its ambit as well as within the ambit of section 34 of the Indian Income tax Act.
+The learned Solicitor General combated all these arguments and contended that the Act was based on a broad and rational classification, that it only dealt with a group of persons who had evaded income tax from the, beginning of the war, 1st January, 1939, to the period ending with 1st September, 1948, as a consequence of war controls resulting in black marketing activities and huge profits.
+In other words, it was said that the Act only dealt with that group of persons who came within the class of war profiteers.
+This was a class by itself and needed special treatment and there fore the law did not offend against the equal protection of the laws clause of the Constitution.
+It was suggest.
+ed that persons coming under sub section (4) of section 5 also belonged to the same class and therefore on the same grounds that section also could not be declared void.
+It was further.
+said that there was no substantial difference in the procedure prescribed under section 34 of the Indian Income tax Act and the impugned Act and that in any case the procedure prescribed by the Act was a good substitute for that prescribed by the Indian Income tax Act.
+459 In our judgment, it is not necessary in this case to deal with all the contentions raised by Mr. P. R. Das and combated by the learned Solicitor General.
+It will be sufficient, for the decision of this case to examine the respective contentions raised about the validity of sub section (4) of section 5 of the Act because the case of the petitioner was referred to the Commission under the provisions of this section and was not referred to the Commission by the Central Government under the provisions of section 5(1) and that being so, an enquiry into the validity of that section is really outside the scope of the present case.
+On the assumption therefore that sectio n 5(1) of the Act is based on a valid classification and deals with a group of persons who came within the class of war profiteers which required special treatment and that the classification is rational and that reasonable grounds existed for making distinction between those who fell within that class and others who did not come within it, but without in any way deciding or even expressing any opinion on that question, we proceed to examine the question whether sub section (4) of section 5 under which proceedings had been initiated against the petitioner offends against the guarantee of equal protection of the laws given in article 14 of the Constitution.
+The first question that requires consideration is whether sub section (4) of section 5 deals with the same class of persons as are said to have been grouped together in subsection (1) of section 5 as persons who to a substantial extent evaded payment of taxation on income: in other words, does sub section (4) of section 5 confer an the Commission the power merely to add to the number of persons included in section 5(1) by, the Central Government or does it confer larger power on the Commission.
+On the phraseology employed in the sub section it is difficult to read therein the limitations contained in sub section (1) of section 5 as contended for by the learned Solicitor General.
+Sub section (4) which has been set out above in clear and unambiguous terms provided that where the Commission "has reason to believe that some person ther than the person whose case is being investigated has evaded payment of taxation on income. . it may 460 make a report to the Central Government.
+" It does,not repeat the phraseology used in section 5(1) that some person other than the person whose case is being investigated "have to a substantial extent evaded payment of taxation on income.
+" On no principle of construction of statutes can the words to a "substantial extent" be read in sub clause (a) of section 5(4).
+On a plain reading of the section it is clear that the subsection is not limited only to persons who made extraordinary profits and to a substantial extent evaded payment of taxation on income, but applies to all persons who may have evaded payment of taxation on income, irrespective of whether the evaded profits are substantial or insubstantial.
+In other respects also the phraseology of the section is different from that employed in sub section (1) of section 5.
+Sub section (1) of section 5 provided that where the Central Government "has prima facie reasons for believing that a person has to a substantial extent evaded payment of taxation on income", while clause (a) of section 5(4).
+says that if the Commission "has reason to believe that some person other that the preson whose case is being investigated has evaded payment of taxation on income".
+The prima facie belief of the Central Government is substituted by the expression "The Commission has reason to believe".
+The scope of the section is thus different from the scope of section 5(1) of the Act, both in its extent and range.
+, It is not necessarily limited to profits made within any particular period and brings within its range all persons, whether traders, businessmen, professional people, whoever they may be, who may have at any time evaded payment of taxation on income for whatever cause.
+That being the true scope or construction of subsection (4), it obviously deals with the same class of persons who fall within the ambit of section 34 of the Indian Income tax Act and are dealt with in subsection (1) of that section and whose income can be caught by proceeding under that section.
+Assessees who have failed to disclose fully and truly all material facts necessary for the assessment under section 34 can be equated with persons who are discovered in the 461 course of the investigation conducted under section 5(1) to have evaded payment of income tax on their incomes.
+The result is that some of these persons can, ' be dealt with under the provisions of Act XXX of 1947, at the choice of the Commission, though they could also be proceeded with under the provisions of section 34 of the Indian Income tax Act.
+It is not possible to hold that all such persons who evade payment of income tax and do not truly disclose all particulars or material facts necessary for their assessment and against whom a report is made under sub section (4) of section 5 of the impugned Act by themselves form a class distinct from those who evade payment of income tax and come within the ambit of section 34 of the Indian Income tax Act.
+It is well settled that in its application to legal.
+proceedings article 14 assures to everyone the same rules of evidence and modes of procedure; in other words, the same rule must exist for all in similar circumstances.
+It is also well settled that this principle does not mean that every law must have universal application for all persons who are not by nature, attainment or circumstance, in the same position.
+The State can by classification determine who should be regarded as a class for purposes of legislation and in relation to a law enacted on a particular subject, but the classification permissible must be based on some real and substantial distinction bearing a just and reasonable relation ' to the objects sought to be attained and cannot be made arbitrarily and without any substantial basis.
+Classification means segregation in classes which have a systematic relation, usually found in common proper ties and characteristics.
+There is nothing uncommon either in properties or in characteristics between persons who are discovered as evaders of income tax during an investigation conducted under section 5(1) and those who are discovered by the Income tax Officer to have evaded payment of income tax.
+Both these kinds of persons have common properties and have common characteristics and therefore require equal treatment.
+We thus hold that both section 34 of the Indian Income tax Act and sub section (4) of 462 section 5 of the impugned Act deal with all persons who have similar characteristics and similar properties, the common characteristics being that they are persons who have not truly disclosed their income and have evaded payment of taxation on income.
+The next question that requires determination is whether the procedure prescribed by Act XXX of 1947 for discovering the concealed profits of those who have evaded payment of taxation on their income is substantially different and prejudicial to the assessees than the procedure prescribed in the Indian Income tax Act by section 34.
+The learned Solicitor General contended that the procedure prescribed by the impugned Act was a fair and good substitute for the procedure prescribed by the Indian Income tax Act and that there was really no substantial difference between the two procedures.
+He urged that justice could be fully done to those persons by following the new procedure and as a matter of fact, it would be more truly done by following the procedure under the impugned Act than following the procedure under the Indian Income tax Act.
+This argument, in our opinion, begs the question to be decided in all such cases.
+It is clear that if persons dealt with by the impugned Act are deprived of the substantial and valuable privileges which they would otherwise have if they were dealt with under the Indian Income tax Act, in that situation it is no defence to say that the discriminatory procedure also advances the course of justice.
+The matter has to be judged from the point of view of the ordinary reasonable man and not from the point of view of the Government.
+The ordinary reasonable man would say, when the stakes are heavy and serious charge of evasion of income tax are made against, him, why one person similarly placed should have the advantage substantially of the procedure prescribed by the Indian Income tax Act, while another person similarly situated be deprived of it.
+It is from this aspect that the application of article 14 to the facts of this case has to be considered.
+The next question for consideration is whether the procedure prescribed by the impugned Act in regard to 463 persons similarly situate with those who are proceeded with under section 34, is substantially different than under the Act, and operates to the prejudice of those persons.
+So far as we can see these assessees have been given discriminatory treatment even from those whose cases are referred to under section 5(1) of the Act to the Commission inasmuch as in the case of persons whose cases are referred to under section 5(1) of the Act it is the prima facie, belief of the Government that enables the reference to be made to the Commission and the Commission has after investigation to form an opinion; while in the case of persons coming within the ambit of sub section (4) of section 5 the Commission itself finds and gathers reason to believe that, these persons have evaded income tax and on its report the Government is bound to refer their cases to the same Commission who has.
+already arrived at the prima facie conclusion that they have evaded payment of income tax.
+The investigator and the judge in this situation are rolled into one.
+That is not so in cases coming under section 5(1).
+Apart from this circumstance, there are substantial differences between the two procedures, inter alia, in the following matters : 1.
+Under the provisions of section 8 of the impugned Act, the findings of fact given by the Commission as to factum and extent of the evasion are final and conclusive and thus the persons against whom proceedings are taken under section 5(4) are deprived of the rights of appeal, second appeal and revision conferred by sections 31, 32 and 33 of the Indian Income tax Act on assessees whose cases are dealt with under the procedure of section 34 of the Indian.
+Income tax Act.
+A person who has evaded payment of income tax and is proceeded with under section 34 and is held to have escaped income tax has a right of appeal to the Appellate Assistant Commissioner of Income tax and can challenge all the findings of fact given by the Income tax Officer.
+If he does not get relief from the Appellate Assistant Commissioner, he is entitled to go before the Appellate Tribunal under section 33 and can challenge all the findings of fact given by the Income tax Officer.
+On the other hand, a person dealt with under section 5(4) of the impugned Act has no such right.
+The learned Solicitor General contended that the constitution 464 of the Commission was such that it was a good substitute for the rights of appeal, second appeal and revision conferred by the Income tax Act inasmuch as the Commission is comprised of a High Court Judge and two other responsible persons and these sitting together were as good a tribunal as the totality of persons comprising the Income tax Officer, Appellate Assistant Commissioner and the Appellate Tribunal.
+In our opinion, the constitution of the Commission by itself cannot be held to be a sufficient safeguard and a good substitute for the rights of appeal and second appeal and revision given by the Indian Income tax Act and there can thus be no doubt that the procedure prescribed by the impugned Act deprives a person who is dealt with under that Act of these valuable rights of appeal, second appeal and revision to challenge questions of fact decided by the Judge of first instance.
+There is thus a material and substantial difference between the two procedures, one prescribed by the impugned Act and the other prescribed by the Indian Income tax Act.
+2.When an assessment on escaped or evaded income is made under the provisions of section 34 of the Indian Income tax Act, all the provisions for arriving *at the assessment provided under section 23(3) come into operation and the assessment has to be made on all relevant materials and on evidence and the assessee ordinarily has the fullest right to inspect the record and all documents and materials that are to be used against him.
+Under the provisions of section 37 of the Indian Income tax Act the proceedings before the Income tax Officer are judicial proceedings and all the incidents of such judicial proceedings have to be observed before the result is arrived at.
+In other words, the assessee would have a right to inspect the record and all relevant documents before he is called upon to lead evidence in rebuttal.
+This right has not been taken away by any express provisions of the Income tax Act but the impugned Act contains a mandate in sub section (4) of section 7 to the effect that "no person shall 'be entitled to inspect, call for, or obtain copies of, any documents, statement or papers or materials furnished to, obtained by or produced before the Commission or any authorized official in.
+any proceedings under this 465 Act.
+" There is a proviso to sub section (4) which says that for the purpose of enabling the person whose case or points in whose case is or are being investigated to rebut any evidence brought on the record against him, he shall, on application made in this behalf and on payment of such fees as may be prescribed by rules, be furnished with certified copies of documents, statements, papers and materials brought on the record by the Commission.
+This little, mercy shown to the person whose case is being investigated by the Commission is no substitute for the fullestright of inspection which under ordinary law and the Code of Civil Procedure and in a judicial proceeding a person would have in order to meet the case made against him.
+He is entitled only to get copies of that portion of the materials which is brought on the record and which is going to be used against him and it is clear that portions of the material which are in his favour and which have not been brought on the record may not be available to him at all.
+He is not even entitled to see all the books of account which may have been impounded under the Act and taken possession of by the Commission.
+It may well happen that there are entries in those books which contain the rebuttal evidence, but the assessee is not entitled to have their copies.
+The assessee is not even entitled to see his own books which are in the possession of the Commission and take copies of those entries which are favourable to him and which would completely demolish the case made against the assessee by the Commission.
+The procedure thus prescribed in this matter by the impugned Act is substantially prejudicial to the assessee than the procedure prescribed under the Indian Income tax Act.
+It was not disputed by the learned Solicitor General that the procedure prescribed by the impugned Act in sections 6 and 7 was more drastic than the procedure prescribed in sections 37 and 38 of the Indian Income tax Act.
+Again, so far as the procedure for reference under subsection (4) of section, 5 is concerned, it is also to a certain extent prejudicial to the assessee.
+There is no doubt that there is in this matter in the first stages some similarity in the procedure to be followed for catching evaded income both under section 34 of the Indian Income tax Act and under the provisions of 69 466 subsection (4) of section 5 of the impugned Act; but the overall picture is that though under the Indian income tax Act the same officer who first arrives at a tentative conclusion hears and decides the case, his decision is not final but is subject to appeal, while under the provisions of sub section (4) of section 5 the decision of the Commission tentatively arrived at in the absence of the assessee becomes final when taken in his presence, and that makes all the difference between the two procedures.
+If there was a provision for reviewing the conclusions of the Investigation Commission when acting both as investigators and judges, there might not have been such substantial discrimination in the two procedures as would bring the case within article 14; but as pointed out above, there is no provision of that kind in the impugned Act.
+It may also be pointed out that under the provisions of section 34 investigation into escaped income or evaded income is limited to a maximum period of eight years, while under the provisions of sub section (4) of, section 5 it is not limited to any period and this certainly operates to the detriment of those dealt with under sub section (4) of section 5 of the impugned Act, and those dealt with under section 34 of the Indian Income tax Act.
+For the reasons given above we are of the opinion that sub section (4) of section 5 and the procedure prescribed by the impugned Act in so far as affects the persons proceeded against under that sub section being a piece of discriminatory legislation offends against the provisions of article 14 of the Constitution and is thus void and unenforceable.
+In reaching this decision we refrain from expressing any opinion, as above pointed out, on the validity of section 5(1) of the Act or on the question whether section 6(5) of the impugned Act offends against the provisions of article 20 sub clause (3) of the Constitution.
+We accordingly direct that an appropriate writ be issued against the Investigation Commission prohibiting it from taking any proceedings under the provisions of the impugned Act against the petitioner.
+The petitioner will have his costs of these proceedings.

2727.txt

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+Appeal No. 1671 of 1966.
+Appeal from the judgment and decree dated March 31, 1965 of the Madras High Court in Appeal No. 276 of 1962.
+M.K. Ramamurthi, Vineet Kumar, L Ramamurthy and Shyamala Pappu, for the appellant.
+A.V. Rangam, for the respondents.
+425 The Judgment of the Court was delivered by Ramaswami, J.
+This appeal is brought by certificate from the judgment of the Madras High Court dated March 31, 1965 in A.S. No. 276 of 1962.
+The appellant 'brought the suit in O.S. No. 3 of 1961 in the Court of Subordinate Judge, Nagapattinam for setting aside the order dated May 10, 1960 of respondent No. 1 the Commissioner of Hindu Religious and Charitable Endowments, Madras who had affirmed earlier the order of the second respondent, the Deputy Commissioner, holding that the trusteeship of the Kumaran Koil in Manjakollai village was not hereditary.
+The appellant was elected as a trustee by the Sengunatha Mudaliars of Manjakollai village at a meeting held on June 27, 1957.
+According to the appellant the temple was rounded two hundred years ago by the members of his community and since then the management of the temple and is affairs was always vested in the community of the Sengunatha Mudaliars and no person other than the elected trustee had at any time the right of management and control of the temple.
+The appellant said that the temple was declared as an "exempted" temple under the provisions of Madras Act 1 of 1925.
+The case of the appellant was that the trusteeship of the temple was "hereditary".
+The respondents, however, took a different view and proceeded on the basis that trusteeship of the Kumaran Koil was not hereditary.
+The Subordinate Judge held that the appellant was a hereditary trustee and the suit was not barred by limitation.
+The respondents took the matter in appeal to the Madras High Court which by its judgment dated March 31, 1965 allowed the appeal and set aside the judgment of the Subordinate Judge Nagapattinam.
+Section 6, sub section
+(9) of Madras Act 19 of 1951 states: "In this Act, unless there is anything repugnant in the subject or context (9) 'hereditary trustee ' means the trustee of a religious institution succession to whose office devolves by hereditary right or is regulated by usage or is specifically provided for by the founder, so long as such scheme of succession is in force;" This Act has been substituted by Madras Act 22 of 1959 but the definition of the trustee is identical in both the Acts.
+The question to be considered in this appeal is whether the appellant is a hereditary trustee Within the meaning of the section.
+The definition includes three types of cases: (1) succession to the office of trusteeship devolving by hereditary right; (2) succession 426 to such office being regulated by usage; and (3) succession being specifically provided for by the founder on condition that the scheme of such succession is still in force.
+It is not the case of the appellant that the trustees of the temple of the Kumaran Koil are hereditary trustees because their office ' devolves by hereditary right or because succession to that office is specifically provided for by the founder.
+The contention on behalf of the appellant is that the succession is "regulated by usage".
+It was said that according to the usage of the temple the trustees were elected for a period of one year each at a meeting of the members of the Sangunatha Mudaliar Community and so the appellant must be held to be a trustee within the meaning of section 6(9) of Act 19 of 1951.
+In our opinion, there is no warrant for this argument.
+The phrase "regulated by usage" in section 6(9) of the Act must be construed along with the phrase "succession to this office" and when so construed that part of the definition would only apply where the ordinary rules of succession under the Hindu law are modified by usage and succession has to be determined in accordance with the modified rules.
+The word "succession" in relation to property and rights and interests in property generally implies "passing of an interest from one person to another" (vide in Re: Hindu Women 's Right to Property Act, 1941 (1).
+It is now well established that the office of a hereditary trustee is in the nature of property.
+This is so whether the trustee has a beneficial interest of some sort or not (see Ganesh Chunder Dhur vs Lal Behary(2) and Bhabatarini vs Ashalata(3).
+Ordinarily a shebaitship or the office of dharmakartha is vested in the heirs of the founder unless the ,founder has laid down a special scheme of succession or except when usage or custom to the contrary is proved to exist.
+Mukherjea J., in Angurbala Mullick vs Debabrata Mullick(4) delivering the judgment of this Court observed: "Unless therefore, the founder has disposed of the shebaitship in any particular manner and this right of disposition is inherent in the founder or except when usage or custom of a different nature is proved to exist, shebaitship like any other species of heritable property follows the line of inheritance from the founder." In the case of mutts, whose heads are often celibates and sometimes sanyasins, special rules of succession obtain by custom and usage.
+In Sital Das vs Sant Ram(5) the law was taken as wellsettled that succession to mahantship of a mutt or religious institution is regulated by custom or usage of the particular institution except where the rule of succession is laid down by the founder himself who created the endowment.
+In that case the custom in (1) (2) 63 I. A. 448.
+(3) 70 I.A. 57.
+(4) ; ,5, (5) A.LR.
+1954 S.C. 606.
+427 matters of succession to mahantship was that the assembly of bairagis and worshippets of the temple appointed the successor; but the appointment had to be made from the disciples of the deceased mahant if he left any, and failing disciples, any one of his spiritual kindred.
+Such a succession was described as not hereditary in the sense that on the death of an existing mahant, his chela does not succeed to the office as a matter of course, because the successor acquires a right only 'by appointment and the authority to appoint is vested in the assembly of the bairagis and the worshippets.
+In Sri Mahant Paramanda Das Goswami vs Radhakrishna Das(1) the Madras High Court took the view that where succession to the mahantship is by nomination by the holder in office, it was not a hereditary succession.
+In that case Venkatasubba Rao, J. said: "If the successor owes his title to nomination or appointment, that is, his succession depends on the volition of the last incumbent and does not rest upon independent title, I am inclined to the view that the office cannot be said to be hereditary." Krishnan J., stated as follows: "Where succession is by nomination by the holder in office of his successor it seems to be impossible to contend that it is a hereditary succession.
+Hereditary succession is succession by the heir to the deceased under the law, the office must be transmitted to the successor according to some definite rules of descent which by their own force designate the person to succeed.
+There need be no blood relationship between the deceased and his successor but the right of the latter should not depend upon the choice of any individual.
+" It is true that the artificial definition of hereditary trustee in section 6(9) of the Act would include even such cases.
+But the election to the office of trustee in the present case is for a fixed period of one year and not for life.
+It is, therefore, difficult to hold that the office of the appellant is hereditary within the meaning of section 6(9) of the Act.
+It is not possible to say that there is a succession of As office to another when on the efflux of the period for which A was appointed, there is a vacancy and B is elected to that vacancy.
+It is quite possible that for that vacancy A himself might be reelected because a retiring trustee is eligible for reelection.
+The possibility of A being the successor A himself is not merely an anomaly, it is an impossible legal position.
+No man can succeed to his own office.
+In Black 's Law Dictionary the word 'succession ' is defined as follows: "The revolution of title to property under the law of descent and distribution.
+(1) 428 The right by which one set of men may, by succeeding another set, acquire a property in all the goods, movables, and other chattels of a corporation.
+The fact of the transmission of the rights, estate, obligations, and charges of a deceased person to his heir or heirs.
+" The view we have taken is borne out by the reasoning of the Madras High Court in State of Madras vs Ramakrishna(1).
+For these reasons we hold that this appeal fails and must be dismissed with costs.
+V.P.S. Appeal dismissed.

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+N: Criminal Appeal No. 87 of 1967.
+721 Appeal by special leave from the judgment and order dated January 24, 1967 of the High Court of Mysore in Criminal Appeal .No.
+29 of 1965.
+A. section R. Chari and R. V. Pillai, for the appellants.
+Shyamala Pappu and section P. Nayar, for the respondent.
+The Judgment of the Court was delivered by Hidayatullah, C.J.
+, These are 14 appellants who appeal against their conviction under section 395 of the Indian Penal Code and sentences of 5 years ' rigorous imprisonment and fine of Rs. 1,000/ passed on them.
+Originally 20 persons were tried and convicted for the same offence and received a like sentence.
+14 alone have appealed to this Court.
+The incident which took place on July 28, 1962 was theft by dacoity of certain cotton pieces from two carts within the limits of Lingsugar Police Station at about 11 30 p.m.
+The facts are that two traders in cloth sent their wares in carts for sale.
+The cartmen halted after the market was over on the way for food.
+Thereafter six carts left for Mudgal at about 10 p.m.
+When the carts reached a Nala called Heri Halla about three miles from Lingsugur at about 11 30 p.m., 20 persons are said to have approached the carts and pelted stones.
+It was a dark night and the assailants were not identified.
+It appears that four out of the six carts escaped, but two carts were looted.
+The police investigated the case and arrested the 20 persons who were accused in the case as being the culprits involved in this incident.
+It is not necessary to go into rest of the case or the evidence on which the case of dacoity was established, because dacoity as such is not challenged before us.
+The accused were convicted on the sole evidence of having in their possession pieces of cloth which were later identified to belong to the traders.
+Searches took place between July 30, 1962 and August 17, 1962.
+In these searches cloth which was undoubtedly stolen at the time of the dacoity was found in their houses.
+The High Court, and the Court below drew from this the conclusion that the appellants were themselves the dacoits, and convicted them accordingly under section 395 of the Indian Penal Code and sentenced them to ' 5 years ' rigorous imprisonment and fine of Rs. 100/ .
+In this appeal, the only contention raised by Mr. A. section R. Chari is that the presumption that they were dacoits ought not to have been drawn since the circumstances do not admit the drawing of such a presumption in the case, According to Mr. Chari, the presumption to be drawn ought to have been one under section 41 1 722 of Indian Penal Code or at the most tinder section 412 of the Indian Penal Code but not of complicity in the crime of dacoity.
+He contends that the circumstances under which the one presumption or the other may be drawn under section 114 of the have not been stated by law and therefore it is necessary always to start with the lesser presumption and draw the higher presumption only when there is some other evidence to show the complicity of the persons in the crime itself.
+According to him there is no other evidence in the case which points, to the complicity of the 14 appellants in the crime of dacoity and therefore as they cannot be suspected to be dacoits themselves, the only presumption to be drawn is one of receivers of stolen property or as receivers of property which was stolen in a dacoity.
+In our opinion, the law advocated by Mr. Chari is not correct.
+If there is other evidence, to connect an accused with the crime itself, however small, the finding of the stolen property with him is a piece of evidence which connects him further with the crime.
+There is then no question of presumption.
+The evidence strengthens the other evidence already against him.
+It is only when the accused cannot be connected with the crime except by reason of possession of the fruits of crime that the presumption may be drawn.
+In what circumstances the one presumption or the other may be drawn, it is not necessary to state categorically in this case.
+It all depends upon the circumstances under which the discovery of the fruits of crime are made with a particular accused.
+It has been stated on more than one occasion that if the gap of time is, too large, the presumption that the accused was concerned with the crime itself gets weakened.
+The presumption is stronger when the discovery of the fruits of crime is made immediately after the crime is.
+committed.
+The reason is obvious.
+Disposal of the fruits of crime requires the finding of a person ready to receive them and the shortness of time, the nature of the property which is disposed of, that is to say, its quantity and its character determine whether the person who had the goods in his possession received them from another or was himself the thief or the dacoit.
+In some cases there may be other elements which may point to the way as to how the presumption may be drawn.
+They need not be stated here for they differ from case to case.(In the present case, the goods stolen were a large quantity of cloth taken for sale to the market.
+These goods were not sold and were being taken back to the dealers by the cartmen.) A large number of persons said to be 20 in number pelted stones at the cartmen and looted the, property.
+Immediately afterwards a number of searches were made and the goods were found with various persons who were prosecuted as offenders and they have been presumed to be involved in the dacoity itself.
+It may be 723 noticed that from each person a large number of goods of the same type such as 20 choli pieces or ten pieces of cloth were found.
+(It is, impossible to think that within the short time available, these goods could have been easily disposed of to receivers of stolen property or could be placed in the custody of friends till such time as the original offenders could take them away.) The time gap in some cases is as short as two days and in some others it is not more than five days.
+In two cases only the time gap is about 19 days.
+Even then we think that the time gap is too short for original offenders to have disposed of the property to these appellants Or to have left the goods in their custody till such time as the original offenders could have taken them away.
+We are, therefore, satisfied that the proper inference was drawn in this case.
+It must not be forgotton that the offence was committed at night by as many as 20 persons or more.
+The houses of 20 persons were searched and large quantities of the stolen goods were found in their houses.
+It is impossible to think that these 20 persons were merely receivers of stolen property from some other 20 persons who were the dacoits.
+It is legitimate therefore to raise the presumption in this case that the persons with whom the goods were found were the dacoits themselves.
+This presumption has been drawn and in our opinion rightly in this case The conviction was therefore correct in 'all the circumstances of the case.
+As regards the sentence, the offence no doubt was serious.
+But no injury beyond one appears to have been caused.
+Therefore we think that a sentence of three years ' rigorous imprisonment will meet the ends of justice in this case.
+The sentence is reduced to three years ' rigorous imprisonment.
+The sentence of fine will stand.
+The appeal is allowed to this extent.
+G.C. Appeal partly allowed.

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+Appeal No. 1311 of 1967.
+Appeal by special leave from the judgment and order dated January 17, 1967 of the Patna High Court in C.W.J.C. No. 952 of 1966.
+M. C. Chagla, N. D. Karkhanis, section P. Chowdhury, Bhuvanesh Kumari, for the appellant.
+section C. Manchanda, R. N. Sachthey and B. D. Sharma, for the respondent.
+The Judgment of the Court was delivered by Hegde, J.
+This is an assessee 's, appeal by special leave against the judgment of the High Court of Patna dismissing in limini its writ petition under Arts 226 and 227 of the Constitution of India.
+The assessee is having construction contracts under the Railways as well as the Government.
+It is a partnership firm.
+For the assessment year 1960 61, relevant to the accounting year 1959 60, after the assessee submitted its income tax return, it was asked by the Income tax Officer during the income tax assessment proceedings to produce before him its books of account and the other relevant papers.
+The assessee also produced before him a statement showing various creditors from whom it had borrowed on Hundis during the accounting year in question.
+In that statement it gave the lull names and address of the alleged creditors.
+After enquiry, the assessee 's total income was assessed at Rs. 69,886/ .
+On June 3, 1966, the 1st respondent (Income tax Officer Ward 'A ',, Muzaffarpur) issued to the assessee a notice under section 148 of the Indian Income tax Act, 1961.
+The material portion of that notice reads as follows "Notice under section 148 of the Income tax Act, 1961.
+Income Tax Officer, Muzaffarpur Dated, the 3 6 1966.
+TO M/s. Chugamal Rajpal, Muzaffarpur.
+Whereas (1) have reason to believe that your income chargeable the income of 1960 1961 in respect of which you are assessable to tax for the assessment year 19 19 has escaped assessment within the 444 meaning of section 147 of the Income Tax Act, 1961.
+I therefore propose to re assess the income for the said assessment year and I hereby require you to deliver to me within 30 days from the date of service of this notice a return in the prescribed form of your income The income assessable relevant to the assessment year 1960 61 of in respect of which you are assessable for the said assessment year.
+The notice is being issued after obtaining the necessary satisfaction of the Commissioner of IncomeTax, Bihar and Orissa, Patna.
+Sd/ section P. Chaliha Income Tax Officer, Ward A, Muzaffarpur.
+" The assessee challenged the validity of that notice as well as proceedings taken on the strength of that notice on various grounds.
+As we are accepting the contention of the assessee that the impugned notice is invalid inasmuch as it did not comply with the requirements of section 151(2) of the Act, we have not thought it necessary to examine the other contentions advanced on behalf of the assessee.
+In this case the notice was issued after four years but before eight years of the date of the original assessment.
+Section 151 (2) of the Act reads "No notice shall be issued under Section 148 after the expiry of four years from the end of the relevant assessment year, unless the Commissioner is satisfied on the reasons recorded by the Income tax Officer that it is a fit case for the issue of such notice." Section 148 prescribes : "(1) Before making the assessment, re assessment or re computation under Section 147, the Income tax Officer shall serve on the assesee a notice containing all or any of the requirements which may be included in a notice under sub section (2) of Section 139 and 445 the provisions of this Act shall, so far as may be, apply accordingly as if the notice were a notice issued under that sub section.
+(2) The Income tax Officer shall, before issuing any notice under this section, record his reasons for doing so.
+" Section 147 deals with income escaping assessment.
+At this stage we need not refer to that section : We shall refer to that provision at a later stage.
+Section 139(2) says : "In the case of any person who, in the incometax Officer 's opinion, assessable under this Act, whether on his own total income or, on the total income of any other person during the previous year, the Income tax Officer may, before the end of the relevant assessment year, serve a notice upon him requiring him to furnish, within thirty days from the date of service of the notice, a return of his income or the income of such other person during the previous year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed." (proviso is not necessary for our present purpose) When this appeal came up for hearing on the last occasion, as we found the affidavit filed by the Income tax Officer to 'be vague and indefinite, we directed the learned Counsel for the Department to produce before us the records of the Incometax Officer to show that the, Income tax Officer had complied with the requirements of section 148 and section 151(2) of the Act.
+When the appeal was taken up for hearing on the 18th January 1971, only the report submitted by the Income tax Officer to the Commissioner and the order of the Commissioner was produced.
+The order sheet recording the reasons of the Income tax Officer as required by section 148(2) was not produced.
+Hereinbelow we have sent out the report of the Income tax Officer as well as the order of the Commissioner: Report in Connection with the starting of proceeding" under Section 147 of the Income tax Act, 1951.
+Name of District Ward of Circle A Ward, Muzaffarpur G. I.R. No. 303 C. 1.1.
+Name and address of the assessee M/S. Chugamal Rajpal, Muzaffarpur.
+R.F. 2.Status 3.
+Assessment year for which notice under section 1 48 is proposed to be issued 1960 61.
+446 4.
+Whether it is a new case or one in which re assessment (or recomputation) has to be made Re assessment 5.
+If a case of reassessment (or recomputation) the income (or loss or depreciation allowance) originally assessed/determined.
+Rs. 73,604/ 6.
+Whether the case falls under cl.
+(a) or (b) of section 147 147(a) 7.
+Brief reasons for starting proceedings under Kindly see section 147 (indicate the items which are Sd/ section P. Chaliha.
+I.T.O. 30 4 66 believed to have escaped assessment) A Ward, Muzaffarpur.
+8.Whether the Commissioner is satisfied that Yes it is a fit case for the issue of notice under Sd/ K. Narain section 148.
+13 5 66 Commissioner of Income tax, Bihar and Orissa, Patna 9.
+Whether the Board is satisfied that it is aSecretary, Board of Revenue.fit case for the issue of notice under section 148.
+During the year the assessee hasshown to have taken loans from various parties of Calcutta.
+From D.I.s Inv.
+No. A/P/ Misc.(5)D.I./63 64/5623 dated 13 8 65, forwarded to this office under C.I.T. Bihar and Orissa, Patna 's letter No. Inv.
+(Inv.)15/ 65 66/1953 2017 dated Patna 24 9 65, it appears that these persons are name lenders and the transactions are bogus.
+Hence proper investigation regarding these loans is necessary.
+The name of some of the persons from whom money is alleged to have taken on loan on Hundis are: 1.
+Seth Bhagwan Singh Sricharan.
+Lakha Singh Lal Singh.
+Radhakissen Shyam Sunder.
+The amount of escapement involved amounts to Rs. 100,000/ .
+Sd/ section P. Chaliha, 30 4 66.
+Income tax Officer, A Ward, Muzaffarpur.
+" In his report the Income tax Officer does not set out any reason for coming to the conclusion that this is a fit case to issue notice under section 148.
+The material that he had before him for issuing notice under section 148 is not mentioned in the report.
+In his report he vaguely refers to certain communications received by him from the C.I.T., Bihar and Orissa.
+He does not mention the facts contained in those communications.
+All that he says is that from those communications "it appears that these persons (alleged creditors) are name lenders and the transactions are bogus".
+He has not even come to a prima facie conclusion 447 that the transactions to which he referred are not genuine transactions.
+He appears to have had only a vague feeling that they may be bogus transactions.
+Such a conclusion 'does not fulfil the requirements of section 151(2).
+What that provision requires is that he must give reasons for issuing a notice under section 148.
+In other words he must have some prima facie grounds before him for taking action under section 148.
+Further his report mentions : "Hence proper investigation regarding these loans is necessary In other words his conclusion is that there is a case for investigating as to the truth of the alleged transactions.
+That is not the same thing as saying that there are reasons to issue, notice under section 148.
+Before issuing a notice under section 148, the Income tax Officer must have either reasons to believe that by reason of the omission or failure on the part of these assessee to, make a return under section 139 for any assessment year to the Income tax Officer or to disclose fully and truly all material facts necessary for his assessment for that year, income chargeable to tax has escaped assessment for that year or alternatively not withstanding that there has been no omission or failure as mentioned above on the part of the assessee, the Income tax Officer has in consequence of information in his possession reason to believe that income chargeable to tax has escaped assessment for any assessment year.
+Unless the requirements of clause (a) or (b) of section 147 are satisfied, the Income tax Officer has no jurisdiction to issue a notice under section 148.
+From the report submitted by the Income tax Officer to the Commissioner, it is clear that he could not have had reasons to believe that by reason of the assessee 's omission to disclose fully and truly all material ' facts necessary for his assessment for the accounting year in question, income chargeable to tax has escaped assessment for that year; nor could it be said that he as a consequence of information in his possession, had reasons to believe that the income chargeable to tax has escaped assessment for that year.
+We are not satisfied that the Income tax Officer had any material before him which could satisfy the requirements of either cl.
+(a) or cl.
+(b) of section 147.
+Therefore he could not have issued a notice under section 148.
+Further the report submitted by him under section 151(2) does not mention any reason for coming to the conclusion that it is a fit case for the issue of a notice under section 148.
+We are also of the opinion that the Commissioner has mechanically accorded permission.
+He did not himself record that he was satisfied that this was a fit case for the issue of a notice under section 148.
+To Question No. 8 in the report which reads "Whether the, Commissioner is satisfied that it is a case for the I issue of notice under section 148", he just noted the word "yes" and affixed his signatures thereunder.
+We are of the opinion .that if only he had read the report carefully, he could never have 448 come to the conclusion on the material before him that this is a fit case to issue notice under section 148.
+The important safeguards provided in sections 147 and 151 were lightly treated by the Income tax Officer as well as by the Commissioner.
+Both of them, appear to have taken the duty imposed on them under those provisions as of little importance.
+They have substituted the form for the substance.
+In the result this appeal is allowed, the order of the High Court is set aside and the impugned notice quashed.
+The Respondent No. 2 shall pay the costs of the appellant both in this Court and in the High Court.
+G.C. Appeal allowed.

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+Appeal No. 1653 of 1967.
+Appeal from the judgment and order dated February 23, 1967 Of the Delhi High Court in C.W. No. 403 D of 1959.
+B. Sen, P. L. Juneja, R. N. Sachthey and section P. Nayer, for the appellant.
+Sardar Bahadur and Yougindra Khushalani, for the respondent.
+The Judgment of the Court was delivered by Sikri, C.J.
+The judgment, reproduced below, was drafted by the late Mr. Justice Roy and we all had subscribed to it.
+We beard the matter formally again on November 19, 1971.
+We adopt the judgment as our own.
+448 This is an appeal by the Union of India by way of special leave.
+On April 9, 1959, the Central Government directed removal from service of Capt. section K. Rao under r. 14 of the Army Rules, 1954.
+The facts leading to his removal are as follows : Rao was a commissioned officer in the Indian Army and was attached to the Army Ordnance Corps Training Centre, Secundrabad.
+It was alleged that on April 4, 1958, he committed acts of .gross misconduct.
+The allegations were as follows : "Knowing Kumari Prakash as the daughter of a brother Officer, Rao assisted her in going away from her parents protection and planning to run away with a sepoy. " "Rao, by threatening to cause harm to Kumari Prakash 's parents, intimidated her t o visit his house where he took her in his scooter to the unit lines of 51 1 1 Gurkha Rifles where he arranged her meeting with a sepoy of the unit." "He (i.e. Rao) acquiesced in the girl being met by the sepoy later at a tea shop nearby where she received a present of a sari and blouse from the sepoy in his presence." "Rao thus actively abetted in the attempt of brother officer 's daughter elope with a sepoy." "Rao then took Kumari Prakash to a hotel "Saidya Lodge ' in Hyderabad and got a room to themselves by impersonating and giving a false identity as "Mr. & Mrs. Prakash".
+An inquiry into the matter was made by Court of Inquiry.
+The Chief of the Army Staff, after going through the proceedings of the Court of Inquiry, considered that the conduct of Capt.
+Rao was most unbecoming of an officer.
+As he was of opinion that trial of the officer by a General Court Martial was inexpedient, he ordered administrative action to be taken under r. 14 of the Army Rules, 1954.
+By memorandum dated September 4, 1958, Rao was called upon to submit his explanation by way of defence regarding the allegations against him.
+The explanation of Rao was placed before the Central Government.
+The Central Government found it to be unsatisfactory, and on April 9, 1959, an order was passed removing the respondent from service.
+Rao thereupon filed a petition under article 226 of the Constitution for quashing the order of removal from service on the 449 ground, inter alia, that r. 14 of the Army Rules, 1954, was ultra vires the , and that the action taken thereunder was without any authority.
+In the petition Rao gave a somewhat different version of what had happened.
+According to him he did not assist Kumari Prakash to go away from her parents ' house.
+At the hearing of the petition the only point which was urged was the validity of r. 14 of the Army Rules, 1954.
+If this rule was intra vires the , Rao has no case.
+The Army Rules, 1954, including r. 14, were framed in exer cise of the powers conferred by section 191 of the .
+Rule 14 of the Army Rules, 1954, is as follows: "(1) When after considering the reports on an officer 's misconduct, the Central Gove rnment is satisfied or the C in C is of the opinion, that the trial of the officer by a court martial is inexpedient or impracticable but considers the further retention of the said officer in the service as undesirable, the C in C shall communicate the view of the Central Government or his views, as the case may be, to the officer together with all reports adverse to him and he shall be called upon to submit his explanation and defence.
+(2) In the event of the explanation of the officer being considered unsatisfactory by the "C in C, or when so directed by the Central Government, the case shall be submitted to the Central Government with the officer 's defence and the recommendation of the C in C as to whether the officer should be, (a) dismissed from the service; or (b) removed from the service; or (c) called upon to retire; or (d) called upon to resign.
+(3) The Central Government, after due consideration of the reports, the officer 's defence, if any, and the recommendation of the C in C, may dismiss or remove the officer with or without pension or call upon him to retire or resign, and on his refusing to do so, the officer may be retired from or gazetted out of the service on pension or gratuity, if any admissible to him." Under the aforesaid r. 14, action can be taken for misconduct against an officer whose further retention in service is not considered desirable.
+without the officer being tried by a court martial.
+450 Before removal he must, under the rule, be asked to submit his explanation and defence.
+If the explanation is found to be unsatisfactory, the Central Government has been given the power to dismiss or remove the officer.
+Rules are framed under section 191 of the .
+Sub section (1) of section 191 gives power to the Central Government to make rules for the purpose of carrying into effect the provisions of the Act.
+Sub section 2(a) provides : "Without prejudice to the generality of the power conferred by sub section (1), the rules made thereunder may provide for (a) the removal, retirement, release or discharge from the service of persons subject to this Act." Sections 18 & 19 which appear in Ch.
+IV of the dealing with "Conditions of Service" provide as follows : S.18 "Every person subject to this Act shall hold office during the pleasure of the President.
+" section 19 "Subject to the provisions of this Act and the rules and regulations made thereunder the Central Government may dismiss, or remove from the service, any person subject to this Act.
+" Offenses under the have been dealt with in sections 34 to 70 in Ch.
+VI, of which section 45 is as follows : section 45 "Any officer, junior commissioned officer or warrant officer who behaves in a manner unbecoming his position and the character expected of him shall, on conviction by court martial, if he is an officer, be liable to be cashiered or to suffer such less punishment as is in this Act mentioned; and, if he is a junior commissioned officer or a warrant officer, be liable to be dismissed or to suffer such less punishment as is in this Act mentioned," It was argued by counsel for the respondent Rao that the contained specific provisions for punishment for unbecoming conduct, viz. section 45.
+To give power to the Central Government to remove an officer without being tried and convicted by court martial was in derogation of section 45 of the .
+Rule 14, therefore, was ultra vires the .
+This argument is not correct.
+Section 19 itself suggests that there should be rules, and subject to the provisions of the Act and such rules, the Central Government may dismiss or remove from the service any person 451 subject to the .
+Section 191 (2) (a) specifically gives.
+power to make a rule providing for the removal from the service of persons subject to the Act.
+It follows that there may be a valid rule where under, subject to the other provisions of the Act, the Central Government may remove a person from the service.
+Rule 14 is such a rule : it is, therefore, not ultra vires.
+It was argued that the words "subject to the provisions of this Act" occurring in section 19 makes section 19 subject to section 45, and the Central Government has thus no power to remove a person from the service in derogation of the provisions of section 45.
+But the power under section 19 is an independent power.
+Although section 19 uses the words "subject to the provisions of this Act", it speaks of removal of a person from the service.
+Section 45 provides that on conviction by court martial an officer is liable to be cashiered or to suffer such less punishment as is in this Act mentioned.
+For removal from service under section 19 of the read with r. 14 of the Army Rules, 1954, a court martial is not necessary.
+The two sections 19 and 45 of the Act are, therefore, mutually exclusive.
+The result is that r. 14 of the Army Rules, 1954, is not ultra vires the .
+The appeal is, therefore, allowed; but in the circumstances of the case without any order as to costs.
+The case will now go back to the High Court for disposal on merits on the other questions raised by the respondent herein in the High Court.
+V.P.S. Appeal allowed.

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+iminal Appeal No. 48 of 1954.
+1303 Appeal by Special Leave granted by the Supreme Court by its Order dated the 31st July 1953 from the Judgment and Order dated the 15th May 1953 of the High Court of Judicature for the State of Pepsu at Th, Patiala in Criminal Appeal No. 140 of 1952 arising out of the Judgment and Order dated the 31st March 1952 of the Court of Magistrate 1st Class, Patiala in Challan Case No. 160/102 of 1951.
+Jai Gopal Sethi, (Naunit Lal, with him) for the appellant.
+N. section Bindra, (Porus A. Mehta and P. G. Gokhale, with him) for the respondent.
+February 28.
+The Judgment of the Court was delivered by VENKATARAMA AYYAR J.
+The appellant was a Sub Divisional Officer in the Public Works Department, Pepsu, and was, at the material dates,, in charge of certain works at a place called Karhali.
+It was part of his duties to disburse the wages to the workmen employed in the works, and the procedure usually followed was that be drew the amount required from the treasury, and paid the same to the emplo yees against their signatures or thumb impressions in the monthly acquittance roll.
+In the roll for April 1951, one Parma was mentioned as a khalasi (menial servant), and a sum of Rs. 51 shown as paid to him for his wages, the payment being vouched by thumbimpression.
+The case of the prosecution was that there was, in fact, no person of the name of Parma, that the thumb impression found in the acquittance roll was that of the appellant himself, that he had included a fictitious name in the acquittance roll, with intent to himself draw the amount, and that by this expedient he had received Rs. 51 and misappropriated the same.
+The First Class Magistrate of Patiala, before whom the appellant was put up for trial, framed charges against him under section 465 of the Indian Penal Code for forging the thumb impression of Parma, and under section 409 of the Indian Penal Code for criminal misappropriation of Rs. 51, and after a full trial, 167 1304 acquitted him.
+He held on the evidence that "there was a khalasi Parma by name in the service of the accused at Kehrauli", and that though the thumbimpression in the acquittance roll was that of the appellant, the prosecution had not established that the amount drawn by him did not reach the hands of Parma.
+Against this judgment, there was an appeal by the State to the High Court of Pepsu, which held that proof that the thumb impression in the acquittance roll was that of the appellant was sufficient, ,.when taken along with other circumstances, to establish his guilt, and accordingly convicted him both under section 465 and section 409 of the Indian Penal Code.
+This appeal by special leave is directed against this judgment.
+In support of " the appeal it is argued by Mr. Jai Gopal Sethi that the conviction of the appellant is illegal, as sanction had not been obtained under section 197 (1) of the Code of Criminal Procedure for his prosecution, that the evidence on record is insufficient to establish an offence either under section 465 or section 409 of the Indian Penal Code and that there having been an acquittal of the appellant by the trial Magistrate, the materials on record did not justify a reversal of that verdict by the appellate Court.
+The question of sanction under section 197 (1) of the Code of Criminal Procedure may be taken up first for consideration, as it goes to the root of the matter.
+The facts bearing on this question are that there was an application by the Department for sanction to prosecute the appellant for an offence under section 409, and that, the Chief Secretary, Home Department, sent the communication, Exhibft PX, stating that he had been "directed to convey sanction of the Government to his prosecution".
+In view of this, no question was raised before the trial Magistrate or the High Court that the prosecution was bad for want of sanction.
+But after the disposal of the appeal by the High Court, it was discovered that, in fact, there was no order of the Government sanctioning the prosecution, and that the Chief Secretary had committed a mistake in sendidg the communication, Exhibit PX.
+1305 The position, therefore, is that the prosecution which has resulted in the conviction of the appellant was initiated without any sanction under section 197(1) of the Code of Criminal Procedure and if sanction under that section is necessary, as contended for by Mr. Sethi, then the entire proceedings including the conviction must be quashed.
+According to the respondent, however, the main charge against the appellant is under section 409, and no sanction is required for a prosecution under that section.
+The point for decision is whether sanction under section 197 (1) of the Code of Criminal Procedure is necessary for prosecuting the appellant under section 409.
+There has been considerable divergence of judicial opinion on the scope of section 197(1) of the Code of Criminal Procedure.
+The question has latterly been the subject of consideration by the highest Courts in this country, and by the Privy Council, and the position may now be taken to be fairly well settled.
+Hori Ram Singh vs Emperor(1) is a decision of the Federal Court on the necessity for sanction under section 270 of the Government of India Act, 1935, which is similar in terms to section 197(1) of the Code of Criminal Procedure.
+The facts in that case were that a Sub Assistant Surgeon was charged under section 409 with having dishonestly removed certain medicines from a hospital which was under his charge, to his own residence, and under section 477 A, with having failed to enter them in the stock book.
+The sanction of the Government had not been obtained for the prosecution under section 270 of the Government of India Act, and the point for decision was whether it was necessary.
+It was held that the charge under section 477 A required sanction, as "the official capacity is involved in the very act complained of as amounting to a crime"; but that no sanction was required for a charge under section 409, because "the official capacity is material only in connection with the 'entrustment ' and does not necessarily enter into the later act of misappropriation or conversion, which is the act complained of".
+(1) 1306 In the course of his judgment, Varadachariar, J. discussed the scope of section 197(1) of the Code of Criminal Procedure and after observing that the decisions on that section were not uniform, proceeded to group them under three categories those which had held that sanction was necessary when the act complained of attached to ' the official character of the person doing it, those which had held that it was necessary in all cases in which the official character of the person gave him an opportunity for the commission of the crime, and those which had held it necessary when the offence was committed while the accused was actually engaged in the performance of official duties.
+The learned Judge expressed his agreement with the first of the three views.
+In H. H. B. Gill vs The King(1), the question arose directly with reference to section 197(1) of the Code of Criminal Procedure.
+There, the accused was charged under section 161 with taking bribes, and under section 120 B with conspiracy.
+On the question whether sanction was necessary under section 197(1) it was held by the Privy Council that there was no difference in scope between that section and section 270 of the Government of India Act, 1935, and approving the statement of the law by Varadachariar, J. in Hori Ram Singh vs Emperor(2), Lord Simonds observed: "A public servant can only be said to act or to purport to act in the discharge of his official duty, if his act is such as to lie within the scope of his official duty. .
+The test may well be whether the public servant, if challenged, can reasonably claim that, what he does, he does in virtue of his office".
+It was accordingly held that as the acts with which the accused was charged could not be justified as done by virtue of his office, no sanction was necessary.
+The view taken in H. H. B. Gill vs The King(1) was followed by the Privy Council in A16 ert West Meads vs The King( '), and reaffirmed in Phanindra Chandra vs (1) [1948] L.R. 75 I.A. 41.
+(2) (3) [1948] L.,R. 70 I.A. 185, 1307 The King(1), and adopted by this Court in R. W. Mathams V. State of We8t Bengal(1).
+The result of the authorities may thus be summed up: It is not every offence committed by a public servant that requires sanction for prosecution under section 197(1) of the Code of Criminal Procedure; nor even every act done by him while he is actually engaged in the performance of his official duties; but if the act complained of is directly concerned with his official duties so that, if questioned, it could be claimed to have been done by virtue of the office, then sanction would be necessary; and that would be so, irrespective of whether it was, in fact, a proper discharge of his duties, because that would really be a matter of defence on the merits, which would have to be in vestigated at the trial, and could not arise at the stage of the grant of sanction, which mu_t precede the institution of the prosecution.
+It is conceded for the respondent that on the principle above enunciated, sanction would be required for prosecuting the appellant under section 465, as the charge was in respect of his duty of obtaining signatures or thumb impressions of the employees before wages were paid to them.
+But he contends that misappropriation of funds could, under no circumstances, be said to be within the scope of the duties of a public servant, that he could not, when charged with it, claim justification for it by virtue of his office, that therefore no sanction under section 197(1) was necessary, and that the question was concluded by the decisions in Hori Ram Singh vs Emperor(1) and Albert We8t Meads vs The King(1), in both of which the charges were of criminal misappropriation.
+We are of opinion that this is too broad a statement of the legal position, and that the two decisions cited lend no support to it.
+In our judgment, even when the charge is one of misappropriation by a public servant, whether sanction is required under section 197(1) will depend upon the facts of each case.
+If the acts complained of are so integrally connected with the duties attach (1) [1949] L.R. 76 I.A. 10.
+(3) (2) [1955] 1 S.O.R. 216.
+(4) [1948] L.R. 75 I.A. 180, 1308 ing to the office as to be inseparable from them, then sanction under section 197(1) would be necessary; but if there was no necessary connection between them and the performance of those duties) the official status furnishing only the occasion or opportunity for the acts, then no sanction would be required.
+Quite recently, this Court had to consider in Shreekantiah Ramayya Munipalli vs The State of Bombay(1) the necessity for sanction under section 197(1), when the charge was one of misappropriation under section 409.
+There, the law was laid down in the following terms: "The section has content and its language must be given meaning.
+What it says is 'When any public servant. . is accused of any offence alleged to have been committed by him while acting or purporting to act in the discharge of his official duty. .
+We have therefore first to concentrate on the word "offence '.
+Now an offence seldom consists of a single act.
+It is usually composed of several elements and, as a rule, a whole series of acts must be proved before it can be established.
+In the present case, the elements alleged against the second accused are, first, that there was an 'entrustment ' and/or 'dominion '; second, that the entrustment and/or dominion was 'in his capacity as a public servant '; third, that there was a 'disposal '; and fourth, that the disposal was 'dishonest '.
+Now it is evident that the entrustment and/or dominion here were in an official capacity, and it is equally evident that there could in this case be no disposal, lawful or otherwise, save by an act done or purporting to be done in an official capacity".
+On the facts, it was held in that case that the several acts which were complained of, were official acts, and that the prosecution was bad for want of sanction.
+The decisions in Hori Ram Singh vs Emperor(1), and Albert West Meads vs The King(1), when properly examined, do not support the extreme contention (1) (2) (3) [1948] L.R 75 I.A. 185.
+1309 urged on behalf of the respondent.
+In Hori Ram Singh vs Emperor(1), the medicines had not been entered in the stock book, and were removed by the accused to his residence, and the charge against him was that in so removing them he had committed MISappropriation.
+It was no part of the duty of the accused to remove medicines to his house, and he could not claim that he did so by virtue of his office.
+He could have made such a claim if he had, let us suppose, entered the medicines in the stock books and shown them as expended in the hospital.
+But, on the facts, no official act was involved, and that was why Varadachariar, J. observed that, ". so far as the charge under section 409 was con cerned, the acts in respect of which he was intended to be prosecuted could not be regarded as acts done or purported to be done in execution of his duty".
+Reference may also be made to the following observations of Sulaiman, J. in the same case: "The question whether a criminal breach of trust can be committed while purporting to act in execution of his duty is not capable of being answered hypothetically in the abstract, without any reference to the actual facts of the case.
+An attempt to answer the question in a generalized way has been responsible for loose language used in some of the cases cited before us.
+The question whether the act purported to have been done in execution of duty or not must depend on the special circumstances of each case".
+In Albert West Meads vs The King(1), an Army Officer had received two sums of money, and was subsequently unable to produce them.
+He was charged with criminal misappropriation, and convicted.
+He contended that the conviction was illegal for want of sanction, but the Privy Council, following H. H. B. Gill vs The King(1), rejected this contention.
+It is essential to note that the accused did not claim to have spent the amount in the course of his official duties, but stated that the moneys had been con sumed by fire.
+It is with reference to these facts that the Privy Council observed: (1) (2) [1948] L.R. 75 I.A. 185.
+(3) [1948] L.R. 75 I.A. 41.
+1310 of which he was charged ', i.e. acts of fraudulently misapplying money entrusted to his care as a public servant, 'as acts done by him by virtue of the office that he held ' ".
+The result then is that whether sanction is necessary to prosecute a public servant on a charge of criminal misappropriation, will depend on whether the acts complained of hinge on his duties as a pubic servant.
+If they do, then sanction is requisite.
+But if they are unconnected with such duties, then no sanction is necessary.
+In this view, we have to examine whether the acts with which the appellant is charged directly bear on the duties which he has got to discharge as a public servant.
+The appellant received the sum of Rs. 51 alleged to have been misappropriated, as Subdivisions Officer, and he admits receipt of the same.
+Then it was his duty to pay that amount to the khalasi Parma, and take his signature or thumb impression in acknowledgment thereof.
+The accused does claim to have paid the amount to Parma, and the acquittance roll records the payment, and there is in acknowledgment thereof a thumb impression as against his name.
+If what appears on the face of the roll is true and whether it is true or not is not a matter relevant at the stage of sanction then the acts with which the appellant is charged fall within the scope of his duties, and can be justified by him as done by virtue of his office.
+Clearly, therefore, sanction was required under section 197(1) of the Code of Criminal Procedure before the appellant could be prosecuted under section 409, and the absence of such sanc tion is fatal to the maintainability of the prosecution.
+The conviction should, therefore, be quashed.
+In this view, there is no need to consider whether on the evidence, the offence of criminal misappropriation or forgery has been brought home to the appellant or not.
+The appeal is accordingly allowed, and the convictions and sentences passed on the appellant arc set aside.
+Fine, if paid, will be refunded.
+Appeal allowed.

3168.txt

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+N: Criminal Appeal No. 34 of 1970.
+Appeal by certificate under Article 134(1)(c) of the Constitution of India from the judgment and order dated 18 3 1969 of the Andhra Pradesh High Court in Criminal Revision Case No. 360 of 1968.
+F. section Nariman, Additional Solicitor General of India and A. V. Rangam, for the appellants.
+L. N. Sinha, Solicitor General of India and A. V. V. Nair, for the Advocate General Andhra Pradesh.
+The Judgment of the Court was delivered by ALAGIRISWAMI, J.
+This is an appeal against the judgment of the Full Bench of the Andhra Pradesh High Court reported in A.I.R. (1970) A.P. 70.
+It arises out of a complaint filed against the 1st respondent company and its directors for failure to Me with the Registrar of Companies on or before 30 10 1967 the balance sheet and profit and loss account of the company as required under section 220(1) of the , which is punishable under sub section (3) of that section.
+Admittedly no general body meeting had been held and, therefore, the balance sheet and profit and loss account had not been laid before a general body meeting nor could it be so laid.
+The Full Bench speaking through Jaganmohan Reddy, C.J., as our learned brother then was, held that if no balance sheet is laid before a general body, there can be no question of that balance sheet not being adopted nor of complying with the requirements of section 220 and though wilful omission to call a general body meeting and to lay the balance sheet and profit and loss account before it may expose the person responsible to punishment under other provisions of the Act, it certainly does not make him liable under the provisions of section 134(4) of the Companies Act, 1913 or section 220 of the .
+In this the Bench was taking a view contrary to that of most of the High Courts after the decision of this Court in The State of Bombay vs Bandhan Ram Bhandani & Ors.(1) In that case this Court (1) ; , 412 had taken the.
+view that a person charged with an offence cannot rely on his default as an answer to the charge and so, if he was responsible for not calling the general meeting, he cannot be heard to say in defence to the charges brought against him that because the general meeting had not been called, the balance sheet and profit and loss account could not be laid before it.
+In that case the directors of a company were prosecuted under sections 32(5) and 133(3) of the Companies Act, 1913, for breaches of sections 32 and 131 of that Act for having knowingly and wilfully authorized the failure to file the summary of share capital for the year 1953 and being knowingly and wilfully parties to the failure to lay before the company in general meeting the balance sheet and profit and loss account as at March 31, 1953.
+The Bombay High Court, however, following its earlier decision in Imperator vs The Pioneer Clay and Industrial Works Ltd.(1) had upheld the acquittal of the directors by the Presidency Magistrate.
+Referring to the decision of the Bombay High Court in that case this Court pointed out that decision turned on section 134 of the Companies Act, 1913 the language of which was to a certain extent different from the language used in sections 32 and 131 and refrained from going into the question whether the difference in language in section 134 on the one hand and sections 32 and 131 on the other made any difference to the decision of the case.
+After referring to the decisions in Gibson vs Barlon(2) Edmonds vs Foster(3) and Park vs Lawton(4 )where it was held that a person charged with an offence could not rely on his own default as an answer to the charge, and so, if the person charged was responsible for not calling the general meeting, he cannot be heard to say, in defence to the charge that the general meeting had not been called, and that the company and its officers were bound to perform the condition precedent if they could do that, in order that they might perform their duty, this Court considered that as the correct view to take.
+As we have noticed, this Court was not dealing there with the provisions of section 134 of 1913 Act which corresponds to section 220 of the 1956 Act.
+That question now directly arises for decision in this case.
+As we said earlier, most of the High Courts which have considered this question after the decision of this Court have proceeded on the basis that the decision necessarily led to the conclusion that even in a prosecution under section 134 of the 1913 Act (corresponding to section 220 of the 1956 Act) the company and its directors could not rely upon their failure to call the general body meeting as a defence to the prosecution.
+Under this category fall the decisions in Dulal Chandra Bhar vs Slate of West Bengal,(5) and Gopal Khaitan vs State (6) of the Calcutta High Court.
+Ramachandra & Sons (P) Ltd. vs State(T) of the Allahabad High Court, State vs T. C. Printers (P) Ltd. (8) of the Rajasthan (1) I.L.R. ; (2) [1875] L. R. 10 Q. B. 329.
+(3) (1875) 45 Law J. Rep. M. C. 41.
+(4) (5) (6) (7) , J. 92 & (8) A.I.R. 413 High Court, India Nutriments Ltd. vs Registrar of Companies(1) and P.S.N.S.A. Chettiar & Company vs Registrar of Companies(2) of the Madras High Court.
+The Orissa High Court had taken a similar view in Registrar of Companies vs Misra (3) but in a latter decision in Vulcan Industries (P) Ltd. vs Registrar of Companies, Orissa(4) it has taken a contrary view and followed the decision of the Andhra Pradesh High Court in the judgment under appeal.
+That decision is also pending in appeal before this Court.
+The Patna High Court in State vs Linkers Private Ltd.(5) and the Kerala High Court in Registrar of Companies vs Gopala Pillai & Ors.
+(6) have also taken a similar view.
+We may now refer to some of the earlier decisions on this Point.
+The earliest decision is the one in Debendra Nath Das Gupta vs Registrar of Joint Stock Companies.
+(?) In that case the principle laid down in Park vs Lawton(8) was applied and it was held that it is not open to the petitioner to plead in answer to a charge under sections 134 his prior default in respect of the calling of the prescribed general meeting and of placing before the company at such meeting a duly prepared and audited balance sheet.
+The decision in Ballav Dass vs Mohan Lal Sadhu(9) did not refer to the wording of the section but merely stated that the provisions of section 134 were not complied with.
+The same court in Bhagirath vs Emperor(10) took the same view.
+In re Varaszmha Rao(11) a learned Single Judge of the Madras High Court took the view that the same persons cannot be charged in respect of the same years with offences punishable both under sections 131 and 134, Companies Act because section 134 clearly contemplates the sending of a copy of the balance sheet only after it has been placed before the company at a general meeting under section 131 and that where in a case there is no such placing of the balance sheet before the company at a general meeting, the offence under section 134 cannot ',be committed.
+In re Gangipati Appayya(12) a view contrary to the one taken earlier by a Judge of that High Court was taken.
+We may now set out the reasoning which weighed with the Andhra Pradesh High Court in the decision under appeal : "The reference to Section 210 by the use of the word aforesaid" and the emphasis indicated by the words "were so laid" make the filing of copies of those balance sheets and the profit and loss accounts which are laid before the general body meeting an essential prerequisite.
+If no general body meeting is held, it is obvious that no copies of the balance sheet (1) (3) A.I.R. 1969 Orissa 234.
+(5) A.I.R. 1969 Patna 445 & (1970) 40 C.C. 17.
+(6) 1961 K.L.J. 490.
+(8) (10) A.I.R. 1948 Calcutta 42.
+(12) A.I.R. 1952 Madras 800.
+(2) A.T. R. 1966 Madras 415.
+(4) I.L.R. 1972 Cuttack 373.
+(7) I.L.R. 1918 Calcutta 486.
+(9) [1934 35] 39 Calcutta Weekly Notes 1152.
+(11) A.I.R. 1937 Madras 341. 414 and profit and loss account can be filed even though the default may be wilful.
+Both under section 134 of the Old Companies Act and Section 220 of the Act, the laying of the balance sheet and the profit and loss account before an annual general meeting is a condition precedent to the requirement that copies of such documents so laid should be filed before the Registrar.
+The intention is made further clear by the provision under sub section (2) of the respective sections of both the Acts that if the balance sheet is not adopted at the general meeting before which it is laid, a statement of that fact and of the reasons therefore have to be annexed to the balance sheet and to the copies thereof required to be filed with the Registrar.
+If no balance sheet is laid before a general body, there can be no question of that balance sheet not being adopted nor of complying with the requirements of the Sub section (2) of Section 134 of the Old Companies Act or Section 220 of the Act as the case may be, while wilful omission to call a general body meeting and omit to lay the balance sheet and profit and loss account before it may expose the person responsible to punishment under other provisions of the Act, it certainly does not make him liable udder aforesaid provisions.
+The punishment under these sections is for default in filing copies of the balance sheet or the profit and loss account which are laid before a general body and for not sending a statement of the fact that the balance sheet was not adopted.
+It may be that copies of the balance sheet so laid before the general body may have been forwarded under sub section (1) of Section 134 of the Old Companies Act or sub section (1) of section 220 of the Act but nonetheless if the requirements of sub section (2) of the respective sections have not been complied with even then, the persons concerned would be liable for punishment for that default.
+In our view, these provisions unmistakably indicate, as we said earlier, that the holding of the annual general meeting and the laying before it of the balance sheet and the profit and loss account is a sine qua non for filing of the copies thereof before the Registrar.
+If no general body meeting is held, the persons concerned cannot be said to have committed a default in complying with those provisions.
+" In this state of difference of opinion among the various High Courts and the absence of a decision of this Court on section 134 this appeal has been filed.
+Though the respondent was not represented before this Court the learned Addl.
+Solicitor General who appeared for the State of Andhra Pradesh and the learned Solicitor General who appeared for the Advocate General of Andhra Pradesh fairly placed before this Court all the decisions for and against, which we have already referred to, and also placed before us all the relevant considerations.
+It was urged before us that the principle accepted by this Court in The State of Bombay vs Bandhan Ram Bhandani & Ors.
+(supra) that a company or its directors in a prosecution under section 32 and section 133 of the 1913 Act could not in defence to such prosecution rely upon their own 415 failure to call the general body meeting, applies with equal force to a prosecution under section 134 of the Act.
+But it appears to us that there is a very clear distinction between sections 32 and 133 on the one hand and section 134 on the other.
+Section 32 relates to the preparation of a list of members of the company and of persons who have ceased to be members as well as a summary, and also provides that it shall be completed within 21 days after the day of the first or only ordinary general meeting in the year.
+It also provides that the company shall forthwith file with the registrar a copy of the list and summary, and any default hi complying with the requirements of the section is made punishable.
+Under section 131 the laying of a balance sheet and profit and loss account before the company in the general meeting is made obligatory.
+Under section 133 the failure to comply with section 131 is made punishable.
+But section 134 lays down that after balance sheet and profit and loss account or the income and expenditure account, as the case may be, have been laid before the company at the general meeting three copies thereof shall be filed with the registrar, and a failure to do so is made punishable under sub section (4) of that section.
+The difference in language is very clear and pointed.
+The responsibility of sending three copies of the balance sheet and profit and loss account or the income and expenditure account, as the case may be, arises only after they have been laid before the company at the general meeting.
+Without so laying copies could not be sent to the Registrar and even if they are sent it would not be a compliance with the provisions of the section.
+It is possible to conceive of the law providing that the balance sheet and profit and loss account shall be sent to the registrar even without the necessity of their being laid before the general body meeting of the company.
+In that case any failure to do so would be punishable and the question whether a general body meeting had been held and the balance sheet and profit and loss account have been laid before it Will not arise.
+Therefore the condition precedent or the essential prerequisite of the balance sheet and the profit and loss account being laid before the general meeting of the company not being fulfilled, the requirement of section 134 cannot be complied with.
+While the appeal to a question of principle might be attractive we cannot ignore the clear words of the section.
+Where the words of the section are very clear it is unnecessary to consider whether it embodies any principle and whether that principle is consistent with the principle as embodied a certain other sections which are differently worded.
+In interpreting a penal provision it is not permissible to give an extended meaning to the plain words of the section on the ground that a principle recognised in respect of certain other provisions of law requires that this section should be interpreted is the same way.
+We may also point out that in Park vs Lawton (supra) the principle laid in which has been adopted in this Court ' , decision in The State of Bombay vs Bandhan Ram Bhandani & Ors.
+(supra) it is realised that there might be circumstances where the principle laid down in that decision will not apply.
+The court there observed : "If it were the case that everything required to be inserted in the list was dependent on the fact of the general meeting having been held, it might perhaps have been contended with 416 some force that it is impossible to calculate a continuing penalty from a day which has never come into existence; but when one sees that section 25 requires a number of most important matters to be included in the list of members which are entirely independent of the holding of a general meeting, this very much weakens the contention that no list need be compiled if, owing to the failure to hold a general meeting, it is impossible to say what day is the fourteenth day thereafter." This observation may provide no defence to a prosecution under section 133 but it might well do so in a prosecution under section 134.
+This was what the learned Solicitor General was fair enough to point out with regard to the difficulty of working out the daily penalty under section 162 after the thirtieth day mentioned in section 220(1) of the 1.956 Act.
+He pointed out that where no meeting has been held it was not possible to calculate the period of 30 days specified in that section and it would not be possible to give effect to the provisions of that section.
+The Bombay High Court pointed out in Emperor vs Pioneer Clay & In dustrial Works(1) that the decision in Park vs Lawton(2) is based on section 36 (it is a mistake for section 26) of the English Act, which in its scheme and terms is entirely different from the section with which they (the Bombay High Court) were concerned, and that the section in the English Act is a composite one which lays down various requirements which are to be complied with by the company under its first four sub clauses and sub cl.
+(5) is the penal sub section which penalises the failure to comply with any of the requirements contained in any of the four preceding sub sections.
+In our Act various stages have to be gone through before we reach the stage of a copy of the balance sheet and the profit and loss account being filed with the Registrar and the failure to reach any one of the stages within the time prescribed is made penal by the 'Act.
+The court pointed out that this is not a case where an accused person relies on his default and pleads his innocence.
+What he says is, I may have committed an offence, but the offence that I have committed is not the one with which I am charged.
+On the facts proved by the prosecution an offence is not disclosed under section 134(4).
+A different offence might have been committed either under section 76(2) or under section 133(3).
+It is interesting to note that it was argued in Park vs Lawton(2) that the fact that section 26 makes the offence a continuing one also shows that the obligation to file the list is independent of the holding of a general meeting.
+The observations which we have extracted earlier will show that the submission on behalf of the prosecution that provisions (1) I.R.L. : (2) [1911] 1 K.E. 417 of section 26 show that the, obligation to file the list is independent of the holding of the general meeting was accepted.
+But under section 134 of the 1913 Act the obligation to send a copy of the balance sheet and profit and loss account is dependent completely on its being laid be, fore a general meeting.
+It is clear, therefore, that on principle and authority it should be held that no offence was committed by the directors in this case under section 134.
+They might have been guilty of offences under sections 76 and 133 but not under section 134.
+We say nothing about section 32 about which this Court has already laid down the law.
+The appeal is dismissed.
+V.P.S. Appeal dismissed.

3210.txt

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+Appeal No. 1604 of 1967.
+From the judgment and order dated the 8th February, 1967 of Le Delhi High Court in Civil Writ No. 531 D of 1964.
+P.P. Rao and R. N. Sachthey, for the appellants.
+G.P. Pai, P. C. Bhartari and O. C. Mathur, for respondents nos.
+1 & 2.
+The Judgment of the Court was delivered by SARKARIA J.
+Whether the Federation of Indian Chambers of Commerce and Industry, New Delhi (Respondent 1) is a "commercial establishment" within the meaning of s.2(5) of the Delhi Shops ,and Establishments Act, 1954 (for short the Act) is the sale question that falls for determination in this appeal by certificate directed against the judgment dated February 8, 1967 of the High Court of Delhi.
+The facts bearing on this question may now be stated: Respondent 1 (hereinafter referred to as the Federation) is a Company registered under section 26 of the Indian Companies Act, 1913.
+The primary objects of the Federation as given in the Memorandum of Association are "(a) To promote Indian business in matters of inland and foreign trade, transport, industry and manufactures, finance and all other economic subjects and to encourage Indian banking, shipping and insurance.
+(b) To encourage friendly feeling end unanimity among business community and association on all subjects connected with the common good of Indian business.
+(c) To secure organised action on all subjects mentioned above.
+(d) To collect and disseminate statistical and other information and to make effort for the spread of commercial and economic knowledge.
+(e) To take all steps by lawful means which may be necessary for promoting supporting or opposing legislation or other action affecting the aforesaid economic interests and in general to take the initiative to assist and promote trade commerce and industry.
+(f)To provide for arbitration in respect of disputes arising, in the course of trade, industry or transport or other business matters, and to secure the services 350 of expert technical and other men to that end if necessary or desirable.
+(g) To conduct, undertake the conduct of and participate in national and international exhibitions.
+(h) To set up museums or show rooms, to exhibit the products of India and other countries and to participate in such activities.
+(1) To secure the interests and well being of the Indian business communities abroad.
+(k) To attain those advantages by united action which each member may not be able to accomplish in its separate capacity.
+(m) To help in the Organisation of Chambers of Commerce or Commercial Associations in different commercial centres of the country.
+(n) (O) (p) (q) (r) (s) (t) (u) (v) (x) (y) To sell or dispose of the undertaking of the Federation or any part thereof for such consideration as the Federation may think fit and in particular for shares, debentures, or securities of any other association or company having objects altogether or in similar to those of the Federation.
+(z) To take or otherwise acquire and hold shares in any other association or company having objects altogether or in part similar to those of the Federation.
+(zl) To establish a Trust or Trusts and/or appoint Trustees thereof from time to time and vest the funds or the surplus income or any property of the Federation in the Trustees who shall hold and deal with the funds, surplus income or property in such manner as the Committee may decide.
+(z2) 351 (z3)To draw, make, accept, discount, execute and issue bills of exchange, promissory notes, bills of lading, warrants, debentures and other negotible instruments or securities.
+(z4) (4) The income and property of the Federation, whencesoever derived, shall be applied solely towards the promotion of the objects of the Federation as set forth in the Memorandum of Association; and no portion thereof shall be paid or transferred directly or indirectly, by way of dividend, bonus, or otherwise by way of profit to the members of the Federation.
+The Articles of Association inter alia provide that a Chamber or an Association can become an ordinary member of the Federation on payment of annual subscription of Rs. 1,000,/ or such higher amount as may from time to time be fixed by the Federation in addition to the admission fee of Rs. 5001 .
+The scales of subscription on the basis of turnover, deposits or premia for associate members have also been prescribed.
+The Chief Inspector of Shops and Establishments, Delhi (Appellant 2 herein) called upon the Federation to register its establishment 'he under the Act The Federation failed to comply with the direction and contended that it was not an "establishment" as defined in section 2(9) of the Act.
+This contention did not find favour with the Chief Inspector who, in consequence, made a complaint under the Act for prosecution of the Secretary of the Federation (Respondent 2 herein) under the appropriate penal provisions of the Act in the Court of the Magistrate.
+1st Class, Parliament Street, New Delhi.
+The Federation then moved the High Court under Article 226 of the Constitution for bringing up and quashing the order, dated February 4, 1964 passed by the Chief Inspector (Appellant 2).
+They further prayed for a writ of Prohibition directing the Magistrate not to proceed with the complaint.
+Before the High Court, the contention of the Federation was that the premises in which the registered office of the Federation is located is not a "commercial establishment" within the meaning of section 2(5) of the Act which, in consequence had no application.
+From the side of the present appellant, at first a half hearted attempt was made to show that the Federation is carrying on a profession as it is "tendering advice to all businessmen and traders".
+This contention was negatived in these terms : " . that contention overlooks the fact that the advice in question is not tendered for any consideration.
+It is done in the interest of trade and business of the country.
+The 1st petitioner is not tendering any advice or giving any assistance to any trader in particular.
+It deals with the trade or busi ness in general to secure the interest of the country.
+it is predominantly a charitable organization and not a professional one.
+" 352 It was then contended that the activities of the Federation carried on in the premises in question amounted to "work in connection with, or incidental or ancillary" to trade or business in general within the latter part of the definition of "commercial establishment".
+This contention was also rejected with the observation that since the earlier part of the definition refers to "some particular business or trade carried on in a premises" the words "any work in connection with or incidental or necessary thereto" obviously refer to such particular business or trade and not to trade or business in general '.
+In the result, it was held that the premises of the Federation were not a commercial establish ment, and the writ petition was allowed.
+A certificate, however, was granted under Article 133(1) (c) of the Constitution that the case was fit for appeal to this Court.
+Hence this appeal.
+Before dealing with the contentions canvassed before us, it will be useful to notice briefly, the scheme and the relevant provisions of the Act.
+The title of the Act is Delhi Shops and Establishments Act, 1954.
+The main object of the Act as stated in its preamble is "regulation of hours of work, payment of wages, leave, holiday, terms of service and other conditions of work of persons employed in shop, commercial establishment, establishments for, public entertainment or amusement and other establishments and to provide for certain matters connected therewith." Section 1(4) indicates its extent and application.
+It shall apply in the first instance.
+only to the municipal areas, notified areas of Delhi and New, Delhi etc., but Government may by notification extend or apply it to shops and establishments in the other local area or areas.
+The definitions of "commercial establishment", "establishment" and "shop" given in sub sections (5), (9) and (27) of section 2 are material for our purpose.
+They read "Commercial establishment" means any premises wherein any trade, business or profession or any work in connection with, or incidental or ancillary thereto is carried on and includes a society registered under the , and charitable or other trust, whether registered or not, which carries on any business, trade or profession or work in connection with or incidental or ancillary thereto, ' journalistic and printing establishments, quarries and mines not governed by the , educational or other Institutions run for private gain and premises in which business of banking, insurance, stocks and shares, brokerage or produce exchange is, carried on, but does not include a shop or a factory registered under the , or theaters, cinemas, restaurants, eating houses residential hotels, clubs or other places of public amusement or entertainment.
+" "Establishment" means a shop, a commercial establishment, residential hotel, restaurant, eating house, theatre or other places of public amusement or entertainment to which this Act applies and includes such other establishment as Government may by notification in the Official Gazette, 35 3 declare to be an establishment for the purposes of the Act.
+" " Shop" means any premises where goods are sold, either by retail or wholesale Or where services are rendered to customers, and includes an office, a stoic room, godown, warehouse or workhouse, or work place, whether in the same premises or otherwise, used in or in connection with such trade or business but does not include a factory or commercial establishment.
+" It will be seen that while the definition of "establishment" includes, a 'shop ' and 'commercial establishment, the definitions of 'shop ' and commercial establishment ' are mutually exclusive.
+Further, the definition of "commercial establishment" is wider than that of "shop".
+A place in order to fall within the definition of "commercial Establishment" must in the first instance be "premises".
+Secondly, it should be premises wherein (a) any trade, business or profession is carried on, or (b) any work in connection with or incidental or ancillary thereto is carried on.
+Sub clause (b) is only ancillary to (a).
+There is no, doubt that the registered office of the Federation is premises.
+The controversy centres round the questions whether the activity of the Federation carried on in these premises is a "trade, business or profession" within the meaning of pari (a) of the definition.
+This question is not res integra.
+It came up for consideration before this Court in Management of the Federation of Indian Chambers of Commerce and Industry vs Their workman, Shri R. K. Mittal.(1) After considering its Memorandum of Association, Articles of Association and other material, which was more or less the same, as in the present case, it was held by this Court that the activity of this Federation is in the nature of a business or trade.
+Mr. Rao, learned Counsel for the appellants strongly relies on the aforesaid decision.
+Mr. Pai, learned Counsel for the Federation has firstly raised a preliminary objection that before the High Court, at no stage, it was urged on behalf of the Appellants that the activity of the Federation carried on in the premises was a business or trade.
+It is added that a half hearted argument was adVanced that its activity was a 'profession ' and that, too, was soon given UP In these circumstances, it is submitted, the appellants should not be allowed to commit a volte face and take up in this Court a stand which was either not taken or was given no in the High Court.
+In the alternative, learned Counsel contends that even if this plea is allowed to be raised, then also the primary activity of the Federation cannot, by any stretch of reasoning, be called a 'trade, business of profession within the definition of "commercial establishment" given in the Act.
+According to Counsel, the activity of the Federation is one of general utility; the only source of its income is from subscriptions.
+The occasional exhibitions or , museums organised by it are activities which are only incidental or ancillary to the primary charitable object of the Federation.
+No divi (1) [1972] 2 S.C.R. 353.
+354 dends are declared, no profits are shared or divided among the Individual members, and no goods are sold or exchanged.
+in support of his contentions, learned Counsel has referred to Commissioner of Income tax vs Andhra Chamber of Commerce.
+(,) Mr. Pai further maintains that the ratio in R. K. Mittal 's case (supra) is not applicable to the instant case because the definition of " 'industry" in section 2(j) of the is far wider than that of "commercial establishment" in section 2(5) of the Act.
+Mr. Pai further doubts the correctness of the decision in R. K. Mittal 's case (supra) inasmuch as it holds that the activity of the Federation partakes the character of trade or business.
+This finding, it is urged, is based on a misapprehension of facts and requires reconsideration.
+It is pointed out that it was wrongly assumed in Mittal 's case (supra) that the Federation, was systematically assisting not only its members but also other business men and industrialists even if they were not its members.
+The fact of the matter is that the Respondent is a Federation of Federations and not an association of any individual traders, industrialists or businessmen.
+As regards the preliminary objection, it is true that before the High Court, it was not argued that the activity of the Federation amounts to the carrying on of any business or trade in the premises in question.
+All that was attempted to argue there was, that its activity amounted to a 'profession '.
+Alternatively, it was contended that the case fell within part (b) of the definition of "commercial establishment" inasmuch as its activities were connected with trade and business, generally.
+We do not think it proper to shut out the contentions now raised before us about the activity of the Federation being a trade or business, merely on the ground, that the point was not properly put before the High Court.
+This point will not require any additional material for its decision.
+The question is only of drawing a correct inference 'about the point in issue from the material already on record.
+We, therefore, overrule the preliminary objection.
+This takes us to the merits of the case.
+In R. K. Mittal 's case, this Court was considering the activity of this Federation in the context of 'industry ' as defined in s.2(j) of the .
+That definition reads: " "Industry" means any business, trade, undertaking, manufacture or calling of employers and includes any calling, service, employment, handicraft or industrial occupa tion or evocation of workmen.
+" It will be seen that "any business, trade" is an element common to the definitions of "commercial establishment" and "industry" given in the respective statutes.
+That was why the question, whether the ,activity of the Federation is a business or trade activity, was directly (1) ; 355 and substantially in issue in R. K. Mittal 's case.
+therein, the Memorandum of Association, Articles of Association and the other material placed before the court were closely examined.
+The entire case law was surveyed.
+The contentions now canvassed were also raised and considered in that case.
+Jagnmohan Reddy J. speaking for the Court,.
+posed the question for decision thus : "In our view the linch pin of the definition of 'industry ' is to ascertain the systematic activity which the organization is discharging namely, whether it partakes the nature of a business or trade; or is an undertaking or manufacture or calling of employers".
+(emphasis added) The answer given to this question has been correctly summed up, in the head note of the Report, as under: "The above being the position in law the were fact that the appellant Federation had charitable aims and objects would not take it out of the definition of industry.
+An examination of the activities of the Federation showed that the Federation carried on systematic activities to assist its members and other businessmen and industrialists and even to non members as for instance in giving them the right to subscribe to their bulletin; in taking up their cases and solving their difficulties and in obtaining concessions and facilities from them from the Government.
+These activities were business activities and material services rendered to businessmen, traders and industrialists who are members of the constituents of the Federation.
+There could be no doubt that the Federation was an industry within the meaning of s.2(j) of the Act." (The crucial words are those that have been underlined).
+The case under the Income tax Act wherein the main object of the organization was charitable, were also considered and found of little assistance.
+It was observed that: "the object of an Organisation may be charitable but nevertheless its activity may be commercial so as to satisfy the definition of an industry as explained and illustrated by this Court particularly in Safdarjang Hospital 's case.(1) We could therefore envisage an institution having its aims and objects charitable and yet its activities could bring it within the definition of industry".
+The above observations were made in the context of the definition of industry ' but they are equally applicable in the present case.
+The very definition of "commercial establishment" indicates that the activity of a registered society, charitable or other trust will not take it out of the definition if the activity carried on by it amounts to a busi (1)[1971] 1, S.C.R. 177.
+356 ness, trade or profession or any work in connection therewith or incidental thereto.
+No doubt, the effective membership as distinguished from Honorary membership of the Federation is open only to Chambers of Commerce or Commercial Associations of requisite strength and standing, but the fact remains that it carries on systematic activities not only to assist its members but also other traders or businessmen members of the constituents of the Federation.
+It has set up Tribunals for arbitration in disputes arising between individual traders or business concerns in the course of trade, industry or other business matters.
+It takes up with the concerned authorities the specific difficulties experienced by the trade in the day today business and endeavours to attain for the traders and industrialists those material advantages by unified action which they may not be able to achieve in their individual capacity.
+It helps businessmen and industrialists by securing for them the services of expert technical men (vide clauses (f) and (k) of the Memorandum of Association).
+It undertakes regular publication of periodicals, bulletins, Reviews etc.
+for the benefit of businessmen, big or small and whether or not they are members of the Federation.
+These publications are available on payment of subscription or price even to individual businessmen or traders who are not members of the Federation.
+All these are business activities are carried on systematically.
+We therefore do not think that R. K. Mittal 's case (supra) was incorrectly decided and needs reconsideration.
+It is true that in R. K. Mittal 's case (supra) it was held that these activities of the Federation are also in the nature of material services within the wider definition of 'industry '.
+Though the rendering or services is not specifically mentioned as an element of the definition of "commercial establishment", yet this very element appears in the definition of 'shop ' in section 2(27) of the Act.
+Any premises where services are rendered to customers fall within the definition of a "shop".
+These services are material services.
+For the application of the Act to the Federation, it is immaterial whether its activities bring its premises within the ambit of a "shop" or a "commercial establishment '.
+It is well settled that a systematic activity can be a business activity even if no dividends are declared or profits shared.
+In the matter.
+of Incorporated Council of Law Reporting for England and Wales, (1) the Queens Bench was considering the interpretation of the expression "trade or business" in section 11 of the English Customs and Inland Revenue Act 1885 with reference to the activity of the Incorporated Council of Law Reporting for England and Wales.
+The association was established for the objects of preparing and publishing under gratuitous professional control, reports of judicial decisions; of issuing digests and other publications relating to legal subjects.
+In carrying them out the association employed editors, reporters, printers, and publishers and supplied its publications to subscribers and others for payment.
+It was condended that the activity of the Association was not "a business or trade" because by the Memorandum of Associ (1) 357 ation all the property and income of the association were applicable solely to the promotion of the above objects, and no part thereof could be paid as dividend or otherwise, to any member.
+Holding that the association was established for a "trade or business", Lord Coleridge C. J. repelled the contention in these terms: "Though it may be true that in the great majority of cases the carrying on of a trade does, in fact, include the idea of profit, yet the definition of the mere word 'trade ' does not necessarily mean something by which a profit is made.
+But putting aside the question whether they carry on a trade, how can it be denied that the Council carry on a business? They are incorporated; they have a secretary; they employ editors, reporters, and printers; they print books, they sell those books, they do all that is ordinarily done in carrying on the business of a bookseller.
+" The above observations apply mutatis mutandis to the activity of the Federation.
+It will bear repetition that the Federation also publishes periodicals, bulletins etc.
+and issues the same to member free of this Court in R. K. Mittal 's case (supra) we would hold that the commercial or industrial exhibitions, runs museums and makes profits.
+Of course, that profit is ploughed back for the purposes of the Federation as set out in its Memorandum of Association, and is not distributed among its members.
+But that does not alter the 'fact that its activity is a trading or business activity.
+For all the foregoing reasons, particularly in view of the decision of this Court in R. K. Mittals case, (supra) we would hold that the pre premises of the Federation are a "commercial establishment" within the meaning of section 2(5) of the Act.
+In the result we allow this appeal, set aside the judgment of the High Court and dismiss the writ petition.
+In the circumstances of the case we make no order as to costs.
+V.P.S. Appeal allowed.

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+Civil Appeal No. 159 of 1974.
+From the Judgment and Order dated 4 4 1973 of the Punjab and Haryana High Court at Chandigarh in R.S.A. No. 1482 of 1961.
+488 N. N. Goswamy and Arvind Minocha, for the appellant.
+Kapil Sibbal and D. Probir Mitra, for respondents.
+The Judgment of the Court was delivered by MATHEW, J.
+This is an appeal by special leave against a decree passed by the High Court of Punjab and Haryana holding that the appeal filed by the plaintiff appellant has abated and dismissing his suit.
+The appellant brought the suit on the allegation that there was one Shiromani Nirankari Dera at Patiala, that this institution had two branches one at Landeke in Moga Tehsil and the other at Nanga Kheri in the erstwhile Patiala State, and that he, as mahant in charge of the Shiromani Dera at Patiala had the right to manage the properties attached to the Dera at Landeke.
+The prayer in the plaint was for recovery of possession of the Dera and the properties attached to it.
+Som Dass, the defendant, contended that the Dera at Landeke was an independent Dera and that he was in possession of the properties of the Dera as its lawfully appointed mahant.
+The trial court decreed the suit.
+In appeal by the defendant the decree was reversed.
+Against that decree, an appeal was preferred by the appellant to the High Court.
+While the appeal was pending in the High Court, Som Dass, the defendant, died on 13 10 1970.
+No application was made by the appellant to bring on record his legal representatives within the period prescribed.
+An application was made on 1 2 1971 by the appellant stating that Som Dass died on 26 11 1970 leaving behind him Shiam Dass as his Chela and for impleading him.
+The correctness of the date of death of Som Dass was contested by Shiam Dass.
+The High Court referred the question to the trial Court for enquiry and decision.
+The trial Court, after taking evidence, found that Som Dass died on 13 10 1970.
+Thereafter the appellant prayed before the High Court that his application dated 1 2 1971 might be treated as an application for setting aside the abatement of the appeal and the ground for setting aside the abatement was that the appellant did not know about the death of Som Dass at the time he died.
+The High Court found no substance in the plea that the appellant had no knowledge about the date of the death of Som Dass and held that the appeal had abated and that there was no ground for setting aside the abatement.
+The appellant had raised an alternative contention before the High Court that there was no abatement of the appeal even if Som Dass was not impleaded within the period prescribed as he claimed to represent the dera as its duly elected Chela.
+The High Court held that after the death of Som Dass, Shiam Dass, as his Chela "inherited the sum total of the rights which earlier vested in Som Dass and when a controversy is raised about such rights, then the appellant was bound to bring on record the legal representatives of the deceased within the time prescribed by law.
+" 489 We do not think that the view of the High Court was correct.
+The suit was filed on the basis that the appellant as the lawfully appointed mahant was entitled to manage the properties of the Dera at Landeke, that the defendant was unlawfully claiming to be the mahant of the Dera and entitled to manage the properties of the Dera, and that the appellant was entitled to be in possession of the properties.
+As already stated the contention of the defendant was that though the properties belonged to the Dera, he was its lawfully appointed mahant and that the appellant had no right to recover possession of the property of the Dera.
+When Som Dass died, the interest which was the subject matter of the suit, devolved upon Shiam Das as he was elected to be the Mahant of the Dera and the appeal could be continued under Q. 22, r. 10, of the Civil Procedure Code against the person upon whom the interest had devolved.
+Order 22, rule 10 reads: "R. 10(1) In other cases of an assignment, creation or devolution of any interest during the pendency of suit, the suit may, by leave of the Court, be continued by or against the person to or upon whom such interest has come or devolved.
+(2) The attachment of a decree pending an appeal there from shall be deemed to be an interest entitling the person who procured such attachment to the benefit of sub rule (1).
+" This rule is based on the principle that trial of a suit cannot be brought to an end merely because the interest of a party in the subject matter of the suit has devolved upon another during the pendency of the suit but that suit may be continued against the person acquiring the interest with the leave of the Court.
+When a suit is brought by or against a person in a representative capacity and there is a devolution of the interest of the representative, the rule that has to be applied is Order 22, rule 10 and not rule 3 or 4, whether the devolution takes place as a consequence of death or for any other reason.
+Order 22, rule 10, is not confined to devolution of interest of a party by death, it also applies if the head of the mutt or manager of the temple resigns his office or is removed from office.
+In such a case the successor to the head of the mutt or to the manager of the temple may be substituted as a party under this rule.
+The word 'interest ' which is mentioned in this rule means interest in the property i.e., the subject matter of the suit and the interest is the interest of the person who was the party to the suit.
+It was, however, contended on behalf of the respondent that there was no devolution of the interest in the subject matter of the suit on the death of Som Dass, since there was no certainty as to the person who would be elected as mahant to succeed him.
+The argument was that it was uncertain on the death of Som Dass as to who would become the mahant by election, that it was only when a person succeeded to the mahantship on the death of a previous mahant by virtue of law 490 or custom that there would be devolution of interest in the subject matter of the suit and, therefore, Order 22, rule 10, would not be attracted.
+We see no force in this argument.
+We are of the view that devolution of the interest in the subject matter of the suit took place when Shiam Dass was elected as mahant of the Dera after the death of Som Dass.
+Som Dass was sued in his capacity as a person who claimed (though illegally according to the appellant) as mahant of the Dera.
+Som Dass contended that he was lawfully appointed as mahant of the Dera.
+He never set up any claim which was adverse to the Dera or its properties.
+The suit against Som Dass was not in his personal capacity but in his capacity as de facto mahant.
+In other words, the suit was for possession and management of the Dera and the properties appertaining to it by the appellant purporting to be the de jure mahant against Som Dass as de facto mahant.
+The fact that it was after Som Dass died that Shiam Dass was elected to be the mahant of the Dera can make no difference when we are dealing with the question whether the interest in the subject matter of the suit devolved upon him.
+The subject matter of the suit was the interest of Som Dass in the Dera and its properties and it devolved upon shiam Dass by virtue of his election as mahant subsequent to the death of Som Dass.
+And, as it was in a representative capacity that Som Dass was sued and as it was in the same representative capacity that the appeal was sought to be continued against Shiam Dass, Order 22, rule 10 will apply(1).
+In Thirumalai vs Arunachella (2) the Court held that a succeeding trustee of a trustee who filed a suit and thereafter died during its pendency was not legal representative of the predecessor in office.
+The Court said that where some of the trustees die or retire during the pendency of a suit and new persons are elected to fill their place, it is a case of devolution of interest during the pendency of a suit and the elected persons can be added as parties under Order 22, rule 10 notwithstanding that the period of limitation for impleading them had expired.
+In Roshan Lal vs Kapur Chand the Court took the view that newly appointed trustees are not legal representatives of the trustees who had filed the suit and thereafter died during the pendency of the suit, that they can be added as parties under Order 22, rule 10 notwithstanding the fact that the period of limitation for an application to 491 impleaded them under Order 22, rule 3 had elapsed.
+The Court said (at p. 384): "Such an application is obviously not an application under O. 22, R. 3 Civil Procedure Code.
+" We also see no reason why the High Court should not have granted leave to the appellant to prosecute the appeal.
+In the result we reverse the decree of the court below and direct the High Court to dispose of the appeal on merits.
+We allow the appeal but, in the circumstances, make no order as to costs.
+V.P.S. Appeal allowed.

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+N: Criminal Appeal No. 425 1974.
+Appeal by Special Leave from the Judgment and order dated the 22nd July 1974 of the Madras High Court at Madras in Criminal Appeal No. 24 of 1974 and Referred Trial No. 3 of 1974.
+A. N. Mulla, K. Jayaram and P. Chandrasekhar for the Appellant. , A. V. Rangam and Miss A. Subhasini for the Respondent.
+The Judgment of the Court was delivered by GOSWAMI, J.
+This appeal by special leave is directed against the 4 judgment and order of the, High Court of Madras convicting the appellant (hereinafter to be described as the accused) under section 302 IPC and sentencing him to death.
+709 The police had submitted charge sheet under section 302/34 IPC against the present accused and accused Jabamani Nadar alias Kanyakumari Comrade alias Ramu and Thamizharasan alias Ramaswami, who was shown as an absconder.
+On the prayer of the prosecution the case against the first two accused without the absconding accused, was taken up for trial.
+The two accused were charged under section 120B read with sections 302 and 109 IPC as well as under section 302/34 IPC.
+The case was referred to the High Court as usual and the accused also preferred appeals against their conviction and sentence.
+The High Court acquitted accused Jabamani Nadar alias Kanyakumari Comrade alias Ramu and accepted the reference in respect of the present accused.
+His appeal was also dismissed.
+Hence this appeal by special leave.
+The facts are in a brief compass.
+The deceased, Viswanatham Pillai, was the village Munsif (Headman).
+On April 26, 1971, at about 10.00 P.M. he was sleeping on a bench outside his cattle shed in the open space, which is shown in the site plan (exhibit P15) at No. 9.
+The younger brother of the deceased, Pandurangam (PW 4), who is a leper, was also sleeping on the eastern parapet of the sluice of the north Boothagudi channel, which is shown at No. 5 in the site plan (exhibit P15).
+Pandurangam woke up at about 11.15 P.M.
+On hearing the shout of his deceased brother crying "younger brother: Karunakaran is running after stabbing me with knife. 'Catch him ' ".
+He got up and saw the accused Karunakaran running on the eastern bank of the channel with a knife 8 inches long.
+The electric lights were burning in the vicinity He also saw two persons running ahead of accused Karunakaran.
+He further saw his two brothers, Gnanasakaran (PW 1) and Thiru gnanasambandam (PW 3) along with Ramasamy (PW 2) chasing them.
+He ran to his elder brother who came from the side of the bench where he was sleeping and who fell down on the southern side of the sluice.
+When he went near him he was already dead.
+He had bleeding injuries on several parts of his body.
+A crowd gathered and Pandurangam was asked to lodge information at the police station which he did.
+The doctor (PW 16) who held the postmortem examination found nine injuries two of which he described as incised and four as punctured incised, two more as punctured and the remaining one as a vertical incised wound.
+These were on the left upper arm, left fore arm, on the left side of the epigastrium, on the left side of the anterior axillary line, on the left mid axillary line, on the right side of the epigastrium and on the left side of the back.
+Injuries are very severe and according to the doctor death was due to shock and hemorrhage on account of the injuries.
+It is clear that whosoever had inflicted these injuries definitely had ? the intention to cause the death of the victim.
+In the first information report which PW 4 lodged at the Thana, which is very close to the place of occurrence, within about 15 minutes of the occurrence, inter alia, stated thus: 4 L159SCI/76 710 At about 11.15.
+P.M. I woke up on hearing a noise to the effect 'younger brother, Karunakaran is running after stabbing me with knife, 'catch him '.
+I stood up and saw Karunakaran, son of Orathur Ayyathurai Padayachi running eastwards from the place where I lay and my elder brother chasing him from behind.
+I too came running".
+It will be seen that at the time of lodging of the first information report only the present accused was implicated.
+Even so, later on four eye witnesses were produced implicating not only the present accused but also two other accused.
+The High Court after appreciating the entire evidence rejected the evidence of these eye witnesses, namely, PW 1, 2, 3 and 5 and described them as "a bunch of liars", "unashamed liars and perjurers".
+The High Court, therefore, acquitted the second accused, Jabamani Nadar alias Kanyakumari Comrade alias Ramu and also observed that necessarily no case would lie on this kind of testimony against even the absconding accused.
+It was also observed that the High Court "can place no reliance on the testimony of PW 4 in so far as he implicated the second accused and Tharnizharasan in the case of murder of Viswanatham".
+The High Court further observed: "Poor PW 4 was compelled to speak to a version which ought to accord and harmonise with the version given out by , PWs 1, 2 and 3".
+Even so the High Court thought that it was justified in convicting the present accused on the sole testimony of PW 4 "corroborated by the contents of exhibit P1 (FIR)".
+The High Court held that "PW 4 who was afflicted with the fell disease of leprosy. has absolutely no motive to implicate the first accused".
+The High Court further held that PW 4 gave a "candid, natural and truthful version. at the earliest opportunity".
+The High Court has taken note of the fact that "there has been a history of a bitter feud spanning over nearly a decade between the first accused and his father on the one hand and the deceased Viswanatham t on the other".
+This is, therefore, a case where conviction of the accused depends .
+on the sole testimony of a single witness.
+If the witness is absolutely reliable there can be no infirmity in convicting the accused.
+In that ' case even corroboration may not be sought for.
+ordinarily in an appeal under article 136 of the Constitution we would have hestitated to go into the facts to reappreciate the evidence.
+It is, however, not possible to adopt that course in this case where the testimony of the sole witness has been rejected with reference to the 1 second accused who was on the same boat with the appellant.
+The very fact that this eye witness could be persuaded to substitute PWs 1, 2 and 3 for his deceased brother as chasing the assailants, degrades him from the status of an absolutely reliable witness.
+He is definitely an obliging witness and cannot at all be trustworthy.
+This witness may not have a qualm of conscience in implicating the accused for the 711 mere asking by someone, if not by the inimical police officer (PW 23) against whom criminal cases were pending at the instance of the accused 's father.
+Apart from that we find that the High Court has not considered the intrinsic quality of the evidence of PW 4.
+It failed to notice certain broad facts which should definitely weigh with the court while appreciating ocular testimony.
+From the medical evidence it is clear that there were more than one assailant and yet for the FIR it appears that there was only one assailant.
+This may not, in a given case, be considered as a very serious infirmity since the witness may not have seen the other.
+assailants when he came running to the place of occurrence.
+But the fact that the witness has stated in the first information report that the deceased was only mentioning the name of accused Karunakaran as his assailant, this earlier version appears to be contradicted by the medical evidence.
+Besides, he has deliberately changed his own stand in court when he deposed that he saw two other persons running ahead of Karunakaran being chased by his two brothers and Ramaswamy.
+Another very serious departure from his earlier version is that while PW 4 had stated in the first information report that "my elder brother" (meaning the deceased) was "chasing him from behind" in court he has completely given a go by to this statement and stated that Karunakaran was being chased by PWs 1, 2, and 3.
+He did not at all refer to the deceased chasing him.
+If his statement in court that he saw PWs 1, 2 and 3 chasing Karunakaran while running away after the assault is true, it is difficult to appreciate that he would not mention about this fact in the first information report.
+He admitted in the course of cross examination that the Sub Inspector asked him whether he had any witnesses and that he "did not tell about them due to excitement".
+It is difficult to accept this explanation of this witness.
+Assuming that his earlier version in the first information report is true that the deceased chased the accused .
+as the latter was running away after the assault we would have expected some evidence of a trail of blood stains from the place where he was sleeping to the place where he fell dead.
+On the other hand we find that there is a mention about a pool of blood only where the dead body was found at No. 1 in the site plan.
+There were also no blood stains on the bench where he was said to be sleeping.
+We further find from the evidence of PW 4 in cross examination that when he went near his deceased elder brother about hundred persons were there and "none of them asked him as to how it had happened".
+We do not find in this case a single witness out of that crowd produced in court for the purpose of corroborating PW 4.
+If the statement of PW 4 is to be believed, the crowd had gathered at the place of occurrence already when he arrived.
+It is also conceivable that those persons, who arrived at the place of occurrence a little earlier than PW 4, did not see the assailants who might have already escaped.
+It also stands to reason that those persons who gathered would not ask PW 4, who arrived at the place a little later, for information with regard to the assailants.
+There is considerable doubt as to this testimony with regard to seeing the accused running away from the place of occurrence.
+When the accused is 712 going to lose his life in such a serious charge it is only necessary that the court should be circumspect and closely scrutinise the evidence to come to an unhesitating conclusion that he is absolutely reliable.
+We are unable to say that the High Court in this case has made a correct approach in assessing the quality of the testimony of this solitary eye witness.
+The High Court is not even right that PW 4 stands wholly corroborated by the contents of the FIR.
+On the other hand we have .
+r shown that his version in the FIR stands contradicted by the testimony in court on a very material point.
+For the reasons given above we are unable to place such reliance as is requisite on the testimony of this uncorroborated solitary witness for convicting the accused facing a murder charge.
+The conviction and sentence of death are, therefore, set aside.
+The appeal is allowed and the accused shall be released from detention forthwith.
+S.R. Appeal allowed.

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+ivil Appeal Nos.
+630 631 of 1971.
+Appeals by Special Leave from the Judgment and order dated the 19 1 1970 of the Andhra Pradesh High Court in Tax Revision Cases Nos 46 and 47 of 1969.
+V. section Desai, Mrs. Vimla Markandeyulu and G. N. Rao for the Appellant.
+P. Ram Reddy and P. P. Rao for the Respondents.
+The Judgment of the Court was delivered by BEG, J.
+The short question before us in these appeals by special leave, is whether sales of Arc carbons, known as "Cinema Arc Carbons", manufactured by the appellant company, were rightly subjected to sales tax for two assessment years 1965 66 and 1966 77 on the ground that they fall under entry No. 4 of the 1st Schedule of the Andhra Pradesh General Sales Tax Act, 1957, (hereinafter referred to as 'the Act ').
+This entry reads as follows: "Cinematographic equipment, including cameras, projectors, and sound recording and reproducing equipment 562 lenses films and parts and accesories required for use their with As indicated above, the very name of the Arc Carbons, as commercial commodities, seems to attach the word "Cinema" to them because of the use to which they are generally put.
+The High Court referred to the fact that the appellants had not produced their account books to show that they had been purchased by persons other than those who ran cinemas or for any other use.
+Of course, it is very difficult to identify a taxable commodity merely by the use to which it may be put.
+Nevertheless, it appears that the entry under consideration links the taxable object with its general or ordinary use.
+The taxing authorities were, therefore, compelled to consider the use which is generally made of the arc carbons.
+They had concluded that the common or ordinary use of the arc carbons was that they exuded their power foul light cast, through the projectors, on cinema screens.
+It was pointed out that the Sales Tax Appellate Tribunal, the final departmental authority under the Act, had allowed an application for adducing expert evidence to determine the question whether arc carbons manufactured by the appellant company could be covered by the entry under consideration.
+It, however, appears that, before further evidence could be taken, at the appellate stage, on the subject, a decision of the Andhra Pradesh High Court, in the State of Andhra Pradesh vs Srimathi Nidmarthi Saraswathi Devi(1), was brought to the notice of the Tribunal.
+There, the High Court had held that such arc carbons are covered by the 4th entry in the 1st Schedule of the Act.
+Hence, the Tribunal dismissed the appeal without taking further evidence.
+In the High Court, two decisions cited on behalf of the appellants were: Deputy Commissioner of Commercial Taxes, Madhurai Division, Madhurai vs Ravi Auto Stores(2), and State of Madras vs Indian oxygen Ltd. (3).
+The High Court pointed out that in both these cases what was decided was whether "welding electrodes", considered by themselves, were "electrical goods" falling within entry 41 of Schedule 1 of the Madras General Sales Tax Act.
+It was held, in these cases, that they were only copper rods which were melted by electrical power in the process of welding.
+Neither the use of the term "electrode" to describe them, suggesting a connection with electricity, nor their utilisation in a process involving application of electrical power could convert them into "electrical goods" as contemplated by the entry in the Madras Act.
+The High Court rightly observed that these decisions had no bearing whatsoever upon the very different entry in a schedule of an entirely different Act of a different State.
+The same question has been argued before us with the help of some more cases to which the same criticism applies.
+The additional cases cited before us were: Pashabhai Patel & Co.(P) Ltd. vs Collector of Sales Tax, Maharashtra State(4), where it was held a "tractor" (1) T.R.C. No. 26 of 2962 (decided on 9th August, 1963) (2) (1968) 22 S.T.C. 172 (Madras) (3) (1968) 22 S.T.C. 476 (Madras) (4) (1964) 15 S.T.C.32.
+563 is not "agricultural machinery", within the meaning of entry 9 in Schedule of the Bombay Sales Tax Act, 1953; Agrawal Brothers vs Commissioner of Sales Tax, Madhya Pradesh(1); where it was also held that a "tractor", which is "nothing but a self propelled vehicle capable of pulling a load", or "traction" does not acquire the character of "agricultural machinery or implement" merely because when used on agricultural land it is used also to draw certain agricultural implements like a plough; The State of Mysore vs Mores (India) Ltd.(2), where it was held that a typewriter ribbon is not an essential part of a type writer so as to attract the tax under entry 18 of the second schedule to the Mysore Sales Tax, Act, 1957, Commissioner, Sales Tax, U. P. v Free India Cycle Industries(3), where it was held that rexine saddle covers used also for bicycle seats are not covered by entry No. 34 introduced by Section 3A of the U.P. Sales Tax Act, 1948, as modified subsequently, which read: "bicycles, tricycles, cycle rickshaws and perambulators and parts and accessaries thereof other than tyres and tubes"; The Madhya Pradesh State Co operative Marketing Society, Jabalpur vs The Commissioner of Sales Tax, M.P. Indore(4), where it was held that oil engines and pumps", which are not known in the commercial world as "agricultural machinery" could not be covered by an entry meant for goods sold for agricultural purposes simply because some of them are also sold to agriculturists for agricultural purposes.
+We do not think that any useful purpose is served by multiplying cases relating to entries which are so very different and could have only a very remote hearing, if any, upon any reasoning which could be adopted to support the submission that the arc carbons, under consideration here, fall within the relevant entry 4 of Schedule 1 of the Act.
+The meaning of this entry can only be satisfactorily determined in the light of the language of the entry itself considered in the context in which it occurs.
+The entry No. 4 occurs in a schedule in which descriptions of goods to be taxed indicate that the expression "required for use there with" has been employed for equipment or accessories connected with the main purpose.
+For instance, in entry No. 5 the expression occurs at the end as follows: "Photographic and other cameras and enlargers, films and plates, paper and cloth and other parts and accessories required for use therewith".
+Apparently, the deciding factor is the predominant or ordinary purpose or use.
+It is not enough to show that the article can be put to other uses also.
+It is its general or predominant user which seems to determine the category in which an article will fall.
+The first entry in the schedule relates to "motor vehicles" and includes "component parts of motor vehicles" and "articles (including batteries) adapted for use as parts and accessories of motor vehicles." but excludes certain other articles by putting in the words "not being such articles as are ordinarily also used for other purposes than as (1) (1965) 16 S.T.C. 860.
+(2) (1970) 26 S.T.C. 87.
+(3) (1970) 26 S.T.C. 428.
+(4) (1971) 27 S.T.C. 45.
+564 part and accessories of motor vehicles".
+Entry No. 2, relating to refrigerators, air conditioning plants covers also "component parts thereof".
+Again, entry No. 3, for "wireless reception instruments and apparatus" includes "electrical valves, accumulators, amplifiers and loud speakers and spare parts and accessories thereof ' '.
+The words "parts thereof" are used in several entries, such as entry No. 6 for clocks, time pieces and watches, entry No. 10 for dictaphones and other similar apparatus for recording sound, and entry No. 11 for sound transmitting equipment such as telephones and loud speakers.
+our object in indicating the nature of entries, amdist which entry No. 4 occurs, is to show that some precision has been attempted in making the entries.
+When it was intended to confine the entry to particular gadgets and "parts thereof" the entry said so.
+Of course, even where an entry relates to parts manufactured for use for a particular kind of instrument of gadget only, the article, manufactured to serve as a part of a particular kind of apparatus, would not cease to be covered by the intended entry simply because a purchaser makes some other use of it.
+We have to find the intention of the framers of the schedule in making the entry in each case.
+The best guide to their intentions is the language actually employed by them.
+We find that the term "accessories" is used in the schedule to describe goods which may have been manufactured for use as an aid or addition.
+A sense in which the word accessory is used is given in Webster 's Third New International Dictionary as follows: "all objects or device that is not essential in itself but that adds to the beauty, convenience, or effectiveness of something else".
+Other meanings given there are: "supplementary or secondary to something of greater or primary importance"; "additional"; "any of several mechanical devices that assist in operating or controlling the tone resources of an organ." "Accessories" are not necessarily confined to particular machines for which they; may serve as aids.
+The same item may be an accessory of more than one kind of instrument.
+It will be noticed that the entry we have to interpret includes parts" as well as "accessories" which are required for use in projectors or other cinematographic equipment.
+We think that the Andhra Pradesh High Court correctly held that the main use of the arc carbons under consideration was duly proved to be that of production of powerful light used in projectors in cinemas.
+The fact that they can also be used for search lights, signalling, stage lighting, or where powerful lighting for photography or other purposes may be required, could not detract from the classification to which the carbon arcs belong.
+That is determined by their ordinary or commonly known purpose or user.
+This, as already observed by us, is evident from the fact that they are known as "cinema arc carbons" in the market.
+This finding was enough, in our opinion, to justify the view taken by the Andhra Pradesh High Court that the goods under consideration are covered by the relevant entry No. 4.
+Consequently, we dismiss these appeals with costs.
+V.P.S. Appeals dismissed.

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+Civil Appeal No. 1231 of 1968.
+Appeal by special leave from the judgment and order dated the 20th December 1962 of the High Court of Judicature at Bombay in Civil Appeal No. 151 of 1960.
+B. D. Bal with A. G. Ratnaparkhi, for the appellant.
+V. section Desai with M. N. Shroff for section P. Nayar, for respondent.
+The Judgment of the Court was delivered by GOSWAMI, J.
+The question that arises in this appeal by special leave is whether Shri Vithal Sukhamai Sansthan at Amalner, (East Khandesh) was a private Devasthan or a public religious trust.
+There was a saint endowed with spiritual powers by the name of Sakharam Maharaj at Amalner.
+The deity of his worship was Shri Vithal Rukhamai.
+Although the origin of the Sansthan is dipped somewhat in antiquity and direct testimony was lacking, it has never been disputed that Sakharam Maharaj constructed a temple in the year 1817 at Amalner and installed the aforesaid deity according to religious rites.
+He also acquired certain properties and the said temple with the properties constituted Shri Vithal Rukhamai Sansthan of Amalner.
+The sansthan had movable property of the value of Rs. 19,164/ and immovable properties of the value of Rs. 1,06,000/ and the average gross annual income as well as the average annual expenditure was Rs. 11,000/ .
+After the passing of the Bombay Public Trusts Act, 1950 (No. 29 of 1950) (briefly the Act) an application under section 18 of that Act was filed by three persons Bhaskarrao Chimanrao Deshmukh, Ramrao Sahebrao Deshmukh and Ramkrishna Tryambak Deshpande, as constituted attorneys of Vasudeobuwa who was described in the application as the "owner" of the property.
+The word 'Buwa ' means saint.
+The application was made on May 29, 1952, to the Assistant Charity Commissioner, Poona, under protest and without prejudice 520 to the claim made therein that the Sansthan was not a public trust.
+In view of the penal provision under section 66 of the Act in the case of non compliance with section 18(1) of the Act the said application was made ex abundanti cautela.
+The Assistant Charity Commissioner after requisite notice made an enquiry into the matter in accordance with the provisions of the Act.
+On behalf of the applicants representing the Sansthan evidence of the attorney Ramkrishna Deshpande was recorded and he was cross examined by the assessors as well as by the Assistant Charity Commissioner.
+Some documents were also produced on behalf of the Sansthan.
+Three witnesses were examined on behalf of the Assistant Charity Commissioner and were afforded an opportunity to the applicants ' pleader for cross examination.
+At the close of the enquiry the Assistant Charity Commissioner by his order of August 25, 1956, held the Sansthan to be a public trust and ordered its registration as a public trust under the Act.
+The applicants thereupon filed an appeal under section 70 of the Act before the Charity Commissioner, Bombay, who by his order of August 31, 1957, affirmed the decision of the Assistant Charity Commissioner.
+That led to an application under section 72 of the Act to the District Judge of West Khandesh at Dhulia which was duly filed on behalf of Purshottambuwa who meanwhile succeeded Guru Vasudeobuwa as "owner" of the Sansthan.
+The learned District Judge reversed the decision of the Charity Commissioner by his order of October 16, 1959, and declared the Sansthan to be a private property and not a public trust.
+The Charity Commissioner then appealed under section 72(4) of the Act to the High Court of Bombay.
+The High Court by its order of 19/20th December, 1962, set aside the order of the District Judge and held the Sansthan to be a public trust under the Act and restored the order of the Charity Commissioner.
+Hence this appeal by special leave which was obtained on March 29, 1968, after condonation of delay, in the peculiar circumstances of the case arising out of revocation by the High Court of its earlier certificate in favour of the appellant on account of default of deposit of security.
+As noted earlier there was both oral and documentary evidence adduced in this case.
+The learned District Judge relied mostly on the documentary evidence for his conclusion in favour of the appellant.
+The High Court took note of both oral as well as documentary evidence.
+The High Court particularly relied upon an admission of the appellant 's witness, Ramkrishna Deshpande, when he stated that "we cannot prevent people from going to the temple as the temple is meant for the Darshan by the public".
+It is not disputed by Mr. Bal appearing on behalf of the appellant that the Sansthan in question is an endowment.
+His only contention is that it is a private religious endowment and not a public one.
+He submits that there is no evidence of long user of this temple by 521 the public as a matter of right.
+Mr. Bal further contends that the High Court failed to consider all the material documents filed on behalf of the appellant except only exhibit 35 and that the conclusion was highly erroneous being contrary to the one that had been reached by the District Judge on appraisal of the entire documentary evidence.
+Before we proceed further, it may be appropriate to note the definitions of 'public trust ' and 'temple ' in section 2(13) and section 2(17) respectively of the Act which read as follows: section 2(13): "Public trust ' means an express or constructive trust for either a public religious or charitable purpose, or both and includes a temple, a math, a wakf, church syna gogue, agiary or other place of public religious worship, a dharmada or any other religious or charitable endowment. " section 2(17): "Temple ' means a place by whatever designation known and used as a place of public religious worship and dedicated to or for the benefit of or used as of right by the Hindu community or any section thereof as a place of public religious worship".
+Relying upon the above definitions Mr. Bal submits that there is absolutely no evidence in this case about dedication to the public or public user of the temple as a matter of right.
+Since the grievance of the appellant is directed against the High Court 's absolute failure to consider all the documentary evidence, we may deal with that aspect first.
+The earliest document produced in this case is a 'Sanad ' (exhibit 42) of November 1, 1863.
+This Sanad was granted by the then British Government during the reign of Queen Victoria in favour of "Devasthan Shri Vithal Rukhamai '.
+The Sanad refers to the entry in the village accounts.
+The entry mentioned therein is in the village accounts in the Khandesh Collectorate for the year 1860 61, field Nos. 623 and 624 measuring 14.5 acres of land in the name of the holder as Devasthan Shri Vithal Rukhamai, Manager Balkrishnabuwa, Guru Govindbuwa, Amalnairker.
+There are significant recitals in the Sanad to the following effect: "It is hereby declared that the said land shall be continued for ever by the British Government as the endowment property of Shri Vithal Rukhamai of Kasabe Amalnair Talooka Amalnir on the following conditions, that is to say, that the managers thereof shall continue faithful subjects of the British Government, and . the said land shall be continued for ever as endowment Inam without increase of land tax over the said fixed amount".
+The amount fixed was Rs. 17/4/0 per annum.
+522 It is true that the High Court has not referred to this Sanad but the District Judge did.
+The District Judge held that ". . the expression in the Sanad cannot be in any way determinative of the nature of the temple or religious endowment as a public trust".
+It is, however, difficult to accept the conclusion of the District Judge.
+The Sanad being an ancient Royal grant is a very important piece of evidence to show that although Sakharam Maharaj, the founder of the temple, had already been succeeded by Guru Govindbuwa and the latter by Balkrishnabuwa, the land had been held in the year 1860 61 in the name of the Devasthan.
+It is in the name of the Devasthan alone that the grant was continued by the Government.
+This would go to show that the Government recognised the Sansthan with the temple as a public religious endowment and only on that basis the grant was continued.
+Apart from that the temple was shown to have a Manager and not an owner as such.
+In the absence of anything to the contrary of a convincing nature, a grant by the Government in favour of the temple describing the property to be in charge of a manager leads to an unerring inference that the property is a public religious endowment.
+From the evidence of Ramkrishna Deshpande, one of the constituted attornies, we find the origin and the devolution as follows: "The originator of this Sansthan is Sakharambuwa.
+After Sakharam there came Gobindbuwa.
+He was followed by Balkrishnabuwa.
+Then came Prahladbuwa.
+Thereafter Tukarambuwa came to Gadi.
+After him there was Krishna buwa and after him there was Balkrishna.
+Then came Vasudeo.
+After him the present Buwa Purshottam came to Gadi.
+This Gadi goes to Shishya from the Guru".
+This evidence of Ramkrishna Deshpande stands corroborated by the Sanad which shows in the year 1860 61 the Manager of the Sansthan as Balkrishnabuwa Guru Govindbuwa.
+Guru Govindbuwa was the second in the line of succession after Sakharam, the founder, and Balkrishnabuwa being the third in the line.
+It is clear from the Sanad that the Government treated the temple as a public religious endowment.
+The next document in sequence is a Varaspatra of February 28, 1869 (exhibit 35) executed by Guru Govind Balkrishna buwa in favour of Prahladbuwa.
+This is a document which was relied upon both by the District Judge as well as by the High Court.
+Varaspatra is a deed of nomination by which an Adhikari for the Sansthan was nominated in order to take charge of the property, maintain and continue the religious worship of the deity as per tradition as well as of the celebration of the festivals in accordance with the customary practice of the Sansthan.
+The appellant draws our attention to the following recitals in the above deed: "I have been carrying on the Malaki of Shri Sansthan Amalner. " 523 According to the appellant this would go to show that the executant of the document Balkrishnabuwa described himself as 'Malak ' (owner) of the Sansthan.
+It is further pointed out that while nominating Prahlad as Adhikari, Balkrishnabuwa stated in the said document as follows: "You are entitled to the ownership of all the incomes that will come before the Deity, Shri Samarth and during the Swari (procession) as well as the income of Inam Najrana and the income of movable and immovable property".
+x x x x x "The entire ownership of the Sansthan and all the movable and immovable property etc.
+pertaining to the Sansthan is of yours.
+That ownership is of your own.
+Your Bhauband and others have no right whatsoever over the same.
+You are free to give and take as per the Shishya sampradaya as has been done previously".
+From the above, the appellant contends that the Sansthan was a private property and it was also transferred to the Shishya Adhikari to maintain it as his own property.
+We are unable to accept this submission as we find some other significant recitals in the documents itself warranting a contrary conclusion.
+Although it is stated in the document that Balkrishnabuwa was "carrying on the Malaki", he at the same time states with regard to the Sansthan thus: ". the same was entrusted to me by Shri Guru Maharaj". . x x x x x "I, therefore, thought that I should entrust the work of the Sansthan to you and have appointed you to the said Sansthan".
+The nature of devolution is explicit in the above extract.
+Although there is use of the words owner and 'Malaki ' in the above recitals, the entire tenor of the document read as a whole goes to show that the property has always been treated as trust property even by the Adhikari saints and the Adhikaris or the disciples who succeeded one after the other were not owners but trustees of the property.
+This ancient document read as a whole does not admit of any other interpretation consistent with the nature of the property and the avowed object and purpose of the founder clearly revealed therein which has been carried into effect by successive loyal and devoted disciples.
+The words 'Malaki ' and 'owner ' in the context, are not used in the broad sense to indicate an absolute character of personal ownership.
+The next document is Vyavasthapatra (exhibit 41) of April 25, 1897.
+We find from the evidence of Ramkrishna that the Shishya is appointed by the Maharaj who happens to be holding the Gadi at the relevant time.
+This fact is borne out by the recitals in exhibit 41.
+524 This document may be described as a deed of nomination or will whereby it appears Krishnabuwa whose Guru was Tukaram Maharaj nominated Balkrishna Gangadhar Dhamurkar as the Devadhikari of the Gadi to succeed him.
+The appellant submits that Balkrishna was bestowed a 'Malaki ' as the term appears in this document.
+Although the High Court has not dealt with this document, there is a reference in its judgment to the contents of the same as being similar to exhibit 35.
+The principal emphasis on both these documents exhibit 35 and exhibit 41 is that the words 'owner ' and 'Malaki ' were used in the recitals.
+As stated above we are unable to hold that recitals in these documents taken as a whole can reasonably lead to the conclusion that the Sansthan is a private property.
+After the turn of the century, coming now to comparatively recent times, there are four documents exhibit 40,37,39 and 38 dated September 10, 1929, July 15, 1936, July 2, 1946 and January 28, 1949, respectively.
+In exhibit 40 the party taking the gift is described as Vahiwatdar Panch of Shri Sakharam Maharaj, Sansthan, Vithalwadi, Amalner.
+The donor, an old agriculturist of a different Taluka viz. Erandole, writes: "I give the gift deed in writing as follows: With the object of giving possible help through me to the above sansthan, I have given in gift my ancestral immovable property. x x x x x I have given in gift the above mentioned property as aforesaid of my free will for the purpose of religious work in order that my life may be of bliss as I have no male issue and wife.
+x x x x x The said field should be used for the sansthan from generation to generation.
+The above sansthan has become full owner thereof".
+In the gift deed exhibit 37 executed by three businessmen of Amalner there are recitals to the similar effect: "When we were joint, the said field was given as a gift to you for the service of the sansthan, viz., Shri Vithal Rukhmai Sansthan, Amalner and was given in your possession.
+Now all our movable and immovable estate is partitioned orally.
+Hence the gift deed of the said field, which had remained unexecuted, has been executed today. " The said gift deed was in favour of Archak (worshipper) Vasudeobuwa Guru Balkrishnabuwa.
+Again, in the gift deed exhibit 39 the donee is described as "Shri Rukhmini Pandurang Sansthan, Sansthan Amalner Sakharam Maharaj at present Vasudev Buwa Guru Bal 525 krishna Maharaj".
+The following recitals in the said document are eloquent: "This land is given to you in charity as per the order of (my) mother with a religious view and with an intention of benefitting others with the object of achieving happiness in this world and in the next world according to the shastras and the above land is given in your possession this day.
+Hence you are the full owner of the land and you are free as full owner thereof to manage and carry on the Vahiwat of the said land by right of ownership perpetually from generation to generation on the strength of this writing.
+x x x x x The Dindi of the said Sansthan from Amalner remains at Shivgaon on the 30th of Jeshta vadya or on the 1st of Ashad Shudha according to practice every year.
+You should spend the income of the said property for the purpose of Naivadya for the Deity Pandurang at night that day.
+" The beneficiaries of this gift are clearly the unascertained Hindu public and not ascertained individuals and the donee is a trustee accepting the gift on behalf of the Sansthan.
+The last deed of gift is exhibit 38 and the donee is "Shri Vasudev Buwa Guru Balkrishna Buwa" described as the worshipper carrying on the "Vahiwat of Shri Vithal Rekhmai Sansthan".
+The deed goes on to say: "I have full faith in Shri Sakharam Maharaj.
+Hence with the intention (object) that some service may be rendered by me for his Devasthan, I have given in gift out of love the below mentioned property valued at Rs. 600 (Six hundred) without taking any consideration from you, for the purpose of expenses of performing worship and offering Naivadya food".
+All the above gifts were donated to the Devasthan and for the maintenance of worship therein.
+These gifts were not made in favour of individuals as such in order that the beneficiaries of the gifts will be only those individuals.
+It is clear that the beneficiaries of the deeds are the deity and the Sansthan and the gifts were made with the object of maintenance of the worship of the deity for the benefit of the Hindu public as a whole.
+The expression in the recital that "you are free as the full owner thereof" does not convert the gift which is expressly in favour of the deity or Sansthan into that in favour of an individual as private property.
+The appellant relies on all these documents for the purpose of showing that the endowment is private only because ownership of the donor is transferred to the donee.
+We are, however, unable to accede to this submission.
+It is very significant that in the last gift deed exhibit 38 of January 28, 1949, there is a most reverential reference to Shri 526 Sakharam Maharaj and his Devasthan when Sakharam Maharaj had departed in the past century.
+Not much can be made therefore from the expression "His Devasthan" to convert the property into a private endowment.
+The reference to Sakharam Maharaj Sansthan, wherever it appears, is only for the purpose of identification and commemoration of the hallowed saint who had admittedly founded the same.
+The principles of law for determination of the question whether an endowment is public or private are fairly well settled.
+This Court observed in Deoki Nandan vs Murlidhar as follows: "The distinction between a private and a public trust is that whereas in the former the beneficiaries are specific individuals, in the latter, they are the general public or a class thereof.
+While in the former the beneficiaries are persons who are ascertained or capable of being ascertained, in the latter they constitute a body which is incapable of ascertainment".
+This Court further held: "When once it is understood that the true beneficiaries of religious endowments are not the idols but the worshippers, and that the purpose of the endowment is the maintenance of that worship for the benefit of worshippers, the question whether an endowment is private or public presents no difficulty.
+The cardinal point to be decided is whether it was the intention of the founder that specified individuals are to have the right of worship at the shrine, or the general public or any specified portion thereof.
+In accordance with this theory, it has been held that when property is dedicated for the worship of a family idol, it is a private and not a public endowment, as the persons who are entitled to worship at the shrine of the deity can only be the members of the family, and that is an ascertained group of individuals.
+But where the beneficiaries are not members of a family or a specified individual, then the endowment can only be regarded as public, intended to benefit the general body of worshippers".
+(See also the State of Bihar & ors.
+vs Sm.
+Charusila Dasi.
+Distinguishing the decision of the Privy Council in Bahu Bhagwan Din vs Gir Har Saroon on the ground that the properties in that case were granted not in favour of an idol or temple but in favour of one Daryao Gir who was maintaining a temple and to his heirs in perpetuity, this Court further held in the above decision: "But, in the present case, the endowment was in favour of the idol itself, and the point for decision is whether it 527 was private or public endowment.
+And in such circumstances, proof of user by the public without interference would be cogent evidence that the dedication was in favour of the public".
+This Court also distinguished the aforesaid Privy Council decision of Babu Bhagwan Din 's case (Supra) in Narayan Bhagwantrao Gosavi Balajiwale vs Gopal Vinayak Gosavi and others.
+This Court also observed in Narayan Bhagwantrao Gosavi Balaji wale 's case (supra) that it is also unusual for rules to make grant to a family idol.
+In Tilkayat Shri Govindlji Maharaj vs The State of Rajasthan and others this Court had to consider about a Hindu temple being private or public and observed as follows: "Where evidence in regard to the foundation of the temple is not clearly available sometimes, judicial decisions rely on certain other facts which are treated as relevant.
+Are the members of the public entitled to an entry in the temple ? Are they entitled to take part in offering service and taking Darshan in the temple ? Are the members of the public entitled to take part in the festivals and ceremonies arranged in the temple ? Are their offerings accepted as a matter of right. The participation of the members of the public in the Darshan in the temple and in the daily acts of worship or in the celebrations of festivals occasions may be a very important factor to consider in deter mining the character of the temple".
+In Goswami Shri Mahalaxmi Vahuji vs Rannchhodds Kalidas and an Ors., this Court observed as follows: "In brief the origin of the temple the manner in which its affairs are managed, the nature and extent of gifts received by it, rights exercised by the devotees in regard to worship therein, the consciousness of the manager and the consciousness of the devotees themselves as to the public character of the temple are factors that go to establish whether a temple is a public temple or a private temple".
+The learned counsel for the appellant relied upon the decision in Bihar State Board Religious Trust, Patna vs Mahant Sri Biseshwar Das and drew our attention to the following observations therein: "Thus, the mere fact of the public having been freely admitted to that temple cannot mean that courts should readily infer therefrom dedication to the public.
+The value of such public user as evidence of dedication depends on 528 the circumstances which give strength to the inference that the user was as of right".
+"Examples do occur where the founder may grant property to his spiritual preceptor and his disciples in succession with a view to maintain one particular spiritual family and for perpetuation of certain rights and ceremonies which are deemed to be conducive to the spiritual welfare of the founder and his family.
+In such cases it would be the grantor and his descendants who are the only persons interested in seeing that the institution is kept up for their benefit.
+Even if a few ascetics are fed and given shelter, such a purpose is not to be deemed an independent charity in which the public or a section of it has an interest.
+Such charities, as already stated earlier, appertain to a private debutter also".
+* * * * * We do not find that there is any difference in the ratio of the principles followed in the above decision.
+The case went against the Board in the above decision in the absence of "evidence of a reliable kind" of public user as "evidence of dedication".
+It is not always possible to have all the features of a public trust in a given case.
+Even some of the tests laid down by this Court may, in a given case, be sufficient to enable the court to come to a conclusion about the character of the trust.
+We cannot agree that the High Court was not right in giving due importance to the admission of the constituted attorney Ramkrishna Deshpande that they "cannot prevent people from going to the temple as the temple is meant for the Darshan by the public".
+The consciousness of the constituted attorney about the nature of the property, which has been held out for more than a century as a public religious endowment, adds to the effect of the documentary evidence produced by the appellant in this case in favour of the same conclusion.
+It has to be remembered that the founder Sakharam Maharaj was a celibate and the successive disciples who succeeded as Adhikaris of the Gadi were also celibates.
+From exhibit 35, the first Varaspatra of February 28, 1869, one gets a full picture of the working of the Sansthan: "The service and Bhajan etc.
+of the Deity have to be made as per the order of the Guru according to the Sampradaya".
+* * * * * * ". you should perform the Bhajan as was being done as per the Shishya Sampradaya and perform the Bhajan in Chaturmas at Shrikshetra Pandharpur regularly and there after you should come to Amalner and keep up the practice of celebrating the festivals etc.
+of Shri Sakharam Maharaj regularly as was being done.
+You should maintain the 529 Mandali (Committee) of the sansthan and continue the whole Mandali (Committee) with unanimous opinion.
+You know the Vahiwet of the Sansthan as is going on.
+You should continue the same accordingly in future". . * * * * * * "That ownership is of your own.
+Your bhauband and others have no right whatsoever over the same.
+You are free to give and take as per the Shishya sampradaya as has been done previously.
+The Deshmukhs and Deshpandes at Kashev Amalner have been rendering service to the said Sansthan faithfully.
+You should make arrangement to accept service from them as being done accordingly and go on rendering service and performing Bhajan etc.
+faithfully as mentioned herein as per the Vaishnava sampradaya as being done from before".
+x x x x x We have also seen from the evidence of Ramkrishna Deshpande: "All the Buwas are saints.
+People go for darshan because these people were saints.
+This Sansthan is based on the principles of Shishya parampara.
+This property goes from Guru to his Shishya.
+* * * * * "The residents of the place where the Bhajans are performed attend these Bhajans.
+In the days of Pandharpur fair the Maharaj remains present.
+He stays there for about 4 months.
+During his stay at Pandharpur Bhajans are performed daily.
+During the fair his Shishyas perform the Bhajans.
+While returning from the pilgrimage also he performs Bhajans.
+Maharaj also attends other fairs at Nasik etc.
+At that time also his Shishyas accompany him.
+By Shishyas I mean the disciples as well as followers.
+Shishyas are few but the followers are in large numbers.
+In the utsava at Amalner many saints of other places, Shishyas and followers take part.
+The persons who attend this year besides Shishyas and followers are about ten thousand.
+The followers and saints are paid their cost of journey.
+All their expenses of boarding and lodging are met by this Sansthan.
+The Bhajans at Pandharpur performed by Maharaj are attended by the public".
+Ramkrishna Deshpande concludes his evidence by stating: "I contend that this is a private temple because others cannot perform puja without permission of Maharaj".
+The oral and documentary evidence leave no room for doubt whatsoever that the Sansthan and the temple are public religious endowments.
+Even in acknowledged public temples any and everybody cannot perform puja in the sense in which the head pujari daily performs 530 at various stages.
+Public is not and may not be allowed to the inner most sanctum where the deity is installed except under special circumstances with special permission.
+That would, however, not lead to the conclusion that the temple is a private temple.
+Worshippers are not merely the accredited daily pujaris but also the multitude of the public who go to the temple for Darshan of the deity and for offerings.
+The contention of Ramkrishna Deshpande in his evidence, therefore, is without any force.
+When the origin of an endowment is obscure and no direct oral evidence is available, the Court will have to resolve the controversy about the character of the trust on documentary evidence, if any, the object and purpose for which the trust was created, the consistent manner in which the property has been dealt with or managed by those in charge, the manner in which the property has long been used by the public, the contribution of the public, to all intents and purposes, as a matter of right without the least interference or restriction from the temple authorities, to foster maintenance of the worship the accretion to the trust property by way of grants from the state of gifts from outsiders inconsistent with the private nature of the trust, the nature of devolution of the property, are all important elements in determination of the question whether a property is a private or a public religious endowment.
+We are satisfied that in this case all the above tests are fulfilled.
+To sum up from the documentary and oral evidence produced, the following features are present in the present case: (1) The deity installed in the temple was intended by the Founder to be continually worshipped by an indeterminate multitude of the Hindu public: (2) In order to facilitate worship by the public, the founder also intended that regular Bhajan, Kirtan and worship shall be maintained and annual ceremonies and processions for pilgrimage shall be conducted by the saints in succession nominated by the reigning saint.
+(3) There has been no evidence of any hindrance or restriction in the matter of continuous worship by the public extending over a long period.
+(4) More than a century ago the temple in its own name was recipient of land by Royal grant and the same has been managed by the saints in succession as Manager not as personal or private property.
+(5) Gifts of land by members of the public from the Taluka and outside it in favour of the temple or of the Sansthan for the purpose of maintenance of the worship.
+(6) Collection of subscriptions were made from house to house by taking Maharaj and also for 'Gulal ' ceremony.
+(7) Holding out of the Sansthan to all intents and purpose as a public temple.
+531 (8) Treating of the Sansthan by those who are connected with the management as intended for user by the public without restriction.
+(9) Absence of any evidence in the long history of the Sansthan to warrant that it had any appearance of, or that it was ever treated as a private property.
+While each case of endowment as to its character depends on the particular history.
+tradition and facts, the presence of the above features in the instant case lead to the inescapable conclusion that Shri Vithal Rukhamai Sansthan at Amalner is a public trust within the meaning of section 2(13) of the Act.
+In the result the appeal fails and is dismissed.
+We will, however, make no order as to costs.
+P.B.R. Appeal dismissed.

3531.txt

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+Appeal No. 1951 of 1975.
+Appeal by Special Leave from the Award of the Industrial Tribunal, Gujarat in Reference (II) No. 30 of 1974, pub lished in the Gujarat Govt.
+Gazette dated 23 10 1975 and Civil Appeal No. 631 of 1976 Appeal by Special leave from the Award of the Industrial Tribunal, Gujarat in Ref.
+(II) No. 158 of 1974 published in the Gujarat Govt.
+Gazette Part I L dated 15 4 76.
+V.B. Patel, 1.
+N. Shroff and H.S. Parihar for the appel lants (In CA 1951/75).
+S.T. Desai, A. P. Hathi, Mrs. section Bhandare, M. section Narasimhan K.C. Sharma, A. K. Sharma and A. K. Mathur for the appellants in C.A. 631/76.
+V.M. Tarkunde, K.L. Hathi and P.C. Kapur for the Re spondent in C.A. 1951/75 and Res.
+1(1) C.A. 631/76.
+S.S. Khanduja, S.K. Jain and Mrs. Laxmi Arvid for Re spondent Nos.
+1(2) In C.A. 631/76.
+The Judgment of the Court was delivered by SHINGHAL, J.
+These two are companion appeals by special leave.
+They have been heard together at the in stance.
+of the learned counsel for the parties, and will be disposed by a common judgment.
+Appeal No. 1951 of 1975 is directed against the award of the Industrial Tribunal Gujarat, dated September 24, 1975, in the dispute between the Alembic Glass Industries Ltd., Baroda, and its workmen, while appeal No. 631 of 1976 arises out of the Tribunal 's award in the dispute between Jyoti Limited, Baroda, and its workmen.
+Speaking broadly, the dispute in both cases related to the workmen 's demand for 10 days sick leave, with retrospective effect, and ,its accumulation over a period of three years i.e. upto 30 days.
+The workmen particularly felt aggrieved because by virtue of the first proviso to section 49 of the , hereinafter referred to as the Act, they were not entitled to the sickness benefit for the first two days of sickness except in the case of a, spell of sickness following, at an interval of not more than 15 days, the spell of sickness for which sickness benefit was last paid.
+It was also a grievance that the benefit under the scheme of the Act was much less than the normal earnings of an employee and was not beneficial to the workmen.
+The demand was resisted by the Companies in both cases.
+In the case of the Alembic Glass Industries Ltd., it was contended that the Act provided more than adequate sickness benefits, and any additional 82 benefit would place unproductive financial burden on the industry and would have an all round adverse effect on other industries.
+It was also urged that section 99 of the Act gave wide powers to the Employees ' State Insurance Corpora tion to enhance the benefit and it was therefore the proper authority to examine the demand.
+The Company also contended that there was no practice of giving any such sick leave in the industries in Baroda or in the State of Gujarat.
+In the case of Jyoti Ltd. an objection was taken that the reference was incompetent and the Tribunal had no jurisdiction to entertain it.
+It was also pointed out that the benefit of sick.leave of 7 days per year was initially given to the workmen under an award dated August 29, 1958 which contained a specific direction that it would be automatically discon tinued when the benefits of the Employees ' State Insurance scheme would become available to the workmen, and also that the reasonableness of the demand could not be examined by the Tribunal.
+An objection was also taken that the workmen had benefited a lot under the entire scheme of the Act and it would not be reasonable and proper to confer any addi tional benefit as the demands would place a heavy financial burden on the Company which it Could not bear.
+The demand, according to the Company, would create an absurd position inasmuch as a worker would receive more wages by remaining absent than on duty.
+The Company also pleaded that the demand for sickness leave could not be granted retrospec tively or allowed to accumulate.
+While the reference in the case of Jyoti Ltd., Baroda, was still pending, the Tribunal gave its award dated Septem ber 24, 1975 in the case of the Alembic Glass Industries Ltd. The Tribunal, inter alia, awarded 7 days sick leave with full pay and dearness allowance to the workmen of that Company in a year, with the facility of accumulation upto 21 days.
+It was stated before the Tribunal, on behalf of the workmen of Jyoti Ltd., that the arguments advanced and the contentions made in the case of the Alembic Glass industries may be considered as those made in their case also.
+The reference in the case of Jyoti Ltd. proceeded accordingly and resulted in the award dated March 9, 1976 to which reference has been made above.
+The award was on the lines of the earlier award in the case of the Alembic Glass Indus tries case, except .that the direction regarding 7 days sick leave was given retrospective effect from January 1, 1975.
+The Company applied for and obtained special leave to appeal as aforesaid, with the further direction that the appeal may be heard along with the identical matter (in the Alembic Glass Industries case).
+This is why these two have become companion appeals and are being disposed of together.
+The controversy in these cases is whether the benefits admissible under the Act in the matter of the grant of sick leave are such as to justify the rejection of the workmen 's demand and the setting aside of the Tribunal 's awards in that respect.
+It has been argued by the learned counsel for the appel lants that as the benefits of sections 47 and 49 of the Act are already admissible to workmen in Baroda with effect from December 14, 1969, and they are quite adequate, the Tribunal committed an error 83 of law in granting the additional benefits mentioned above.
+Reference in this connection has been made to section 61 of the Act which provides that when a person is entitled to any of the benefits provided by the Act, he shall not be enti tled to receive any similar benefit admissible under the provisions of any other enactment.
+The argument was raised in the Tribunal, but was rejected.
+A similar question arose for consideration in The Hindustan Times Ltd., New Delhi vs Their Workmen(1) and was answered as follows by this Court, "Mr. Pathak has tried to convince us that in view of the provisions of the , no provision need be made about sickness leave at all.
+That this Act has been applied, to the Company and that the workmen of the Company get the benefit of this Act is not disputed.
+It is difficult to see however how the benefit that the workmen will get under this Act can affect the question of sickness leave being provided for the workmen.
+This Act it has to be noticed does not provide for any leave to the workmen on the ground of sickness.
+It provides in section 46(1)(a) for periodical treatment of any insured person in case of his sickness if certified by a duly appointed medical practitioner.
+It is unnec essary to mention here the several provisions in the Act; viz., Sections 47, 48 and 49 which deal 'with the eligibility of workmen for sickness .benefit and the extent of the benefit that may be granted.
+Section 56 of the Act pro vides for medical benefits to the insured workmen or in certain cases to the members of his family.
+It appears to us clear however that in providing for periodical payments to an insured worker in case of sickness (sickness benefit) or for medical treatment or attendance to him or the members of his family, the legislature did not intend to substitute any of these benefits for the workmen 's right to get leave on full pay on the ground of sickness.
+" The matter came up again for consideration by this Court in Technological Institute of Textiles vs Its Workmen and others(2) and it was held as follows with specific reference to the first proviso to section 49 of the Act according to which a person qualified to claim sickness benefit is not enti tled to it for the initial waiting period of two days except in the case of continuous illness of the nature mentioned therein, "With regard to sick leave, the argument on behalf of the appellant was that benefits were granted by the , but .that is not a bar to the demand of the workmen for sick leave.
+The reason is that the first proviso to section 49 of the Employees ' State (1) [1964] 1 S.C.R. 234.
+(2) [1965] 2 L L.3,149.
+84 Insurance Act states that a person qualified to claim sickness benefit shall not be entitled to the benefit for an initial waiting period of two days except in the case of a spell of sickness following at an interval of not more than fifteen days, the spell of sickness for which benefit was last paid.
+It is apparent that the Employees ' State Insurance Scheme does not cover all contingencies of sickness and in any event the first two waiting days are not covered.
+In our opinion, the tribunal was, there fore, justified in its view that the workmen are entitled to 7 days ' sick leave with wages on pro duction of a medical certificate.
+" It would thus appear that the Scheme of the benefits admissible under the Act cannot be said to cover the work men 's demand for sick leave to the extent allowed by the Tribunal.
+Section 61 of the Act cannot thus be said to be applicable for the simple reason that the benefits granted by the Tribunal are not similar to those admissible under the Act.
+The Act does not in fact deal with the question of sickness leave.
+The other question regarding the adequacy of the sick ness benefit under the provisions of the Act has been exam ined by the Tribunal with reference to the reports of the National Commission of Labour, 1969, the Labour Laws Review Committee and the Norms Committee of Gujarat State, which go to show that the benefit cannot b.e said to be adequate for, it works out to about half the average wage of a workman, and even that amount is not admissible for the first two days of sickness except in the case of a spell of sickness following, at an interval of not more than 15 days, the spell of sickness for which the sickness benefit was last paid.
+It has to be appreciated that a workman is prevented from earning the normal daily wages during the period of his illness and there is no justification for the argument that the rate of benefit at about half his wage, under the Act, should be considered sufficient so as to deny him the bene fit of sick leave on full emoluments for a period of 7 days when he is certified by a competent medical officer to be ill for that or a longer period.
+Sickness is a serious misfortune to a workman for it not only prevents him from earning his normal wages, but is a drain on his meagre financial resources by way of additional expenditure on food, nursing and visits to the medical centre etc.
+It has not been disputed before us that the "region cure industry" basis is suitable in cases like the present for examining any controversy regarding the work man 's demand for additional benefits, but it has been argued by the learned counsel for the appellants that the award of the benefit of sick leave to the workers of the two Compa nies could not be justified on that basis.
+We find that the Tribunal has examined this aspect of the controversy also, and we have no reason to disagree with the view which it has taken.
+As has been stated, the Act came into force in the region concerned on December 14, 1969, and it has not been disputed before us that till then it was the practice in the glass industries to grant sick leave with wages for periods varying from 6 to 10 days.
+In fact in the 85 case of the Alembic Glass Industries Ltd., Baroda, the Tribunal made an award for 7 days sick leave on full pay and dearness allowance in 1958, subject to the condition that the benefit would cease to apply when the benefits of the Act became available to the workmen.
+The benefit of sick leave was therefore lost when the Act was made applicable to the region from December 14, 1969.
+That was obviously under a mistaken impression of the sickness benefit which the Act allowed for, as has been shown, it does not deal with all aspects of the demand for sickness benefit and does not, at any rate, provide for the grant of leave on full emoluments during the period of the workman 's physical incapacity to earn his normal wages because of his sickness.
+It there fore appears that the Tribunal could not be said to have erred in restoring the benefit which the workmen were re ceiving under the award of 1958, for it was taken away under the mistaken impression that it had been adequately replaced by the new provisions on the coming into force of the Act.
+The appellants have filed a statement (exhibit 7) containing information regarding the companies which have provided the benefit of sick leave to its workmen in the region.
+It shows that even though the Act was applicable to the workers of the Precision Bearings India Ltd., Baroda, Hindustan Brown Bovari Ltd., Baroda, the Associated Cement Companies Ltd., and M.S. University Press, Baroda, the benefit of sick leave has been allowed to the workmen of.
+those companies.
+It is therefore .futile to contend that the benefit should not be admissible on the ground that it had not been allowed by other companies in the region.
+We also find that such a benefit has been allowed in the case of glass industries by Shree Vallabha Glass Works Ltd., Vallabh Vidyanagar, Ogale Glass Works Ltd., Oglewadi and Vijay Glass Works, Bombay.
+Even the Alembic Glass Industries Ltd. has allowed 6 days sick leave in a year to its employ ees in Bangalore and it is permissible to accumulate it upto 12 days in addition to the current year 's leave, under a settlement dated July 17, 1969, which is being continued even after the coming into force of the Act.
+Learned coun sel for the appellants have invited our attention to the case between the Textile Labour Association and the Ahmeda bad Millowner 's Association where the demand for sick leave was refused but, as the Tribunal has pointed out, the demand there was for a month 's leave every year in addition to 15 days casual leave and pay in lieu of privilege leave.
+The Full Bench of the Industrial Court in that case considered the paying capacity of the mills also, and held that the additional leave demanded by the workmen would be very much beyond the paying capacity of the industry.
+As against this, the Tribunal has examined the financial capacity of the two companies in question, and has given adequate rea sons for holding that they are in good financial position and can bear the additional burden of sick leave.
+Learned counsel for the appellants have in fact not advanced any argument to the contrary.
+Mr. S.T. Desai has raised the argument, in the case of Jyoti Ltd., Baroda, that the Tribunal laboured under a misconception that 86 the sickness benefit would be lost for the first two days of sickness under the first proviso to section 49 of the Act, that the Tribunal should not, in any view of the matter, have given the benefit of 7 days sick leave, and that the workmen did not deserve anything more than sickness benefit for the first two days also.
+According to him, what has been awarded by the Tribunal is additional privilege leave for 7 days in the garb of sick leave.
+The argument is however futile because, as has been stated, the Tribunal has cor rectly examined the controversy and given adequate reasons for allowing the benefit of 7 days sick leave in the manner set out in the award.
+Such a leave could not be categorised as privilege leave as, by its very nature, it would be admissible only in the case of actual sickness certified by a registered medical practitioner.
+It would thus appear that the appellants have not been able to show that the awards in question are illegal or unjust; or would adversely affect the economy or the indus trial peace, or lead to imbalance in the conditions of service in other industrial establishments.
+It appears, however, that it was not necessary, in the circumstances of the case, to award the benefit of the sick leave with retro spective effect from January 1, 1975, in the case of Jyoti Ltd. Baroda.
+The appeals therefore fail and are dismissed except that the award in the case of Jyoti Ltd., Baroda, is made effective from the date of its commencement.
+The appellant companies shall pay to the workmen ' the costs of these appeals; one set of counsel 's fees.
+P.B.R. Appeals dismissed.

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+N: Criminal Appeals Nos.
+39 40 of 1976.
+(From the Judgment and Order dated 1 12 1975 of the Punjab and Haryana High Court in Criminal Original Nos.
+13 Crl. of 1975 and 14 Crl. of 1975).
+D. Mookherjee and Harbans Singh and V.M. Jain, for the appellants.
+Deven Chetan Das, Advocate General, Haryana and R.N. Sachthey, for the respondent.
+The Judgment of the Court as delivered by RAY, C.J. These are appeals under section 19(1)(b) of the against the judgment and order dated 1 December, 1975 of the Full Bench of the High Court of Punjab and Haryana.
+243 The appellants wrote a letter on 20 February 1975 to the President with copies to the Prime Minister, Chief Justice of India, the Chief Minister of Haryana and the Chief Jus tice of Punjab and Haryana High Court.
+The letter was signed by 15 members of the Bar belonging to the District Bar Association, Bhiwani.
+In that letter they brought to the notice of the President that Justice D.S. Tewatia of the Punjab and Haryana High Court visited the session division of Bhiwani and inspected the Courts from 14 February 1975 to 19 February 1975.
+In that letter they further stated as follows: "The learned Judge met the members of the Bar on 15 February, 1975 in the Bar Room, Bhiwani.
+During the course of the meeting, the learned Judge criticised the Government 's policy in regard to its attitude towards the judiciary.
+Besides the learned Judge was openly attacking the Govern ment in its political as well as administrative decision.
+On the ' whole, he gave an impression that he was not a Judge but a politician who had come to Bar Room.
+When the members of the Bar who had gone to meet the learned Judge in the P.W.D. Rest House, Bhiwani he discussed politics with them and criticised the present executive in general and the Congress Party in particular.
+He suggested the members of the Bar to revolt against the present Government as it has suppressed the civil liberation (sic) of the individuals and has also failed miserably in all fields.
+The Judge further said that the prevailing system of Government is not good in this country and we must adopt the communist form of Govern ment which can save the nation.
+Later on he had some pri vate political discussion with the local C.P.M. leaders.
+He also accepted the hospitality of the Technological Institute of Textiles (Mills) people who also took him for a sight seeing from Dadri to Pilani.
+The members of the District Bar Association highly regret the attitude of Justice D.S. Tewatia and urge the Government to take appropriate action in this regard".
+Five members of the Bar Association at Charkhi Dadri sent a letter addressed to the President.
+with copies to the Chief Justice of Punjab and Haryana High Court, the Chief Minister of Haryana, the Chief Justice of India and the Prime Minister.
+In that letter they said that Justice D.S. Tewatia visited the Bar and inspected the court at Charkhi Dadri on 17 February, 1975.
+Thereafter they stated as follows: "While talking with the members of the Bar, he pointed out that the library of this Bar seems to be very poor.
+Then Shri Virender Kumar Single, a member of the Bar requested the honourable Judge to help the Bar either by supplying books or by allocating the grant by the High Court so that the needy Bar may be able to purchase necessary books for the library.
+Then the Honourable Judge turned down the request and replied that it is never possible in the present system of Government of India.
+If you want this kind of help then you should prepare yourself for the commu nist Government in India by creating such atmosphere in the country.
+At another stage also during the course of his discussion with the members of the Bar over the matter of Rajasthan Law students demands in which they demanded a grant 244 of Rs. 5000/ from the Government for the library of each fresh law graduate and Rs. 200/ per month for a period of two years the initial stage of their legal practice he strongly emphasised the need for the communist system of Society and Government in India to fulfil these demands.
+The learned Judge also met Smt.
+Chandrawati separately and discussed with her the political affairs of the State.
+He also expressed his desire to see Comrade Dharam Singh a member of the Marxist Communist Party at his residence before Smt.
+Chandrawati.
+During his stay in the rest house he also discussed the teachers agitation and individual position of various political leaders in the State.
+He also enquired all about Shri Sohan Lal a leader of the teacher 's movement in the State".
+The letter concluded by saying that the Hon 'ble Judge during his entire stay in his tour deliberately showed the bent of his mind towards commu nism while exchanging view on various matters.
+The appellants took a copy of their letter to the Chief Justice of Punjab and Haryana.
+The appellants could not see the Chief Justice and left the letter with the Registrar in a closed cover.
+The Registrar told them that the closed cover could reach the Hon 'ble Chief Justice, A notice was issued by the High Court on 12 March 1975 as follows: "Letter dated 20th February, 1975 a copy of an application dated 20 February, 1975 signed by 15 members of the District Bar Association, Bhiwani, has been placed for the consideration of this Bench.
+On a perusal of the con tents thereof, a prima facie case of criminal contempt is made out.
+We therefore direct that the contempt of Court (Punjab 'and Haryana) Rules, 1974 be issued to each of the signatories of the above said application, returnable for the 1st of April, 1975".
+The High Court did not take any action against two persons on the letter written by five members of the Bar Association of Charkhi Dadri.
+Each of the appellants affirmed an affidavit in this pattern.
+"It is an article of faith with the deponent that dignity and respect of all Courts and of all Judges and particularly of the High Court must be maintained for, amongst other reasons, on that depends the orderly function ing of the society as also prestige of the profession to which the deponent has the honour to belong.
+The deponent has been taught to believe that a Judge ought always to steer clear of all avoidable controversial matters.
+The deponent most respectfully submits that the contents of the letter which he and others addressed to the President of India cannot be construed as scandalising the Hon 'ble Judge or the Court in any manner to weaken people 's faith in the administration of justice.
+The letter in question was addressed by the deponent to the President of India with copies to others with the sole object of conveying the opinion that the public expression by the Hon 'ble Judge of his personal views on controversial political matters con cerning the merits and demerits of the present system of the Government was not in keeping with the well accepted role of proverbial aloofness of a Judge.
+The letter was addressed ,bona fide, in good faith and without 245 any ill will and no publicity was given to it.
+It was intended to be a privileged communication made solely with a view to uphold the dignity of the Court.
+In order to prevent unwanted disclosure of its contents, the communica tion in question was brought personally by two members of the Bar Association, Bhiwani to Chandigarh in a closed cover addressed to the Chief Justice for being handed over to him for his personal attention.
+The deponent submits that the contents of the letter.
+have no relevance or relation to the functioning of the learned Judge of the High Court.
+The letter does not interfere much less substantial ly with due course of justice or proper administration of law by the courts.
+The deponent submits that there was no intention whatsoever on his part to scandalise the Hon 'ble Judge or this Hon 'ble Court or to lower the authority or undermine the prestige of the learned Judge or of the Hon ' ble Court or to weaken in any way the confidence of the people in the administration of justice.
+The deponent respectfully submits that the communication does not bear out any foundation for an action for criminal contempt.
+In any case, if in view of this Hon 'ble Court, the action of the deponent in addressing the letter in question constitut ed for any reason contempt of court, one would be more sorry than the deponent himself.
+Therefore, the deponent tenders his apology to this Hon 'ble Court, for the same, and prays for its acceptance.
+" The Full Bench of the High Court consisting of Justice Surjit Singh Sandhawalia, Justice Prem Chand Jain and Jus tice Bhupinder Singh Dhillon extracted portions from the affidavit of the appellants to which references has been made.
+The Full Bench thereafter referred to paragraph 9 of the affidavit where the deponents said that "if in view of this Hon 'ble Court the action of the deponent in addressing the letter in question constituted for any reason contempt of court, no one would be more sorry than the deponent himself.
+Therefore, the deponent tender his apology to this Hon 'ble Court for the same and prays for its acceptance".
+After the recital of paragraph 9 the judgment of the Full Bench said as follows: "In view of the averments made in the affidavit filed in rely and in particular in paragraph 9 thereof we accept the apology tendered on behalf of the respondents and discharge the rule issued against them".
+In our view the judgment is utterly unsound and unsus tainable.
+The elementary basis of acceptance of apology is that there is to be a finding of committal of contempt.
+The deponents stated that if the Court is of the view that the letter of the deponents constitute for any reason contempt of court, the deponents tender apology.
+It is a conditional apology.
+The condition is that if there is contempt the deponents tender apology.
+In the absence of any finding by the High Court that the appellants committed any contempt of court there was never any occasion for acceptance of apology.
+It appears before us that the allegations in the letter were not disputed and challenged.
+The High Court proceeded on the basis that the letters written by the appellants were correct.
+It is indeed curious 246 that the High Court in the notice referred to the letter of the appellant and said "on a perusal of the contents thereof a prima facie case contempt is made out".
+The High Court did not mention which particular portion of the letter constituted contempt of court.
+It is necessary to state here that if any Judge address es on political problems or controversies the Judge exposes himself to discussion by public.
+The reason is that the Judge travels from his judicial work and descends into the arena of politics and parties.
+The Judge cannot in such a case take shelter behind his office if the public discusses and criticises the views expressed by him.
+The reason is obvious.
+It is no part of the duty of a Judge nor is it a duty in discharge of office of a Judge to go and address a meeting on political matters to redress grievances of the people.
+However, if the speech of any Judge is criticised and if it becomes a disputed question of fact as to whether any Judge did speak or not as is alleged by the writer the matter would have to be ascertained by the court on facts whether the Judge concerned did speak on the matters ascribed to him before the court would take any action against the persons who would criticise the Judge 's speech.
+We wish to make it clear that if on facts it appears that the Judge did say things or matters about politics such utterances or views or observations will be the personal opinions expressed by the Judge, and, therefore, the protec tive umbrella of the court cannot be used by way of bringing the critics on the charge of contempt of court.
+It also appears in the letter that there is an allega tion that the Judge accepted hospitality of some organisa tion.
+To say that will not by itself be a contempt.
+All we need say is that it will not be correct and proper for any Judge to accept the invitation and hospitality of any busi ness or commercial organisation or of any political party or of any club or organisation run on sectarian, communal or parochial lines.
+Invitations by the Bar Associ ation or social invitations naturally Stand on a different footing and no one will find an exception to any Judge attending a social function.
+Judges are by reason of their office and nature of work expected not to get involved in controversial matters, or to concern themselves with political issues or policies under taken by political parties as a part of their political programme.
+We are of opinion that the Full Bench fell into the error of accepting the apology without finding that the appellants committed any contempt.
+In the absence of such a finding no question arises for acceptance of apology.
+In view of the fact that the High Court proceeded on the basis that the allegations in the letter were unchallenged we are of opinion that the matters did not constitute any contempt.
+The High.
+Court should have dropped the proceed ings and not pursued the matter.
+247 The judgment is set aside.
+The contempt proceedings are dropped.
+We should state here that the Advocate General of Haryana quite fairly stated that the letter did not consti tute any contempt.
+M.R. Appeals allowed.

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+Civil Appeal No. 1744 of 1968.
+(Appeal by Special Leave from the Judgment and Order dated 14 6 1967 of the Mysore High Court in Writ Petition No. 440/65).
+Mrs. Shyamala Pappu and Girish Chandra, for the Appellant.
+Narayana Nettar, for Respondents 4 and 5. 3 1338SCI/76 828 The Judgment of the Court was delivered by BEG, J.
+The judgment under appeal after certificate of fitness of the case under Article 133(1)(c) of the Constitu tion of India, is very short as it purports to follow the ratio decidendi of Union of India vs
+G.M. Shankariah & Ors.
+,(1) where this Court had held upon a concession by the Attorney General, that a list prepared under Section 115 of the , (hereinafter referred to as 'the Act '), was provisional.
+Therefore, it was held that the writ petition was premature as the final list of officers on an integrated seniority list was still to be prepared after hearing objections.
+The High Court of Mysore seems to have been under the misapprehension that the case now before us is also governed by what was held by this Court in Shankariah 's case (supra) with reference to an entirely different and provisional list of Forest Officers.
+The case now before us pertains to Animal Husbandry and Veterinary Services of the Mysore State in which the petitioner, was given, in the final integration list, a position to which he objected.
+Apparently, the petitioner, whose date of birth is given as 28th June, 1915, has retired.
+He is a respondent who has not appeared before us, and, therefore, could not be heard by us.
+We have, however, gone through his petition and the affidavit filed in its support where, in paragraph 16, he states as fol lows: "The Mysore State Civil Service Integra tion Rules 1960 provide for filing objections only against the preliminary provisional Inter State Seniority List and do not provide any provision for filing objections or appeal ing against the final Inter State Seniority List as per Annexure 'B '.
+Thus we have no other legal remedies open to us for the re dressal of our grievances and the abridgement of our fundamental rights guaranteed under the Constitution of India, and, therefore, we are forced to approach this Honble Court to invoke the writ jurisdiction for the redressal.
+" It is apparent that the petitioner re spondent was claiming relief against the final Inter State seniority list although he was given due opportunity to object to the provi sional list.
+Mrs. Shyamala Pappu, who has looked up the departmental records, informs us that the petitioner was given ample opportu nity to file his objections to the preliminary list.
+Now, Shankariah 's case (supra) was con fined to an admission on behalf of the Central Government that the list before the Court was provisional so that the petitioners before the Court on that occasion were to get opportuni ties of puting forward their objections before the final list is prepared.
+In the case before us, the petitioner admits that the Mysore State Civil Services Integration Rules provided for filing of objections against the preliminary provisional Inter State Seniori ty list.
+Presumably, he had that opportunity.
+Otherwise, he would, no doubt have objected that the rules had not been complied (1) S.L.R. 1969 p.1 (C. As.
+1439 & 1446 of 1967 decided on 16 10 1968).
+829 with, which he did not do.
+His grievance seemed to be that he was not heard after the final list was prepared.
+We are unable to appreciate.
+this line of attack upon the final list.
+We think that the concession in Shankari ah 's case (supra) was confined to the facts of that particular ease.
+There the list was provisional.
+The most that could be urged, in the light of decisions of this Court, is that a person whose seniority is to be determined under Section 115 of the Act must be given.
+an opportunity to object to the proposed assign ment of a place to him in the seniority list.
+As already observed above, the petitioner had ample opportunity to do that.
+Hence, the principle recognised in Shankariah 's case (supra) was not applicable to such a case.
+The judgment of the Mysore High Court was, in our opinion, based on an apparent misun derstanding of Shankariah 's case (supra) and on a failure to appreciate the facts of the case of the petitioner respondent which is now before us.
+There was not reference whatsoever to any facts of the case in the order of a few lines by which the petitioner 's petition was disposed of by the High Court on the errone ous assumption that it was governed by Shan kariah 's case (supra).
+As the petitioner in the High Court, who is the, respondent before us, was unrepresented, Mrs. Shymala Pappu, appearing on behalf of Union of India, very Conscientiously, took us through Union of India & Anr.
+P.K. Roy & Ors.
+( '1) from which, learned Counsel thought, the following observations could perhaps be cited on behalf of the petitioner respondent (at p. 202): "it was argued by Mr. Ashoke Sen that in regard to both these matters the respond ents have a right of representation and the final gradation list should have been pub lished after giving them further oppor tunity to make a representation.
+Normally speaking, we should have thought that one opportunity for making a representation against the preliminary list published would have been sufficient to satisfy the require ments of law.
+But the extent and applicationof the doctrine of natural justice cannot be imprisoned within the straight jacket of a rigid formula.
+The application of the doctrine depends upon the nature of the jurisdiction conferred on the administrative authority, upon the character of the rights of the per sons affected, the scheme and policy of the statute and other relevant circumstances disclosed in the particular case (See the decision of this Court in Shri Bhagwan and Anr.
+vs Ram Chand & Ant. ; , 222.
+In view of the special circumstances of the present Case we think that the respondents were entitled to an opportunity to make a representation with regard to the two points urged by Mr. Ashoke Sen before the final gradation list was published.
+As no such opportunity was furnished to the respondents with regard to these two matters (1) 202.
+830 we hold that the combined final gradation list dated April 6, 1962, so far as category 6 is concerned, is ultra vires and illegal and that part of the notification alone must be quashed by grant of a writ in the nature of certiorari".
+We think that any claim to have a say against the final fist prepared, on an analogy with the second opportunity which is afforded to a person to be punished after arriving at a decision on the facts of a departmental trial and proposal to inflict a particular punishment upon him, is quite inap propriate.
+No element of punishment at all is involved in preparing either a provisional or a final seniority list.
+All that is done is that certain principles are applied in the preparation of the list.
+These principles are generally found in the rules or executive directions which are known to or are capable of being found out by the persons affect ed.
+When a provisional seniority fist is prepared, there is a possibility of some mistakes occurring about the facts of a case or in the application of those rules.
+It would, therefore, be quite fair to give a person affected an 'oppo rtunity to be heard against the proposed fist before it is finalised so that any possible mistakes, either on facts relating to his particular case or of law in applying the rules governing seniority to those facts, may be rectified.
+But, once he has had that opportunity, it cannot possibly be said that he should have a further opportunity against even a final seniority list.
+If he was to have that opportunity the list would not really be final but only provisional or preliminary.
+It will be obviously contradictory to hold it to be a final list and yet declare it Subject to modifica tions on further objections.
+We are unable to find any rule of natural justice having such a paralysing scope.
+In P.K. Roy 's case (supra), the opportunity afforded was to be given before the publication of the final list.
+It was an opportunity to be given before the final list was to be declared and published as a final list.
+A right to representation was recognised as existing at time when the list was still to be considered as not finalised presumably because some mistakes had crept in due to want of heating on two points.
+Evidently what was meant was that the publication gave the list finality.
+In that particular case, the fist had been prepared without due regard to the particular important points which had to be considered before finalisation.
+What we have observed does not mean that, if a final list is prepared contrary to the rules applicable or is vitiated on some ground showing that a condition precedent to the finalisation of the list is absent, it would still be inviolable ,Dr sacrosanct.
+Even a list purporting to be final can be vitiated by non observance of conditions prece dent.
+In order to establish the invalidity of the final list on some such grounds of invalidity, those grounds have to be shown to exist.
+We find no such grounds in the ease before us.
+Learned Counsel for the Central Government had cited before us Union of India vs
+G.R. Prabhavalkar & Ors.
+(1) where it was held by this Court (at p. 2106): (1) A.I.R. 1973 'S.c. 2102 at 2106.
+831 "In our opinion the contentions of the learned Additional Solicitor General are well founded.
+The Central Government, under Sec. 115 of the Act, has to determine the princi ples governing equation of posts and prepare a common gradation list by integration of services.
+To assist it in the task of inte gration of services and for a proper consid eration of representations, the Central Gov ernment is empowered to establish Advisory Committees.
+The Central Government is bound to ensure a fair and equitable treatment to officers in the matter of integration of services and preparation of gradation lists.
+It has also to give a full and fair opportuni ty to the parties affected to make their representations; and the Central Government has also to ,give a proper consideration to those representations.
+So long as the Central Government has acted properly according to the provisions of the Act, we are of the view that a Court cannot go into the merits or otherwise of equation of posts which is a matter within the province of the Central Government".
+It was also held there (at p. 2106): "It is no doubt true that the Central Government must have due regard to the princi ples enunciated by it in consultation with the States for the purpose of equation Of posts.
+It must not only give an opportunity to the concerned officers to make representations, but it must also give those representations a proper consideration.
+It is not within the province of the Courts to lay down what are in the principles to be adopted for purposes of equation.
+That falls within the purview of the statute concerned and the authorities charged with such duty.
+The power of the Courts is only to see that an authority has acted properly in accordance with the statute.
+If that is established, the decision of the authorities concerned will have to stand.
+If a particular decision is mala fide or arrived at on totally irrelevant and extraneous consider ations, such a decision can be interfered with by Courts.
+In this case, no mala fides are alleged.
+" We find that, as was the case of the petitioner in Prabhavalkar 's case (supra), the petitioner respondent Dr. R.D. Nanjiah, and others similarly placed respondents before us have been unable to make out, in their petitions, any grounds for interference with the final list.
+We, therefore, allow this appeal, and set aside the judgment and order of the Mysore High Court.
+The parties will bear their own costs.
+V.P.S. Appeal allowed.

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+270 of 1955.
+Under Article 32 of the Constitution of India for a Writ in the nature of Habeas Corpus.
+Hemendra Shah, J. B. Dadachanji and Rajinder Narain, for the petitioner.
+M. C. Setalvad, Attorney General of India, C. K. Daphtary, Solicitor General of India, (B. Sen and R. H. Dhebar, with them) for the respondent No. 1. 890 1955 October 14.
+DAS ACTG.
+This rule was issued on a petition filed under article 32 of the Constitution by one Purshottam Govindji Halai, a citizen of India, calling upon the respondents to show cause why a writ in the nature of a writ of habeas corpus should not be issued by this Court directing the Superintendent, House of Correction, Byculla, being the second respondent herein., to produce before this Court one Govindji Deoji Halai, the father of the petitioner, who is also a citizen of India., for the purpose of being released forthwith.
+The facts which are not in dispute may be shortly stated as follows.
+The said Govindji Deoji Halai (hereinafter referred to as the "assessee") is the sole proprietor of a business carried on under the name and style of Indestro Sales and Service Co. at No. 50 52, Lohar Chawl Street in the City of Bombay.
+Two private limited companies, namely, Indestro India Ltd., and Indestro Eastern Ltd., also carry on business and have their respective offices in the same premises.
+The assessee is said to have some connection with the two companies the nature of which, however, is not quite clear on the record before us.
+In respect of his own business of Indestro Sales and Service Co., the assessee was assessed to income tax for the years 1943 44 to 1947 1948 and 1951 1952 by the Third Income tax Officer, C 1 Ward, Bombay, at and for Rs. 40,178 4 0.
+The assessee not having paid up the assessed amount of tax the Income tax Officer on the 10th April 1951 issued to the ' Additional Collector of Bombay, the first respondent herein, a recovery certificate ,under section 46(2) of the Income tax Act.
+It may here be mentioned that the Indestro Eastern, Ltd., was also assessed to income tax at and for Rs. 1,92,000 and a recovery certificate was also issued by the Income tax Officer to the Additional Collector of Bombay.
+On the 1st February, 1954 the Additional Collector issued a notice of demand on the assessee for payment of the assessed amount of tax.
+No payment 891 having been made, the Additional Collector attached the goodwill and tenancy rights in the said premises by a warrant of attachment issued on the 24th March 1954.
+The sale proclamation was issued on the 15th January 1955.
+The sale was held on the 25th February 1955 fetching a price of Rs. 33,000 and it was confirmed on the 30th March 1955.
+The sale proceeds not being sufficient to satisfy the assessed tax the Additional Collector on the 7th June 1955 issued a notice under section 13 of the Bombay City Land Revenue Act, 1876, requiring the assessee to appear before him in person on the 16th June 1955 and show cause why he, the assessee, should not be apprehended and confined to civil jail in satisfaction of the said certified demand.
+The assessee did not appear in person on the appointed day but on the next day, the 17th June 1955, an Advocate acting on behalf of the assessee wrote a letter to the Additional Collector purporting to show cause why the assessee should not be arrested and sent to the civil jail.
+The contentions put forward on behalf of the assessee not being considered satisfactory the Additional Collector on the 30th June 1955 issued a warrant for the arrest of the assessee under section 13 of the Bombay City Land Revenue Act, 1876.
+The assessee was actually arrested on the 1st July 1955.
+On the 8th July 1955 an application was made by the present petitioner to the Bombay High Court under article 226 complaining of the arrest of his father, the assessee, and praying for a writ in the nature of a writ of habeas corpus for the production and release of the assessee.
+A rule was issued by the High Court but eventually on the 24th August 1955 the High Court (Chagla, C.J. and Desai, J.) discharged the rule.
+No application was made to the High Court for leave to appeal to this Court from the decision of that High Court but on the 2nd September 1955 the present petition was filed in this Court under article 32 of the Constitution for the relief hereinbefore mentioned.
+On the 7th September 1955 a rule was issued by this Court on that petition subject to the question of its maintainability in view of the dismissal by the 113 892 High Court of the petition under article 226 from which no leave to appeal to this Court had been sought or obtained.
+The rule has now come up before us for hearing.
+In the view we have taken about the merits of the petition it is not necessary for us to consider the question of its maintainability after the dismissal of the petition under article 226 or to make any pronouncement, on this occasion, on the scope and ambit of article 32 of the Constitution in that situation.
+The principal contentions urged by the learned Advocate appearing for the petitioner are as follows, namely, (a) that section 46(2) of the Indian Income tax Act under which the Income tax Officer issued the recovery certificate to the Additional Collector of Bombay is void under article 13(1) of the Constitution in that the same offends article 22(1) and (2), article 21 and article 14 of the Constitution; (b) that section 13 of the Bombay City Land Revenue Act, 1876 under which the warrant of arrest was issued by the Additional Collector is void under article 13 (1) of the Constitution as the same is repugnant to article 14 of the Constitution.
+We proceed to deal with the objections seriatim.
+(a): Section 46(2) of the Indian Income tax Act which is impugned before us runs as follows: "46.
+(1). . . . . . . . (2) The Income tax Officer may forward to the Collector a certificate under his signature specifying the amount of arrears due from an assessee, and the Collector, on receipt of such certificate, shall proceed to recover from such assessee the amount specified therein as if it were an arrear of land revenue: Provided that without prejudice to any other powers of the Collector in this behalf, he shall for the purpose of recovering the said amount have the powers which under the Code of Civil Procedure, 1908 (Act V of 1908), a Civil Court has for the purpose of the recovery of an amount due under a decree.
+The first objection to the above sub section is that it 893 contravenes the fundamental rights guaranteed by clauses (1) and (2) of article 22.
+In view of the decision of this Court in the State of Punjab vs Ajaib Singh & Another(1) this objection has not been pressed before us and we need say no more about it.
+The second objection to section 46(2) of the Indian Income tax Act is that it is violative of article 21.
+Article 21 guarantees that no person shall be deprived of his personal liberty except in accordance with procedure established by law.
+In this case the assessee has been arrested and is being detained in jail in execution of a warrant of arrest issued under section 13 of the Bombay City Land Revenue Act, 1876 for the recovery of the demand certified under section 46(2) of the Indian Income tax Act.
+As long as those sec tions stand no complaint can be made of infringement of article 21, for those two sections constitute a procedure established by law.
+It is only if those sections are void that the question of violation of the fundamental right under article 21 can arise at all.
+We have, therefore, to pass on to the third objection to section 46(2) founded on article 14 of the Constitution which alone has been strenuously insisted on before us by learned counsel for the petitioner.
+Article 14 is invoked in two ways.
+It is pointed out that the first part of section 46(2) provides that the Collector, on receipt of a certificate from the Income tax Officer, shall proceed to recover from the defaulting assessee the amount specified therein as if it were an arrear of land revenue.
+It is next said that the proviso to the sub section invests the Collector with all the powers a Civil Court has under the Code of Civil Procedure for the purpose of the recovery of the amount due under a decree.
+It is submitted that section 46(2) provides for two different and alternative methods of recovery of the dues and clothes the Collector with the power to apply either of the two methods, that is to say, he may issue a warrant of arrest under section 13 of the Bombay City Land Revenue Act, 1876 against one defaulter and keep him in detention for a period which may (1) ; 894 work out to be much longer than six months and he may proceed against another defaulter under the Code of Civil Procedure and arrest and detain him for the maximum period of six months.
+The powers that are thus conferred on the Collector by section 46(2) are unfettered and unguided and enable the Collector, at his will, to discriminate between two defaulters who are similarly situated and thereby violate the behests of the equal protection clause of the Constitution.
+This argument appears to us to be founded on a misapprehension about the true meaning of section 46(2).
+On a proper reading, that subsection does not prescribe two alternative modes of procedure at all.
+All that the sub section directs the Collector to do is to proceed to recover the certified amount as if it were an arrear of land revenue, that is to say, he is to adopt the procedure prescribed by the appropriate law of his State for the recovery of land revenue and that in thus proceeding he is, under the proviso, to have all the powers a Civil Court has under the Code.
+The sub section does not prescribe two separate procedures.
+The statement to the contrary in the judgment of the Bombay High Court in Shaik Ali Ahmed vs Collector of Bombay(1) does not appear to us to be correct.
+In our opinion the proviso does not indicate a different and alternative mode of recovery of the certified amount of tax but only confers additional powers on the Collector for the better and more effective application of the only mode of recovery authorised by the body of sub section (2) of section 46.
+Viewed in this light, there is no question of the possibility of any discrimination at all.
+This part of the argument cannot, therefore, be accepted.
+The other way in which the protection of article 14 is invoked is founded on a comparison of the provisions of the different laws adopted by the different States for the recovery of land revenue.
+Section46(2) of the Indian Income tax Act requires the Collector, on receipt of the requisite certificate from the Incometax Officer, to proceed to recover from the assessee the amount specified in the certificate as if it were an (1) I.L.R. , 155. 895 arrear of land revenue.
+This means that the Collector must take such proceedings as he would have done if he were engaged in recovering land revenue.
+Thus a Collector in the City of Bombay in recovering the certified amount of income tax must proceed under Ejection 13 of the Bombay City Land Revenue Act, 1876 (Bombay Act II of 1876) and arrest and detain him far the period therein mentioned which, prior to the 8th October 1954, might have worked out to a period much longer than six months.
+On the other hand, the defaulting assessee in all other parts of the State of Bombay has to be proceeded against under section 157 of the Bombay Land Revenue Code, 1879 (Bombay Act V of 1879) under which he cannot be detained for more than the period limited by the Code of Civil Procedure for the detention of a judgment debtor in execution of a decree for an equal amount of money.
+So, even in one State there were two procedures to which defaulting assessees could be subjected according as they were in or outside the City of Bombay.
+A Collector in the State of Madras in recovering the certified amount of income tax has to proceed under section 48 of the Madras Revenue Recovery Act, 1864 (Madras Act II of 1864).
+When the Collector finds that the certified amount cannot be liquidated by the sale of the property of the defaulting assessee and the Collector has reason to believe that the defaulter is wilfully withholding payment or has been guilty of fraudulent conduct in order to evade payment, the Collector may, under section 48 of that Act, cause the arrest and imprisonment of the defaulter, not being a female.
+But that section goes on to say that no person shall be imprisoned for a longer period than two years or for a longer period than six months if the arrear does not exceed Rs. 500 or for a longer period than three months if the arrear does not exceed Rs. 50.
+A Collector in West Bengal proceeding to recover the certified amount under the Bengal Public Demands Recovery Act, 1913 (Bengal Act III of 1913) cannot, under section 31 of that Act, direct the detention of the defaulting assessee in prison for more than six months if the amount is more 896 than Rs. 50 or in other cases for more than six weeks.
+The defaulter in the Punjab cannot, under section 69 of the Punjab Land Revenue Act, 1887 (Punjab Act XXVII of 1887), be kept in civil jail for more than one month.
+Section 148 of the U. P. Land Revenue Act) 1901 (U.P. Act III of 1901) limits the period of detention to 15 days and also exempts many persons, e.g. Talukdars and women, from any imprisonment.
+The Assam Land and Revenue Regulation, 1886 (Reg.
+I of 1886) does not insist on imprisonment at all.
+A cursory perusal of the provisions of the different Acts referred to above will at once show that in the matter of recovery of arrears of land revenue the different States have prescribed different machinery, some obviously harsher than others.
+The argument is that income tax being a subject with respect to which the Union alone may make law and the recovery of it being the Union responsibility, the machinery for the recovery of income tax should be framed on a uniform all India basis, for to the Union all defaulters who may not pay up the Union demand are similarly situated; but the Indian Income tax Act by section 46(2) authorises the Collectors in different States to adopt machinery which differs from State to State, so that defaulters are treated differently in different States.
+The contention is that section 46(2) which sanctions such discrimination is clearly violative of the equal protection clause of the Constitution and has, therefore, become void under article 13 (1).
+The learned Attorney General appearing for the respondents seeks to meet the aforesaid argument in two ways.
+In the first place, he urges that the impugned sub section does not by itself make any discrimination.
+All that it says is that the certified amount of income tax is to be recovered as if it were an arrear of land revenue and there its operation ends.
+In recovering the certified demand the Collector has to have recourse to the machinery available to him for enforcing a demand for arrears of land revenue but the provisions of the State laws which prescribe that machinery are not incorporated in section 46(2).
+897 If the State laws are discriminatory that vice cannot be imputed to section 46(2).
+There is good deal to be said on either side.
+The State laws prescribe the procedure for the recovery of arrears of land revenue only and they are not, in terms and by themselves, concerned at all with the recovery of income tax demand.
+That machinery is made available for the purpose of recovery of income tax by virtue only of section46(2) of the Indian Income tax Act.
+In the matter of recovery of income tax the Collectors adopt theprocedure laid down by the State laws, not because the State laws enjoin them to do so but because section 46(2) directs them to do so.
+In other words, it is section 46(2) which tells the Collectors of Madras to follow the procedure under section 48 of the Madras Revenue Recovery Act, 1864 as if those provisions are set out in the Indian Income tax Act in extenso and it tells the Collectors of all other States to adopt the procedure prescribed by their own State laws as if the provisions prescribing that procedure were set out in that section.
+In such a situation it is a plausible argument to say that all the provisions of all the State laws are, mutatis mutandis, to be read into section 46 (2) and that, therefore, if there be any vice of discrimination in the State laws that vice cannot but be regarded as having crept into section 46(2).
+On the other hand, to hold that all the provisions of all the State laws for recovery of arrears of land revenue have been referentially incorporated in section 46(2) of the Indian Income tax Act will lead us into difficulties.
+Will the subsequent amendments of the State laws be also incorporated in section 46(2)? Section 46(2) of the Indian Income tax Act having incorporated the State laws as they then stood, how can any State Legislature which has no power to make any law with respect to income tax alter or amend section 46(2)? Are the State laws as incorporated in section 46(2) at the time it was enacted to be treated as crystallised and to be applied by the Collectors, although the State laws for the recovery of arrears of land revenue may be materially altered by sub 898 sequent amendment? These are some of the questions which will have to be answered before we can come to a decision on this point.
+In the view we take of the second part of the learned AttorneyGeneral 's argument to which we shall presently refer it is not necessary for us to express any opinion on this part of his argument.
+The learned Attorney General then argues that assuming that section 46(2) by incorporating the different State laws which are not uniform has become discriminatory such discrimination is permissible and does not offend the fundamental right guaranteed by article 14.
+This argument appears to us to be well ,founded.
+The meaning, scope and effect of the article in question have been explained by this Court in a series of decisions beginning with that in Chiranjit Lal Chowdhury vs The Union of India(1) and ending with that in Budhan Chowdhury and others vs The State of Bihar(1).
+The following passage in the unanimous judgment of the Full Court in the last mentioned case at p. 1049 briefly summarises the true intendment of the constitutional provision: ". . . . . . .
+It is now well established that while article 14 forbids class legislation, it does not forbid reasonable classification for the purposes of legislation.
+In order, however, to pass the test of permissible classification two conditions must be fulfilled, namely, (i) that the classification must be founded on an intelligible differentia which distinguishes persons or things that are grouped together from others left out of the group and (ii) that that differentia must have a rational relation to the object sought to be achieved by the statute in question.
+The classification may be founded on different bases; namely, geographical, or according to objects or occupations or the like.
+What is necessary is that there must be a nexus between the basis of classification and the object of the Act under consideration.
+It is also well established by the decisions of this Court (1) [1950) S.C.R. 869.
+(2) ; 899 that article 14 condemns discrimination not only by a substantive law but also by a law of procedure".
+The respective contentions now put forward as to the validity or otherwise of section 46(2) of the Indian Income tax Act have to be judged in the light of the principles so laid down by the Full Court.
+The Indian Income tax Act imposes a liability on persons who are amenable to it to pay the tax assessed against them.
+The assessed amount is a public demand of the Union and has to be recovered, if not voluntarily paid up.
+The assessees are scattered all over the Union and machinery has to be devised for that purpose.
+On looking round the Union finds that there is machinery in every State for recovery of land revenues which are State demands.
+Each State in its wisdom has devised a machinery which it has considered appropriate and suitable for the recovery of its own public demand.
+As was said by the Supreme Court of America in Middleton vs Texas Power and Light Company(1) "There is a strong presumption that a legislature understands and correctly appreciates the needs of its own people, that its laws are directed to problems made manifest by experience and that its discriminations are based upon adequate grounds".
+It is conceded that each State is well within its rights to devise its own machinery for the recovery of its own public demand and that no person belonging to one State can complain that the law of his State is more rigorous than that of the neighbouring state.
+The reason is obvious, for the people of one State are not similarly situated as people of another State.
+Their needs, as understood by their own Legislature, are different from those of the people of other States.
+If in the matter of recovery of arrears of land revenue defaulters of one State cannot complain of denial of equal protection of the laws on the ground of the difference in the modes of recovery prevailing in other States, can it be said to be unreasonable for the Union to adopt, for the recovery of its public demand from defaulters of each State, the same mode of recovery (1) ; , 157.
+114 900 of public demand prevailing in that State? Here the defaulters are classified on a territorial, or geographical basis and this basis of classification has precisely the same correlation to the object of the Indian Income tax Act as it has to the object of the different Public Demands Recovery Acts.
+The objects of the two Acts in this behalf are in pari materia and the same considerations must apply to both.
+People of each State are familiar with and used to the coercive processes which each State finds it necessary to impose on its own people for the recovery of public demand and there can be no hardship and consequently no objection to their being put to the same processes for the recovery of the public demand of the Union.
+The grouping of the income tax defaulters into separate categories or classes Statewise is certainly a territorial classification which is based on an intelligible differentia and the subjection, for the purposes of the recovery of the certified demand, of each of such classes of defaulters to the same coercive process devised by their own State, on a consideration of local needs, for the recovery of their own public demands, cannot be regarded as bereft of a reasonable nexus or correlation between the basis of classification and the object sought to be achieved by the Indian Income tax Act any more than it can be so regarded with respect to the respective State laws.
+The fact that the income tax demand is a Union public demand appears to us to make no difference in the legal position.
+The Indian Income tax Act classifies people into various groups for the purpose of imposing the tax and taxes them differently, e.g., insurance companies which are taxed differently from an ordinary business concern and in some cases exempts them altogether, e.g., agriculturists and persons with income below a certain level.
+There can, on the same principle, be no objection to people of a backward area who may be in need of aid in the shape of tax remission to be exempted from 'taxation either wholly or in part.
+If this is right when a question of imposition is concerned, it cannot be wrong when the matter is one of recovery.
+The two together make up the full measure of the 901 burden and if it is permissible to vary the burden at one end it must be equally valid to vary it at the other for the same or similar reasons.
+It is said that the income tax demand being a Union demand there should be uniformity in the punishment to be, meted out to defaulters and it can be done easily by suitably amending section 46(2) so as to provide for the detention of all defaulters for the same period in all cases in all States.
+In the first place, it is a fallacy to regard arrest and detention.
+of a defaulter who fails to pay income tax as a punishment or penalty for an offence.
+It is a coercive process for recovery of public demand by putting pressure on the defaulter.
+The defaulter can get himself released by paying up the dues.
+In the next place, the Court is only concerned to interpret the law and, if it is valid, to apply the law as it finds it and not to enter upon a discussion as to what the law should be.
+The whole problem before us is whether the apparent discrimination can be supported on the basis of a permissible classification.
+The case of Bowman vs Lewis(1) is in point.
+We do not, however, find it necessary to express any opinion on the extreme contention urged by the learned Attorney General, on the authority of that decision, that a mere territorial classification, by itself and without anything else, is enough to place the law beyond the operation of the equal protection clause.
+Indeed, in that very case it was recognised that it was not impossible that a distinct territorial establishment and jurisdiction might be intended as or might have the effect of discrimination against a particular race or class where such race or class should happen to be the principal occupants of the disfavoured area.
+For the purposes of this case it will suffice to say that the discrimination complained of is not unconstitutional for the simple reason that the impugned law is based on a territorial classification having a reasonable nexus or correlation between that basis of classification and the object sought to be achieved by the Act.
+Our decision in The State of Rajasthan vs Rao Manohar Singhji(2) which is relied on by learned counsel for the petitioner is easily (1) ; ; (2) ; 902 distinguishable on facts for, the law impugned in that case for the first time imposed certain disabilities on Jagirdars of a certain area of the State and there was no evidence that those Jagirdars were in any way different from the Jagirdars of the other areas of the State.
+In the present case the classification has been made Statewise and it is clear that in the matter of payment of public demands of the States the people of different States are not similarly situated and their own States have imposed on them such coercive processes as the circumstances and needs of each State require.
+The law impugned before us has only adopted, for its own purpose, the same coercive process which was devised by the States for their own purposes which are closely akin or similar to the purpose of the Union.
+The same or similar considerations apply to both cases.
+There is the same or similar correlation between the basis of classification and the object sought to be achieved by the Indian Incometax Act.
+To deny this power to the Union on constitutional grounds urged before us will lead us to hold that no new offence created by law can be made triable according to the procedure laid down in the Code of Criminal Procedure, for that Code sanctions different modes of trial in different areas, namely, by a Section 30 Magistrate in some areas, by the Sessions Judge with assessors in certain areas and by the Sessions Judge with jurors in other areas.
+Adoption of an existing machinery devised for a particular purpose cannot, if there be no vice of unconstitutionality in the machinery render it unconstitutional if it is made to subserve a purpose closely akin or similar to the purpose for which it bad been devised.
+The first objection formulated by learned counsel for the petitioner must, therefore, be rejected.
+As already stated under section 46 (2), the Collector, on receipt of the certificate from the Income tax Officer, has to proceed to recover the certified demand as if it were an arrear of land revenue.
+This means that the Collector of a particular place has to take steps as indicated in the State law relating to the recovery of arrears of land revenue.
+As already stated, in the State of Bombay there are two 903 statutes regulating the procedure for the recovery of arrears of land revenue according as the defaulter resides in the City of Bombay or in any other area within the State of Bombay.
+Section 13 of the Bombay City Land Revenue Act, 1876 applies to the City of Bombay and section 157 of the Bombay Land Revenue Code, 1879 applies to the rest of the State.
+Prior to the 8th October 1954 the portion of section 13 of the Bombay City Land Revenue Act, 1876 which is relevant for our present purpose was as follows: "If the sale of the defaulter 's property shall not produce satisfaction of the demand, it shall be lawful for the Collector to cause him to be apprehended and confined in the civil jail under the rules in force at the Presidency for the confinement of debtors, for which purpose a certificate of demand under the Collector 's signature sent with the defaulter shall be the sheriff 's sufficient warrant, equally with the usual legal process in ordinary cases of arrest in execution of judgment for debt: Provided, however, that such imprisonment shall cease at any time upon payment of the sum due, and that it shall in no case exceed one day for each rupee of the said sum".
+Section 157 of the Bombay Land Revenue Code, 1879 which provides for the arrest and detention of the defaulter residing outside the City of Bombay Contains the following proviso: "Provided that no defaulter shall be detained in imprisonment for a longer period than the time limited by law in the case of the execution of a decree of a Civil Court for a debt equal in amount to the arrear of revenue due by such defaulter".
+A cursory perusal of the two sections will show at once that the procedure prescribed by section 13 of the Bombay City Land Revenue Act, 1876 for the recovery of arrears of land revenue was harsher and more drastic than the procedure laid down in section 157 of the Bombay Land Revenue Code, 1879 in that a defaulter residing in the City of Bombay could be kept in detention for a day for every rupee of the arrears which might considerably exceed the maximum period of six months which is the period 904 limited by the Code of Civil Procedure for the detention of a judgment debtor in civil jail.
+The argument is that on the advent of the Constitution section 13 of the Bombay City Land Revenue Act, 1876 became void under article 13(1) in that it denied to the Bombay defaulter equality before the law in comparison with the defaulter outside the City of Bombay, for he could be detained for a longer period of time.
+In the view we have taken, it is not necessary to express any opinion whether the discrimination brought about by the two sections was supportable on the ground of a reasonable classification based on territorial considerations so as not to offend the constitutional inhibition.
+Assuming, then, but not deciding, that section 13 of the Bombay City Land Revenue Act, 1876 became inconsistent with the fundamental right guaranteed by article 14 and, therefore, became void to the extent of such inconsistency, it was not, as recently explained by this Court in Bhikaji Narayan Dhakras vs The State of Madhya Pradesh, Nagpur and Another(1), obliterated from the statute book for all times or for all purposes or for all people.
+The effect of article 13(1) is that the law could not stand in the way of the enjoyment of fundamental rights.
+The law was not dead.
+Further, the law was amended on the 8th October, 1954 when the proviso to section 13 quoted above was replaced by the following proviso: "Provided that such imprisonment shall cease at any time upon payment of the sum due and that it shall in no case exceed (i) A period of six months when the sum due is more than Rs. 50; and (ii)A period of six weeks in any other case.
+" This amendment is nothing less than an enactment of a new provision.
+It lays down a new law which is similar to the law laid down by section 157 of the Bombay Land Revenue Code, 1879.
+Therefore, the disparity that prevailed between the original proviso to section 13 of the Bombay City Land Revenue Act, 1876 and the proviso to section 157 of the Bombay Land Revenue Code,, 1879 is now removed, The (1) ; 905 disparity between the two provisions as they originally stood being thus eliminated, the vice of unconstitutionality is also removed and section 13 of the Bombay City Land Revenue Act, 1876, as it now stands, cannot be assailed as repugnant to article 14 of the Constitution.
+It was faintly suggested that as the assessment proceedings had been started and the certificate had been issued by the Income tax Officer to the Additional Collector of Bombay and the Additional Collector issued a notice of demand and actually attached the properties prior to the amendment, the assessee must be governed by section 13 as it originally stood and not by it as subsequently amended.
+We do not think there is any substance in this contention.
+It is true that the warrant of attachment of the property was issued on the 24th March 1954 but the sale proclamation was issued and the sale was actually held after the date of amendment.
+The defaulting assessee might have paid up the dues in which case there would have been no occasion for sale.
+It is, therefore, his default that occasioned the sale.
+Again, the sale proceeds might have been sufficient to cover the certified demand,, in which case there would have been no occasion for the issue of warrant for his arrest.
+It is only after the sale proceeds were found to be insufficient to satisfy the assessed amount and the assessee failed to pay up the balance that the question of the arrest of the defaulter arose.
+By that time section 13 had been amended and the warrant of arrest was issued on the 7th June 1955, that is to say, long after the amendment of the section.
+In our opinion, the second ground urged by the learned counsel must also be negatived.
+We may mention that our attention was drawn to the decision of the Madras High Court in Erimmal Ebrahim Hajee, vs The Collector of Malabar(1) but learned counsel could not rely upon it as an authority as it was itself under appeal before this Court.
+The result, therefore.
+, is that this application must be dismissed.
+(1) 906 CHANDRASEKHARA AIYAR J. I agree rather reluctantly.
+The reluctance is not because there is anything in the reasoning of the judgment pronounced just now by my Lord which does not appear to be sound but because I am not happy about the result.
+We have to face and accept wholly different consequences for non payment of income tax according as the assessee belongs to one State or another.
+The nature of the tax is one and the same, and it is levied under a single Central Act, and yet the ultimate coercive processes for recovery differ in nature and extent between State and State.
+We have to attribute to the legislature a rational classification based on geographical areas, the susceptibilities of people in those areas, and their reactions to the adoption of methods of recovery.
+For arrest and detention, wilful default or fraudulent conduct is required in Madras.
+In Assam, there can be no imprisonment at all.
+The periods of detention vary between Bengal, U.P. and the Punjab.
+Taluqdars in U.P. are completely exempt.
+Are we to assume that people in Madras are more amenable and generally ready and willing to pay as compared with those in Bombay who are a tenacious lot and must be subjected to a longer process of detentive coercion? Are the Talaqdars in U.P. exempt from arrest because of possible political repercussions if such influential persons are subjected to such treatment? What is the rationale in providing different periods of detention for Bengal and the Punjab? We must be in a position to postulate some reasonable basis for the differentiation and we cannot get away from this necessity by vague references ' to the wisdom of the legislature or by indulging in pure speculation as to what might have been at the back of its mind.
+Speaking broadly, for the enforcement of the levy of a central tax like the Income tax there should be uniformity of procedure and identity of consequences from non payment.
+The machinery for recovery might be different between the several States but the defaulting assessees must be put on the same footing as regards the penalties.
+But the law as it now stands can be supported on the grounds mentioned by my Lord and I do not propose to differ.

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+Appeal No. 205 of 1954.
+On appeal from the judgment and order dated the 978 13th April 1954 of the Bombay High Court in Appeal No. 49 of 1954 arising out of the order dated the 31st day of March 1954 of the said High Court exercising its Ordinary Original Jurisdiction in Misc.
+Petition No. 55 of 1954.
+K. T. Desai, P. N. Bhagwati, Rameshwar Nath and Rajinder Narain, for the appellants.
+C. K. Daphtary, Solicitor General of India, (Porus A. Mehta and B. H. Dhebar, with him), for the respondent.
+November 10.
+The Judgment of the Court was delivered by VENKATARAMA AYYAR J.
+This appeal raises a question as to the powers of a Custodian of Evacuee Property to cancel a lease granted by him under section 12 of the (XXXI of 1950), hereinafter referred to as the Act.
+Messrs Abdul Karim and Brothers owned, along with certain other properties which are not the subject matter of the present appeal, three mills with bungalows and chawls at Ambernath in Thana District and the Bobbin Factory at Tardeo in Bombay.
+They having migrated to Pakistan, these properties were declared by a notification dated 12 9 1951 issued under section 7 of the Act as evacuee property, and under section 8(1) of the Act, they became vested in the respondent as the Custodian for the State.
+The appellants are displaced persons, and on 30 8 1952 the respondent entered into an agreement with them, Exhibit A, which is, as aptly characterised by learned counsel for the appellants, of a composite character, consisting of three distinct matters.
+There was, firstly, a demise under which the mills and the factory in question were leased to the appellants for a period of five years on the terms and conditions set out therein.
+Secondly, there was a sale of the stock of raw materials, unsold finished goods, spare parts, cars, trucks and other movables which were in the mills and the factory, with elaborate provisions for the determination and payment of the price therefor in 979 due course.
+And thirdly, there was an agreement to sell the mills and the factory to the appellants in certain events and subject to certain conditions.
+There was also a clause for referring the disputes between the parties to arbitration.
+In pursuance of this agreement, the appellants were put in possession of the mills and the factory on 31 8 1952.
+On 12 2 1954 the respondent issued a notice to the appellants, Exhibit C, wherein be set out that the appellants had systematically committed breaches of the various terms on which the properties bad been leased to them, and called upon them to show cause why the lease should not be cancelled and why they should not be evicted.
+The notice then went on to state that the respondent considered it necessary to issue certain directions for the "preservation of the demised premises and the goods and stock in trade, etc., lying in the demised premises", and the appellants were accordingly required not to remove the stock or raise any money on the security thereof, and to send daily reports to the Custodian, of the transactions with reference thereto.
+Presumably, these directions were given under section 10 of the Act.
+On 13 2 1954 the appellants appeared before the respondent, and contended that he had no auth ority to issue the notice in question under section 12, and that it was therefore illegal.
+Apprehending that the lease might be cancelled, and that they might be evicted, the appellants filed on 16 2 1954 the application out of which the present appeal arises, for a writ of certiorari for quashing the notice, Exhibit C, and for a writ of prohibition restraining the respondent from taking any further action pursuant thereto.
+In support of the petition, the appellants urged that section 12 under which the respondent purported to act authorised the cancellation of only leases granted by the evacuee and not by the Custodian himself, and that no directions could be given under section 10 as it applied only to properties of the evacuee, and that by reason of the sale, the movables in question had become the property of the appel 124 980 lants.
+The petition was heard by Tendolkar, J., who stated the points for determination thus: (1) "Whether the Custodian has power under section 12 of the , to terminate a lease granted by himself, and (2) Whether the directions given by the Custodian are beyond the jurisdiction conferred upon him by section 10 of the said Act?" On the first question, he held that section 12 applied only to leases granted by the evacuee and not by the Custodian, and that therefore the notice, Exhibit C, was ultra vires the powers of the Custodian under that section.
+On the second question, he held that section 10 applied only to properties of the evacuee, and that the movables in respect of which directions were given, ceased to be the property of the evacuee by reason of the sale in favour of the appellants, and that in consequence, the directions with reference to them were unauthorised.
+In the result, the application was allowed.
+The respondent took the matter in appeal, and that was heard by Chagla, C.J. and Dixit, J.
+By their judgment dated 13 4 1954, they held that on the plain language of section 12 it would apply whenever there was a lease, and that lease was in respect of property belonging to the evacuee, that there was no warrant for imposing a further limitation on that section that that lease should also have been granted by the evacuee, and that accordingly the Custodian had power to issue the notice, Exhibit C, for cancelling the lease.
+As regards movables, however, they agreed with Tendolkar, J. that for the reasons given by him the Custodian had no authority under section 10 to issue any directions with reference thereto.
+The appeal was accordingly allowed in so far as it related to the lease but dismissed as regards movables.
+Against this judgment, the appellants have preferred this appeal on a certificate granted by the High Court under article 133(1) (b), and the only point that arises for determination therein is as to whether the Custodian has the power under section 12 to 981 cancel a lease granted by himself and not by the evacuee.
+But that question is no longer open to argument, as there has been subsequent to the decision of the court below legislation which concludes the matter.
+Section 5 of the Administration of Evacuee Property (Amendment) Act, 1954 (XLII of 1954) enacts the following Explanation to section 12 of Act XXXI of 1950: "In this sub section 'lease ' includes a lease granted by the Custodian and 'agreement ' includes an agreement entered into by the Custodian".
+And it provides that the Explanation "shall be inserted and shall be deemed always to have been inserted" in the section.
+Mr. Desai, learned counsel for the appellants, concedes that this amendment which is retrospective in operation would govern the rights of the parties in the present appeal, and that under the section as it now stands, the Custodian has the power and had always the power to cancel leases created not merely by the evacuees but also by himself.
+But he con tends that this power could be exercised only so as to override a bar imposed by any law but not the contract under which the lease is held, and this result flows according to him from the language of the non obstante clause, which is limited to anything contained in any other law for the time being in force", and does not include "or any contract between the parties".
+This was a contention which was open to the appellants on the terms of the section as it stood even before the amendment, but it was not put forward at any stage prior to the bearing of this appeal and that by itself would be sufficient ground for declining to entertain it which it may be noted is now sought to be raised by a supplemental proceeding under Order 16, rule 4 of the Supreme Court Rules.
+On the merits also it is without any substance.
+The section expressly authorises the custodian to vary the terms of the lease, and that cannot be reconciled with the contention of the appellants that it confers no authority on him to go back upon his own contracts.
+The operative portion of the section which confers power on 982 the Custodian to cancel a lease or vary the terms thereof is unqualified and absolute, and that power cannot be abridged by reference to the provision that it could be exercised "notwithstanding anything contained in any other law for the time being in force".
+This provision is obviously intended to repel a possible contention that section 12 does not by implication repeal statutes conferring rights on lessees, and cannot prevail as against them and has been inserted ex abundanti cautela.
+It cannot be construed as cutting down the plain meaning of the operative portion of the section.
+Vide the observations in Aswini Kumar Ghosh vs Arabinda Bose(1) and the Dominion of India vs Shrinbai A. Irani(1) on the scope.
+of a non obstante clause.
+We must accordingly bold that the respondent was acting within his authority in 'issuing Exhibit C in so far as it concerned the lease granted in favour of the appellants.
+It was next contended by Mr. Desai that even if the Custodian had the power under section 12 to cancel the lease in favour of the appellants, be bad no power under that section to cancel the agreement to sell the mills and the factory to them, which was one of the matters contained in Exhibit A, that the notice, Exhibit C, was to that extent without juris,diction, and that the respondent should accordingly be prohibited from cancelling that portion of Exhibit A in pursuance of Exhibit C.
+But the notice in terms refers firstly to the lease which it is proposed to cancel, and secondly to the movables in respect of which certain directions were given.
+In their petition under article 226, it was the validity of the notice.
+, Exhibit C, with reference to these two matters that the appellants challenged.
+Tendolkar, J. stated in his judgment and quite correctly that these were the two points that &rose for determination.
+The question of the rights of the appellants in so far as they related to the purchase by them of the mills and the factory was not raised in the petition, and no contentions were put forward in support thereof at any stage of the proceedings.
+It is for the first time in the argu (1) ; , 21, 24.
+(2) ; , 213.
+983 ment before us that those rights are sought to be agitated.
+Under the circumstances, we must decline to consider them.
+It will be sufficient if we observe that the rights of the appellants, if any, other than those arising out of the lease, are left open to the determination of the appropriate authorities, and that nothing in our decision should be taken as a pronouncement on those rights.
+In the result, the appeal fails and is dismissed with costs.

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+Appeal No. 182 828 of 1975.
+Appeal by Special Leave from the Judgment and Order dated the 19th March, 1975 of the Bombay High Court in First Appeal No. 524 of 1966 from original decree.
+R. B. Datar for the Appellant.
+V. N. Ganpule and (Mrs.) V. D. Khanna for the respondent.
+The Judgment of the Court was delivered by CHANDRACHUD, C.J.
+It will be easier, with the help of the following pedigree to understand the point involved in this appeal Khandappa Sangappa Magdum Hirabai (Plaintiff) Gurupad Biyawwa Bhagirathibai Dhundubai Shivapad (Deft. 1) (Deft. 3) (Deft.
+4)1 (Deft. 5) (Deft. 2) Khandappa died on June 27, 1960 leaving him surviving his wife Hirabai who is the plaintiff, two sons Gurupad and Shivapad, who are defendants 1 and 2 respectively, and three daughters, defendants 3 to 5.
+On November 6 , 1962 Hirabai filed special civil suit No. 26 of 1963 in the court of the Joint Civil Judge, Senior Division, Sangli for partition and separate possession of a 7/24th share in two houses, a land, two shops avoid movables on the basis that these properties belonged to the joint family consisting of her husband, herself and their two sons.
+If a partition were to take place during Khandappa 's lifetime between himself and his two sons, the plaintiff would have got 1/4th share in the joint family properties, the other three getting 1/4th share each.
+Khandappa 's 1/4th share would devolve upon his death on six sharers, the plaintiff and her five children, each having a 1/24th share therein.
+Adding 1/4th and 1/24th, the plaintiff claims a 7/24th share in the joint family properties.
+That, in short, is the plaintiffs case.
+Defendants 2 to 5 admitted the plaintiff 's claim, the suit having H been contested by defendant 1, Gurupad, only.
+He contended that the suit properties did not belong to the joint family, that they were Khandappa 's self requisitions and that, on the date of Khandappa 's 764 death in 1960 there was no joint family in existence.
+He alleged that Khandappa had effected a partition of the suit properties between himself and his two sons in December 1952 and December 1954 and that, by a family arrangement dated March 31, 1955 he bad given directions for disposal of the share which was reserved by him for himself in the earlier partitions.
+There was, therefore, no question of a fresh partition.
+That, in short, is the case of defendant 1.
+The trial court by its judgment dated July 13, 1965 rejected defendant 1 's case that the properties were Khandappa 's self acquisitions and that he had partitioned them during his lifetime.
+Upon that finding the plaintiff.
+became indisputably entitled to a share in the joint family properties but, following the judgment of the Bombay High Court in Shiramabai Bhimgonda vs Kalgonda(1) the learned trial judge limited that share to 1/24th, refusing to add 1/4th and 1/24th together.
+As against that decree, defendant 1 filed first appeal No. 524 of 1966 in the Bombay High Court, while the plaintiff filed cross objections.
+By a judgment dated March 19, 1975 a Division Bench of the High Court dismissed defendant 1 's appeal and allowed the plaintiff 's cross objections by holding that the suit properties belonged to the joint family, that there was no prior partition and that the plaintiff is entitled to a 7/24th share.
+Defendant I has filed this appeal against the High Court 's judgment by special leave.
+Another Division Bench of the Bombay High Court in Rangubai Lalji vs Laxman Lalji(2) had already reconsidered and dissented from earlier Division Bench judgment in Shiramabai Bhimgonda(1) In these two cases, the judgment of the Bench was delivered by the same learned Judge, Patel J.
+On further consideration the learned Judge felt that Shiramabai(1) was not fully argued and was incorrectly decided and that on a true view of law, the widow 's share must be ascertained by adding the share to which she is entitled at a notional partition during her husband 's life time and the share which she would get in her husband 's interest upon his death.
+In the judgment under appeal, the High Court has based itself on the judgment in Rangubai Lalji(2) endorsing indirectly the view that Shiramabai(1) was incorrectly decided.
+Since the view of the High.
+Court that the suit properties belonged to the joint family and that there was no prior partition is well founded and is not seriously disputed, the decision of this appeal rests on the interpretation of Explanation 1 to section 6 of the Hindu Succession Act, (30 of 1956).
+That section reads thus "6.
+When a male Hindu dies after the commencement of this Act, having at the time of his death an interest in a Mitakshara coparcenary property, his interest in the property (1)(1963)66Bom.
+L.R.351.
+(2) 765 shall devolve by survivorship upon the surviving members of the coparcenary and not in accordance with this Act : Provided that, if the deceased had left him surviving a female relative specified in class I of the Schedule or a male relative specified in that class who claims through such a female relative, the interest of the deceased in the Mitakshara coparcenary property shall devolve by testamentary or intestate succession, as the case may be, under this Act and not by survivorship.
+Explanation I. For the purposes of this section, the interest of a Hindu Mitakshara coparcener shall be deemed to be the share in the property that would have been allotted to him if a partition of the property had taken place immediately before his death, irrespective of whether he was entitled to claim partition or not.
+Explanation 2.
+Nothing contained in the proviso to this section shall be construed as enabling a person who has separated himself from the coparcenary before the death of the deceased or any of his heirs to claim on intestacy a share in the interest referred to therein.
+" The Hindu Succession Act came into force on June 17, 1956, Khandappa having died after the commencement of that Act, to wit in 1960, and since he had at the time of his death an interest in Mitakshara coparcenary property, the pre conditions of section 6 are satisfied and that section is squarely attracted.
+By the application of the normal rule prescribed by that section, Khandappa 's interest in the coparcenary property would devolve by survivorship upon the surviving members of the coparcenary and not in accordance with the provisions of the Act.
+But, since the widow and daughter are amongst the female relatives specified in class I of the Schedule to the Act and Khandappa died leaving behind a widow and daughters, the proviso to section 6 comes into play and the normal rule is excluded.
+Khandappa 's interest in the coparcenary property would therefore devolve, according to the proviso, by intestate succession under the Act and not by survivorshop.
+Testamentary successive is out of question as the deceased had not made a testamentary disposition though under the explanation to section 30 of the Act, the interest of a male Hindu in Mitakshara coparcenary property is capable of being disposed of by a will or other testamentary disposition.
+There is thus no dispute that the normal rule provided for by section 6 does not apply, that the proviso to that section is attracted and that the decision of the appeal must turn on the meaning to be given to Explanation 1 of section 6.
+The interpretation of that Explanation is the subject matter of acute controversy between the parties.
+Before considering the implications of Explanation 1, it is necessary to remember that what section 6 deals with is devolution of the interest which a male Hindu has in a Mitakshare coparcenary property at 766 the time of his death.
+Since Explanation 1 is intended to be explanatory of the provisions contained in the section, what the Explanation provides has to be correlated to the subject matter which the section itself deals with.
+In the instant case the plaintiff 's suit, based as it is on the provisions of section 6, is essentially a claim to obtain a share in the interest which her husband had at the time of his death in the coparcenary property.
+Two things become necessary to determine for the purpose of giving relief to the plaintiff.
+One, her share in her husband 's share and two, her husband 's own share in the coparcenary property.
+The proviso to section 6 contains the formula for fixing the share of the claimant while Explanation 1 contains a formula for deducing the share of the deceased.
+The plaintiff 's share, by the application of the proviso, has to be determined according to the terms of the testamentary instrument, if any, made by the deceased and since there is none in the instant case, by the application of the rules of intestate succession contained in sections 8, 9 and 10 of the Hindu Succession Act.
+The deceased Khandappa died leaving behind him two sons, three daughters and a widow.
+The son, daughter and a widow are mentioned as heirs in class I of the Schedule and therefore, by reason of the provisions of section 8(a) read with the 1st clause of section 9, they take simultaneously and to the exclusion of other heirs.
+As between them the two sons, the three daughters and the widow will take equally, each having one share in the deceased 's property under section 10 read with Rules 1 and 2 of that section.
+Thus, whatever be the share of the deceased in the coparcenary property, since there are six sharers in that property each having an equal share, the plaintiff 's share therein will be 1/6th.
+The next step, equally important though not equally easy to work out, is to find out the share which the deceased had in the coparcenary property because after all, the plaintiff has a 1/6th interest in that share.
+Explanation 1 which contains the formula for determining the share of the deceased creates a fiction by providing that the interest of a Hindu Mistakshara coparcener shall be deemed to be the share in the property that would have been allotted to him if a partition of the property had taken place immediately before his death.
+One must, therefore, imagine a state of affairs in which a little prior to Khandappa 's death, a partition of the coparcenary property was effected between him and other members of the coparcenary.
+Though the plaintiff, not being a coparcener, was not entitled to demand partition yet, if a partition were to take place between her husband and his two sons, she would be entitled to receive a share equal to that of a son.
+(see Mulla 's Hindu Law, Fourteenth Edition, page 403, para 315).
+In a partition between Khandappa and his two sons, there would be four sharers in the coparcenary property, the fourth being Khandappa 's wife, the plaintiff.
+Khandappa would have therefore got a 1/4th share in the coparcenary property on the hypothesis of a partition between himself and, his sons Two things are thus clears : One, that in a partition of the coparcenary property Khandappa would have obtained a 1/4th share and 767 two, that the share of the plaintiff in the 1/4th share is 1/6th, that is to say, 1/24th.
+So far there is no difficulty.
+The question which poses a somewhat difficult problem is whether the plaintiff 's share in the coparcenary property is only 1/24th, or whether it is 1/4th plus 1/24th, that is to say, 7/24th.
+The learned trial Judge, relying upon the decision in Shiramabai which was later overruled by the Bombay High Court, accepted the former contention while the High Court accepted the latter.
+The question is which of these two views is to be preferred.
+We see no justification for limiting the plaintiff 's share to 1/24th by ignoring the 1/4th share which she would have obtained had there been a partition during her husband 's life time between him and his two sons.
+We think that in overlooking that 1/4th share, one unwittingly permits one 's imagination to boggle under the oppression of the reality that there was in fact no partition between the plaintiff 's husband and his sons.
+Whether a partition had actually taken place between the plaintiff 's husband and his sons is beside the point for the purposes of Explanation 1.
+That Explanation compels the assumption of a fiction that in fact "a partition of the 'property had taken place", the point of time of the partition being the one immediately before the death of the person in whose property the heirs claim a share.
+The fiction created by Explanation 1 has to be given its due and full effect as the fiction created by section 18A(9) (b) of the Indian Income tax Act, 1922, was given by this Court in Commissioner of Income tax, Delhi vs section Teja Singh(1).
+It was held in that case that the fiction that the failure to send an estimate of tax on income under section 18A(3) is to be deemed to be a failure to send a return, necessarily involves the fiction that a notice had been issued to the assessee under section 22 and that he had failed to comply with it.
+In an important aspect, the case before us is stronger in the matter of working out the fiction because in Teja Singh 's case, a missing step had to be supplied which was not provided for by section 18A(9) If b), namely, the issuance of a notice under section 22 and the failure to comply with that notice.
+Section 18A(9) (b) stopped at creating the fiction that when a person fails to send an estimate of tax on his income under section 18A(3) he shall be deemed to have failed to furnish a return of his income.
+The section did not provide further that in the circumstances therein stated, a notice under section 22 shall be deemed to have been issued and the notice shall be deemed not to have been complied with.
+These latter assumptions in regard to the issuance of the notice under section 22 and its non compliance bad to be, made for the purpose of giving due and full effect to the fiction created by section 18A(9) (b).
+In our case it is not necessary, for the purposes of working out the fiction, to assume and supply a missing link which is really what was meant by Lord Asquith in his famous passage in East End Dwellings Co. Ltd. vs Finsbury Borough Council.(1) He said if you are bidden to treat an imaginary state of affairs as real, you must also imagine as real the consequences and (1) [1959] Stipp.
+1 S.C.R. 394 (2) 768 incidents which, if the putative state of affairs had in fact existed, must inevitably have flowed from or accompanied it; and if the statute says that you must imagine a certain state of affairs, it cannot be interpreted to mean that having done so, you must cause or permit your imagination to boggle when it comes to the inevitable corollaries of that state of affairs.
+In order to ascertain the share of heirs in the property of a deceased coparcener it is necessary in the very nature of things, and as the very first step, to ascertain the share, of the deceased in the coparcenary property.
+For, by doing that alone can one determine the extent of the claimant 's share.
+Explanation 1 to section 6 resorts to the simple expedient, undoubtedly fictional, that the interest of a Hindu Mitakshara coparcener "shall be deemed to be" the share in the property that would have been allotted to him if a partition of that property had taken place immediately before his death.
+What is therefore required to be assumed is that a partition had in fact taken place between the deceased and his coparceners immediately before his death.
+That assumption, once made, is irrevocable.
+In other words, the assumption having been made once for the purpose of ascertaining the share of the deceased in the coparcenary property, one cannot go back on that assumption and ascertain the share of the heirs without reference to it.
+The assumption which the statute requires to be made that a partition had in fact taken place must permeate the entire process of ascertainment of the ultimate share of the heirs, through all its stages.
+To make the assumption at the initial stage for the limited purpose of ascertaining the share of the deceased and then to ignore it for calculating the quantum of the share of the heirs is truly to permit one 's imagination to boggle.
+All the consequences which flow from a real partition have to be logically worked out, which means that the share of the heirs must be ascertained on the basis that they bad separated from one another and had received a share in the partition which had taken place during the life time of the deceased.
+The allotment of this share is not a processual step devised merely for the purpose of working out some other conclusion.
+It has to be treated and accepted as a concrete reality, something that cannot be recalled just as a share allotted to a coparcener in an actual partition cannot generally be recalled.
+The inevitable corollary of this position is that the heir will get his or her share in the interest which the deceased bad in the coparcenary property at the time of his death, in addition to the share which he or she received or must be deemed to have received in the notional partition.
+The interpretation which we are placing upon the provisions of section 6, its proviso and explanation I thereto will further the legislative intent in regard to the enlargement of the share of female heirs, qualitatively and quantitatively.
+The Hindu Law of Inheritance (Amendment) Act, 1929 conferred heirship rights on the son 's daughter, daughter 's daughter and sister in all areas where the Mitakshara law prevailed.
+Section 3 of the Hindu Women 's Rights to Property Act.
+1937, speaking broadly, conferred upon the Hindu widow the right to a share in the joint family property as also a right to demand partition like any male member of the family.
+The Hindu Succession provides by section 14(1) that any property possessed by a female Hindu, whether acquired before or after the commencement of the Act, shall be held by her as a full owner thereof and not as a limited owner.
+By restricting the operation of the fiction created by Explanation I in the manner suggested by the appellant, we shall be taking a retrograde step, putting back as it were the clock of social reform which has enabled the Hindu Woman to acquire an equal status with males in matters of property.
+Even assuming that two interpretations of Explanation I are reasonably possible, we must prefer that interpretation which will further the intention of the legislature and remedy the injustice from which the Hindu women have suffered over the years.
+We are happy to find that the view which we have taken above has also been taken by the Bombay High Court in Rangubai Lalji vs Laxman Lalji (supra) in which Patel, J., very fairly, pronounced his own earlier judgment to the contrary in Shiramabai Bhimgonda vs Kalgonda (supra) as incorrect.
+Recently, a Full Bench of that High Court in Sushilabai Ramachandra Kulkarni vs Narayanrao Gopalrao Deshpande & Ors.,(1) the Gujarat High Court in Vidyaben vs Jagdishchandra N. Bhatt(2) and the High Court of Orissa in Ananda vs Haribandhu(3) have taken the same view.
+The Full Bench of the Bombay High ,Court in Sushilabai (supra) has considered exhaustively the various decisions bearing on the point and we endorse the analysis contained in the judgment of Kantawala C. J., who has spoken for the Bench.
+For these reasons we confirm the judgment of the High Court and ,dismiss the appeal with costs.
+S.R. Appeal dismissed.
+(1) A.I.R. 1975 (Bombay) 257.
+(2) A.I.R. 1974 Guj.
+(3) A.I.R. 1967 Orissa 194.

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+N: Criminal Appeal No. 332 of 1977.
+Appeal by Special Leave from the Judgment and order dated 20 10 75 of the Bombay High Court in Criminal Application No. 1 379/75.
+77 M. C. Bhandare, A. N. Karkhanis, Miss Malini Panduval and Mrs. section Bhandare for the Appellant.
+G. L. Sanghi and A. K. Verma for Respondent No. 1.
+M. N. Shroff for Respondent No. 2.
+The Judgment of the Court was delivered by A Prefatory statement KRISHNA IYER, J.
+In this appeal, by special leave, we are called upon to interpret a benign provision enacted to ameliorate the economic condition of neglected wives and discarded divorcees, namely.
+s 125.
+P.C. Welfare laws must be so read as to be effective delivery systems of the salutary objects sought to be served by the Legislature and when the beneficiaries are the weaker sections, like destitute women, this spirit of article 15(3) of the Constitution must belight the meaning of the Section.
+The Constitution is a pervasive omnipresence brooding over the meaning and transforming the values of every measure.
+So, section 125 and sister clauses must receive a compassionate expansion of sense that the words used permit.
+The Brief Facts The respondent (husband) married the appellant (wife) as a second wife, way back in 1956, and a few years later had a son by her.
+15 The initial warmth vanished and the jealousies of a triangular situation erupted, marring mutual affection.
+The respondent divorced the appellant around July 1962.
+A suit relating to a flat in which the husband had housed the wife resulted in a consent decree which also settled the marital disputes.
+For instance, it recited that this respondent had transferred the suit premises, namely, a flat in Bombay, to the appellant and also the shares of the Cooperative Housing Society which built the flat concerned.
+There was a reference to mehar money (Rs. 5,000/ and 'iddat ' money, Rs. 180/ ) which was also stated to have been adjusted by the compromise terms.
+There was a clause in the compromise: G "The plaintiff declares that she has now no claim or right whatsoever against the defendant or against the estate and the properties of the defendant.
+" And another term in the settlement was that the appellant had by virtue of the compromise become the absolute owner of the flat and various deposits in respect of the said flat made with the cooperative housing society.
+78 For some time there was flickering improvement in the relations between the quondum husband and the quondum wife and they lived together.
+Thereafter, again they separated, became entranged.
+The appellant, finding herself in financial straits and unable to maintain herself, moved the magistrate under section 125 of the Criminal Procedure Code, 1973, for a monthly allowance for the maintenance of herself and her child.
+She proceeded on the footing that she was still a wife while the respondent rejected this status and asserted that she was a divorce and therefore ineligible for maintenance.
+The Magistrate who tried the petition for maintenance held that the appellant was a subsisting wife and awarded monthly maintenance of Rs. 300/ for the son and Rs. 400/ for the mother for their subsistence, taking due note of the fact that the cost of living in Bombay, where the parties lived, was high, and that the respondent had provided residential accommodation to the appellant.
+This order was challenged before the sessions Judge by the aggrieved husband, who on a strange view of the law that the court, under section 125, had no jurisdication to consider whether the applicant was a wife, dismissed the petition in allowance of the appeal.
+The High Court deigned to bestow little attention on the matter and summarily dismissed a revision petition.
+This protracted and fluctuating litigation misfortune has leu to the appeal, by special leave, before this Court.
+The Questions Mooted Shri Bhandare appearing for the appellant contended that the Courts below had surprisingly forgotten the plain provision in the Explanation (b) to section 125(1) of the Code, which reads: "wife ' includes a woman who has been divorced by.
+or has obtained a divorce from, her husband and has not remarried.
+On this foundation, he urged that accepting the contention of the respondent that the appellant was a divorcee? his client was still entitled to an allowance.
+This is obviously beyond dispute or.
+a simple reading of the sub section and it is curious how this innovative and sensitive provision with a benignant disposition towards destitute divorcees has been overlooked by all the courts below.
+We hold that every divorce otherwise eligible, is entitled to the benefit of maintenance allowance and the dissolution of the marriage makes no difference to this right under the current Code.
+In the normal course, an order for maintenance must follow, the quantum having been determined by the learned Magistrate at the trial level.
+79 However, Shri Sanghi, appearing for the respondent, sought sustain the order in his favour on three grounds They arc of pubic importance since the affected party in such a fact situation is the neglected divorcee.
+He first argued that section 125(4) would apply in the absence of proof that the lady was not living separately by mutual consent.
+His next plea was that there must be proof of neglect to maintain to attract s.125 and his third contention was that there was a settlement by consent decree in 1962 whereby the mehar money had been paid and all claims adjusted, and so no claim for maintenance could survive.
+The third contention is apparently based upon contractual arrangement in the consent decree read with section 127(3) (b) which reads: C "(b) the woman has been divorced by her husband and that she has received, whether before or after the date of the said order, the whole of the sum which, under any customary or personal law applicable to the parties, was payable on such divorce cancel such order, (i) in the case where such sum was paid before such order, from the date on which such order was made.
+(ii) in any other case, from the date of expiry of the period, if any, for which maintenance has been actually paid by the husband to the woman; We must state, however, that there was no specific plea, based upon the latter provision, set up anywhere in the courts below or urged before us.
+But if one were to locate a legal ground to raise The contention That the liability to pay maintenance had ceased on account of the payment of mehar, it is section 127(3) of the Code.
+So we must deal with the dual sub heads of the third ground.
+The meaning of meanings is! derived from values in a given society and its legal system.
+Art.15(3) has compelling, compassionate relevance in the context of section 125 and the benefit of doubt.
+If any in statutory interpretation belongs to the ill used wife and the derelict divorcee.
+This social perspective granted, the resolution of all the disputes projected is easy.
+Surely, Parliament, in keeping with article 15(3) and deliberate by design, made a special provision to help women in distress cast away by divorce.
+Protection against moral and material abandonment manifest in article 39 is part of social and economic justice, specificated in article 38, fulfilment of which is fundamental to the governance of the country (Art.37).
+From this coign of vantage we must view the printed text of the particular Code.
+80 section 125 requires, as a sine qua non for its application, neglect by husband or father.
+The magistrate 's order proceeds on neglect to maintain; the sessions judge has spoken nothing to the contrary; and The High Court has not spoken at all.
+Moreover, the husband has not examined himself to prove that he has been giving allowances to the divorced wife.
+His case, on the contrary, is that she has forfeited her claim because of divorce and the consent decree.
+Obviously, he has no case of non neglect.
+His plea is his right to ignore.
+So the basic condition of neglect to maintain is satisfied.
+In this generous jurisdiction, a broader perception and appreciation of the facts and their bearing must govern the verdict not chopping little logic or tinkering with burden of proof.
+The next submission is that the absence of mutual consent to live separately must be made out if the hurdle of section 125(4) is to be over come.
+We see hardly any force in this plea.
+The compulsive conclusion from a divorce by a husband and his provision of a separate residence as evidenced by the consent decree fills the bill.
+Do divorcees have to 1) prove mutual consent to live apart? Divorce painfully implies that the husband orders her out of the conjugal home.
+If law has nexus with life this argument is still born.
+The last defence, based on mehar payment, merits more serious attention.
+The contractual limb of the contention must easily fail.
+The consent decree of 1962 resolved all disputes and settled all claims then available But here is a new statutory right created as a projection of public policy by the Code of 1973, which could not have been in the contemplation of the parties when in 1962, they entered into a contract to adjust their then mutual rights.
+No settlement of claims which does not have the special statutory right of the divorcee under section 125 can operate to negate that claim.
+Nor can s.127 rescue the respondent from his obligation.
+Payment of mehar money, as a customary discharge, is within the cognisance of that provision.
+But what was the amount of mehar ? Rs. 5000/ , interest from which could not keep the woman 's body and soul together for a day, even in that city where 40% of the population are reported to live on pavements, unless she was ready to sell her body and give up her soul ? The point must be clearly under stood that the scheme of the complex of provisions in Chapter IX has a social purpose.
+Ill used wives and desparate divorcees shall not be driven to material and moral dereliction to seek sanctuary in the streets.
+This traumatic horror animates the amplitude of s.127.
+Where the husband, by customary payment at the time of divorce, has adequately provided for the divorce, a subsequent series of recurrent does is 81 contra indicated and the husband liberated.
+This is the teleological A interpretation, the sociological decoding of the text of s.127.
+The keynote thought is adequacy of payment which will take reasonable care of her maintenance.
+The payment of illusory amounts by way of customary or personal law requirement will be considered in the reduction of maintenance rate but cannot annihilate that rate unless it is a reasonable substitute.
+The legal sanctity of the payment is certified by the fulfilment of the social obligation, not by a ritual exercise rooted in custom.
+No construction which leads to frustration of the statutory project can secure validation if the court is to pay true homage to the Constitution.
+The only just construction of the section is that Parliament intended divorcees should not derive a double benefit.
+If the first payment by way of mehar or ordained by custom has a reasonable relation to the object and is a capitalised substitute for the order under section 125 not mathematically but fairly then section 127(3) (b) subserves the goal and relieves; the obligor, not pro tanto but wholly.
+The purpose of the payment 'under any customary or personal law ' must be to obviate destitution of the divorcee and to provide her with wherewithal to maintain herself.
+The whole scheme of section 127(3) (b) is manifestly to recognise the substitute maintenance arrangement by lump sum payment organised by the custom of the community or the personal law of the parties.
+There must be a rational relation between the sum so paid and its potential as provision for maintenance.
+To interpret otherwise is to stultify the project.
+Law is dynamic and its meaning cannot he pedantic but purposeful.
+The proposition, therefore, is that no husband can claim under section 127(3)(b) absolution from this obligation under section 125 towards a divorced wife except on proof of payment of a sum stipulated by customary or personal law whose quantum is more or less sufficient to do duty for maintenance allowance.
+The conclusion that we therefore reach is that the appeal should be allowed and it is hereby allowed, and the order of the trial court restored.
+P.B.R. Appeal allowed.

3924.txt

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+: Criminal Appeal No 133 of 1975.
+Appeal from the Judgment and order dated 3 2 1978 of the Andhra Pradesh High Court in Crl.
+A. No. 628/73.
+R. Nagarathnam for the Appellant.
+P. Parmeswara Rao and G. N. Rao for the Respondent.
+The Judgment of the Court was delivered by CHINNAPPA REDDY, J.
+This appeal has been filed under Section 2(a) of the .
+The appellant was acquitted by the learned Additional Sessions judge, Chittoor of an offence under Section 302, Indian Penal Code.
+The acquittal was reversed by the High Court of Andhra Pradesh and the appellant was convicted under Section 302 Indian Penal Code and sentenced to suffer imprisonment for life.
+365 The deceased Subhadramma was the wife of the appellant.
+They were married about one and a half years before the occurrence.
+About three months before the occurrence the deceased gave birth to a female child in the house of the accused at Cherlopalle.
+After the ninth day the mother and child, according to customary practice, were taken by the mother of the deceased to her house at Krishna Kalva.
+Cherlopalle is about 25 miles from Krishna Kalva.
+The accused used to visit his wife and often used to stay in the house of the deceased 's mother.
+After about one and a half months the, accused asked his mother in law and brother in law to send his wife to his place.
+They replied that she had only delivered a child recently and that she would be sent to her husband 's house in the fifth month.
+On 18th December, 1972, according to the case of the prosecution the accused once again requested his mother in law to send his wife to his house.
+This time he also brought with him P.W. 8, an elderly gentleman from his village.
+His mother in law P.W. 2 told him that she would send the girl in the fifth month as she had not yet regained her health after delivery.
+The accused and P. W. 8 went away.
+That evening the accused again came to the house of his mother in law.
+After dinner all of them went to sleep.
+The house consisted of only one room.
+The accused, the deceased, her brother P.W. 1, her mother P.W. 2 and her grand mother P.W. 3 were all sleeping in the room.
+In the middle of the night P.Ws. 1, 2 and 3 were awakened by the cry "Amma" raised by Subhadramma.
+On waking up they saw the accused sitting by the side of the deceased with a knife in his hand.
+They found the deceased bleeding profusely from the left side of her chest.
+P.W. 1 put his foot on the hand in which the accused was holding the knife.
+The accused dropped the knife which was then picked up by the grand mother P.W. 3.
+Attracted by the cries raised by the P.Ws. 1 to 3, the neighbourers P. Ws. 4, 5, 6 and others came there.
+They caught hold of the accused and tied him to a pole in front of the house by means of a rope.
+Some of the villagers who had gathered there also gave a beating to the accused P.W. proceeded to the house of P.W. 9 the Village Munsif and reported the occurrence to him.
+P. W. 1 affixed his thumb impression on the report exhibit P. 1 prepared by P. W. 9.
+P. W. 9 then proceeded to the house of P.W. 1 where the blood stained knife M.O. 1 was handed over to him.
+Thereafter, P. W. 9 prepared his own report exhibit P. 4 and sent it alongwith exhibit P. 1 and M.O. 1 to the Police Station at Renigunta.
+P. W. 14, the Sub Inspector of Police registered the First Information Report at 5 A. M. on 19th December, 1972 and went ahead with the further investigation which was later taken over by the Inspector of Police P.W. 15.
+When the Police officers went to the village, they 366 found the accused tied to a pole.
+They arrested him and found that he had injuries on his person.
+They got him examined by a Doctor.
+After holding the inquest the dead body was sent for postmortem examination.
+The Medical Officer, P. W. 12 who conducted the autopsy, found on the dead body a stab wound over the left axila 6 cms.
+below the arm pit 1.75 cms x 0.5 cm.
+nearly horizontal.
+The stab injury had gone through the third intercostal space and through the upper lobe of the left lung in an upward and medial direction.
+The upper lobe of the left lung had been cut through and through,, and had collapsed.
+P. W. 13 the Medical officer who examined the accused found several abrasions and contusions on the person of the accused.
+There was no fracture.
+After completing the investigation the Police laid a chargesheet against the accused and he was duly tried.
+The plea of the accused was one of denial.
+In the Committing Court the accused was content with a bare denial but in the Court of Sessions he stated that he went to the house of his mother in law at about 10 p.m.
+On 18th December, 1972.
+P. Ws. 1 and 2 taunted him saying "we are maintaining you and your wife, yet you come at any time you like` '.
+They insulted him.
+There was an altercation.
+P.W. 3 hit him with a stone near his left eye.
+P. W. 1 beat him with a stick two or three times.
+He felt giddy and was about to lose consciousness.
+P. W. 1 came upon him with a knife to stab him.
+The deceased intervened and interposed herself between P.W. 1 and the accused.
+She received a stab injury.
+Seeing his wife injured, he fell down unconscious.
+He regained consciousness next morning.
+The Learned Sessions Judge held that the prosecution had failed to establish any motive and that the evidence of the prosecution witnesses was 'discrepant, conflicting and improbable. ' He thought that the prosecution had made an attempt to improve its case which was originally based on circumstantial evidence to made it appear as if P.W. 3 had also seen the stabbing.
+He commented on the failure of the Police to seize the mat or bedding on which the deceased was sleeping.
+He referred to the evidence of me Doctor who stated that the injury found on the deceased could have been caused even if she was standing.
+The learned Sessions Judge thought that when there were two divergent versions given by the prosecution and the defence and when two views were possible, the benefit of doubt should be given to the accused.
+He, therefore, acquitted the accused.
+The High Court reversed the finding of acquittal.
+The learned Judges pointed out that there was no reason to doubt the testimony of P. Ws. 1 to 3 and that the discrepancies noticed by the learned Sessions 367 Judge were of a minor character.
+The High Court observed that the learned Sessions Judge had magnified the importance to be attached to minor discrepancies.
+The High Court also concluded from the medical evidence that it was more probable that the deceased was stabbed when she was lying down.
+Accepting the evidence of P. Ws. 1 to 3 which was corroborated by the evidence of P. Ws. 4 and 5 who came to the scene soon afterwards, the High Court convicted the accused under Section 302 and sentenced him as aforesaid.
+In this appeal the learned Counsel for the appellant argued that the accused had no motive to kill his wife and that his version was more probable than the version of the prosecution.
+He submitted that the version of the accused that the occurrence took place at about 10 p.m. was substantiated by what was mentioned in exhibit P. 15 the wound certificate given by P.W. 13 the Medical officer in respect of the injuries which he found on the person of the accused.
+He urged that the knife was not seized by the Police under any seizure Memo nor was the knife sent to any finger print expert.
+He urged that at the reasons given by the learned Sessions Judge had not been met by the High Court.
+He also contended that two views were possible on the evidence and the accused was entitled to the benefit of doubt.
+We have perused the relevant evidence as well as the judgments of the Sessions Judge and the High Court.
+We are unable to find any substance in the submissions made by the, learned Counsel for the appellant.
+The High Court was well justified in commenting that the discrepancies on the basis of which the Trial Court rejected the evidence of P. Ws. 1, 2 and 3 were of a minor character and that they have been unduly magnified by the learned Sessions Judge.
+The discrepancies were in regard to which of them woke up first, where was the lantern and which of the neighbours came first to the scene on hearing their cries.
+The High Court was also right in holding that the medical evidence supported the prosecution version and not the defence version.
+Merely because the Medical Officer stated that the victim could have received the injury if she was standing, it did not follow that the injury could have been received in the circumstances mentioned by the accused.
+The injury was inflicted with great force and its direction was upward.
+The location of the injury was 6 cms.
+below the arm pit on the left side.
+According to the accused the deceased received the injury when she placed herself between P. W. 1 and himself.
+We do not think that an injury of the nature received by the deceased could have been caused in the manner suggested by the accused.
+The injury must have been caused in the manner suggested by the prosecution that 368 is, when the deceased was lying on her right side.
+It is true that the accused did not have any deep motive to kill the deceased.
+It is obvious that he must have been upset by the persistent refusal of the brother and mother of the deceased to send her with him to his house.
+He probably attributed the refusal to reluctance on the part of his wife to accompany him straightaway.
+We may also refer here to the comment of the learned Counsel for the appellant that realizing that the motive would assume considerable importance if the case was one based on circumstantial evidence, the prosecution tried to make P. W. 3 depose as if she had witnessed occurrence.
+We do not think that the comment is justified.
+P.W. 3, an old woman of 69 years, stated in her evidence that she saw the accused who was sitting by the side of the deceased on the cot make a gesture as if he was stabbing the deceased and that the deceased cried out 'Amma. ' In cross examination she stated that she did not remember if she had told the Police that the accused made a gesture as if he was stabbing the deceased.
+The Inspector of Police P. W. 15, however, stated that P. W. 3 did not state before him that she saw the accused making a gesture as if he was stabbing the deceased.
+We do not think that we will be justified in rejecting the evidence of all the prosecution witnesses on the basis of this statement of P. W. 3.
+At the worst the so called improvement made by her may be rejected but no more.
+We are unable to discover any good reason to reject the evidence of P. Ws. 1 to 3 or the evidence of P. Ws. 4 and 5.
+We are afraid the learned Sessions Judge allowed himself to be assailed by airy and fanciful doubts.
+We are satisfied that the High Court was justified in interfering with the order of acquittal.
+The learned Counsel for the appellant advanced the usual argument submitted in all cases where an order of acquittal is reversed, namely, that where two views of the evidence are possible, the accused is entitled to the benefit of the doubt arising from the two views and that where the Trial Court has taken a possible view and acquitted the accused, the High Court should not interfere with the order of acquittal merely because another view is also possible.
+The principles are now well settled.
+At one time it was thou ht that an order of acquittal could be set aside for "substantial and compelling reasons" only and Courts used to launch on a search to discover those "substantial and compelling reasons".
+However, the 'formulae ' of "substantial and compelling reasons", "good and sufficiently cogent reasons" and "strong reasons" and the search for them were abandoned as a result of the pronouncement of this Court in Sanwat Singh & Ors.
+vs State of Rajasthan(1).
+In Sanwat Singh 's case, this Court harked (1) A.l.
+R. 369 back to the principles enunciated by the Privy Council in Sheo Swarup vs Emperor(1) and re affirmed those principles.
+After Sanwat Singh vs State of Rajasthan, this Court has consistently recognised the right of the Appellate Court to review the entire evidence and to come to its own conclusion, bearing in mind the considerations mentioned by the Privy Council in Sheo Swarup 's case.
+Occasionally phrases like 'manifestly illegal ', grossly unjust ', have been used to describe the orders of acquittal which warrant interference.
+But, such expressions have been used more, as flourishes of language, to emphasise the reluctance of the Appellate Court to interfere with an order of acquittal than to curtail the power of the Appellate Court to review the entire evidence and to come to its own conclusion.
+In some cases Ramabhupala Reddy & Ors.
+v The State of A.P.(2), Bhim Singh Rup Singh vs State of Maharashtra(3) it has been said that to the principles laid down in Sanwat Singh 's case may be added the further principle that "if two reasonable conclusions can be reached on the basis of the evidence on record, the Appellate Court should not disturb the finding of the Trial Court".
+This, of course, is not a new principle.
+It stems out of the fundamental principle, of our criminal jurisprudence that the accused is entitled to the benefit of any reasonable doubt.
+If two reasonably probable and evenly balanced views of the evidence are possible, one must necessarily concede the existence of a reasonable doubt.
+But, fanciful and remote possibilities must be left out of account.
+To entitle an accused person to the benefit of a doubt arising from the possibility of a duality of views, the possible view in favour of the accused must be as nearly reasonably probable as that against him.
+If the preponderance of probability is all one way, a bare possibility of another view will not entitle the accused to claim the benefit of any doubt.
+It is, therefore, essential that any view of the evidence in favour of the accused must be reasonable even as any doubt, the benefit of which an accused person may claim, must be reasonable. "A reasonable doubt", it has been remarked, "does not mean some light, airy, insubstantial doubt that may flit through the minds of any of us about almost anything at some time or other, it does not mean a doubt begotten by sympathy out of reluctance to convict; it means a real doubt, a doubt founded upon reason"(4).
+As observed by Lord Denning in Miller vs Minister of pensions(5) "Proof beyond a reasonable doubt does not mean proof beyond a shadow of a doubt.
+(1) 61 I.A. 389.
+(2) A.I.R. 1971 S.C. 460.
+(3) A.l.
+R. (4) Salmon J. in his charge to the jury in R. V. Fantle reported in (5) 370 The law would fail to protect the community if it admitted fanciful possibilities to deflect the course of justice.
+If the evidence is so strong against a man as to leave only a remote possibility in his favour, which can be dismissed with the sentence 'of course it is possible but not in the least probable ' the case is proved beyond reasonable doubt, but nothing short of that will suffice".
+In Khem Karan & Ors.
+vs State of U.P. & Anr.(1).
+, this Court observed: "Neither mere possibilities nor remote possibilities nor mere doubts which are not reasonable can, without danger to the administration of justice, be the foundation of the acquittal of an accused person, if there is otherwise fairly credible testimony".
+Where the Trial Court allows itself to be beset with fanciful doubts, rejects creditworthy evidence for slender reasons and takes a view of the evidence which is but barely possible, it is the obvious duty of the High Court to interfere in the interest of justice, lest the administration of justice be brought to ridicule.
+That is what the High Court has done in this case.
+The appeal is dismissed.
+P. B. R. Appeal dismissed.

4071.txt

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+Civil Appeal Nos.
+1617 and 1640A of 1979.
+Appeals by Special Leave from the Judgment and order dated 20 1 1979 of the Madhya Pradesh High Court in Misc.
+Petition No 884 of 1978.
+R. P. Bhatt and Sri Narain for the Appellant (In CA 1617/79).
+G. L. Sahu and Miss Maya Ra for the Appellant (In CA 1640A/79) an R. 54 in CA 1617/79.
+Shiv Shankar Rao, H. K. Puri, V. K. Bahl and Miss Madhu Moolchandani For RR 7 10, 13, 14, 16, 18 25, 27 29, 33 36, 39 42, 45, 49 and 50 in CA 1617 and for RR 7, 10, 13 14, 16, 18 25, 27 29, 33 36, 39 42, 45, 49 & 50 in C.A. 1640A/79.
+section K. Gambhir for RR.
+5 6 in CA 1617/79.
+The Judgment of the Court was delivered by VENKATARAMIAH, J.
+For the purpose of holding election to the .
+Municipal Corporation of Raipur in the month of December, 1978 under the provisions of the Madhya Pradesh Municipal Corporation Act, 1956 (No. 23 of 1956) (hereinafter referred to as 'the Act '), the Collector of Raipur published the preliminary electoral roll on September 30, 1978 under Rule 4(1) of the Madhya Pradesh Munici 493 pal Corporation (Preparation, Revision and Publication of Electoral Rolls and Selection of Councillors) Rules, 1963 (hereinafter referred to as 'the Rules ') promulgated under the Act by the Madhya Pradesh State Government and issued a public notice under Rule 4(1) of the Rules calling upon persons whose names had not been included in the electoral roll and who claimed to be included in i. and persons who had any objection to the inclusion of the name of any person in the said electoral roll to submit their claims and/or objections within 20 days from the date of the publication of the said notice before Shri K. P. Pande, Deputy Collector, Raipur who had been authorised to pass orders on such claims or objections.
+It was also notified that claims or objections which had not been preferred as required under the Rules within the prescribed period would be rejected.
+The final publication of the electoral roll under Rule 8 of the Rules was done on November 16, 1978.
+Thereafter the calendar of events was published on November 25, 1978 notifying that the poll, if necessary would take place on December 31, 1978 in all the 44 constituencies: Six petitioners including the appellants herein presented a petition under Article 226 of the Constitution before the High Court of Madhya Pradesh at Jabalpur on December 28, 1978 requesting the Court to make an order quashing the electoral roll and the calendar of events issued for the purpose of the said election and directing the respondents to refrain from conducting the poll on December 31, 1978.
+They prayed for a further direction to be issued to the respondents calling upon them to hold the election after preparing the electoral roll afresh in accordance with the provisions of the Act and the Rules.
+They also prayed for the issue of an interim order staying the poll which had been fixed to be held on December 31, 1978.
+On December 30, 1978, the learned Single Judge before whom the case came up for orders directed the issue of notice of the petition and the stay application to the respondents and issued an interim order directing the respondents not to notify the results of the election under Rule 46 of the Rules pending disposal of the petition.
+On December 31, 1978, the poll was held and 44 persons were declared elected.
+Their names were, however, not published under Rule 46 of the Rules in view of the interim order made by the Court.
+Thereafter the successful candidates were also impleaded as respondents and the petition was amended by the inclusion of an additional prayer that the declaration of the results of the election should also be quashed.
+After the respondents filed their counter affidavits, the petition was heard and it was dismissed by a Division Bench of the High Court on January 20, 1979.
+Aggrieved by the order passed by the High Court, Ashok Kumar Mishra and Bhagwat Singh Thakur (Petitioners No. 1 and 5 respectively in the 494 petition before the High Court) filed a petition for special leave to appeal to this Court and Purshottam Lal Sharma (petitioner No. 6 before the High Court) filed another petition.
+On special leave being granted, the above petitions were registered as appeals.
+One of the grounds on which the appellants challenged the validity of the electoral roll, the calendar of events and the declaration of results of election was that the entire election process had become vitiated on account of the defect in the notice issued under Rule (1) of the Rules notifying that claims and objections should be preferred within a period of 20 days from the date of the publication of that notice when sub rule (3) of Rule 4 of the Rules prescribed that such claims and objections could be preferred within 30 days from the date of publication of that notice.
+It was alleged that by reason of a shorter period being fixed for entertaining claims and objections, a large number or people who could have filed claims and objections were prevented from preferring them within 30 days from the date of publication or the notice which was the prescribed period.
+It was alleged that petitioner No. 5 had filed a claim to include his name in the electoral roll on October 19, 1978 and that was rejected by the Deputy Collector without following the procedure prescribed for the purpose.
+It was also alleged that on October 20, 1978, 34 persons mentioned in Annexure P 7 approached the Deputy Collector to entertain their claim for inclusion in the electoral roll and he refused to receive their applications.
+It was contended that on account of noncompliance with Rule 4(3) of the Rules, which was mandatory, the entire election process held on the basis of the defective electoral roll '.
+became a nullity and that therefore, the declaration of results of all the 44 successful candidates was liable to be quashed.
+On behalf of the respondents, it was pleaded that while it was true that the period of 20 days had been mentioned in the notice issued under Rule 4(1) of the Rules, it was open to all the persons who were interested in preferring claims or objections to file them within 30 days from the date of publication of the notice under Rule 4(1).
+It was pleaded that pursuant to the notice published under Rule 4(1) of the Rules only four claims including that of petitioner No. S were received by the Deputy Collector; that all the applicants were asked to appear on October 30, 1978 to substantiate their claim and that the applications were disposed of on October 30, 1978.
+The claim of petitioner No. 5 was rejected as no evidence in support of his claim was produced before the Deputy Collector.
+It was further pleaded that no other claims or objections were preferred either on October 20, 1978 or on any other sub sequent date.
+The allegation that 34 persons had approached the Deputy 495 Collector requesting him to receive their applications for inclusion of their names in the electoral roll on October 20, 1978 was denied.
+They further pleaded that the authorities would have taken action to correct the error in the notice issued under Rule 4(1) of the Rules granting 20 days ' time to prefer claims and objections if it had been brought to their notice by the petitioners immediately after it was noticed by them.
+The petitioners were not entitled to any relief under Article 226 of the Constitution on account of the inordinate delay involved in the presentation of the writ petition.
+The High Court after hearing the parties dismissed the petition holding (i) that respondent No. 2, the Deputy Collector had asked petitioner No. S to appear before him on October 30, 1978 and that as he did not produce any evidence in support of his claim, his application was dismissed, (ii) that none of the persons mentioned in Annexure P 7 preferred any claim before respondent No. 2 on October 20, 1978 and that he did not refuse to receive any such claim and that no person preferred any claim or objection after October 19, 1978 before respondent No. 2 and (iii) that the petitioners were not entitled to any relief as they had approached the Court after undue delay.
+Since one of the grounds on which the High Court dismissed the petition was that the petitioners were not prompt in moving the High Court, we shall first examine whether the High Court was right in doing so, since if we agree with the High Court on the above question, it would become unnecessary to go into the other questions raised before us.
+The Collector published the notice under Rule 4(1) of the Rules on September 30, 1978 and also called upon interested persons to prefer claims and/or objections thereto within a period of 20 days.
+In paragraph 7 of the notice, it was mentioned that claims and objections received beyond the prescribed period would not be considered.
+The period prescribed for preferring claims and objections under Rule 4(3) was 30 days.
+It is not the case of the petitioners that they did not know immediately after the publication of such notice that in the said notice a period of 20 days had been mentioned in its preamble as the period within which the claims and objections could be preferred and in paragraph 7 thereof it had been stated that any such claim or objection filed beyond the prescribed period was liable to be rejected.
+If they felt that the said notice suffered from any illegality, they could have brought it to the notice of the Collector immediately 496 thereafter.
+It was open to them to move the State Government under Rule 6 of the Rules to make an order directing the Collector to follow .
+the provisions governing the preparation of the electoral roll.
+It was also open to them to file a writ petition immediately after the publication of the said notice questioning its legality.
+None of the above courses was adopted by the petitioners.
+Persons whose claims were rejected could have filed an appeal under Rule S before the Collector.
+No such appeal was presented.
+The final electoral roll was published on November 16, 1978.
+It was notified that the nominations could be filed on and after November 25, 1978 and the poll, if necessary, would take place on December 31, 1978.
+After November 25, 1978, a large number of nominations were received by the Returning officer.
+It was only on December 5, 1978 for the first time that a letter was addressed by petitioner No. 6 to the Collector drawing his attention to the error that had crept into the notice published under Rule 4(1) of the Rules.
+By that time, the nominations had all been received.
+The final list of candidates for the election with their symbols was published on December 20, 1978.
+The writ petition itself was filed on December 28, 19?8 when the poll had to take place on December 31, 1978.
+When the petition came up for order on December 29, l 978, it had to be adjourned to December 30, 1978 at the request of the counsel for the petitioners.
+No satisfactory explanation was given in the course of the petition by the petitioners as to why they delayed the filing of the petition till December 28, 1978 even though they knew that there was an error in the notice issued under Rule 4(1) of the Rules in the month of October, 1978 more than two months before the date on which i, was filed.
+It was, however, argued before us relying upon a news item which had appeared in a daily called 'Nav Bharat ' dated October 21, 1978 in which there was a reference to a statement made by the Minister for Local Self Government of Madhya Pradesh regarding the irregularity in the division of Raipur town into different wards for purposes of election.
+It was also stated therein that in the course of the discussion with the press reporters on that day, the Minister had stated that he had directed the Commissioner, Raipur Division, Raipur that the date for inclusion of names in the electoral roll could be extended if the election date was not affected.
+There was a further reference to dates of election to Bilaspur Municipal Committee having been adjourned twice before.
+It is difficult to place any reliance on the above news item for the purpose of concluding that the Collector, Raipur had been informed about the defect in the notice issued under Rule 4(1) of the Rules by October 21, 1978.
+The other documents produced alongwith the writ petition referred to omissions of certain names from the electoral roll.
+They do not show that any 497 of the petitioners had raised any objection with regard to the date within which the claims and objections could be preferred to the electoral roll mentioned in the notice.
+We have, therefore, to proceed on the basis that it was only on December S, 1978 for the first time that the attention of the Collector was drawn to the said error and that the writ petition itself was presented on December 28, 1978.
+No satisfactory reason for the delay was set out in the petition.
+It is well settled that the power of the High Court under Article 226 of the Constitution to issue an appropriate writ is discretionary and if the High Court finds that there is not satisfactory explanation far the inordinate delay, it may reject the petition if it finds that the issue of Writ will lead to public inconvenience and interference with rights of others.
+This rule applies also to a case in which the validity of an election to a local authority is challenged.
+The question whether in a given case the delay involved is such that it dissentients a person to relief under Article 226 is a matter within the discretion of the High Court which as in all matters of discretion has to exercise it judiciously and reasonably having regard to the surrounding circumstances.
+We are not, therefore, impressed by the argument that the petitioners were entitled to the issue of the writ prayed for as of right and the delay in filing the petition should have been ignored.
+On the facts and in the circumstances of the case, we are of the view that the writ petition was rightly dismissed by the High Court as there was no satisfactory explanation for the delay in preferring it.
+We, therefore, find it unnecessary to deal with the other points urged before us.
+For the foregoing reasons, the appeals fail and arc dismissed.
+We make no order as to costs.