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iminal Appeal No. 83 of 1961. Appeal from the judgment and order dated June 20, 1960, of the Calcutta High Court in Criminal Revision No. 1525 of 1959. H. R. Khanna, K. L. Hathi and R. N. Sachthey, for the appellant. G. section Pathak, B. Datta, J. B. Dadachanji, O. C. Mathur and Ravinder Narain, for the respondent. April 14, 1964. The judgment of the Court was delivered by RAGHUBAR DAYAL, J. This appeal, on certificate granted by the Calcutta High Court, is directed against an order of the High Court dated June 20, 1960 reversing the Order of the Chief Presidency Magistrate directing return of certain documents to the respondent, and has arisen in the following circumstances: On April 6, 1959, the Chief Presidency Magistrate, Calcutta, ordered the issue of search warrants on the application of the Enforcement Officer, Enforcement Directorate, Ministry of Finance, under sub section (3) of section 19 of the Foreign Ex change Regulation Act, 1947 (Act VII of 1947). The search warrant was issued on May 6, 1959. It required the produc tion of documents seized, before the Magistrate. In execution of the search warrant, a number of documents were seized from the possession of the respondent on May 14, 1959. The 726 Enforcement Officer reported that day that a certain room could not be searched and therefore further action on the search warrant was to be taken. He also noted in his appli cation, for the Chief Presidency Magistrate 's information: "that the seized documents as per enclosed Seizure Memo have been kept with us for scrutiny and those will be retained till the completion of the enquiry or the adjudication proceedings as the case may be and a report will be submitted to Your Honour thereafter." on May 28. 1959, the Enforcement Officer applied to the Chief Presidency Magistrate for permission for the retention of the seized documents for a period of two months for the submission of further report in the matter. The Chief Presidency Magistrate granted the necessary permission. Similar permission was again granted on applications, by the Chief Presidency Magistrate, on July 28 and September 28, 1959. On October 5, 1959, the respondent applied to the Chief Presidency Magistrate for an order of return of the said documents as the statutory period of 4 months during which the Director of Enforcement could keep the documents had expired, and no proceedings had been commenced against him under section 23 of the Act. The claim for the return of the documents was based on the provisions of section 19 A. On Octo ber 20, 1959 the Chief Presidency Magistrate ordered the return of the seized files to the respondent. He, however, modified this order the same day, when his attention was drawn to his earlier order dated September 28, 1959 permit ting the Enforcement Officer to retain the documents till November 28, 1959. He directed the matter to be heard 'on October 26, 1959 and on that day, in view of the Investigat ing Officer being on leave, adjourned the matter for decision to November 10, 1959. in his application presented on November 10, 1959 the Enforcement Officer stated that the Director of Enforcement had started adjudication proceedings against the respondent for alleged violation of section 4(1) of the Act and had issued notice to him to show cause and that in connection with the adjudication proceedings seized files items Nos. 2 and 7 of the Seizure Memo would be required and that he had no objection to the return of the remaining seized files though they might have some distant bearings on those proceedings. The Chief Presidency Magistrate ordered, on November 10, 1959, the return of all the documents except those mentioned at items 2 and 7 of the search list. The respondent went up in revision against this order for the continued retention 727 of the two documents, and the High Court allowed the revision and ordered the return of these documents also to the s respondent. It is against this order that this appeal has been filed. We may first refer to the relevant provisions of sections 19 and 19 A of the Act, and later to certain provisions of the Code of Criminal Procedure, hereinafter called the Code, to appreciate the contention for the parties. "19(1). The Central Government may, at any time by notification in the Official Gazette, direct owners, subject to such exceptions, if any, as nay be specified in the notification, of such foreign exchange or foreign securities as may be so specified, to make a return thereof to the Reserve Batik within such period, and giving such particulars, as may be so specified. Government or the Reserve Bank considers it necessary or expedient to obtain and examine any information, book or other document in the possession of any person or which in the opinion of the Central Government or the Reserve Bank it is possible for such person to 'obtain and furnish, the Central Government or, as the case may be, the Reserve Bank may, by order in writing, require any such person (whose name shall be specified in the order) to furnish, or to obtain and furnish, to the Central Government or the Reserve Bank or any person specified in the 'order with such information, book or other document. (3) If on a representation in writing, made by a person authorised in this behalf by the Central Government or the Reserve Bank, a District Magistrate, Sub Divisional Magistrate, Presidency Magistrate or Magistrate of the first class, has reason to believe that a contravention of any of the provisions of this Act has been, or is being or is about to be, committed in any place, (2) of this section has been or might be addressed, will not or would not produce the information, book or other document, or where such information, book or other document is not known to the Magistrate to be in the possession of any person, or where the Magistrate considers that the purposes of any investigation or proceeding under this Act will be served by a general search or inspection, 728 he may issue a search warrant and the person to whom such warrant is directed may search or inspect in accordance therewith and seize any book or other document, and the provisions of the Code of Criminal Procedure, 1898 relating to searches under that Code shall, so far as the same are applicable, apply to searches under this sub section: Provided that such warrant shall not be issued to any police officer below the rank of sub inspector. Explanation. In this subsection, 'place ' includes a house, building, tent, vehicle, vessel or aircraft. Where in pursuance of an order made tinder sub section (2) of section 19 or of a search warrant issued under sub section (3) of the said section, any book or other document is furnished or seized, and the Director of Enforcement has reasons to believe that the said document would be evidence of the contravention of any of the provisions of this Act or of any rule, direction or order made thereunder, and that it would be necessary to retain the document in his custody, he may so retain the said document for a period not exceeding four months or if. before the expiry of the said period of four months, any pro ceedings under section 23: (a) have been commenced before him, until the disposal of those proceedings, including, the proceedings before the Appellate Board, if any, or (b) have been commenced before a Court, until the document has been filed in that Court. " Chapter VII of the Code provides for processes to compel the production of documents etc. Section 94 empowers the Court to issue a summons to a person in possession of the document or whose production is considered necessary or desirable for the purpose of any investigation, inquiry, trial or other proceeding under the Code to produce the same before it. In certain circumstances mentioned in section 96 it may issue a search warrant, for conducting the search for such documents or articles as are mentioned in section 94. The combined effect of the two sections is that the articles seized in execution of the search warrant have to be produced before the Magistrate and the Magistrate thereafter passes suitable orders about the custody or return of those documents. Form 8, Schedule V, of the Code gives the form of the search warrant and contains a direction that the articles seized be produced forthwith before the Court. Sections 98 and 99 A deal with search 729 warrants in special circumstances and sections 101 to 103 come under the general provisions relating to searches. The appellant 's main contentions are: 1.The provisions of section 19 A limit the period for retaining the documents seized in execution of a search warrant issued under section 19 to 4 months by the Director of Enforcement but does not limit the power of the Court issuing the search warrant to pass any orders for the retention of the seized documents or with respect to the disposal 'of those documents. In the absence of any prescribed procedure for the issue of a search warrant under section 19, the provisions of sections 96, 98 and Form 8 of Schedule V of the Code would be applicable to the search warrants issued under section 19. 3.The Court has inherent power to pass proper orders with respect to the retention of the documents seized for the purposes of investigation and proceedings following it. 1.Section 19 and, 19 A are special provisions which provide for special procedure for investigation of the several offences created by the statute and were enacted in order to remove certain difficulties in investigation which led to the keeping of documents of citizens unduly long and thus causing them inconvenience and harassment, and to relieve the Magistrate of his repeatedly dealing with police reports for permission to retain the documents and that therefore when section 19 A fixes the maximum duration for the retention of the documents by the Director of Enforcement at 4 months and thus prohibits further detention except in certain circum stances by the officer concerned, the Magistrate cannot allow the Director of Enforcement to keep the documents beyond four months. 2.There is no provision in the Act empowering the Court to extend the period for the detention of documents and any such power in the Magistrate will defeat the very object of the Act. The provisions of the Code relating to searches under the Code apply so far as the same be applicable to searches under sub section (3) of section 19 of the Act and therefore the provision of the Code giving jurisdiction to the Magistrate over the property seized in execution of a search warrant issued by him will not fully apply to property seized in execution of the search warrant issued under sub section (3) of section 19. The first question to determine is whether Magistrate issuing the search warrant has control over the disposal of the articles seized in execution of the warrant. The provisions of the Code relating to searches apply to search warrants issued under sub section (3) of section 19 but only in so far as they be 730 applicable. The provisions dealing with the circumstances in which, and the authorities by which, search warrants can be issued cannot apply, in view of the specific provision for the issue of a search warrant under the Act in sub section (3) of section 19. Sections 96, 98 and Form 8 of Schedule V, do not therefore operate in connection with searches under sub section 19. It is therefore the provisions which deal with what is done after the issue of a search warrant which have been made applicable to searches under the Act and such provisions therefore would be the provisions relating to the mode of conducting searches. The object of the aforesaid provision in sub section (3) of section 19 is to provide how the searches are to be conducted as it deals with the issue of search warrant in sub section (3) of s.19. It is only with respect to the intervening stage, that is the stage of actual search that no specific Provision is made in the Act. We are therefore of opinion that, the provisions under sub section (3) of section 19 are the provisions relating to the conduct of searches and that these provisions are sections 101, 02 and 103 of the Code. What is to be done with the articles seized does not strictly come within the expression 'searches '. It is dealt with in section 19 A. It is therefore not correct for the appellant to say that the Magistrate can exercise his powers under the Code in connection with property seized tinder sub section (3) of section 19 of the Act. It follows that any further reference to the Magistrate, as made by the Enforcement Officer in this case, for permission to retain the documents seized was not necessary. The Enforcement Officer has a right under section 19 A to retain the articles seized in accordance with its provision. What course is to be adopted by the person aggrieved when the Enforcement Officer contravenes the provisions of section 19 A, is a different matter. The fact that such a contingency may arise does not mean that it is the Magistrate issuing the search warrant who is to be approached and who is competent to deal with the grievance. Any way, such a contingency is insufficient to warrant the finding that the Magistrate issuing the warrant has control and possession over the documents seized and that therefore he can pass any orders with respect to their disposal. He has no such power, in any case, till the period mentioned in section 19 A has expired. There is no provision in the Act which gives him any power to deal with the situation arising after the expiry of that period. One should, however, presume that the Director 'of Enforcement will not by his order act against the provisions of section 19. Section 19 A deals with the custody of documents which come into the possession of the Director 'of Enforcement in two ways. Documents are furnished to the Director of En forcement in pursuance of an order made under sub section (2) of section 19 under the directions of the Central Government or the Reserve Bank. No Magistrate as such has jurisdiction over the disposal of such documents which come into the possession of the Director of Enforcement in pursuance 'of orders under sub section (2) of section 19. The Director of Enforcement also gets possession of documents in execution of search warrants under sub section (3) of section 19. The provisions with respect to his retaining in his posses. ion the documents which come in his possession are the same, whether they conic so one way or the other. It follows that, in the latter case too, the Magistrate issuing the search warrant has nothing to do with the retention or disposal of the documents seized in execution of the search warrant. It was also urged for the apelllant that the provisions of section 5(2) of the Code apply to the present case in matters which are not provided by the Act. This contention too has no basis. Section 5 provides that all offences under any law other than the Indian Penal Code shall be investigated, in quired into, tried and otherwise dealt with according to the provisions contained in the Code of Criminal Procedure, but subject to any enactment for the time being in force regu lating the manner or place of investigating, inquiring into, trvina or otherwise dealing with such offences. The Act is a special Act and it provides under section 19 A for the necessary investigation into the alleged suspected commission of an offence under the Act. by the Director of Enforcement. The provisions of the Code of Criminal Procedure therefore will not apply to such investigation by him, assuming that the expression investigation ' includes the retaining of the documents for the purposes of the investigation. Reliance has also been placed for the appellant on the case reported as Moliammad Serajuddin vs R. C. Mishra(1) in support of the contention that the Magistrate retains con trol over the disposal of the articles seized in connection with the search warrant issued by him. In that case the Court was considering the question of the disposal of the documents seized in execution of a search warrant under section 172 of the Sea Customs Act. The provisions of that section are different from those of sub section (3) of section 19 of the Act. A search warrant issued by a Magistrate under section 172 of the Sea Customs Act has the same effect as a search warrant issued under the Code of Criminal Procedure and thus assumes the character of a search warrant issued under the Code of Criminal Procedure. The same is not the case with respect to the search warrant issued under sub section (3) of section 19. further, there is no section corresponding to section 19 A of the Act in the Sea Customs Act. This case, therefore, is not of help to the appellant. 732 In this view of the matter, the order of the Magistrate with respect to the disposal of the documents was beyond his jurisdiction and the High Court was right in setting aside his order directing the retaining of certain documents by the Director of Enforcement. The question however remains whether the order of the High Court directing the return of the two documents to the respondent is a correct order. It has been urged for the appellant that there is no pro vision under section 19 A or any other section of the Act that the documents be returned to the party from whose custody they were seized, without an order from the Magistrate and that therefore no order for their return can be made by any authority. No such express provision is necessary. Documents seized have to be returned if the law provides that they are not to be retained after a certain period of time. Such a direction under the statute is sufficient Justification and authority for the person in possession of the documents to return them to the person from whose possession they had been seized. Provisions are necessary for retaining documents of others and not for returning them to the persons entitled. Section 19 A authorises the Director of Enforcement to retain a document for a period of not exceeding 4 months, or, if before the expiry of the said period of 4 months, any proceedings under section 23(1) have been commenced before him, until the disposal of those proceedings, including the proceedings before the Appellate Board, if any, or (ii) if such proceedings have been commenced before a Court, until the document has been filed in that Court. This means that the Director of Enforcement can justifiably retain with himself the document seized till the final disposal of the proceedings taken under section 23 of the Act if the proceedings had commenced before the period of 4 months, during which he could keep the documents. In the present case such proceedings had not been commenced within the period of 4 months of the Director of Enforcement getting possession of the documents. He could not have therefore, on his own, retained those documents after the expiry of the fourth month. He ,could have taken legal steps for the retention of those documents. He did not keep those documents with himself on his own. He had been obtaining the permission of the Chief Presidency Magistrate for retaining the documents from the time of their seizure under the impression that the Magistrate could legally order the retention of the documents, presumably as the warrant had directed the production of documents seized, before him. Proceedings under section 23 did start prior to the order for the return of the documents. Considering the real intention 733 of section 19 A to be that the Director of Enforcement can retain the documents seized till the final disposal of proceedings under section 23 of the Act. the Magistrate 's order, even if he had not the authority to pass orders for the retention of the documents by the Director of Enforcement, till the final disposal of the proceedings under section 23, was an order giving effect to the spirit behind the provisions of section 19 A. The order of the High Court directing the return of the documents to the respondent therefore appears to us to be unjustified in the special circumstances of the case. It is not necessary for us to consider in this case what legal steps the Director of Enforcement could take for re taining possession of the documents seized on the expiry of the 4 months ' period in case his investigation in connection with those documents is not complete within that period. One of the methods possibly can be his applying to the Cen tral Government to make an order under sub section (2) 'of section 19 directing the owner of those documents to furnish them to the Director of Enforcement. Such an order will be legal justification for the Director of Enforcement to retain in possession any of the documents which nationally be would be deemed to have returned to the owner on the expiry. of the four months and to have got fresh possession over those documents not by virtue of a search warrant but by virtue ,of an order of the Central Government under sub section (2) of section 19. We therefore hold that the Magistrate has no jurisdiction over the articles seized in execution of the search warrant issued under section 19(3) of the Act and that he cannot permit the retention of such documents by the Director of Enforce ment after the expiry of the period he is entitled to keep them in accordance with the provisions of section 19 A. In the special circumstances of the case, we allow the appeal, set aside the order of the High Court and order that the documents mentioned at items Nos. 2 and , 7 of the Seizure Memo can be retained by the Director of Enforcement till the final conclusion of the proceedings commenced under section 23 of the Act. Appeal allowed.(...TRUNCATED)

On May 14,1959 ,a number of documents were seized from the possession of the respondent by the Enforcement Officer in execution of a search warrant. The search warrant was issued by the Chief Presidency Magistrate under sub section (3) of section 19 of the Foreign Exchange Regulation Act, 1947. The Director of Enforcement with the permission of the Chief Presidency Magistrate retained those seized documents for a period exceeding four months. On October 5, 1959, the respondent filed an application before the Chief Presidency Magistrate in which he claimed the return of the seized documents on the basis, of the provision of section 19 A of the Foreign Exchange Regulation Act. On this application the Chief Presidency Magistrate directed the return of all the documents to the respondent except those mentioned at items 2 and 7 of the search list. The respondent went up in revision against this order for the continued retention of the two documents, and the High Court allowed the revision and ordered the return of these documents also to the respondent. Against this order appeal was filed in this Court. Held:(i) The Magistrate has no jurisdiction over the articles seized in execution of the search warrant issued under section 19(3) of the Foreign Exchange Regulation Act and that he cannot permit the retention of such documents by the Director of Enforcement after the expiry of the period he is entitled to keep them in accordance with the provisions of section 19 A of the Act. The Enforcement Officer has a right under section 19 A to retain the articles seized for a period not exceeding four months and it is not necessary for him to obtain permission from the Magistrate for retaining the seized documents within the statutory period. Therefore, the Magistrate issuing the search warrant has nothing to do with the retention or disposal of the documents seized in execution of the search warrant either during the statutory period of four months or after the expiry of that period. Mohammad Serajuddin vs R. C. Mishra, [1962] 1 Supp. S.C.R. 545, distinguished. (ii) In view of the specific provision for the issue of a search warrant under sub section (3) of section 19 of the Foreign Exchange Regulation Act, the provisions of sections 96, 98 and Form No. 8 of Schedule V of the Code would not be applicable to the search warrants issued under sub section (3) of section 19. The provisions of SS. 101, 102, 103 of the Code will apply to searches under sub section (3) of section 19 of the Act as there is no specific provision in the Act with respect to the conduct of the search. 725 (iii) The provisions of section 5(2) of the Code will not apply to an investigation conducted under the Act because the Act is a special Act and it provides under s.19 A for the necessary investigation into the alleged suspected commission of an offence" under the Act, by the Director of Enforcement. (iv) No express provision is necessary in the statute for the return of documents after the expiry of the statutory period. Provisions are necessary for retaining documents of others and not for returning them to persons entitled. Therefore the documents seized have to be returned to the person from whose possession they had been seized after the expiry of the statutory period. (v) Under s.19 A of the Act the Director of Enforcement can justifiably retain with himself the documents seized till the final disposal of the proceedings taken under s.23 of the Act if the proceedings had commenced before the period of four months, during which he could keep the documents. In the present case he could not have retained those documents beyond four months because no such proceeding had been commenced within 4 months. In the present case proceedings under s.23 did start prior to the order for the return of documents. On the facts of this case it was held that the direction of the Magistrate in regard to the retention of documents was an order giving effect to the spirit behind the provision of section 19 A.(...TRUNCATED)

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: Criminal Appeal No. 193 of 1971. Appeal by Special Leave from the Judgment and Order dated 11 5 71 of the Orissa High Court in Criminal Appeal No. 14/70. Gobind Das, Mrs. Sunanda Bhandare, ,A. K. Mathur, A. K. Sharma and M.S. Bhandare, for the Appellant. S.C. Agarwal and G.S. Chatterjee, for the Respondent. The Judgment of the Court was delivered FAZAL ALl, J. In this appeal by special leave, the appellant has been convicted for criminal misconduct under s.5(2) read with S.5(1) (c) of the Prevention of Corruption Act, 1947 and sentenced to rigorous imprisonment for three years. He has also been convicted under section 5(1)(d) of the Prevention of Corruption Act but no separate sentence has been passed thereunder. The appellant preferred an .appeal to the High Court of Orissa against the order of the Special Judge which was, however, dismissed, and the convic tions and sentences imposed on him were confirmed by the High Court. Thereafter an application for leave to appeal to this Court was made before the High Court, which having been refused the appellant obtained special leave from this Court, and hence this appeal. After going through the judgments of the Courts below, we are constrained to observe that the High Court as well as the Trial Court have made a wholly wrong approach in apply ing the provisions of the Prevention of Corruption Act in the case of the appellant. Put briefly, the prosecution case was as follows: The appellant was the Additional District Magistrate, Cuttack from September 1964 to June 1966 and in that capaci ty he was in 442 overall charge of the Nizarat and land acquisition sections of the Collectorate. Sayad Allamuddian Ahmed P.W. 8 was the District Land Acquisition Officer and one A. Ballav Pradhan P.W. 9 was the Nizarat Officer, whereas Prahalad Mahapatra P.W. 1 was the Nazir and Rajkishore Das P.W. 2 was the Assistant Nazir under P.W. 1 P.W. 3 Bhakta Charan Mohanti was the Land Acquisition Inspector. It appears that a number of lands had been acquired by the Government for certain public projects in various villages particularly Mauza Balichandrapur with which we are concerned in the present case. A huge compensation amount to be given to land owners had been deposited in the treasury for payment to them. It appears that a sum of Rs. 31,793.85 had been disbursed by July 24, 1964 leaving a balance of Rs. 11,650 61 but no disbursement could be made between July 24, 1964 and January 20, 1965 as the villagers refused to accept the payments and wanted the Land Acquisition proceedings to be withdrawn. The prosecution case further is that the appellant as Addi tional District Magistrate attended a meeting at the Secre tariat in the office of the Secretary of Works Department at Bhubaneswar on September 25, 1964 where certain decisions were taken. There appears to be some divergence of opinion between the appellant and the prosecution on the delibera tions of the aforesaid meeting which we shall consider later. It is further alleged that on January 9, 1965 the appellant directed the Nazir to pay him a sum of Rs. 10,000/from the cash which remained with the Nazir P.W. 1 for the purpose of distributing the amount to the land owners of the village Balichandrapur. As, however, the A.D.M. 's visit to Balichandrapur could not materialise because the Executive Engineer with whom he was to go there was not available, the visit was postponed and the A.D.M. went to some other place. On January 20, 1965 the appellant again took a sum of Rs. 10,000/ from the Nazir and decided to visit the village Balichandrapur along with the Executive Engineer and the Land Acquisition Inspector. It is said that the S.D.O., P.W.D., also accompanied the party to the village Balichandrapur, and the case of the appellant is that the Land Acquisition Inspector also travelled to Bali chandrapur with the appellant, though this fact is disputed by the Land Acquisition Inspector. It is, however, the admitted case of the prosecution that there ,was no dis bursement in village Balichandrapur and thereafter the amount of Rs. 10,000/ was not deposited with the Nazir but remained in the personal custody of the appellant who ap pears to have retained it dishonestly for about six months. This is the gravamen of the charges against the appellant. We may also mention that the amount was paid to the Nazir towards the end of September 1965 when it was deposited in the treasury. On receiving certain applications, the Vigi lance Organisation of the State of Orissa instituted an inquiry against the appellant and after completing the same lodged a formal F.I.R. on May 13, 1966. The appellant thereafter was challaned under various sections of the Prevention of Corruption Act and ultimately convicted as indicated above. The case of the appellant was that he had no doubt withdrawn a sum of Rs. 10,000/ from the Nazir on January 9, 1965 but on his return from tour as he could not disburse the money to the 443 villagers he had returned it to the Nazir at Cuttack on January 13, 1965. When, however, he again decided to go to the village with the Executive Engineer and others on Janu ary 20, 1965 he again directed the Nazir to pay him the amount for disbursement. He went to the village Balichan drapur and tried to persuade the villagers to accept the compensation amount so that the Government project may be started as soon as possible. The villagers wanted some other alignment to be made or the compensatioion to be increased, and the appellant persuaded them to accept part payment and assured them that he will try to get the amount increased. It was also the definite case of the appellant that in the meeting held in the secretariat on September 25, 1964, the appellant was expressly directed to proceed to the spot and persuade the villagers to accept the compensation money and it was in consequence of this mandate from the Secretary of works Department that the A.D.M. proceeded to the village Balichandrapur and made all possible efforts to persuade the tenants to accept compensation even by holding out promises to them. Unfortunately, however, the villagers refused to accept the compensation and the party had to come back to Cuttack disappointed. The appellant further seemed to suggest that although he had failed to persuade the villagers to accept the money he had not com pletely lost all hopes and that there was a possibility of the villagers coming round to his point of view and ulti mately decide to accept the compensation and for this reason the appellant returned the sum of Rs. 10,000/ to the Nazir on his return from the village but directed him not to deposit the same in the treasury or to make any entry in the Cash Register so that if the villagers came to Cuttuck to demand the money they could be given the same immediately without any formality of a fresh withdrawal. The appellant further averred that because of some personal jealousies, a false complaint was made against him which necessitated an inquiry. The Courts below accepted the prosecution case and disbelieved the version of the defence completely. The High Court has found that as the entrustment was proved and admitted by the appellant himself and the explanation given by him was absolutely false, this would lead to the irre sistible inference that the appellant had temporarily misap propriated the money. It was also suggested by the prosecu tion that at the relevant time the appellant was building a house and he had already applied for loans from the Govern ment and it may be that for this purpose he might have been in need of the money to build his house. One of the essential peculiarities of this case is that as many as three witnesses examined by the prosecution to prove its case, namely, P.Ws. 6, 7 and 8, had been declared hostile and the Public Prosecutor sought permission of the Court to cross examine those witnesses which was readily allowed. According to the prosecution these witnesses tried to help the accused and made certain statements which sup ported the case of the appellant and, therefore, had to be crossexamined by the prosecution. Having regard to the stand taken by the parties, the matter lies within a very narrow compass. So far as the entrustment of Rs. 444 10,000/ is concerned that is undoubtedly admitted by the appellant, and the only explanation given by him is that he had returned the money to the Nazir after his return from the village Balichandrapur and he had also directed the Nazir not to deposit the money in the treasury. If once the explanation of the accused is disbelieved, or proved to be absolutely false, then it is quite natural that he must be presumed to have retained the money with himself for a period of six months. Although the Onus lies on the prose cution to prove the charge against the accused, yet where the entrustment is proved or admitted it will be difficult. for the prosecution to prove the actual mode or manner of misappropriation and in such a case the prosecution would have to rely largely on the truth or the falsity of the explanation given by the accused. In Jaikrishnadas Manohar das Desai and Anr. vs State of Bombay(1) this Court observed as follows: "The principal ingredient of the offence being dishonest misappropriation or conversion which may not ordinarily be a matter of direct proof, entrustment of property and failure in breach of an obligation to account for the property entrusted, if proved, may in the light of other circumstances, justifiably lead to an inference of dishonest misappropriation on conversion. Convic tion of a person for the offence of criminal breach of trust may not, in all cases, be founded merely on his failure to account for the property entrust ed to him, of over which he has dominion, even when a duty to account is imposed upon him, but where he is unable to account or renders an explanation for his failure to account which is untrue, an infer ence of misappropriation with dishonest intent may readily be made. " The Courts below appear to have convicted the appellant on the basis of the decision referred to above and have held that since the explanation given by the appellant was false, an inference of misappropriation could reasonably be drawn against him. This proposition cannot be doubted. But the question is whether the explanation given by the appellant in this case can be said to be absolutely false ? Another question that arises is what are the standards to be em ployed in order to judge the truth or falsity of the version given by the defence ? Should the accused prove his case with the same amount of rigour and certainty, as the prose cution is required, to prove a criminal charge, or it is sufficient if the accused puts forward a probable or reason able explanation which is sufficient to throw doubt on the prosecution case ? In our opinion three cardinal prin ciples of criminal jurisprudence are well settled, namely: (1) that the onus lies affirmatively on the prosecution to prove its case beyond reasonable doubt and it cannot derive any benefit from weak ness or falsity of the defence version while prov ing its case; (1) , 324. 445 (2) that in a criminal trial the accused must be presumed to be innocent unless he is. proved to. be guilty; and (3) that the onus of the prosecution never shifts. It is true that under section 105 of the Evidence Act the onus of proving exceptions mentioned in the Indian Penal Code lies on the accused, but this section does not at all indicate the nature and .standard of proof required. The Evidence Act does not contemplate that the accused should prove his case with the same strictness and rigour as the prosecution is required to prove a criminal charge. In fact, from the cardinal principles referred to above, it follows that, it is sufficient if the accused is able to prove his case by the standard of preponderance of probabil ities as envisaged by section 5 of the Evidence Act as a result of which he succeeds not because he proves his case to the hilt but because probability of the version given by him throws doubt on the prosecution case and, therefore, the prosecution cannot be said to have established .the charge beyond reasonable doubt. In other words, the mode of proof, by standard of benefit of doubt, is not applicable to the accused, where he is called upon to prove his case or to prove the exceptions of the Indian Penal Code on which he seeks to rely. It is sufficient for the defence to give a version which competes in probability with the prosecution version, for that would be sufficient to throw suspicion on the prosecution case entailing its rejection by the Court. This aspect of the matter is no longer res integra but is concluded by several authorities of this Court. In Harbha jan Singh vs State of Punjab (1) this Court observed as follows: "But the question which often arises and has been frequently considered by judicial decisions is whether the nature and extent of the onus of proof placed on an accused person who claims the benefit of an Exception is exactly the same as the nature and extent of the onus placed on the prosecution in a criminal case; and there is consensus of judicial opinion in favour of the view that where the burden of an issue lies upon the accused, he is not re quired to discharge that burden by leading evidence to prove his case beyond a reasonable doubt. That, no doubt, is the test prescribed while deciding whether the prosecution has discharged its onus to prove the guilt of the accused; but that is not a test which can be applied to an accused person who seeks to prove substantially his claim that his case falls under an Exception. Where an accused person is called upon to prove that his case fails under an Exception, law treats the onus as dis charged if the accused person succeeds "in proving a preponderance of probability. " As soon as the preponderance of probability is proved, the burden shifts to. the prosecution which has still to discharge its original onus. It must be remembered that basically, the original onus (1) ; , 241 446 never shifts and the prosecution has, at all stages of the case, to prove the guilt of the accused beyond a reasonable doubt. " The same view was taken in a later case in State of U.P. vs Ram Swarup & Anr.(1) where this Court observed as follows: "That is to say, an accused may fail to establish affirmatively the existence of circum stances which would bring the case within a general exception and yet the facts and circumstances proved by him while discharging the burden under section 105 of the Evidence Act may be enough to cast a reasonable doubt on the case of the prosecu tion, in which event he would be entitled to an acquittal. The burden which rests on the accused to prove the exception is not of the same rigour as the burden of the prosecution to prove the charge beyond a reasonable doubt. It is enough for the accused to show, as in a civil case, that the preponderence of probabilities is in favour of his plea." While the Courts below have enunciated the law correct ly, they seem to have applied it wrongly by overlooking the mode and nature of proof that is required of the appellant. A perusal of the oral and documentary evidence led by the parties goes to show that the Courts not only sought the strictest possible proof from the appellant regarding the explanation given by him, but went to. the extent of mis placing the onus on.the accused to prove even the prosecu tion case by rejecting the admissions made by the prosecu tion witnesses and by not relying on the documents which were in power and possession of the prosecution itself on the speculative assumption that they were brought into existence by the accused through the aid of the officers. Further more, the Courts below have failed to consider that once the appellant gives a reasonable and probable explana tion, it is for the prosecution to prove affirmatively that the explanation is absolutely false. In a criminal trial, it is not at all obligatory on the accused to produce evi dence in support of his defence and for the purpose of proving his version he can rely on the admissions made by the prosecution witnesses or on the documents field by the prosecution. In these circumstances, the Court has to probe and consider the materials relied upon by the de fence instead of raising an adverse inference against the accused, for not producing evidence in support of his defence, because as we have already stated that the prosecu tion can not derive any strength or support from the weak ness of the defence case. The prosecution has to stand on its own legs, and if it fails to prove its case beyond reasonable doubt, the entire edifice of the prosecution would crumble down. Thus it would appear to us that both the Courts below have made an absolutely wrong approach in deciding the truth of the defence version and have not followed principles laid down by this Court in judging the case of the accused. The Courts below have based the conviction of the appel lant on the sole testimony of P.W. 1 the Nazir who has categorically stated (1) [1975] 1.S.C.R. 409, 416 17. 447 in the Court that the appellant had taken a sum of Rs. 10,000/ on January 9, 1965 and thereafter he never returned this amount to the Nazir until September 30, 1965. The Courts below have chosen to place implicit reliance on the evidence of P.W. 1 completely ignoring the important admis sions made in favour of the accused by other prosecution witnesses some of whom were declared hostile and some of whom were not. Before analysing the evidence, it may be necessary to describe the exact allegation made by the prosecution against the accused. The starting point of the case is a meeting which is said to have taken place in the Secretariat on September 25, 1964 in which according to the appellant he was positively directed to visit the villages and persuade the land owners to receive the compensation and this formed the occasion for the A.D.M. to have withdrawn the money to visit the spot with the money. According to the prosecution no such decision was at all taken in the meeting and the visit to the village Balichandrapur might have been for some other purpose and the question of distri bution was only a pretext invented by the accused to shield his guilt. We would, therefore, now take up the evidence regarding the meeting said to have taken place on September 25, 1964. We might also mention that the learned Special Judge has believed the statement of the accused that he did attend the meeting in the Secretariat on September 25, 1964, as would appear from the finding given by him at p. 79 of the Paper Book. What the Special Judge has not accepted is the assertion of the accused that he had been directed to visit the village personally and distribute the amounts to the villagers. The meeting is said to have been called by the Secretary Works Department and therefore the Secretary Works Department was the best person who would have thrown light on the subject and would have clinched the issue. The Secretary, Works Department, was a Government servant and it was not at all difficult for the prosecution to have examined him to settle the controversy on this matter. For the reasons best known to the prosecution, the Secretary, Works Department, was not at all examined and we have to decide this question on the basis of oral and documentary evidence produced by the prosecution. The Special Judge, instead of drawing an adverse inference against the prosecu tion, has placed the onus on the accused for not having summoned the Secretary, Works Department, as a witness in defence forgetting that it was part of the prosecution case itself that no decision to distribute the amount was taken in the meeting and therefore, the money was not taken for distribution to tenants in the village but was misappropri ated. It was not for the defence to prove the prosecution case which formed the bulwark of the charge of misappro priation. Further more, the Secretary, Works Department, was a high Officer of the Government and he could have thrown a flood of light on this question. Now coming first to the oral evidence, P.W. 8 Sayad Allamuddin who was the Land Acquisition Officer Cuttack has testified to the fact that in the meeting held on September 25, 1964 the appellant had been asked to take early action for payment of compensation money by going personally to persuade the tenants. Perhaps, it was because of this statement, that this witness was declared hostile, and the prosecution 448 sought permission to cross examine him. The actual state ment made by him in the Court may be quoted thus: "The accused had been asked to take early action for payment of the compensation money, by going personally and by persuading the tenants. It was the duty of the accused to see that compensa tion amounts were paid for land acquisition. " When the witness was declared hostile, all that was elicited from him was as follows: "It is not a fact that I had not stated to Investigating Officer that the accused and the Executive Engineer persuaded the tenants to receive the compensation amount. It is not a fact that I had stated to the Investigating Officer that while we were returning, some people wanted to take part payments for the lands already acquired, but no payment was made by the accused as we were then leaving. " Thus the prosecution even in cross examination did not give any suggestion that the witness who was present in the meeting held on September 25, 1964 had stated on earlier occasions that no decision was taken in the meeting direct ing the accused to visit the village and persuade the ten ants to receive the compensation amounts. He merely did not state to the police that when the accused and the Executive Engineer visited the spot they did not persuade the tenants to receive the compensation amounts. This was a case of a mere omission of a broad detail and not a case of contra diction. In these circumstances, therefore, the evidence of this witness on the question as to what transpired in the meeting and the nature of the directions given to the appel lant remains unchallenged, and even if he was declared to be a hostile witness, he does not cease to be a reliable witness. if the Court chooses to accept his testimony. Before proceeding further we might like to state the law on the subject at this stage. Section 154 of the Evidence Act is the only provision under which a party calling its own witnesses may claim permission of the Court to cross examine them. The section runs thus: "The Court may in its discretion permit the person who calls a witness to put any question to him which might be put in cross examination by the adverse party. " The section confers a judicial discretion on the Court to permit crossexamination and does not contain any conditions or principles which may govern the exercise of discretion. It is, however, well settled that the discretion must be judiciously and properly exercised in the interests of justice. The law on the subject is well settled that a party will not normally be allowed to cross examine its own witness and declare the same hostile, unless the Court is satisfied that the statement of the witness exhibits an element of hostility or that he has 449 resiled from a material statement which he made before an earlier authority or where the Court is satisfied that the witness is not speaking the truth and it may be necessary to cross examine him to get out the truth. One of the glaring instances in which this Court sustained the order of the Court in allowing cross examination was where the witness resiles from a very material statement regarding the manner in which the accused committed the offence. In Dahyabhai Chaganbhai Thakker vs State of Gujarat(1) this Court made the following observations: "Section 154 does not in terms, or by neces sary implication confine the exercise of the power by the court before the examination in chief is concluded or to any particular stage of the exami nation of the witness. It is wide in scope and the discretion is entirely left to the court to exer cise the power when the circumstances demand. To confine this power to the stage of examination in chief is to make it ineffective in practice. A clever witness in his examination in chief faith fully conforms to what he stated earlier to. the police or in the committing court, but in the cross examination introduces statements. in a subtle way contradicting in effect what he ;stated in the examination in chief. If his design is obvious, we do not see why the court cannot, during the course of his cross examination, permit the person calling him as a witness to put ques tions to him which might be put in cross examina tion by the adverse party." "Broadly stated, the position in the present case is that the witnesses in their statements before the police attributed a clear intention to the accused to commit murder, but before the court they stated that the accused was insane and, therefore, he committed the murder. " A perusal of the above observations will clearly indicate that the permission to cross examination was upheld by this Court because the witnesses had categorically stated before the police that the accused had committed the murder but resiled from that statement and made out a new case in evidence before the Court that the accused was insane. Thus it is clear that before a witness can be declared hostile and the party examining the witness is allowed to cross examine him, there must be some material to show that the witness is not speaking the truth or has exhibited an ele ment of hostility to the party for whom he is deposing. Merely because a witness in an unguarded moment speaks the truth which may not suit the prosecution or which may be favourable to the accused, the discretion allow the party concerned to cross examine its own witnesses cannot be allowed. In other words a witness should be regarded as adverse and liable to be cross examined by the party calling him only when the Court is satisfied that the witness bears hostile animals against the party for whom he is deposing or that he does not appear (1) ; ,368, 369 70. 450 to be willing to tell the truth. In order to ascertain the intention of the witness or his conduct, the Judge concerned may look into the statements made by the witness before the Investigating Officer or the previous authorities to find out as to whether or not there is any indication of the witness making a statement inconsistent on a most mate rial point with the one which he gave before the i previous authorities. The Court must, however, distinguish between a statement made by the witness by way of an unfriendly act and one which lets out the truth without any hostile inten tion. It may be rather difficult to lay down a rule of univer sal application as to when and in what circumstances the Court will be entitled to exercise its discretion under section 154 of the Evidence Act and the matter will largely depend on the facts and circumstances of such case and on the satisfaction of the Court on the basis of those circum stances. Broadly, however, this much is clear that the contingency of cross examining the witness by the party calling him is an extra ordinary phenomenon and permission should be given only in special cases. It seems to us that before a Court exercises discretion in declaring a witness hostile, there must be some material to show that the wit ness has gone back on his earlier statement or is not speaking the truth or has exhibited an element of hostility or has changed sides and transferred his loyalty to the adversary. Further more, it is not merely on the basis of a small or insignificant omission that the witness may have made before the earlier authorities that the party calling the witness can ask the Court to exercise its discretion. The Court, before permitting the party calling the witness to cross examine him, must scan and weigh the circumstances properly and should not exercise its discretion in a casual or routine manner. It is also clearly well settled that the mere fact that a witness is declared hostile by the party calling him and allowed to be crossexamined does not make him an unreliable witness so as to exclude his evidence from consideration altogether. In Bhagwan Singh vs State of Haryana(1), Bhag wati, J., speaking for this Court observed as follows: "The prosecution could have been avoided requesting for permission to cross examine the witness under Section 154 of the Evidence Act. But the fact that the court gave permission to the prosecutor to cross examine his own witness, thus characterising him as, what is described as a hostile witness, does not completely efface his evidence. The evidence remains admissible in the trial and there is no legal bar to base a convic tion upon his testimony if corroborated by other reliabIe evidence. " Applying these principles, we would now examine the position. So far as P.W. Sayad Allamuddin was concerned, he was the Land Acquisition Officer and merely because he happened to be working ; , 391 92. 451 under the accused, there was no reason for him to depose falsely at a time when the appellant had been suspended and was facing a trial before the Special Judge. Further more, on the basic point that the accused had been asked in the meeting to go personally to the village and persuade the tenants to receive compensation money nothing has been elicited from him even in cross examination to show that this statement was an after thought or was in any event incorrect or false. We shall presently show that this statement is supported by documents of an unimpeachable nature which have been produced by the prosecution itself and whose genuineness cannot be doubted. Exhibit 2 which is a note by this witness dated January 9, 1965 long before an inquiry started against the accused contains categorically a statement which runs as follows: "In the last meeting held in the Secretariat the Secretary, Works Department suggested that the A.D.M. and the Executive Engineer (R & B) should .try to persuade the villagers and make payment of the compensation. " This note further shows that the appellant proposed to pay a visit to the area along with the Executive Engineer and he had suggested that the A.D.M. should take an amount of Rs. 10,000/ for disbursement if the villagers agreed to receive compensation. This document, according to P.W. 1, the Nazir, who is the star witness of the prosecution, was received by him as far back as January 9, 1965 along with Ext. 1 the order of the appellant directing the Nazir to pay him Rs. 10,000/ . It would be impossible to suggest that as early as January 9, 1965 the witness Sayad Allamuddin Ahmed P.W. 8 was fabricating this document regarding an event which had taken three or four months ago without any rhyme or reason. Thus Ext. 2 fully corroborates the evidence of P.W. 8 on the point as to what transpired at the meeting held in the Secretariat and demolishes the prosecution case that no instructions were given to the appellant on Septem ber 25, 1964 in the meeting for visiting the spot and per suade the tenants to accept compensation money. In these circumstances, therefore, we feel that the Trial Court was not at all justified in declaring P.W. 8 as a hostile wit ness or in allowing the prosecution to cross examine him. Even if he was cross examined his evidence appears to be fully acceptable and worthy of credence. He is a person of status and responsibility and there is nothing to show why he should depose falsely merely to help the accused knowing full well that being a Government servant he might be harmed if he made a false statement in order to support the appellant. This fact is further supported by another official docu ment which is Ext. 10, namely, the tour diary of the appel lant dated January 7, 1965 to January 31, 1965. In this diary the appellant, as far back as January 7, 1965, made a clear mention of the facts that transpired at the meeting and stated thus: "Discussed with Revenue Secretary regarding various allegations of Kanika Tahasil pending for enquiry. He also wanted that I should visit the spot and enquire into the matter 452 personally and also make a thorough enquiry into the various encroachments in different forest blocks of Kanika Tahasil." This statement which is made in an official document in the discharge of his duties has been made even before the money was sought to be withdrawn from the treasury and at a time when there was no dispute at all regarding the question of misappropriation. This document also fully corroborates the evidence of P.W. 8. Thus from the evidence of the prosecu tion itself, the fact that in the meeting held in the Secre tariat a decision was taken by Which the appellant was directed to visit the village Balichandrapur and persuade the tenants to accept the compensation has been amply proved. The only person who could have contradicted this fact or falsified the same would have been the Secretary, Works Department, in whose presence the meeting took place whom the prosecution did not choose to examine. On the materials produced by the prosecution itself, it is manifest that the prosecution has miserably failed to prove that the visit of the A.D.M. to the village Balichandrapur on Janu ary 9, 1965 was not in connection with the payment of com pensation to the villagers as no such decision was taken in the meeting. The next question that arises is whether the appellant had actually taken the money for disbursement to the vil lage Balichandrapur. On this point also oral and documen tary evidence led by the prosecution clearly proves the version given by the appellant. To begin with, P.W. 7 who was an Executive Engineer at the relevant. time has categor ically stated that he had accompanied the appellant to village Balichandrapur and the appellant did try to persuade the tenants to receive the compensation but they refused to accept the same. In this connection the witness deposed as follows: "The accused thereafter enquired from the parties as to on what terms they were willing to give up possession of their lands which had already been selected for acquisition. The parties stated that if they were paid compen sation at the rate of Rs. 200/ per gunth, they would part with their lands. The accused stated that he did not have sanction for payment of Rs. 200/ per gunth and could not pay them off hand, but if the parties wanted payment at the rate of Rs. 150/ per gunth he was willing to pay them cash at the spot. The parties did not agree. The accused said that they would be paid Rs. 200/ . when that rate would be sanctioned and he was going to write about it. " This witness was also declared hostile and that too not because he had not made the statement referred to above before the police, but because of certain minor omissions in his statement before the police. These omissions consisted of the facts that there is no mention about the previous visit to Balichandrapur or that he had stated that while he was returning to Cuttuck he remained sitting in the car and the accused asked P.W. 3 to follow him with the bag 453 and things like that. It has, however, not been elicited from him in cross examination nor has it been argued that the witness had told the Investigating Officer that the accused had not met or had not talked at all with the ten ants in his presence in order to persuade them to accept the compensation. P.W. 6 Udaynath Parida who is a villager of Balichandra pur has categorically supported the statement of P.W. 7 that the accused had agreed to pay compensation at the rate of Rs. 200/ per gunth and persuaded them to give up possession but the villagers refused. In this connection, the witness stated thus: "On hearing of the arrival of the accused we met him in Balichandrapur near the market place. We demanded payment of compensation money at a rate higher than what was proposed by Government. The accused and his party agreed to pay us compensation at the rate of RS. 200/per gunth and persuaded us to give up possession so that Government may not be forced to take possession forcibly with the help of police. " "The accused had informed the villagers in cluding me that if we would be willing to accept the rate already fixed by Government, at Rs. 150/ per gunth, he would pay us at the spot;" This witness was also declared hostile, merely because of certain facts which he had omitted to state before the police. Thus it would appear that all the prosecution witnesses P.Ws. 6, 7 and 8 had been allowed to be declared hostile without any justification and the Trial Court appear to have exercised its discretion mechanically in readily accepting the prayer of the prosecution without making any probe into the reasons for allowing the cross examination. Indeed if suck a discretion is freely exercised, then the accused will suffer serious prejudice and will be deprived of taking advantage of any damaging admission made by the prosecution witnesses, merely because the prosecution is allowed to cross examine them by declaring them hostile. Such a course of action would have serious repercussion on the fairness of the trial. After going through the evidence of P.Ws. 6 and 7 we see absolutely no reason to distrust their evidence. So far as P.W. 7 is concerned he is a very high officer being an Executive Engineer at the relevant time and in no way subor dinate to the appellant. He has admitted in his cross examination by the prosecution that even his confidential reports are not written by the accused. There is also nothing to show that he was in any way interested in the accused or was his great friend and supporter. In these circumstances, he had no reason to make a false statement that the accused had visited the village and persuaded the tenants to accept the compensation. The evidence of the villager P.W. 6 Udayanath Parida who is an independent wit ness also proves that the accused had taken the money to the village and made efforts to persuade the tenants to accept the money. In fact the evidence of these two witnesses on this point follows as a logical corollary from the decision taken at the meeting held by the Secretary, Works Depart ment, where the appellant was 454 directed to visit the spot and persuade the tenants to accept compensation. The evidence of P.W. 7 is fully cor roborated by Ext. B a letter written by P.W. 7 Executive Engineer dated July 6, 1966, a copy of which was sent to the appellant and other officers. In this letter which is addressed to the Assistant Engineer, Road, Office of the Chief Engineer, Bhubaneswar, P.W. 7 as Executive Engineer had clearly mentioned that he along with the appellant had visited the site at Balichandrapur and persuaded the tenants to accept the money by enhancing the amount to Rs. 200/ per gunth to which the tenants. agreed but for this the sanction had to be taken. It was, however, submitted by counsel for the State that this letter appears to have been brought into existence after the inquiry against the accused was launched in order to help him. This was an official letter and we do not see any reason why such a high officer as the Executive Engineer should have gone to the extent of fabricating an unnecessary letter to help the appellant against whom an inquiry had been ordered. Even if this letter be excluded from consideration, the other evidence both oral and docu mentary clearly show that the appellant had visited the spot in village Balichandrapur on January 20, 1965 with a view to distribute the compensation money and did make an attempt to persuade the tenants to accept the compensation but they refused to accept the same unless the compensation was raised to Rs. 200/ per gunth. As against this the prosecution relied merely on the fact that in the tour diary of the accused Ext. 8 of the even date, viz. January 20, 1965, as also in the office report there is no clear mention that the appellant tried to persuade the tenants to accept the money or that he had taken the money with him to the spot. These documents undoubtedly contain the statement regarding the visit of the appellant to the spot and some other matters. The question of actual distribution or persuasion of the tenants being a matter of detail does not appear to have been mentioned in those documents. It would have been necessary to be men tioned in the documents, if the tenants had agreed to accept the money and if the money was actually disbursed to them. As the proposal suggested by the appellant did not materia lise, there was no occasion for mentioning these facts in those documents. As we have already indicated, it was not for the accused but for the prosecution to prove, before raising an adverse inference against the accused, that the visit of the appel lant to Balichandrapur was merely a hoax. On the materials placed before us, not only the prosecution has miserably failed to prove this fact, but the explanation given by the accused appears to be not only probable but proved by the accused, even applying the standard of benefit of doubt. For these reasons, therefore, we do not agree with the finding of the Courts below that the accused did not take the money with him to Balichandrapur or made any attempt to distribute it to the tenants but has misappropriated and retained it dishonestly. We might mention here that P.W. 3 Bhakta Charan Mohanti is another Witness who has supported the case of the ac cused. But as 455 the witness has made inconsistent statements which sometimes go to support the prosecution and sometimes the accused and is further, contradicted by his own tour diary and T.A. Bills, we do not choose any reliance on the evidence of this witness. The next and the last question that falls for determina tion is as to whether or not the accused after returning from Balichandrapur handed over the money to the Nazir. It may be mentioned that the appellant had made no secret of the fact that after returning the money to the Nazir he had instructed him not to deposit the same in the treasury but to keep it out of cash for the reason which we have already indicated. In this connection we have only the word of P.W. 1 the Nazir as against the word of the appellant. The Nazir also does not appear to be a witness who is completely above suspicion. Crossexamination of this witness clearly re vealed that the manner in which he had kept the accounts was not at all satisfactory and he was in the habit of allowing huge amounts to remain with him without depositing them in the treasury and that he was also building a house for which he had taken some loans. Instead of applying a very strict standard to test the testimony of such a witness, the High Court seems to have explained the irregularities committed by the Nazir P.W. 1 thus: "Heavy cash remaining with the Nazir that Ext. D discloses and the facts of the Nazir having secured housebuilding advance during September 1965 may raise speculations and surmises against the Nazir. " There are, however, important circumstances to indicate that the explanation given by the appellant is both probable and reasonable. P.W. 9 who was the Nizarat Officer and who had not been declared hostile (emphasis ours) has clearly stated that the amount was taken by the appellant for dis bursement. The witness further deposes that in March 1965 he had a discussion with the appellant regarding the amount of Rs. 10,000/ taken by him and the appellant had then told him that the amount could not be disbursed as the tenants did not agree to take the amounts and that he had kept the amount with the Nazir. In this connection his statement is as follows: "In March, 1965, I had a discussion with the accused regarding the amount of Rs. 10,000/ taken by him and the accused then told me that the amount could not be disbursed as the tenants did not agree to take the amounts and that he had kept the amount with the Nazir. I did not make any enquiry from the Nazir regarding this as the balance amount as shown in the cash Book was the same in the cash sheet. The accused had told me that the Nazir had kept the amount of Rs. 10,000/ outside the cash as per his instructions. " It is, therefore, clear from the admission made by this witness that the case of the accused t,hat he had given money to the Nazir is fully supported by him because he has referred to the statement made to him by the appellant as far back as March 1965 when there was absolutely no dispute, no inquiry and no allegation of misappropriation against the appellant. Much was made by the learned counsel for the 13 1104SCI/76 456 State out of the fact that the accused had directed the Nazir to keep the amount outside the cash which betrayed the falsity of his explanation. A careful study of the circum stances in which the accused was placed would show that the accused was very much anxious to disburse the payments to the villagers, he had tried to persuade them to accept the money, but the villagers wanted more compensation and he had already taken steps to move the Government for increasing the amount of compensation to Rs. 200/ per gunth. In these circumstances, therefore, there may be some justification in his thinking that the money should be readily available to be paid as soon as the villagers decided to accept the same. It is possible that he may have made an error of judgment or calculation or he was rather too optimistic but this conduct by itself does not lead to the inference of dishonest inten tion to misappropriate the money. At any rate, in view of the evidence of P.W. 9 the Nizarat Officer that the amount was given to the Nazir by the appellant which fact was disclosed to him as far back as March 1965, it will be difficult to accept the uncorroborated evidence and testimo ny of P.W. 1 the Nazir, that he did not receive the money from the appellant after January 9, 1965. Further more there were other important circumstances why no reliance should be placed on the evidence of the Nazir P.W. 1. It would appear from the evidence of the Nazir himself that on September 15, 1965 the cash in the hands of the Nazir was Rs. 11,16,066.57 out of which Rs. 7,36,810.86 were for land acquisition proceedings. Admit tedly he did not deposit this amount until October 20, 1965. He has given no explanation as to why he had kept such a huge amount with him without depositing the same in the Treasury. This was undoubtedly a grave lapse on the part of the Nazir and should have been taken notice by the Courts below. Exhibit D is the order of the appellant dated Septem ber 27, 1965 by which the Nazir was directed to deposit the amount in the treasury and it was only on October 20, 1965 as would appear from Ext. D/4 that the Nazir deposited this amount in the treasury. The Nazir has given no explanation for this delay. Again it appears that the Nazir was also building a house and he had received advances from the Government which he had not repaid and the possibility that he might have himself misappropriated the money handed over to him by the appellant for the purpose of returning the advances cannot safely be excluded. It would appear that the Nazir had taken a loan of Rs. 4,500/ on September 8, 1965 and another loan of Rs. 4,500/ was taken by him on Septem ber 27, 1965, total being Rs. 9,000/ , and it is quite possible that the Nazir may have paid these amounts of the loans from out of the money given to him by the appellant. Finally even if the accused had not given any money to the Nazir P.W. 1 right from January 9, 1965 he should have at least approached him and should have drawn the attention of the appellant to the fact that the money paid to him for the purpose of disbursement had not so far been deposited with him. No such thing was done by the Nazir. It was suggested by the prosecution that as the appellant was in charge of the Treasury, the Nazir did not think it proper to interrogate him. It was, however, not a question of inter rogation. It was 457 only a question of a subordinate officer pointing out some thing of very great importance to a superior officer which a superior officer would never misunderstand. In view of these circumstances, therefore, we are not in a position to place implicit reliance on P.W. 1. There is yet another very important document which has been brought on record by the appellant which is Ext. A dated December 8, 1965. This is a statement by P.W. 3 which to a very great extent supports the case of the accused, but as we do not propose to rely on the evidence of P.W. 3, we would exclude this document from consideration. Another document Ext. H is a statement of the Accountant Ghansham Das which appears at p. 215 of the Paper Book wherein Mr. Ghansham Das clearly mentions that when he found that Rs. 10,000/ were not traceable, be brought the matter to the notice of the officer in charge and he was told by the Nazir that the amount of Rs. 10,000/ had been left with him by the appellant with instructions not to refund in the treas ury. TIffs statement clinches the issue so far as the defence case is concerned and fully proves that the explana tion given by the appellant was correct. This document would also have falsified the evidence of P.W. 1 who has tried to put the entire blame on the shoulders of the appel lant. Unfortunately, however, the prosecution did not choose to examine Ghansham Das the Accountant who was a very material witness in order to unfold the prosecution narra tive itself, because once a reasonable explanation is given by the appellant that he had entrusted the money to the Nazir on his return from Balichandrapur on January 20, 1965 which is supported by one of the prosecution witnesses, P.W. 9, as referred to above, then it was for the prosecution to have affirmatively disproved the truth of that explanation. If Ghansham Das would have been examined as a witness for the prosecution, he might have thrown a flood of light on the question. In his absence, however, Ext. H cannot be relied upon, because the document is inadmissible. At any rate, the Court is entitled to draw an inference adverse to the prosecution for not examining Ghansham Das Accountant as a result of which the explanation given by the appellant is not only reasonable but stands unrebutted by the prosecution evidence produced before the Trial Court. Having regard to these circumstances. it is not neces sary for us to consider the other documents, like Exts. F, G and E produced by the appellant because they do not throw much light on the question and the facts contained therein have been seriously disputed by the prosecution. Similarly we have not referred to the other documents produced by the prosecution which show the entry of the money received by the appellant and 50 on because these facts are not disputed by the appellant at all. On a consideration of the evidence and the circumstances we are satisfied that the appellant has been able to prove that the explanation given by him was both probable.and reason.able judged by the standard of the preponderance of probabilities This being the position, it was for the prosecution to prove affirmatively m what manner the amount was misappropriated after it had been transferred from the custody of 458 the appellant to the custody of the Nazir. Such proof is wholly lacking in this case. As the accused has given a reasonable explanation, the High Court was in error in drawing an adverse inference against him to the effect that he had misappropriated the money. For these reasons, the appeal is allowed, the judgments of the Courts below are set aside, the convictions and sentences imposed on the appellant are quashed and he is acquitted of the charges framed against him. P.H.P. Appeal allowed.(...TRUNCATED)

The appellant ,who was the Additional District Magis trate in overall charge ,of the Nizarat and the Land Acqui sition sections of the Collectorate was charged for criminal misconduct under section 5(2) read with section 5(1)(c) and 5(1 ) (d) of the Prevention of Corruption Act, 1947. The allegation against the appellant was that he withdrew a sum of Rs. 10,000/ on 9 1 1965 on the ground that he wanted to distribute the said amount amongst the villagers whose land was acquired as the compensation; that in fact the appellant never wanted to distribute the said amount and that he retained,the money with him for about 6 months dishonestly and only after that the money was deposited in the Treasury. The defence of the appellant was that the Secretary of the Works Department called a meeting in the Secretariat on 25 9 1964 and that the appellant was expressly directed to proceed to the spot and persuade the villagers to accept the compensation money; that it was pursuant to that mandate that the appellant withdrew the money on 9 1 1965; that he could not go to the village in question in that day because one of the officers who was to accompany him was not avail able; that he, therefore, again deposited the money back with the Nazir and collected the money from him again on 20 1 1975; that he went there along with several officials; that the villagers, however, refused to accept the compensa tion. The appellant was, however, hopeful of getting the compensation increased and to persuade the villagers to accept the increased compensation. He, therefore, on his return handed over the money to the Nazir, however, asked him not to deposit the same in the Treasury so that cash would be readily available as soon as needed. Nazir was examined by the prosecution and he denied having received the money as suggested by the appellant. Secretary of the Works Department was not examined by the prosecution. The Land Acquisition Officer PW 8 deposed that the Secretary directed the appellant to take action for payment of the compensation money to the villagers and that the appellant should personally persuade the villagers to accept the compensation. The said witness was, however, declared hostile on the ground that he did not state to the Police that when the appellant and the Executive Engineer visited the village they did not persuade the villagers to receive the compensation amount. PW 7 the Executive Engi neer deposed that he accompanied the appellant to the vil lage and that the appellant tried to persuade the villagers to receive the compensation but that they refused to accept the same. This witness was also declared hostile because of certain minor omissions in his statement before the Police. PW 6, one of the villagers also deposed that the appellant persuaded them to give up possession but the villagers did not agree. This witness was also declared hostile because he omitted state some facts before the Police. The Trial Court and the High Court relying on the evi dence of Nazir and certain documents convicted the appellant under section 5(1)(c) and 5(1)(d) read with section 5(2)of the Prevention of Corruption Act, 1947. 12 1104SCI/76 440 Allowing the appeal by Special Leave, HELD: 1. In a charge of misappropriation once the en trustment of money is proved and although the onus to prove the entrustment is on the prosecution. if the explanation of the accused is found to be false he must be presumed to have retained the money with himself. [444 A B] Jaikrishnadas Manohardas Desai and Anr. vs State of Bombay, 324; followed. Three principles of criminal jurisprudence which are well settled are as under: (i) that the onus ties affirmatively on the prosecution to prove its case beyond reasonable doubt and it cannot derive any benefit from weak ness or falsity of the defence version while prov ing its case; (ii) that in a criminal trial the accused must be presumed to be innocent until he is proved to be guilty; and (iii) that the onus of the prosecution never shifts. [444 G H, 445 A] 3. Under section 105 of the Evidence Act the onus of proving exceptions mentioned in the Indian Penal Code lies on the accused but the said section does not at all indicate the nature and the standard of proof required. It is suffi cient if the, accused is able to prove his case by the standard of preponderance of probabilities as envisaged by section 5 of the Evidence Act. [445 A B] Harbhajan Singh vs State of Punjab, ; , 241 and State of U.P. vs Ram Swarup & Anr. [1975] 1 S.C.R. 409, 416 17, followed. The accused succeeds if the probability of his version throws doubt on the presecution case. He need not prove his case to the hilt. It is sufficient for the defence to give a version which competes in probability with the prosecution version for that would be sufficient to throw suspicion on the prosecution case entailing its rejection by the court. [445 B C] 4. In a criminal trial it is not at all obligatory on the accused to produce evidence in support of his defence and for the purpose of proving his version he can rely on the admissions made by prosecution witnesses or on the documents filed by the prosecution. The courts below were not justified in drawing adverse inference against the accused for not producing evidence in support his defence. The prosecution cannot derive any strength or support from the weakness of the defence case. [446 E G] 5. The courts below erred in basing conviction of the appellant on the sole testimony of the Nazir completely ignoring the important admissions made in favour of the accused by other prosecution witnesses, some of whom were declared hostile and some were .not. [446 H, 447 A] 6. No explanation is coming forth why the Secretary, Works Department Who was a Government servant, has not been examined. It was a part of the prosecution case that in the said meeting the Secretary did not direct the appellant to go to the village for making payment. The prosecution ought to have examined the Accountant who was a material witness in order to unfold the prosecution narrative itself. The court drew adverse inference for his non examination. [447 D:E] 7. Section 154 of the Evidence Act confers. a discretion on the court to permit a witness to be cross examined by a party calling him. The section confers a judicial discretion and must be exercised judiciously and properly in the inter est of justice. The court will not nor.m. ally allow a party to cross examine his own witness and declare the same hostile unless the court is Satisfied that the statement of the witness exhibits an element of hostility. or that he has resiled from a material statement which he made before an earlier authority. [448 G H, 449 A] 441 Dahyabhai Chhaganbhai Thakker vs State of Gujarat, ; , 368. 69. 70 followed. Merely because a witness in an unguarded moment speaks the truth which may not suit the prosecution or which may be favourable to the accused, the discretion to allow the party concerned to cross examine his own witnesses cannot be allowed. The contingency _of permitting the cross examina tion of the witness by the party calling him is an extra ordinary phenomenon and permission should be given only in special cases. [449 G H, 450 C] 8. On the facts the court found that the Trial Court wrongly exercised its discretion in permitting the prosecu tion to cross examine its own witnesses. [451 F] 9. Merely because a witness is declared hostile it does not make him unreliable so as to exclude his evidence from consideration altogether. [450 E F] Bhagwn Singh vs State of Haryana, ; , 391 92 followed. The court found that the defence version was ren dered probable by the testimony of witnesses as well as documents. [457 A D] 11. The Court found that the Nazir was not a reliable witness and that the courts below ought not to have acted on his sole testimony. [455 C](...TRUNCATED)

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Civil Appeal No. 3400 of 1987. From the Judgment and order dated 23.1.1986 of the Andhra Pradesh High Court in Writ Appeal No. 22 of 1985. M.K. Ramamurthi, Attar Singh and G.N. Rao for the Appellant. T.V.S.N. Chari for the Respondents. The Judgment of the Court was delivered by SHARMA, J. The appellant 's application for appointment as a District Munsif by the State of Andhra Pradesh in the quota reserved for Scheduled Castes was rejected by the Andhra Pradesh Public Service Commission (briefly described as the 'Commission '), respondent No. 1, which the appellant challenged before the Andhra Pradesh High Court by a writ petition. The learned Single Judge allowed the prayer and directed the first respondent to consider the candidature of the appellant for the appointment in question. The respondents challenged the decision under Clause 15 of the Letters Patent in the High Court in Writ Appeal No. 22 of 1985. The appeal was allowed and the writ petition was dismissed. We have granted leave under Article 136 of the Constitution allowing the appellant to appeal against the said decision. The appointment of District Munsifs is regulated by Andhra Pradesh State Judicial Service Rules (hereinafter referred to as the Rules). In response to an advertisement issued by the 'Commission ' for filling up a large number of vacancies of District Munsifs by direct recruitment, the appellant applied. Subsequently a second advertisement was issued on 27.5.1984 with reference to vacancies reserved for Scheduled Castes, and the appellant made a second application. His present claim is with respect to these reserved posts. After passing the Law Examination the appellant got himself enrolled as an Advocate on the rolls of the State Bar Council on 24.2.1977 and practised law till 31.3.1981. On 1.4.1981 he was appointed in the service of Hindustan Shipyard, an undertaking owned by the Government of India, and claims to have remained in charge of the legal cell. As stated earlier, he applied in pursuance of the second advertisement dated 27.5.1984 notified by the 'Commission 38 In the opinion of the 'Commission ' the appellant did not fulfil the necessary qualification fixed under the Rules, and was therefore ineligible for appointment. The Rules have laid down three modes for appointment, namely, by direct recruitment, by promotion and by transfer. Rule 12 requires inter alia as an essential qualification for a candidate for appointment as a District Munsif that he should be in actual practice and should have been so engaged for not less than 3 years in a court of civil or criminal jurisdiction. Since the appellant was not in actual law practice, reliance has been placed on his behalf on the Proviso tc the aforementioned Rule, which is quoted below: "Provided that in the case of a person who is already in Government service and who applied for appointment to the post of District Munsif by direct recruitment, he must have actually practised for a period of not less than 3 years immediately prior to the date of his entering the Government service. It is contended that as the appellant had practised for a requisite period immediately prior to the date of his entering the service of Hindustan shipyard, he must be held to be qualified for appointment. The appellant 's claim is being refuted by the respondents on the ground that he was not in Government service. The stand of the respondents appears to be well founded. The Hindustan Shipyard, although a fully owned undertaking of the Central Government, cannot be equated with the Government or State except for the purposes of Part III of the Constitution. The undertaking has a separate legal entity. The expression "State" does not by reason of Article 12 of the Constitution include the undertaking except for the limited purpose which is not attracted in the present case. Mr. Ramamurthy, the learned counsel for the appellant, appreciating this position, contended that the word "Government '. should be deleted from the Proviso mentioned above, so as to save it from the vice of discrimination. The argument is that no distinction ought to be made between the experience which a candidate acquires in Government service and the experience one acquires in any other service, whether public or private in nature. The learned counsel urged that it is true that the appellant cannot claim to be qualified on the strength of the Proviso as it stands now but to save it from being struck down as illegal, the Court should omit the word 'Government '. There is no doubt that the expression "Government service" mentioned in the Proviso includes service either under the State Government or the Government of India. Sub rule (15)(a) of the definition Rule 2 explains that the expression "recruited direct" would refer to a candidate including a person in the service of Government of India or the Government of a State to be recruited directly subject to certain conditions mentioned therein. The learned counsel for the respondents, therefore, rightly said that a servant under the Government of India must be included within the scope of the Proviso. Mr. Ramamurthy, learned counsel for the appellant, fairly conceded that the appellant who is in the service of Hindustan Shipyard and is not serving directly the Union of India cannot take advantage of the Proviso, if the same as it stands is held to be legally valid. The attack is on its vires on the ground of illegal discrimination. We do not find any merit in this submission. What is forbidden by the Constitution is discrimination between persons who are substantially in similar circumstances or conditions. An equal treatment does not arise as between persons governed by different conditions and different sets of circumstances. It is obviously permissible to classify persons into groups and such groups may be differently treated if there is a reasonable basis for such difference or distinction. Having regard to the difference in the nature of service under the Government and that of the other services, therefore, a classification based on that line cannot be struck down on the ground of illegal discrimination. The Proviso in question must be held to be valid and effective 8. The High Court in the writ appeal while upholding the Proviso has interpreted it differently which does not appear to be correct. However, since the learned counsel for the respondents while defending the decision whereby the appellant 's writ application was rejected, has stated that the interpretation put by the Division Bench was not correct and he does not support it, it is not necessary to consider that aspect in detail. In view of our finding in paragraph 7 above, upholding the validity of the Proviso, as it is, the appellant must fail. Before closing, however, we would like to point out that the appellant cannot succeed even if the enabling provision in the Proviso relaxing the qualification clause of Rule 12 is held to be ultra vires. Besides, we have serious doubt whether a court can reframe a rule and give effect to it as suggested on behalf of the appellant, but we do not consider it necessary to deal with this aspect any further. In the result, the appeal fails and is dismissed but, in the circumstances, without costs. N.P.V. Appeal dismissed.(...TRUNCATED)

% The appellant who had enrolled himself as an Advocate on 24.2.77 and practised law till 1.4.81 when he was appointed in the service of the Hindustan Shipyard, an undertaking owned by the Government of India, applied for the post of a District Munsif, in pursuance of an advertisement dated 25.4.84 issued by the respondent No. 1 Andhra Pradesh Public Service Commission for filling up, by direct recruitment, of vacancies reserved for the Scheduled Castes. His application was rejected by the respondent No. I, as in its opinion, he did not fulfil the necessary qualification fixed under Rule 12 of the Andhra Pradesh State Judicial Service Rules and was, therefore, ineligible for appointment. The appellant challenged the aforesaid decision before the High Court. A Single Judge allowed the writ petition and directed the first respondent to consider the appellant 's candidature. The Letters Patent Appeal filed by the respondent was allowed and the writ petition was dismissed. In the appeal by special leave, the appellant contended that as he had practised for a requisite period immediately prior to his entering 36 service of Hindustan Shipyard, an undertaking owned by the Government of India, he must be held to be qualified for appointment, that no distinction ought to be made between experience acquired in Government service and the one in any other service, whether public or private in nature, that this discrimination was illegal and ultra vires and that the word "Government" should be deleted from the proviso to Rule 12 so as to save it from the vice of discrimination. The respondents opposed the appeal on the ground that the appellant was not in Government service. Dismissing the appeal, ^ HELD: 1.1 There is no doubt that the expression "Government service" mentioned in the proviso to Rule 12 of the Andhra Pradesh State Judicial Service Rules includes service either under the State Government or the Government of India. Sub rule (15)(a) of Rule 2 explains that the expression "recruited direct" would refer to a candidate including a person in the service of Government of India or the Government of State to be recruited directly subject to service conditions mentioned therein. [39A B] In the instant case, the Hindustan Shipyard, although a fully owned undertaking of the Central Government cannot be equated with the Government or State except for the purpose of part III of the Constitution. The undertaking has a separate legal entity. The expression "State" does not by reason of Article 12 of the Constitution include the undertaking except for the limited purpose which is not attracted in the present case. The appellant who is in the service of Hindustan Shipyard and is wt serving directly the Union of India cannot take advantage of the proviso. [38E F] 1.2 What is forbidden by the Constitution is discrimination between persons who are substantially in similar circumstances or conditions. An equal treatment does not arise as between persons governed by different conditions and different sets of circumstances. It is obviously permissible to classify persons into groups and such groups may be differently treated if there is a reasonable basis for such difference or distinction. [39C D] Having regard to the 'difference in the nature of service under the Government and that of the other services, therefore, a classification based on that line cannot be struck down on the ground of illegal discrimination. The Proviso to Rule 12 must be held to be valid and effective. [39D E] 37(...TRUNCATED)

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ivil Appeal No.678 of 1957. Appeal from the judgment and order dated August 1, 1956 of the Patna High Court, in Misc. Judicial Case No. 188 of 1955. WITH Civil Appeals Nos. 546 of 1958 and 115 of 1959. 333 Appeals from the judgment and order dated March 8, 1957, of the Patna High Court, in Misc. Judicial Cases Nos. 116 and 215 of 1956. Lal Narayan Sinha and section P. Varma, for the appellant. C. K. Daphtary, Solicitor General of India and R. C. Prasad, for respondent No. 1 in C. A. No. 678 of 57. B. C. Ghose and P. K. Chatterjee, for the intervener. H. N. Sanyal, Additional Solicitor General of India and C. P. Lal, for respondent No. 1 in C.A. No. 546 of 58. H. N. Sanyal, Additional Solicitor General of India and P. K. Chatterjee, for respondent No. 1 in C.A. No. 115 of 1959. November 26. The Judgment of the Court was delivered by GAJENDRAGADKAR J. This is a group of three appeals which have been filed in this Court by the State of Bihar (hereinafter called the appellant) against three separate registered dealers with a certificate issued by the Patna High Court Under article 132(1) of of the Constitution that they involve a substantial question of law as to the interpretation of article 20(1) of the Constitution. The facts in each one of the three appeals are similar, though not exactly the same, but they raise a common question of law under the proviso to section 14A of the Bihar Sales Tax Act, 1947 (Act XIX of 1947) (hereinafter called the Act). Orders of forfeiture have been passed against the three registered dealers in the three appeals respectively, and they raise a common question of law in regard to the validity of the said orders. By consent Civil Appeal No. 678 of 1957, has been argued before us as the principal appeal and it has been conceded that our decision in that appeal will govern the two other appeals. We would,, therefore, set out the facts in Civil Appeal No, 678 of 1957 and deal with the merits of the points raised for our decision in that appeal. Rai Bahadur Hurdut Roy Motilal Jute Mills, Katihar (hereinafter called the first respondent) was at the, 43 334 material time registered as a dealer under the Act and was carrying oil business of manufacture and sale of gunny bags, Hessian and other jute products at Katihar in the district of Purnea. During the period April 1, 1950, to March 31, 195 1, the said respondent sold and despatched its ware worth about Rs. 92,24,386 to dealers outside the State of Bihar and realised a sum of Rs. 2,11,222 9 6 as sales tax from such dealers. The said respondent 's assessment to sales tax for the relevant period was taken up by the Superintendent of Sales Tax, Purnea (hereinafter called the second respondent) on May 31, 1953; and in consequence of these proceedings the impugned order of forfeiture came to be passed. Meanwhile article 286 of the Constitution along with other articles was considered by this Court in the State of Bombay & Anr. vs The United Motors (India) Ltd. & Ors. The question which this Court bad to consider in that case was about the vires of the impugned provisions of the Bombay Sales Tax Act, 1952 (Act XXIV of 1952), and for the decision of the said question article 286 fell to be Considered. According to the majority judgment in that case article 286(1)(a) read with the explanation thereto and construed in the light of article 301 and article 304 prohibits the taxation of sales or purchases involving inter State elements by all States except the State in which the goods are delivered for the purpose of consumption therein. The latter State is left free to tax such sales or purchases and it derives this power not by virtue of the explanation to article 286(1) but under article 243(3) read with Entry 54 of List 11. The view that the explanation does not deprive the State in which the property in the goods passed of its taxing power and that consequently both the State in which the property in the goods passes and the State in which the goods are delivered for consumption have the power to tax is not correct. When the first respondent 's assessment was taken up by the second respondent his attention was invited to this Court 's decision in the case of the United Motors (1); he followed the said decision and held that (1) ; 335 the turn over of Rs. 92,24,386 1 6 on account of despatch of manufactured jute products to out of Stat buyers was exempted from the levy of tax; this meant, a deduction of the said amount from the amount of Rai Bahadur the total turnover shown by the first respondent in the return submitted by him according to the provisions of the Act. Subsequently the second respondent proceeded against the first respondent under section 14A of the Act" and issued a notice in that behalf on June 18, 1954. By this notice the first respondent was called upon to show cause why the entire amount of Rs. 2,11,222 9 6 which had been recovered by him as sales tax from the dealers should not be forfeited to Government. The first respondent showed cause but the second respondent was not satisfied with the explanation given by the first respondent, and so he directed the first respondent to deposit the said amount into the Government treasury and produce the proof of payment before him within a month of the receipt of his order. This order was passed on February 10, 1955. It shows that the second respondent thought that the matter raised for his decision was simple; the first respondent had collected the amount in question as tax under the Act from his customers for and on behalf of the appellant, and so he could not retain the said amount ; it must go to the State coffers. He also held that the first respondent had represented to the, purchasers that the amount was chargeable as sales tax under the Act and as such the first respondent had clearly contravened the explicit provisions of section 14A of the Act read with r. 19 of the Bihar Sales Tax Rules (hereinafter called the Rules). It is on these findings that the second respondent passed the impugned order of forfeiture. The first respondent then applied to the Patna High Court, tinder articles 226 and 227 of the Constitution challenging the validity of the said order. It was urged on his behalf that the proviso to section 14A under which the impugned order was purported to have been passed did not apply to the case of the first respondent, and as such the order was Dot justified 336 by the said proviso. It was also contended that if it is held that the said proviso justified the impugned order it was ultra vires the State Legislature inasmuch as it violates article 20(1) and article 31(2) of the Constitution. The High Court did not consider the first contention raised before it; it dealt with the two constitutional points urged by the first respondent and found in his favour on both of them. On these findings the petition filed by the first respondent was allowed, the impugned order of forfeiture was set aside and the proceedings taken against the first respondent under section 14A were quashed. The appellant then applied for and obtained a certificate from the said High Court under article 132(1) of the Constitution. On behalf of the appellant Mr. Lal Narain Sinha has contended that the High Court was in error in holding that the proviso to section 14A violates either article 20(1) or article 31(2) of the Constitution. He has addressed us at length in support of his case that neither of the two articles is violated by the impuged proviso. On the other hand, the learned SolicitorGeneral has sought to support the findings of the High Court on the said two constitutional points; and he has pressed before us as a preliminary point his argument that on a fair and reasonable construction, the proviso cannot be applied to the case of the first respondent. We would, therefore, first deal with this preliminary point. In cases where the vires of statutory provisions are challenged on constitutional grounds, it is essential that the material facts should first be clarified and ascertained with a view to determine whether the impugned statutory provisions are attracted; if they are, the constitutional challenge to their validity must be examined and decided. If, however, the facts admitted or proved do not attract the impugned provisions there is no occasion to decide the issue about the vires of the said provisions. Any decision on the said question would in such a case be purely academic. Courts are and should be reluctant to decide constitutional points merely as matters of academic importance. 337 Before considering the preliminary point raised by the first respondent it is necessary to refer briefly the relevant scheme of the Act. The Act was originally passed in 1947 because the Legislature thought it necessary to make an addition to the revenue of Bihar, and for that purpose to impose a tax on the sale of goods in Bihar. The provisions of the Act as well as the statutory Rules framed under it have been subsequently modified from time to time. In our present discussions we would refer to the provisions and the Rules which were in operation at the material time. The goods the sale of which is taxed under the Act are defined by section 2(d) as meaning all kinds of moveable property other than those specifically excepted. Section 2(g) defines " sale " inter alia as meaning any transfer of property in goods for cash or other considerations and the second proviso to it prescribes that the sale of any goods (1) which are actually in Bihar at the time when, in respect thereof the contract of sale as defined in section 4 of that Act is made, or (2) which are produced or manufactured in Bihar by the producer or manufacturer thereof, shall wherever the delivery or contract of sale is made, be deemed for the purposes of this Act to have taken place in Bihar. The tax leviable Linder the Act is defined by section 2(hh) as including a fee fixed in lieu of the tax under 'the ' first proviso to section 5, whereas under section 2(i) " turnover " means the aggregate of the amounts of sale prices received and receivable by a dealer in respect of sale or supply of goods or carrying out of any contract, effected or made during the given period, or, where the amount of turnover is determined in the prescribed manner, the amount so determined. Section 4 which is the charging section provides that every dealer whose gross turnover during the specified period on sales which have taken place both in and outside Bihar exceeds Rs. 10,000 shall be liable to pay tax on sales which have taken place in Bihar oil and from the date of the commencement of the Act. This section shows that the incidence of taxation can be attracted only where the gross turnover of the dealer exceeds Rs. 10,000 and in 338 determining this prescribed minimum. sales which take place both in Bihar and outside are taken into account. Section 5, prescribes the rate of tax at six pies in a rupee on the taxable turnover. The provisos to this section confer specific powers on the State Government; the first proviso which is relevant for our purpose empowers the State Government by notification to fix a higher rate of tax not exceeding one anna in a rupee or any lower rate of tax in respect of sale of any goods or class of goods specified in such notification subject to such conditions as it may impose. The explanation to this section indicates what the taxable turnover for the purpose of the section means. " Taxable turnover " according to this explanation means that part of a dealer 's gross turnover on sales which have taken place in Bihar during any period which remains after deducting therefrom the items specified in cls. (a) and (b) of the explanation. The sale of any goods declared from time to time as tax free goods under section 6 is one of those items. Section 6 empowers the State Government to exempt sale of any goods or class of goods from the levy of tax under this Act subject to the conditions specified in the section, whereas section 7 empowers the Government to exempt dealers from tax, and section 8 authorises the Government to prescribe points at which goods may be taxed or exempted. Section 9 deals with the question of registration of dealers and provides that no dealer who is liable to pay tax under section 4 shall carry on business unless he has been registered under the Act and possesses a registration certificate. Under section 11 a list of registered dealers is published, and by section 12 such registered dealers are required to furnish such returns by such dates and to such authorities as may be prescribed. Section 13 prescribes the procedure for assessment, and section 14 requires that the tax payable under the Act shall be paid in the manner hereinafter provided at such intervals as may be prescribed. Section 14(2) requires the registered dealer to pay into a Government treasury the full amount of tax due from him according to the returns which he has to file and has to 339 furnish along with the said return a receipt from the treasury showing the payment of such amount. Having thus provided for the recovery of the tax charged under section 4, section 14A in effect authorises registered dealers to reimburse their dues by making collections of the tax payable by them in accordance with the restrictions and conditions as may be prescribed. It provides that no dealer who is not a registered dealer shall realise any amount by way of tax on sale of goods from purchasers nor shall any registered dealer make any collection of tax except in accordance with such restrictions and conditions as may be prescribed. That takes us to the proviso to section 14A with which we are directly concerned in the present appeal. It reads thus: " Provided that if any dealer collects any amount by way of tax, in contravention of the provision of this section or the conditions and restrictions prescribed thereunder, the amount so collected shall, without prejudice to any punishment to which the dealer may be liable for an offence under this Act, be forfeited to the State Government and such dealer shall pay such amount into the Government treasury in accordance with a direction issued to him by the Commissioner or any officer appointed under section 3 to assist him and in default of such payment, the amount shall be recovered as an arrear of land revenue. " The effect of this proviso is clear. A dealer is authorised to collect amounts by way of tax from the purchasers only in accordance with the provision of section 14A and the conditions and restrictions prescribed thereunder. The conditions and restrictions referred to in the proviso are to be found in the material Rules framed under the Act. If it is shown that a dealer has collected an amount by way of tax in violation of the conditions and restrictions prescribed by the Rules he incurs the penalty of forfeiture as specified in the proviso. There can be no doubt that before the penalty of forfeiture can be imposed upon the dealer under the proviso it must be shown that he has acted contrary to the conditions and restrictions prescribed 340 by the Rules. It would not be enough to show that the collection of the amounts in question by the dealer is otherwise illegal or improper. The contravention of the statutory provision contained in section 14A or of the Rules prescribing conditions and restrictions in that behalf alone can form the basis of the imposition of the penalty under the proviso. This position is not disputed before us. The appellant contends that the proviso is attracted to the present case because the first respondent has contravened the conditions and restrictions imposed by the proviso to r. 19, whereas the first respondent argues that a proper construction of this latter proviso does not justify the appellant 's plea. It would thus be seen that the decision of the preliminary point raised by the first respondent involves the narrow question of the construction of the proviso to r. 19. Before construing the said proviso it is, however, necessary to refer to section 33 of the Act. This section was enacted on April 4,1951, but it has been expressly made retrospective as from January 26, 1950. Therefore at the material time this section must be deemed to have been in operation. Section33(1)(a)(i)provides that notwithstanding anything contained in the Act a tax on the sale or purchase of goods shall not be imposed under the Act where such a sale or purchase takes place outside the State of Bihar. Section 33(2) makes the explanation to cl. (1) of article 286 of the Constitution applicable for the interpretation of subcl. (i) of cl. (a) of sub section It is common ground that if the relevant provision just cited is construed in the light of the decision of this Court in the case of the United Motors (1) there can be no doubt that the sales which are the subject matter of the present proceedings consist of transactions on which a tax cannot be imposed under the Act. That is why the appellant strongly relies on this provision and contends that in construing the proviso to r. 19 the true legal position in respect of the transactions in question must be borne in mind. Let us now read the proviso to r. 19. Rule 19 itself prescribes the procedure which has to be followed by (1) ; 341 a registered dealer in realising any amount by way of tax on sale of goods from purchasers. This procedure refers to the issue of a cash memo or a bill as prescribed by it. The proviso to this Rule lays down that no such registered dealer shall realise any amount by way of tax at a rate higher than the rate, at which he is liable to pay tax under the Act, or realise any amount by way of tax in respect of such part of his turnover as is allowed to be deducted from his gross turnover for the determination of his taxable turnover under the Act or these Rules. The appellant relies on the latter part of the proviso and argues that the part of the turnover of the first respondent which is in question fell within section 33(1)(a)(1) and as such was not liable to be taxed. That being so there was no justification for the first respondent to collect any amount by way of tax from his purchasers under section 14A. The scheme of section 14A is to permit the registered dealer to collect such amounts of tax from his purchasers as he in his turn is liable to pay to the appellant. Authority to collect such tax amounts given to the registered dealer inevitably postulates his liability to pay a similar amount to the appellant. Therefore the conduct of the first respondent in collecting amounts by way of tax from his purchasers amounts to a breach of section 14A itself. It is also contended that having regard to the provisions of section 33(1)(a)(i) the first respondent was entitled to claim a deduction of the transations in question from his gross turnover under the latter part of the proviso, and that clearly means the first part of the said proviso applies to his case and it prohibited him from realising the said amounts. His conduct in collecting the amounts, therefore, constitutes a breach of the conditions specified in the proviso to r. 19. In appreciating the validity of these arguments it would be relevant to remember that at the material time there was considerable confusion in the minds of the public as well as the State authorities about the true scope and effect of the provisions of article 286(1) of the Constitution. It is not disputed that during the material period and in the years preceding it registered 44 342 dealers used to pay tax in respect of transactions which were really not liable to be taxed under section 33(1)(a)(i) and such tax was being received by the appellant. In fact, as we have already pointed out section 14 of the Act imposes a liability on the registered dealer to furnish along with his return a receipt for the payment of the tax which is payable under the return. Such payments were made by registered dealers in respect of similar transactions and were accepted. It is an accident that the assessment proceedings of the first respondent were actually taken up for decision by the second respondent after the decision of this Court in the case of the United Motors (1). If the question about the first respondent 's liability to pay the tax under the Act had been decided before the date of the said decision there is no doubt that he would have been required to pay the tax for the transactions in question. Indeed it is common ground that the notification issued for the material period levied a tax at three pies on the goods in question " if the sales tax authority is satisfied that the goods have been despatched by or on behalf of the dealer to any person outside the Province of Bihar. " This notification is consistent with the definition of the word " sale " as it then stood. It is thus clear that at the material time the appellant thought that transactions like those in question in the present appeal were liable to pay the tax at the rate of three pies as prescribed by the relevant notification; the registered dealers also had no doubt on the point; and so taxes were collected in respect of such transactions by the appellant from the registered dealers and by the registered dealers in their turn from their purchasers. Nevertheless, after the enactment of section 33 the legal fiction about the retrospective operation of the said section must be given effect to and in construing the proviso to r. 19 it must be assumed that the transactions in question were outside the scope of the Act and no tax could have been imposed in respect of them. Construing the proviso on this assumption, can it be said that in respect of the part of the first respondent 's (1) ; 343 turnover which is in question a deduction was allowable within the meaning of the proviso? In our opinion this question cannot be answered in favour of the appellant. Rule 19 itself was framed in 1949 and has not been amended subsequent to the enactment of section 33. As it was framed its reference to the allowable deductions was clearly based on the provisions of sections 6, 7 and 8 of the Act. This position would be clear beyond all doubt if we read the material words in the proviso in the light of the explanation to section 5 of the Act. The explanation in terms enumerates deductions which have to be made in determining the taxable turnover of the 'registered dealer and it is to these deductions which are allowable under the three sections specified in the explanation to which the latter part of the proviso to r. 19 refers. A claim for the exclusion of a part of the first respondent 's turnover on the strength of section 33(1)(a)(i) cannot, therefore, be said to be an allowable deduction under the proviso. This question can be considered from another point of view. The provisions which allow deductions to be made or grant exemptions in respect of certain transactions obviously postulate that but for them the transactions in question would be liable to. tax under the Act; and so when such transactions are included in the return the registered dealer is allowed to claim appropriate deductions in respect of them. But, the position with regard to section 33 is entirely different ; transactions which attract the provisions of the said section are in substance outside the scope of the Act and no tax can be imposed on them at all. If that be the true position the claim which can be made by the registered dealer in respect of such transactions cannot in law be regarded as a claim for allowable deductions or exemptions properly so called; it is really a claim that the Act itself does not apply to the said transactions. Therefore, in our opinion it would be straining the language of the second part of the proviso to r. 19 to hold that the transactions in question fell within its purview. There is one more point to be considered in this connection. Form VI which has been prescribed for 344 making the returns under section 12 requires the gross turnover to be mentioned at the outset, and then it provides for the different deductions allowable under the Act. This form was prescribed in 1949 and has not been amended after the addition of section 33 to the Act. On looking at this form it seems difficult to entertain the argument that the claim for the total exclusion of the transactions in question can be made under any of the headings prescribed in the form. The appellant, however, contends that the first item of gross turnover means the whole of the gross turnover which must include all sale transactions whether they took place within Bihar or outside it, and in support of this argument reliance is placed on the definition of " turnover " contained in section 2(1). If the whole of the gross turnover has to be mentioned under item 1, it is urged, the claim for the exclusion of the transactions in question can well be adjusted under one or the other of the deduction items prescribed in the form. We are not inclined to accept this argument. The form as it has been prescribed construed in the light of the material provisions contained in sections 6, 7 and 8 does not support the case that in prescribing its several items it was intended that the transactions failing under section 33 should be first shown under item 1 and then excluded under one or the other of the remaining items of deduction. Besides it may be relevant to point out that the heading of Chapter VII which deals with the submission of returns by dealers is " return of taxable turnover " and it is arguable that the gross turnover mentioned in Form VI may mean "gross taxable turnover " and not the gross turnover including the transactions which are outside the scope of the Act. Then as to the argument about the contravention of section 14A itself it is difficult to appreciate how any provision of section 14A can be said to have been contravened. Section 14A consists of two parts both of which are put in a negative form. The second part with which we are concerned in effect means nothing more than this, that a registered dealer can make collections of such tax only as is payable by him in accordance with the restrictions and conditions as may be 345 prescribed. If the argument is that the first respondent was not liable to pay any tax and as such was not entitled to make any corresponding collection, then the collection made by him may fall outside section 14A and be otherwise unjustified or improper; but it does not amount to the contravention of any provision of section 14A as such. In fact section 14A itself refers to the restrictions and conditions which may be prescribed and, as we have already seen, these conditions and restrictions are prescribed by the Rules in general and by r. 19 in particular. So the argument urged under section 14A takes us back to the question as to whether the proviso to r. 19 has been contravened. In dealing with this question we cannot ignore the fact that the relevant provisions which fall to be construed in the present appeal impose a serious penalty on the registered dealer, and so, even if the view for which the appellant contends may perhaps be a possible view, we see no reason why the other view for which the first respondent contends and which appears to us to be more reasonable should not be accepted. In the result we hold that the proviso to section 14A cannot be invoked against the first respondent and so the order of forfeiture passed against him by the second respondent is unjustified and illegal. In view of this conclusion it is unnecessary to consider the objections raised by the first respondent against the validity of the proviso on the ground that it contravenes articles 20(1) and 31(2) of the Constitution. We may incidentally add that during the course of the arguments before us we have also heard all the learned counsel on the question as to whether the said proviso contravenes the provisions of article 19(1)(f) as well. The result is the appeal fails and is dismissed with costs. The decision of this appeal governs Civil Appeals Nos. 546 of 1958 and 115 of 1959. They also fail and are dismissed with costs. Appeal dismissed.(...TRUNCATED)

The respondent mills, a registered dealer under the Bihar Sales Tax Act, 1947 (Act 111 of 1947), was carrying on business of manufacture and sale of gunny bags, hessian and other jute products at Katihar. During the period April 1, 1950, to March 31, 1951, it sold and despatched its wares worth about Rs. 92,24,386 1 6 to dealers outside the State and realised a sum of Rs. 2,11,222 9 6 as sales tax from them. In assessing the sales tax payable by the said respondent for the relevant period the Superintendent of Sales Tax, Purnea, held that the said amount of sales tax had been realised in contravention of section 14A of the Act read with r. 19 of the Bihar Sales Tax Rules, and directed its forfeiture under the proviso to that section. The respondent challenged the validity of the said order under articles 226 and 227 of the Constitution. The High Court held that the proviso to section 14A of the Act was ultra vires the State Legislature as it violated articles 20(1) and 31(2) of the Constitution and set aside the order of forfeiture and quashed the proceedings under section 14A of the Act. The State of Bihar appealed to this Court. It was urged by way of preliminary objection on behalf of the respondent that since the proviso to section 14A of the Act had no application to the facts of the case, there was no occasion to decide its constitutional validity. The contention of the appellint was that the proviso did apply to the respondent inasmuch 332 as he had contravened the conditions and restrictions imposed by the proviso to r. 19. The question for determination, therefore, was whether the said respondent could be said to have realised any amount by way of tax in respect of such part of its turn over as was allowed to be deducted from his gross turn over for the determination of his taxable turn over under the Act or the rules, as contemplated by the later part of the said proviso. Held, that the preliminary objection must prevail. Held, further, that before the penalty of forfeiture could be imposed upon a dealer under the proviso to section 14A of the Bihar Sales tax Act, 1947, it had to be shown that he had acted contrary to the conditions and restrictions prescribed by the Rules and it was not enough to show that the collection of the sales tax made by him was otherwise illegal or improper. The contravention of the statutory provisions contained in section 14A or of the Rules prescribing conditions and restrictions in that behalf alone could form the basis of the imposition of the penalty of forfeiture prescribed by the said proviso. With the insertion of section 33 into the Act with retrospective operation, prohibiting the imposition of the tax on sales taking place outside the State and in view of the decision of this Court in State of Bombaay vs The United Motors (India) Ltd. ; , the proviso to r. 19 must be construed on the basis that the sales in question were outside the scope of the Act and no tax could be imposed on them. It could not, therefore, be said that that part of the respondent 's turnover which was in question was an allowable deduction within the meaning of the said proviso. Such allowable deductions as are contemplated by the proviso are clearly based on the provisions of sections 6, 7 and 8 of the Act as is quite clear from the Explanation to section 5 of the Act. State of Bombay & Another vs The United Motors (India) Ltd. An allowable deduction under the said proviso was not the same thing as exclusion of a part of the turn over on the basis of section 33(1)(a)(1) of the Act. It stands on an entirely different footing. Transactions which fall within the said section are in substance outside the Act and no tax can be imposed on them. The transaction in question did not, therefore, fall within the proviso to r.19 and the proviso to section 14A was not attracted and the order of forfeiture passed against the respondent was unjustified and illegal.(...TRUNCATED)

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Special Leave Petition (Civil) Nos. 6698 6700 of 1979. 867 From the Judgment and Order dated 25 10 1978 of the Rajasthan High Court in D. B. Civil Misc. Appeal Nos. 195, 196 and 197 of 1978. Soli J. Sorabjee Soli. and Sobhagmal Jain for the Petitioner. M. N. Shroff for the Respondent. The Order of the Court was delivered by KRISHNA IYER, J. These three petitions for special leave relate to a road tragedy where many lost their limbs while travelling in a bus belonging to the nationalised transport system of Rajasthan. A flimsy plea was put forward by the operator to escape liability for compensation that the lights of the bus accidentally failed and thus the unfortunate episode occurred. Other embellishments were also set up for the purpose of exoneration. The Accidents Tribunal was not taken in and, having disbelieved the evidence, awarded compensation in sums far lower than were claimed by the victims. Two contentions were raised and rightly over ruled and they have been repeated in the Petition for special leave and we similarly reject them. The nature of the accident and the surrounding circumstances are such that the doctrine res ipsa loquitur was rightly invoked by the court. Indeed, the terrible accidents attributable to reckless driving and escalating year after year make our high ways great hazards. One should have thought that nationalisation of road transport would have produced a better sense of social responsibility on the part of the management and the drivers. In fact, one of the major purposes of socialisation of transport is to inject a sense of safety, accountability and operational responsibility which may be absent in the case of private undertakings, whose motivation is profit making regardless of risk to life; but common experience on Indian high ways discloses callousness and blunted consciousness on the part of public corporations which acquire a monopoly under the in plying buses. It is a thousand pities that our State Road Transport vehicles should become mobile menaces, and we should impress upon them the need to have greater reverence for human life representing, as they do, the value set of the State itself. In the present case, the State Corporation put forward a false plea and contested the application of the principle of res ipsa loquitur to avoid liability. It would have been more humane and just if, instead of indulging in wasteful litigation, the Corporation had hastened compassionately to settle the claims so that goodwill and public credibility could be improved. After all, the State has a paramount duty, apart 868 from liability for tort, to make effective provision for disablement in cases of undeserved want Aritcle 41 of the Constitution states so. It was improper of the Corporation to have tenaciously resisted the claim. It was right on the part of the Tribunal to have raised a rebuttable presumption on the strength of the doctrine of res ipsa loquitur. The State Corporation has contested even the quantum of the claim. Indian life and limb cannot be treated as cheap, at least by State instrumentalities. The heads of claim have been correctly appreciated by the Tribunal and the awards have been moderate. Here again, the State Corporation should have sympathised with the victims of the tragic accident and generously adjusted the claims within a short period. What is needed is not callous litigation but greater attention to the efficiency of service, including insistence on competent, cautious and responsible driving. We have had the advantage of Shri Soli J. Sorabjee, who represented the Corporation with a characteristic sense of fairness, but we are unable to desist from making the above observations which are induced by the hope that nationalised transport service will eventually establish their superiority over the private system and sensitively respond to the comforts of and avoid injury to the travelling public and the pedestrian users of our highways. We dismiss the Special Leave Petitions. N.V.K. Petitions dismissed.(...TRUNCATED)

The respondents lost their limbs in a road accident while travelling in a bus belonging to the petitioner, a nationalised transport system. The plea by the operator to escape the liability for compensation was that the lights of the bus accidentally failed, which resulted in the accident. The Accidents Claims Tribunal negatived the plea and awarded compensation in sums far lower than were claimed by the respondents. In the special leave petitions to this Court, the petitioner contested the application of the principle of res ipsa loquitur and the quantum of the claim. Dismissing the petitions, ^ HELD: 1. (i) It was improper of the Corporation to have tenaciously resisted the claim. [868 A] (ii) It was right on the part of the Tribunal to have raised a rebuttable presumption on the strength of the doctrine of res ipsa loquitur. [868 B] 2. The heads of claim have been correctly appreciated by the Tribunal and the awards have been moderate. [868 C] 3. Instead of indulging in wasteful litigation, it would have been more humane and just, if the Corporation had hastened compassionately to settle the claims so that goodwill and public credibility could be improved. [867 H] 4. The State has a paramount duty, apart from liability for tort, to make effective provision for disablement in cases of undeserved want Article 41 of the Constitution states so. [868 A] 5. Nationalisation of road transport should have produced a better sense of social responsibility on the part of the management and drivers. One of the major purposes of socialisation of transport is to inject a sense of safety, accountability and operational responsibility which may be absent in the case of private undertakings whose motivation is profit making regardless of risk to life. [867 E F] 6. Common experience on Indian high ways disclose callousness and blunted consciousness on the part of public corporations which acquire a monopoly under the in plying buses. It is a pity that State Road Transport vehicles should become mobile menaces. [867 G](...TRUNCATED)

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Civil Appeal No. 3787 of 1983. Appeal by Special leave from the Judgment and Order dated the 19th March, 1971 of the Madhya Pradesh High Court in Misc. Petition No. 565 of 1980. S.Q. Hassan, S.K. Mehta, P.N. Puri and M.K. Dua for the Appellant. Rameshwar Nath for the Respondent. The Judgment of the Court was delivered by BHAGWATI, J. This appeal by special leave raises a short but interesting question of law relating to the interpretation of certain provisions of the (hereinafter referred to as the Act). The question is whether section 47 sub section (3) of the Act is attracted when an application is made by the holder of a permit for extension of the route for which the permit has been granted to him. In order to appreciate the question, it is necessary to state a few facts giving rise to the appeal. The appellants are a partnership firm and at all material times they held a stage carriage permit granted to them by the Regional Transport Authority for the route Dabra Karera via Lodi Mata extended upto Gwalior. It appears that on 22nd June 1978 this route for which the permit was held by the appellants was modified at the request of the appellants and the portion of the route from Karera to Shivpuri was deleted. Thereafter by a Notification dated 4th August 1978 certain routes were nationalised under Scheme No. 11 M which came into force with effect from 25th September 1978 and under clause 7 (b) of this Scheme, the portion of the route from Shivpuri to Satanwara was deleted and the permit of the appellants remained operative only for the remaining portion of the route, namely, Satanwara Gwalior via Dabra. This state of affairs conti 292 nued from 25th September 1978 until 18th December 1978 when the State Government by a Notification issued in exercise of the powers conferred under sub section (2) of section 68 F of the Act made the following modifications in the various schemes approved by it under section 68 D sub section (2), including Scheme No. 11 M: "Notwithstanding anything contained in this Scheme, the private operators may be permitted to ply stage carriages for hire or reward subject to the following conditions, namely: (1) Whereas the notified route connects a district Head quarter, the portion thereof covered by the permit shall not exceed 20 kilometers and in other cases it shall not exceed 10 kilometers. (2) The private operators shall ply the stage carriage over the distance, other than the distance of the notified route, which shall not be less than twice the distance of the notified route covered by the permit; (3) The private operators shall not pick up or set down passengers on the notified route. Since this modification permitted plying of stage carriages by private operators even on portion of a nationalised route connecting a district head quarter and not more than 20 kms. in length, the appellants made an application to the Regional Transport Authority for restoring the portion of the route from Shivpuri to Satanwara on the ground that Shivpuri was a district head quarter and the portion of the route between Shivpuri and Satanwara was less than 20 kilometers. The Regional Transport Authority however took the view and in our opinion rightly, that the modification made by the State Government in Scheme No. 11 M under the Notification dated 18th December 1978 did not have any retrospective effect and the appellants were therefore not entitled to automatic restoration of the portion of the route from Shivpuri to Satanwara and in this view, the Regional Transport Authority rejected the application of the appellants. The appellants thereupon filed a regular application in the prescribed form for extension of the route specified in their permit 293 from Satanwara to Shivpuri. The application was published in the Gazette on 11th April 1980 and on coming to know about it, M.P. State Road Transport Corporation which is the 2nd respondent before us filed its objections against the grant of such extension. The application together with the objections was heard by the Regional Transport Authority and by an order dated 11th September 1980 the Regional Transport Authority rejected the application on two grounds. The first ground was that "the specific order of the State Government curtailing the Satanwara Shivpuri portion of applicant 's permit while approving Scheme No. 11 M cannot be treated as having been amended by the general amendment made to the scheme" and the other was that no extension of the route could be granted without following the procedure laid down in Section 47 sub section (3) of the Act. This order made by the Regional Transport Authority was challenged by the appellants in a writ petition filed in the High Court of Madhya Pradesh. There were two grounds of challenge urged on behalf of the appellants in support of the writ petition but we are concerned in this appeal with only one ground and hence we need not refer to the other ground and burden our judgment with a discussion of that ground. The ground which was seriously pressed before the High Court and repeated before us was that Section 47 sub section (3) has no application where what is sought by an applicant is not the grant of a new permit on a specified route under section 48 but merely an extension of the route under an existing permit under sub section (8) of section 57 and the order made by the Regional Transport Authority rejecting the application of the appellants on the ground of non compliance with sub Section (3) of section 47 was therefore plainly wrong. The appellants sought to support this ground by relying on the decision of the Madhya Pradesh High Court in Dewan Chand vs State Transport Authority. But the learned Judge who heard the writ petition observed that the decision in Dewan Chand 's case (supra) was contrary to the view taken by this Court in R. Obliswamy Naidu vs Regional State Transport Appellate Tribunal and Delhi Transport Undertaking vs Zamindar Motor Transport Company and held that by reason of the express language of sub section (8) of section 57 an application for 294 extension of the route specified in an existing permit was tantamount to an application for grant of a new permit and hence it was subject to the provisions of section 47 sub section (3) and it could not be considered without following the procedure prescribed by sub section (3) of section 47. The learned Judge on this view rejected the writ petition of the appellants. The appellants thereupon preferred the present appeal with special leave obtained from this Court. The only question which arises for consideration in this appeal is as whether section 47 sub section (3) is attracted when an application is made by a holder of a permit for extension of the route specified in the permit. The determination of this question depends upon a true interpretation of some of the relevant provisions of the Act. Section 2 is the definition section and clause (28A) of this section defines route to mean "a line of travel which specifies the high way which may be traversed by a motor vehicle between one terminus and another". Chapter IV is the only material chapter for our purpose and as its heading shows, it deals with control of transport vehicles. Section 42 provides that no owner of a transport vehicle shall use or permit the use of the vehicle in any public place save in accordance with the conditions of a permit granted or countersigned by a Regional or State Transport Authority or the Commission authorising the use of the vehicle in that place in the manner in which the vehicle is being used. Section 43 confers certain powers on the State Government to issue directions to the State Transport Authority and section 44 provides for the constitution of State Transport Authority and Regional Transport Authorities for each State. Section 45 specifies the authority to which an application for a permit must be made and what particulars an application for a permit shall contain is prescribed in section 46. Section 47 sub section (1) lays down what matters shall be taken into account by the Regional Transport Authority in considering an application for a stage carriage permit and various other provisions regarding reservation of certain percentage of stage carriage permits for Scheduled Castes and Scheduled Tribes and persons belonging to economically weaker sections of the community are made in sub section (1A) to sub section (1H) of section 47. Then follows sub section (3) of section 47 which is in the following terms: "47 (3). A Regional Transport Authority may, having regard to the matters mentioned in sub section (1) limit the number of stage carriages generally or of any specified 295 type for which stage carriage permits may be granted in the region or in any specified area or on any specified route within the region. " Section 48 sub section (1) provides that, subject to the provisions of section 47, a Regional Transport Authority may, on an application made to it under section 46, grant a stage carriage permit in accordance with the application or with such modifications as it deems fit or refuse to grant such a permit, provided that no such permission shall be granted in respect of any route or area not specified in the application. Sub section (3) of section 48 empowers the Regional Transport Authority while granting a stage carriage permit to attach to the permit any one or more of the conditions set out in that sub section. One of the conditions which may be attached to the permit is that set out in clause (xxi) and it reads as follows: "48(xxi): that the Regional Transport Authority may, after giving notice of not less than one month (a) vary the conditions of the permit; (b) attach to the permit further conditions; Provided that the conditions specified in pursuance of clause (i) shall not be varied so as to alter the distance covered by the original route by more than 24 kilometres, and any variation within such limits shall be made only after the Regional Transport Authority is satisfied that such variation will serve the public convenience and that it is not expedient to grant a separate permit in respect of the original route as so varied or any part thereof. " Sections 49 to 51 deal with an application for grant of contract carriage permit while sections 52 and 53 deal with an application for grant of private carrier 's permit. We are not concerned with these provisions and hence we need not refer to them. So also we are not concerned with sections 54 to 56 which deal with application for public carrier 's permit. Section 57 is however an important section and in its various provisions it lays down the procedure in applying for and granting permits. Sub section (2) of section 57 296 prescribes the time within which an application for a stage carriage permit should be made and sub Sections (3) to (7) lay down the procedure which must be followed by the Regional Transport Authority while dealing with an application for a stage carriage permit made before it. Sub section (8) of section 57 is the material provision which calls for interpretation and it runs as follows: "57 (8): An application to vary the conditions of any permit, other than a temporary permit, by the inclusion of a new route or routes or a new area or, in, the case of a stage carriage permit, by increasing the (number of trips above the specified maximum or by altering the route covered by it) or in the case of a contract carriage permit or a public carrier 's permit, by increasing the number of vehicles covered by the permit, shall be treated as an application for the grant of a new permit. " The argument of the respondents on these provisions was, and this argument found favour with the High Court, that an application for extension of the route specified in a permit is nothing but an application to vary the conditions of the permit by altering the route covered by it and it is therefore required by sub section (8) of section 57 to be treated as an application for grant of a new permit and hence, by reason of section 48, the grant of such an application for extension must be held to be subject to the provisions of section 47 sub section (3) and no such extension can be granted without following the procedure prescribed by sub section (3) of section 47. The validity of this argument was assailed before us on behalf of the appellants and it was contended that the fulfilment of the condition set out in sub section (3) of section 47 was not a part of the procedure for consideration of an application for extension of the route specified in a permit and when sub section (8) of section 57 provided that such an application shall be treated as an application for grant of a new permit, what was sought to be incorporated was merely the procedure set out in sub section (3) to (7) of Section 57 and not pre condition for consideration of such an application set out in sub section (3) of Section (47). This contention, it was submitted on behalf of the appellants, was supported by Clause (xxi) of sub section (3) of Section 48, because if the condition set out in that clause is attached to a permit, the Regional Transport Authority can suo motu extend the route specified in the permit upto a distance of 297 24 k.ms. for serving the public convenience, without being subject to the provisions of sub section (3) of Section 47 and if the Regional Transport can do so suo motu without being required to follow the procedure of sub section (3) of Section 47, there is no reason why the Regional Transport Authority should not be entitled to do so on an application for extension made by the holder of the permit. These were the rival arguments urged on behalf of the parties and we shall now proceed to consider them. The permit held by the appellants in the present case, after the deletion of the portion of the route from Shivpuri to Satanwara was operative only for the remaining portion of the route namely, Satanwara Gwalior via Dabra and in view of the modification made in Scheme No. 11 M by the notification issued by the State Government under section 68F sub section (2) on 18th December, 1978, the appellants applied for extension of the route from Satanwara to Shivpuri, a distance less than 20 kilometers. The question it whether this application could be considered by the Regional Transport Authority without first determining under section 47 sub section (3) the number of stage carriages for which permits may be granted for the route Shivpuri Satanwara Gwalior via Dabra, because if the extension applied for were granted, that would be the route for which the permit would be operative. Now, it is clear that it was a condition of the permit, after the deletion of the portion of the route from Shivpuri to Satanwara, that the appellants shall use their vehicle or vehicles only on the route Satanwara Gwalior via Dabra. The application of the appellants for extension of this route by including the portion from Shivpuri to Satanwara was, therefore, in effect and substance, an application for varying this condition of the permit by extending the route and it clearly fell within the terms of sub section (8) of section 57. So far there was no dispute between the parties, but at this point the agreement between the parties ended and a controversy arose as to what was the consequence and effect of the applicability of sub section (8) of section 57 to this application made by the appellants. There can be little doubt that under terms of sub section (8) of section 57, this application of the appellants was liable to be "treated as an application for the grant of a new permit". But the question is: for what purpose and which of the provisions of the Act could be said to be attracted to this application by reason of the requirement that it should be treated as an application for the grant a new permit. The argument of the respondents was that no application for grant of a new permit can be entertained by the Regional Transport Authority under section 48, unless the number of stage carriages 298 for which permits may be granted for the particular route is first determined by the Regional Transport Authority under sub section (3) of section 47, and, therefore, the consequence of treating the application of the appellants for extension of the route as an application for grant of a new permit was that no extension could be granted by the Regional Transport Authority unless the requirement of section 47 sub section (3) was first complied with and the number of stage carriages for which permits may be granted on the extended route was determined under that provision. But we do not think this argument is well founded. It is undoubtedly true that having regard to the several decisions of this Court and particularly, the decision in Mohd. Ibrahim vs State Transport Appellate Tribunal, Madras, the law must now be taken to be well settled that an application for grant of a new permit cannot be entertained by the Regional Transport Authority under section 48, unless the limit of the number of stage carriages for which permits may be granted is first determined under section 47 sub section (3). There are two independent steps required to be taken in connection with the grant of a permit, the first being the determination by the Regional Transport Authority under section 47 sub section (3) of the number of stage carriages for which permits may be granted and the second being that "thereafter applications for stage carriage permits can be entertained" and, therefore, it would mean that before an application for grant of a permit can be entertained by the Regional Transport Authority, there would be a determination under section 47 subsection (3). Ray, J., as he then was speaking on behalf of the Court observed in Ibrahim 's case (supra): "In our opinion, the provisions of the Act in regard to stage carriage permits have the following consequences. If the Regional Transport Authority were to appoint a date for the receipt of applications for the grant of stage carriage permits, the Regional Transport Authority should fix the limit of the number of permits which might be granted and then notify the same under section 57 (2) of the Act. If, on the other hand, applications were sent by persons suo motu for the grant of permit the applications would have to be published and the representations would have to be asked for. The proviso of 299 section 57 (3) of the Act furnishes the answer that if the grant of any permit in accordance with the application would have the effect of increasing the number of permits beyond the limit fixed under section 47 (3) of the Act, the Regional Transport Authority might summarily refuse the application without following the procedure laid down in section 57 of the Act. In other cases, the proper stage for fixing the limit under section 47 (3) of the Act would be after applications are received and before the same would be published under section 57 (3) of the Act asking for representations. If however the Regional Transport Authority would not increase or modify the number of permits which already exist, the grant of an application would mean transgressing the limit fixed, and procedure laid down in section 57 (3) of the Act need not than be followed. On the other hand, if the Regional Transport Authority on receipt of applications would decide upon the limit of permits and the grant thereof would be with in the limit prescribed then the procedure laid down in section 57 (3) of the Act would be followed. " There can, therefore, be no doubt that if an application for varying the condition of a permit by extension of the route specified in the permit were equated wholly with an application for grant of a new permit and the permit for the extended route were to be regarded as a new permit, the procedure prescribed in section 47 sub section (3) would have to be followed and the number of stage carriages for which permits may be granted on the extended route would have to be determined before the application could be entertained by the Regional Transport Authority. But we do not think that the prescription in sub section (8) of section 57 that an application for varying the condition of a permit by extension of the route shall be treated as an application for grant of a new permit has effect of equating such an application with an application for grant of a new permit for all purposes so as to attract the applicability of sub section (3) of section 47. Section 57 deals with the procedure in applying for and granting permits and sub section (3) to (7) lay down the procedure which must be followed in considering and deciding, inter alia, an application for grant of a stage carriage permit. Sub section (8) follows upon sub section (3) to (7) and is part of the same section which has a definite object and scheme of providing the procedure for considering and granting an application and therefore, when it 300 provides that an application to vary the conditions of a permit by the inclusion of new route or routes or new area or by increasing the number of trips above the specified maximum or by altering the route covered by it shall be treated as an application for grant of a new stage carriage permit it is obviously intended to incorporate and make applicable the procedure set out in the preceding sub section (3) to (7) to such an application. The context in which sub section (8) occurs and its juxtaposition with sub section (3) to (7) in section 58 clearly indicate that what is sought to be made applicable to an application referred to in sub section (8) by treating it as an application for grant of a new permit, is the procedure set out in sub section (3) to (7) of section 58 and nothing more. The requirement spelt out in sub section (3) of section 47 that the number of stage carriages for which permits may be granted on any particular route must be first determined before an application for grant of a stage carriage permit can be entertained by the Regional Transport Authority under section 48, is obviously not a part of the procedure for considering an application for grant of a permit; it is a condition precedent before an application for grant of a permit can be considered and granted. This condition precedent cannot be said to have been incorporated by reference under sub section (8) of section 57. An application to vary the conditions of a permit as set out is undoubtedly to be treated as an application for grant of a new permit, but that is only for the purpose of applying the procedure set out in sub section (3) to (7) of that section. It is not an application for a new permit and if it is granted, the permit for the extended route does not become a new permit in the hands of the applicant. It is the same permit which now, after the granting of the application, covers the extended route. It may be possible to say that where a totally new route is sought to be included by an application to vary the conditions of a permit or the alteration of the route sought by such an application is of such a drastic character that it becomes substantially a new route, the application, though in form an application to vary the conditions of the permit, would in effect a and substance, be an application for grant of a new permit and in such a case, a view may conceivably be taken with some degree of plausibility that the number of stage carriages for which permits may be granted on such new route should first be determined under section 47 sub section (3) before the application to vary the conditions of the permit can be entertained. An applicant for a permit on a route which is not merely technically, but in truth and reality a different route, distinct from the original route, may not be permitted to defeat the provision enacted in section 47 sub section (3) by 301 labelling his application as one for varying the conditions of the permit and in such a case, the procedure set out in section 47 sub section (3) may have to be complied with before the Regional Transport Authority can consider and grant the application. But where an application merely seeks a short extension of the route specified in the permit as in the present case, it would not be appropriate to say that it is an application for grant of a new permit, though technically the extended route may not be regarded as the same as the original route and where such is the case, it would not be necessary to comply with the procedure set out in sub section (3) of Section 47. We are, therefore, of the view that the High Court was in error in holding that the application made by the appellants for extension of the route specified in their permit from Satanwara to Shivpuri could not be considered by the Regional Transport Authority with out following the procedure prescribed under sub section (3) of Section 47. We accordingly allow the appeal, set aside the judgment of the High Court as also the order made by the Regional Transport Authority and remit the case back to the Regional Transport Authority for considering the application of the appellants in accordance with law in the light of the observations contained in this judgment. There will be no order as to costs of the appeal. S.R. Appeal allowed.(...TRUNCATED)

The appellants held stage carriage permit granted to them by the Regional Transport Authority for the route Dabra Karera Via Lodi Mato extended upto Gwalior. On 22 6 1978, this route for which the permit was held by the appellants was modified, at their own request, by deleting the portion of the route from Karera to Shivpuri. By a notification dated 4 8 1978 certain routes were nationalised under Scheme No. 11 M which came into effect from 25 9 1978, including deletion of the portion of the route from Shivpuri to Satanwara, with the result the permit of the appellants remained operative only for the remaining portion of the route namely, Satanwara Gwalior Via Dabra. Effective from 19 12 1978, the State Government issued another Notification making modifications in the route schemes. Since this modification permitted plying of stage carriages by private operators even on a portion of a nationalised route connecting a district headquarters and not more than 20 KMs in length, the appellants made an application to the Regional Transport Authority for restoring the portion of the route from Shivpuri to Satanwara on the ground that Shivpuri was a district headquarter and the portion of the route from Shivpuri and Satanwara was less than 20 KMs. The Regional Transport Authority rejected the said application on the ground that the Notification dated 18 12 1978 did not have any retrospective effect and therefore, the appellants were not entitled to automatic restoration of the portion of the route from Shivpuri to Satanwara. The appellants thereupon filed an application in the prescribed form for extension of the route specified in their permit from Satanwara to Shivpuri. The said application was rejected after hearing the objections on two grounds, namely (i) the specific order of the State Govt. Curtailing the Satanwara Shivpuri portion of the applicants ' permit, while approving Scheme 11 M cannot be treated as having been amended by the General Amendment to the Scheme, and (ii) no extension of the route could be granted without following the procedure laid down in Section 47(3) of the Act. This order of the Regional Transport Authority was challenged by the appellants in a writ petition filed in the High Court of Madhya Pradesh. The High Court rejected the petition holding that by reason of the express language of Sub Section (8) of Section 57, an application for extension of the route specified in an existing permit was tantamount to an application for grant of a new permit and hence 289 it was subject to the provisions of Section 47(3) and it could not be considered without following the procedure prescribed by Section 47(3). Hence the appeal after obtaining special leave of the Court. Allowing the appeal, the Court HELD: 1.1 The application made by the appellants for extension of the route specified in their permit from Satanwara to Shivpuri could be considered by the Regional Transport Authority without following the procedure prescribed under Sub Section (3) of Section 47. [297 E H] 1.2 However, under the terms of Sub Section (8) of Section 57 this application of the appellants was liable to be treated as an application for the grant of a new permit, since in effect and substance, it was an application for varying the condition of the permit by extending the route from Shivpuri to Satanwara. But the question is for what purpose ? [297 G H] 2.1 Having regard to the several decisions of the Supreme Court and particularly the decision in Mohd. Ibrahim vs State Transport Appellate, Tribunal, Madras, , the law is well settled that an application for grant of a new permit cannot be entertained by the Regional Transport Authority under Section 48, unless the limit of the number of stage carriages for which permits may be granted is first determined under section 47(3). There are two independent steps required to be taken in connection with the grant of a permit, the first being the determination by the Regional Transport Authority under Section 47(3) of the number of stage carriages for which permits may be granted and the second being that "thereafter applications for stage carriage permits can be entertained" and, therefore, it would mean that before an application for grant of a permit can be entertained by the Regional Transport Authority, there should be a determination under Section 47(3). Therefore, if an application for varying the condition of a permit by extension of the route specified in the permit were equated wholly with an application for grant of a new permit and the permit for the extended route were to be regarded as a new permit, the procedure prescribed in Section 47(3) would have to be followed and the number of stage carriages for which permits may be granted on the extended route would have to be determined before the application could be entertained by the Regional Transport Authority. [298 C E; 299 E F] 2.2 But, the prescription in Sub Section (8) of Section 57 that an application for varying the condition of a permit by extension of the route shall be treated as an application for grant of a new permit has not the effect of equating of such an application with an application for grant of a new permit for all purposes so as to attract the applicability of Sub Section (3) of Section 47. [299 F G] 3.1 Section 57 deals with the procedure in applying for and granting permits and Sub Sections (3) to (7) lays down the procedure which must be followed in considering and deciding, inter alia, an application for grant of a stage carriage permit. Sub Section (8) follows upon Sub Sections (3) to (7) 290 and is a part of the same Section which has a definite object and Scheme of providing the procedure for considering and granting an application and therefore, when it provides that an application to vary the conditions of a permit by the inclusion of new route or routes or new area or by increasing the number of trips above the specified maximum or by altering the route covered by it shall be treated as an application for grant of a new stage carriage permit, it is obviously intended to incorporate and make applicable the procedure set out in the preceding Sub Sections (3) to (7) to such an application. The context in which Sub Section (8) occurs and its juxtaposition with Sub Section (3) to (7) in Section 58 clearly indicate that what is sought to be made applicable to an application referred to in Sub Section (8) by treating it as an application for grant of a new permit is the procedure set out in Sub Section (3) to (7) of Section 58 and nothing more. [299 G H; 300 A C] 3.2 The requirement spelt out in Sub Section (3) of Section 47 that the number of stage carriages for which permits may be granted on any particular route must be first determined before an application for grant of a stage carriage permit can be entertained by the Regional Transport Authority under Section 48, is obviously not a part of the procedure for considering an application for grant of a permit; it is a condition precedent before an application for grant of a permit can be considered and granted. This condition cannot be said to have been incorporated by reference under Sub Section (8) of Section 57. An application to vary the conditions of a permit as set out in Sub Section (8) of Section 57 is undoubtedly to be treated as an application for grant of a new permit, but that is only for the purpose of applying the procedure set out in Sub Sections (3) to (7) of Section 57. It is not an application for a new permit and if it is granted, the permit for the extended route does not become a new permit in the hands of the applicant. It is the same permit which now after granting of the application covers the extended route. [300 C F] 3.3 Where a totally new route is sought to be included by an application to vary the conditions of a permit or the alteration of the route sought by such an application is of such a drastic character that it becomes substantially a new route, the application, though in form an application to vary the conditions of the permit, would in effect and substance, be an application for grant of a new permit and in such a case, a view may conceivably be taken with some degree of plausibility that the number of stage carriages for which permits may be granted on such new route should first be determined under Sub Section (3) of Section 47 before the application to vary the conditions of the permit can be entertained. [300 F H] An applicant for a permit on a route which is not merely technically, but in truth and reality a different route, distinct from the original route, may not be permitted to defeat the provision, enacted in Sub Section (3) of Section 47, by labelling his application as one for varying the conditions of the permit and in such a case, the procedure set out in Section 47 (3) may have to be complied with before the Regional Transport Authority can consider and grant the application. [300 H; 301 A] 291 But where an application merely seeks a short extension of the route specified in the permit, as in the present case, it would not be appropriate to say that it is an application for grant of a new permit, though technically the extended route may not be regarded as the same as the original route and where such is the case, it would not be necessary to comply with the procedure set out in Sub Section (3) of Section 47 of the Motor Vehicles Act. [301 B C](...TRUNCATED)

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Special Leave Petition (Civil) No. 15667 of 1987. 813 From the Judgment and Order dated 11.11.1987 of the Patra High Court in Appellate Decree No. 133 of 1983. G.L. Sanghi, S.K. Mehta, M.K. Dua, S.M. Sarin and Aman Vachher for the Petitioner. Salman Khurshid, Irshad Ahmad, V.D. Phadke and L.R. Singh for the Respondents. The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J. This is a petition for leave to appeal against the judgment and order dated 11th November, 1987 of the High Court of Patna. On 16th January, 1958 a lease deed was executed between the lessee Latifur Rehman and lessor Khaja Midhat Noor (hereinafter called the respondent) with permission to sub lease the same. The said Latifur Rehman sub leased the premises to Burmah Shell Oil Distributing Company (the petitioner herein) for running a petrol pump and making necessary constructions thereon. The lease was for a period of ten years which expired on 16th January, 1968. It appears further that after the lease period had expired, the sub lessee, petitioner continued to pay the rent which was being accepted continuously from month to month by the respondent, the lessor. A notice was issued by the respondent to the lessee terminating the lease and for giving vacant possession of the land by the 15th January, 1973 and also requiring the removal of the buildings, plant, etc., by the 16th January, 1973. In the last two paras of the said notice, it was stated that the lessee was to surrender the lease hold land on the expiry of 15th January, 1973. No notice was given separately to the petitioner terminating its lease. A suit for ejectment was filed thereafter. The lessee Latifur Rehman did not contest the suit for ejectment. The petitioner, however, contested that proceeding. The learned Munsiff I, Gaya, by his judgment dated 8th May, 1979 dismissed the suit holding that the notice terminating the lease was necessary and the notice in this case was invalid. The plea of the landlord that the tenancy expired by afflux of time, was rejected. On 22nd February, 1983 the 1st Additional Sub Judge, Gaya allowed the appeal of the landlord and held that the notice terminating the tenancy and asking the petitioner to surrender by the 15th January, 1973 was a valid notice. The main question involved is, whether there was a valid termination of the lease and as such the sub lessee, the petitioner herein was 814 bound to deliver vacant possession. A written statement had been filed by the petitioner, the sub lessee, wherein it was, inter alia, stated that it was holding over the lease hold property after the expiry of the lease by paying rent. No notice terminating tenancy was received by it. The validity of the notice to the lessee was also challenged. The trial Court held that the lease was not extended for a fixed period of five years in absence of any written instrument. The following two questions of law were re formulated by the High Court: (1) In absence of any registered instrument executed by both the parties i.e. the lessor and the lessee after the period stipulated in Ext. 4 i.e. the period of ten years, can it be said that the lease was extended automatically for a period of five years in terms of Ext. 4 or further whether the lessee was holding the suit property as tenancy from month to month? (2) If the first part of question (1) is held in negative and second part in the affirmative, as a consequence of which it must be held that the lease was required to be determined, whether the notice as contained in Ext. 7 validly terminated the lease of the lessee? Indubitably, the lessee came in possession of the property in question on 16th January, 1958. The lease was for a period of ten years with a right of renewal for a further period of five years. After the expiry of ten years, no instrument was executed by the parties and the lessee continued to remain in possession of the suit property. The lessor accepted the rent and allowed the lessee to continue. It is relevant in this connection to refer to the provisions of the (hereinafter called 'the Act '). Section 106 of the Act deals with the duration of certain leases in absence of written contract or local usage and section 107 deals how leases are to be made. These sections read as follows: "106. In the absence of a contract or local law or usage to the contrary, a lease of immovable property for agricultural or manufacturing purposes shall be deemed to be a lease from year to year, terminable, on the part of either lessor or lessee, by six months ' notice expiring with the end of a year of the tenancy; and a lease of immovable property for 815 any other purpose shall be deemed to be a lease from month to month, terminable, on the part of either lessor or lessee, by fifteen days ' notice expiring with the end of a month of the tenancy. Every notice under this section must be in writing, signed by or on behalf of the person giving it, and either be sent by post to the party who is intended to be bound by it or be tendered or delivered personally to such party, or to one of his family or servants, at his residence, or if such tender or delivery is not practicable affixed to a conspicous part of the property. A lease of immovable property from year to year, or for any term exceeding one year, or reserving a yearly rent, can be made only by a registered instrument. All other leases of immovable property may be made either by a registered instrument or by oral agreement accompanied by delivery of possession. Where a lease of immovable property is made by a registered instrument, such instrument or, where there are more instruments than one, each such instrument shall be executed by both the lessor and the lessee: Provided that the State Government may, from time to time, by notification in the Official Gazette, direct that leases of immovable property, other than leases from year to year, or for any term exceeding one year, or reserving a yearly rent, or any class of such leases, may be made by unregistered instrument or by oral agreement without delivery of possession. " In view of the paragraph 1 of section 107 of the Act, since the lease was for a period exceeding one year, it could only have been extended by a registered instrument executed by both the lessor and the lessee. In the absence of registered instrument, the lease shall be deemed to be "lease from month to month". It is clear from the very language of section 107 of the Act which postulates that a lease of immovable property from year to year, or for any term exceeding one year, or reserving a yearly rent, can be made only by a registered instrument. In the absence of registered instrument, it must be a 816 monthly lease. The lessee and the sub lessee in the facts of this case continued to remain in possession of the property on payment of rent as a tenant from month to month. The High Court so found. We are of the opinion that the High Court was right. Section 116 of the Act which was placed before the High Court deals with the effect of holding over and provides as follows: "116. If a lessee or under lessee of property remains in possession thereof after the determination of the lease granted to the lessee, and the lessor or his legal representative accepts rent from the lessee or under lessee, or otherwise assents to his continuing in possession, the lease is, in the absence of an agreement to the contrary, renewed from year to year, or from month to month, according to the purpose for which the property is leased, as specified in section 106. " It was submitted before the High Court that this was not a case of continuing of old tenancy for a period of five years but in view of the clear provisions of section 107 which we have noted hereinbefore and in the absence of a registered instrument, it must be held that it was holding over and not continuation of old tenancy for a further period of five years. That would be the harmonious construction of section 107 read with section 116 in the facts of this case. We are of the opinion that the High Court was right that the tenancy was automatically determined on the expiry of ten years which was stipulated in Ext. Thereafter the lessee continued to hold the property and the lessor accepted the rent. The lease was, therefore, renewed from month to month because it was not the case of any party that it was for agricultural purposes. In that view of the matter, the termination of the lease could only be by giving a valid notice. Such notice was given to the lessee but not to the sub lessee. The respondent 's case is that a notice to sub lessee was not necessary. It was contended on behalf of the appellant that by Ext. 7 the lessee was asked to quit the lease hold premises on the expiry of 15th June, 1973. Admittedly, in this case, the lease was executed on 16th January, 1958 and from that date the lease came into existence. For computing the period of ten years the 16th January, 1958 had to be excluded. The tenancy was, therefore, terminated on the expiry of 16th of the month. The notice in the instant case of the quit which was Ext. 7 before the Court dated 30th November, 1972, 817 was given on behalf of the respondent to Latifur Rehman lessee. In paragraph 4 of Ext. 7 it was stated that the lessee was to deliver the possession of the lease hold property by 16th January, 1973. In paragraph 5 of Ext. 7 the lessee and sub lessee were required to remove the buildings, plants etc. by the 16th January, 1973. In the last but one and the last paragraph of Ext. 7 it was stated that the lessee was to surrender the properties of the lease hold land on the expiry of 15th January, 1973. The question is whether there was a valid notice. The High Court held that in the facts of this case, there was a valid notice of termination and after the valid notice of termination of the lease to the lessee, there was no need to give a fresh notice to the sub lessee. Notice must be read in the context of the facts of each particular case having regard to the situation of the parties to whom it is addressed. In Harihar Banerji and others vs Ramasashi Roy and others, 45 Indian Appeals 222 at page 225, the Judicial Committee observed as follows: ". .that notices to quit, though not strictly accurate or consistent in the statements embodied in them, may still be good and effective in law; that the test of their sufficiency is not what they would mean to a stranger ignorant of all the facts and circumstances touching the holding to which they purport to refer, but what they would mean to tenants presumably conversant with all those facts and circumstances; and, further, that they are to be construed, not with a desire to find faults in them which would render them defective, but to be construed ut res magis valeat quam pereat. " This is how the notices should be literally construed. This decision was relied upon by this Court in Mangilal vs Suganchand Rathi; , There, however, the facts were different. There the defendant was a tenant of the plaintiffs. The defendant was in arrears of rent for one year to the extent of Rs. 1020. On April 11, 1959 the plaintiffs served a notice on the defendant requiring him to remit to them Rs.1020 within one month from the date of service of notice, failing which suit for ejectment would be filed. This notice was received by the defendant on April 16, 1959. On June 25, 1959 the defendant sent a reply to the notice enclosing with it a cheque for Rs.1320. This amount consisted of the rental arrears as well as the rent due right up to June 30, 1959. The plaintiffs accepted the cheque and cashed it and gave a fresh notice on July 9, 1959 requiring the defen 818 dant to vacate the premises by the end of the month of July. The defendant did not vacate the premises. Then the plaintiffs filed a suit to eject the defendant upon the ground that the latter was in arrears of rent for one year and had failed to pay the arrears within one month of the service of the notice dated April 11, 1959 upon him. From the undisputed facts it was clear that the defendant was in fact in arrears of rent and had failed to pay it within the time prescribed by cl.(a) of section 4 of the Madhya Pradesh Accommodation Control Act, 1953. It was held that though the notice dated 11th April, 1959 could be construed to be composite notice under section 4(a) of the Accommodation Act and section 106 of the it was ineffective under section 106 of the because it was not a notice of 15 clear days. In that case, the defendant had only 14 clear days ' notice. Reference was made to the aforesaid decision of Harihar Banerji vs Ramsashi Roy (supra) which was distinguished by this Court. This Court held that notice under section 106 of the Act must be strictly complied with. In so holding this Court relied on a decision of the Calcutta High Court in Subadini vs Durga Charan Law, I.L.R. which was construing a notice contemplated by section 106 of the Act and had held that in calculating the 15 days ' notice the day on which the notice was served was excluded and even if the day on which it expired was taken into account it would be clear that the defendant had only 14 clear days ' notice. This position was again reiterated by the Calcutta High Court in Gobinda Chandra Saha vs Dwarka Nath Patita, A.I.R. This Court affirmed this view that notice must be understood in the light of Harihar Banerji vs Ramsashi Roy (supra). This Court held that the suit was actually based upon the notice dated July 9, 1959 which gave more than 15 days ' clear notice to the defendant to vacate the premises. This notice was a valid notice under section 106 of the Act. In the instant case if all the paragraphs of Ext. 7 which is a notice in the instant case are read together in harmony it would be manifest that the lessee was directed to hand over the lease hold property on 16th January, 1973. In the aforesaid view of the matter, in our opinion, there was a valid notice of termination of the lease of the lessee. In any event the lessee did not dispute this contention. The lessee accepted a valid termination of the lease hold property. In Roop Chand Gupta vs Raghuvanshi (Pvt.) Ltd. and another; , , it was held by this Court that it is quite clear that law does not require that the sub lessee need be made a party, if there was a valid termination of the lease. This Court reiterated that in 819 all cases where the landlord instituted a suit against the lessee for possession of the land on the basis of a valid notice to quit served on the lessee and did not implead the sub lessee as a party to the suit, the object of the landlord is to eject the sub lessee from the land in execution of the decree and such an object is quite legitimate. The decree in such a suit would bind the sub lessee. This Court noted at page 1892 of the report that this might act harshly on the sub lessee; but this was a position well understood by him when he took the sub lease. The law allows this and so the omission cannot be said to be an improper act. In the facts of this case these observations apply more effectively. The termination of the lease was not disputed by the lessee. There is no allegation of any collusion between the lessee and the respondent. In that view of the matter, we are of the opinion that the High Court was right. The suit in question was instituted in May, 1979 and the valid notice to quit was given long after the expiry of the period of lease. The sub lessee had long innings. It is time for him to quit. There is no merit in this petition. The special leave petition fails and is, therefore, dismissed with costs. R.S.S. Petition dismissed.(...TRUNCATED)

On 16th January, 1958 a lease deed was executed between the lessee and the lessor respondent in respect of the demised land for a period of ten years, with a right of renewal for a further period of five years, and with permission to sub lease the same. The lessee sub leased the premises to the petitioner for running a petrol pump. After the expiry of the lease period on 16th January, 1968, the lessor continued to accept the rent from month to month. However, no fresh instrument was executed by the parties. The lessor issued on 30th November, 1972 a notice to the lessee terminating the lease and for giving vacant possession of the land on the expiry of 15th January, 1973 after removing the structures by the 16th January, 1973. No notice was given separately to the petitioner. The lessee did not contest the suit filed on the basis of the notice. The petitioner contested the proceedings and contended that it was holding over after the expiry of the lease, that no notice terminating tenancy was received by it, and that the notice was invalid. The trial Court dismissed the suit holding that the notice terminating the lease was necessary and the notice in this case was invalid. The Court also rejected the lessor 's plea that the tenancy expired by afflux of time. The trial Court, however, held that the lease was not extended for a fixed period of five years in absence of any written instrument. The 1st Additional Sub Judge allowed the lessor 's appeal and held the notice valid. The High Court upheld the appellate order. 812 Dismissing the special leave petition, it was, ^ HELD: (1) In view of paragraph 1 of section 107 of the a lease of immovable property from year to year, or for any term exceeding one year, or reserving an yearly rent, can be made only by a registered instrument. In the absence of a registered instrument, it must be a monthly lease. [815G H] (2) The High Court was right in holding that the lessee and the sub lessee, in the facts of this case, continued to remain in possession as a tenant from month to month. [816A B] (3) The High Court was right that the tenancy was automatically determined on the expiry of ten years. The lease was thereafter renewed from month to month which could only be terminated by giving a valid notice. [816E F] (4) The notice of termination must be read in the context of the facts of each particular case having regard to the situation of the parties to whom it is addressed. If all the paragraphs of the notice in the instant case are read together in harmony it would be manifest that the lessee was directed to handover the lease hold property on 16th January, 1973, and hence the notice was a valid notice of termination of the lease under section 106 of the Act. [817C;818F] (5) Law does not require that the sub lessee need be made a party, if there was a valid termination of the lease. In all cases where the landlord instituted a suit against the lessee for possession of the land on the basis of a valid notice to quit served on the lessee and did not implead the sub lessee as a party to the suit, the object of the landlord is to eject the sub lessee from the land in execution of the decree and such an object is quite legitimate. The decree in such a suit would bind the sub lessee. [818H;819A B] Harihar Banerji vs Ramsashi Roy, 45 Indian Appeals 222;Mangilal vs Suganchand Rathi, ; ;Subadini vs Durga Charan Law, I.L.R. ;Gobinda Chandra Saha vs Dwarka Nath Patita, A.I.R. 1915 Cal. 313 and Roop Chand Gupta vs Raghuvanshi (Pvt.) Ltd., ; , referred to.(...TRUNCATED)

5706.txt

"ivil Appeal No. 2840 of 1982.\nFrom the Judgment and Order dated 5.12.\n1979 of the Allahabad High (...TRUNCATED)

"The Appellant 's father purchased the house of respondent Nos. 1 and 2 with condition of repurchase(...TRUNCATED)

6585.txt

"Appeal No. 49 of 1972.\nAppeal from the Judgment and Order dated 24th December, 1970 of the Madhya (...TRUNCATED)

"Under section 2(g) of the Madhya Pradesh General Sales Tax Act the term 'goods ' means all kinds of(...TRUNCATED)

3815.txt

"Appeal No. 213 of 1967.\nAppeal from the Judgment and order dated February, 17th 1965 of the Patna (...TRUNCATED)

"By clause 4 of a will the testator bequeathed to his grand daughters T and S an absolute right in t(...TRUNCATED)

3038.txt