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Appeals Nos. 131, 131 A and 131 B of 1952. Appeals from the Judgment and Decree dated the 2nd day of February, 1950, of the High Court of Judicature at Madras (Satyanarayana Rao and Vishwanath Sastri JJ.) in Cases Referred Nos. 76 and 78 of 1946 and 32 and 56 of 1947. 259 C.K. Daphtary, Solicitor General for India (G. N. Joshi, with him) for the appellant. B. Somayya (Alladi Kuppuswami, with him) for the respondent. October 14. The Judgment of the Court was delivered by GHULAM HASAN J. These three appeals arise from the judgment and order of the Madras High Court dated 2nd February, 1950, delivered on a reference by the Income tax Appellate Tribunal (hereinafter referred to as 'The Tribunal '), whereby the High Court answered the first referred question in, the negative, and as regards the second question, Satyanarayana Rao J. answered it in the affirmative, while Viswanatha Sastri J. answered it in the negative, as a result of which the judgment of Satyanarayana Rao J. ultimately prevailed. They relate to the assessment for 1942 1943 and are filed by the Commissioner of Income tax, while Appeal No. 132 of 1952 which relates to 1943 1944 is filed by the assessee, and, is dealt with separately. The two question which were referred in respect of the first group of appeals are as follows: (1) Whether there is any material for the Tribunal 's finding that the appellants (respondents in this case) were being assessed on cash basis in the prior years? (2) Whether on the facts and in the circumstances of the case the Appellate Tribunal 's finding that the sum of Rs. 2,26,850 could not be assessed for the assessment year 1942 43 is correct in law? The assessee is a registered firm (hereinafter referred to as 'the firm ') consisting of K.R.M.T.T. Thiagaraja Chetty and his two sons. The firm is the managing agent of Shri Meenakshi Mills, Ltd., (hereinafter referred to as the Com pany) owning a, spinning mill at Madura. The firm also con ducted insurance business and the business of ginning cotton in a ginning factory at another place. Under the terms of L/B(D)2SCI 3(a) 260 the agreement the managing agents were entitled to a remu neration of Rs. 1,000 per mensem and a commission of I per cent. on all purchases, I per cent. on all sales and 10 per cent. commission on the net profits of the mills before allowing for ,depreciation. The firm had plenary powers of management of the affairs of the company subject to general supervision of the directors. It was to have charge and custody on behalf of the company of all the property, books of accounts, papers and documents and effects belonging to the company. It was required to keep at the expense of the company proper and complete books of account of all purchases and sales and of all payments made and moneys received on behalf of the company. It had to defray all the expenses of maintaining a suitable office and a staff of assistants and clerks sufficient to transact the business of the firm as managing agents of the company. Clause 16 is most important and lays down that the firm be at liberty to retain, reimburse, and pay themselves out of the funds of the company, all charges and expenses, legal or otherwise and all the costs and expenses of providing and maintaining offices for the company and the salaries of clerks, servants, agents or workmen and all moneys expended by them on behalf of the company and all sums due to the firm for commission or otherwise. The company made considerable profit in the assessment year 1942 1943 and the firm became entitled to commission to the tune of Rs. 2,26,850 5 0. The firm did not show this sum in the return on the ground that it was not actually re ceived in the year of account, viz., by the 31st March, 1942. It relied upon a resolution of the Board of Directors of the company, dated the 30th March, 1942, by which they had decided to keep the aforesaid amount in suspense without paying it on the ground that an amount of two lakhs odd was due to the company from the firm. It appears that the firm owed a debt to the company for a long time past which was outstanding. The firm wrote on the 30th March, 1942, to the company requesting that the debt be written off. The Firm also wrote that on account of the extraordinary increase in the 261 volume of business. it found it difficult to bestow adequate attention on all the aspects of the mill business and proposed that the direct responsibility for sales and purchases may be transferred to some other agency, leaving the general supervision over the entire management in the firm 's hands. The firm agreed to forego its commission on purchases and sales and agreed to take half of the commission on the net profits. The directors by their resolution, passed on the same date, refused to write off the amount without consulting the general body of shareholders and pending the settlement of the dispute resolved, to keep the amount in suspense. The Income tax Officer held that the firm followed the mercantile method of accounting and not the cash basis and that the income having accrued become assessable whether received or not. The actual amount payable to the firm in, accordance with the terms and conditions of the agreement for the year 1942 1943 was not disputed. The Appellate Assistant Commissioner confirmed the assessment and dismissed the appeal of the assessee. The Commissioner upheld the view that the income was determined on the mercantile basis and that the income had accrued or arisen to the assessee within the meaning of section 4(1) (b)(i) of the Income tax Act. and the mere fact that the amount was put in the suspense account did not alter the fact that the income had accrued to the firm Upon the matter being carried further in appeal by the assessee, the Tribunal held that the income had not accrued to the firm and that the amount should be excluded from taxation as not having been received during the accounting year. The two questions aforementioned were then referred, at the instance of the Commissioner by the Tribunal to the High Court. As already stated, the opinion on the first question was unanimous, both the learned Judges Satyanarayana Rao J. and Viswanatha Sastri J. holding against the assessee that there was no material for the Tribunal 's finding that the firm was being assessed on cash basis in previous years, the latter observing that finding in respect of 1942 1943 and 1943 1944 262 were mutually inconsistent, for in respect of the latter assessment year the Tribunal had held that the sum of Rs. 2,20,702 was assessable to income tax, though the amount merely stood as a credit to the firm in the books of the company and has not been drawn by the firm. It is contended by Mr. Somayya on behalf of the firm that the finding of the Commissioner that the firm was not paid in cash in the prior years was set aside by the Tribunal and being a finding of fact ought not to have been interfered with by the High Court. The firm had raised this question before the Tribunal at the time of the reference and had contended that no question of law arose from its order, as it was concluded by finding of fact. The Tribunal, however repelled this contention observing that the question was one of ,law, as it related to the existence of any material for the finding. The High Court upon such question being referred applied its mind to the precise question and came to the conclusion that there was No. material for the finding that the firm was being assessed on cash basis in the prior year. The case of Commissinoer of Income tax, Bihar and Orissa vs Maharaiadhiraja of Darbhanga(1) does not support the contention of Mr. Somayya. There the Income tax Officer had computed the profits of the business for a particular year by taking into account both actual receipts of interest in that year and sums treated by the assessee in that year as receipts of interest by their transference to the interest register from what might be regarded as a suspense account. The Privy Council held that there was nothing illegel or contrary to principle in the computation arrived by the Income tax Officer. The High Court under section 66(1) had to decide the question of law raised by the first question and decided it against the assessee. Nor can it be said that in answering the question, the High Court acted illegally or contrary to principle. Admittedly, the firm kept no separate books of accounts other than the (1) 60 I.A, 146. 263 books of accounts of the company in which there was a ledger containing entries relating to the remuneration and commis sion paid in cash to the firm. The sum of Rs. 2,26,850 5 0 was debited as a revenue expenditure of the company as having been paid to the firm in the books of accounts of the company kept by the firm and was also allowed as a deduction in computing the profits and gains of the company for the purposes of income tax for 1941 1942. The fact that certain moneys were drawn in cash by the firm from time to time does not necessarily lead to the inference that the firm kept its accounts on a cash basis. Anyone familiar with commercial transactions knows that even in accounts kept on a mercantile basis there can be entries of cash credits and debits. We see no flaw in the conclusion reached by the High Court on the first question. The next question that falls to be determined is whether the sum of Rs. 2,26,850 5 0 was part of the profit and gains which had accrued to the firm during the accounting year 1941 1942. The undisputed facts are that the amount in question was the commission earned by the firm as managing agents of the company. In the books of the company main tained by the firm the aforesaid sum was debited as an item of revenue expenditure and the profits were computed after deducting that sum. The amount was simultaneously credited to the managing agents ' commission account. Under these circumstances, it is idle to contend that the aforesaid sum had not accrued. There can be no doubt under the circum stances that the aforesaid sum was income which had accrued to the firm. The only question is whether the aforesaid sum ceased to be, income by reason of the fact that on the 30th March the sum was carried to the suspense account by a reso lution of the directors as a result of the request made by the firm that the outstanding debt due from it may be written off. It is true that the, sum was not drawn by the firm but that can hardly affect the question of its liability to tax, once it is established that the income had accrued or arisen to the firm 264 The mere fact that the company was withholding payment on account of a pending dispute cannot be held to mean that the amount did not accrue to the firm. The resolution of the directors itself shows beyond doubt that the amount in question was treated as belonging to the firm though its payment was deferred on account of a pending dispute. As Viswanatha Sastri J. tersely put it "The sum had irrevocably entered the debit side of the company 's account as a disbursement of managing agency commission to the firm and had been appropriated to the, firm 's dues and the same sum could not again be entered in a suspense account at a later date. The sum, therefore, belonged to the firm and had to be included in the computation of the profits and gains that had accrued to it unless the firm had regularly kept its accounts on a cash basis, Which is not the case here" '. A reference to the ledger folios in the books of the company shows that apart from the managing agents ' monthly remuneration of Rs. 1,00.0 which has duly entered in. their account the amount in question also finds a place in the ledger as outstanding charges against the company and as credits in favour of the firm, The ' journal entries in the company 's books are the same. Section 10 of the Act makes "profits and gains of busi ness, profession or vocation" ' carried on by an assessee liable to tax. Section 12 makes "income from other sources in respect of income, profits and gains of every kind" liable to tax. By section 13 income, profits and gains shall be computed for the purposes of both those sections in accordance with the method of accounting regularly employed by the assessee, but there is a proviso that, if no method of accounting has been regularly employed, or if the method employed is such that, in the opinion of the Income tax Officer, the income, profits and gains cannot properly be deduced therefrom, then the c Computation shall be made upon such basis and in such manner as the Income tex Officer may determine. 265 The Income tax Officer in computing the income of the assessee would have followed the mercantile system or the cash basis whichever was employed by the assessee. There is some evidence, though not conclusive, on the record that the assessee followed the mercantile system of accountancy. This appears from the assessment orders field in the case, but apart from this, ' the Income tax Officer had full authority under the proviso to compute the profits upon such basis and in such manner as he thought fit. The case of St. Lucia Usines and Estates Company, Ltd. vs Colonial Treasurer of St. Lucia(1) was relied upon strongly before us as it was in the High Court in support of the contention that the sum not having been paid to or realized by the firm no income can be said to have accrued to the firm. In that case the assessee company sold all its property in St. Lucia in 1920 and ceased to reside or carry on business there. In 1921 interest upon the unpaid part of the purchase price, was payable to it, but was not paid. The company was liable to pay income tax for the year 1921 under the Income tax Ordinance, 1910, of St. Lucia, only if the interest above mentioned was 'income arising and, accruing ' to it in 1921. It was held that though the interest was a debt accruing in 1921, it was not 'income arising or accruing ' in 1921, and that the company was not liable. The decision was based upon the meaning of the word 'income ' as used in the Ordinance which was said to connote the idea of something "coming in". Lord Wrenbury who delivered the judgment of the Privy Council construed the words "income arising or accruing" as money arising or accruing by way of income and not "debts arising or accruing". The learned Law Lord observed "A debt has accrued to him (taxpayer) but income has not". It is clear that the case related to the meaning of the word "Income" as used in the Ordinance and can be no authority on the question of the assessment of profits and gains under the Indian Income tax Act. The next case relied upon is Dewar vs Commissioners of Inland Revenue(2). In that case one of the executors be (1) (2) 266 came entitled to a legacy which carried interest for such time as it remained unpaid. The testator 's estate was sufficient at all material times to enable interest to be paid on the legacy but the legatee acting on the advice of his accountant did not demand the legacy or interest thereon. It was held that as the legatee had not received interest, there was no income in respect of which he could be charged to sur tax. The decision turned upon the language of Schedule D, clause 1, sub clause (b) of the English Income Tax Act of 1918, as distinguished from clause I (a). Clause I (a) deals with annual profits or gains arising or accruing from any kind of property whatever. but clause (b) imposes a tax in respect of "all interest of money, annuities and other annual profits." Lord Hanworth. M. R. drew the distinction between the two clauses and observed that the case was one of interest of money and fell under clause (b) and not under clause (a). Under that clause the tax was limited.to any interest of money whether the same is received and payable half yearly or any shorter or more distant period. The learned Master of the Rolls observed: "If the interest on the legacy in this case has not arisen to the respondent, if he had not become the dominus of this sum, if it does not lie to his order in the hands of his agent, can it be said that it has arisen to him? I think the answer definitely upon the facts must be: No. it has not." Lord Maugham L. J. put the question thus: "I think in the present case two circumstances may be accurately stated in regard to the sum of pound 40,000 which it is said can be brought into charge. The first is that the sum of pound 40,000 was not during the year of assessment a debt due by the executors to Mr. Dewar, and secondly, that the sum in question may never be paid or received at all." The case of Commissioner of Taxes vs The Melbourne Trust, Limited(1) turned on the construction of the charging (1) 267 section in the Income Tax Act 1903 of Victoria, whereby a company was liable to pay tax upon the profits earned, in or derived in or from Victoria. In this case the surplus realized by the assessees over the purchase price for the assets sold after making all just deductions was taxed as profit but it was held that they were entitled to hold in suspense part of the surplus realised to meet possible losses on other assets and that under the circumstances the profit was earned for the purposes of the Act only when distributed to the share holders. Having considered all these cases, we are of opinion that neither of them has any bearing upon the facts and circumstances of the present case. Lastly it was urged that the commission could not be said to have accrued, as the profit of the business could be computed only after the 31st March, and therefore the com mission could not be subjected to tax when it is no more than a mere right to receive. This argument involves the fallacy that profits do not accrue unless and until they are actually computed. The computation of the profits whenever it may take place cannot possibly be allowed to suspend their accrual. In the case of income where there is a condition that the commission will not be payable until the expiry of a definite period or the making up of the account, it might be said with some justification, though we do not decide it, that the income has not accrued, but there is no such condition in the present case. Clauses 7 & 8 of the agreement which relate to the payment of the commission and the calculation of the profits mean no more than this that the commission will be quantified only after certain deductions had been made and not that the commission will not accrue until the profits have been ascertained. The quantification of the commission is not a condition precedent to its accrual. If the profits of the company are said to have accrued on the 31st of March, upon a parity of reasoning, it must be conceded that the commission also accrued on the same date. The date has as much to do with the accrual of the commission as it has to do with the accrual of the profits. It was faintly suggested that the managing. agency was not a business but this is immaterial for income tax purposes because section 13 will apply to cases both under sections 10 268 and 12, so we refrain from deciding the point. We may, how ever, point out in passing that in two cases Tata Hydro Electric Agencies, Ltd. vs Commissioner of Income tax Bombay(1) and Commissioner of Income tax. Bombay Presidency vs Tata Sons Ltd.(2) it was assumed that the managing agency is business but the point was directly decided in Inderchand Hari Ram vs Commissioner of Income tax, U.P. and C.P.(3) that it is so. For the foregoing reasons, we accept the view taken by Viswanatha Sastri J. and allow the appeals. The respondent shall pay the costs of the Commissioner both in this court and before the High Court. Appeals allowed.

Where, under the terms of a managing agency agreement the assessee firm who were the managing agents of a company were entitled to a certain percentage of the profits as their commission and in the books of the company maintained by the firm a sum of Rs. 2,26,850 odd was shown as commission due to the firm on the profits for the year 1941 42 and the said sum was also debited as an item of business expenditure and credited to the managing agents ' commission account, but the aforesaid sum was subsequently carried to a suspense account by a resolution of the company as a result of a request made by the firm that a debt due by the firm to the company may be written off : Held, that, as the assessee kept the accounts on the mercantile system the commission accrued to the assessee when the commission was credited to it in the accounts, and the subsequent carrying over of the amount of the commission to a suspense account pending the settlement of the dispute between the company and the assessee could not affect assessee 's liability to be taxed on this income. Held further, that the fact that the profits of the business could be computed only after the 31st of March, 1942, was Immaterial as quantification of the commission is not a condition precedent to its accrual.

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ION: Criminal Appeal No. 52 of 1955. Appeal from the judgment and order dated the 15th February, 1955, of the Calcutta High Court in Criminal Appeal No. 40 of 1955 arising out of the 751 judgment and order dated the 22nd January, 1955, of the Additional Sessions Judge, 24 Parganas, Alipore, in Trial No. 1 of January Sessions for 1955. A. C. Roy Choudhari, K. R. Choudhari and Sukumar Ghosh, for the appellant. A. C. Mitra, K. B. Bagchi and P. K. Bose, for the respondent. October 24. The following Judgment of the Court was delivered by SINHA J. This appeal on a certificate granted by the High Court at Calcutta, under article 134(1)(c) of the Constitution, is directed against the order of a Division Bench of that Court, dated February 15, 1955, summarily dismissing an appeal from the judgment and order dated January 22, 1955, passed by the learned Second Additional Sessions Judge of Alipore, accepting the unanimous verdict of guilty returned by the jury holding the appellant guilty under section 376 of the Indian Penal Code, for having committed rape on a young girl, named Sudharani Roy, said to be about 14 15 years of age. The learned trial judge, accepting the unanimous verdict of the jury and agreeing with it, imposed a " deterrent punishment " of rigorous imprisonment for 5 years, in view of the fact that he was in loco parentis to the large number of girls who were the inmates of the Nari Kalyan Ashram of which the appellant had been the secretary for a pretty long time. The learned counsel for the State of West Bengal raised a preliminary objection that the certificate granted by the Bench of the Calcutta High Court presided over by the learned Chief Justice, was bad on the face of the judgment given by him while granting the certificate. We have, therefore, first to examine whether the preliminary objection is sound. As already stated, the Division Bench before which the appeal came up for admission, summarily dismissed it without giving any reasons. Apparently, the Bench was not satisfied that there was any error of law or mis direction in the learned Sessions Judge 's charge to the jury which had returned a unanimous verdict of 752 guilty against the appellant. On March 7, 1955, the Bench consisting of Chakravarty C. J. and section C. Lahiri J. passed the order to the effect that having heard the argument on behalf of the applicant for the certificate of fitness for the proposed appeal to this Court on March 4, they had the opportunity of reading through the charge delivered by the learned trial judge, and that they had " come to feel that before the application is disposed of, we should see the depositions in full. " Accordingly, they directed the records of the original trial to be called for and placed before them. The case, therefore, stood adjourned till the arrival of the records. The matter was heard again on March 17, and on March 18, the learned Chief Justice delivered a judgment which appears at pages 220 to 231 of the record. It is a full judgment giving the facts and history of the case and the evidence adduced on behalf of the prosecution. The learned Chief Justice, in the course of his very elaborate judgment, observed that the " learned Judge delivered an exhaustive charge to the jury from which he does not appear to have omitted any part of the evidence which was of any materiality whatsoever. The jury appear to have applied their minds critically. . Having examined the grounds taken in the appeal as presented to the High Court, he made the following observations: " I have gone through the grounds taken in the petition of appeal to this Court and I have no hesitation in saying that if those were the grounds urged before the learned Judges, no one need be surprised that their Lordships saw nothing arguable or worth attention in the case. Except one, not one of the grounds urged by Mr. Roy Choudhury before us is to be found in the petition of appeal. . ." On an examination, in great detail, of the grounds urged before the Bench hearing the application for certificate, the learned Chief Justice observed: " Mr. Roy Choudhury, however, urged before us six several points. Except one, in respect of which there is something to be said, none of them impresses me. " 753 It was not clearly indicated in the judgment what that single ground was. The penultimate paragraph of the order passed by the learned Chief Justice, contains the following: " We are oppressed by the feeling that there were arguable points, although they might not bear examination and the accused has not had the satisfaction of feeling that he has been fully heard by the Court of appeal. I would therefore grant him the leave he asks for, not because we take any view in his favour of the evidence in the case, but because justice should also appear to have been done and therefore the evidence ought to have received a full consideration by the appellate Court, although the result might be to confirm the conviction. " We have set out the findings of the learned Chief Justice while granting "leave to appeal" to this Court, in his own words, to appreciate the reasons for granting " leave to appeal ". It appears that the learned Chief Justice and his brother judge, contrary to the legal position that one Bench of the High Court has no jurisdiction to sit in judgment on the decision of another Division Bench, have, in fact, done so. But in the instant case, the learned Chief Justice has gone further and observed that the summary dismissal of the appeal by the Criminal Bench, has not given satisfaction to the appellant that he had been fully heard, and that it did not appear to him that justice had been done. Such observations are not conducive to the maintenance of a healthy atmosphere for the administration of justice in the highest Court in the State. Furthermore, the observation almost amounts to a condemnation of the practice of summary dismissal of appeals, especially against orders passed in a case tried by a jury where the appellant has to make out clear grounds of law. Such a practice prevails, so far as we know, in almost all the High Courts in India and has the sanction of the statute law as contained in the Code of Criminal Procedure. This Court has repeatedly called the attention of the High Courts to the legal position that under 754 article 134(1)(c) of the Constitution, it Is not a case of granting leave" but of "certifying that the case is a fit one for appeal to this Court. " Certifying " is a strong word and, therefore, it has been repeatedly pointed out that a High Court is in error in granting a certificate on a mere question of fact, and that the High Court is not justified in passing on an appeal for determination by this Court when there are no complexities of law involved in the case, requiring an authoritative interpretation by this Court. On the face of the judgment of the learned Chief Justice, the leave granted cannot be sustained vide the case of Haripada Dey vs The State of West Bengal (1), and a number of decisions of this Court referred to therein. In view of those authorities of this Court, it is clear that the certificate granted by the High Court is not a proper one. The preliminary objection is, therefore, upheld. But the appeal having been placed before this Court, we have to satisfy ourselves whether there are any grounds on which this Court would have granted special leave to appeal under article 136 of the Constitution. In order to appreciate the grounds raised in support of the appeal by the learned counsel for the appellant, it is necessary to state the following facts: The appellant was the honorary secretary of a large institution for receiving and looking after young girls and women who had no homes of their own or had gone astray. It is called the ' Nari Kalyan Ashram ' and is located in one of the quarters of the city of Calcutta. The appellant in his capacity as the secretary, used to come to the Ashram daily in the evening at about 7 p.m., and stay there till mid night or past mid night. In his office room, there was a bed stead with a bedding spread thereon. He used to occupy the bed and requisition the services of girls to massage his body. Between January and April, 1954, the accused who was in the 'habit of calling the girls named Sudharani, Narmaya, Kalyani and others, for that purpose, is said to have committed rape on those girls. The subject matter of the charge in this case is the offence of rape said to have been 755 committed on the two girls Narmaya and Sudharani, one after the other, on the night of April 20, 1954. On April 29, 1954, at about 10 p.m., the officer in charge of the Maniktala police station, accompanied by Sub Inspector Nirmal Chandra Kar, went to the Ashram in connection with collecting information regarding the escape of some girls from the Ashram. Narmaya and Sudharani are said to have given information to the said officer in charge of the police station, alleging rape on them. They also pointed out a steel locker in the room of the secretary, where, it was alleged, he used to keep rubber sheaths used by him before he had sexual intercourse with each of them. The police officers aforesaid obtained the key from the appellant, with which the steel locker was opened and a leather bag inside the locker was pointed out by the girls. The bag was found to have contained a rubber sheath along with other articles. After recording the information, the police officer in charge of the Maniktala police station, investigated the case and submitted a charge sbeet against the appellant. After the preliminary inquiry by a magistrate, the appellant was committed for trial to the Court of Session on a charge of rape upon the two girls, under section 376, Indian Penal Code. The defence of the appellant was that the case against him was completely false and had been concocted by the police with the help of the inmates of the Ashram and the Assistant Secretary, Tarun Kumar Sarkar who was one of the prosecution witnesses. At the trial, the prosecution examined 23 witnesses, in support of the case against the accused. The two victims of the alleged outrage by the appellant, were examined, namely, Sudharani Roy, P.W. 2 and Narmaya, P.W. 5, who both deposed that the appellant used to come to the Ashram in the evening at about 7 p.m., and used to stay there till after mid night in his special room which contained a bedstead and a bedding and a steel almirah and other pieces of furniture. On the &ate of the occurrence in question, first Narmaya was called in by the appellant and then Sudharani, and the appellant is said to have committed rape first on 96 756 Narmaya and then on Sudharani, in the presence of both of them, against their will and without their consent. They further deposed that the appellant had intercourse with them after putting on the sheath. In between the two acts, he had a cup of tea with which he swallowed " a black pill " which is suggested to have been an aphrodisiac. The accused paid them each eight annas and warned them not to divulge those acts on pain of being severely dealt with, if they disclosed the same. Kalyani, P.W. 19, is another young girl who was an inmate of the Ashram on the material dates. She is a girl who was both deaf and dumb, and her intelligence was below normal. As she was feeble minded, she was not allowed to continue her studies at the school. She has given evidence by signs which were interpreted by the principal of the Deaf and Dumb School, who had taught her at that school. Her evidence, if accepted, would be a corroboration of the testimony of the victims aforesaid of the outrageous act of the appellant. Besides this direct oral testimony, there was also evidence tending to show that the appellant was in the habit 'of having himself massaged at night by the girls of the Ashram, and that the police found a rubber sheath in his bag kept in the steel locker inside his special room. There was also the evidence of a woman employee of the Ashram that she had been asked by the ' appellant to keep a number of rubber sheaths which she had buried underground, and which on her pointing out, had been discovered by the police. There was also the evidence of a complaint made the next day by the victim girls to the assistant secretary when be came to the Ashram in connection with his work there. The prosecution also led evidence to show the age of the girl Sudharani to be below 16. It produced the register of the girls in the Ashram which has a column for mentioning the age of the inmates. The estimate of her age by medical evidence, was given after X ray examination and the stage of ossification and other indicia for determining the age of a person. The medical estimate of her age was that she was between 13 and 757 14 years on the date of the X ray examination, that is May 19, 1954. That, in barest outline, is the prosecution case and the evidence adduced in support of it. Beyond cross examining the prosecution witnesses and pointing out contradictions and omissions in their evidence, the accused did not adduce any positive evidence in support of his defence. The appellant was tried by a jury assisted by the learned Additional Sessions Judge at Alipore. The jury returned a unanimous verdict of guilty against the accused in respect of the charge of committing rape on Sudharani and a unanimous verdict of riot guilty in respect of the charge of rape on Narmaya. The jury answered the judge 's question as regards the charge with respect to Narmaya in these words: "Not guilty as we found with consent and she is above 16 years of age." As the jury did not give any such clue in respect of their verdict of guilty so far as rape on Sudharani was concerned, it is difficult to say whether they found consent in her case also, and returned a verdict of guilty because they were of the opinion that she was under 16 years of age. In this Court, the learned counsel for the appellant raised a large number of contentions, but as most of them concerned the appreciation of evidence with reference to omissions and contradictions, it is not necessary to deal with those arguments. It is only necessary to notice the following points raised, namely, (1) that the learned judge refused permission to counsel for the appellant to read out the written statement filed on behalf of the appellant at the Sessions stage, (2) that there was a serious misdirection in respect of corroboration of the testimony of the alleged victims of rape, and (3) that the direction as to the age of the girl Sudharani was not complete. In our opinion, there is no substance in any one of these contentions. Firstly, as regards the refusal to permit the written statement of the accused being placed before the jury, it has to be observed that there is no provision in the 758 Code of Criminal Procedure for such a written statement being filed at the Sessions stage. Section 256(2) which occurs in Chapter XXI, headed " Of the trial of Warrant Cases by Magistrates ", does contain the specific provision that if the accused person puts in a written statement, the magistrate shall file it with the record. But there is no corresponding provision in the Code, requiring a Sessions Court to accept a written statement at that stage on behalf of the accused. But the accused has the right to make a statement under section 342 of the Code, which has to be considered by the Court for what it is worth. In a jury trial, the Court has got to be circumspect to see that nothing is allowed to be placed before the jury which is not evidence. It is not necessary to decide whether in the case of a Sessions trial without a jury, such a statement is receivable. But if such a written statement is allowed to be used at a Sessions trial by a jury, it may throw the door open to irrelevant and inadmissible matter and, thus, throw an additional burden on the presiding judge to extricate matter which was admissible from a mass of inadmissible statements which may have been introduced in the written statement. In view of these considerations, in our opinion, the learned Sessions Judge rightly refused to allow the written statement put in by the appellant, to be read out before the jury. On the question of corroboration, the learned judge in his charge to the jury, has, at more than one place, pointed out the necessity of corroboration of the evidence of the victims of the alleged crime. Referring to the evidence of Kalyani, P.W. 19, aforesaid, the learned judge has charged the jury in these terms: ". whether her evidence is a corroboration with respect to the committing of rape by accused on Sudharani Roy on 20th April, 1954. If the evidence of Kalyani appears unreliable to you or the evidence of Tarun, there remain the uncorroborated testimonies of Sudharani and Narmaya. The rule of prudence demands that it is unsafe to convict an accused on the uncorroborated testimony of an accomplice or accomplices. But I must tell you, gentlemen, that it 759 is within your legal province to convict upon such unconfirmed evidence, provided you can come to the conclusion in the particular circumstances of this case that corroboration can be dispensed with. " It will be noticed that if the learned judge has made any mistake, the mistake is in favour of the accused and. not against him in so far as the learned judge refers to the evidence of the two girl victims as that of accomplices. A girl who is a victim of an outrageous act is, generally speaking, not an accomplice though the rule of prudence requires that the evidence of a prosecutrix should be corroborated before a conviction can be based upon it. Hence, the girl Sudharani was not exactly in the position of an accomplice though the judge may, as a rule of prudence, warn the jury that such a rule of prudence required corroboration of the testimony of the prosecutrix, but that it was open to the jury to convict even on the uncorroborated testimony of the prosecutrix if the jury, in the particular circumstances of the case before it, came to the conclusion that corroboration was not essential to conviction. Hence, the learned Sessions Judge was fully justified in telling the jury that there was no rule of law or practice that there must be corroboration in every case, before a conviction for rape. If the jury had been apprised of the necessity, ordinarily speaking, of corroboration of the evidence of the prosecutrix, it is for the jury to decide whether or not it will convict on the uncorroborated testimony of a prosecutrix in the particular circumstances of the case before it. In other words, insistence on corroboration is advisable but is not compulsory in the eye of law. In the instant case, apart from the evidence of the two victims aforesaid, there was the evidence of the deaf and dumb girl, Kalyani, and the other circumstantial evidence in support of the prosecution case. It is well established that the nature and extent of corroboration, necessary, vary with the circumstances of each case. The nature of the corroborative evidence should be such as to lend assurance that the evidence of the prosecutrix can be safely acted upon. See, in this connection, the observations of this Court in the case 760 of Rameshwar vs The State of Rajasthan (1) to the following effect: "The only rule of law is that this rule of prudence must be present to the mind of the judge or the jury as the case may be and be understood and appreciated by him or them. There is no rule of practice that there must, in every case, be corroboration before a conviction can be allowed to stand. " Lastly, we do not find anything basically wrong with the direction in the charge to the jury as regards the age of the girl Sudharani and as to the nature of the evidence to prove her age. The learned judge pointed out the several items of evidence which had been adduced by the prosecution bearing on the question of the girl 's age. The only conclusive piece of evidence may be the birth certificate, but, unfortunately, in this country such a document is not ordinarily available. The Court or the jury has to base its conclusions upon all the facts and circumstances disclosed on examining all the physical features of the person whose age is in question, in conjunction with such oral testimony as may be available. The girl 's father was dead. Her mother apparently has left her to her own fate, and according to the evidence of the police, the mother 's whereabouts were not traceable. It was sought to be argued that the police officer who himself made the inquiry, should have been examined, otherwise, the result of the inquiry is a mere hearsay. An inquiry whether made by one or the other police officer, would, almost in every case, be the result of hearsay. The girl is said to be a displaced person. The difficulty of tracing evidence of the parents of such a person is all the greater. Hence, in all the circumstances of the case, the learned Sessions Judge has not committed any error in this part of his charge to the jury. On this part of the case, the learned judge gave the following concluding directions: " In criminal trial the accused must get the benefit of doubt and there should not be any conviction unless it can be clearly and unequivocally said that (1) 761 the age of the girl was below 16. But, gentlemen, in this case you have seen the girls, you have heard the evidence of the experts and you should also take into consideration the various factors found out in cross examination and in considering all these facts you can arrive at the conclusion that Sudharani Roy was under 16 years of age on the night of the occurrence on 20th April, 1954, taking into consideration the facts that ossification test is not a sure guide, even in spite of this, you can come to the conclusion that Sudharani Roy was under 16 years of age on the night of the occurrence, i.e., on 20th April, 1954. 1 would tell you, gentlemen, that the question of consent would be immaterial." In our opinion, the learned Sessions Judge placed the evidence pro and con very fairly and fully, and left it to the jury to come to their own conclusion. According to the medical evidence, Sudharani was between 13 to 14 years of age on the relevant date, whereas the other girl in respect of whom, the accused was acquitted, was found by the medical test to be between 15 and 16 years. The jury, therefore, took the commonsense point of view and appeared to have come to the conclusion that Narmaya may well have been above 16, and that, therefore, the accused could not be convicted for rape on her. In respect of the girl Sudharani, they may have come to the conclusion that she was not above 16, and that, therefore, the prosecution had succeeded in bringing the charge home to the accused. We have read the charge of the learned judge to the jury more than once, and, in our opinion, it is a very fair and full charge, erring more on the side of verbosity than of brevity. In our opinion, there is no merit in the appeal. It is accordingly dismissed. Appeal dismissed.

Appellant was tried by the Sessions judge and a jury on the charge of committing rape. On the question of the age of the girl expert medical evidence was produced but no birth certificate was available. The father of the girl could not be examined as he was dead. According to the Police evidence the whereabouts of the mother were not traceable but the Police Officer who himself made the inquiry was not produced. As regards the commission of the rape the girl herself was examined and there was the evidence of another girl and some circumstantial evidence. The 750 accused filed a written statement but the judge refused to read it out to the jury. The jury returned a unanimous verdict of guilty and the judge, accepting the verdict, convicted the appellant and sentenced him to 5 years rigorous imprisonment. An appeal to the High Court was summarily rejected. But the High Court granted "leave to appeal" on the ground that on account of the summary dismissal of the appeal appellant did not have the satisfaction of feeling that he had been fully heard and that justice should also appear to have been done by a full consideration of the evidence by the appellate court. Held that, the certificate granted by the High Court amounts to a condemnation of the practice of summary dismissal of appeals, especially in jury trials. Such practice prevails in most High Courts and has the sanction of statute law. No certificate should be granted on a mere question of fact nor in a case where there are no complexities of law involved requiring an authoritative interpretation by the Supreme Court. Haripada Dey vs The State of West Bengal, ; , followed. There is no provision in the Code of Criminal Procedure requiring a Session judge to accept a written statement filed by an accused. If such a written statement is allowed to be used at a Sessions trial by jury, it may throw the door open to irrelevant and inadmissible matter and cast an additional burden on the judge of separating admissible from inadmissible statements. The judge had rightly refused the written statement to be read to the jury. There is no rule of law or practice that there must be cor roboration of the testimony of the prosecutrix, before conviction for rape. If the jury had been appraised of the necessity of corroboration, it was for the jury to decide whether or not it would convict on the uncorroborated testimony of the prosecutrix in the particular circumstances of the case before it. Rameshwar vs The State of Rajasthan, , followed. There was no misdirection on the question of the age of the girl. The Session judge had pointed out the several items of evidence to the jury. The failure of the prosecution to examine the Police Officer who actually made inquiry into the whereabouts of the mother does not affect the case as in any case the inquiry would be the result of hearsay.

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Appeal No. 390 of 1963. Appeal by special leave from the award dated December 11, 1959, of the Industrial Tribunal, Assam at Gauhati in Reference No. 7 of 1959. C.B. Agarwal, J.N. Hazarika and K.P. Gupta, for the appellants. Sankar Bannerjee, P.K. Chatterjee, D.N. Gupta and B.N.Ghosh, for the respondents. November 25, 1963. The judgment of the Court was delivered by GAJENDRAGADKAR, J. This appeal by special leave arises from an industrial dispute between the respondent, the Management of 11 Tea Estates and the appellants, their workmen. It appears that the appellants raised a dispute against the respondent in regard to the lay off declared by them in the 11 550 estates in question in February, 1959. The said (ay off lasted for 45 days and the appellants ' contention was that the lay off was not justified, and so, they were entitled to their full wages for the period of the lay off. The respondent 's Managing Agents for the nine Companies that run the 11 tea estates in question, resisted this claim on the ground that the lay off was justified and they alleged that the appellants were not entitled to anything more than the compensation prescribed by section 25C of the (hereinafter called 'the Act '). This dispute was referred to the adjudication of the Industrial Tribunal by the Governor of Assam under section 10(1)(d) of the Act. The 11 tea estates which are concerned with this dispute were described in Appendix A to the order of reference. It is common ground that these 11 tea estates ' are run by nine Companies and M/s. Macneill and Barry Ltd. are the Managing Agents of all these companies. The case for the respondent was that the tea estates in question which are all situated in Cachar District had to face a long period of depression in trade by reason of the poor prices generally commanded by the tea produced by them. In 1959, the management faced a very difficult financial position and it took the view that in the interests of the employees and its own business, it would be appropriate to lay off the workmen for a certain period in order to avoid closure of business. The circumstances which caused financial depression were beyond the control of the management and lay off was, therefore, inevitable and fully justified. On the other hand, the appellants urged that there were other tea estates in the district of Cachar which had to face similar problems; the labour costs incurred by the respondent were not higher than the corresponding costs incurred by the other tea estates, the burden of taxes was the same for all the tea estates in the district and the quality of the tea produced was relatively similar. They contended that the difficulty which the respondent had to face 551 was partly the result of its mismanagement and neglect. They pleaded that the workmen employed by the respondent had been promised continuous work throughout the year and the declaration of lay off for such a long period as 45 days exposed them to the risk of semi starvation. The appellants also urged that depression in trade or financial difficulties which may be characterised as trade reasons did not justify the lay off under the relevant Standing Order, and so, they justified their claim for full wages during the period of the lay off. The Tribunal has held that the relevant Standing Order No. 8 justified the lay off. The trade reasons resulting from the depression in trade and financial liabilities arising therefrom fell within the scope of the Standing Order; it has also held that the last clause in the Standing Order which was general in terms could be relied upon by the respondent in support of its plea that the lay off was justified. In the alternative, the Tribunal thought that even if the lay off was not justified by the relevant clause in the Standing Order, the respondent had a common law right to declare a lay off and this right was recognised by section 25C of the Act. According to the Tribunal, section 25 C recognises this common law right and since it is a statutory provision, it over rides the relevant clause in the standing Order. Having thus found that the lay off was justified, the Tribunal proceeded to examine the question as to whether the trade reasons on which the respondent relied had 'been proved. It then considered the relevant documentary evidence bearing on the point and noticed some general features applicable to all the tea companies before it. "They have suffered losses which are by no means inconsiderable", said the Tribunal, "and some of the companies have not been able to declare dividends in time during the last ten years, though others have declared them from year to year. " The Tribunal rejected the respondent 's contention that the losses were due to high labour charges, but it found that the tea companies were not making adequate profits. It was satisfied that 552 the companies had reserves and large capital assets and would not have found it difficult to raise necessary finances. On the whole, the Tribunal thought it necessary to distinguish between the different tea estates with which it was dealing, and having considered their respective individual cases, it came to the conclusion that out of the nine companies, five companies need not have declared lay off for 45 days. In its opinion, there was justification for lay off in their cases, but its duration should have been 21 days. Acting on this finding, the Tribunal has ordered that for the 24 days in excess of three weeks for which the lay off was justified the said companies should pay their workmen full wages and not merely the compensation prescribed by section 25C of the Act. In regard to the remaining four companies, the Tribunal held that the lay off was fully justified, and so, the workmen were not entitled to full wages for the period of the lay off. In other words, the award made by the Tribunal partially granted relief to the appellants inasmuch as it gave them full wages against five companies for 24 days only. These five companies are: Bhubandhar, Doyapore, Western Cachar, Borak and Koyah. The other four companies in respect of which the Tribunal has given no relief to the workmen are: Doodputlee ' Majagram, Scottpore and Tarrapore. It is this award which has given rise to the present appeal by the appellants. The first question which arises for our decision is whether the Tribunal was justified in holding that section 25C recognises the common law right of the respondent to declare a lay off for reasons other than those specified in the relevant clause of the Standing Order. While dealing with this argument, we must proceed on the assumption that the financial difficulties experienced by the respondent at the relevant time which have been compendiously described by it as constituting trading reasons for the lay off do not fall within the purview of the said relevant clause. The respondent 's argument is that though the trading reasons may not justify the declaration of the lay off 553 under the said clause, as prudent employers who must be given liberty to run their industry in the best manner they choose, they have a common law right to declare a lay off if they feel that the alternative to the lay, off would be closure and acting bonafide they want to avoid closure and adopt the lesser evil,, of declaring the lay off. Does section 25C of the, Act justify this argument? Section 25C(1) which, recognises the right of the workmen who are laid; off, for compensation, provides that whenever a workman therein specified has been laid off, he shall be paid by the employer for whole of the period of the lay off, except for such weekly holidays as may intervene, compensation at the rate prescribed by the section. The proviso to this section lays down that the compensation payable to a workman during any period of twelve months shall not be for more than; 45 days; and this proviso seems to indicate that the legislature thought that normally the period of lay off within 12 months may not exceed 45 days. Section 25C(2), however, contemplates the possibility that the period of lay off may exceed 45 days, and it lays down that if during any period of 12 months, a work , man is laid off for more than 45 days, whether continuously or intermittently, he shall be paid compensation in the manner indicated by it. Thus, the position is that workmen who are laid off are entitled to compensation and the method in which the said compensation has to be calculated has been prescribed by the two clauses of section 25C. It is, however, significant that when section 25C deals with workmen who are laid off and proceeds to prescribe the manner in which compensation should be paid to them, it is inevitably referring to the lay off as defined by section 2(kkk) of the Act. The said section defines a "lay off" (with its grammatical variations and cognate expressions) as meaning: "the failure, refusal, or inability of an employer on account of shortage of coal, power or raw materials or the accumulation of stocks or the breakdown of machinery or for any other reason 554 to give employment to a workman whose name is borne on the muster rolls of his industrial establishment and who has not been retrench ed. " It would be legitimate to hold that lay off which primarily gives rise to a claim for compensation under section 25C must be a lay off as defined by section 2(kkk) If the relevant clauses in the Standing Orders of industrial employers make provisions for lay off and also prescribe the manner in which compensation should be paid to them for such lay off, perhaps the matter may be covered by the said relevant clauses; but if the relevant clause merely provides for circumstances under which lay off may be declared by the employer and a question arises as to how compensation has to be paid to the workmen thus laid off, section 25C can be invoked by workmen provided, of course, the lay off permitted by the Standing Order also satisfies the requirements of section 2(kkk). Whether or not section 25C can be invoked by workmen who are laid off for reasons authorised by the relevant clause of the Standing Order applicable to them when such reasons do not fall under section 2(kkk), is a matter with which we are not directly concerned in the present appeal. The question which we are concerned with at this stage is whether it can be said that section 25C recognises a common law right of the industrial employer to lay off his workmen. This question must, in our opinion, be answered in the negative. When the laying off of the workmen is referred to in section 25C, it is the laying off as defined by section 2(kkk), and so, workmen who can claim the benefit of section 25C must be workmen who are laid off and laid off for reasons contemplated by section 2(kkk); that is all that section 25C means. If any case is not covered by the Standing Orders, it will necessarily be governed by the provisions of the Act, and lay off would be permissible only where one or the other of the factors mentioned by section 2(kkk) is present, and for such lay off compensation would be awarded under section 25C. Therefore, we do not think that the Tribunal was right in holding that section 25C recognises the inherent right 555 of the employer to declare lay off for reasons which he may regard as sufficient or satisfactory in that behalf. No such common law right can be spelt out from the provisions of section 25C. That takes us to the question whether the lay off in the present case is justified under Rule 8 of the, Standing Orders which have been duly certified under ' the Industrial Employment (Standing Orders) Act, (No. 20 of 1946). The relevant portion of Rule 8 reads thus: "Closing and re opening of sections of the in dustrial establishments, and temporary stoppages of work, and the rights and liabilities of the employer and workmen arising therefrom. (a) (1) The Manager may at any time in the event of fire, catastrophe, break down of machinery, stoppage of power or supply, epidemic, civil commotion, strike, extreme climate conditions or other causes beyond his control, close down either the factory or field work or both without notice. In cases where workmen are laid off for short periods on account of failure of plant or a temporary curtailment of production, the period of unemployment shall be treated as compulsory leave either with or without pay, as the case may be, when, however, workmen have to be laid off for an indefinitely long period, their services may be terminated after giving them due notice or pay in lieu thereof. " It will be seen that the circumstances under which a lay off can be declared have been specifically described by Rule 8(a)(1). Two grounds have been urged before us by Mr. Banerjee in support of the Tribunal 's conclusion that the impugned lay off is justified. He contends that the clause "stoppage of supply" may cover cases of stoppage of financial assistance. The argument is that in 1959 when the lay off was declared. the companies found that they 556 could not raise enough money to carry on the operations in the tea gardens, and so, it was a case of stoppage of supply. If that be so, the lay off would be justified. In our opinion, this argument is wholly misconceived. Stoppage of supply must, in the context, mean stoppage of raw material or other such thing. In regard to the factory, the stoppage of supply may mean the stoppage of tea leaves, or in the case of field work, it may mean the stoppage of supply of other articles necessary for field operations. It is impossible to accept the argument that "supply" in the context can mean money or funds. The other argument urged before us is that the last clause of R. 8(a)(i) which refers to "other causes beyond his control" would take in the financial difficulties of the Cos. We are not inclined to accept this argument also. Other causes beyond his control for one thing should be similar to the causes that have preceded; even otherwise we see no justification for the argument that the financial difficulty which is alleged to have confronted the respondent was beyond its control. In fact, on this point the Tribunal has made a definite finding that though the respondent had produced a letter from the Chartered Bank of the 9th April, 1959 in which the Bank expressed its re luctance to afford financial facilities, it was by no means clear that the Companies acting through their Managing Agents completely failed to raise the necessary finances at the relevant time. As the Tribunal has observed, the letter written by the Bank shows that it had promised to consider the matter and write to the Companies again; no evidence was produced to show what the Bank subsequently stated and whether finances became available or not ' On the other hand, it is clear that at the end of the period of the lay off, all the Cos. started operating their tea gardens and we have been told that the operations have continued uninterrupted ever since. Besides, the letter on which reliance is placed was written in April, 1959, whereas the lay off was declared in February, 1959. Therefore, there is no evidence on the record which can justify 557 the assumption made by Mr. Banerjee when he raised the contention that the financial difficulties faced by the respondent at the relevant time were beyond its control. The fact that some of the Cos. have been incurring losses and have not made profits would not necessarily show that the financial position which they had to face at the relevant time was beyond their control. It is true, as Mr. Banerjee has pointed out, that the three Cos. Scottpore, Tarrapore and Doodputalee have not been able to pay dividends between 1951 to 1958 and it may be that with the exception of the year 1954, the position of all of them is not very satisfactory; but, on the other hand, there are other tea gardens in the same area and it is not suggested or shown that their position was any better than that of the companies before us. It is also true that at the relevant time, all the tea companies in Cachar in general, and the Managing Agents of the nine companies before us in particular M/s. Macneill and Barry Ltd. were trying their best to persuade the Assam Government to give them some relief in the matter of taxation. But the question which we have to decide is whether the financial position disclosed by the evidence on the record can be described as constitu ting a cause beyond the control of the respondent. We are not inclined to answer this question in favour of the respondent. Besides, as we have already indicated, having regard to the factors specified by Rule 8(a)(i) before the clause in regard to other causes beyond his control was introduced, it would not be easy to entertain the argument that a trading reason of the kind suggested by Mr. Banerjee can be included in that clause. Therefore, we are satisfied that the Tribunal was in error in holding that the impugned lay off could be justified by Rule 8(a)(i). Rule 8(a) (iii) which refers to temporary curtailment of production must obviously be read in the light of R. 8(a)(1) and if the case of the present lay off does not fall under R. 8 (a)(i), R. 8(a) (iii) would not improve the position. Mr. Banerjee has then urged that the present Standing Orders which were duly certified under the 558 Standing Orders Act came into force in 1950, whereas section 2(kkk) which defines a lay off was added to the Act by the Amending Act 43 of 1953 on the 24 th October, 1953. His argument is that the Standing Orders having been certified before the definition of the lay off was introduced in the Act, the respondent is entitled to rely upon the said definition in support r of the plea that the impugned lay off was justified. Basing himself on the definition of the lay off as prescribed by section 2(kkk), Mr. Banerjee urged that this definition was wider than R. 8(a)(1) of the respondent 's Standing Orders and would take in the trading reasons on which he relies. We are not prepared to accept the argument that in the present case, the respondent can rely on the definition of lay off as prescribed by section 2(kkk). It will be recalled that the Standing Orders which have been certified under the Standing Orders Act became part of the statutory terms and conditions of service between the industrial employer and his employees. Section 10(1) of the Standing Orders Act provides that the Standing Orders finally certified under this Act shall not, except on agreement between the employer and the workmen, be liable to modification until the expiry of six months from the date on which the Standing Orders or the last modification thereof came into operation. If the Standing Orders thus become the part of the statutory terms and conditions of service, they will govern the relations between the parties unless, of course, it can be shown that any provision of the Act is inconsistent with the said Standing Orders. In that case, it may be permissible to urge that the statutory provision contained in the Act should over ride the Standing Order which had been certified before the said statutory provision was enacted. Assuming without deciding that section 2(kkk) may include the trading reasons as suggested by Mr. Banerjee, the definition prescribed by section 2(kkk) is not a part of the operative provisions of the Act, and so, the argument that there is inconsistency between the definition and the relevant Rule of the Standing Orders does not assist Mr. Banerjee 's case. If there had been a provision in the Act specifically providing 559 that an employer would be entitled to lay off his workmen for the reasons prescribed by section 2(kkk), it might have been another matter. The only provision on which reliance has been placed is contained in section 25C and that, as we have already seen, merely takes in the definition of lay off inasmuch as it refers to the workmen as laid off and provides the manner in which compensation would be paid to them. An alleged conflict between the definition of lay off and the substantive rule of the Standing Orders would not, therefore, help the respondent to contend that the definition over rides the statutory conditions as to lay off included in the certified Standing Order. Therefore, we do not think Mr. Banerjee would be entitled to contend that section 2(kkk) of the Act is wider than the relevant Rule in the Standing Orders and should apply to the facts of this case. We ought to make it clear that in dealing with this argument, we have not thought it necessary to consider whether the broad and general construction of section 2(kkk) for which Mr. Banerjee contends is justified. In fact, Mr. Agarwala for the appellants has very strongly urged that the words "for any reason" found in section 2(kkk) will not take in the trading considerations. He contends and prima facie with some force that the said words must be construed ejusdem generis with the words that precede them. (vide Management of Kairbetta Estate, Kotagiri vs Rajamanickam & Ors.)(1) According to him, the circumstances specified in section 2(kkk) which justify a lay off must be integrally connected with production, and so, trading reasons cannot be included in that definition. According to this argument, the distinguishing features of the genus of which the several circumstances mentioned in the definition are different species, are: they are beyond the control of the employer, are expected to be of a short duration, and are of compulsive effect. As we have already indicated, we do not think it necessary to decide this interesting point in the present appeal because we are satisfied that the present dis (1) ; 560 pute must be governed by Rule 8(a)(1) of the respondent 's Standing Orders. In the result, we reverse the finding of the Tribunal that the lay off declared by the respondent for 45 days in 1959 was justified. That being so, it is unnecessary to consider the individual cases of the nine respective companies, because whatever may have been their respective financial position, under the relevant Rule they could not validly declare a lay off at all, nor could they have declared the lay off in exercise of their alleged common law right. The questions referred to the Tribunal must, therefore, be answered in favour of the appellants. The appeal is accordingly allowed and the appellants ' claim for full wages for the 45 days of lay off in respect of the 11 tea gardens is awarded to them. The appellants will be entitled to their costs throughout. Appeal allowed.

As a result of the lay off declared by the respondent in the II tea estates, managed by them an industrial dispute arose between the respondent and their workmen, the appellant. The respondent justified the lay off on the ground that its financial position was very difficult and that the lay off was appropriate in the interests of the employees and their own in order to avoid closure of business. The appellants urged, inter alia, that the depression in trade or financial difficulties which may be characterised as trade reasons did not justify the lay off under the relevant Standing Order, and so, they justified their claim for full wages during the period of the lay off. The Tribunal held that the relevant Standing Order No. 8 justified the lay off, and the trade reasons resulting from the depression in trade and financial liabilities arising therefrom fell within the scope of the Standing Order. Alternatively, the Tribunal thought that even if the lay off was not justified by the relevant clause of the Standing Order, the respondent had a common law right to declare a lay off and this right was recognised by section 25C of the and since it is a statutory provision, it overrides the relevant clause in the Standing Order. In appeal by special leave: Held: (i) The Tribunal was not right in holding that section 25C of the recognises the inherent right of the employer to declare lay off for reasons which he may regard as sufficient or satisfactory in that behalf. No such common law right can be spelt out from the provisions of section 25C. When the laying off of the workmen is referred to in section 25C, it is laying off as defined by section 2 (kkk), and so, workmen who can claim the benefit of section 25C must be workmen who are laid off for the reasons contemplated by section 2(kkk); that is all that section 25C means. If in any case the lay off is not covered by the Standing Orders, it will necessarily be governed by the provisions of the Act, and lay off would be permissible only where one or the other of the factors mentioned by section 2(kkk) is present, and for such lay off compensation would be awarded under section 25C. 549 (ii) "Stoppage of supply" must, in the context, mean stoppage ' of raw material or other such thing. In regard to the factory, "stoppage of supply" may mean the stoppage of tea leaves, or in the case of field work, it may mean the stoppage of supply of other articles necessary for field operations. "Supply" in the context cannot mean money or funds. (iii) The last clause of r. 8(a) (i) of the Standing Order which refers to "other causes beyond his control" would not take in the financial difficulties of the companies. Other causes beyond his control for one thing should be similar to the causes that have preceded; even otherwise there is no justification for the argument that the financial difficulty which is alleged to have confronted the respondent was beyond its control. Rule 8(a) (iii) which refers to temporary curtailment of production must obviously be read in the light of r. 8(a) (i) and if the case of the present lay off does not fall under r. 8(a) (i), r. 8(a)(iii) would not improve the position. (iv) The present dispute must be governed by r. 8(a)(i) of the respondent 's Standing Orders. It cannot be accepted that the Standing Orders having been certified before the definition of the lay off was introduced in the Act, the respondent is entitled to rely upon the said definition in support of the plea that the impugned lay off was justified. Management of Kairbetta Estate, Kotagiri vs Raja manickam & Ors., ; , referred to.

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rit Petition No. 1032 of 1986. (Under Article 32 of the Constitution of India). Soli J. Sorabjee, Ms. section Ralhan, S.C. Dhande and Ms. Rekha Pandey for the petitioners. 770 V.S. Desai, A.S. Bhasme and Khanwilkar for the respondents. The Judgment of the Court was delivered by PATHAK, C.J. The petitioners manufacture electronic goods, including television sets, television cameras and television monitors. The factories are located at Delhi, and the goods are sold through sales organisations spread all over India, including the State of Gujarat. Section 7 of the Gujarat Sales Tax, Act, 1969 provides for the levy of sales tax on the turnover of sales of goods specified in Part A Sch. II appended to the Act. Entry 80A(a) of Part A of Sch. II specifies the rate of tax applicable to the turnover of television sets. The rate was 15% originally upto 1981, the Entry applied to all television sets, whether manufactured and sold within the State of Gujarat or imported from outside the State. No distinction was made between the goods on the basis of the place of manufacture. Sub section (2) of section 49 of the Act empowers the State Government to exempt, in the public interest, any specified class of sales from payment of the whole or any part of the tax payable under the Act. In 1981, while the rate for electronic goods entering the State for sale therein was maintained at 15%, the rate in respect of locally manufactured goods was reduced to 6% by Notification No. (GHN 51) GST 1081 (section 49)(109) TH issued under sub section (2) of section 49 of the Act. The Notification introduced a new entry in the Schedule dealing specifically with electronic goods manufactured in the State of Gujarat. Thereafter in 1986 the rate of sales tax in respect of television sets imported from outside the State was reduced from 15% to 10% and for goods manufactured within the State of sales tax was reduced to 1% by Notification No. (GHN 22) GST 1086/(S. 49)(173) TH dated 29 March, 1986. The petitioner contends that by lowering the rate of tax in respect of goods manufactured within the State, the State Government has created an invidious discrimination which is adversely affecting the free flow of inter state Trade and commerce, resulting in a contravention of Article 301 of the Constitution. It is pointed out that a purchaser buying a television set manufactured within the State of Gujarat pays about Rs.250 to 300 less for a black and white model and Rs.750 to Rs.1,000 for a colour model. It is said that the sales of electronic goods manufactured by the petitioner have been prejudicially affected within the State of Gujarat. article 301 of the Constitution declares that subject to the provi 771 sions of Part XIII "trade, commerce and intercourse throughout the territory of India shall be free". Clause (1) of article 303 prohibits "the legislature of a State from making any law giving, or authorising the giving of, any preference to one State or another, or making, or authorising the making of, any discrimination between one State and another, by virtue of any entry relating to trade and commerce in any of the Lists in the Seventh Schedule". The terms of the prohibition are subject to article 304, which provides: "Notwithstanding anything in article 301 or article 303, Legislature of a State may by law: (a) impose on goods imported from other States or the Union territories any tax to which similar goods manufactured or produced in that State are subject, so, however, as not to discriminate between goods so imported and goods so manufactured or produced; and (b) impose such reasonable restrictions on the freedom of trade, commerce or intercourse with or within that State as may be required in the public interest: Provided that no Bill or amendment for the purpose of clause (b) shall be introduced or moved in the Legislature of a State without the previous sanction of the President. " It is apparent that while a State Legislature may enact a law imposing a tax on goods imported from other States as is levied on similar goods manufactured in that State the imposition must not be such as to discriminate between goods so imported and goods so manufactured. In the Firm A.T.B. Mehtab Majid & Co. vs State of Madras & Anr., [1963] Suppl. 2 S.C.R. 435 this Court was called upon to consider the validity of Rule 16 of the Madras General Sales Tax Rules under which tanned hides and skin imported from outside the State of Madras were subject to a higher rate of tax then the tax imposed on hides and skins tanned and sold within the State. Referring to its earlier decisions in Atiabari Tea Co. Ltd. vs The State of Assam and Ors. ,[1961] 1 S.C.R. 809 and The Automobile Transport (Rajasthan) Ltd. vs The State of Rajasthan & Ors., [1963] 1 S.C.R. 491 where the scope and significance of article 301 were explained, it proceeded to observe: "It is therefore now well settled that taxing laws can be restrictions on trade, commerce and intercourse, if they hamper the flow of trade and if they are not what can be termed to be compensatory taxes or regulatory measures. 772 Sales tax, of the kind under consideration here, cannot be said to be a measure regulating any trade or a compensatory tax levied for the use of trading facilities. Sales tax, which has the effect of discriminating between goods of one State and goods of another, may affect the free flow of trade and it will then offend against article 301 and will be valid only if it comes within the terms of article 304(a). article 304(a) enables the Legislature of a State to make laws affecting trade, commerce and intercourse. It enables the imposition of taxes on goods from other States if similar goods in the State are subjected to similar taxes, so as not to discriminate between the goods manufactured or produced in that State and the goods which are imported from other States. This means that if the effect of the sales tax on tanned hides or skins imported from outside is that the latter becomes subject to a higher tax by the application of the proviso to sub rule of r. 16 of the Rules, then the tax is discriminatory and unconstitutional and must be struck down." So also in H. Anraj vs Government of Tamil Nadu and Dipak Dhar & Ors. vs State of West Bengal & Anr., this Court struck down the levy of tax imposed by the State of Tamil Nadu on lottery tickets issued by other States and sold within the State of Tamil Nadu while exempting from such levy lottery tickets issued by the Government of Tamil Nadu. In answer to the writ petition, the respondents point out that the rate of tax was reduced in the case of goods manufactured locally in order to provide an incentive for encouraging local manufacturing units. Reference is made to cl.(b) and (c) of article 39 of the Constitution. We do not think that any support can be derived from the two clauses of article 39. (a) of article 304 is clear in meaning. An exception to the mandate declared in article 301 and the prohibition contained in Cl. (1) of article 303 can be sustained on the basis of cl. (a) of article 304 only if the conditions contained in the latter provision are satisfied. In the result, the discrimination effected by applying different rates of tax between goods imported into the State of Gujarat and goods manufactured within that State must be struck down. The next question is whether, for the purpose of ensuring the 773 same rate of tax between the petitioners and the local manufacturers, the levy of the higher rate of tax suffered by the petitioners should be quashed and they be held entitled to the levy of the lower rate applied to the local manufacturers or should the higher rate imposed on the petitioners be maintained and the notifications imposing the lower rate on local manufacturers be quashed. A perusal of the record shows that the grievance of the petitioners has arisen only because the local manufacturers have been favoured by a lower rate of tax. So long as the higher rate of tax imposed on the petitioners was also suffered by the local manufacturers, no complaint was voiced by the petitioners. It is the levy of the lower rate on local manufacturers that constitutes the substance of the grievance. That is borne out by the terms of the relief specifically claimed by the petitioners, that the notifications specifying a lower rate for local manufacturers should be quashed. Moreover, the rate levied on the petitioners is the rate prescribed under section 7 of the Act. That is the rate applied generally. It represents the normal standard of levy. The lower rate applied to local manufacturers has been applied by invoking sub section (2) of section 49 of the Act. It represents a departure from, or exception to, the general norm. In cases such as this, the Court should, when granting relief, choose the alternative which would give effect to the statutory intention. And, therefore, in this case what is called for is the quashing of the impugned notifications reserving a lower rate of tax for local manufacturers. Accordingly, the writ petition is allowed and the Notifications No. (GHN 51) GST 1081 (section 49)(109) TH dated 23 July, 1981 and No. (GHN 22) GST 1086/(S.49)(173) TH dated 29 March, 1986 prescribing a lower rate of tax for local manufacturers in respect of television sets and other electronic goods are quashed. The petitioners are entitled to their costs. H.L.C. Petition allowed.

By availing of its powers under sub section (2) of section 49 of the Gujarat Sales Tax Act, 1969 to exempt, in the public interest, any specified class of sales from payment of the whole or any part of the tax payable under the Act, the Government of Gujarat issued two notifications prescribing a lower rate of tax for goods manufactured within the State as compared to similar goods imported from outside the State. The petitioners, who are manufacturing electronic goods, including television sets etc., in factories located outside the State, challenged the validity of these notifications as violative of article 301 of the Constitution. The State Government contended that the rate of tax was reduced in order to provide as incentive for encouraging local manufacturing units and sought to draw support for its action from clauses (b) and (c) of article 39. Allowing the Petition and quashing the notifications aforesaid, ^ HELD: article 301 declares that subject to the provisions of Part XIII, trade, commerce and intercourse throughout the territory of India shall be free. Clause (1) of article 303 prohibits the legislature of a State from making any law giving, or authorising the giving of, any preference to one State or another, or making, or authorising the making of, any discrimination between one State and another. The terms of the prohibition are subject to article 304. Clause (a) of article 304 provides that the legislature of a State may, by law, impose on goods imported from other States any tax to which similar goods manufactured or produced in that State are subject so, however, as not to discriminate between goods so imported and goods so manufactured or produced. It is apparent that while a State Legislature may enact a law 769 imposing a tax on goods imported from other States, as is levied on similar goods manufactured in that State, the imposition must not be such as to discriminate between goods so imported and goods so manufactured. We do not think any support can be derived from the two clauses of article 39 to justify the reduction in the rate of tax in the case of goods manufactured locally. Clause (a) of article 304 is clear in meaning. An exception to the mandate declared in article 301 and the prohibition contained in cl. (1) of article 303 can be sustained on the basis of cl. (a) of article 304 only if the conditions contained in the latter provision are satisfied. [770H;771A B,772F G] Firm A.T.B. Mehtab Majid & Co. vs State of Madras & Anr., [1963] Suppl. 2 S.C.R. 435; Atiabari Tea Co. Ltd. vs The State of Assam and Ors. , ; ; The Automobile Transport (Rajasthan) Ltd. vs The State of Rajasthan & Ors., [1963] 1 S.C.R. 491 and H. Anraj etc. vs Government of Tamil Nadu etc., , relied on. (ii) The next question is whether, for the purpose of ensuring the same rate of tax between the petitioners and the local manufacturers, the levy of the higher rate of tax suffered by the petitioners should be quashed and they be held entitled to the levy of the lower rate applied to the local manufacturers, or, should the higher rate imposed on the petitioners be maintained and the notifications imposing the lower rate on local manufacturers be quashed. The grievance of the petitioners has arisen only because the local manufacturers have been favoured by a lower rate of tax. The rate levied on the petitioners is the rate prescribed under section 7 of the Act. That is the rate applied generally. It represents the normal standard of levy. The lower rate applied to local manufacturers has been applied by invoking sub section (2) of section 49 of the Act. It represents a departure from, or exception to, the general norm. In cases such as this, the Court should, when granting relief, choose the alternative which would give effect to the statutory intention. And, therefore, in this case what is called for is the quashing of the impugned notifications reserving a lower rate of tax for local manufacturers. [772H; 773A E]

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Civil Appeal No. 422 of 1964 Appeal by special leave from the order dated September 29, 1962 of the Central Government Industrial Tribunal at Dhanbad in Application No. 45 of 1960 in Reference Nos. 40 and 34 of 1960. section V. Gupte, Solicitor General and 1. N. Shroff, for the appellant Jitendra Sharma and Janardan Sharma, for the respondent. The Judgment of the Court was delivered by Gajendragadkar C.J. The short question of law which arises in this appeal relates to the scope and effect of the provisions contained in s 33(2) of the (No. 14 of 1947) (hereinafter called 'the Act '). The appellant, the Tata Iron & Steel Co. Ltd., Jamadoba, applied before the Chairman, Central Government Industrial Tribunal, Dhanbad, (hereafter called "the Tribunal") under section 33(2)(b) of the Act for approval of the order passed by it discharging the respondent, its employee section N. Modak, from its service. In its application, the appellant alleged that the respondent had been appointed as a Grade 11 Clerk in the Chief Mining Engineer 's Office at Jamadoba. One of the duties assigned to the respondent was to check arithmetical calculations according to sanctioned rate of the bills coming from the Heads of Department. He was required to bring to the notice of the Deputy Chief Mining Engineer cases of discrepancies or irregularities, and also cases where additions or alterations in the bills had been made, but not initialed. On rechecking of the bills which had been passed by the respondent, it was discovered that several additions and alterations made in the bills were not noticed by him and were not reported. This failure constituted misconduct under the Standing Orders of the appellant. For this misconduct, the respondent was charge sheeted (No. 51 dated 1/5 10 1960); that led to a departmental enquiry, and as a result of the report made by the Enquiry Officer, the appellant passed an order on December 17, 1960, terminating the services of the respondent as from December 24, 1960. The present applica tion was drafted on the 17th December and it reached the Tribunal on the 23rd December 1960. It appears that this application was made by the appellant under section 33(2)(b), because four industrial disputes were pending between the appellant and its employees at that time in References Nos. 27, 34, 40 & 49 of 1960. After this application was filed, the respondent challenged the propriety of the order passed by the appellant for which approval was sought by it, and several contentions were raised by him in support of his case that the enquiry held against him was invalid and improper and the 'order of dismissal passed against him was the result of mala fides. Evidence was led by the parties in support of their respective pleas 413 When the matter came to be argued before the Tribunal, it. was urged by the appellant that the application made by it no longer survived, because all the industrial disputes which were pending between the appellant and its employees and as as a result of the, pendency of which it had made the application under section 33(2)(b) of the Act, had been decided by the Tribunal; Awards had been, made in all the said References and they had been published in the Gazette. It does appear that the four References which we have already mentiond, ended in Awards made on 31 10 1960, 8 11 1960,. 14 4 1961, and 22 9 1961 respectively. The award on the present application was made on 29 9 1962, and it is common ground that, the time when the appellant urged its contention that the application made by it did not survive any longer, all the four References had, in fact, been disposed of. The plea thus raised by the appellant naturally raised the question as to what would be the effect of the awards pronounced by the Tribunal on industrial disputes pending before it at the time when the appellant moved the Tribunal tinder section 33(2)(b)? If, as a result of the pendency of an industrial dispute, between an employer and his employees, the employer is required to apply for approval of the dismissal of his employee under section 33 (2)(b), does such an application survive if the main industrial dispute is meanwhile finally decided and an award pronounced on it? That is the question which this appeal raises for our decision, aid the answer to this question would depend upon a fair determination of the true scope and effect of the provisions of section 33(2)(b) of the Act. This question has been answered by the Tribunal against the appellant. Having held that the application made by the appellant survived the decision of the main industrial disputes, the Tribunal ' has considered the merits of the controversy between the parties. Airier examining the evidence, the Tribunal has found that the enquiry made by the appellant before passing the impugned order of discharge against the respondent, was invalid. It has pointed out that the Enquiry Officer, Mr. Watcha, did not in fact record the statement of any witnesses who gave evidence before him, and the only record of the enquiry is the report made by Mr. Watcha. It has also noticed that the enquiry in question suffered from the serious infirmity that Mr. Watcha who acted as the Enquiry Officer himself gave evidence against the respondent, and the evidence which was actually recorded in the case was taken not by Mr. Watcha, but by Mr. Paravatiyar. In the result,the conclusion of the Tribunal on the merits was that the enquiry "was a farce, a mere eye wash, biased with pre determined result, and entirely mala fide and not at all fair". As a result of this conclusion, the Tribunal refused to accord approval to the order of discharge passed by the appellant against the respondent. It is against this order that the appellant has. come to this Court by special leave. Reverting then to the question of construing section 33 of the Act,. we may refer to some general considerations at the outset. Broadly. 414 stated. section 33 provides that the conditions of service, etc. should remain unchanged under certain circumstances during the pendency of industrial adjudication proceedings. It is unnecessary to refer to the previous history of this section. It has undergone many changes , but for the purpose of the present appeal, we need not refer to the ,aid changes. We are concerned with section 33 as it stands after its final amendment in 1956. Section 33 consists of five sub sections. For the purpose of this appeal, it is necessary to read subsections (1) & (2) of section 3 3 : "(1) During the pendency of any conciliation proceeding before a conciliation officer or a Board or of any proceeding before a Labour Court or Tribunal or National Tribunal in respect of an industrial dispute, no employer shall (a)in regard to any matter connected with the dispute, alter, to the prejudice of the workmen concerned in such dispute, the conditions of service applicable to them immediately before the commencement of such proceedings; or (b)for any misconduct connected with the dispute, discharge or punish, whether by dismissal or otherwise, any workmen concerned in such dispute save with the express permission in writing of the authority before which the proceeding is pending. (2)During the pendency of any such proceeding in respect of an industrial dispute, the employer may, in accordance with the standing orders applicable to a workman concerned in such dispute (a) alter, in regard to any matter not connected with the dispute, the conditions of service applicable to that workman immediately before the commencement of such proceeding; or (b)for any misconduct not connected with the dispute, discharge or punish, whether by dis missal or otherwise, that workman: Provided that no such workman shall be discharged or dismissed, unless he has been paid wages for one month and an application has been made by the employer to the authority before which the proceeding is pending for approval of the action taken by the employer". A reading of the above two sub sections of section 33 makes it clear that its provisions are intended to be applied during the pendency of any proceeding either in the nature of conciliation proceeding or in the 415 nature of proceeding by way of reference made under section 10. The pendency of the relevant proceeding is thus one of the conditions prescribed for the application of section 33. Section 33(1) also shows that the provisions of the said subsection protect workmen concerned in the main dispute which is pending conciliation or adjudication. The effect of sub section (1) is that where the conditions precedent prescribed by it are satisfied, the employer is prohibited from taking any action in regard to matters specified by clauses (a) & (b) against employees concerned in such dispute without the previous express permission in writing of the authority before which the proceeding is pending. In other words, in cases falling under sub section (1), before any action can be taken by the employer to which reference is made by clauses (a) & (b), he must obtain express permission of the specified authority. Section 33(2) pproceedes to lay down a similar provision and the conditions precedent prescribed by it are the same as those contained in section 33(1.). The proviso to section 33(2) is important for our purpose. This proviso shows that where is action is intended to be taken by an employer against any of his employees which falls within the scope of cl. (b), he can do so, subject to the requirements of the proviso. If the employee is intended to be discharged or dismissed an order can be passed by the employer against him, provided he has paid such employee the wages for one month, and he has made an application to the authority before which the proceeding is pending for approval of the action taken by him. The requirements of the proviso have been frequently considered by Industrial Tribunals and have been the subject matter of decisions of this Court as well. It is now well settled that the requirements of the proviso have to be satisfied by the employer on the basis that they form part of the same transaction; and stated generally, the employer must either pay or offer the salary for one month to the employee before passing an order of his discharge or dismissal, and must apply to the specified authority for approval of his action at the same time, or within such reasonably short time thereafter as to form part of the same transaction. It is also settled that if approval is granted, it takes effect from the date of the order passed by the employer for which approval as sought. If approval is not granted the order of dismissal or discharge passed by the employer is wholly invalid or inoperative, and the employee can legitimately claim too continue to be in the employment of the employer notwithstanding the order passed by him dismissing or discharging him words, approval by the prescribed authority makes the order of discharge or dismissal effective; in the absence of approval such an orders is invalid and inoperative in law. Sub sections (3) & (4) of section 33 deal with cases of protected workmen, but with the provisions contained in these two subsections we are not concerned in the present appeal. That leaves section 33(3) to be considered. This sub section requires that where an application is made under the proviso to sub section (2), the specified authority has to 416 dispose of the application without delay; and indeed, it expressly prescribes that the said proceedings must be dealt with as expeditiously as possible. This sub section is naturally limited to cases falling under sub section In regard to cases falling under sub section (1), the employer can act only with the previous express sanction of the prescribed authority, and, therefore, there is no need to made any provision in regard to an application which the employer may make under sub section (1) requiring that the said application should be dealt with expeditiously. That is the general scheme of section 33. it is quite clear that section 33 imposes a ban on the employer exercising his common law, statutory, or contractual right to terminate the services of his employees according to the contract or the provisions of law governing such service. In all cases where industrial disputes are pending between the employers and their employees, it was thought necessary that such disputes should be adjudicated upon by the Tribunal in a peaceful atmosphere undisturbed by any subsequent cause for bitterness or unpleasantness. It was, however, realized that if the adjudication of such disputes takes long the employers cannot be prevented absolutely from taking action which is the subject matter of section 33(1) and (2). The Legislature, therefore, devised a formula for reconciling the need of the employer to have liberty to take action against his employees, and the necessity for keeping the atmosphere calm and peaceful pending adjudication of industrial disputes. In regard to actions covered by section 33(1), previous permission has to be obtained by the employer, while in regard to actions falling under section 33(2), he has to obtain subsequent approval, subject to the conditions which we have already considered. In that sense, it would be correct to say that the pendency of an industrial dispute is in the nature of a condition precedent for the applicability of section 33(1) & (2). It would, prima facie, seem to follow that as soon as the said condition precedent ceases to exist, section 33(1) and (2) should also cease to apply; and the learned Solicitor General for the appellant has naturally laid considerable emphasis on this basic aspect of the matter. It is also true that having regard to the conditions precedent prescribed by section 33(1) and (2), it may be possible to describe the application made by the employer either under section 33(1) or under section 33(2) as incidental to the main industrial dispute pending between the parties. We have noticed that such applications have to be made before the specified authority which is dealing with the main indus trial dispute; and so, the argument is that an incidental or an interlocutory application which arises from the pendency of the main industrial dispute, cannot survive the decision of the main dispute itself. That is another aspect of the matter on which the learned Solicitor General relies. He urges that it is during the pendency of the main industrial dispute that section 33 applies; that it applies in relation to workmen concerned with such main dispute; and that the 417 power conferred by it has to be exercised by the authority before which the main dispute is pending. These broad features of section 33 impress upon the applications made under section 33(1) and (2) the character of interlocutory proceedings, and thus considered, interlocutory proceedings must be deemed to come to an end as soon as the main dispute has been finally determined. On the other hand, there are several considerations which do not support the argument of the appellant that as soon as the main industrial dispute is decided, the application made by it for approval under section 33(2) should automatically come to an end. As we have already indicated, the application of the appellant can., in a sense, be treated as an incidental proceeding; but it is a separate proceeding all the same, and in that sense, it will be governed by the provisions of section 33(2)(b) as an independent proceeding. It is not an interlocutory proceeding properly so called in its full sense and significance; it is a proceeding between the employer and his employee who was no doubt concerned with the main industrial dispute along with other employees; but it is nevertheless a proceeding between two parties in respect of a matter not covered by the said main dispute. It is, therefore, difficult to accept the argument that a proceeding which validly commences by way of an application made by the employer under section 33(2)(b) should automatically come to an end because the main dispute has in the meanwhile been decided. What is the order that should be passed in such a proceeding, is a question which cannot be satisfactorily answered, unless it is held that the proceed ing in question must proceed according to law and dealt with as such. In this connection it is significant that though the Legislature has specifically issued by section 33(5) a directive to the specified authorities to dispose of the applications without delay and act as expeditiously as possible, it has not made any provision indicating that if the decision on the applications made under section 33(2) is not reached before the main dispute is decided no order should be passed on such applications. There is little doubt that the Legislature intends that applications made under section 33(2) should be disposed of well before the main dispute is determined; but failure to provide for the automatic termination of such applications in case the main dispute is decided before such applications are disposed of, indicates that the Legislature intends that the proceedings which begin with an application properly made under section 33(2) must run their own course and must be dealt with in accordance with law. The direction that the said proceeding should be disposed of as expeditiously as possible emphasises the fact that the legislature intended that proper orders should be passed on such applications without delay, but according to law and on the merits of the applications themselves. It is, however, urged by the learned Solicitor General that it would be futile to allow the present application to proceed any 418 further, because the appellant can proceed to dismiss the respondent notwithstanding the fact that the Tribunal does not accord its approval to its order in question. This argument, in out opinion, is misconceived. It cannot be denied that with final determination of the main dispute between the parties, the employer 's right to terminate the services of the respondent according to the terms of service revives and the ban imposed on the exercise of the said power is lifted. But it cannot be overlooked that for the period between the date on which the appellant passed its order in question against the respondent, and the date when the ban was lifted by the final determination of the main dispute, the order cannot be said to be valid unless it receives the approval of the Tribunal ' In other words, the order being incomplete and inchoate until the approval is obtained, cannot effectively terminate the relationship of the employer and the employee between the Appellant and the respondent , and so, even if the main industrial dispute is finally decided, the question about the validity of the order would still have to be tried and if the approval is not accorded by the Tribunal, the employer would be bound to treat the respondent as its employee and pay him his full wages for the period even though the appellant may subsequently proceed to terminate the respondent 's services. Therefore, the argument that the proceedings if continued beyond the date of the final decision of the main industrial dispute would become futile and meaningless, cannot be accepted. There is another aspect of this matter to which reference must be made. Section 33A makes a special provision for adjudication as to whether any employer has contravened the provisions of section 33. This section has conferred on industrial employees a very valuable right of seeking the protection of the Industrial Tribunal in case their rights have been violated contrary to the provisions of section 33. Section 33 A provides that wherever an employee has a grievance that he has been dismissed by his employer in contravention of section 33(2), he may make a complaint to the specified authorities and such a complaint would be tried as if it was an industrial dispute referred to the Tribunal under section 10 of the Act. In other words, the complaint is treated as an independent industrial proceeding and an award has to be pronounced on it by the Tribunal concerned. Now, take the present case and see how the acceptance of the appellants argument would work. As we have already pointed out, in the present case the Tribunal has considered the met its of the appellant 's prayer that it should accord approval to the proposed dismissal of the respondent and it has come to the conclusion that having regard to the relevant circumstances, the approval should not be accorded. If the appellant 's argument is accepted and it is held that as soon as the main industrial disputes were finally deter mined, the application made by the appellant under section 33(2) auto magically came to an end, the respondent would not be able to 419 get any relief against the appellant for the wrongful termination of his services between the date of the impugned order and the final disposal of the main industrial disputes; and this would mean that in a case like the present, section 33A would be rendered nugatory, because the employer having duly applied under section 33(2)(b), the employee cannot complain that there has been a contravention of section 33 by the employer, even though on the merits the dismissal of the employee may not be justified. That, in our opinion, could not have been the intention of the Legislature. This aspect of the matter supports the conclusion that a proceeding validly commenced under section 33(2)(b) would not automatically come to an end merely because the main industrial dispute has in the meanwhile been finally determined. It is of course true that under section 33 the authority to grant permission or to accord approval in cases falling under section 33(1) and (2) respectively is vested in the Tribunal, before which the main industrial dispute is pending, but that is not an unqualified or inflexible requirement, because section 33B(2) seems to permit transfers of applications before one Tribunal to another, and in that sense, the argument urged by the appellant that the condition that a specified Tribunal alone can deal with applications made to it is an inflexible condition, cannot be accepted. We are, therefore, satisfied that the Tribunal was right in over ruling the contention raised by the appellant that the application made by it for approval under section 33(2)(b) ceased to constitute a valid proceeding by reason of the fact that the main industrial disputes, the pendency of which had made the application necessary, had been finally decided. This question has been considered by several High Courts in this country. The High Courts of Calcutta, Madras and Mysore have taken the view for which the learned Solicitor General has contended before us, vide Alkali and Chemical Corporation of India Ltd. vs Seventh Industrial Tribunal, West Bengal and Ors.(1); Mettur Industries Ltd. vs Sundara Naidu and Anr.;(2) and Shah (A.T.) vs State of Mysore and Ors.(3) respectively. On the other hand, the Kerala, the Punjab, and the Allahabad High Courts have taken the view which we are inclined to adopt, vide Kannan Devan Hill Pro duce Company Ltd., Munnar vs Miss Aleyamma Varghese and Anr.;(4) Om Parkash Sharma vs Industrial Tribunal, Punjab and Anr.;(5) and Amrit Bazar Patrika (Private) Ltd. vs Uttar Pradesh State Industrial Tribunal and Ors.(6) respectively. In our opinion, the former view does not, while the latter does, correctly represent the true legal position under section 33(2)(b). That takes us to the merits of the findings recorded by the Tribunal in support of its final decision not to accord approval to the (1) [1964] II L.L.J. 568. (2) [1963] II L.L.J. 303. (3) [1964] I L.L.J. 237. (4) [1962] II L.L.J. 158. (5) [1962] II L.L.J. 272, (6) [1964] II L.L.J. 53, B(N)3SCI 14 420 action proposed to be taken by the appellant against the respondent. We have already indicated very briefly the nature and effect of the said findings. The learned Solicitor General no doubt wanted to contend that the said findings were not justified on the evidence adduced before the Tribunal. We did not, however, allow the learned Solicitor General to develop this point because, in our opinion, the findings in question are based on the appreciation of oral evidence, and it cannot be suggested that there is no legal evidence on the record. to support them. Usually, this Court does not under article 136 of the Constitution entertain a plea that the findings of fact recorded by the Industrial Tribunal are erroneous on the ground that they are based on a misappreciation of evidence. The propriety or the correctness of the findings of fact is not ordinarily allowed to be challenged in such appeals. The result is the appeal fails and is dismissed with costs. Appeal dismissed.

The appellant applied under section 33(21)(b) of the to the Industrial Tribunal for the Tribunal 's approval of the order passed by the appellant discharging its employee the respondent. This application was made because certain industrial disputes were pending between the appellant and its employees, but when the matter came to be argued before the Tribunal, the pending disputes had been disposed of. Hence, the appellant contended that the application made by it no longer survived '. which the Tribunal rejected. In appeal by Special Leave. HELD:The Tribunal was right in overruling the appellant 's contention. [419 E]. A proceeding validly commenced under section 33(2)(b) would not automatically come to an end merely because the main industrial dispute had in the meanwhile been finally determined. [417 D E]. The application of the appellant can in a sense, be treated as an incidental proceeding; but it is a separate proceeding all the same, and in that sense it will be governed by the provisions of section 33(2)(b) as an independent proceeding. It is not an interlocutory proceeding properly so called in its full sense and significance; it is a proceeding between the employer and his employee who was no doubt concerned with the main industrial dispute along with other employees; but it is nevertheless a proceeding between two parties in respect of a matter not covered by the main dispute. [417 B D]. The order being incomplete and inchoate until the approval is obtained, cannot effectively terminate the relationship of the employer and the employee between the appellant and the respondent; and so even if the main industrial dispute was finally decided, the question about the validity of the order would still have to be tried and if the approval is not accorded by the Tribunal, the employer would be bound to treat the respondent as its employee and pay him full wages for the period even though the appellant may subsequently proceed to terminate the respondent 's service. [418 C E]. Besides, if it were held that with the final determination of the main industrial dispute such application would automatically come to an end, it would mean that section 33 A under which a complaint by the employee is treated as an independent proceeding, would be rendered nugatory. [419 A]. Alkali and Chemical Corporation of India Ltd. vs Seventh Industrial Tribunal, West Bengal and Ors. (1964) II L.L.J. 568, Mettur Industries Ltd. vs Sundara Naidu and Anr. (1963) II L.L.J. 303 and Shah (A.T.) vs State of Mysore and Ors (1964) I LL.J. 237, disapproved Kannan Devan Hill Produce Company Ltd. Munnar vs Miss Aleyamma Varughesa and Anr. (1962) II L.L.J. 158, Om Prakash Sharma vs Industrial Tribunal, Punjab and Anr. (1962) II L.L.J. 272 and Amrit Bazar Patrika (Private) Ltd. vs Uttar Pradesh State Industrial Tribunal and Ors. (1964) II L.L.J. 53, approved.

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minal Appeal No. 170 of 1967. Appeal by special leave from the judgment and order dated October 25, 1966 of the Bombay High Court in Criminal Appeal No. 805 of 1965. S.S. Kavalekar, K. Rajendra Chaudhuri and K.R. Chaudhuri, for the appellant. H.R. Khanna, B.D. Sharma and S.P. Nayar, for respondent No.1. The Judgment of the Court was delivered by P. Jaganmohan Reddy, J. This appeal is by special leave directed against the judgment of the Bombay High Court. 81 The appellant is the author of a short story entitled Shama published in the 1962 Diwali Issue of Rambha, a monthly Marathi Magazine, which story is said to be obscene. Criminal proceedings were, therefore, initiated before the first class Magistrate, Poona by the complainant Bhide under section 292 I.P.C. against the Printer and Publisher accused 1, the writer of the story accused 2 and the selling agent accused 3. The complainant stated that he had read the aforesaid Diwali issue of Rambha and found many articles and pictures in it to be obscene which are calculated to corrupt and deprave the minds of the readers in general and the young readers in particular. The Complainant further relented to several other articles in the same issue such as the story of Savitri and certain cartoons but we are not now concerned with these because both the Magistrate as well the High Court did not think that they offended the provisions of section 292 I.P.C. the magistrate after an exhaustive consideration did not find the accused guilty of the offence with which they were charged and, therefore, acquitted them. The complainant and the State filed appeals against this judgment of acquittal. Before the High Court it was conceded that there was no evidence that accused No. 3 had sold any copies of the issues of Rambha and accordingly the order of acquittal in his favour was confirmed. In so far as the other two accused are concerned it reversed the order of acquittal and convicted the printer and publisher accused 1 and the writer accused 2 under section 292 I.P.C. but taking into consideration the degree of obscenity in the passages complained of a fine Rs. 25/ only was imposed on each of the accused and in default they were directed to suffer simple imprisonment for a week. It was also directed that copies of the magazine Rambha in which the offending story was published and which may be in possession and power of the two accused be destroyed. The allegation, against the accused is that certain passages in the story of Shama at pp. 111 112, 114, 116, 118 121, 127, 128, 131, and 134 are said to be obscene. In support of this the complainant examined himself and led the evidence of Dr. P.G. Sahstrabudhe and Dr. G.V. Purohit in support of his allegation that the novel is obscene and that the writer and publisher contravened the provisions of section 292 I.P.C. Accused No. 1 stated that the story of Shama was written by an ;able writer which depicted the frustration in the life of a poet and denied that it was obscene. The writer Kakodar, accused No. 2 claims to have written about 60 such stories. which are published in different periodicals by reputed publishers. He also denies that Shama is obscene and states that he has introduced certain characters in order to condemn the worst and glorify the best and it was never his intention to titillate the sex feelings of the 82 readers, but on the other hand his attempt was to achieve the literary and artistic standard which was in keeping with the style of some of the able and successful writers of Marathi literature. In support of his defence, he examined Shri Keluskar and Prof. Madho Manohar D.Ws. 1 and 2 respectively. The Court on its own summoned and examined Prof. N.S. Phadke and Acharya P.K. Atre. Both the magistrate as well as the learned Judge of the High Court were conversant with Marathi and they seem to have read the story of Shama in the original, an advantage which we have not got. However, on a consideration of the offending passages in the story to which we shall refer presently, they came to different and opposite conclusions. It is apparent that the question whether a particular article or story or book is obscene or not does not altogether depend on oral evidence because it is the duty of the court to ascertain whether the book or story or any passage or passages therein offend the provisions of section 292. Even so as the question of obscenity may have to be judged in the light of the claim that the work has a predominant literary merit, it may be necessary if it is at all required, to rely to a certain extent on the evidence and views of leading litterateurs on that aspect particularly when the work is in a language with which the Court is not conversant. Often a translation may not bring out the delicate nuances of the literary art in the story as it does in the language in which it is written and in those circumstances what is said about its literary quality and worth by persons competent to speak may be of value, though as was said in an earlier decision, the verdict as to whether the book or article or story considered as a whole panders to the prurient and is obscene must be judged by the courts and ultimately by this Court. What is obscenity has not been defined either in section 292 IPC or in any of the statutes prohibiting and penalising mailing, importing, exporting, publishing and selling of obscene matters. The test that has been generally applied in this country was that laid down by Cockburn, C.J. in Hicklin 's case(1) and even after the inauguration of the Constitution and considered in relation to the fundamental right of freedom of speech and expression this test, it has been held, should not be discarded. In Hicklin 's case(1) while construing statutes 20 and 21 Victoria, a measure enacted against Obscene books, Cockburn, C.J. formulated the test in these words: "I think the test of obscenity is this, whether the tendency of the matter charged as obscenity is to deprave and corrupt those whose minds are open to such immoral influences, and into whose hands publication of (1) 83 this sort may fail. It is quite certain that it would suggest to the minds of the young of either sex, or even to persons of more advanced years, thought of most impure and libidinous character. " This Court has in Udeshi vs State of Maharashtra(1) considered the above test and also the test laid down in certain other American cases. Hidayatullah, J. as he then was, at the outset pointed out that it is not easy to lay down a true test because "art has such varied facets and such individualistic appeals that in the same object the insensitive sees only obscenity because his attention is arrested, not by the general or artistic appeal or message which he cannot comprehend, but by what he can see, and the intellectual sees beauty and art but nothing gross. " It was also pointed out in that decision at p. 74, "None has so far attempted a definition of obscenity because the meaning can be laid bare without attempting a definition by describing what must be looked for. It may, however, be said at once that treating with sex and nudity in art and literature cannot be regarded as evidence of obscenity without something more. It is not necessary that the angels and saints of Michelangelo should be made to wear breeches before they can be viewed. If the rigid test of treating with sex as the minimum ingredient were accepted hardly any writer of fiction today would escape the fate Lawrence had in his days. Half the book shops would close and the other half would deal in nothing but moral and religious books which Lord Campbell boasted was the effect of his Act. " It is, therefore, the duty of the court to consider the obscene matter by taking an overall view of the entire work and to determine whether the obscene passages are so likely to deprave and corrupt those whose minds are open to such influences and in whose hands the book is likely to fail and in doing so one must not overlook the influences of the book on the social morality of our contemporary society. We can do no better than to refer to this aspect in the language of Hidayatullah, J. at p. 76: "An overall view of the obscene matter in the setting of the whole work would, of course, be necessary, but the obscene matter must be considered by itself and separately to find out whether it is so gross and its obscenity so decided that it is likely to deprave and corrupt those whose minds are open to influences of this sort and into whose hands the book is likely to fall." (1) ; 84 Referring to the attempt which our national and regional languages are making to strengthen themselves by new literary standards after a deadening period under the impact of English, it was further observed at p. 77, "that where obscenity and art are mixed, art must so preponderate as to throw the obscenity into a shadow or the obscenity so trivial and insignificant that it can have no effect and may be overlooked. In other words, treating with sex in a manner offensive to public decency and morality (and these are the words of our Fundamental Law), judged of by our national standards and considered likely to pander to lascivious, prurient or sexually precocious minds, must determine the result. We need not attempt to bowdlerize all literature and thus rob speech and expression of freedom. A balance should be maintained between freedom of speech and expression and public decency and morality but when the latter is substantially transgressed the former must give way. " Bearing in mind these observations and the tests laid down in Udeshi 's case,(1) we propose to examine, having regard to our national standards, the passages in Shama to ascertain in the light of the work as a whole whether the treat with sex in such a way as to be offensive to public decency and morality as can be considered likely to pander to lascivious, prurient or sexually precocious minds. The second appellant writes about the life of a poet Nishikant who left school in the days of freedom struggle, wrote revolutionary poems, but as the freedom struggle waned he did not join school as others had done notwithstanding his brother 's advice that he should pass the metric so that he could be employed in service. As he was mostly unemployed, he was living on his brother and on the bounty of his sister in law who was kind and considerate to him. Nishikant, it will appear, is emotional, sensitive and has the power to discern right from wrong. The story starts ,with his being employed as a teacher and his meeting Sharma, the ' Music teacher in the school. His attraction for her and the opportunity she gives him to meet her alone in her room fills him with a sense of foreboding lest he may have to endure the pangs of suffering which he had to undergo. in his two earlier affairs with Neela and Vanira. The poet recalls these two affairs individually and we get the impression that the pain which he underwent should not be repeated. It is more as a repellent to any further involvement with Shama that these experiences are related. (1) ; 85 Neela who is about 17 years of age is the daughter 015 a distant maternal cousin of his mother. As she had reached the marriageable age, her father in Goa, Wasudeo who always treated Nishikant 's mother like his own sister is anxious to get her married to some eligible youngman, but evidently the opportunity for choosing the right person was remote. So he suggests to Nishikant 's mother that Nishikant should come and bring Neela to Bombay to live with them where they would have better opportunity of choosing a youngman for her to be married. Nishikant who was appointed in a newspaper office was at first reluctant but his sister in law persuades him and so he goes to Goa. When he meets Neela, she had changed and was not as ugly as when he had seen her earlier. The author then depicts the slow but steady maturing of the love between them, the seeking of and getting of opportunities to be near to each other, their having to sleep in the same bed while on the boat coming to Bombay and ultimately falling in love with each other which developed during Neela 's stay in Bombay. During Neela 's stay with Nishikant 's family the love between her and Nishikant became intense as a result Nishikant proposes to marry her and writes to her father for his consent. They wait for a reply but unknown to Nishikant, Neela receives a reply from her father rejecting the proposal on the ground that Nishikant is unemployed and would not join Government service even though he had suggested it to him. He says in that letter that poetry may bring him fame but would not give him a livelihood. As he was entirely dependant on his brother for his maintenance, the father refused to give his consent in the interest of Neela 's happiness and told her that he was coming back to fetch her. As Neela was in love with Nishikant but she knew that she would not be married to him, she encourages him to bring their love to culmination. This state of affairs lasted for a few days before her father took her away. About two months later Nishikant receives an invitation card for Neela 's marriage and thereafter he received another letter written by Wasudeo to his daughter to which we have earlier referred and which also. contained at the back of it Neela 's message to Nishikant asking him to forget her. Even after four years he was unable to forget Neela and had taken to drinking and coming home late. He was idle for long spells and whenever he thought of Neela he wrote a poem. Then one day he was introduced to Vanita who was a graduate and a married woman who had left her husband. She was a critic of stories and novels. When they met, she had praised his poems and had invited him to come to. her room ostensibly to discuss his poetry. Vanita is shown as an oversaxed woman, experienced and forward, making advances and suggestions. Ultimately she and Nishikant have several affairs till one morning 86 he finds that the person who had introduced her to him was coming out of her room and when he went in he found Vanita sleeping naked. His spirit revolted seeing her in that condition. He was greatly upset at her recalcitrance when he asked her how many more men she had. She replied that it had nothing to do with him, that he had got what he wanted and she does not want to be a slave to any person. He retorted with indignation that he did not wish to see her face and walked out. He had then made up his mind not to have any relations with any woman. It was with such unpleasant experiences that when he met Shama and was attracted to her he was hesitating and avoiding meeting her alone but circumstances conspired to bring them together and again another affair developed between them. He encourages Shama to sing, writes lyrics for her songs and when she gives a performance in school he arranges for a radio and gramophone representatives to be present there. Her music was appreciated and she began to get audition from these sources. It appears one of the school teacher Kale had earlier attempted to make love to Shama and she had slapped him. When Kale informs Nishikant that he knows about his affairs with Shama, Nishikant gets angry and tells him that he knows how he was slapped by Shama for making advances to her. This enraged Kale and he seems to have taken his revenge by maligning the character of Shama to the Principal. As a result of this, the Principal dismissed her. Hearing this, Nishikant gets angry, goes to the Headmaster and accuses him of being an accomplice of Kale and leaves the service. He then persuades Shama to start a music school, later gets her engagements in films as a playback singer for which he was asked to write lyrics. Shama 's reputation as a singer grows rapidly in the Marathi public. It was then that her uncle knowing of it comes to see her and makes insinuations against Nishikant who is offended and hurt because Shama does not prevent her uncle but listens to him without a demur. Periodical quarrels are witnessed because Shama becomes more status minded, begins to think of her wealth and position and moves into wealthy quarters all of which are against Nishikant 's outlook and temperament. Both began to fall apart and the visits of Nishikant to Shama became rare. Even though Nishikant lives in poverty, he is too proud to ask her money and is not willing to live with her on her conditions. He stays away from her, showing that he has pride, self respect and spirit of sacrifice. Suddenly a realisation comes to Shama that she had wronged Nishikant and that she owed everything to him, and therefore has an intense desire for reconciliation. In this state of affairs When she hears that he is taking part in the Kavi Samelan on the radio she gets into the car and asks her driver to drive fast 87 to the radio station. On tiffs pitch of expectant reconciliation and ultimate reunion the story ends. The story read as a whole does not, in our view, amount to its being a pornography nor does it pander to the prurient interest. It may not be of a very high literary quality and may show immaturity and insufficient experience of the writer, but in none of the passages referred to by the complainant do we find anything offending public order or morality. The High Court itself did not consider the description of Neela when Nishikant meets her in Goa (at p. 107) objectionable, nor the narration and the description of the situation which is created for Nishikant and Neela on the way back to Bombay from Goa when for want of room they had to sleep on a single bed (p. 112) as obscene. The passages at pp. 112, 114, 119 120 and 131 have been found by the High Court to come within the mischief of section 292 I.P.C. We have been taken through the corresponding passages in the English translation and even allowing for the translation not bringing out the literary or artistic refinement of the original language, we find little in these passages which could be said to deprave or corrupt those in whose hands the book is likely to fall, nor can it be said that any of the passages advocates, as the High Court seems to think, a licentious behaviour depraving and corrupting the morals of adolescent youth. We do not think that it can be said with any assurance that merely because adolescent youth read situations of the type presented in the book, they would become depraved, debased and encouraged to lasciviousness. It is possible that they may come across such situations in life and may have to face them. But if a narration or description of similar situations is given in a setting emphasising a strong moral to be drawn from it and condemns the conduct of the erring party as wrong and loathsome it cannot be said that they have a likelihood of corrupting the morals of those in whose hands it is likely to fall particularly the adolescent. In the passage at pp. 113 114 Nishikant takes Neela out to show the sights of the city of Bombay but instead takes her to a picture where after the lights go off, seeing a soldier and his girl friend in front kissing, they also indulge in kissing. Then as we said earlier, when the love between them develops Nishikant wanted to marry but the father of the girl was unwilling. Neela realising that their love could never be consummated encourages him to bring it to a culmination. In this way they enjoy unmarried bliss for a few days until Neela 's father takes her away. We agree with the learned Judge of the High Court that there is nothing in this or in the subsequent passages relating to Neela, Vanita and Shama which amounts to poronography nor has the author indulged in a description of the sex act or used any 88 language which can be classed as vulgar. Whatever has been done is done in a restrained manner though in some places there may have been an exhibition of bad taste, leaving it to the more experienced to draw the inferences, but certainly not sufficient to suggest to the adolescent anything which is depraving or lascivious. To the literate public there are available both to the adults and the adolescents innumerable books which contain references to sex. Their purpose is not, and they have not the effect of stimulating sex impulses in the reader but may form part of a work of art or are intended to propagate ideas or to install a moral. The concept of obscenity would differ from country to country depending on the standards of morals of contemporary society. What is considered as a piece of literature in France may be obscene in England and what is considered in both countries as not harmful to public order and morals may be obscene in our country. But to insist that the standard should always be/or the writer to see that the adolescent ought not to be brought into contact with sex or that if they read any references to sex in what is written whether that is the dominant theme or not they would be affected, would be to require authors to write books only for the adolescent and not for the adults. In early English writings authors wrote only with unmarried girls in view but society has changed since then to allow litterateurs and artists to give expression to their ideas, emotions and objectives with full freedom except that is should not fall within the definition of 'obscene ' having regard to the standards of contemporary society in which it is read. The standards of contemporary society in India are also fast changing. The adults and adolescents have available to them a large number of classics, novels, stories and pieces, of literature which have a content of sex, love and romance. observed in Udeshi 's(1) case if a reference to sex by itself is considered obscene, no books can be sold except those which are purely religious. In the field of art and cinema also the adolescent is. shown situations which even a quarter of a century ago would be considered derogatory to public morality, but having regard to changed conditions are more taken for granted without in anyway tending to debase or debauch the mind. What we have to see is that whether a class, not an isolated case, into whose hands the book, article or story falls suffer in their moral outlook or become depraved by reading it or might have impure and lecherous thought aroused in their minds. The charge of obscenity must, therefore, be judged from this aspect. We do not think that any of the impugned passages which have been held by the High Court as offending section 292 I.P.C. can (1) ; 89 be said to pervert the morals of the adolescent or be considered to be obscene. In this view, we allow the appeal, set aside the conviction and fine. The fine if paid is directed to be refunded. R.K.P.S. Appeal allowed.

The appellant, the author of a short story and the printer and publisher of the story were convicted under section 292 I.P.C. on a charge of obscenity. Setting aside the conviction this Court, HELD: It is the duty of the Court to consider the article, story or book by taking an overall view of the entire work and to determine whether the obscene passages are so likely to deprave and corrupt those whose minds are open to such influences and in whose hands the book is likely to fall; and in doing so the influence of the book on the social morality of our contemporary society cannot be overlooked. Even so as the question of obscenity may have to be judged in the light of the claim that the work has a predominant literary merit, it may be necessary if it is at all required, to rely to a certain extent on the evidence and views of leading litterateurs on that aspect. [82 D; 83 E G] To insist that the standard would always be for the writer to see that the adolescent ought not to be brought into contact with sex or that if they read any references to sex in what is written, whether that is the dominant theme or not, they would be affected, would be to require the authors to write books only for the adolescent and not for the adults What has to be seen is that whether a class, not an isolated case, into whose hands the book, article or story falls suffer in their moral outlook or become depraved by reading it or might have impure or lecherous thoughts aroused in their minds. The charge of obscenity must, therefore, be judged from this aspect. [88 D, G H] Ranjit D '. Udeshi vs State of Maharashtra ; followed. Applying the above tests the story read as a whole did not amount to its being pornography nor did it pander to the prurient interest. [87 A B]

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Criminal Appeal No. 241 of 1982 From the Judgment and Order dated 14.9.81 of the Patna High Court in Crl. Revision No. 874/81. Dr. L.M. Singhvi, S.K. Sinha, S.K. Verma, A.M. Singhvi, section Singh, C. Mukhopadhya and R. Tyagi for the Appellants. Dr. Y.S. Chitale, F.S. Nanman, S.N. Kacker, Rajinder Singh, D. Goburdhan, D. Chandrachud, L.R. Singh, Gopal Singh, M.P. Jha, R.K. Jain, Ranjit Kumar and B.P. Singh for the Respondents. The following Judgments were delivered: BHAGWATI, CJ. This case has had a chequered history and it is necessary to state the facts in some detail in order to appreciate the questions which arise for determination before us. The principal actor in the drama in this case is Dr. Jagannath Misra, one time Chief Minister of the State of Bihar. The main controversy around which all questions revolve is whether the prosecution launched against Dr. Jagannath Misra at a time when he was not in power has been rightly allowed to be withdrawn by the Chief Judicial Magis trate or whether such withdrawal is invalid and must be set aside so that the prosecution can continue against Dr. Jagannath Misra. The fact situation out of which this case arises relates to the affairs of a cooperative Bank called the 'Patna Urban Cooperative Bank ' (hereinafter referred to as the 'Coopera tive Bank '). The Cooperative Bank was registered in May 1970 and it commenced its banking business with Nawal Kishore Sinha as its Chairman, K.P. Gupta as its Honorary Secretary, M.A. Hyderi as its Manager and A.K. Singh as a loan clerk. It was not seriously disputed that most of the members of the Cooperative Bank were closely associated with Nawal Kishore Sinha. The object of the Cooperative Bank was to help people financially to set up small industries and businesses and to assist people in ordinary circumstances to carry on their vocation or business. There was a sub Commit tee formed, called "Loan Sub Committee", consisting of Nawal Kishore Sinha, K.P. Gupta and one Purnendu Narain, an Advo cate, to attend to the work of sanctioning and granting of loans. The Chairman, i.e., Nawal Kishore Sinha, was, accord ing to the bye laws, the ultimate deciding authority in regard to all the functions of the Cooperative Bank and the Honorary Secre 724 tary i.e. K.P. Gupta along with the Chairman had to exercise supervisory control over all the activities of the Coopera tive Bank, while the Manager, i.e. M.A. Hyderi, was con cerned only with its :lay to day working. Dr. Jagannath Misra who was then a Member of the Legislative Council was closely associated with Nawal Kishore Sinha and he helped the Cooperative Bank and Nawal Kishore Sinha in diverse ways in connection with the affairs of the Cooperative Bank and also assisted in mobilisation of resources for the Coopera tive Bank. Sometime in 1974 separate audits into the func tioning of the Cooperative Bank were carried out by the Reserve Bank of India as well as the Cooperative Department of the State of Bihar for the years 1972 73 and 1973 74 and as a result of these audits, there came to light a large number of irregularities such as non maintenance of cash books in a proper manner and grant of overdraft facilities without current account as also illegal practices and acts of defalcation and malversation of funds of the Cooperative Bank. The audit reports disclosed that huge amounts running into lakhs of rupees, had been squandered away by giving loans to non members, giving loans even without applica tions, agreements or promissory notes, giving loans without hypothecation or security, giving short term loans instead of releasing cash from sale proceeds of hypothecated goods, giving loans to the same persons in different names and giving loans to fictitious persons and non existing firms or industries. There were instances where loans had been grant ed on the security of Gandhi Maidan and Patna Railway Sta tion. The audit team of the Reserve Bank in its Report came to the conclusion that Nawal Kishore Sinha and others were responsible for 'bad loans ' to the tune of Rs. 12 lakhs and misappropriation and embezzlement of funds to the extent of Rs.25 lakhs. On the basis of these audit reports, the Registrar Cooperative Societies, at the instance of the Reserve Bank, made an order on 10th July 1974 superseding the management of the Cooperative Bank, removing Naval Kishore Sinha and other Directors on the Board from their office as Chairman and Directors and appointing an officer of the Cooperative Department as Special Officer to look after the affairs of the Cooperative Bank. The Registrar, Cooperative Societies followed up this action by putting up a note dated 4th November 1974 to the Secretary, Cooperation pointing out that, according to the audit reports, prima facie charges of defalcations, embezzlement of funds, conspiracy etc. were made out against the officials of the Cooperative Bank and legal action should be taken against them after taking the opinion of the Public Prosecutor. The Secretary, Cooperation by his note dated 7th November 1974 sought the opinion of the Law Depart 725 ment in regard to the action to be taken as suggested in the note of the Registrar, Cooperative Societies. The Law De partment recorded its opinion in the relevant file on 18th November 1974 that a prima facie case of conspiracy and criminal breach of trust was made out against the loanees and the office bearers of the Cooperative Bank. On the basis of this opinion, a draft complaint was prepared on 16th December 1974 by the Asstt. Public Prosecutor, Patna for being filed in the court of the Chief Judicial Magistrate, Patna and on the same day, an office noting was made on the file suggesting that the advice of the Law Department on the draft complaint be obtained. This course of action was approved by the Secretary, Cooperation and the Minister for Cooperation also approved of it on1st January 1975 and it also received the approval of the then Chief Minister, Shri Abdul Ghafoor on 2nd January 1975. The file was then sent back to the Law Department and the Law Department again reiterated its earlier advice for launching the prosecution and on the file being received back on 17th January 1975, the Secretary Cooperation, endorsed the file on 21st January 1975 to the Additional Public Prosecutor, Shri Girish Narain Sinha, for necessary action, that is, to file the prosecu tion. Thus, by 21st January 1975 a firm decision was taken to launch a criminal prosecution against the loanees and the members of the Board of Directors of the Cooperative Bank including the Chairman Naval Kishore Sinha and a com plaint in that behalf duly approved by the Law Department and signed by Shri Jagdish Narain Verma, District Coopera tive Officer, Patna on 25th January 1975 was ready with the Addl. Public Prosecutor, for being filed in the court of the Chief Judicial Magistrate. But before the Additional Public prosecutor could file the complaint, Dr. Jagannath Misra who was then Minister incharge of Agriculture and Irrigation wrote a buff sheet note dated 24th January 1975 asking the Secretary Cooperation to send the concerned file along with the audit reports to him before instituting the criminal case. It may be pointed out that under the Notification dated 30th April 1974 issued under Article 166(3) of the Constitution read with Rule 5 of the Rules of Executive Business of the State of Bihar, the then Chief Minister Shri Abdul Ghafoor, was holding inter alia the portfolio of Law but, according to the affidavit of Shri Neelanand Singh dated 19th October 1982 filed on behalf of respondent No. 1 in this Court, Shri Abdul Ghafoor had, with a view to lessen his heavy burden, requested Dr. Jagannath Misra to look after the work of the Law Department. Since Dr. Jagan nath Misra asked for the concerned file, Shri Abdul Ghafoor, on a reference made to him directed on 27th January 1975 that the file may be sent to Dr. Jagannath Misra. The Secretary, Cooperation accordingly recalled the comp 726 laint and other papers from the Additional Public Prosecutor on 28th January 1975. The file was then placed before R.K. Srivastava, Minister of Cooperation and he made an endorse ment on the file on 31st January 1975 pointing out various instances of criminal conspiracy criminal breach of trust and misappropriation of public funds which had come to light against the Directors of the Cooperative Bank and sent the file to Dr. Jagannath Misra route to the Chief Minister since they wanted to see the file before the complaint was actually lodged. It does not appear from the record as to when the file was actually sent to Dr. Jagannath Misra but in any event the file was in the hands of Dr. Jagannath Misra on 24th February 1975. The file remained with Dr. Jagannath Misra for over two and a half months and no en dorsement was made by him on that file until the middle of May 1975 with the result that prosecution could not be filed against Naval Kishore Sinha and the other Directors. Mean while on 11th April 1975, Shri Abdul Ghafoor was thrown out and in his place Dr. Jagannath Misra became Chief Minister. Dr. Jagannath Misra made an Order in his own hand in Hindi in the file on 16th May 1975 regarding the action to be taken against Nawal Kishore Sinha and others and the English translation of this Order ran as follows: "Much time has passed. On perusal of the File it appears that there is no allegation of defalcation against the Chairman and the Members of the Board of the Bank. Stern action should be taken for realisation of loans from the loanees and if there are difficulties in realisation from the loanees surcharge pro ceedings should be initiated against the Board of Directors. The normal condition be resorted in the Bank after calling the Annual General Meeting and holding the election. Sd/ May 16, 1975 Jagan nath Misra In the margin opposite to this Order, the seal contain ing the despatch entry originally showed May 16, 1975 as the date on which the file was despatched from the Chief Minis ter 's ,secretariat to the Cooperative Department after Dr. Jagannath Misra had made the Order. It is obvious from the first part of the Order that Dr. Jagannath Misra did not want any criminal prosecution to be launched against Nawal Kishore Sinha and the other Members of the Board of the Cooperative Bank and that is why he observed that there was no allegation of defalcation against the Chairman and the Members of the 727 Board though that was not correct. The object of making this observation clearly was to pre empt the filing of any crimi nal prosecution against Nawal Kishore Sinha and the other members of the Board. The second part of the Order provided that if there was any difficulty in realisation of the loans from the loanees, surcharge proceedings should be initiated against the Chairman and other members of the Board and since the loans advanced by the Cooperative Bank were mostly in fictitious names and in any event it was impossible to recover them. It was clear that, on the basis of this part of the Order, surcharge proceedings would have to be adopted against the Chairman and other Directors of the Cooperative Bank. Now, according to the despatch entry as originally made, the file containing this Order must have left the office of Dr. Jagannath Misra on 16th May 1975, though the case of Dr. Jagannath Misra is that it never left his of fice. If the file left the office of Dr. Jagannath Misra on 16th May 1975, it does not appear from the record as to when i4 came back, because there is no endorsement or seal show ing inward receipt of the file by the Secretariat of Dr. Jagannath Misra. But whether the file remained in the office of Dr. Jagannath Misra as claimed by him or it left the office on 16th May 1975 and subsequently came back to the office, it is indisputable that Dr. Jagannath Misra passed another Order in his own hand on a piece of paper in Hindi under his signature and had it pasted over the earlier order dated 16th May 1975 so as to efface the same completely and this subsequent Order was ante dated to 14th May 1975. The date of despatch namely, 16th May 1975 in the despatch entry appearing in the margin was also altered to 14th May 1975 by over writing. The English translation of this second Order addressed to the Minister, Cooperation was in the following terms: "Please issue order for restoring the normal condition in the Bank after holding Annual General Meeting". Sd / May 14, 1975 Jagan nath Misra" The explanation given on behalf of Dr. Jagannath Misra was that, as Chief Minister, he had authority and power to revise or review his earlier order and that it is the usual practice prevailing at the Patna Secretariat that whenever any order passed earlier is sought to be revised or reviewed by the same officer or Minister, it is done by pasting it over by a piece of paper containing the revised order. But even with this explanation, the admitted position that emerges is that the first Order dated 16th May 1975 made by Dr. Jagannath Misra in 1 is own 728 handwriting in the file was obliterated by the second Order made by him subsequent to 16th May 1975 but ante dated to 14th May 1975 and the date 16th May 1975 in the despatch entry was also changed to 14th May 1975 by overwriting. The effect of this action on the part of Dr. Jagannath Misra was that even the direction to adopt surcharge proceedings against the Chairman and Board of Directors in default of realisation of the loans from the loanees, was wiped out and the only direction which remained was that normal condition in the Cooperative Bank should be restored by calling the Annual General Meeting and holding the election. Thus, not only no approval was given by Dr. Jagannath Misra to the filing of the prosecution against the Chairman and members of the Board of Directors but no direction was given even in regard to the adoption of surcharge proceedings against them. There can be no doubt that Dr. Jagannath Misra as Chief Minister had the authority and power to revise the earlier Order dated 16th May 1975 and he could have easily done sO, but instead, he ante dated the second Order to 14th May 1975 and pasted it over the earlier Order dated to 16th May 1975 so as to efface it altogether and also altered the date of the despatch entry to 14th May 1975. The contention was that this was deliberately done by Dr. Jagannath Misra with the fraudulent intent to override the effect of the earlier Order dated 16th May 1975 and protect Nawal Kishore Sinha from civil liability arising from initiation of sur charge proceedings. This contention was disputed on behalf of Dr. Jagannath Misra and it was said that this was an innocent act in accordance with the practice of the Patna secretariat and the ante dating was not mala fide but simply a result of bona fide error. This is a matter which would have to be gone into by the Court if the withdrawal of the prosecution is set aside and the prosecution is directed to be continued against Dr. Jagannath Misra. So far as the filing of the prosecution against Nawal Kishore Sinha and the other members of the Board of Direc tors was concerned, it appears that the Cooperative Depart ment wanted to go ahead with it and the Minister, Coopera tion accordingly put up a Note dated 28th June 1975 and sought directions from Dr. Jagannath Misra as to what should be the next course of action in the matter of filing of the complaint. Dr. Jagannath Misra in response to this query passed the following Order in the file on 30th June 1975: "Discussion has been held. There is no need to file the prosecution. " This clearly shows that Dr. Jagannath Misra did not want any prosecution to be filed against Nawal Kishore Sinha and others and wanted to protect Nawal Kishore Sinha against any such criminal prosecution. It appears that in July 1975 there were questions and call attention motions in the 729 Bihar Legislative Assembly and in the course of the proceed ings, the propriety of not filing prosecution against Nawal Kishore Sinha and others connected with the affairs of the Cooperative Bank, despite the advice of the Law Department, was discussed and the Speaker referred the matter to the Estimates Committee of the House. The next event which happened in chronological sequence was that the annual general meeting of the Cooperative Bank was held and the associates of Nawal Kishore Sinha were elected in November, 1975, the management of the Cooperative Bank was handed over to the elected directors. But, on 15th April, 1976 the Reserve Bank of India cancelled the banking licence of the Cooperative Bank and on 19th April, 1976 the Cooperative Bank was ordered to be liquidated and T. Nand Kumar, an IAS officer, was appointed liquidator of the Cooperative Bank. The Estimates Committee to which the matter had been referred by the Speaker submitted its report in June, 1976 recommending prosecution of Nawal Kishore Sinha and others and this led to a debate in the Bihar Legislative Assembly in July 1976, the upshot of which was that the Government was forced to agree to launch prosecution against the cul prits. Dr. Jagannath Misra accordingly passed an order on 4th August 1976 directing launching of prosecution against those involved in the sordid affairs of the Cooperative Bank but even there, he directed that the prosecution be launched against some of the office bearers and loanees including K.P. Gupta, M.A. Hyderi and A.K. Singh but not against Nawal Kishore Sinha. Thus, 23 criminal cases were filed against these office bearers and loanees but Nawal Kishore Sinha was excluded from being arraigned as an accused in these cases. This order made by Dr. Jagannath Misra affords the clearest indication that, even with all the furore which had arisen on account of non prosecution of Nawal Kishore Sinha and others. Dr. Jagannath Misra persisted in his attempt to shield Nawal Kishore Sinha from prosecution. T. Nand Kumar, liquidator of the Cooperative Bank however addressed a communication to the Registrar Cooperative Societies sug gesting that besides the other office bearers, Nawal Kishore Sinha also deserved to be prosecuted for the offences of embezzlement, forgery, cheating etc. but the matter was kept pending. for the report of the Superintendent of the Police (Cooperative Vigilance Cell). The Superintendent of Police (Cooperative Vigilance Cell) after collecting the necessary evidence got it examined by the Deputy Secretary, Law, and on the basis of the opinion given by the Law Department that a criminal case was fully made Out against Nawal Kishore Sinha. He proposed on the file on 8th October, 1976 that a 730 fresh criminal case as per draft first information report, should be filed against Nawal Kishore Sinha and he should also be made co accused in the previously instituted cases. This proposal was approved by the Deputy Inspector General (CID) and it was submitted to the Commissioner of Coopera tive Department for obtaining the approval of the Chief Minister, that is, Dr. Jagannath Misra. Since Dr. Jagannath Misra had earlier made an order restricting the filing of criminal cases against some of the office bearers and loa nees and excluded Nawal Kishore Sinha from the prosecution, the Superintendent of Police in charge of cooperative vigi lance cell categorically stated in his note that the draft first information report against Nawal Kishore Sinha had been vetted by the Deputy Secretary, Intelligence CID, as well as by Inspector General of Police. The Commissioner of Cooperative Department after examining the entire material carefully and obtaining clarifications on certain points put up a lengthy note on 15th January, 1977, to the Minister Cooperation in which he specifically placed the proposal of the Superintendent of Police (Cooperative Vigilance Cell) for launching first information report against Nawal Kishore Sinha for his approval and also suggested that the Hon 'ble Minister may obtain the approval of the Chief Minister. The Minister Cooperation in his turn endorsed the file on 20th January, 1977 to the Chief Minister for approval. The file was received in the secretariat of the Chief Minister on 30th March, 1977 and Dr. Jagannath Misra as Chief Minister instead of clearly and specifically approving the proposal or even indicating his mind either way, merely marked the file to 'I.G. of Police ' on 9th April, 1977. It is difficult to understand this endorsement made by Dr. Jagannath Misra because the draft first information report had already been vetted and approved by the Inspector General of Police and there was no point in referring the matter back to the Inspector General of Police. If Dr. Jagannath Misra was merely approving the action proposed to be taken he would have either made an endorsement of approval or put his signatures or initials without saying anything more but instead he marked the file to 'I.G. of Police '. There is considerable force in the submission made on bahalf of the appellant that the object of making this endorsement was merely to put off the matter. Soon thereafter however on 30th April, 1977 the Government of Dr. Jagannath Misra went out of power and President 's Rule was imposed in the State of Bihar. The file containing the proposal for prosecution of Nawal Kishore Sinha then went to the Advisor (Coopera tion) under the President 's Rule and he approved the propos al on 15th May, 1977 and the then Governor, Shri Jagannath Kaushal, gave his approval to the proposal on 16th May, 1977 with the result that a criminal case ultimately came to be filed against 731 Nawal Kishore Sinha on 30th May, 1977. It is obvious from this narration of facts that Dr. Jagannath Misra, whilst he was in power, made determined effort to protect Nawal Ki shore Sinha against any criminal prosecution even though the filing of criminal prosecution was advised by the Reserve Bank of India and the Cooperative Department, proposed by the investigating authorities, recommended by the Estimates Committee and strongly supported by the Law Department. But ultimately a criminal prosecution was launched against Nawal kishore Sinha after Dr. Jagannath Misra went out of power. Sometime in May, 1977 as a result of fresh elections to the State Legislature, a new Government came to power in the State of Bihar and at the instance of Shri Karpoori Thakur who became the Chief Minister in the new Government, an inquiry was directed into the allegations regarding irregularities in the affairs of the Cooperative Bank. The inquiry was entrusted to the then Secretary Shri D.N. Sahay. Meanwhile a Commission of Inquiry had already been institut ed by the State Government and Shri D.N. Sahay therefore addressed a communication dated 1st September, 1977 to the Special Secretary in regard to the charge relating to the affairs of the Cooperative Bank and he pointed out that since an inquiry had already been instituted, it may not be desirable to proceed with a vigilance inquiry. Shri Karpoori Thakur however directed that the vigilance inquiry might continue as the materials collected as a result of the vigilance inquiry could be made use of by the Commission of Inquiry. The vigilance inquiry was thereafter entrusted to Shri D.P. Ojha who was posted as Superintendent of Police, Vigilance, by Shri Karpoori Thakur and all the cases relat ing to the affairs of the Cooperative Bank were transferred to the vigilance department. M.A. Hyderi who was already an accused in the previously instituted cases was re arrested in connection with those cases and in the course of the fresh investigation started by the vigilance department, M.A. Hyderi made a second confessional statement on 24th January, 1978 which implicated Dr. Jagannath Misra which sought to support the case that Dr. Jagannath Misra had been helping Nawal Kishore Sinha by abusing his office and for making illegal gains for himself. It may be noted that M.A. Hyderi had earlier made a confessional statement on 3/4th November, 1976 in which he had not implicated Dr. Jagannath Misra but in the second confessional statement recorded on 24th January, 1978 he clearly and unequivocally implicated Dr. Jagannath Misra. On 28th January, 1978 A.K. Singh also made a confessional statement supporting the confessional statement of M.A. Hyderi. Immediately after recording these confessional statements Shri D.P. Ojha submitted his inquiry report 732 recommending institution of criminal cases against Dr. Jagannath Misra and others. This recommendation was support ed by the Deputy Inspector General of Police (Vigilance) as also by the inspector General of Police (Vigilance). The file was then referred to the Advocate General, Shri K.D. Chatterjee, and the recommendation to institute prosecution against Dr. Jagannath Misra and others was approved by the Advocate General who opined that there was sufficient mate rial for the prosecution of Dr. Jagannath Misra and others. The file was then placed before the Chief Minister, Karpoori Thakur, on 31st January, 1978 and it was approved by him on the same day and a direction was given to investigate the case against Dr. Jagannath Misra and others and to institute prosecution against them. The police in the vigilance de partment thereafter filed Vigilance P.S. Case No. 9(2)78 and carried out further investigation and ultimately as a result of such investigation, two charge sheets were filed against Dr. Jagannath Misra and others on 21st February, 1979. One, A.K. Datta, a senior advocate of the Patna High Court was appointed Special Public Prosecutor by the State Government on 26th February, 1979 to conduct these two vigilance cases against Dr. Jagannath Misra and others and on 21st November, 1979, the Chief Judicial Magistrate cum Special Judge, Patna took cognizance of these two cases. But before these two cases could proceed further there was a change of Government in the State of Bihar and Dr. Jagannath Misra once again became the Chief Minister in June, 1980. Dr. Jagannath Misra after coming back to power constituted a Cabinet subCommittee on 15th September, 1980 to consider the expediency of the withdrawal of the prosecution and on 20th February, 1981 the Cabinet sub Committee recommended that the cases against Dr. Jagannath Misra and others should be withdrawn. This recommendation of the Cabinet sub Committee was placed before the Cabinet presided over by Dr. Jagannath Misra and it was approved by the Cabinet on 24th February, 1981. On the same day on which the recommendation of the Cabinet sub Committee was approved, a decision was taken that the two cases against Dr. Jagannath Misra and others should be withdrawn and the State Government cancelled the panel of lawyers which had been constituted by the previous Government for conducting cases pertaining to the vigilance department and in its place constituted a new panel consist ing of four lawyers including one Lallan Prasad Sinha. The Secretary to the Government of Bihar thereafter addressed a letter dated 25th February, 1981 to the District Magistrate which was in the following terms: 733 " Government of Bihar Law (Justice) Department From: Shri Ambika Prasad Sinha Secretary to Government, Bihar, Patna To: The District Magistrate Patna. Patna, Dated 25th Feb. 1981. Subject: In connection with the withdrawal of Vigilance P.S. Case No. 9(2)78 and P.S. case No. 53(8)78. Sir, I am directed to say that the State Government have decided to withdraw from prosecution the above mentioned two criminal cases on the ground of inexpediency of prose cution for reasons of State and public policy. You are, therefore, requested to direct the public prosecutor to pray the Court after himself considering for the withdrawal of the above mentioned two cases for the above reasons under section 321 of the Code of Criminal Procedure. Please acknowledge receipt of the letter and also intimate this department about the result of the action taken. Yours faithfully, sd. Illegible Secretary to Govt. Patna. Memo No. MW 26/81, 1056 J. Patna, dated 25th February, 1981 Copy forwarded to Vigilance Depart ment for information. " 734 Shri Lallan Prasad Sinha thereupon filed an application in the Court of the Chief Judicial Magistrate on 16th Jane, 1981 praying for permission to withdraw from the prosecution of Dr. Jagannath Misra and others under Vigilance P.C. Case No. 9(2)78. There were four grounds stated in the applica tion for permission to withdraw from the prosecution and they may be stated as follows in the language of the appli cation itself: (1) Lack of prospect of successful prosecution in the light of evidence, (2) the implication of the persons as a result of political and personal vendetta, (3) inexpediency of the prosecution for the reasons of the State and public policy, and (4) the adverse effects that the continuation of the prosecution will bring on public inter est in the light of the changed situation. The application after setting out these grounds proceeded to elaborate them in the following words: " . . That I have therefore gone through the case diary and the relevant materials connected with the case and have come to the conclusion that in the circumstances prevail ing at the time of institution of the case and the investigation thereof, it appears that the case was instituted on the ground of political vendetta and only to defame the fair image of Dr. J.N. Mishra, who was then the leader of the opposition and one of the acknowledged leaders of the Congress party in the country. The prosecution was not launched in order to advance the interest of public justice. I crave leave to place materials in support of the above submission and conclusion at the time of moving this petition. That it is in public interest that the prosecutor which has no reasonable chance of success and has been launched as a result of political vendetta unconnected with the advancement of the cause of public justice should not proceed further. More so, as the same is directed against the head of the Executive in whom not only the electorate have put their faith and confidence but who has been elected 735 leader of the majority party in the legisla ture, both events have taken place after the institution of the case . " The application for withdrawal was opposed by Sheonandan Paswan, a member of the Bihar Legislative Assembly and its Deputy Speaker at the material time. The locus standi of Sheonandan Paswan to object to the application for withdraw al was challenged by Shri Lallan Prasad Sinha and this challange was upheld by the learned Chief Judicial Magis trate and it was held that Sheonandan Paswan had no locus standi to oppose the application for withdrawal. The learned Chief Judicial Magistrate then considered the application for withdrawal on merits and passed an order dated 28th JUne, 1981 in which, after reciting the rival contentions urged before him, held that "it is a fit case in which prayer of the 1earned Special Public Prosecutor to withdraw should be allowed and it is therefore allowed" and Dr. Jagannath Misra and other accused persons were ordered to be discharged. It will thus be seen that no reasons at all were given by the learned Chief Judicial Magistrate in his order for giving his consent to the withdrawal of the prosecution against Dr. Jagannath Misra and others. It does not appear from the order as to which ground or grounds ' appealed to the learned Chief Judicial Magistrate for giving his consent to the withdrawal. Sheonandan Paswan thereupon filed Criminal Revision Application No. 874 of 1981 against the order of the learned Chief Judicial Magistrate permitting withdrawal of the prosecution but this application was dismissed in limine by the High Court by an order dated 14th September 1981. The High Court observed that the learned Chief Judicial Magis trate having considered the grounds urged by Lallan Prasad Sinha for withdrawal of the prosecution "was satisfied that permission should be accorded to the special public prosecu tor to withdraw the prosecution" and there was, therefore, no illegality in the Order passed by the learned Chief Judicial Magistrate. The High Court did not even consider for itself whether the grounds on which withdrawal of the prosecution was sought were justified or not. The High Court seem to proceed on the basis that if the learned Chief Judicial Magistrate was satisfied that permission should be accorded for withdrawal of the prosecution, that was enough and it was not necessary for the High Court to examine the validity of the grounds urged for such withdrawal. This view taken by the High Court was, as we shall presently point out, wholly erroneous. Since the High Court rejected the Revision Application in 736 limine, Sheo Nandan Paswan filed the present appeal after obtaining special leave from this Court. The appeal was heard by a Bench of three Judges consisting of Tulzapurkar, Baharul Islam and R.B. Misra, JJ. There was a difference of opinion amongst the Judges in regard to the decision of the appeal. Tulzapurkar, J. took the view that a prima facie case was clearly made out against Dr. Jagannath Misra and others and the ground urged on behalf of the State Govern ment that there was not sufficient evidence which could lead to the conviction of Dr. Jagannath Misra and others, was not well founded. The learned Judge took this view on a detailed consideration of the material which was on record and held that the withdrawal of the prosecution was not justified either on merits or in law and being illegal had to be quashed. Baharul Islam and R.B. Misra, JJ., on the other hand, took the view that the entire investigation was viti ated and no person could be convicted on the basis of evi dence procured as a result of such investigation and the withdrawal of the prosecution was, therefore, justified. Having regard to the majority judgment of Baharul Islam and R.B. Misra, JJ., the appeal was dismissed. Sheo Nandan Paswan thereupon filed a Review application before this Court. But on the date when the Review applica tion was filed, Baharul Islam, J. had already resigned his office as a Judge of this Court. Now, under the Rules of this Court the Review application had to be heard by the same Bench but since Baharul Islam, J. had ceased to be a Judge, A.N. Sen, J. was asked to join Tulzapurkar and R.B. Misra, JJ. and thus the Bench consisting of Tulzapurkar, A.N. Sen and R.B. Misra, JJ. heard the Review application. The judgment of the Review Bench was delivered by A.N. Sen, J on 22nd August 1983 and after setting out the rival argu ments the learned Judge observed: "Applying the well settled principles govern ing a review petition and giving my very anxious and careful consideration to the facts and circumstances of this case, I have come to the conclusion that the review petition should be admitted and the appeal should be re heard. I have deliberately refrained from stating my reasons and the various grounds which have led me to this conclusion. Any decision of the facts and circumstances which, to my mind, constitute errors apparent on the face of the record and my reasons for the finding that these facts and circumstances constitute errors apparent on the face of the record resulting in the success of the review peti tion, may have the possibility of 737 prejudicing the appeal which as a result of my decision has to be re heard." and in the result the learned Judge passed an order admit ting the review petition and directing re hearing of the appeal. But since prior to the date of this judgment the case of Mohd. Mumtaz vs Smt. Nandini Satpathy, had already been referred to a Bench of five Judges, the learned Judge directed that the present appeal should be re heard immediately after Nandini Satpathy 's case. That is how the present appeal has now come before this Bench of five Judges. There was one contention of a preliminary nature ad vanced by Mr. Nariman on behalf of Dr. Jagannath Misra and that contention was that on a proper reading of the order on the Review Petition made by A.N. Sen, J. it was clear that the Review Bench did not exercise the power of review and set aside the order made by the Original Bench. The argument was that the order made by the Original Bench stood un quashed and unreserved and it was therefore not competent to the Constitution Bench to rehear the appeal on merits as if the order of the Original Bench did not exist. It was also urged by Mr. Nariman on behalf of Dr. Jagannath Misra that the order made by the Review Bench was not legal and valid since it was a non speaking order which did not contain any reasons why the order of the Original Bench should be re viewed. This contention was of course not strongly pressed by Mr. Nariman but in any event we do not think that it has any substance. It is undoubtedly true that the order of the Review Bench did not in so many terms set aside the order of the Original Bench and used a rather unhappy expression, namely, "I . admit the Review Petition". But it is clear that when the Review Bench used the expression "I . . admit the Review Petition" it plainly unequivocal ly meant that it was allowing the Review Petition and set ting aside the order of the Original Bench, otherwise it is difficult to understand how it could possibly "direct the reheating of the appeal". The appeal could be reheard only if the Review Petition was allowed and the order of the Original Bench was set aside and therefore obviously when the Review Bench directed rehearing of the appeal, it must by ' necessary implication be held to have allowed the Review Petition and set aside the Order of the Original Bench. We cannot allow the true meaning and effect of the order of the Review Bench to be obfuscated by a slight ineptness of the language used by the Review Bench. We must look at the substance of the Order rather than its apparent form. We must therefore proceed on the basis that the Order of the Original Bench 738 was set aside and reheating of the appeal directed by the Review Bench. We must concede that no reasons appear to have been given by the Review Bench for allowing the Review petition and directing heating of the appeal. The question is: does this introduce any infirmity in the Order of the Review Bench. There can be no doubt that the Review Bench was not legally bound to give reasons for the Order made by it. The apex court being the final court against which there is no further appeal, it is not under any legal compulsion to give reasons for an order made by it. It is not uncommon to find the Supreme Court of the 'United States allowing a writ of certiorari without giving any reasons. But merely because there may be no legal compulsion on the apex court to give reasons, it does not follow that the apex court may dispose of cases without giving any reasons at all. It would be eminently just and desirable on the part of the apex court to give reasons for the orders made by it. But when the apex court disposes of a Review Petition by allowing it and setting aside the order sought to be reviewed on the ground of an error apparent on the face of record, it would be desirable for the apex court not to give reasons for allow ing the Review Petition. Where the apex court holds that there is an error apparent on the face of the record and the order sought to be reviewed must therefore be set aside and the case must be reheard, it would considerably prejudice the losing party if the apex court were to give reasons for taking this view. If the Review Bench of the apex court were required to give reasons, the Review Bench would have to discuss the case fully and elaborately and expose what according to it constitutes an error in the reasoning of the Original Bench and this would inevitably result in pre judgment of the case and prejudice its reheating. A reasoned order allowing a Review Petition and setting aside the order sought to be reviewed would, even before the rehearing of the case, dictate the direction of the reheating and such direction, whether of binding or of persuasive value, would conceivably in most cases adversely affect the losing party at the reheating of the case. We are therefore of the view that the Review Bench in the present case could not be faulted for not giving reasons for allowing the Review Petition and directing reheating of the appeal. It is sig nificant to note that all the three Judges of the Review Bench were unanimous in taking the view that "any decision of the facts and circumstances which . .constitute errors apparent on the face of record and my . . reasons for the finding that these facts and circumstances constitute errors apparent on the face of record resulting in the success of the Review Petition, may have the possibility of prejudicing the 739 appeal which as a result of my decision has to be reheard". This contention of Mr. Nariman must therefore be rejected. The learned counsel on behalf of Dr. Jagannath Misra also raised another contention of a preliminary nature with a view to displacing the locus standi of Sheonandan Paswan to prefer the present appeal. It was urged that when Shri Lallan Prasad Sinha applied for permission to withdraw the prosecution against Dr. Jagannath Misra and others, Sheonan dan Paswan had no locus to oppose the withdrawal since it was a matter entirely between the Public Prosecutor and the Chief Judicial Magistrate and no other person had a right to intervene and oppose the withdrawal, and since Sheonandan Paswan had no standing to oppose the withdrawal, he was not entitled to prefer an appeal against the order of the learned Chief Judicial Magistrate and the High Court grant ing permission for withdrawal. We do not think there is any force in this contention. It is now settled law that a criminal proceeding is not a proceeding for vindication of a private grievance but it is a proceeding initiated for the purpose of punishment to the offender in the interest of the society. It is for maintaining stability and orderliness in the society that certain acts are constituted offences and the right is given to any citizen to set the machinery of the criminal law in motion for the purpose of bringing the offender to book. It is for this reason that in R.S. Nayak vs A.R. Antulay, ; this Court pointed out that "punishment of the offender in the interests of the society being one of the objects behind penal statute enact ed for larger goods of society, the right to initiate pro ceedings cannot be whittled down, circumscribed of lettered by putting it into a strait jacket formula of locus standi". This Court observed that locus standi of the complainant is a concept foreign to criminal jurisprudence. Now if any citizen can lodge a first information report or file a complaint and set the machinery of the criminal law in motion and his locus standi to do so cannot be questioned, we do not see why a citizen who finds that a prosecution for an offence against the society is being wrongly withdrawn, cannot oppose such withdrawal. If he can be a complainant or initiator of criminal prosecution, he should equally be entitled to oppose withdrawal of the criminal prosecution which has already been initiated at his instance. If the offence for which a prosecution is being launched is an offence against the society and not merely an individual wrong, any member of the society must have locus to initiate a prosecution as also to resist withdrawal of such prosecu tion, if initiated. Here in the present case, the offences charged against Dr. Jagannath Misra and others are offences of corruption, criminal breach of trust etc. and therefore any person who is interested in cleanliness of public 740 administration and public morality would be entitled to file a complaint, as held by this Court in R.S. Nayak vs A.R. Antulay (supra) and equally he would be entitled to oppose the withdrawal of such prosecution if it is already insti tuted. We must therefore reject the contention urged on behalf of Dr. Jagannath Misra that Sheonandan Paswan had no locus standi to oppose the withdrawal of the prosecution. If he was entitled to oppose the withdrawal of the prosecution, it must follow a fortiori that on the turning down of his opposition by the learned Chief Judicial Magistrate he was entitled to prefer a revision application to the High Court and on the High Court rejecting his revision application he had standing to prefer an appeal to this Court. We must therefore reject this contention of the learned counsel appearing on 'behalf of Dr. Jagannath Misra. There was also one other contention urged on behalf of Dr. Jagannath Misra with a view to bunking an inquiry by this Court into the merits of the appeal. It was argued on behalf of Dr. Jagannath Misra that this was not a fit case in which the Court should interfere in the exercise of its extraordinary jurisdiction under Article 136 of the Consti tution since the permission granted by the learned Chief Judicial Magistrate for withdrawal of the prosecution had resulted in discharge of Dr. Jagannath Misra in respect of the offences for which he was charge sheeted and this order of discharge was upheld by the High Court in revision and finally by two out of three Judges of this Court and it would be unfair and unjust to reverse the order of discharge and direct a retrial of Dr. Jagannath Misra. We have consid ered this argument but it does not appeal to us. We fail to see any logic behind it. It is undoubtedly true that the effect of the withdrawal of the prosecution against Dr. Jagannath Misra was that he stood discharged in respect of the offences for which he was sought to be prosecuted but it was not an order of discharge which was challenged by Sheo nandan Paswan in the revision application filed by him before the High Court but it was an order granting consent for withdrawal of the prosecution that that assailed by him. The analogy of an order of discharge made under section 227 or section 239 of the Code of Criminal Procedure is not apposite because there the Sessions Judge or the Magistrate, as the case may be, considers the entire material before him and then comes to the conclusion that there is not suffi cient ground for proceeding against the accused or that the charge against the accused is groundless. But here when the Magistrate makes an order granting consent to withdrawal of the prosecution under section 321, it is a totally different judicial exercise which he performs and it would not there fore be right to say that if the High Court sets aside the order of the Magistrate granting consent 741 to withdrawal from the prosecution, the High Court would be really setting aside an order of discharge made by the Magistrate. What the High Court would be doing would be no more than holding that the withdrawal from the prosecution was incorrect or improper and that the prosecution should proceed against the accused and ultimately if there is not sufficient evidence or the charges are groundless, the accused may still be discharged. Moreover it may be pointed out that even an order of discharge made by the Magistrate can be set aside by the High Court in revision if the High Court is satisfied that the order passed by the Magistrate is incorrect, illegal or improper or that the. proceedings resulting in the order of discharge suffer from any irregu larity. The revisional power exercised by the High Court under section 397 is couched in words of widest amplitude and in exercise of this power can satisfy itself as to the correctness, legality or propriety or any order passed by the Magistrate or as to the regularity of any proceedings of such Magistrate. When this Court is hearing an appeal against an order made by the High Court in the exercise of its revisional power under section 397 it is the same revi sional power which this Court would be exercising and this Court therefore certainly can interfere with the order made by the Magistrate and confirmed by the High Court if it is satisfied that the order is incorrect, illegal or improper. In fact, in a case like the present where the question is of purity of public administration at a time when moral and ethical values are fast deteriorating and there seems to be a crisis of character in public life, this Court should regard as its bounden duty a duty owed by it to the socie ty to examine carefully whenever it is alleged that a prosecution for an offence of corruption or criminal breach of trust by a person holding high public office has been wrongly withdrawn and it should not matter at all as to how many Judges in the High Court or the lower court have been party to the granting of such consent for withdrawal. Here in the present case, it is no doubt true that the order granting consent for withdrawal of the prosecution was made by the learned Chief Judicial Magistrate and it was upheld by the High Court and two out of three Judges of the bench of this Court which initially heard the appeal agreed with the view taken by the High Court but we cannot overlook the fact that according to the Review Bench which also consisted of three Judges, there was an error apparent on the face of the record in the judgment of the earlier Bench. The mathe matics of numbers cannot therefore be invoked for the pur pose of persuading this Court not to exercise its discretion under Article 136 of the Constitution. It was then contended on behalf of Dr. Jagannath Misra that 742 Sheonandan Paswan was Minister in the cabinet of Karpoori Thakur and continued to be a member of the political party opposed to Dr. Jagannath Misra and he was therefore actuat ed by political motivation in opposing the withdrawal of prosecution against Dr. Jagannath Misra and in preferring a revision application to the High Court and an appeal to this Court. This contention is also without substance and does not command itself to us. We may concede for the purpose of argument that Sheonandan Paswan opposed the withdrawal of the prosecution against Dr. Jagannath Misra because he had a political score to settle with Dr. Jagannath Misra and he was motivated by a political vendetta. But that is no reason why this Court should sustain an order made by the learned Cheif Judicial Magistrate granting consent for withdrawal of the prosecution if otherwise the order appears to be improp er and unjustified. The question is even if no one had opposed the withdrawal of the prosecution, would the learned Chief Judicial Magistrate and the High Court have been justified in granting consent to the withdrawal of the prosecution and that would depend essentially on the facts and particulars of the case placed before the Court. The political motivation or vendetta of Sheonandan Paswan could not possibly be a valid ground for granting consent for withdrawal of the prosecution if otherwise on the facts and circumstances of the case it was improper and invalid. It is a well established proposition of law that a criminal prose cution, if otherwise justifiable and based upon adequate evidence does not become vitiated on account of mala fides, or political vendetta of the first informant or the com plainant. It was rightly observed by Krishna lyer, J. in State of Punjab vs Gurdial Singh, "If the use of power is for the fulfilment of a legitimate object, the actuation or catalisation by malice is not legiciable." The same principle must obviously apply where a person is opposing withdrawal of prosecution against an accused. His political motivation or vendetta cannot justify grant of consent for withdrawal if otherwise it is not legitimate or justified. It is undoubtedly true that the prosecution against Dr. Jagannath Misra was initiated by the successor Government of Karpoori Thakur after Dr. Jagannath Misra went out of power. But that by itself cannot support the inference that the initiation of the prosecution was actuated by political vendetta or mala fides because it is quite possible that there might be material justifying the initiation of prose cution against Dr. Jagannath Misra and the successor Govern ment might have legitimately felt that there was a case for initiation of prosecution and that is why the prosecution might have been initiated. There would be nothing wrong on the part of the successor Government in 743 doing so and the prosecution cannot be said to be vitiated on that account. This is precisely what Hidayatullah, J. speaking for the Constitution Bench pointed out in Krishna Ballabha Sahay and others vs Commission of Enquiry, ; "The contention that the power cannot be exercised by the succeeding ministry has been answered already by this Court in two Cases. The earlier of the two has been referred to by the High Court already. The more recent case is Shri P.V. Jagannath Rao & Ors. vs State of Orissa, ; It hardly needs any authority to state that the inquiry will be ordered not by the Minister against himself but by some one else. When a Minister goes out of office, its successor may consider any glaring charges and may, if justified, order an inquiry. Otherwise, each Ministry will become a law unto itself and the corrupt conduct of its Ministers will remain beyond scrutiny. " These observations afford a complete answer to the conten tion urged on behalf of Dr. Jagannath Misra that this Court should not interfere with the withdrawal of the prosecution because the successor Government of Karpoori Thakur or Sheonandan Paswan was actuated by political motivation or vendetta. The learned counsel on behalf of Dr. Jagannah Misra also contended that the prosecution should not have been initiat ed against Dr. Jagannath Misra without a prior inquiry made through a Commission of Enquiry set up for that purpose. The argument was that both prudence and propriety requires the setting up of a Commission of Enquiry prior to initiation of the prosecution because an inquiry made through the Commis sion of Enquiry would act as a filter for politically moti vated or mala fide prosecution. This argument is also, in our opinion, without any force and cannot be sustained. It is undoubtedly true that in the past there have been cases where a successor Government has set up a Commission of Enquiry to enquire into the conduct of former Chief Minister and other persons connected with the administration during the regime of the former Chief Minister but that does not mean that no prosecution should be launched against a former Chief Minister or a person holding high pOlitical office under the earlier regime without first setting up a Commis sion of Enquiry for enquiring into his conduct. There is no provision of law which requires such a course of action to be adopted and it cannot be said that if a prosecution is initiated without an inquiry being held by a Commis 744 sion of Enquiry set up for that purpose, the prosecution would be bad or. that on that ground alone the prosecution could be allowed to be withdrawn. The criminal process in India is quite tardy and slow moving and as it is, it takes considerable time for a prosecution to ultimately come to an end and if a requirement were super imposed that no prosecu tion shall be launched against a person holding high politi cal office under an earlier regime without first setting up a Commission of Enquiry and the Commission coming to a prima facie conclusion that such person has committed acts which would constitute offences, the entire criminal process would be reduced to a mockery because the Commission of Enquiry itself might go on for years and after the inquiry is con cluded the prosecution will start where the entire evidence will have to be led again and it would be subject to cross examination followed by lengthy arguments. It would, in our opinion, be perfectly legitimate for the successor Govern ment to initiate a prosecution of a former Chief Minister or a person who has held high political office under the earli er regime without first having an inquiry made by a Commis sion of Enquiry, provided, of course, the investigation is fair and objective and there is sufficient material to initiate such prosecution. There are, under the existing law, sufficient safeguards for the purpose of ensuring that no public servant is harassed by false and vexatious prose cution or charges of corruption because no such prosecution can be initiated without sanction under section 6 of the prevention of Corruption Act or section 197 of the Code of Criminal Procedure, 1973. These safeguards cannot be said to be inadequate even if they do not afford adequate protection in any particular case, the Magistrate is. always there to protect an innocent accused because if in the opinion of the Magistrate, there is not sufficient evidence and the charge against the accused appears to be groundless, the Magistrate may straightaway discharge the accused without taking any evidence. It would become very difficult almost impossible to bring, to use the words of Krishna lyer, J. "the higher inhabitants of Indian public and political decks" within the net of the criminal law if an additional requirement is imposed that there should first be an inquiry by the Commission of Enquiry before any prosecution can be launched against them. This contention urged on behalf of Dr. Jagannath Misra must also, therefore, fail. That takes us to the merits of the question debated before us, namely, whether the learned Chief Judicial Magis trate and the High Court were right in granting consent for withdrawal of the prosecution against Dr. Jagannath Misra and others. The application for withdrawal was made by Shri Lallan Prasad Sinha and consent for such 745 withdrawal was given by the learned Chief Judicial Magis trate under section 321 of the Code of Criminal Procedure, 1973 and consequently, it is this section which falls for construction and application in the present case. The ques tion is whether the application for withdrawal made by Shri Lallan Prasad Sinha was within the scope of his power under section 321 and whether the consent given by the Chief Judicial Magistrate for such withdrawal was within the terms of that section. Section 321 reads as follows: "321. Withdrawal from prosecution The Public Prosecutor or Assistant Public Prosecutor in charge of a case may, with the consent of the Court, at any time before the judgment. is pronounced, withdraw from the prosecution of any person either generally or in respect of any one or more of the offences for which he is tried; and, upon such withdrawal, (a) if it is made before a charge has been framed, the accused shall be discharged in respect of such offence or offences; (b) if it is made after a charge has been framed, or when under this Code no charge is required he shall be acquitted in respect of such offence or offences: Provided that where such offence (i) was against any law relating to a matter to which the executive power of the Union extends, or (ii) was investigated by the Delhi Special Police Establishment under the Delhi Police EStablishment Act, 1946 (25 of 1946); or (iii) involved the misappropriation or de struction of, or damage to, any property belonging to the Central Government, or (iv) was committed by a person in the service of the Central Government while acting or purporting to act in the discharge of his official duty, 746 and the Prosecutor in charge of the case has not been appointed by the Central Government, he shall not, unless he has been permitted by the Central Government to do so, move the Court for its consent to withdraw from the prosecution and the Court shall, before ac cording consent, direct the Prosecutor to produce before it the permission granted by the Central Government to withdraw from the prosecution." This section corresponds to section 494 of the old Criminal Procedure Code, 1898 and it incorporates certain changes which have relevance in that they threw some light on the true interpretation of the section. It may be noted that there are two limbs of section 321. The first is that any Public Prosecutor or Assistant Public prosecutor incharge of a case may withdraw from the prosecution of any person but this power to withdraw from the prosecution is not an unfet tered or unrestricted power because it can be exercised only "with the consent of the Court". If the Court does not give, its consent to the withdrawal of the prosecution, the Public Prosecutor or the Assistant Public Prosecutor cannot with draw it. But the question is as to what are the grounds on which the Public Prosecutor or Assistant Public Prosecutor can apply for withdrawal from the prosecution and also similarly what are the considerations which must weigh with the Court in granting or refusing consent for the withdrawal of the prosecution. There have been a number of decisions of this Court bearing on both these issues but it must be conceded straightaway that these decisions do not disclose any uniform approach. The Court has in some decisions taken very narrow view while in some others it has adopted a broader view. The Court has swung from narrow grounds to broad ones in different decisions from time to time. We shall consider some of these decisions a little later. Now one thing is certain that no unfettered or unre stricted power is conferred on the Public Prosecutor when we refer to Public Prosecutor, we also include Assistant Public Prosecutor to apply for withdrawal from the prosecu tion. It is obvious that the power conferred on the Public Prosecutor to withdraw from the prosecution must be a con trolled or guided power or else it will fall foul of Article 14 of the Constitution. It is necessary in this context to refer to certain other provisions of the Code of Criminal Procedure, 1973 which, though not directly relevant, throw some light on the determination of the question as to what is the extent of the power of the Public Prosecutor to withdraw from the prosecution and how it is controlled and regulated. 747 When a First Information Report relating to the commission of a cognizable offence is lodged in a Police Station under section 154 or an order is made by a Magistrate directing the police to investigate a non cognizable case under sec tion 155, the police is bound to investigate the offence alleged to have been committed. The powers of the police in regard to investigation and the procedure to be followed by them in such investigation are set out in sections 157 to 172. Section 173 sub section (1) casts an obligation on the police to complete the investigation without unnecessary delay and sub section (2) of section 173 then proceeds to state that as soon as the investigation is completed, the officer incharge of the Police Station shall forward to a Magistrate empowered to take cognizance of the offence on a police report, a report in the prescribed form stating the ,various particulars mentioned in that sub section. Section 190 confers power on the Magistrate to take cognizance of an offence and there are three different ways in which cogni zance of an offence may be taken by a Magistrate. This section states that cognizance of an offence may be taken(a) upon receiving a complaint of facts which constitute such an office (b) upon a police report of such facts and (c) upon information received from any person other than a police officer or upon his own knowledge that such offence has been committed. We may concentrate our attention on clause (b) since the section read with that clause clearly goes to show that even in the matter of initiating a prosecution, the police has no unfettered discretion. It is now well settled as a result of several decisions of this Court, of which we may mention only one, namely, H.S. Bains vs State; ; , that even if the report submitted by the police to the Magistrate under section 173 states that in the opinion of the police no offence appears to have been committed and no prosecution may therefore be initiated, the Magistrate can still form an opinion on the facts set out in the report that they constitute an offence and he can take cognizance of the offence and issue process against the accused. The Magistrate may also find, after considering the report, that the investigation is unsatisfactory or incomplete or there is scope for further investigation and in that event, the Magistrate may decline to accept the report and direct the police to make further investigation and then decide whether or not to take cognizance of the offence after considering the report submitted by the police as a result of such further investigation. It will thus be seen that the police has no absolute or unfettered discretion whether to prose cute an accused or not to prosecute him. In fact, in our constitutional scheme, conferment of such absolute and uncanalised discretion would be violative of the equality clause of the Constitution. The Magistrate is therefore given the power to structure and control the discretion of the 748 police. If the Magistrate finds from the report made by the police either on initial investigation or on further inves tigation directed by the Magistrate, that prima facie an offence appears to have been committed, the Magistrate is empowered to take cognizance of the offence notwithstanding the contrary opinion of the police and equally if the Magis trate forms an opinion that on the facts set out in the report no offence prima facie appears to have been committed though the police might have come to a contrary conclusion, the Magistrate can decline to take cognizance of the of fence. The discretion of the police to prosecute is thus 'cabined and confined ' and, subject to appeal or revision, and the Magistrate is made the final arbiter on this ques tion. The Legislature has in its wisdom taken the view that it would be safer not to vest absolute discretion to prose cute in the police which is an Executive arm of the Govern ment but to subject it to the control of the judicial organ of the State. The same scheme has been followed by the Legislature while conferring power on the Public Prosecutor to withdraw from the prosecution. This power can be exercised only with the consent of the Court so that the Court can ensure that the power is not abused or misused or exercised in an arbi trary or fanciful manner. Once the charge sheet is filed and the prosecution is initiated, it is not left to the sweet will of the State or the Public Prosecutor to withdraw from the prosecution. The Court is entrusted with control over the prosecution and as pointed out by Krishna lyer, J. in Subhash Chander vs State and others; ; "The even course of criminal justice cannot be thwarted by the Executive however high the accused, however sure the Govern ment feels a case is false, however unpalatable the continu ance of the prosecution to the powers that be who wish to scuttle court justice because of hubris, affection or other noble or ignoble consideration. " Once the prosecution is launched, its relentless course cannot be halted except on sound considerations germane to public justice. And again, to quote the words of Krishna lyer, J. in the same case, "the Court is monitor, not servitor, and must check to see if the essentials of the law are not breached, without, of course, crippling or usurping the power of the public prose cutor. " The Public Prosecutor cannot therefore withdraw from the prosecution unless the Court before which the prosecu tion is pending gives its consent for such withdrawal. This is a provision calculated to ensure non arbitrariness on the part of the Public Prosecutor and compliance with the equal ity clause of the Constitution. It is also necessary to point out that the law has fashioned 749 another safeguard against arbitrary exercise of power by the Public Prosecutor in withdrawing from the prosecution and this safeguard is that the Public Prosecutor can apply for withdrawal only on the basis of certain legitimate grounds which are germane or relevant to public justice. It is significant to note that the entire development of adminis trative law is characterised by a consistent series of decisions controlling and structuring the discretion con ferred on the State and its officers. The Law always frowns on uncanalised and unfettered discretion conferred on any instrumentality of the State and it is the glory of adminis trative law that such discretion has been through judicial decisions structured and regulated. This Court has there fore, despite fluctuating opinions delivered in different cases, laid down the broad principle and consistently acted upon it, namely, that the power to apply for withdrawal from the prosecution can be exercised only in furtherance of justice. It was pointed out by this Court in M.N. Sankarana rayanan Nair V.P.V. Balakrishnan and others; , , "the essential consideration which is implicit in the grant of the power is that it should be in the interest of administration of justice." So also, one of us, (Bhagwati, J. as he then was) said in State of Orissa vs C. Mohapatra, "the ultimate guiding consideration must always be the interest of administration of Justice. " That is the broad principle under which the Public prosecutor, must bring his case in order to be able to justify his application for withdrawal from the prosecution. What are the different grounds which may possibly come within this principle is a matter which we shall presently discuss but whatever be the grounds on which the application is made it can be sustained only if those grounds are relatable to furtherance of public justice. There was one major question debated before us in regard to the position of the Public Prosecutor in relation to an application for withdrawal from the prosecution and the issue was as to what is the degree of autonomy conferred on the Public Prosecutor vis a vis the Government whilst filing an application for withdrawal. This issue can be operationa lised into three different questions: (1) Does section 321 permit a Public Prosecutor to withdraw from a case without seeking the opinion of the Government (2)whether section 321 empowers a Public Prosecutor to refuse to withdraw from the prosecution despite the advice of the Government to withdraw and (3) where a public prosecutor withdraws from the prose cution on the advice and direction of the Government, does he act contrary to the requirement of section 321? These questions have presented a lot of difficulty and unfortu nately as mentioned earlier the decisions of this Court have not been 750 consistent in the answer to be given to these questions. We shall refer to a few of these decisions. In State of Bihar vs Ram Naresh Pandey; which is the first important case dealing with the interpretation and applica tion of section 321, this Court while deliberating on the role of a Public Prosecutor said: " . . it is right to remember that the Public Prosecutor (though an executive officer as stated by the Privy Council in Bawa Faqir Singh vs The Kind Emperor, [1938] L.R. 65 I.A. 388, 395) is, in a larger sense , also an officer of the Court and that he is bound to assist the Court with his fairly considered view and the Court is entitled to have the benefit of the fair exercise of his function. It has also to be appreciated that in this country the scheme of the administration of criminal justice,is that the primary responsi bility of prosecuting serious offences (which are classified as cognizable offences) is on the executive authorities. Once information of the commission of any such offence reaches the constituted authorities, the investigation including collection of the requisite evi dence, and the prosecution for the offence with reference to such evidence, are the functions of the executive. But the Magistrate also has his allotted functions in course of these stages. ". . . In all these matters he exercises discretionary functions in respect of which the initiative is that of the executive but the responsibility is his." These observations seem to suggest that the prosecution for an offence is the function of the Executive and that the Public Prosecutor is really an Executive Officer who is conducting the prosecution on behalf of the State. So also in M.N. Sankarayaraya Nair vs P.V. Balakrishnan and others (supra) we find that there is a paragraph which seems to impliedly accept governmental directive in the matter of withdrawal from the prosecution as legitimate and that paragraph reads as follows: "The appellant 's Advocate later during the course of the argument conceded that there is no force in the first of his contentions namely that the Public Prosecutor cannot either be asked by the State Government to consider the filing of a petition under sec tion 494 nor would it be proper for him if he was of the opinion that the prosecution ought not to proceed to get the consent of the Government to the 751 filing of a petition under that section for obtaining permission of the Court to withdraw from the prosecution. " This Court also seemed to accept in State of Orissa vs C. Mohapatra (supra) that the policy decision for withdrawal from the prosecution can be made by the State though the application for withdrawal would be made by the Public Prosecutor. This is what the Court said in that case: "We cannot forget that ultimately every of fence has Social or economic cause behind it and if the State feels that elimination or eradication of the social or economic cause behind it would be better served by not pro ceeding with the prosecution the State should be at liberty to withdraw." (italics are ours) This position seems to obtain until 1978 so far as the decided cases are concerned. But in 1978 the trend changed when in Balwant Singh vs State of Bihar; the view that found favour was that the Public Prosecutor is the primary authority to decide on the question of withdrawal from the prosecution. This Court speaking through Krishna Iyer, J observed in this case: "The Statutory responsibility for deciding upon withdrawal squarely vests on the public prosecutor. It is non negotiable and cannot be bartered away in favour of those who may be above him on the administrative side. The Criminal Procedure Code is the only matter of the public prosecutor and he has to guide himself with reference to Criminal Procedure Code only '. Here, the Public Prosecu tor is ordered to move for withdrawal. This is not proper for a District Magistrate to do. Indeed, it is not proper to have the public prosecutor ordered about. It is entirely within the discretion of the public prosecu tor. It may be open to the District Magistrate to bring to the notice of the Public Prosecu tor and suggest to him to consider whether the prosecution should be withdrawn or not. He cannot command where he can only command. " This decision for the first time made the Public Prosecutor autonomous of the Executive in so far as withdrawal from the prosecution is 752 concerned and held that the Public Prosecutor must apply his own mind and come to his own decision whether to apply for withdrawal or not, irrespective of the opinion or advice of the Executive. The same view was reiterated by Krishna lyer J., speak ing on behalf of the Court, in Subhash Chander vs State and others (supra) where the learned Judge said: "The functionary clothed by the Code with the power to withdraw from the prosecution is the Public Prosecutor. The Public Prosecutor is not the executive, nor a flunk of political power. Invested by the Statute with a discre tion to withdraw or not to withdraw, it is for him to apply an independent mind and exercise his discretion. In doing so, he acts as a limb of the judicative process, not as an extension of the executive. " The learned Judge strongly depricated the action of the District Magistrate in directing the Public Prosecutor to withdraw the prosecution in the case before him and observed in words admitting of no doubt: "The jurisprudence of ' genuflexion is alien to our system and the law expects every reposito ry of power to do his duty by the Constitution and the law, regardless of commands, direc tives, threats and temptations. The Code is the master for the criminal process. Any authority who coerces or orders or pressurises a functionary like a public prosecutor, in the exclusive province of his discretion violates the rule of law and any public prosecutor who bends before such command betrays the authori ty of his office. May be, Government or the District Magistrate will consider that a prosecution or class of prosecutions deserves to be withdrawn on grounds of policy or rea sons of public interest relevant to law and justice in their larger connotation and re quest the public prosecutor to consider wheth er the case or cases may not be withdrawn. Thereupon, the Prosecutor will give due weight to the material placed, the policy behind.the recommendation and the responsible position of Government, which in the last analysis, has to maintain public order and promote public justice. But the decision to withdraw must be his." this case also, like the earlier one in Balwant Singh vs State of Bihar 753 (supra), introduced the concept of independent application of mind by the Public Prosecutor on the question of with drawal from the prosecution and insisted that the Executive cannot direct or pressurise the Public Prosecutor to with draw from the prosecution and the Public Prosecutor must come to his own decision without bending before the command of the Executive. Once this component of independent appli cation of mind on the part of the Public Prosecutor was introduced the Court while considering whether consent for such withdrawal should be granted or not was required to deliberate not only on the legitimacy of the grounds urged in support of the withdrawal but also whether the Public Prosecutor had applied his mind in the matter. But then again there was a slight shift in this posi tion in the latest decision in R.K. Jain vs State, [ ; The Court in this case adopted a more middle of the road approach and after pointing out what 'the Court con ceived to be the correct position in law in the following words: "Whilst at one point it said that it shall be the duty of the Public Prosecutor to inform the Court ' and it shall be the duty of the Court to appraise itself of the reasons which prompt the Public Prosecutor to withdraw from the prosecution. The Court has a responsibili ty and stake in the administration of criminal justice and so has the Public Prosecutor, its 'Minister of Justice. ' Both have a duty to protect the administration of criminal justice against possible abuse or misuse by the Executive by resort to the provisions of s.321 Cr. PC." (emphasis is ours) The Court recognised that the Government has a role in the administration of criminal justice and observed: "An elected Government, sensitive and responsive to the feelings and emotions of the people, will be amply justified if for pur poses of creating an atmosphere of goodwill or for the purpose of not disturbing the calm which has descended it decides not to prose cute the offenders involved or not to proceed further with prosecutions already launched. In such matters who but the Government can and should decide in the first instance whether it should be baneful or beneficial to launch or continue prosecutions. If the Government decides that it would be in the interest to withdraw from 754 prosecutions, how is the Government to go about to task?" (emphasis is ours). and proceeded to add that the Public Prosecutor may act on the advice of the Government in applying for withdrawal of the prosecution "where large and sensitive issues of public policy are involved. " Chinnappa Reddy, J. speaking on behalf of the Court elaborated this view in the following words: "Where large and sensitive issues of public policy are involved he must if he is right minded the Public Prosecutor seek advice and guidance from the policy makers. His sources of information and resources are of a very limited nature unlike those of the policy makers. If the policy makers themselves move in the matter in the first instance as indeed it is proper that they should where matters of momentous public policy are involved and if they advice the Public Prosecutor to withdraw from the prosecution,. it is not for the Court to say that the initiative came from the Government and therefore the Public Prosecutor cannot be said to have exercised a free mind." (Emphasis is ours) The majority Judges however took a different view in the present appeal when it was heard by the earlier Bench. Baharul Islam, J. stated the view of the majority in the following terms: "Unlike the Judge, the Public Prosecutor is not an absolutely independent officer. He is an appointee of the Government, Central or State (see sections 24 and 25, CrPC), appoint ed for conducting in court any prosecution or other proceedings on behalf of the Government concerned. So there is the relationship of counsel and client between the Public Prosecu tor and the Government. A Public Prosecutor cannot act without instructions of the Govern ment; a Public Prosecutor cannot conduct a case absolutely on his own, or contrary to the instruction of his client, namely, the Govern ment . Section 321 of the Code does not lay any bar on the Public Prosecutor to receive any instruction from the Government before he files an application under that section. If the Public Prosecutor receives such instruc tions, he cannot be said to act under extrane ous influence. On the contrary, the Public Prosecutor cannot file an application for withdrawal of a 755 case on his own without instruction from the Government . In our opinion, the object of Section 321, Cr. P.C. appears to be to reserve power to the Executive Government to withdraw any criminal case on larger grounds of public policy such as inexpediency of prosecutions for reasons of State, broader 'public interest like maintenance of ,law and order, maintenance of public peace and harmo ny, social, economic and political; changed social and political situation; avoidance of destabilization of a stable government and the like. And such powers have been, in our opin ion, rightly reserved for the Government, for, who but the Government is in the know of such conditions and situations prevailing in a State or in the country? The Court is not in a position to know such situations. " It will thus be seen that the position in law in regard to the degree of autonomy enjoyed by the Public Prosecutor vis a vis the Government in filing an application for with drawal of the prosecution is rather confused and it would be desirable to approach the question on first principle. Now there can be no doubt that prosecution of an offend er who is alleged to have committed an offence is primarily the responsibility of the Executive. It is the executive which is vested with the power to file a charge sheet and initiate a prosecution. This power is conferred on the Executive with a view to protecting the society against offenders who disturb the peace and tranquillity of the society by committing offences. Of course it is left to the Court to decide whether to take cognizance of the offences set out in the charge sheet but the filing of the charge sheet and initiation of the prosecution is solely within the responsibility of the Executive. When the prosecution is initiated by filing a charge sheet the Public Prosecutor comes into the picture. Of course, even before the charge sheet is filed, the investigating, authorities may seek the advice of the Public Prosecutor in regard to the prosecution of the accused but it is not obligatory on the investi gating authorities to do so. The Public Prosecutor comes on the scene as soon as the charge sheet is filed and he ap pears and argues the case on behalf of the prosecution. It is the State through the investigating authorities which files a charge sheet and initiate the prosecution and the Public Prosecutor is essentially counsel for the State for conducting the prosecution on behalf of the State. The expression "Public Prosecutor" is defined in section clause (u) to mean" any person appointed under section 24 and includes any person acting under the 756 directions of a Public Prosecutor. " Section 24 provides for the appointment of a Public Prosecutor: sub section (1) of section 24 states that "for every High Court the Central Government or the State Government shall, after consultation with the High Court, appoint a Public Prosecutor and may also appoint one or more Additional Public Prosecutors for conducting in such court any prosecution, appeal or other proceeding on behalf of the Central Government or State Government, as the case may be". (Emphasis is ours). Sub section(3) of section 24 enacts that for every District, the State Government shall appoint a Public Prosecutor and may also appoint one or more Additional Public Prosecutors for the district and under sub section(7) of that section a person is eligible for being appointed as a Public Prosecu tor or an Additional Public Prosecutor only if he has been in practice as an advocate for not less than 7 years. Thus the Public Prosecutor appointed by the State Government conducts the prosecution on behalf of the State Government and the Public Prosecutor appointed by the Central Govern ment does so on behalf of the Central Government. It is undoubtedly true that the Public Prosecutor is an officer of the Court, as indeed every advocate practising before the Court is, and he owes an obligation to the Court to be fair and just: he must not introduce any personal interest in the prosecution nor must he be anxious to secure conviction at any cost. He must present the case on behalf of the prosecu tion fairly and objectively and as pointed out by this Court in State of Bihar vs Ram Naresh Pandey (supra) he is bound to assist the court with his fairly considered view and the fair exercise of his judgment. But at the same time it must be noted that he conducts the prosecution on. behalf of the Central Government or the State Government, as the case may be, and he is an advocate acting on behalf of the Central Government or the State Government which has launched the prosecution. We are therefore of the view that there is nothing wrong if the Government takes a decision to withdraw from the prosecution and communicate such direction to the Public Prosecutor. The Public Prosecutor would inter alia consider the grounds on which the Government has taken the decision to withdraw from the prosecution and if he is satisfied that these grounds are legitimate, he may file an application for withdrawal from the prosecution. If on the other hand he takes the view that the grounds which have been given by the Government are not legitimate he has two options available to him. He may inform the Government that in his opinion, the grounds which have weighed with the Government are not valid and that he should be relieved from the case and if this request of his is not granted, he may tender his resignation. Or else, he may make an application for withdrawal from the prosecution as directed by the 757 Government and at the hearing of the application he may offer his considered view to the court that the application is not sustainable on the grounds set out by him and leave it to the court to reject the application. We do not think there is anything wrong in the Public Prosecutor being advised or directed by the Government to file an application for withdrawal from the prosecution and the application for withdrawal made by him pursuant to such direction or advice is not necessarily vitiated. The Public Prosecutor can of course come to his own independent decision that the prose cution should be withdrawn but ordinarily if he is wise and 'sensible person he will not apply for withdrawal without consulting the Government because it is the Government which has launched the prosecution and is prosecuting the accused. The critically, of course, he can make an application for withdrawal from the prosecution without consulting the Government and he cannot be accused of any illegality for doing so and the court may give its consent for such with drawal but in that event the Public Prosecutor would render the risk of incurring the displeasure of the Government which has appointed him. If the Public Prosecutor seeks the permission of the Government for withdrawal from the prose cution and the Government grants such permission to him and on the basis of such permission he applies for withdrawal the application cannot be said to be vitiated. The proviso to section 321 in fact contemplates in so many terms that in certain categories of offences the Public Prosecutor ap pointed by the State Government cannot move the Court for its consent to withdraw from the prosecution without the permission of the Central Government. There is no danger of abuse or misuse of power by the Government inherent in this process because there are two principal safeguards against any such abuse or misuse of power by the Government: one is that the application must be based on grounds which advance public justice and the other is that there can be no with drawal without the consent of the court. Now let us consider the question as to what are the grounds on which the Public Prosecutor can apply for with drawal from the prosecution. These grounds have been var iously stated in the decisions of this Court but the basic principle under lying all these grounds is that the with drawal can be sought only for furthering the cause of public justice. If we. may repeat what we have said before, the paramount consideration must always be the interest of administration of justice. That is the touch stone on which the question must be determined whether an application for withdrawal of the prosecution can be sustained. This Court tried to formulate several instances where the cause of public justice Would be served better by withdrawal from the pro 758 secution. It was observed by this Court in M.N. Sankarava raya vs P.V. Balakrishnan (supra) that an application for withdrawal from the prosecution may be made on the ground that "it will not be possible to produce sufficient evidence to sustain the charge or that subsequent information before prosecuting agency would falsify the prosecution evidence or in any other similar circumstances which it is difficult to predicate aS they are dependent entirely on the facts and circumstances of each case". This Court also pointed out in State of Orissa vs C. Mohapatra (supra) that "it is not sufficient for the Public Prosecutor merely to say ' that it is not expedient to proceed with the prosecution. He has to make out some ground which would show that the prosecution is sought to be withdrawn because inter alia the prosecution may not be able to produce sufficient evidence to sustain the charge or that the prosecution does not appear to be well founded or that there are circumstances which clearly show that the object of administration of justice would not be advanced or furthered by going on with the prosecution. " It was also emphasised by this Court in Subhash Chander vs State (supra) that "justice cannot be allowed to be scuttled by the Public Prosecutor or the State because of hubris affection or other noble or ignoble considerations. " This Court also observed in R.K. Jain vs State (supra): "In the past we have often known how expedient and necessary it is in the public interest for the public Prosecutor to withdraw from prose cutions arising out of mass agitations, commu nal riots, regional disputes, industrial conflicts, student unrest etc. Wherever issues involve the emotions and there is a surcharge of violence in the atmosphere it has often been found necessary to withdraw from prosecu tions in order to restore peace, to free the atmosphere from the surcharge of violence, to bring about a peaceful settlement of issues and to persist with prosecutions where emotive issues are involved in the name of vindicating the law even be utterly counter productive. An elected Government, sensitive and responsive to the feelings and emotions of the people, will be amply justified if for the purpose of creating an atmosphere of goodwill or for the purpose of not disturbing a calm which has descended it decides not to prosecute the offenders involved or not to proceed further with prosecutions already launched. " It will thus be seen that the Public Prosecutor cannot maintain an application for withdrawal from the prosecution on the ground that the 759 Government does not want to produce evidence and proceed with the prosecution against the accused or that the Govern ment considers that it is not expedient to proceed with the prosecution. The Public Prosecutor has to make out some ground which would advance or further the cause of public justice. If the Public Prosecutor is able to show that he may not be able to produce sufficient evidence to sustain the charge, an application for withdrawal from the prosecu tion may be legitimately made by him. But there are two clarifications which we would like to introduce where the prosecution is sought to be withdrawn on this ground. The first qualification is that where a charge has been framed by the Court either under section 228 or section 240 of the Code of Criminal Procedure, 1973, it would not be open to the Public Prosecutor to apply for withdrawal from the prosecution on the ground of insufficiency of evidence in support of the prosecution. The reason is that under section 228 a charge can be framed by the Court only if the court is of opinion that there is ground for presuming that the accused has committed an offence and so also under Section 240 the Court can frame a charge only if it is of opinion that there is ground for presuming that the accused has committed an offence. The Court in both these cases applies its mind to the material consisting of the police report and the documents sent with it under section 173 and comes to a conclusion that a prima facie case has been made out against the accused and the charge should therefore be framed. When the Court has come to this conclusion after full consideration and framed a charge, it is difficult ' to see how on the same material the Court can be persuaded to hold that there is not sufficient evidence to sustain the prosecution. How can the Public Prosecutor be permitted to make a volte face on the basis of the same material? That would be mockery of justice and it would shake the confi dence of the people in the purity and integrity of the administration of justice. That is why this Court pointed out in Bansi Lal vs Chandi Lal, AIR that, "if the material before the Additional Sessions Judge was con sidered sufficient to enable him to frame the charges against the respondents, it is not possible to say that there was no evidence in support of the prosecution case." So also in Balwant Singh vs State (supra) this Court reiter ated that "the State should not stultify the Court by first stating that there is a true case to be tried and then make volte face to the effect that on a second investigation the case has been discovered to be false." The Public Prosecutor in this last mentioned case sought to rely on a second investigation for supporting.the application for withdrawal but, that was clearly and unequivocally not countenanced by this 760 Court. Obviously, the Public Prosecutor would be on much weaker ground when on the same material which was before the Court when it flamed the charge, he subsequently seeks to withdraw the prosecution on the ground that there is not sufficient evidence to sustain the prosecution. It is, therefore, dear that though the prosecution can be withdrawn at any stage, even after the flaming of the charge, it would not be competent to the Public Prosecutor, once the charge is framed, to apply for withdrawal of the prosecution on the ground that the same material which was before the Court when it framed the charge is not sufficient to sustain the prosecution. Of course, if some material has subsequently come to light which throws doubt on the veracity of the prOsecution case the Public Prosecutor can certainly apply for withdrawal on the ground that the prosecution is not well founded. It may also happen that in the meanwhile a key witness may have died or some important evidence may have become unavailable or some such thing may have happened; in that event, the Public Prosecutor may legitimately feel that it will not be possible to sustain the prosecution in the absence of such evidence and he may apply for withdrawal from the prosecution. But, on the same material without anything more, the Public Prosecutor cannot apply for with drawal from the prosecution after the charge is flamed. To allow him to do so would impair the faith of the people in the purity and integrity of the judicial process. The second qualification which we must introduce relates to a situation where a charge sheet has been filed but charge has not been framed in a warrant case instituted on police report. Section 239 of the Code of Criminal Proce dure, 1973 provides: "If, upon considering the police report and the documents sent with it under section 173 and making such examination, if any, of the accused as the Magistrate thinks necessary and after giving the prosecution and the accused an opportunity of being heard, the Magistrate considers the charge against the accused to be groundless, he shall discharge the accused, and record his reasons for so doing. " Now when a warrant case instituted on a police report comes before the Court, the Court is required to consider only the police report and the documents sent alongwith it and the Court may make such examination, if any, of the accused as it thinks necessary and on the basis of such material if the Court, after giving the prosecution and the accused an opportunity of being heard, considers the charge against the accused to be groundless, the Court is bound to discharge the accused. 761 What the Court, therefore, does while exercising its func tion under section 239 is to consider the police report and the document sent along with it as also any statement made by the accused if the court chooses to examine him. And if the court finds that there is no prima facie case against the accused the court discharges him. But that is precisely what the court is called upon to do when an application for withdrawal from the prosecution is made by the public prose cutor on the ground that there is insufficient or no evi dence to support the prosecution. There also the court would have to consider the material placed before it on behalf of the prosecution for the purpose of deciding whether the ground urged by the public prosecutor for withdrawal of the prosecution is justified or not and this material would be the same as the material before the court while discharging its function under section 239. If the court while consider ing an application for withdrawal on the ground of insuffi ciency or, absence of evidence to support the prosecution has to scrutinise the material for the purpose of deciding whether there is in fact insufficient evidence or no evi dence at all in support of the prosecution, the court might as well engage itself in this exercise while considering under section 239 whether the accused shall be discharged or a charge shall be framed against him. It is an identical exercise which the Court will be performing whether the court acts under section 239 or under section 321. If that be so, we do not think that in a warrant case instituted on a police report the public prosecutor should be entitled to make an application for withdrawal from the prosecution on the ground that there is insufficient or no evidence in support of the prosecution. The court will have to consider the same issue under section 239 and it will most certainly further or advance the case of public justice if the court examines the issue under section 239 and gives its reasons for discharging the accused after a judicial consideration of the material before it, rather than allow the prosecution to be withdrawn by the Public Prosecutor. When the prosecu tion is allowed to be withdrawn there is always an uneasy feeling in the public mind that the case has not been al lowed to be agitated before the court and the court has not given a judicial verdict. But, if on the other hand, the court examines the material and discharges the accused under section 239, it will always carry greater conviction with the people because instead of the prosecution being with drawn and taken out of the ken of judicial scrutiny the judicial verdict based on assessment and evaluation of the material before the court will always inspire greater confi dence. Since the guiding consideration in all these cases is the imperative of public justice and it is absolutely essen tial that justice must not only be done but also appear to be done. We would hold that in a warrant case instituted on a police report which 762 the present case against Dr. Jagannath Misra and others admittedly is it should not be a legitimate ground for the public prosecutor to urge in support of the application for withdrawal that there is insufficient or no evidence in support of the prosecution. The court in such a case should be left to decide under section 239 whether the accused should be discharged or a charge should be framed against him. We may also reiterate what was pointed out by this Court in State of Orissa vs C. Mohapatra (supra) that in a given case it may not be "conducive to the interest of justice to continue the prosecution . since the prosecution with the possibility of conviction" may rouse feelings of bitter ness and antagonism and disturb the calm and peaceful atmos phere which has been restored. We cannot forget that ulti mately every offence has a social or economic cause behind it and if the State feels that the elimination or eradica tion of the social or economic cause of the crime would be better served by not proceeding with the prosecution, the State should clearly be at liberty to withdraw from the prosecution. This was the ground on which this court in State of Orissa vs C. Mohapatra (supra) allowed withdrawal of the prosecution in a case where the incident resulting in the commission of the offence had arisen out of rivalry between two trade unions but since the date of the incident calm and peaceful atmosphere prevailed in the industrial undertaking. There may be broader considerations of public peace, larger considerations of public justice and even deeper considerations of promotion of long lasting security in a locality, of order in a disorderly situation or harmony in a factious milieu which may legitimately persuade the State to "sacrifice a pending case for a wider benefit". The imperative of public justice may in such cases transcend and overflow the legal justice of a particular litigation. We are wholly in agreement with what this Court in Balwant Singh vs State of Bihar (supra): ". communal feuds which may have been amicably settled should not re erupt on ac count of one or two prosecutions pending. Labour disputes which, might have given rise to criminal cases, when set tled, might probably be another instance where the interests of public justice in the broader connotation may perhaps warrant withdrawal from the prosecution. " We also express our approval of the observations made by this Court in R.K. Jain vs State (supra) which we have reproduced above: These are broadly the considerations which can be brought under the rubric of public justice so as to justify an application for withdrawal from prosecution. But, of course, we must make it clear that in this area no hard and fast rule can be laid down nor can any categories of 763 cases be defined in which an application for withdrawal of the prosecution could legitimately be made. It must ulti mately depend on the facts and circumstances of each case in the light of what is necessary in order to promote the ends of justice. When the application for consent to the withdrawal from the prosecution comes for consideration, the Court has to decide whether to grant such consent or not. The function which the court exercises in arriving at this decision, as pointed out by this Court in State of Bihar vs Ram Naresh, is a judicial function. The Court has to exercise its judi cial discretion with reference to such material as is then available to it and in exercise of this discretion the court has to satisfy itself that the executive function of the public prosecutor has not been improperly exercised and that the grounds urged in support of the application for with drawal are legitimate grounds in furtherance of public justice. The discretion has not to be exercised by the court mechanically and the consent applied for has not to be granted as a matter of formality or for the mere asking. The Court has to consider the material placed before it and satisfy itself that the grant of consent would serve the interest of justice. That is why this Court in State of Bihar vs Ram Naresh (supra) examined the entire material which was available to it for the purpose of coming to the conclusion that there was no evidence worth the name on the basis of which the prosecution could be sustained against the accused Mahesh Desai. This court pointed out that con sent is not to be lightly given on the application of public prosecutor "without a careful and proper scrutiny of the grounds on which the application for consent is made. " It was emphasised by this Court that in these matters the public prosecutor exercises discretionary functions in respect of which the initiative is that of the executive but the responsibility is that of the court. This court again reiterated in M.N. Sankarayaraynanan Nair vs P.V. Balakrish nan & Ors. (supra) that the court must satisfy itself that the executive function of the public prosecutor has not been improperly exercised and that it is not an attempt to inter fere with the normal course of justice and added that the court may give its permission only if it is satisfied on the materials placed before it that the grant of consent sub serves the administration of justice. The same view has been taken in all the subsequent cases and it must now be regard ed as well settled that the court while considering whether 'to grant consent or not must not accept the ipse dixit of the public prosecutor and content itself by merely examining whether the public prosecutor has applied an independent mind but the court must satisfy itself not only that the grounds are germane or relevant to advancement of public justice but also 764 whether the grounds in fact are satisfactorily established. The ultimate test which must be applied by the court in order to determine the validity of the grounds in a particu lar case is that the requirement of public justice outweighs the legal justice of that case so that withdrawal from the prosecution could be permitted in the larger interest of public justice. The same considerations which we have dis cussed while determining what are the legitimate grounds on which an application may be made by the public prosecutor for withdrawal from the prosecution must also apply in guiding the court as to whether consent for withdrawal of the prosecution should be granted or not. We may again emphasise that the imperative of public justice provides the only relevant consideration for determining whether consent should be granted or not. It is not possible to provide an exclusive definition of what may be regarded as falling within the imperative of public justice nor is it possible to place the concept of public justice in a strait jacket formula. Every case must depend on its peculiar facts and circumstances because there may be a myriad situation where this question may have to be considered by this court. The paramount consideration must be the requirement of public justice and some of the grounds which would bring the case within the fabric of public justice have already been dis cussed by us in the preceding paragraphs and we need not repeat them. The same grounds may be regarded as germane and relevant to the requirement of public justice and if they exist, the court would be justified in granting consent to withdrawal from the prosecution. If we apply these principles to the facts of the present case, it is clear that the court of the Chief Judicial Magistrate, Patna as also the High Court were clearly in error in granting consent to the withdrawal from the prose cution against Dr. Jagannath Misra and others. We do not propose to go into the question whether the material avail able to the court could be regarded as sufficient for sus taining the prosecution of Dr. Jagannath Misra and others because if we consider this question and make any observa tions in regard to the sufficiency of the material, such observations may tend to prejudice Dr. Jagannath Misra and the other accused. Of course, if there were no other reasons which would persuade the court not to grant consent to the withdrawal of the prosecution, we would have had to go into the question whether the material produced before the court was sufficient prima facie to sustain the prosecution. But, there are two very strong and cogent reasons why consent to the withdrawal of the prosecution must be refused. In the first place, the learned Chief Judicial Magistrate could have considered under section 239 whether the material placed before him was 765 sufficient to make out a prima facie case against Dr. Jagan nath Misra and the other accused so that if the learned Chief Judicial Magistrate came to the conclusion on the basis of such material that the charge against Dr. Jagannath Misra and the other accused was groundless, he would be bound to discharge them for reasons to be recorded by him in writing. There is no reason why in these circumstances the public prosecutor should be allowed to withdraw from the prosecution under section 321. The same exercise could be performed by the learned Chief Judicial Magistrate by acting under section 239. Moreover, in the present case, the deci sion to withdraw from the prosecution was taken by the Cabinet at a meeting held on 24th February 1981 and this meeting was presided over by Dr. Jagannath Misra himself. It may be that Shri Lallan Prasad Sinha did not implicitly obey the decision of the Cabinet and applied his independent mind to the question whether the prosecution should be withdrawn or not but even so, it would seriously undermine the confi dence of the people in the administration of justice if a decision to withdraw the prosecution against him is taken by the accused himself and pursuant to this decision the Spe cial Public Prosecutor who is appointed by the State Govern ment of which the accused is the Chief Minister, applied for withdrawal from the prosecution. It is an elementary princi ple that justice must not only be done but must also appear to be done. It would be subversive of all principles of justice that the accused should take a decision to withdraw the prosecution against himself and then the Special Public Prosecutor appointed in effect and substance by him makes an application for withdrawal from the prosecution. We are of the view that these two considerations are so strong and cogent that consent to withdraw from the prosecution should not have been granted in the present case. It is no doubt true that if there is not sufficient evidence to sustain the prosecution against Dr. Jagannath Misra and the other accused, it would be subjecting them to harassment and inconvenience to require them to appear and argue before the Court for the purpose of securing an Order of discharge under section 239, but even so we think it would be desirable in the interest of public justice that high ' political personages, accused of offences should face the judicial process and get discharged, rather than seem to manoeuvre the judicial system and thus endanger the legiti macy of the political as well as the judicial process. It is possible that in a particular case personal harassment or inconvenience may be caused by non withdrawal of the prose cution, if the accused is really innocent and is ultimately liable to be discharged, but such harassment or inconven ience must be considered as an inevitable cost of public life, which the repositories of public power should have no hesitation to pay, as justice must not only be 766 done but must also appear to be done. We accordingly allow the appeal, set aside the Order made by the Chief Judicial Magistrate and confirmed by the High Court and direct that the prosecution may proceed against Dr. Jagannath Misra and the other accused in accord ance with law. VENKATARAMIAH, J. I have gone through the judgments of Bhagwati, C.J. and Khalid, J. which are pronounced today. I have also gone through the orders of the Special Judge who permitted the withdrawal of the prosecution, the judgment of the High Court affirming it, the three judgments pronounced by Tulzapurkar, J., Bahrul Islam, J. and R.B. Misra, J. by which this Court by majority affirmed the order permitting withdrawal of the criminal case in question and also of A.N. Sen, J. who passed the orders admitting the review petition. The facts of the case are set out in the judgments referred to above and it is unnecessary to repeat them here. I have given my anxious consideration to the case since it relates to the purity of public life. At the outset it should be stated that merely because a court discharges or acquits an accused arraigned before it, the Court cannot be considered to have compromised with the crime. Corruption, particularly at high places should be put down with a heavy hand. But our passion to do so should not overtake reason. The Court always acts on the material before it and if it finds that the material is not suffi cient to connect the accused with the crime, it has to discharge or acquit him, as the case may be, notwithstanding the fact that the crime complained of is a grave one. Simi larly if the case has been withdrawn by the Public Prosecu tor for good reason with the consent of the Court, this Court should be slow to interfere with the order of with drawal. In this case if the Special Judge had rejected the application for withdrawal and the High Court had affirmed that Order, this Court may not have interfered with that order under Article 136 of the Constitution of India. Even if the Special Judge had permitted the withdrawal but the High Court had reversed that order, this Court may not have interfered with the orders of the High Court. But this is a case where the Special Judge had permitted the withdrawal of the prosecution, and the said order of withdrawal has been affirmed by the High Court as well as by the majority judg ment pronounced by this Court earlier. The question is whether this Court on review should interfere with the order permitting the withdrawal of the ease. Are there any strong and compelling reasons which require interference with the order permitting withdrawal? This is the question which has arisen before us now. 767 Since the orders of the Special Judge, of the High Court and of Bahrul Islam, J. and R.B. Misra, J. are in favour of the accused, I shall not refer to them. I shall refer only to the judgment of Tulzapurkar, J. (See Sheonandan Paswan versus State of Bihar and others); ; , who has held against the accused to decide whether there are sufficient incriminating circumstances which compel this Court to set aside the order permitting withdrawal of the prosecution. In his judgment at pages 101 to 103 Tulzapur kar, J. summarises the case against Dr. Jagannath Misra thus: "It will appear clear from the above discus sion that the documentary evidence mentioned above, the genuineness of which cannot be doubted, clearly makes out a prima facie case against Respondent No. 2 sufficient to put him on trial for the offence of criminal miscon duct under section 5(1) (d) read with section 5(2) of the Prevention of Corruption Act, 1947. Simi lar is the position with regard to the inci dental offence of forgery under s.466, I.P.C. said to have been committed by him, for, ante dating of the second order by him is not disputed; and it is on record that in regard to such ante dating no explanation was offered by him during the investigation when he was questioned about it in the presence of his lawyers and there has been no explanation of any kind in any of the counter affidavits filed before us. But during the course of arguments his counsel offered the explanation that could only be ascribed as a bona fide mistake or slip (vide written arguments filed on 14.10.1982) but such explanation does not bear scrutiny, having regard to the admitted fact that after the ante dated order was pasted over the first order the despatch date appearing in the margin was required to be and has been altered to 14.5.1975 by over writing is required to be done there cannot any bona fide mistake or slip. The ante dating in the circumstances would be with oblique intent to nullify any possible action that could have or might have been taken pursuant to the first order as stated earlier, that being the most natural consequence flowing from it which must in law be presumed to have intended. It would, of course, be open to him to rebut the same at the trial but at the moment there is no mate rial on record by way of rebuttal. In the circumstances it is impossible to accept the paucity of evidence or lack of prospect of successful prosecution as a valid ground for withdrawal from the prosecution. On the 768 aforesaid undisputed documentary evidence no two views are possible in the absence of any rebuttal material, which, of course, the respondent No.2 will have the opportunity to place before the Court at the trial. What is more the socalled unfair or over zealous investigators were miles away when the afore said evidence came into existence. As far as Respondent No. 3 (Nawal Kishore Sinha) and Respondent No.4 (Jiwanand Jha) are concerned it cannot be forgotten that they have been arraigned alongwith Respondent No. 2 on a charge of criminal conspiracy in pursuance whereof the several offences are said to have been committed by all of them. Further it is obvious that the principal beneficiary of the offence of criminal miscon duct said to have been committed by Respondent No. 2 under section 5(1) (d) read with section 5(2) of Prevention of Corruption Act, 1947 has been Respondent No. 3 and so far as Respondent No.4 is concerned it cannot be said that there is no material on record suggesting his complici ty. Admittedly, he has been very close to Respondent No. 2 for several years and attend ing to his affairs priVate and party affairs and the allegation against him in the F.I.R is that he was concerned with the deposit of two amounts of Rs. 10,000 and Rs.3,000 on 27.12.1973 and 1.4.1974 in the Savings Bank Account of Respondent No. 2 with the Central Bank of India, Patna Dak Bungalow Branch, which sums, says the prosecution, represented some of the bribe amounts said to have been received by respondent No. 2 and the tangible documentary evidence in proof of the two deposits having been made in Respondent No. 2 's account consists of two pay in slips of the concerned branch of Central Bank of India. Whether the two amounts came from the funds of the Patna Urban Co operative Bank or not and whether they were really paid as bribe amounts or not would be aspects that will have to be considered at the trial. However, as pointed out earlier the offence under s.5(1) (d) would even otherwise be complete if pecuniary advan tage (by way of scuttling the civil liability of surcharge) was conferred on Nawal Kishore Sinha and others. If Respondent No. 2 has to face the trial then in a case where conspiracy has been charged no withdrawal can be permit ted against Respondent No. 3 and Respondent No. 4. In arriving at the conclusion that paucity of evidence 769 is not a valid ground for withdrawal from the prosecution in regard to Respondents Nos. 2,. 3 and 4. I have deliberately excluded from consideration the debatable evidence like confessional statements of the approvers etc. (credibility and effect whereof would be for the trial court to decide) said to have been collected by the allegedly over zealous inves tigating officers after Respondent No.2 went out of power in 1977. " The three circumstances put up against the accused in this case are (i) that Jiwanand Jha had credited Rs.10,000 and Rs.3000 on 27.12.1973 and on 1.4.1974 respectively in the Savings Bank account of Dr. Jagannath Misra, (ii) that there was ante dating of the order passed by Dr. Jagannath Misra on 16.5.1975 and it had been shown as having been passed on 14.5.1975, and (iii) that there was a confessional statement of Hydari which supported the prosecution. Tulza purkar, J. himself has found it not safe to act on the confessional statement. He observes "I have deliberately excluded from consideration the debatable evidence like confessional statement of approvers (credibility and effect whereof would be for the trial court to decide) said to have been collected by the allegedly over zealous investigating officers after Respondent No. 2 went out of power in 1977". The two other circumstances on which Tulzapurkar, J. has acted are (i) the crediting of Rs. 10,000 and Rs.3,000 on 27.12.1973 and 1.4.1974 respectively in the Savings Bank Account of Dr. Jagannath Misra by Jiwanand Jha and (ii) the ante dating of the orders dated 16.5.1975. As regards the first of these two circumstances Tulza purkar, J. Observes: "Admittedly, he (Jiwanand Jha) has been very close to Respondent No. 2 (Dr. Jagannath Misra) for several years and attending to his affairs private and party affairs and the allegation against him in the F.I.R. is that he was concerned with the deposit of two. amounts of Rs. 10,000 and Rs.3,000 on 27.12.1973 and on 1.4.1974 respec tively in the Savings Bank Account of Respondent No. 2 with the Central Bank of India, Patna Dak Bungalow Branch, which sums, says the prosecution represented some of the bribe amounts said to have been received by Respondent No.2 and the tangible documentary evidence of the two deposits having been made in Respondent No. 2 's account consists of two pay in slips of the concerned Branch of Central Bank of India. Whether the two amounts came from the funds of the Patna Urban Co operative Bank or not and whether they were really paid as bribe amounts or not would be aspects that will have to be considered at the trial". On this observa tion, it has to be stated, that it 770 has not been shown by any extract of bank account that the said two sums came from the Patna Urban Co operative Bank. If that was so there would have been entries in the Bank accounts. Mere crediting of two sums, without any other reliable evidence, in a bank account by a politically or a friend does not by itself show that the sums were either bribe amounts or any official. favour had been shown. This fact by itself is not conclusive about the guilt of the accused. As regards the ante dating of the order dated 16.5.1975 it may be noticed that Tulzapurkar, J. himself observes in the course of his order "It is true that a mere ante dating a document or an order would not amount to an offence of forgery but if the document or the order is ante dated with the obligue motive or fraudulent intent indicated above (without the same actually materialising) it will be a forgery. " The passing of the two orders one on 16.5.1975 on the note sheet and the other on buff paper which is dated 14.5.1975 is not in dispute. It is explained that it was the practice in the Bihar Secretariat that whenever an order is changed it is done by writing the later order on a buff sheet and pasting it on the earlier order. We were shown another file of the Bihar Government where similar pasting had been done. Tulzapurkar, J. observes that "the second order which was ante dated with the obvious fradulent intent of nullifying or rendering any action that could have been or in fact might have been taken (even if not actually taken) pursuant to the first order after the file had left the Chief Minister 's Secretariat on 16.5.1975, that being the most material consequence flowing from the act of ante dating the second order". It is not shown by the prosecution that any action had been taken pursuant to the order dated 16.5.1975 by any of the departmental authorities. If any action had been taken it would have been a matter of record readily available for production. No such record is produced before the Court. Hence it is a mere surmise to say that any such action was sought to be nullified, particularly when there was no acceptable evidence at all on the communication of the order dated 16.5.1975 to any departmental authori ties. I also adopt the reasons given by Bahrul Islam. J. and R.B. Misra, J. in support of my judgment. In fact about 23 criminal cases have been launched against Naval Kishore Sinha and others for the offences alleged to have been committed by them. They remain unaf fected. The questions involved in this case are whether Dr. Jagannath Misra has been a privy to the misdeeds committed in the Patna Urban Co operative Bank, whether he and his co accused should be prosecuted for the offences of conspi 771 racy, bribery etc., and whether the Public Prosecutor had grievously erred in applying for the withdrawal of the case. All the other Judges who have dealt with the case on merits from the Special Judge onwards, except Tulzapurkar, J., have opined that the permission was properly given for withdraw al. In the circumstances, it is difficult to take a differ ent view in this case. I respectfully agree with the legal position flowing from section. 321 of the Code of Criminal Procedure as explained by Krishna Iyer and Chinnappa Reddy, JJ. in re spect of cases relating to Bansi Lal and Fernandes in R.K. Jain etc. , vs State through Special Police Establishment and Ors., etc. ; , In that case Chinnappa Reddy, J. has summarised the true legal position thus: "1. Under the scheme of the Code prosecution of an offender for a serious offence is pri marily the responsibility of the Executive. The withdrawal from the prosecution is an executive function of the Public Prosecutor. The discretion to withdraw from the prose cution is that of the Public Prosecutor and none else, and so, he cannot surrender that discretion to someone else. The Government may suggest to the Public Prosecutor that he may withdraw from the prosecution but none can compel him to do so. 5. The Public Prosecutor may withdraw from the prosecution not merely on the ground of pauci ty of evidence but on other relevant grounds as well in order to further the broad ends of public justice, public order and peace. The broad ends of public justice will certainly include appropriate social, economic and, political purposes Sans Tammany Hall enter prise. The Public Prosecutor is an officer of the Court and responsible to the Court. The Court performs a supervisory function in granting its consent to the withdrawal. 772 8. The Court 's duty is not to reappreciate the grounds which led the Public Prosecutor to request withdrawal from the prosecution but to consider whether the Public Prosecutor applied his mind as a free agent, uninfluenced by irrelevant and extraneous considerations. The Court has a special duty in this regard as it is the ultimate repository of legislative confidence in granting or withholding its consent to withdrawal from the prosecution. We may add it shall be the duty of the Public Prosecutor to inform the Court and it shall be the duty of the Court to appraise itself of the reasons which prompt the Public Prosecutor to withdraw from the Prosecution. The Court has a responsibility and a stake in the administration of criminal justice and so has the Public Prosecutor, its 'Minister of Justice '. Both have a duty to protect the administration of criminal justice against possible abuse or misuse by the Executive by resort to the provisions of s.321 Criminal Procedure Code. The independence of the judi ciary requires that once the case has tra velled to the Court, the Court and its offi cers alone ' must have control over the case and decide what is to be done in each case. " In the circumstances of this case I find it difficult to say that the Public Prosecutor had not applied his mind to the case or had conducted himself in an improper way. If in the light of the material before him the Public Prosecutor has taken the view that there was no prospect of securing a conviction of the accused it cannot be said that his view is an unreasonable one. We should bear in mind the nature of the role of a Public Prosecutor. He is not a persecutor. He is the representative not of an ordinary party to a contro versy, but of sovereignty whose obligation to govern impar tially is as compelling as its obligation to govern at all, and whose interest, therefore, in a criminal prosecution is not that it shall win a case, but that justice shall be done. As such he is in a peculiar and very definite sense the servant of the land the two fold aim of which is that guilt shall not escape or innocence suffer. He may prosecute with earnest and vigour indeed, he should do so. But while he may strike hard blows, he is not at liberty to strike fould ones. It is as much his duty to refrain from improper methods calculated to produce a wrongful conviction as it is to use every legitimate one to bring about a just one. (See Berger vs United States), ; It is a privilege of an accused that he should be prosecuted by a Public Prosecu tor in all cases involving 773 heinous charges whenever the State undertakes prosecution. The judgment of a Public Prosecutor under section 321 of the Code of Criminal Procedure, 1973 cannot be lightly inter fered with unless the Court comes to the conclusion that he has not applied his mind or that his decision is not bona fide. A person may have been accused of several other mis deeds, he may have been an anathema to a section of the public media or he may be an unreliable politician. But these circumstances should not enter into the decision of the Court while dealing with a criminal charge against him which must be based only on relevant material. Judged by the well settled principles laid down by this Court in State of Bihar vs Ram Naresh Pandey; [1957] S.C.R. 279 and R.K. Jain 's case (supra), it is seen that the aver ments in the application are similiar to the avernments in the application made for withdrawal in the case relating to Fernandes which are to be found in R.K. Jain 's case (supra). I feel that no case has been made out in this case for interference. I am also of the opinion that there is no need to differ from the legal position expanded in the above two decisions. If any change in the law is needed, it is for Parliament to make necessary amendment to section 321 of the Code of Criminal Procedure, 1973. It is significant that section 321 of the Code of Criminal Procedure, 1973 is allowed to remain in the same form in 1973 even though in 1957 this Court had construed section 494 of the former Criminal Procedure Code as laid down in Ram Naresh Pandey 's case (supra). I, however, find it difficult to construe section 321 of the Code of Criminal Procedure, 1973 in the light of the principles of administrative law. Before leaving this case I may refer to another circum stance which is rather disturbing. The Review Petition was filed before this Court after the retirement of Bahrul Islam, J. Allegations of bias were made against him appar ently to get the petition admitted. But later on they were withdrawn before the Court hearing the Review Petition pronounced its order. But again in the course of the hearing before this Bench an attempt was made to repeat the allega tion of bias against the learned Judge. But on objection being taken by the Court, it was promptly withdrawn. This conduct on the part of the appellant deserves to be depre cated. The Review Petition was admitted after the appeal had been dismissed only because Nandini satpathy 's case had been subsequently reffered to a larger Bench to review the earli er decisions. When the 774 earlier decisions are allowed to remain intact, there is no justification to reverse the decision of this Court by which the appeal had already been dismissed. There is no warrant for this extra ordinary procedure to be adopted in this case. The reversal of the earlier judgment of this Court by this process strikes at the finality of judgments of this Court and would amount to the abuse of the power of review vested in this Court, particularly in a criminal case. It may be noted that no other court in the country has been given the power of review in criminal cases. I am of the view that the majority judgement of Bahrul Islam and R.B. Misra, JJ. should remain undisturbed. This case cannot be converted into an appeal against the earlier decision of this Court. Having considered all aspects of the case, I agree with the decision of Khalid, J. and dismiss the appeal filed against the judgment of the High court. KHALID, J. I regret I cannot persuade myself to agree with the Judgment now pronounced by the learned Chief Jus tice, the last portion of which was received by me on 18.12. It is unfortunate that a discussion could not be held about this case by the Judges who heard this case, after it was reserved for Judgment in September, 1986. It was by a sheer accident that this appeal came before a Constitution Bench. Criminal Appeal Nos. 48 & 49 of 1983 were originally directed to be posted before a Constitution Bench and this Appeal was also directed to be heard by a Constitution Bench because the same points were involved. Judgments are being pronounced today in those appeals dismissing them. I have agreed with the conclusion but not with the reasoning. Due to paucity of time I have written only a short Judgment there. This appeal has been pending for a long time. I am, therefore, pronouncing a Judgment of my own hurriedly pre pared so that this matter can be given quietus. This appeal had an unpleasant history. I am grieved at the turn of events in this case. Even so, it is necessary to have the utmost restraint in dealing with the said turn of events, because what is involved here, is the credibility of this Court as the Highest Court of the land. In two well reasoned concurring Judgments, Beharul Islam, J. and R.B. Misra, J. dismissed the appeal by their Judgments dated December 16, 1982 and by an equally reasoned Judgment, Tulzapurkar, J. dissented from the main Judgment and allowed the appeal. These Judgments are reported in ; One of the Judges (Baharul Islam,J) demited office on 13.1.1983. An application was filed on 17.1.1983, to review the judgment. This application can only 775 be to review the concurring judgments. On 27.1.1983, an application to raise additional grounds, specifically, based on bias was filed. The review application was considered in chambers on 13.4.1983. Notice was issued, returnable on 19.4.1983. In July, 1983, the matter was again considered in chambers when allegation of bias was given up. In August, 1983, the matter was heard in open Court by Tulzapurkar, J., A.N. Sen, J. and R.B, Misra, J. On August 22, 1983, the order worded as follows (reported in 1983(4) SCC 104) was by A.N. Sen, J. "1, therefore, admit the review petition and direct the rehearing of the appeal. " The learned Judge who gave this order justified his conclu sion with the following observation: "In view of the limited scope of the present proceeding I do not consider it necessary to deal at length with the various submissions made by the learned counsel appearing on behalf of the parties. In the view that I have taken after a very anxious and careful consid eration of the facts and circumstances of this case I am further of the opinion that it will not be proper for me in this proceedings to express any views on the same. Applying the well settled principles governing a review petition and giving my very anxious and care ful consideration to the facts and circum stances of this case, I have come to the conclusion that the review petition should be admitted and the appeal should be re heard. I have deliberately refrained from stating my reasons and the various grounds which have led me to this conclusion. Any decision of the facts and circumstances which, to my mind, constitute errors apparent on the face of the record and my reasons for the finding that these facts and circumstances constitute errors apparent on the face of the record. re sulting in the success of the review petition, may have the possibility of prejudicing the appeal which as a result of my decision has to be re heard. " In paragraph 15, the learned judge directed as follows: "Accordingly, I further direct that the appeal be re heard immediately after the decision of Nandani Satpathy case. " The other Judges agreed with this. 776 3. Thus the Bench that heard the review petition did not disclose in the order, the reasons why re hearing of the appeal was ordered nor did it outline in the order, what constituted errors apparent on the face of the record to justify the order passed. By this order, the Bench did not set aside the earlier judgment. All that was done was to admit the review petition and to direct re hearing of the appeal. The one question seriously debated at the bar is whether the Judgment sought to be reviewed was set aside or not. It was forcefully contended that the earlier judgment was not set aside and was still at large. This was met with the plea that if it was not set aside, what is it that the Court now hears? I will examine this contention presently. One incontrovertible fact is that the earlier was not in terms set aside. Admitting a review petition is not the same thing as setting aside the order, sought to be re viewed. Order 47 Rule 1 C.P.C. deals with review in civil matters. Article 137 of the Constitution is a special power with the Supreme Court to review any judgment pronounced or order made by it. An order passed in a criminal case can be re viewed and set aside only if there are errors apparent on the record. In this case, we are left only to guess what reasons or grounds persuaded the Judge to pass this order, for, the learned Judge has deliberately refrained from stating his reasons and 'various grounds ' in the order. That the Judgment was not set aside can be concluded from one important fact. One of the Judges who was a party to this order (R.B. Misra, J) had earlier dismissed the appeal with convincing reasons. If the Judgment was set, aside by the order passed in the review petition, the learned Judge would definitely have given his own reasons for doing so by a separate order. This has not been done. All that the order says is that the review petition had been admitted. The direction to re hear the appeal, therefore, can only be to ascertain reasons to see whether the Judgment need be set aside. In my view, with great respect, it would be highly unfair to the learned Judge (R.B. Misra, J. ) to contend that his earlier Judgment was set aside. It is left to us now, the unpleasant task to unravel this mystery and to divine the mind of man. I must confess my failure in this task. After heating the lengthy argu ments, I have not been able to find any error apparent on the face of the record in the earlier Judgment. The direc tion contained in the second order was to re hear the ap peal. That wish has been set aside by the reviewing order nor any error 777 discernable on the face of the record shown, in my consid ered view, the original order has to stand, which means that the appeal has to be dismissed affirming it. This is the short manner in which this appeal can be dismissed and I do so. However, I do not propose to rest content with this manner of disposal of the appeal. This matter was heard at length. The stand taken by the appellant is that the earlier Judgment has been set aside. Therefore, it is only fair that the facts of the case and the questions of law beating on them are also considered since the matter has been placed before a bench of five Judges. The appeals referred to this Bench do not raise any questions of constitutional law. There are decisions ren dered by Benches of three Judges and two Judges of this Court wherein the scope of Section 321 of Criminal Procedure Code (Section 494 of Old Criminal Procedure Code) has been discussed at length. Two criminal appeals 48 and 49 of 1983 were referred to a Constitution Bench, originally. The Bench that referred these appeals did not doubt the correctness of such earlier Judgments. The reference order reads as fol lows: "Special leave granted in both the matters. In view of certain decisions referred to at the time of the hearing of the petitions with differing interpretations, it appears that in order to clarify the legal issues connected with power of withdrawal of criminal cases and put them beyond pale of controversy, it is better the matter be placed before Hon 'ble the Chief Justice to place the matter before a larger Bench of five Judges. " It is this order of reference and the direction by the Bench that heard the review petition, to re hear this appeal immediately after the decision in Nandani Satpathy 's case, criminal appeal Nos.48 and 49 of 1983, that has brought this case also before this Bench. This is the accidental coinci dence about which reference was made by me in the opening paragraph of this Judgment. It is not necessary to deal at length with the facts leading to this appeal. The background facts have been given in detail in the Judgment sought to be reviewed. I do not, therefore, think it necessary to encumber this Judgment with all the facts. I shall refer only to the bare facts neces sary for the purpose of this Judgment. 778 8. The appellant and respondent No. 2 belonged to the rival political parties. The appellant is a member of the Bihar Legislative Assembly. Respondent No. 2 was the Chief Minister of Bihar. Respondent No. 4 was a close associated of Respondent No. 2. Respondent No. 3 started the Patna Urban Co operative Bank and became its Chairman. He and respondent No. 2 were close friends. There were some irregu larities in the affairs of the bank. Proceedings were taken to prosecute those connected with the bank for the irregu larities. The then Chief Minister (Respondent No. 2) ordered the prosecution of the office bearers and staff of the bank including its Honorary Secretary Shri K.P. Gupta, Manager M.A. Haidari and the loan clerk. Consequent upon a mid term poll to the Lok Sabha in March, 1977, there was a change of Ministry at the Centre. In April, 1977, the Patna Secretariat Non Gazetted Employees Association submitted a representation against the second respondent to the Prime Minister and the Home Minister of the Union Government. In June, the Government, headed by the second respondent, was replaced by the Government headed by Shri Karpoori Thakur. The Employees ' Association submitted a copy of their representation to the new Chief Minister on July 9, 1977, requesting him to enquire into the allegations against the second respondent. After a detailed procedure and obtaining requisite sanction from the Governor, a crimi nal case was instituted by the vigilance against the second respondent and others. On 19.2.1979, a charge sheet was filed. The charge sheet filed by the State of Bihar against the respondents on 19th February, 1979, was for offences under Sections 420/466/471/109/120 B of I.P.C. and under Sections 5(1)(a), 5(a)(b) & 5(1)(d) read with Section 5(2) of the Prevention of Corruption Act, 1947. The charge against the second respondent was that he, who at all mate rial times, was either a Minister or the Chief Minister of Bihar abusing his position as a public servant, in conspira cy with the other accused, sought to interfere with the criminal prosecution and surcharge proceedings against Nawal Kishore Sinha and others with a view to obtain to himself and to the other respondents pecuniary advantage to the detriment of Patna Urban Cooperative Bank. The Cheif Judi cial Magistrate took cognizance of the case on 29.7.1979. There was a change of ministry in Bihar in June, 1980 and the second respondent became the Chief Minister again. A policy decision was taken on 10.6.1980, that crimi nal cases launched out of political vendetta and cases relating to political agitation be with 779 drawn. On 24.2.1981, the Government appointed Shri L,P. Sinha as a Special Public Prosecutor. On 25.2.1981, the secretary to the Government of Bihar wrote a letter to the District Magistrate informing him of the policy decision taken by the Government to withdraw from prosecution of two vigilance cases including the case with which we are con cerned. He was requested to take steps for the withdrawal of the case. On 17th June, 1981, Shri Sinha made an application under Section 32 1 of the Cr. P.C. to the Special Judge seeking permission to withdraw from the prosecution of respondent Nos. 2, 3 & 4, on four grounds; (a) Lack of prospect of successful prosecution in the light of the evidence, (b) Implication of the persons as a result of political and personal vendetta, (c) Inexpediency of the prosecution for the reasons of the State and public policy and (d) Adverse effects that the continuance of the prosecu tion will bring on public interest in the light of the changed situation. The learned Special Judge gave consent sought, by his order dated 20th June, 1981. A criminal revision was tiled before the High Court against this order. This was dismissed on 14th September, 1981 and this dismiss al has given rise to this appeal. The application for withdrawal and their order granting consent are assailed on the following grounds: (1) The withdrawal was unjustified on merits. (2) It was against the principles settled by this Court in various decisions governing the exercise of power under Section 321 Cr. P.C. (3) Neither the public prosecutor nor the Special Judge applied their mind in the appli cation for withdrawal and in the order giving consent. (4) Shri L.P. Sinha was not competent to apply for withdrawal since Shri A.K.Datta 's appoint ment to conduct the case under Section 24(8) of the Cr. P.C. had not been cancelled. (5) In the circumstances of the. case Shri Sinha did not function independently but was influenced and guided by the State Government decision in the matter and the withdrawal was vitiated for this reason. I will dispose of question No. 4 first. It is not neces sary to 780 consider in detail the question whether Shri Sinha was competent to make the application for withdrawal. The con tention is that Shri Sinha 's appointment is bad since the earlier appointment of Shri Datta had not been set aside. This case was pressed before the three Judges who heard the appeal first and is repeated before us also. All the three Judges who gave the Judgement in the case of Sheonandan Paswan vs State of Bihar & Ors., ; , have declined to accept the plea that Shri Sinha was not a compe tent public prosecutor since Shri Datt 's appointment had not been cancelled. I adopt the reasons given in the judgment and reject the plea repeated before us. The real question that has to be answered in this case is whether the executive function of the public prose cutor in applying for, and the supervisory functions of the Court in granting consent to, the withdrawal have been properly performed or not. The four remaining points enumer ated above virtually revolve around this question. Section 321 needs three requisites to make an order under it valid; (1) The application should be filed by a public prosecutor or Assistant public prosecutor who is competent to make an application for withdrawal, (2) He must be in charge of the case, (3) The application should get the consent of the Court before which the case is pending. I find that all the three requisites are satisfied here. The question is whether the functions by the public prosecu tor and the Court were properly performed. At no stage was a case put forward by any one that the application made by the public prosecutor was either mala fide or that it was not in good faith. There is no allegation of bias against the Special Judge. The application filed by the public prosecu tor discloses the fact that he had gone through the case diary and the relevant materials connected with the case and that he came to the conclusion that in. the circumstances prevailing at the time of institution of the case and inves tigation thereof, the case was instituted on the ground of political vendetta and only to defame the ' fair image of J.N. Misra. This statement of the public prosecutor has not been challenged as borne out of any unwholesome motive. It has not been made out or suggested that the public prosecu tor was motivated by improper considerations. The only contention raised is that the reasons are not sufficient or relevant. The public prosecutor should normally be credited with fair 781 ness in exercise of his power under Section 321, when there is no attack against him of having acted in an improper manner. He had before him the State Government 's communica tion of the policy taken by it. He had before him the case diary statements and other materials. He perused them before filing the application. Thus his part under Section 321 in this case has been performed strictly in conformity with this Section. The question that remains then is whether the grounds urged by him in support of withdrawal were suffi cient in law. The application clearly shows that Sh. Sinha applied his mind to the facts of, the case. One would normally not expect a more detailed statement in an applica tion for withdrawal than the one contained in the applica tion in question, when one keeps in view the scope of Sec tion 321 and the wide language it uses. The plea that there was lack of application of mind by the public prosecutor has only to be rejected in this case. The Chief Judicial Magistrate was acting as the Special Judge. In his order giving consent he has expressly stated that he perused the relevant records of the case before granting consent. This statement was not challenged in the revision petition before the High Court. It has, therefore, to be assumed that the Magistrate perused the relevant records before passing the order. We must give due credence to this statement by the Magistrate. There is no other allegation against the Special Judge. Thus the func tion of the Special Judge was also performed in conformity with the Section. The matter was taken in revision before the High Court. The High Court dismissed the revision and while doing so exercised its power properly because the materials before the Court would justify only an order of dismissal and not an order ordering retrial. Section 32 1 gives the public prosecutor, the power for withdrawal of any case to any stage before judgment is pronounced. This pre supposes the fact that the entire evidence may have been adduced in the case, before the application is 'made. When an application under Section 321 Cr. P.C. is made, it is not necessary for the Court to assess the evidence to discover whether the case would end in conviction of acquittal. To contend that the Court when it exercises its limited power of giving consent under Section 321 has to assess the evidence and find out whether the case would end in acquittal or conviction, would be to re write Section 321 Cr. P.C. and would be to concede to the Court a power which the scheme of Section 321 does not contemplate. The acquittal or discharge order under Section 321 are not the same as the normal final orders in criminal cases. The conclusion will not be backed by a detailed discussion of the evidence in the case of 782 acquittal or absence of prima facie case or groundlessness in the case of discharge. All that the Court has to see is whether the application is made in good faith, in the inter est of public policy and justice and not to thwart or stifle the process of law. The Court, after considering these facts of the case, will have to see whether the application suf fers from such improprieties or illegalities as to cause manifest injustice if consent is given. In this case, on a reading of the application for withdrawal, the order of consent and the other attendant circumstances, I have no hesitation to hold that the application for withdrawal and the order giving consent were proper and strictly within the confines of Section 321 Cr. P.C. 18. While construing Section 321, it is necessary to bear in mind the wide phraseology used in it, the scheme behind it and its field of operation. True, it does not give any guideline regarding the grounds on which an application for withdrawal can be made. But in applying it, we have to bear in mind that it was enacted with a specific purpose and it would be doing violence 'to its language and contents by importing into the section words which are not there or by restricting its operation by fetters in the form of condi tions and provisos. Its predecessor Section 494 had been on the statute book from the inception of the Criminal Proce dure Code. When the code was amended in 1973, this Section was re numbered and the only change brought in this section is to add the words "in charge of the case" while referring to the Public Prosecutor or Assistant Public Prosecutor. The old code contained a section which enabled the Advocate General to inform the High Court before which a case is pending at any stage before the return of the ver dict that he will not further prosecute the defendant upon the charge. This was Section 333 Cr. The discretion of the Advocate General under this Section was absolute. It was not subject to any control. When the Advocate General in forms the High Court that he does not propose to proceed with the prosecution, the Court has no alternative but to stay all proceedings and to act in accordance with that section. That section has now been deleted from the Code. Public Prosecutors are lesser mortals and therefore the discretion given to them by section 321 is less plenary and is made subject to one limitation and that is the consent of the Court before which the prosecution is pending. Section 333, which was deleted consequent on the discon tinuance of original criminal trials in the High Court, has still a beating, while considering the scope of Section 32 1 corresponding to Section 783 494 of the earlier code and a comparative study of the two sections and their scope will be appropriate. Both the Sections pertain to withdrawal of prosecutions though at different level. A harmonious view should, in my view, prevail in the reading of the two sections. Section 333 does not give any discretion or choice to the High Court when a motion is made under it. Such being the case, Section 321 must also be construed,as conferring powers within circum scribed limits to the Court to refuse to grant permission to the public prosecutor to withdraw the prosecution. If such a harmonious view is not taken it would then lead to the anomalous position that while under Section 333, a High Court has to yield helplessly to the representation of the Advocate General and stop the proceedings and discharge or acquit the accused, the subordinate courts when moved under Section 321 Cr. P.C. would have a power to refuse to give consent for withdrawal of the prosecution if it is of opin ion that the case did not suffer from paucity of evidence. The legislature would not have intended to confer greater powers on the subordinate courts than on the High Court in the exercise of powers under Section 494 of the old Code and Section 333 respectively. It would, therefore, be just and reasonable to hold that while conferring powers upon the subordinate courts under Section 494 to give consent to a public prosecutor withdrawing the prosecution, the legisla ture had only intended that the courts should perform a supervisory function and not an adjudicatory function in the legal sense of the term. Section 321 reads as follows: "321. Withdrawal from prosecution The Public Prosecutor or Assistant Public Prosecutor in charge of a case may, with the consent of the Court at any time before the Judgment is pronounced, withdraw from the prosecution of any person either generally or in respect of any one or more of the offences for which he is tried; and, upon such withdrawal: (a) if it is made before a charge has been framed, the accused shall be discharged in respect of such offence or offences; (b) if it is made after a charge has been framed, or when under this code no charge is required, he shall be acquitted in respect of such offence or offences." (Proviso omitted) This Section enables the Public prosecutor, in charge of the case to withdraw from the prosecution of any person at any time before the 784 Judgment is pronounced, but this application for withdrawal has to get the consent of the Court and if the Court gives consent for such withdrawal the accused will be discharged if no charge has been framed or acquitted if charge has been framed or where no such charge is required to be framed. It clothes the public prosecutor to withdraw from the prosecu tion of any person, accused of an offence both when no evidence is taken or even if entire evidence has been taken. The outer limit for the exercise of this power is "at any time before the Judgment is pronounced". The Section gives no indication as to the grounds on which the Public Prosecutor may make the application, or the considerations on which the Court is to grant its consent. The initiative is that of the Public Prosecutor and what the Court has to do is only to give its consent and not to determine any matter judicially. The judicial function implicit in the exercise of the judicial discretion for granting the consent would normally mean that the Court has to satisfy itself that the executive function of the Public Prosecutor has not been improperly exercised, or that it is not an attempt to interfere with the normal course of jus tice for illegitimate reasons or purposes. The Court 's function is to give consent. This sec tion does not obligate the Court to record reasons before consent is given. However, I should not be taken to hold that consent of the Court is a matter of course. When the Public Prosecutor makes the application for withdrawal after taking into consideration all the materials before him, the Court exercises its judicial discretion by considering such materials and on such consideration, either gives consent or declines consent. The section should not be construed to mean that the Court has to give a detailed reasoned order when it gives consent. If on a reading of the order giving consent, a higher Court is satisfied that such consent was given on an overall consideration of the materials avail able, the order giving consent has necessarily to be upheld. It would be useful to compare the scope of the Court 's power under Section 321 with some other sections of the Code. There are some provisos in the Code which relate to the manner in which Courts have to exercise their juris diction in pending cases when applications are made for their withdrawal or when the Court finds that there is no ground to proceed with the cases. Sections 203,227,245,257 and 258 are some such sections. Section 203 of Criminal Procedure Code empowers a Magistrate to dismiss a complaint at the initial stage itself if he is of opinion that there is no sufficient ground for proceeding. But, 785 before doing so, the Magistrate is called upon to briefly record his reasons for so doing. The Section reads as fol lows: "203. Dismissal of complaint. If, after considering the statements on oath (if any) of the complainant and of the wit nesses and the result of the enquiry or inves tigation (if any) under Section 202, the Magistrate is of opinion that there is no sufficient ground for proceeding, he shall dismiss the complaint, and in every such case he shall briefly record his reasons for so doing." Section 245(1) deals with the power of the Magistrate in discharging an accused when no case has been made out against him. However, the Section imposes an obligation on the Magistrate to record his reasons before discharging the accused, Section 245(1) reads as follows: "If, upon taking all the evidence referred to in Section 244, the Magistrate considers, for reasons to be recorded, that no case against the accused has been made out which, if unre butted, would warrant his conviction, the Magistrate shall discharge him." This section gives the Magistrate, in cases where he consid ers that the accused should be discharged, a power to dis charge him but the power is lettered by an obligation to record his reasons for doing so. If reasons are not recorded in an order of discharge that would be violative of the mandate of the Section. Section 245(2) enables the Magistrate to discharge an accused "at any previous stage" of the case also if he considers that the charge against an accused is groundless. Sub section (1) deals with a stage when all evidences re ferred to in Section 244 is taken. Section 244 deals with evidence in any warrant case instituted otherwise than on a police report. It.is when all such evidence has been taken that the Magistrate can discharge the accused under Section 245(1), while Section 245(2) deals with the case in which the evidence referred to in Section '244 has not been taken. Here again the order of discharge by Magistrate has to be supported with reasons for discharge. Section 245(2) reads as follows: 786 "Nothing in this section shall be deemed to prevent a Magis trate from discharging the accused at any previous stage of the case if, for reasons to be recorded by such Magistrate, he considers the charge to be groundless. " An order of discharge under either of the two sub sections can be sustained only if the Magistrate has recorded his reasons for discharge. Section 257 in chapter 20, deals with trial of summons cases by a Magistrate and provides for the withdrawal of complaints. It reads as follows: "257. Withdrawal of Complaint If a complain ant, at any time before a final order is passed in any case under this Chapter, satis fies the Magistrate that there are sufficient grounds for permitting him to withdraw his complaint against the accused, or if there be more than one accused, against all or any of them, the Magistrate may permit him to with draw the same, and shall thereupon acquit the accused against when the complaint is so withdrawn. " The wording of this section is also significantly different from Section 32 1. When a complainant wants to withdraw his complaint against the accused, the Magistrate can permit him to withdraw the same and acquit the accused against whom the complaint is so withdraw, only when he satisfies the Magis trate that there are sufficient grounds for permitting him to withdraw his complaint. other words, the complainant cannot withdraw his complaint as he pleases nor can the Magistrate permit him to do so unless the Magistrate satis fies himself that there are sufficient grounds to withdraw the complaint. This section thus contemplates an order disclosing sufficient grounds to satisfy the Magistrate to accord permission to withdraw the complaint. The power conferred on a Magistrate under this Section is in order to ensure that a complainant does not abuse the process of law by filing a false or vexatious complaint against another and withdrawing the complaint after adequately embarrassing or harassing the accused so as to escape the consequences of a complaint or suit for malacious prosecution by the accused in the complaint. Section 258 Cr. P.C. in the same chapter deals with the power of Magistrate to stop proceedings in certain cases which can also be usefully read. 787 "258. Power to stop proceedings in certain cases In any summons case instituted otherwise than upon complaint, a Magistrate of the first class or, with the previous sanction of the Chief Judicial Magistrate, any other Judicial Magistrate, may, for reasons to be recorded by him, stop the proceedings at any stage without pronouncing any judgment and where such stop page of proceeding is made after the evidence of the principal witness has been recorded, pronounce a judgment of acquittal, and in any other case, release the accused, and such release shall have the effect of discharge." This section deals with the stopping of proceedings at any stage without pronouncing any judgment and acquitting or discharging the accused as the case may be, but the section mandates the Magistrate to record his reasons for doing so. The Magistrate, cannot stop proceedings under this section without recording his reasons. Even in a Sessions case the Sessions Court cannot exercise its powers of discharge under Section 227 without recording reasons therefore. Section 227 is in the following terms: "If, upon consideration of the record of the case and the documents submitted therewith, and after hearing the submissions of the accused and the prosecution in this behalf, the Judge considers that there is not suffi cient ground for proceeding against the ac cused, he shall discharge the accused and record his reasons for so doing. " It is thus clear that the scheme of the above Sections differ from Section 321. The scope of Section 321 can be tested from another angle and that with reference to Section 320 which deals with "compounding of offences". Both these Sections occur in Chapter 24 under the heading "General Provisions as to Enquiries and Trials". Section 320(1) pertains to compound ing of offences, in the table, which are not of a serious nature while Section 320(2) pertains to offences of a slightly serious in nature but not constituting grave crimes. The offences in the table under Section 320(1) may be compounded by the persons mentioned in the third column of the table without the permission of the Court and those given in the Table II, under Section 320(2) can be compound ed only with the permission of the Court. Under Subsection 4(a), when a person who would otherwise be competent to compound an offence under Section 320, is under the age of 18 years 788 or is an idiot or a lunatic, any person competent to con tract on his behalf may, with the permission of the Court, compound such offence. Sub section 4(b) provides that when a person who would otherwise be competent to compound an offence under this Section is dead, the legal representa tive, as defined in the Code of Civil Procedure, of such person may, with the consent of the Court, compound such offence. These two sub sections use the expression "with the permission of the Court" and "with the consent of the Court" which are more or less ejusden generis. On a fair reading of the above mentioned Subsections it can be safely presumed that the Sections confer only a supervisory power on the Court in the matter of compounding of offences. in the manner indicated therein, with this safeguard that the accused does not by unfair or deceitful means, secure a composition of the offence. Viewed thus I don 't think that a plea can be successfully put forward that granting permis sion or giving consent under Subsection 4(a) or 4(b) for compounding of an offence, the Court is enjoined to make a serious detailed evaluation of the evidence or assessment of the case to be satisfied that the case would result in acquittal or conviction. It is necessary to bear in mind that an application for compounding of an offence can be made at any stage. Since Section 321 finds a place in this chapter immediately after Section 320, one will be justified in saying that it should take its colour from the immediate ly preceding Section and in holding that this Section, which is a kindred to Section 320, contemplates consent by the Court only in a supervisory manner and not essentially in an adjudicatory manner, the grant of consent not depending upon a detailed assessment of the weight or volume of evidence to see the degree of success at the end of the trial. All that is necessary for the Court to see is to ensure that the application for withdrawal has been properly made, after independent consideration, by the public prosecutor and in furtherance of public interest. I referred to these sections only by way of illustra tion to emphasis the distinction between section 321 and other sections of the Code dealing with orders withdrawing criminal cases or discharging or stopping proceedings. My purpose in referring to the above sections is only to show that Section 321, in view of the wide language it uses, enables the public prosecutor to withdraw from the prosecu tion any accused, the discretion exercisable under which is lettered only by a consent from Court on a consideration of the materials before it and that at any stage of the case. The Section does not insists upon a reasoned order by the Magistrate while giving consent. All that is 789 necessary to satisfy the section is to see that the public prosecutor acts in good faith and that the Magistrate is satisfied that the exercise of discretion by the public prosecutor is proper. There is no appeal provided by the Act against an order giving consent under Section 321. But the order is revisable under Section 397 of the Criminal Procedure Code. Section 397 gives the High Court or the Sessions Judge jurisdiction to consider the correctness, legality or pro priety of any finding, sentence or order and as to the regularity of the proceedings of any inferior Court. While considering the legality, propriety or the correctness of a finding or a conclusion, normally, the revising Court does not dwell at length into the facts and evidence of the case. The Court in revision considers the materials only to satis fy itself about the correctness, legality and propriety of the findings, sentence or order and refrains from substitut ing its own conclusion on an elaborate consideration of evidence. An order passed under Section 321 comes to this Court by special leave, under Article 136 of the Constitution of India. The appeal before us came thus. It has been the declared policy of this Court not to embark upon a roving enquiry into the facts and evidence of cases like this or even an order against discharge. This Court will not allow itself to be converted into a Court of facts and evidence. This Court seldom goes into evidence and facts. That is as it should be. Any departure from this salutary self imposed restraint is not a healthy practice and does not commend itself to me. It is necessary for this Court to remember that as an apex Court, any observation on merits or on facts and evidence of a case which has to go back to the Courts below will seriously prejudice the party affected and it should be the policy of this Court not to tread upon this prohibited ground and invite unsavory but justifiable criti cism. Is this Court to assess the evidence to find out whether there is a case for acquittal or conviction and convert itself into a trial Court? Or is this Court to order a retrial and examination of hundred witnesses to find out whether the case would end in acquittal or conviction? Either of these conclusions in the case is outside the scope of Section 321. This can be done only if we rewrite Section 321. Section 321 Cr. P.C. is virtually a step by way of composition of the offence by the State. The State is the master of the litigation in criminal cases. It is useful to remember that by the exercise of functions under Section 321, the accountability of the concerned person or persons does not disappear. A private complaint can still be filed if a party is aggrieved by the withdrawal of the prosecution but running the 790 possible risk of a suit of malicious prosecution if the complaint is bereft of any basis. Since Section 32 1 does not give any guideline regarding the grounds on which a withdrawal application can be made, such guidelines have to be ascertained with refer ence to decided cases under this section as ' well as its predecessor Section 494. I do not propose to consider all the authorities cited before me for the reason that this Court had occasion to consider the question in all its aspects in some of its decisions. Suffice it to say that in the Judgments rendered by various High Courts, public poli cy, interests of the administration, inexpediency to proceed with the prosecution for reasons of State and paucity of evidence were considered good grounds for withdrawal in many cases and not good grounds for withdrawal in certain other cases depending upon the peculiar facts and circumstances of the cases in those decisions. AIR 1932. 699 (Giribala Dasi vs Mader Gazi), AIR 1943 Sind 161 (Emperor vs Sital Das), AIR 1936 Cal. 356 (Marihar Sinha vs Emperor), AIR 1949 Patna 233 (The King vs Moule Bux and Ors.) AIR 1952 Raj. 42 and 1933 Privy Council 266 are some of the cases which were brought to our notice. Ram Naresh Pandey 's case reported in is a land mark case which has laid down the law on the point with precision and certainty. In this decision the functions of the Court and the Public Prosecutor have been correctly outlined. While discussing the role of the Court, this Court observed: "His discretion in such matters has necessari ly to be exercised with. reference, to such material as is by then available and it is not a prima facie judicial determination of any specific issue. The Magistrate 's functions in these matters are not only supplementary, at a higher level, to those of the executive but are intended to prevent abuse. Section 494 requiring the consent of the Court for with drawal by the public prosecutor is more in line with this scheme, than with the provi sions of the Code relating to inquiries and trials by Court. It cannot be taken to place on the Court the responsibility for a prima facie determination of the triable issue. For instance the discharge that results therefrom need not always conform to the standard of "no prima facie case" under Sections 209(1) and 253(1) or of 'groundlessness ' under Sections 209(2) and 253(2). This is not to say that a consent is to be lightly given on the applica X X tion of the 791 public prosecutor, without]a careful and proper scrutiny of the grounds on which the application for consent is made. " This decision was approved by this Court in M.N. Sankarana rayanan Nair vs P.V. Balakrishnan & Ors., ; as is seen at page 606: " . . In the State of Bihar vs Ram Naresh Pandey it was pointed out by this Court that though the Section does not give any indication as to the ground on which the Public Prosecutor may make an application on the consideration of which the Court is to grant its consent, it must none the less satisfy itself that the executive function of the Public Prosecutor has not been improperly exercised and that it is not an attempt to interfere with the normal course of justice for illegitimate reasons or purposes . . " 26. I will now briefly refer to some other cases cited to understand how Courts considered the scope of Section 321 depending upon the facts of each case. In the case of Bansi Lal vs Chandan Lal, AIR 1976 SC 370 this Court followed its earlier decision reported in ; which in turn followed and declined consent when withdrawal 'was sought on the ground that the prosecution did not want to produce evidence and continue the criminal matter against the accused. The Sessions Judge gave his consent as it appeared to him "futile to refuse permission to the State to withdraw prosecution". This consent was set aside because reluctance to produce evidence was held to be not sufficient ground for withdrawal. In State of Orissa vs Chandrika Mohapatra & Ors., ; the application for withdrawal was made on two grounds: (i) that it was considered inexpedient to proceed with the case; (ii) that the evidence collected during investigation was meagre and no useful purpose would be served by proceedings with the case against the accused. The Magistrate gave consent holding that compelling the State to go on with the prosecution would involve unnecessary expend iture and waste of public time. This Court upheld the con sent and held that meagre evidence was a legitimate ground for withdrawal. The following observation at page 338 is useful for our purpose on an important aspect In that case, as in this case, the Magistrate had clearly stated in his order that he was giving consent after going through the materials placed before him. This is how the Court summed up its finding: 792 "It is difficult for us to understand how the High Court could possibly observe in its order that the Magistrate had not perused the case diary when in terms the learned Magistrate has stated in his order that he had read the case diary and it was after reading it that he was of the opinion that the averment of the prose cution that the evidence was not sufficient was not iII founded. Then again it is diffi cult to comprehend how the High Court could possibly say that the learned Magistrate accorded consent to the withdrawal of the prosecution on the ground that it was inexpe dient to proceed with the case, when, in so many terms, the learned Magistrate rejected that ground and granted consent only on the second ground based on inadequacy of evidence . " When the Magistrate states in his order that he has consid ered the materials, it is not proper for this Court not to accept that statement. The proper thing to do is to hold that the Magistrate gave consent on objective consideration of the relevant aspects of the case. It would be acting against the mandate of Section 32,1 to find fault with the Magistrate in such cases, unless the order discloses that the Magistrate has failed to consider whether the applica tion is made in good faith, in the interest of public policy and justice and not to thwart or strifle the process of law. In Balwant Singh vs State of Bihar, this Court felt unhappy when the public prosecutor and the Magistrate had surrendered their discretion, but still declined to grant leave under Article 136 and the withdrawal stood confirmed. In Subhash Chander vs State, ; , this Court upheld the consent given for withdrawal since a fresh inves tigation had revealed that the case was framed by the con cerned Police Officers with ulterior motives. This Court observed that two relevant matters to be considered about the consent are: (1) whether the considerations are germane and (2) whether actual decision was taken by the public prosecutor or he only obeyed the orders dictated to him by others. in Rajendra Kumar Jain vs State, ; , this Court had to deal with two sets of cases one relating to the Baroda Dynamite case and the other the Bhiwam Temple Demolition case. In that case, this Court summarised eight propositions which are given in the judgment rendered by Tulzapurkar, J. in Sheonandan Paswan vs State of Bihar & Ors., This Court observed that paucity of evidence is not 793 the only ground on which the Public Prosecutor may withdraw from the prosecution, though that is a traditional ground for withdrawal. Political purposes and political vendetta afford sufficient ground for withdrawal. All the above decisions have followed the reasoning of Ram Naresh Pandey 's case and the principles settled in that decision were not doubted. It is in the light of these decisions that the case on hand has to be considered. I find that the application for withdrawal by the Public Prosecutor has been made in good faith after careful consideration of the materials placed before him and the order of consent given by the Magistrate was also after due consideration of various details, as indicated above. It would be improper for this Court, keep ing in view the scheme of Section 321, to embark upon a detailed enquiry into the facts and evidence of the case or to direct re trial for that would be destructive of the object and intent of the Section. Now, I propose to quickly rush through the facts of the case to make the discussion complete. When the matter was first heard by this Court, the documents produced were profusely referred to by counsel on both sides. This consisted of also affidavits filed by both sides. Baharul Islam, J, after discussing the questions of law examined the factual aspect also.

Under Article 137 of the Constitution of India The Supreme Court shall have power to review any judgment pro nounced or order 703 made by it, subject to the provisions of any law made by Parliament or any rules made under Article 145. The Supreme Court, in exercise of the powers conferred by Article 145 of the Constitution and all other powers enabling it and with the approval of the President made the "Supreme Court 'Rules 1966". Under Rule I of Order XL thereof, the "Court may review its judgment or order but no application for review will he entertained . in a criminal proceeding except on the ground of an error apparent on the face of the re cord. " Patna Urban Cooperative Banks was registered in May 1970 and it commenced its banking business with Nawal Kishore Sinha as its Chairman, K.P. Gupta as its Honorary Secretary, M.A. Hydary as Manager and A.K. Singh as loan clerk. Dr. Jagannath Misra who was then a Member of the Legislative Council was closely associated with Nawal Kishore Sinha and helped the Cooperative Bank and Nawal Kishore Sinha in diverse ways in connection with the affairs of the Bank and assisted in mobilisation of the resources for the Bank. There were some irregularities in the affairs of the Bank. The then Chief Minister Shri Abdul Ghafoor ordered the prosecution of the officers and staff of the Bank including its Honorary Secretary Shri K.P. Gupta, Manager, M.A. Hai dary and the loan clerk. However, this was not done. On 11.4.1975 Shri Abdul Ghafoor was replaced by Dr. Jagannath Misra as Chief Minister. On May 16, 1975 he passed an order that only stern action should he taken for realisation of loans since on the perusal of the file it appeared there was no allegation of defalcation against the Chairman and mem bers of the Board. This date is alleged to have been later changed to May 14, 1975 by a fresh order. As per the revised order directions for restoration of normalcy and holding of Annual General Meeting "of the bank was made. On 15.4.1976 the Reserve Bank cancelled the banking licence issued to the Bank and a liquidator was appointed. Consequent to the report of the Estimates Committee and the debate in the Assembly, Dr. Jagannath Misra directed, on 4.8.76 the prose cution against those involved in the defalcation. Thus 23 criminal cases were filed against the office bearers and loanees but Nawal Kishore Sinha was excluded from being arraigned as an accused. In June 1977 there was a change of Ministry at the Centre. In June 1977 the Government headed by Dr. Jagannath Misra was replaced by the Government headed by Sri Karpoori Thakur. As a sequel to the memorandums submitted by the Patna Secretariat Non gazetted Employees ' Association to the now Chief Minister on 9.7.1977 requesting him to enquire into allegations against Dr. Jagannath Misra, after a detailed procedure and obtaining requisite 704 sanction of the Governor, a criminal case was instituted by the vigilance Department against Dr. Jagannath Misra and others. The charge sheet filed by the State of Bihar against the respondents on 19th February, 1979, was for offences under sections 420/466/ 471/109/120 B of Indian Penal Code and under Sections 5(1) (a), S(a) (b) & 5(1) (d) read with Section 5(2) of the Prevention of Corruption Act, 1947. The charge against Dr. Jagannath Misra was that he, who at all material times, was either a Minister or the Chief Minister of Bihar abusing his position as a Public servant, in con spiracy with the other accused, sought to interfere with the criminal prosecution and surcharge proceedings against Nawai Kishore Sinha and others with a view to obtain to himself and to the other respondents pecuniary advantage to the detriment of Patna Urban Cooperative Bank. The Chief Judi cial Magistrate took cognizance of the case on 29.7.1979. There was a change of ministry in Bihar in June 1980 and the second respondent became the Chief Minister again. A policy decision was taken on 10.6.1980, that criminal cases launched out of political vendetta and cases relating to political agitation be withdrawn. On 24.2.1981 the Govern ment appointed Shri L.P. Sinha as a Special Public prosecu tor. On 25.2.1981, the secretary to the Government of Bihar wrote a letter to the District Magistrate informing him of the policy decision taken by the Government,to withdraw from prosecution of two vigilance cases including the case with which the Court is concerned. He was requested to take steps for the withdrawal of the case. On I7th June, 1981, Shri Sinha made an application under s.32I of the Cr. P.C. to the Special Judge seeking permission to withdraw from the prose cution of respondent Nos. 2, 3 and 4 on four grounds; (a) Lack of prospect of successful prosecution in the light of the evidence, (b) Implication of the persons as a result of political and personal vendetta; (c) Inexpediency of the prosecution for the reasons of the State and public policy and (d) Adverse effects that the continuance of the prosecu tion will bring on public interest in the light of the changed situation. The learned Special Judge gave consent sought, by his order dated 20th June, 1981. The appellant, thereupon, filed a criminal Revision Application No. 874/81 against the order permitting withdrawal of the prosecution. The said application was dismissed in limine by the High Court by an order dated 14.9.1981. The appellant therefore preferred Crl. Appeal No. 241/82 by special leave to this Court. In two well reasoned concurring judgments, Baharul Islam J and R.B. Misra J. dismissed the appeal by their judgments dated December 16, 1982 and by an equally reasoned judgment, Tulzapurkar J. dissented from the 705 main judgement and allowed the appeal. (See Sheonandan Paswan vs State of Bihar & 0rs. ,[(1983) 2 SCR 61] Baharul Islam J. demited office on 13.1. An application was filed on 17.1. 1983 to review the judgment under Article 137 of the Constitution read with Order XI of the Supreme Court Rules. On 22.8.1983, the matter was heard in open court by a Bench consisting of Tulzapurkar J., A.N. Sen J. and R.B. Misra J, and A.N. Sen J. passed an order admitting the Review Petition without disclosing any reason therefor and directed the rehearing of the petition immediately after the decision in Mohd. Mumtaz vs Smt. Nandini Satpathy , which was referred already to a Constitutional Bench of five Judges. Hence the rehearing of the case to review the two concurrent judgments. Dismissing the appeal, in accordance with the opinion of the majority, the Court, (Per Venkataramiah J.) (Majority view) Held: 1.1 Merely because a court discharges or acquits an accused arraigned before it, the court cannot be consid ered to have compromised with the crime. True, corruption, particularly at high places should be put down with a heavy hand. But, the passion to do so should not overtake reason. The Court always acts on the material before it and if it finds that the material is not sufficient to connect the accused with the crime, it has to discharge or acquit him, as the case may be, notwithstanding the fact that the crime complained of is a grave one. Similarly if the case has been withdrawn by the Public Prosecutor for good reason with the consent of the Court, Supreme Court should be slow to inter fere with the order of withdrawal. In either case, where the Special Judge had rejected the application for withdrawal and the High Court had affirmed that order, and where the special judge had permitted the withdrawal but the High Court had reversed that order, the Supreme Court may not have interfered with the orders of the High Court under Article 136 of the Constitution. But this is a case where the Special Judge had permitted the withdrawal of the prose cution, and the said order of withdrawal has been affirmed by the High Court as well as by the majority judgment pro nounced by Supreme Court earlier. Interference by the Su preme Court on review must only be on strong and compelling reasons. [766D H] 1.2 When the earlier decisions of the Supreme Court are allowed to remain in tact, there is no justification to reverse the majority judgments of Baharul Islam and R.B. Misra JJ., reported in ; by which the appeal had already been dismissed. The reversal of the earlier judgment of Supreme Court by the process of Review strikes at 706 the finality of judgments of Supreme Court and would amount to the abuse of the power of review vested in Supreme Court, particularly in a criminal case. This case which was admit ted solely on the ground that Nandini Satpathy 's case had been subsequently referred to a larger Bench to review the earlier decision cannot be converted into an appeal against the earlier decision of Supreme Court. [774A C] R.K. Jain etc. vs State through Special Police Estab lishment and Ors. ; , and State of Bihar vs Ram Naresh Pandey, , referred to. 2.1 Section 321 of the Code of Criminal Procedure cannot be construed in the light of the principles of Administra tive law. The legal position expounded by the Supreme Court in R.K. Jain 's case and in Ram Naresh Pandey 's, case is correct. If any change in the law is needed it is for Par liament to make necessary amendments to section 321 of the Code of the Criminal Procedure, 1973, which has remained so despite the judgment of the Supreme Court in Pandey 's case rendered in 3957. [773D E] 2.2 The judgment of a Public Prosecutor under section 321 of the Code of Criminal Procedure, 1973 cannot be light ly interfered with unless the Court comes to the conclusion that he has not applied his mind or that his decision is not bona fide. A person may have been accused of several other misdeeds, he may have been an anthema to a section of the public media or he may be an unreliable politician. But these circumstances should not enter into the decision of the Court while dealing with a criminal charge against him which must be based only on relevant material. [773B C ] 2.3 In the circumstances of this case, it cannot be said that the Public Prosecutor had not applied his mind to the case or had conducted himself in an improper way. If in the light of the material before him the Public Prosecutor has taken the view that there was no prospect of securing a conviction of the accused it cannot be said that his view is an unreasonable one. The Public Prosecutor is not a Persecu tor. He is the representative not of an ordinary party to a controversy, but of a sovereignty whose obligation to govern impartially is as compelling as its obligation to govern at all, and whose interest, therefore, in a criminal prosecu tion is not that it shall win a case, but that justice shall be done. As such he is in a peculiar and very definite sense the servant of the land, the two fold aim of which is that guilt shall not escape or innocence suffer. He may prosecute with earnest and vigour indeed, he 707 should do so. But while he may strike hard blows, he is not at liberty to strike foul ones. It is as much his duty to refrain from improper methods calculated to produce a wrong ful conviction as it is to use every legitimate one to bring about a just one. [772E H] Berger vs United States, ; , quoted with approval. 2.4 Further the questions involved in this case are: whether Dr. Jagannath Misra has been a privy to the misdeeds committed in the Patna Urban Co operative Bank; whether he and his co accused should be prosecuted for the offences of conspiracy, bribery etc., and whether the Public Prosecutor had grievously erred in applying for the withdrawal of the case. All the other Judges who have dealt with the case on merits from the Special Judge onwards, except Tulzapurkar J. have opined that the permission was properly given for withdrawal. In the circumstances, it is difficult to take a different view. [770G H; 771A B] The three circumstances put up against the accused in this case are (i) that Jiwanand Jha had credited Rs. 10,000 and Rs. 3000 on 27.12.1973 and on 1.4.1974 respectively in the Savings Bank account of Dr. Jagannath Misra; (ii) that there was ante dating of the order passed by Dr. Jagannath Misra on 14.5.1975; and (iii) that there was a second con fessional statement of Hydary which supported the prosecu tion. As regards the two items of bribe, it has not been shown by any extract of bank account that the said two sams came from the Patna Urban Cooperative Bank. If that was so there would have been entries in the Bank accounts. Mere crediting of the two sums, without any other reliable evi dence, in a bank account by a political ally or a friend does not by itself show that the sums were either bribe amounts or any official favour had been shown. This fact by itself is not conclusive about the guilt of the accused. The passing of the two orders one on 15.6.1975 on the note sheet and the other on buff paper which is dated 14.5.1975 cannot be faulted on account of the explanation that it was the practice in the Bihar Secretariat that whenever an order is changed it is done by writing the later order on a buff sheet and pasting it on the earlier order. It is not also shown by the prosecution that any action had been taken pursuant to the order dated 16.5.1975 by any of the depart mental authorities. If any action had been taken it would have been a matter of record readily available for produc tion. No such record is produced before Supreme Court. Hence ' it is a mere surmise to say that any such action was sought to be nullified, particularly when there was no acceptable evidence at all on the communication of the order dated 16.5.1975 to any departmental authorities. [769F G; 770D G ] 708 Per Khalid J. (on behalf of himself and on behalf of section Natarajan J.) 1.1 Admitting a review petition is not, the same thing as setting aside the order sought to be reviewed. Order 47, Rule 1 C.P.C. deals with review in civil matters, Article 137 of the Constitution is a special power with the Supreme Court to review any judgment pronounced or order made by it. An order passed in a criminal case can be reviewed and set aside only if there are errors apparent on the record. In this case, one of the Judges who was a party to the order to review (R.B. Misra J) had earlier dismissed the appeal with convicting reasons. If the judgment was set aside by the order passed in the review petition, the learned Judge would definitely have given his own reasons for doing so by a separate order. This has not been done. All that the order says is that the review petition had been admitted. The direction to re hear the appeal, therefore can only be to ascertain reasons to see whether the judgment need be set aside. [776C G] 2.1 There is no error apparent on the face of the record in the judgment reported as Sheonandan Paswan vs State of Bihar & Ors., ; [776G H] 2.2 All the three judges who gave the earlier judgment in this case have correctly declined to accept the plea that Shri Sinha was not a competent Public Prosecutor since Datt 's appointment has not been cancelled. [780B C] 3.1 Section 321 needs three requisite to make an order under it valid; (1) The application should be filed by a public prosecutor or Assistant Public Prosecutor who is competent to make an application for withdrawal; (2) he must be in charge of the case; (3) the application should get the consent of the court before which the case is pending. All the three requisites are satisfied here. [780D E] 3.2 In the absence of any allegation of mala fide against the public prosecutor or of bias against the Special Judge the Public Prosecutor should normally be credited with fairness in exercise of his power under s.321. Equally, in the absence of a challenge in the revision petition before the High Court to the order of the Special Judge giving consent, it has to be assumed that he has perused the rele vant records before passing the consent order. [781 C E] 3.3 Section 321 gives the public prosecutor the power for withdrawal of any case at any stage before judgment is pronounced. This 709 pre supposes the fact that the entire evidence may have been adduced in the case, before the application is made. When an application under s.32I Cr. P.C. is made, it is not neces sary for the court to assess the evidence to discover wheth er the case would end in conviction or acquittal. To contend that the court when it exercises its limited power of giving consent under s.32I has to assess the evidence and find out whether the case would end in acquittal or conviction, would be to re write s.321 Cr. P.C. and would be to concede to the court a power which the scheme of s.321 does not contem plate. [781 F H] 3.4 The acquittal or discharge order under s.321 are not the same as the normal final orders in criminal cases. The conclusion will not be hacked by a detailed discussion of the evidence in the case of acquittal or absence of prima facie case or groundlessness in the case of discharge. All that the court has to see is whether the application is made in good faith, in the interest of public policy and justice and not to thwart or stifle the process of law. The court, after considering these facets of the case, will have to see whether the application suffers from such improprieties or illegalities as to cause manifest injustice if consent is given. On a reading of the application for withdrawal, the order of consent and the other attendant circumstances, it must be held that the application for withdrawal and the order giving consent were proper and strictly within the confines of section 321 Cr. P.C. [781H; 782A C] 3.5 While construing s.321, it is necessary to bear in mind the wide phraseology used in it, the scheme behind it and its field of operation. True, it does not give any guideline regarding the grounds on which an application for withdrawal can be made. But since it was enacted with a specific purpose, it would be doing violence to its language and contents by importing into the section words which are not there or by restricting its operation by fetters in the form of conditions and provisos. [782C D] 3.6 While conferring powers upon the Subordinate courts under s.321 of the Code, the Legislature had only intended that the court should perform a supervisory function and not an adjudicatory function in the legal sense of the term. Section 321 clothes the public prosecutor to withdraw from the prosecution of any person, accused of an offence both when no evidence is taken or even if entire evidence has been taken. The outer limit for the exercise of this power is "at any time before the judgment is pronounced". The initiative is that of the Public Prosecutor and what the court has to do ' only to give its consent and not to deter mine any matter judicially. The Judicial function implicit in the 710 exercise of the judicial discretion for granting the consent would normally mean that the court has to satisfy itself that the executive function of the Public Prosecutor has not been improperly exercised, or that it is not an attempt to interfere with the normal course of justice for illegitimate reasons or purposes. [484A B; C D] 3.7 The courts ' function is to give consent. It is not obligatory on the part of the court to record reasons before consent is given. However, consent of the court is not a matter of course. When the Public Prosecutor makes the application for withdrawal after taking into consideration all the materials before him, the Court exercises its judi cial discretion by considering such materials and on such consideration either gives consent or declines consent. If on a reading of the order giving consent a higher court is satisfied that such consent was given on an overall consid eration of the materials available, the order giving consent has necessarily to be upheld. [484D G] 3.8 The order under section 321 is pot appealable but only revisable under section 397 of the Code of Criminal Procedure. While considering the legality, propriety or the correctness of a finding or a conclusion, normally, the revising court does not dwell at length into the facts and evidence of the case. The Court, in revision, considers the materials only to satisfy itself about the correctness, legality and propriety of the findings, sentence or order and refrains from substituting an order passed under s.397 appeal comes to the Supreme Court by special leave under Article 136 of the Constitution of India. [789B C] It has been the declared policy of the Supreme Court not to embark upon a roving enquiry into the facts and evidence of cases like this or even an order against discharge. The Supreme Court will not allow itself to be converted into a court of facts and evidence. The Supreme Court seldom goes into evidence and facts. That is as it should be. Any depar ture from this salutary self imposed restraint is not a healthy practice. As an apex Court, any observation on merits or on facts and evidence of a case which has to go back to the courts below will seriously prejudice the party affected and it should be the policy of the court not to tread upon this prohibited ground and invite unsavory but justifiable criticism. Supreme Court cannot assess the evidence to find out whether there is a case for acquittal or conviction and cannot convert itself into a trial court. Nor can this court order a retrial and examination of hun dred witnesses to find out whether the case would end in acquittal or conviction. [789D G] 711 3.9 Section 321 Crl. P.C. is virtually a step by way of composition of he offence by the State. The State is the master of the litigation in criminal cases. By the exercise of functions under s.321 the accountability of the concerned person or persons does not disappear. A private complaint can still be filed if a party is aggrieved by the withdrawal of the prosecution but running the possible risk of a suit of malicious prosecution if the complaint is bereft of any basis. [789G H; 790A] 3.10 When the Magistrate states in his order that he has considered the materials, it is not proper for the court not to accept that statement. The proper thing to do is to hold that Magistrate gave consent on objective consideration of the relevant aspects of the case. It would be acting against the mandate s.321 to find fault with the Magistrate in such cases, unless the order discloses that the Magistrate has failed to consider whether the application is made in good faith, in the interest of public policy and justice and not to thwart or strifle the process of law. The application for withdrawal by the Public Prosecutor has been made in good faith after careful consideration of the materials placed before him and the order of consent given by the Magistrate was also after the consideration of various datails as indicated above. It would be improper for the Court, keeping in view the scheme of s.321, to embark upon a detailed inquiry into the facts and evidence of the case or to direct re trial for that would be destructive of the object and intent of the section. [792C E; 793B D] State of Bihar vs Ram Naresh Pandey, ; M.N. Sankaranarayanan Nair vs P.V. Balakrishnan & Ors., [1972]2 SCR 599; Bansi Lal vs Chandan Lal, AIR ; State of Orissa vs Chandrika Mohapatra & Ors., ; ; Balwant Singh vs State of Bihar, ; Subhash Chander vs State, ; and Rajendra kumar Jain vs State, ; , referred to. 4.1 In this case the Supreme Court is called upon only to consider the ambit and scope of s.321 Crl. P.C. and not the truth or otherwise of the allegations against the re spondent No. 2. The appellant is admittedly a political rival of respondent No.2. There is no love lost between them. It is at the instance of such a highly interested person that the Court is called upon to direct re trial of the case, setting aside the consent given by the Special Judge. The second respondent is a leader of a political party. He was a rival to the Chief Minister who followed him after the 1977 at the time of institution of the case. In 1977, when the second respondent was the Chief Minister, a warrant of arrest was issued 712 against Shri Karpoori Thakur for his arrest and detention. It has been suggested that Shri Thakur had grudge against the second respondent. Viewed against this background, and on the unsatisfactory factual details of the case, accepting the appeal and ordering retrial would not advance either the interests of justice or public interest. [796B E] 4.2 There were two confessional statements of Haidari in this case one on 4.11.1976 and another on 24.1.1978. In the former he did not implicate respondent No.2 but he did it in the next one. The second statement at best is the confes sional statement of a co accused which normally will not inspire confidence, in any court. It is also a statement an accomplice turned approver and hence of a very little evidentiary value. When Supreme Court exercises its juris diction while considering an order giving consent on an application under s.321, consistent with the declared policy of the court not to embark upon evidence, request for an order for retrial on this legally weak and infirm evidence should be rejected. [795A E] 4.3 As to the accusation of forgery, taking the entire evidence against the appellant it cannot be held that he has committed forgery under s.463 or an offence under s.466. Even though there is overwriting or pasting or interpolation or change of digits, there is no evidence at all to show that this paper went out of the Chief Minister 's office or that any one was unduly favoured or that any one secured undue advantage by use of such overwriting. [796A B] Per Bhagwati (on behalf of himself and G.L. Oza J.) (Minority view). (Per contra) 1.1 The Review Bench did exercise the power of review and set aside the order made by the Original Bench. When the Review Bench used the expression "I . . admit the Review" and directed rehearing of the appeal, it must by necessary implication be held to have allowed the Review Petition and set aside the order of the Original Bench. The true meaning and effect of the order of the Review Bench cannot be allowed to be obfuscated by a slight ineptness of the language used by the Review Bench. The substance of the order must always be looked in to its apparent form. [737F H] 1.2 There can be no doubt that the Review Bench was not legally bound to give reasons for the order made by it. The apex Court being the final court against which there is no further appeal, it is not under any legal compulsion to give reasons for an order made by it. But 713 merely because there may be no legal compulsion on the apex court to give reasons. It does not follow that the apex court may dispose of cases without giving any reasons at all. It would be eminently just and desirable on the part of the apex court to give reasons for the orders made by it. But when the apex court disposes of a Review Petition by allowing it and setting aside the order sought to be re viewed on the ground of an error apparent on the face of record, it would be desirable for the apex court not to give reasons for allowing the Review Petition. Where the apex court holds that there is an error apparent on the face of the record and the order sought to be reviewed must there fore be set aside and the case must be reheard, it would considerably prejudice the losing party if the apex court were to give reasons for taking this view. If the Review Bench of the Court were required to give reasons, the Review Bench would have to discuss the case fully and elaborately and expose what according to it constitutes an error in the reasoning of the Original Bench and this would inevitably result in pre judgment of the case and prejudice is rehear ing. A reasoned order allowing a Review Petition and setting aside the order sought to be reviewed would, even before the reheating of the case, dictate the direction of the rehear ing and such direction, whether of binding or of persuasive value, would conceivably in most cases adversely affect the losing party at the rehearing of the case. Therefore, the Review Bench, in the present case, could not be faulted for not giving reasons for allowing the Review Petition and directing rehearing of the appeal. [738B G] 2. It is now well settled law that a criminal proceeding is not a proceeding for vindication of a private grievance but it is a proceeding initiated for the purpose of punish ment to the offender in the interest of the society. It is for maintaining stability and orderliness in the society that certain acts are constituted offences and the right is given to any citizen to set the machinery of the criminal law in motion for the purpose of bringing the offender to book. Locus standi of the complainant is a concept foreign to criminal jurisprudence. Now if any citizen can lodge a first information report or file a complaint and set the machinery of the criminal law in motion and his locus standi to do so cannot be questioned, a citizen who finds that a prosecution for an offence against the society is being wrongly withdrawn can oppose such withdrawal cannot oppose such withdrawal. If he can be a complainant or initiator of criminal prosecution, he should equally be entitled to oppose prosecution which has already been initiated at his instance. If the offence for which a prosecution is being launched is an offence against the society and not merely an individual wrong, any member of the society must have locus to initiate a prosecution as also to resist 714 withdrawal of such prosecution, if initiated. Here in the present case, the offences charged against Dr. Jagannath Misra and others are offences of corruption, criminal breach of trust etc. 'and therefore any person who is interested in cleanliness of public administration and public morality would be entitled to file a complaint; equally he would be entitled to oppose the withdrawal of such prosecution, if it is already instituted. [739C H; 740A] R.S. Nayak vs A.R. Antulay, , referred to 3.1. It is undoubtedly true that the effect of withdrawal of the prosecution against Dr. Jagannath Misra was that he stood discharged in respect the offences for which he was sought to be prosecuted but it was not an order of discharge which was challanged by Sheonandan Paswan in the revision application filed by him before the High Court but it was an order granting consent for withdrawal of the prosecution that was assailed by him. [740E G] 3.2 The analogy of an order of discharge made under section 227 or section 239 of the Code of Criminal Procedure is not apposite because there the Sessions Judge or the Magistrate, as the case may be, considers the entire materi al before him and then comes to the conclusion that there is not sufficient ground or proceeding against the accused or that the charge against the accused is groundless. But, here, when the Magistrate makes an order granting consent to withdrawal of the prosecution under s.321, it is a totally different judicial exercise which he performs and it would not therefore be right to say that if the High Court sets aside the order of the Magistrate granting consent to with drawal from the prosecutor, the High Court would be really setting aside an order of discharge made by the Magistrate. What the High Court would be doing would be no more than holding that the withdrawal from the prosecution should proceed against the accused and ultimately if there is not sufficient evidence or the charges are groundless, the accused may still be discharged. Even the order of discharge can be discharged by the High Court in revision if the High Court is satisfied that the order passed by the Magistrate is incorrect, illegal or improper or that the proceedings resulting in the order of discharge suffer from any irregu larity. [740F H; 741A C] 3.3 The revisional power exercised by the High Court under s.397 is couched in words of widest amplitude and in exercise of this power can satisfy itself as to the correct ness, legality propriety of any order passed by the Magis trate or as to the regularity of any proceedings of such Magistrate. When the Supreme Court is hearing an appeal 715 against an order made by the High Court in the exercise of its revisional power under s.397 it is the same revisional power which the Supreme Court would be exercising and the Supreme Court, therefore, certainly can interfere with the order made by the Magistrate and confirmed by the High Court if it is satisfied that the order is incorrect, illegal or improper. In fact, in a case like the present where the question is of purity and public administration at a time when moral and ethical values are fast deteriorating and there seems to be a crises of character in public life, the Supreme Court should regard as its bounded duty a duty owed by it to the society to examine carefully whenever it is alleged that a prosecution for an offence of corruption or criminal breach of trust by a person holding high public office has been wrongly withdrawn and it should not matter at all as to how many judges in the High Court or the lower court have been party to the granting of such consent for withdrawal. The mathematics of numbers cannot, therefore, be invoked for the purpose of persuading the court not to exercise its discretion under Article I36 of the Constitu tion. [741C H] 4.1 It is a well established proposition of law that a criminal prosecution, if otherwise justifiable and based upon adequate evidence does not become vitiated on account of mala fides or political vendetta of the first informant or the complainant. [742D E] State of Punjab vs Gurdial Singh, , re ferred to. 4.2 The fact that the prosecution against Dr. Jagannath Misra was initiated by the successor Government of Karpoori Thakur after the former went out of power, by itself cannot support the inference that the initiation of the prosecution was actuated by political vendetta or mala fides because it is quite possible that there might be material justifying the initiation of prosecution against Dr. Jagannath Misra and the successor Government might have legitimately felt that there was a case for initiation of prosecution and that is why the prosecution might have been initiated. Therefore, the prosecution cannot be said to be vitiated on that ac count. [742G H; 743A] Krishna Ballabha Sahay and Ors. vs Commission of En quiry; , and P.V. Jagannatha Rao vs State of Orissa, ; , referred to. 5.1 There is no provision of law which requires that no prosecution should be launched against a former Chief Minis ter or a person holding high political office under the earlier regime without first set 716 ting up a Commission of Enquiry for enquiring into his conduct. It cannot be said that if a prosecution is initiat ed without an inquiry being held by a Commission of Enquiry set up for that purpose, the prosecution would be bad or that on that ground alone the prosecution could be allowed to be withdrawn. [743G H; 744A] 5.2 In view of the tardy and slow moving criminal proc ess in India causing inordinate delay and availability of adequate protection under different existing laws to the accused, it would be perfectly legitimate for the successor government to initiate a prosecution of a former Chief Minister or a person who has held high political office under the earlier regime without first having an enquiry made by a Commission of Enquiry, provided of course, the investigation is fair and objective and there is sufficient material to initiate such prosecution. [744A D] 6. No unfettered or unrestricted power is conferred on the Public prosecutor/Assistant Public Prosecutor under section 321 of the Code to apply for withdrawal from the Prosecution, but the said power must be a controlled or guided power or else it will fail foul of Article 14 of the Constitution Section 321 is more or less similar to the powers of the police under section 173 of the Code of Criminal Procedure. [746F H] The police has no absolute or unfettered discretion whether to prosecute an accused or not to prosecute him. In fact, in the constitutional scheme, conferment of such absolute and uncanalised discretion would be violative of the equality clause of the Constitution. The Magistrate is therefore given the power to structure and control the discretion of the police. The discretion of the police to prosecute is thus ' 'combined and confined" and, subject to appeal or revision, and the Magistrate is made the final arbiter on this question. The Legislature has in its wisdom taken the view it would be safer not to vest absolute dis cretion to prosecute in the police which is an Executive arm of the government but to subject it to the control of the judicial organ of the State. The same scheme has been fol lowed by the Lesiglature while conferring power on the Public Prosecutor to withdraw from the prosecution. This power can be exercised only with the consent of the court so that the court can ensure that the power is not abused or misused or exercised in an arbitrary or fanciful manner. Once the charge sheet is filed and the prosecution is initi ated, it is not left to the sweet will of the State or the Public Prosecutor to withdraw from the prosecution. Once the prosecution is launched, its relentless course cannot be halted except on sound considerations germane to public justice. The Public Prosecutor cannot therefore withdraw from the prosecution unless the Court 717 before which the prosecution is pending gives its consent for such withdrawal. This is a provision calculated to ensure non arbitrarinesS on the part of the Public Prosecu tor and compliance with the equality clause of the Constitu tion. [748D H] H.S. Bains vs State, ; ; Subhash Chander vs State & Ors. , ; ; M.N. Sankaranarayanan Nair vs P.N. Balakrishnan & Ors., ; ; and State of Orissa. vs C. Mohapatra, , referred to. 7.1 The position in law in regard to the degree of autonomy enjoyed by the Public Prosecutor vis a vis the government in filling an application for withdrawal of the prosecution is rather confused. Now there can be no doubt that prosecution of an offender who is alleged to have committed an offence is primarily the responsibility of the Executive. It is the Executive which is vested with the power to file a chargesheet and initiate a prosecution. This power is conferred on the Executive with a view to protect ing the society against offenders who disturb the peace and tranquility of the society by committing offences. Of course it is left to the court to decide whether to take cognizance of the offences set out in the charge sheet but the filing of the charge sheet and initiation of the prosecution is solely within the responsibility of the Executive. It is the State through the investigating authorities which files a charge sheet and initiate the prosecution and the Public Prosecutor is essentially counsel for the State for conduct ing the prosecution on behalf of the State. The Public Prosecutor is an officer of the court, as indeed every advocate practising before the court is, and he owes an obligation to the court to be fair and just: he must not introduce any person interest in the prosecution nor must he be anxious to secure conviction at any cost. He must present the case on behalf of the prosecution fairly and objective ly. He is bound to assist the court with his fairly consid ered view and the fair exercise of his intention. But at the same time he conducts the prosecution on behalf of the Central Government or the State Government, as the case may be, and he is an advocate acting on behalf on the Central Government or the State Government which has launched the prosecution. There is nothing wrong if the government takes a decision to withdraw from the prosecution and communicate such direction to the Public Prosecutor. The Public Prosecu tor, would, inter alia, consider the grounds on which the government has taken the decision to withdraw from the prosecution and if he is satisfied that those grounds are legitimate, he may file an application for withdrawal from the prosecution. If on the other hand he takes the view that the grounds which have been given by the government are not 718 legitimate he has two options available to him. He may inform the government that in his opinion, the grounds which have weighed with the government are not valid and that he should be relieved from the case and if this request of his is not granted he may tender his resignation or else, he may make an application for withdrawal from the prosecution as directed by the government and at the hearing of the appli cation he may offer his considered view to the court that the application is not sustainable on grounds set out by him and leave it to the court to reject the application. There is nothing wrong in the Public Prosecutor being advised or directed by the government to file an application for with drawal from the prosecution and the application for with drawal made by him pursuant to such direction or advice is not necessarily vitiated. The Public Prosecutor can of course come to his own independent decision that the prose cution should be withdrawn but ordinarily if he is wise and sensible person he will not apply for withdrawal without consulting the government because it is the government which has launched the prosecution and is prosecuting the accused. Theoretically of course, he can make an application for withdrawal from the prosecution without consulting the government and he cannot be accused of any illegality for doing so and the court may give its consent for such with drawal but in that event the Public Prosecutor would render the risk of incurring the displeasure of the Government which has appointed him. If the Public Prosecutor seeks the permission of the government for withdrawal from the prose cution and the government grants such permission to him and on the basis of such permission he applies for withdrawal the application cannot be said to be vitiated. The proviso to s.321 in fact contemplates in so many terms that in certain categories of offences the Public Prosecutor ap pointed by the State Government cannot move the court for its consent to withdraw from the prosecution without the permission of the Central Government. There is no danger of abuse or misuse of power by the Government inherent in this process because there are two principal safeguards against any such abuse or misuse of power by the government: one is that an application must be based on grounds which advance public justice and the other is that there can be no with drawal without the consent of the Court. [755C H; 756A H; 757A F] State of Bihar vs Ram Naresh Pandey, ; Balwant Singh vs State of Bihar, ; M.N. Sankaranarayanan Nair vs P.V. Balakrishnan & Ors., ; ;.State of Orissa, vs C. Mohapatra, ; and R.K. Jain vs State, ; , referred to. 7.2 The Public Prosecutor cannot maintain an application for 719 withdrawal from the prosecution on the ground that the government does not want to produce evidence and proceed with the prosecution against the accused or that the govern ment considers that it is not expedient to proceed with the prosecution. The Public Prosecutor has to make out some ground which would advance or further the cause of public justice. If the Public Prosecutor is able to show that he may not be able to produce sufficient evidence to sustain the charge, an application for withdrawal from the prosecu tion may be legitimately made by. [758H; 759A B] 7.3 However, where a charge has been framed by the court either under s.228 or s.240 of the Code of Criminal. Proce dure, 1973 it would not be open to the Public Prosecutor to apply for withdrawal from the prosecution on the ground of insufficiency of evidence in support of the prosecution. The reason is that in both these cases the Court applies its mind to the material consisting of the police report and the documents sent with it under s.173 and comes to a conclusion that a prima facie case has been made out against the ac cused and the charge should therefore be framed. When the court has come to this conclusion after full consideration and framed a charge, the court cannot be persuaded on the same material to hold that there is not sufficient evidence to sustain the prosecution. The Public Prosecutor cannot be permitted to make a volte face on the basis of the same material. To do so would be mockery of justice and it would shake the confidence of the court in the purity and integri ty of the administration of justice. It is, therefore, clear that though the prosecution can be withdrawn at any stage, even after the framing of the charge, it would not be compe tent to the Public Prosecutor once the charge is framed, to apply for withdrawal of the prosecution on the ground that the same material which was before the court when it framed the charge is not sufficient to sustain the prosecution. Of course, if some material has subsequently come to light which throws doubt on the veracity of the prosecution case the Public Prosecutor can certainly apply for withdrawal on the ground that the prosecution is not well founded. It may also happen in the meanwhile a key witness may have died or some important evidence may have become unavailable or some such thing may have happened in that event, the Public Prosecutor may legitimately feel that it will not be possi ble to sustain the prosecution in the absence of such evi dence and he may apply for withdrawal from the prosecution. But on the same material without anything more, the Public Prosecutor cannot apply for withdrawal from the prosecution after the charge is framed. To allow him to do so would impair the faith of the people in the purity and integrity of the judicial process. [759C H; 760A E] 720 Bansi Lal vs Chandi Lal, AIR 1976 SC 370, referred to. 7.4 Further while exercising its function under s.239 is to consider the police report and the document sent along with it as also any statement made by the accused if the court chooses to examine him. And if the court finds that there is no prima facie case against the accused the court discharges him. But that is precisely what the court is called upon to do when an application for withdrawal from the prosecution is made by the public prosecutor on the ground that there is insufficient or no evidence to support the prosecution There also the court would have to consider the material placed before it on behalf of the prosecution for the purpose of deciding whether the ground urged by the public prosecutor for withdrawal of the prosecution is justified or not and this material would he the same as the material before the court while discharging its function under s.239. If the court while considering an application for withdrawal on the ground of insufficiency or absence of evidence to support the prosecution has to scrutinise the material for the purpose of deciding whether there is in fact insufficient evidence or no evidence at all in support of the prosecution, the court might as well engage itself in this exercise while considering under s.239 whether the accused shall he discharged or a charge shall he framed against him. It is an identical exercise which the court will he performing whether the court acts under s.239 or under s.321. If that he so, in a warrant case instituted on a police report the public prosecutor should not he entitled to make an application for withdrawal from the prosecution on the ground that there is insufficient or no evidence in support of the prosecution. The court will have consider the same issue under s.239 and it will most certainly further or advance the case of public justice if the court examines the issue under s.239 and gives its reasons for discharging the accused after a judicial consideration of the material before it, rather than allow the prosecution to he withdrawn by the Public Prosecutor. When the prosecution is allowed to he withdrawn there is always an uneasy feeling in the public mind that the case has not been allowed to be agitated before the court and the court has not given a judicial verdict. But if on the other hand, the court examines the material and discharges the accused under s.239 it will always carry greater conviction with the people because instead of the prosecution being withdrawn and taken out of the ken of judicial scrutiny the judicial verdict based on assessment and evaluation of the material before the court will always inspire greater confidence Since the guiding consideration in all these cases is the imperative of public justice and it is absolutely essential that justice must not only he done but also appear to be done. Hence in a warrant case instituted on a police report which the 721 present case against Dr. Jagannath Misra and others admit tedly is it should not be a legitimate ground for the public prosecutor to urge in support of the application for with drawal that there is insufficient or no evidence in support of the prosecution. The court in such a case should be left to decide under s.239 whether the accused should be dis charged or a charge should be framed against him. [761A H; 762A B] 7.5 Ultimately every offence has a social or economic cause behind it and if the State feels that the elimination or eradication of the social or economic cause of the crime would be better served by not proceeding with the prosecu tion, the State should clearly be at liberty to withdraw from the prosecution. Though in this area no hard and fast rule can be laid down nor can any categories of cases be defined in which an application for withdrawal of the prose cution could legitimately be made. It must ultimately depend on the facts and circumstances of each case in the light of what is necessary in order to promote the ends of justice. [762C D; H; 763A B] 7.6 The Court, while considering whether to grant con sent or not, must not accept the ipse dixit of the public prosecutor and content itself by merely examining whether the public prosecutor has applied an independent mind but the court must satisfy itself not only that the grounds are germane or relevant to advancement of public justice but also whether the grounds in fact are satisfactorily estab lished. The ultimate test which must be applied by the court in order to determine the validity of the grounds in a particular case is that the requirement of public justice outweighs the legal justice of that case so that withdrawal from the prosecution could be permitted in the larger inter est of public justice. The imperative of public justice provides the only relevant consideration for determining whether consent should be granted or not. It is not possible to provide an exclusive definition of what may be regarded as failing within the imperative of public justice in a straitjacket formula. Every case must depend on its peculiar facts and circumstances because there may be a myriad situa tion where this question may have to be considered by the Court. [763G H; 764A D] 8. Applying these principles to the facts of the present case, it is clear, that the court of the Chief Judicial Magistrate Patna as also the High Court were clearly in error in granting consent to the withdrawal from the prose cution against Dr. Jagannath Misra and others. There are two very strong and cogent reasons why consent to the withdrawal of the prosecution must be refused. In the first place, the learned Chief Judicial Magistrate could have considered under s.239 whether the 722 material placed before him was sufficient to make out a prima facie case against Dr. Jagannath Misra and the other accused so that if the learned Chief Judicial Magistrate came to the conclusion on the basis of such material that the charge against Dr. Jagannath Misra and the other accused was groundless, he would be bound to discharge them for reasons to be recorded by him in writing. There is no reason why in these circumstances the public prosecutor should be allowed to withdraw from the prosecution under s.321. The same exercise could be performed by the learned Chief Judi cial Magistrate by acting under s.239. Moreover, in the present case, the decision to withdraw from the prosecution was taken by the Cabinet at a meeting held on 24th February 1981 and this meeting was presided over by Dr. Jagannath Misra himself. It may be that Shri Lallan Prasad Sinha did not implicitly obey the decision of the Cabinet and applied his independent mind to the question whether the prosecution should be withdrawn or not but even so, it would seriously undermine the confidence of the people in the administration of justice if a decision to withdraw the prosecution against him is taken by the accused himself and pursuant to this decision the Special Public Prosecutor who was appointed by the State Government of which the accused is Chief Minister, applies for withdrawal from the prosecution. It is an ele mentary principle that justice must not only done but must also appear to be done. It would be subversive of all prin ciples of justice that the accused should take a decision to withdraw the prosecution against himself and then the Spe cial Public Prosecutor appointed in effect and substance by him makes an application for withdrawal from the prosecu tion. [764E H; 765A E] 8.2 It is no doubt true that if there is not sufficient evidence to sustain the prosecution against Dr. Jagannath Misra and the other accused, it would be subjecting them to harassment and inconvenience to require them to appear and argue before the Court for the purpose of securing an order of discharge under s.239, but even so it would be desirable in the interest of public justice that high political per sonages, accused of offences should face the judicial proc ess and get discharged, rather than seem to manoeuvre the judicial system and thus endanger the legitimacy of the political as well as the judicial process. It is possible that in a particular case personal harassment or inconven ience may be caused by non withdrawal of the prosecution, if the accused is really innocent and is ultimately liable to be discharged, but such harassment or inconvenience must be considered as an inevitable cost of public life, which the repositories of public power should have no hesitation to pay, as justice must not only be done but must also appear to be done. [765E H; 766A] 723

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Appeal No.424 of 1957. Appeal by special leave from the judgment and order dated January 25, 1955, of the Patna High Court in Misc. Judicial Case No. 621 of 1953. N. C. Chatterjee and R. C. Prasad, for the appellant. K. N. Rajagopal Sastri and D. Gupta, for the respondent. 791 1960. November 30. The Judgment of the Court was delivered by KAPUR, J. This is an appeal by special leave ' against the judgment and order of the High Court at Patna answering the question referred to it by the Income tax Appellate Tribunal against the assessee who is the appellant before us. The appeal relates to three assessments made on the appellant for the respective assessment years 1945 46, 1946 47 and 1947 48. The appellant is a Zamindar and owns considerable properties. In the accounting years he granted licences to different parties to prospect for Bauxite. The particulars of the licences are: Received from Date of the Period of Assess Amount Licence Licence ment year Received. Rs. 1.Aluminium Corporation ofIndia Ltd. 20 1 1945 6 months 1945/46 15,290/ . 2.Indian Aluminium Co.Ltd. 26 5 945 1 year 1946/47 1,24,789/ . 3.Dayanand Modi. 7 5 1945 6 months 1947/48 1,500/ . 4.Indian Aluminium Co.Ltd. 14 8 1945 1 year 1947/48 70,146/ . The Income tax Officer held that these amounts were received as revenue payments and were therefore taxable. On appeal to the Appellate Assistant Commissioner the amounts were held to be capital receipts but this order was set aside by the Income tax Appellate Tribunal which held the amounts to be revenue receipts and taxable as such. At the instance of the appellant the case was referred to the High Court under section 66(1) of the Income tax Act and the following question was stated for the opinion of the Court: "Whether in the facts and circumstances of these cases the sums of Rs. 15,209, Rs. 1,24,789, Rs. 1,500 and Rs. 70,146 received by the assessee are income assessable to tax under the Indian Income tax Act?" 792 The question was answered in the affirmative and the High Court held that there was material to support the finding of the Tribunal, and it was a finding of fact; that the amounts received by the appellant were revenue receipts and not capital receipts. Against this judgment the appellant has come in appeal to this court by special leave. The question that falls for decision is whether the amounts received by the assessee are capital or revenue receipts and for that purpose it is necessary to investigate the nature of the grants made by the appellant. Under the licence the licensee was granted the sole and exclusive right and liberty to (a) to enter into and upon, to prospect, search for, mine quarry, bore, dig and prove all Bauxite lying and being in, under or within the said lands. (b) For the purposes aforesaid and all other purposes incidental thereto dig, drive, make and maintain such pits, shafts, borings, inclines, admits levels, drifts, air courses drains, water courses, roads and ways and to set up, erect and construct such temporary engines, machinery sheds and things as may be reasonably necessary for effectually carrying on the prospecting operations hereby licenced. (c) To remove, take away and appropriate samples and specimens of Bauxite of every quality, kind and description and in reasonable quantities not exceeding one hundred tons in all during the terms of this grant. (d) For the purposes aforesaid to clear undergrowth brushwood and to make use of any drains or water courses on the lands or for clearing sites of working from any water which may flow or accumulate thereon or therein. The periods of the licences were comparatively short 6 months in two cases and a year each in the other two. Under the covenants the licensees were to cause as little damage as possible to the surface of the land. They were to give full information regarding the progress of the operations and true copies of all borings to the licensor. The licensees were also 793 required to plug all holes made by them. The licensor convenanted to give a reasonable right of passage through and over the adjoining lands and properties and in consideration of the premium paid, the licensees could, at their option, after giving necessary notice and on payment of a further sum, get a mining The lease for a term of thirty years on the terms and conditions set out in the indenture attached as schedule 2 to the licence. The Income tax Appellate Tribunal found that the licensees were not granted any interest in land and the amounts received were revenue receipts and therefore, assessable to income tax A reference to some of the cases would assist in determining the nature of the transaction which was evidenced by the documents placed on the record. In Raja Bahadur Kamakshya Narain Singh of Ramgarh vs Commissioner of Income tax, Bihar & Orissa (1) the payments by way of premium were held to be capital receipts. In that case large payments by way of royalty for granting various mining leases were received by the assessee. The leases were for a period of 999 years for mining coal with liberty to search for, work, make merchantable and carry away the coal there found and with power to dig and sink pits. In consideration of these rights the lessees paid a sum by way of salami (premium) and an annual sum as royalty on the amount of coal raised subject to minimum annual royalty. The lessor had the right to reenter in case of failure to pay the royalty. It was contended by the assessee there that the sums received as salami and royalty were capital receipts representing the price of the minerals removed. It was held that salami was a single payment paid for the acquisition of the right to enjoy the benefits granted by the lease and was a capital asset and that the two other forms of royalty both minimum and per ton flowing from the covenants in the lease were not on capital account and fell within the meaning of other income under s.12 of the Act. Lord Wright said at p. 190: "The salami, has been, rightly in their Lordships ' opinion, treated as a capital receipt. It is a single (1) (1943), L.R. 70 I.A. 186. 794 payment made for the acquisition of the right of the lessees to enjoy the benefits granted to them by the lease. That general right may properly be regarded as a capital asset, and the money paid to purchase it may properly be held to be a payment on capital account. But the royalties are on a different footing. " This case was sought to be distinguished by counsel for the respondent on the ground that the lease was for a long period of 999 years but the observations above quoted were not based on this consideration but on the nature of the right which was conveyed. In Commissioner of Income tax, Bihar & Orissa vs Raja Bahadur Kamakshya Narain Singh (1) a coal company had been given by the Court of Wards a prospecting licence in respect of certain coal bearing lands with the option of renewal and also to take a mining lease on certain terms and conditions. The prospecting licence was subsequently extended on four occasions. When the assessee attained majority he claimed that the giving of the licence was ultra vires the Court of Wards but there was a settlement between the licencee and the assessee by which the latter agreed to accept the various prospecting licences, their extensions and leases in consideration of which he received by way of salami Rs. 5,25,000 and capital lump sum of Rs. 40,000 and some other payments in lieu of cesses. The question arose whether the amounts were capital or revenue and it was held that the amount of Rs. 5,25,000 received as salami and the amounts received as cesses were capital receipts and therefore not taxable. Manohar Lal, A. C. J., held that the amount was received by way of settlement and not by way of salami but section K. Das, J. (as he then was) held that salami was a lump sum payment for rights which were being given to the licensee, namely, the right to prospect for a certain number of years and also the right to get mining leases and therefore salami in question was undoubtedly a capital receipt. In The Province of Bihar vs Maharaja Pratap Udai Nath Sahi Deo of Ratugarh (2) it was contended that payments in the nature of premium or salami were (1) [1946) (2) 795 not part of the income of the assessee and were therefore not taxable and it was held that salami may, in certain cases, be regarded as a payment of rent in advance and it would in those cases be regarded as income but where it could not be so regarded it would not be income and therefore not taxable. It was also held that prima facie salami is not income. In The Member for the Board of Agricultural Income Tax, Assam vs Smt. Sindurani Chaudhurani (1) this Court defined as salami as follows: The indicia of salami are (1) its single non recurring character and (2) payment prior to the creation of the tenancy. It is the consideration paid by the tenant for being let into possession and can be neither rent nor revenue but is a capital receipt in the hands of the landlord. Thus if it is a consideration paid by the tenant or the licensee for being let into possession with the object of obtaining a tenancy or as in this case with the object of obtaining a right to remove minerals, it cannot be termed rent or revenue but is a capital receipt. In Sindurani 's case (1) salami was a lump sum payment as consideration for what the landlord was transferring to the tenant, i.e., parting with his right, under the lease, of a holding. In the instant case the terms of the covenant quoted above show that the payment has a close analogy to the payment in Sindhurani 's case(1). That case was sought to be distinguished by the respondent on the ground that there was a transfer of a tenancy which was capable of ripening into an occupancy holding but that was not the ground on which this court decided the case of salami. The definition of salami was agener alone, in that it was a consideration paid by a tenant for being let into possession for the purpose of creating a new tenancy. In Raja Bahadur Kamakshya Narain Singh 's case (2) also the Privy Council laid the definition of salami in general terms and described the characteristics of a payment by way of salami without any reference to the nature of the lease. In reply to the argument of counsel for the appellant, Mr. Rajagopal Sastri for the respondent argued (1) ; (2) (1943) L.R. 70 I.A. 180. 796 that the question was whether the licensor had allowed the licensee to take his capital or he had allowed him to use the capital. If it was the former, the receipts were in the nature of capital receipts and if latter they were in the nature of revenue. His contention was that it wag really the latter because all that the licensee was allowed to do was to enter on the lands and make use of the assets belonging to the appellant. This, in our opinion, is not a correct approach to the question. What the licence gave to the licensee was the right to enter upon the land to pros pect, search and mine quarry, bore, dig and prove all Bauxite lying in or within the land and for that purpose the licensee had the right to dig pits, shafts, borings and to remove, take away and appropriate samples and specimens of Bauxite in reasonable quantities not exceeding 100 tons in the aggregate. It cannot be said that this amounts merely to a grant of the use of the capital of the licensor but it was really a grant of a right to a portion of the capital in the shape of a general right to the capital asset. In support of this distinction between the use of capital and the taking away of capital, counsel relied upon the following observation of Lawrence, J., in Greyhound 's case(3): "The question as to what receipts are revenue and what are capital has given rise to much difference of opinion; but it is clear, in my opinion, that, if the sum in question is received for what is in truth the user of capital assets and not for their realisation, it is a revenue receipt, not capital. " That may be so but the question has to be decided on the nature of the grant. The terms of the covenant in the present case which have been quoted above show that the transaction was not one merely of the user of capital assets but of their realisation, By this test therefore the receipts were on capital account and not revenue. Counsel then referred to a judgment of the Patna High Court in R. B. H. P. Bannerji vs Commissioner of Income tax, Bihar & Orissa (2) where it was held that compensation received by the assessee (1) (2) 797 for use by the military of his lands for a short period was a revenue receipt. In that case the assessee purchased 13 bighas of land for purposes of setting up a market. That plot was requisitioned by the military A authorities under the Defence of India Rules and the assessee received compensation for the use of the The land. It was held to be a revenue receipt because it was really profit derived from the land for the use of a capital asset. Another case upon which counsel for the respondent placed reliance is Smethurst vs Davy (1). That was a case which was decided on the wording of section 31(1)(d) of the Finance Act of 1948, and therefore is not of much assistance. Reference was also made to Stow Bardolph Gravel Co., Ltd. vs Poole (2). There the assessee company, which carried on business in sand and gravel, purchased two un worked deposits. The company contended that the payments made to acquire the deposits were deductible being expenditure which was incurred in the acquisition of trading stock or otherwise of revenue character. It was held that the company had acquired a capital asset and not stock in trade. The case turned upon a finding by the Special Commissioners and is not helpful. Reliance was also placed on Rajah Nanyam Meenakshamma vs Commissioner of Income tax, Hyderabad (3). In that case certain fixed sums of money were paid as royalty for the whole period of the lease which were held to be revenue receipts as consolidated advance payments of the amount which would otherwise have been payable periodically. None of these cases is of any assistance to the respondent 's case. The question which has to be decided is what was the nature of the transaction. The covenants in the licence show that the licensee had a right to enter upon the land and take away and appropriate samples of all Bauxite of every kind up to 100 tons and therefore there was a transfer of the right the consideration for which would be a capital payment. (1) (2) (3) 101 798 In our opinion the High Court was in error and the question referred should have been decided in favour of the appellant. We therefore allow the appeal, set aside the judgment and order of the High Court and answer the question in favour of the appellant who will have his costs in this Court and the High Court. Appeal allowed.

In 1945 the appellant who was a Zamindar granted licences to different parties to prospect bauxite. Under the licence the licensee had the right to enter upon the land to prospect, dig and prove all bauxite lying in or within the land and to take away and appropriate samples of bauxite in reasonable quantities not exceeding 100 tons in the aggregate. In consideration of the premium paid, the licensees could, at their option, after giving necessary notice and on payment of a further sum, get a mining lease for a term of thirty years. The income tax authorities were of the view that the licensees were not granted any interest in land and that the amounts received by the appellant from the licensees were revenue receipts and, therefore, assess able to income tax. Held, that on its true construction the transaction of 1945 did not amount merely to a grant of the use of the capital of the licensor but was really a grant of a right to a portion of the capital. Accordingly, the amounts received by the appellant were capital receipts and, therefore, not liable to income tax. Raja Bahadur Kamakshya Narain Singh of Ramgarh vs Com missioner of Income tax, Bihar and Orissa, (1943) L.R. 70 I.A. 180,The Member for the Board of Agricultural Income tax, Assam vs Smt. Sindurani Chaudhurani, [1957] S C.R. 1019 and Commissioner of Income tax, Bihar and Orissa vs Raja Bahadur Kamakshya Narain Singh, , considered.

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Special leave Petition (Civil) No. 10330 of 1991. From the Judgement and Order dated 3.5.1991 of the Bomaby High ourt in writ Petition No. 186 of 1991. Kapil Sibal, Makrand D. Adkar and Ejaz Maqbool for the Petitioner. R.D. Tulpule, D.M. Nargolkar, Ms. Kiran Bhagalia, Ms. V.D.Khanna and A.M. Khanwilkar for the respondents. Caveator in person. The following Order of the Court was delivered. The petitioner, Bhushan Uttam Khare, appeared for the Third Year M.B.B.S. Examination held by University of Poona in the months of October November, 1990. The results of the said examination were declared on 12.12.1990. As per University of Poona Ordinance 134A, the petitioner applied for revaluation of his answer papers. 167 students including the petitioner had applied for revaluation. When the revaluation results were declared, certain students made representation to the University authorities for their answer papers being revaluate from the same set of examiners. 388 On receipt of the representation, the Executive Council of University appointed a Committee to make an enquiry. On the report of the Committee, the University of Poona decided to cancel the revaluation results and to conduct further revaluation. This decision of the Executive Council cancelling the earlier revaluation and directing a second revaluation was challenged by the petitioner and others in writ petitions filed before the High Court at Bomaby. By the impugned judgement dated May 3, 1991 the High Court dismissed the writ petitions. Aggrieved by the decisions, the petitioners have moved this petition for special leave. The Poona University Act, 1974 defines the powers and duties of the Executive Council. The Executive Council may make Ordinances to provide for the conduct of the examinations. Under Ordinance 134A, the Vice Chancellor shall use his discretionery powers to decide as to whether all the applications received from the candidates, be considered for revaluation or not. If as a result of revaluation of answer books, the marks obtained by the candidate increase over the original marks by 10% or more of the marks carried by the paper then only the result of revaluation will be accepted by the University. Application for vertification of answer books will be entertained within a period of two weeks from the date of declaration of the results. Ordinance 146 reads: "146. In any case where it is found that the result of an examination has been affected by error, malpractice, fraud, improper conduct or other course of whatsoever nature, the Executive Council shall have power to amend such result in such manner as shall be in accord with the true position and to make such declaration as the Executive Council shall consider necessary in that behalf. Provided that, but subject to 0.147, no result shall be amended after the expiration of six months from the date of publication of the said result". In the Third Year M.B.B.S. Examination, 402 students appeared for the examination and 167 students for revaluation of the answer books. When the representation of students opting for revaluation was placed before the Executive Council as glaring difference was indicated, a Committee was appointed for scrutiny and to reassess theory papers of the students acquiring more than 20% marks after revaluation, from senior teachers of the Faculty. After scrutiny, it was found out that the marks are closer to the original marks in Medicine, Surgery and Preventive and Social Medicine. Therefore, the Committee recommended that the entire revaluation of the papers should be cancelled. This report of the 389 Committee was placed before the Executive Council in its meeting held on March 27, 1991 and the Council by the resolution cancelled the result of the revaluation and directed fresh revaluation. The second revaluation was done through the examiners outside the State. The results on revaluation intimated to the Medical College thus stood cancelled and the final results were delcared in pursuance to the second revaluation. The action of the Executive Council was attacked on the grounds that it was an arbitrary action; that the choice of the examiners was that of the Vice Chancellor as enjoined under the Ordinance and there was no glaring instance of any malpractice, fraud or other course of whatsoever nature to cancel the revaluation and in the absence of any provision in the statute or the Ordinance for a second revaluation, the decision taken by the Executive Council is unwarranted and, therefore, illegal. In repelling these contentions, the High Court has taken the view that educational institutions set up Enquiry Committee to deal with problem posed by the adoption of unfair means and it is normally within their domestic jurisdiction to decide all questions in the light of the material adduced. Unless there is an absolute and compelling justification, the Writ Court is slow to interfere with the autonomous activity of the Executive Councils. The High Court said that the material on record indicated that this is not a case for exercise of jurisdiction under Article 226 of the Constitution and since the Court has found that there is material to reach the decision as regards cancellation of the impugned result of revaluation, the contentions taken up by the petitioner are untenable. The petitioners have reiterated the submissions that there had been no improper conduct come to light and the absence of any provision for a second revaluation vitiates the whole action. We have been taken through a comparative chart containing the marks awarded in the original examination, the first revaluation and the second revaluation. The attempt of the learned counsel for the petitioners had been to make out that the disparity was not such as to indicate any improper practice and that the Committee constituted consisted of four members of whom two were original examiners and the report submitted by that Committee should not have been made the basis for the decision which affected the prospects and career of a large number of medical students. The learned counsel for the University as also the standing counsel for the State drew our attention to the fact that Executive Council had only cautiously proceeded in the matter and before ordering cancellation a probe was made and the mem 390 bers of the Enquiry Committee were competent persons and that there is no illegality which warrants interference of the Court. We have considered all the materials placed before us in the light of arguments advanced keeping in mind the well accepted principle that in deciding the matters relating to orders passed by authorities of educational institutions, the Court should normally be very slow to pass orders in its jurisdiction because matters falling within the jurisdiction of educational authorities should normally be left to their decision and the Court should interfere with them only when it thinks it must do so in the interest of justice. We are satisfied that there had been sufficient material before the Executive Council to proceed in the manner in which it has done. It is not correct to say that the University had acted on non existing rule for ordering revaluation. Ordinance 146 is comprehensive enough to include revaluation also for further action. The fact that two examiners were also the members of the Committee which recommended for revaluation cannot result in any bias even if they had been directly concerned with the original evaluation. It is true that in the second revaluation also there had been some changes between the original valuation and the revaluation results. However, it is not so glaring or demonstrably unconscionable as seen in the first revaluation. We cannot, therefore, accept the contention of the petitioner that the High Court had erred in not granting the relief sought for. We can only observe that the case of the petitioner, who alone has come before this Court and who had secured higher marks in the first revaluation and is, therefore, aggrieved by the cancellation of the same, would by duly considered in the selection for Post Graduate Course. The special leave petition is dismissed. Y.L. SLP dismissed.

Consequent upon the announcement of his M.B.B.S. Examination result on 12.12.1990, the petitioner alongwith other 166 students, applied for revaluation of answer books under University of Poona Ordinance 134A. When the revaluation results were declared, certain students made representation to the University Authorities for their answer papers being revalued from the same set of examiners. The University on consideration of that representation appointed a Committee for scrutiny and to reasses theory papers of the students acquiring more than 20% marks after revaluation, from senior teachers of the Faculty. After scrutiny, it was found out that the marks are closer to the original marks in Medicine, Surgery and Preventive and Social Medicine. The Committee therefore recommended that the entire revaluation of the papers should be cancelled. The Executive Council by a resolution cancelled the result of the revaluation and directed fresh revaluation and the second revaluation was done through the examiners outside the State and the result declared on the basis thereof. The peritioner and others challenged the aforesaid decision of the Executive Council cancelling the earlier revaluation and directing a second revaluation by means of writ petitions. It was contended before the High Court on behalf of the petitioners that the action of the Executive Council was arbitrary in as much as there was no malpractice, fraud or anything objectionable to the revaluation as the examiners were chosen by the Vice Chancellor as enjoined under the Ordinance. Hence the cancellation of revaluation was not proper. The High Court repelled the two contentions advanced before it and dismissed the writ petitions. Hence this Petition for Special Leave to appeal. Dismissing the Petition for special leave to appeal, this Court, HELD: In deciding the matters relating to orders passed by authorities of educational institutions, the Court should normally be 387 very slow to pass orders in its jurisdiction because matters falling within the jurisdiction of educational authorities should normally be left to their decision and the Court should interfere with them only when it thinks it must do so in the interest of justice. [390 B] Under Ordinance 134A, the Vice Chancellor shall use his discretionary power to decide as to whether all the applications received from the candidates, considered for revaluation or not. If as a result of revaluation of answer books, the marks obtained by the candidate increase over the original marks by 10% or more then only the result of revaluation will be accepted by the University. [388 C D] Ordinance 146 is comprehensive enough to include revaluation also for further action. The fact that two examiners were also the members of the Committee which recommended for revaluation cannot result in any bias even if they had been directly concerned with the original evaluation. It is true that in the second revaluation also there had been some changes between the original valuation and the revaluation results. However, it is not so glaring or demonstrably unconscionable as seen in the first revaluation. [390 D]

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: Special Leave Petition (Crl.) No. 2088 of 1979. From the Judgment and Order dated 25 7 1979 of the Allahabad High Court in Criminal Revision No. 1189/79. N. Ali Khan and A. D. Mathur for the Petitioner The Judgment of the Court was delivered by KRISHNA IYER, J. Counsel for the petitioner states that the sentence imposed upon his client for the offence under section 7 read with section 16 of the Prevention of Food Adulteration Act must be reduced because the adulterant, namely, prohibited coal tar dye, is, in his submission, non injurious or an innocent mix. Therefore, the imprisonment part of the sentence, it was urged, should be eliminated. It is true that the High Court has observed that the "colour which was mixed with powdered chillies" is not mentioned in the Public Analyst 's report to be injurious to human life. It does not follow that because it is not specifically mentioned to be injurious, it is non injurious. Absence of evidence is not equal to evidence of absence. For ought we know, the prohibition under the Act and the Rules has been imposed because it is harmful to human health. It is true that the High Court has, under a mis conception, reduced the sentence, but we cannot be pressurised further into following the wrong path. The special leave petition is dismissed. V.D.K. Petition dismissed.

HELD: The prohibition under the Prevention of Food Adulteration Act and the Rules has been imposed because it is harmful to human health. [312 G] Absence of evidence is not equal to evidence of absence. Non mention in the Public Analyst 's report that the "colour which was mixed with powdered Chillies" was injurious to human life does not amount to the adulterant being non injurious. When the High Court under this misconception has already reduced the sentence, this Court cannot under article 136 of the Constitution be pressurised further to follow the wrong path. [312 F H]

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Appeal No. 330 of 1960. Appeal from the judgment and decree dated March 18, 1954, of the Calcutta High Court in Appeal from Original, Decree No. 80 of 1947. section T. Desai and B. P. Maheshwari, for the appellants. B. Sen, N. R. Ghosh, Salil K. Datt and P. K. Ghosh, for the respondents Nos. 1 and 2. January 13, 1964. The Judgment of the Court was delivered by AYYANGAR J. This is an appeal preferred, by virtue of a certificate of fitness granted by the Calcutta High Court, against its judgment, by which the decree passed by the Subordinate Judge of Darjeeling was substantially affirmed. The plaintiffs are the appellants before this Court. The suit out of which the appeal arises was brought by the appellants claiming title to and the recovery of possession of a property known as the Azambad Tea Estate which comprised about 378 acres of land in Touzi No. 911 of the Darjeeling Collectors. This property was set out in Schedule A to the plaint and besides a claim was also made to certain other items of the movable and certain other tenures, but this appeal is not concerned with these others which were set out. in Schs. B and C to the plaint. 195 One Kazi Azam Ali was admittedly a full owner of this entire property and the proceedings giving rise to the appeal are concerned with the rights of his heirs to it. The plain tiffs claim their title on the basis of various purchases from the heirs of this Azam Ali. The contesting defendants were the Azamabad Tea Co. who also claim the entire property as transferees from the National Agency Co. Ltd., who too have been impleaded as defendants. The National Agency Co. Ltd. claim to have purchased the entire 16 as. interest in the property at a Court sale in pursuance of a decree obtained by them against Kazi Mohammed Ismail, the eldest son of Azam Ali. Various contentions were raised by the plaintiffs in challenge of the validity of the transactions by which the defendants claimed their title. But the learned Subordinate Judge repelled the plaintiffs ' claim and held that the purchase by the National Agency Co. Ltd. was valid and extended to the entire interest in the property and that in consequence the plaintiffs ' vendors had no title to convey to them any interest in the property. The plaintiffs ' claim of the property in respect of Sch. A was therefore dismissed. The plaintiffs preferred an appeal to the High Court and the learned Judges upheld the title of the plaintiffs to an 8 pies share in the property mentioned in Sch. A to the plaint but confirmed the decree of the Subordinate Judge as regards the rest. The learned Judges however granted a certificate of fitness to the plaintiffs on the strength of which the present appeal has been filed. The history of the transactions before the suit occupies a period of over 20 years and the facts in relation thereto are at once long, voluminous and complicated. But, for the disposal of the appeal and the points urged before us it is wholly unnecessary to set these out and we shall therefore confine ourselves to a narration of the bare outlines of the case along with those facts which are necessary to appreciate the contentions raised in support of the appeal. The property covered by the Tea Estate was granted by Government by way of lease to one Mudir and another for 30 years, the term to start on the 1st of April 1898. The grantees effected transfers of their lease hold and after several successive transfers the property was purchased in 196 1913 by one Kazi Azam Ali who got his name registered as a proprietor. It was Azam Ali who started the tea garden. constructed the requisite factories as accessories thereto and named it the Azamabad Tea Estate. Azam Ali had several children and among them 8 daughters and in consideration of gifts made to them, these daughters by a registered deed executed in 1909 relinquished their rights of succession to Azam Ali. They thus faded away from the picture and no more notice need be taken of them. Besides these 8 daughters, Azam Ali had 8 sons who survived him and were among his heirs, when he died on June 8, 1917. Mohammed Ismail was the eldest of these sons. Azam Ali also left behind him a daughter who was born after ' the relinquishment of 1909 and three widows. Admittedly the sons of Azam Ali, his widows and his last daughters were all his heirs entitled to his estate in the shares as prescribed by Muslim Law. On Azam Ali 's death his eldest son Ismail had his name entered in the Government records as the next in succession and at the time the thirty years term of the lease expired, the lease continued to remain in the name of Ismail alone. We now proceed to the transactions as a result of which the contesting defendants claim to have obtained the full title to the Tea Estate. Ismail made large borrowings and among them were some from the National Agency Co. Ltd. and for securing the loan he deposited with them the title deeds of the Tea Estate. It may be mentioned that the deposit was on the footing that he was the full owner of the 16 as. share of the property mortgaged. The amount due under the mortgage was not paid in time and the mortgagee filed a suit for the enforcement of its mortgage and prayed for the sale of the property for the realisation of the mortgage money. The suit was decreed as prayed for and the property was sold in execution of the final decree and was purchased by the mortgage decree holder on September 24, 1931. The sale was confirmed on November 13, 1931. This decree holder purchaser sold the property to the Azamabad Tea Estate the principal respondent before is. There was some little controversy as regards the reality and effectiveness of the transfer of the property from the National Agency Co. Ltd. to the Azamabad Tea Estate, 197 but nothing turns on this, for even if that transfer was not effective that would not help the plaintiffs so long as they could not displace the title of the National Agency Co. Ltd. under the latter 's court auction purchase. The case of the plaintiffs rested on the fact that Ismail who got himself registered as if he were a full proprietor of the lease hold interest in Touzi 911 was merely one of several co sharers of Azam Ali 's estate to whom it passed on his death. The lease hold which was his property was according to them inherited by all his heirs including Ismail, the seven other sons, the three widows and the daughter born after 1909. The term of the lease granted by the Government expired in 1928 and a renewed lease was granted in the name of Ismail alone. Rival contentions were urged as regards the effect of this circumstance on the right of Ismail. It was the case of the contesting respondents that the lease granted in 1928 in favour of Ismail was his sole and individual pro perty and even if for any reason the other heirs of Azam Ali had an interest in the previous lease hold, they did not have any such interest in the property covered by the fresh lease. On the other hand, the case of the plaintiffs was that by the renewal of the lease, Ismail obtained qua his co heirs the same interest as he formerly had in the lease of 1898. The renewal, they stated, was for the benefit not merely of Ismail but for everyone of his co heirs who still retained his or her interest in Azam Ali 's estate. On this basis the plaintiffs raised the contentions that when by the sale in execution of the mortgage decree obtained by the National Agency Co. they purchased the property mortgaged, it was only the interest of Ismail that passed to them and not those of his co sharers who were no parties to the mortgage, There is one further transaction to which we must advert before passing on to the next stage of the proceedings. After the mortgage by deposit of title deeds in favour of the National Agency Co., Ismail transferred his entire interest in the mortgaged property, that is, in the equity of redemption, to his wife Mst. Nazifannessa, by a deed dated May 6, 1930. Notwithstanding this deed and this transfer of the equity of redemption Mst. Nazifannessa was not made a party to the 198 mortgage suit by the National Agency Co. The plaintiffs who claim to have acquired Mst. Nazifannessa 's interest contended that by reason of the failure to implead Nazifannessa in the mortgage action, her right to redeem the mortgage was still in tact in spite of the mortgage decree and the sale in pursuance thereof, and on this footing made a claim in the alternative to redeem the mortgage in favour of the National Agency Co. and obtain possession after re demption. To complete the narrative of the relevant facts, very soon after the purchase in Court auction in execution of the mortgage decree, the heirs of Azam Ali brought a suit (58 of 1931) to set aside the decree and the sale in favour of the National Agency Co. Ltd. on various grounds collusion, fraud, the circumstance that Ismail was merely a co sharer entitled to about 2 1/2 as. share in the property and so could not mortgage more than that share, and that the decree could not bind a larger interest nor the sale convey anything more than that share, even if it conveyed any title to the property. This suit however did not proceed to trial, but was dismissed for default, in that the plaintiffs did not appear in Court on the date fixed for trial. The only other matter to be mentioned is that the plaintiffs have, by their purchases, acquired from the several co heirs, directly or mediately, the entire 16 as. share in the property assuming that their vendors had any such right. Armed with these purchases the plaintiffs filed this suit for the reliefs already indicated. The defences raised to the suit were three fold: (1) That Ismail was the sole proprietor of the Tea Estate at the date of the mortgage and consequently the entire interest was the subject of mortgage and so passed at the court sale. This was based on the provisions of the Crown Grants Act, now the Government Grants Act. It would be recollected that the thirty years lease of Touza 911 was renewed in 1928 and this renewal was made in the name of Ismail alone. Based on this feature a contention was raised that the grant of the lease created a new title in the grantee since the original lease in 199 which alone the heirs of Azam Ali might have had a share was extinguished by the termination of that lease by efflux of time. (2) The second line of defence was that Ismail, even if in fact or law was not the full owner, was an ostensible owner of the entire interest in the property and that the co heirs were estopped from questioning the validity of the mortgage of the entire interest effected by him under section 41 of the Transfer of Property Act and that in conse quence the sale in execution passed the entire 16 as. share to the purchaser. (3) Lastly, it was urged that the plaintiffs ' suit was liable to be dismissed by reason of the provisions of 0. IX, r. 9 of the Civil Procedure Code as the earlier Original Suit 58 of 1931 brought by the co heirs to set aside the sale under the mortgage decree had been allowed to be dismissed for default. The learned Judges of the High Court rejected the first two of the defences but held that except to the extent of an eight pies share which represented the interest of a co heir which was not affected by the proceeding in Suit 58 of 1931, the plaintiffs were precluded by 0. r. 9, Civil Procedure Code from disputing the sale in execution of mortgage decree by reason of the dismissal for default of Suit 5 8 of 1931. Before proceeding to set out the arguments addressed to us by Mr. Desai, learned counsel for the appellants, it might be convenient to dispose of the submissions made to us by Mr. Sen, learned counsel for the respondents, seeking to ,sustain the first two defences which were repelled by the High Court. The first of them was that by reason of the renewal of the lease in 1928 in the name of Ismail and the entry of his name as sole lessee in the revenue records, the leasehold became his sole property. Apart from the arguments about Ismail being the ostensible owner of the entire 16 as. share in the lease hold under the lease of 1898 which we shall consider a little later Mr. Sen did not dispute that 200 Ismail 's co heirs were entitled to their fractional shares in the property under the original lease. The acceptability of this argument regarding the renewed lease has to be determined on the basis of two factors first the intention of the parties, and here primarily of the grantor, as to the nature and quantum of the title intended to be conferred on or obtained by Ismail and, second, the provisions of the Crown, Grants Act which governed the grant on which reliance was placed as leading to that result. First, as to the intention of the parties. The original lease of 1898 was due to expireon March 31, 1928. On July 20, 1928 Mohd. Ismail made a petition to the Deputy Commissioner, Darjeeling by which after drawing the latter 's attention to the date on which the lease was to expire, he "respectfully solicited the favour of ' kindly granting a further lease of the said Estate for a further period of 30 years. " The Deputy Commissioner replied by letter dated August 10, 1928 sending Ismail the draft of the renewed lease for his approval and return adding "in the record of rights the following names have been recorded: 1. Kazi Mohammed Ismail 2 as.; 2. Kazi Isahaque 2 as.; 3. Kazi Yakub 2 as.; 4. Kazi Samoddoha 2 as.; 5. Kazi Nurul Huda 2 as.; 6. Kazi Badarudduza 2 as.; 7. Kazi Insaf Ali 2 as.; 8. Kazi Asfaque 2 as. ; Please mention the name in whose favour the lease will have to be issued." Ismail returned the draft lease with his approval but desired that the lease should be issued according to the name in the land register. We are unable to read this request as meaning that Ismail, contradicting what the Government said, wanted that the leasehold interest should be his sole property in which his co heirs who had interest in the earlier lease were to be denied all beneficial interest. It was thereafter that the lease was executed on February 1, 1929 in the name of Ismail to be operative from April 1, 1928 and was in terms in renewal of the previous 201 lease. In the circumstance, we are satisfied that the Gov ernment intended to grant a lease in favour of his co sharers as well, though the lease deed was in the name of Ismail alone. If Ismail intended to benefit himself at the expense of his co sharers and as we have said, we do not read his reply to the Deputy Commissioner as disclosing such an intention, the same was not made known to the Government. We are therefore unable to accept Mr. Sen 's submission based on the intention of the parties. He, however, submitted that whatever be the intention of the parties, by reason of section 3 of the Crown Grants Act Ismail 's title to the full 16 as. share in the leasehold could not be disputed. This section reads: "3. All provisions, restrictions, conditions and limitations over contained in any such grant or transfer as aforesaid shall be valid and take effect according to (their tenor, any rule of law, statute or enactment of the Legislature to the contrary notwithstanding. " If, as we have held. it was the intention of the Government in granting the renewal that the co heirs too should have the benefit of the lease we do not see how these provisions affect their beneficial interest in the lease. Nor are thereany clauses in the lease which preclude the existence of abeneficial interest in persons other than the lessee named. This point is therefore without substance and is rejected. The next point urged was based on section 41 of the Transfer of Property Act. It was said that Ismail was by reason of the entry in the revenue registers, which the co heirs did nothing to correct, ostensibly the full owner of the property and hence the mortgage by him as full owner and the sale in court auction in execution of the decree by the National Agency Co. Ltd. passed the full title to the Tea Estate and that the co heirs were consequently estopped from disputing the defendant 's right to the full 16 as. share in the property. In order that section 41 of the Transfer of Property Act could be attracted, the respondents should prove that Ismail was the ostensible owner of the property with the consent of his co sharers and besides that they took reason able care 202 to ascertain whether Ismail had the power to make a transfer of the full 16 as. interest. Now, the facts however were that except the property being entered in the revenue records in Ismail 's name, and that the management of the property was left by the co sharers with Ismail, there is not an iota of evidence to establish that Ismail was put forward by them as the ostensible owner of the property. It is manifest that the conduct of co sharers in permitting one of them to manage the common property does not by itself raise any estoppel precluding them from asserting their rights. The learned Judges have also pointed out that even the least enquiry by the mortgagee would have disclosed that Ismail was not the full owner and this finding was not seriously challenged before us. In this view it is unnecessary for us to consider the submissions made to us by Mr. Desai that section 41 was inapplicable to cases of sales in court auctions for the reason that what the court is capable of selling and what is sold in execution of a decree is only the right, title and interest of the judgment debtor and nothing more. We, therefore, hold that the learned Judges of the High Court rightly held that section 41 of the Transfer of Property Act afforded no defence to the respondents. The next and the only point remaining for consideration is whether the appellants ' suit is barred under the provisions of 0. r. 9, Civil Procedure Code. The part of this provision material for our purpose runs: "Where a suit is wholly or partly dismissed under rule 8, the plaintiff shall be precluded from bringing a fresh suit in respect of the same cause of action. " The learned Judges of the High Court have held that this provision barred the plaintiffs ' claim in the present suit except to the extent of an 8 pies share in the estate which belonged to Azifunnessa and Najifennessa, two of the daughters of Azam Ali, who on the death of their mother became entitled to that share. These two were not the parties to suit No. 58 of 1931 and hence the learned fudges held that their share (which was purchased 'by the plaintiffs) was unaffected by the dismissal of that suit. 203 The decision of the High Court in regard to this 8 pies share has become final and thus is outside controversy. The ,only question is whether the plaintiffs appellants are entitled to anything beyond this share. The suit, 58 of 1931, was instituted by 7 plaintiffs Ashfaq, Shamsuzzoha, Nurul Huda, Mohd. Yakub, these four being the sons of Azam Ali, two of his daughters Mahbuba Khatun and Habiba Khatun and one of his widows Bibi Marium. There were two defendants the National Agency Co. Ltd. the purchaser in court sale of the property under the mortgage decree, whose title was challenged and against whom reliefs were claimed and Mohd. Ismail who was a pro forma defendant. Ashfaq, The first plaintiff, died after the institution of the suit and certain of the parties already on record were recorded as his legal representatives. The allegations in the plaint briefly were that the 2nd defendant Mohd. Ismail was not tile sole proprietor or owner of the Azamabad Tea Estate and that for that reason, the mortgage in favour of the 1st defendant, the mortgage decree obtained by it and the sale thereunder passed to it no title except to the extent of 2 1/2 as. share belonging to Mohd. Ismail. The plaintiffs therefore prayed for a decree declaring (1) that Mohd. Ismail had only 2 1/2 as. share in the property and the remaining 132 1/2 as. share belonged to the plaintiffs; (2) that only 2 1/2 as. share was sold under the mortgage decree and purchased by the National Agency Co. Ltd. at the court sale. The suit was instituted on 28th November, 1931 and after the issues were settled, the suit was posted for trial on 22nd August, 1932, on which date the plaintiffs were absent, no witnesses on their behalf were present, and their pleader reported no instructions. The suit was therefore directed to be dismissed with costs in favour of the National Agency Co. Ltd. who was the only party present in Court. It may be mentioned that Mohd. Ismail never appeared during the hearing of the suit. 204 Before taking up for consideration certain points urged before us by Mr. Desai regarding the construction of 0. IX r. 9 C.P.C. we might dispose of a contention raised by him that Suit No. 58 of 1931 was filed fraudulently and collusively and the dismissal was the result of a settlement brought about collusively in order to defeat the plaintiffs ' rights. We consider that there is no factual basis to sustain, this plea for he could point to no definite proof in support, and the most he could do was to refer us to certain suspicious circumstances. We cannot obviously base any decision or rest any finding, on mere suspicion and we have no hesitation in saying that the submission does not deserve serious consideration. The next submission was that even the 212 as. share of Ismail did not pass under the sale in execution of the mortgage decree, because it was said Ismail had been, adjudicated an insolvent in Insolvency Case 38 of 1931 by the Dist. Judge Purnia, as a result of which the properties which were the subject of the court sale had vested in the official receiver before the relevant date. Though, no doubt, an allegation regarding this matter was made in the plaint and this was denied by the plaintiffs there is nothing in the judgments of the courts below or in the, evidence to indicate that the necessary facts were proved or that this point was urged with any seriousness at any stage of the proceedings until in this Court. We have therefore nothing beyond the bare allegations and denials and as the full facts in relation to this matter were not placed before the Court we hold that this plea is devoid of merits and does not merit consideration. It was next said that two of the plaintiffs in suit No. 58 of 1931, Nurul Huda and Habiba Khatun, a son and a daughter of Azam Ali were really adults but were shown in the cause title as minors represented by their respective natural guardians as their next friends and that as these adults could not in law be represented by persons purporting to act as their guardians they could not be held to be parties to the suit and hence their interests could not be affected by the dismissal of the suit. This also is one of the matters in respect of which the plaintiffs beyond a mere pleading which was denied, made no grievance in the courts 205 below and the facts in relation to this issue, namely, the age ,,of the two plaintiffs at the date of the plaint not having been clearly proved, we do not find it possible to entertain the plea at this stage. Mr. Desai, then submitted that Ashfaq who had figured as the first plaintiff in suit No. 58 of 1931 had already on April 18, 1931 transferred his 2 as. 13 gandas and odd share in Touzi No. 911 to one Pir Baksh from whom the plaintiff obtained a conveyance by a deed dated September 2, 1943 of what he had purchased from Ashfaq. For this reason he urged that on the findings on the merits of the title in favour of the plaintiffs on the first two defenses we have dealt with earlier the plaintiffs should have been granted .a decree to this share of Ashfaq in addition to the 8 pies share decreed to them by the High Court. No doubt, if this transaction were made out and was real, it would stand on the same footing as the 8 pies share in regard to which a decree was granted in favour of the plaintiffs by the judgment now under appeal. We shall however consider this matter after dealing with the point urged as regards the construction of 0. r. 9, Civil Procedure Code, which was his main submission and which, if upheld, would entirely eliminate the bar under this provision of law. On this the first submission was that the rule which spoke of the "plaintiff" being precluded from bringing a fresh suit created merely a personal bar against the plaintiff in the first suit and that in the absence of words referring to the representatives of the plaintiff or those claiming under the plaintiff as in section 11 or section 47 of the Civil Procedure Code, the bar was not attracted to cases where the subsequent suit was by the heirs and assigns of that plaintiff. In support of this submission Mr. Desai invited our attention to the observations of Das J. in Gopi Ram vs Jagannath Singh(1) where this argument was characterised as a weighty one and examined elaborately. Though the learned Judge decided this matter on quite a different line of reasoning, he referred to various earlier decisions which appeared to him to favour the view submitted to us by Mr. Desai and expressed his hesitation in (1) L.L.R. 9 Pat. 447 at P. 454. 206 rejecting that construction. We are not however impressed by the argument that the ban imposed by 0. r. 9 creates merely a personal bar or estoppel against the particular plaintiff suing on the same cause of action and leaves the matter at large for those claiming under him. Beyond the absence in 0. r. 9 of the words referring "to those claiming under the plaintiff" there is nothing to warrant this argument. It has neither principle, nor logic to commend it. It is not easy to comprehend how A who had no right to bring a suit or rather who was debarred from bringing a suit for the recovery of property could effect a transfer of his rights to that property and confer on the transferee a right which he was precluded by law from asserting. There are, no doubt, situations where a person could confer more rights on a transferee than what he possessed but those are clearly defined exceptions which would not include the case now on hand. This argument was addressed to the High Court and the learned Judges characterised it as startling, a view which we share. The rule would obviously have no value and the bar imposed by it would be rendered meaningless if the plaintiff whose suit was dismissed for default had only to transfer the property to another and the latter was able to agitate rights which his vendor was precluded by law from putting forward. Aga in to say that an heir of the plaintiff is in a better position than himself and that the bar lapses on a plaintiff 's death, does not appeal to us as capable of being justified by any principle or line of reasoning. In our opinion, the word "plaintiff ' in the rule should obviously, in order that the bar may be effective, include his assigns and legal representatives. It was next urged that 0. r. 9 precluded a second suit in respect of "the same cause of action" and that the cause of action on which Suit 58 of 1931 was laid and the present suit Title suit 18 of 1943 was not the same and so, the bar was not attracted. In view of this argument it is necessary to examine them cause of action on which the present suit has been filed and compare and contrast with that in Suit 58 of 1931. Closely analysed the material allegations to found the cause of action on which reliefs were claimed in the present suit 207 were (i) That the Tea Estate was originally the property of Azam Ali. When he died his estate was inherited by his 8 sons, his widows and a daughter. That the registration of the estate in the name of Md. Ismail was as a co sharer, the property belonging beneficially to all the heirs. This position was not altered by the termination of the first lease and its renewal in 1928 for a further period of 30 years. All the co heirs lived as a joint family with a common mess and hence there was no question of any adverse possession by Md. Ismail whose possession was not as sole proprietor or exclusive. The suit on the mortgage was fraudulent and collusive, by Ismail colluding with the mortgagee to defraud his co heirs. Details were mentioned as evidence of the fraud and collusion. The sale in pur suance of the decree which was passed ex parte was also fraudulent. On the date of the auction Ismail had no title even to the 2 1/2 as. share because of his adjudication as an insolvent earlier. The manner in which the 8 pies share of the daughters was obtained by the plaintiff was set out, and similarly the purchase by them through Pir Baksh of the share of Ashfaq. The other purchases by the plaintiffs whereby they claimed to have obtained the 16 as. share in the Tea Estate were set out. The plaint then went on to refer to suit 58 of 1931 and set out their case as regards the nature of that litigation and its effect. Lastly, they pleaded that they had obtained possession of the Tea gardens on October 10, 1934 and that on the next day the defendants moved the Magistrate for an order under section 144, Criminal Procedure Code and that the Magistrate had made an order against the plaintiffs restraining them from interfering with the possession of the defendants which necessitated their bringing the suit for the reliefs we have set out earlier. We have already summarised the material allegations which were made in Suit 58 of 1931. The material difference between the cause of action alleged in the present suit consists only in the addition of the allegations about the possession and dispossession in October, 1934. This suit is based on the title of the plaintiffs by reason of their purchases and admittedly their vendors would have nothing to convey if the court sale conveyed, as it purported to 208 convey, the full 16 as. interest in the Tea garden to the National Agency Co. Ltd. It was because of this that allegations were made to sustain their title and this could be done only if they established want of title to the extent of 16 as share in Ismail, the consequent ineffectiveness of the mortgage effected by Ismail and of the decree obtained in pursuance thereof and of the court sale in execution of that decree, being confined at the most to 2 1/2 as. share belonging to Ismail. These allegations which were fund amental to the plaintiffs ' case were identical with those which had been made in suit No. 58 of 1931. Bearing these features in mind, the proposition that Mr. Desai submitted for our acceptance was briefly this. A cause of action is a bundle of facts on the basis of which relief is claimed. If in addition to the facts alleged in the first suit, further facts are alleged and relief sought ,on their basis also, and he explained the additional facts to be the allegations about possession and dispossession in October, 1934, then the position in law was that the entire complexion of the suit is changed with the result that the words of 0. r. 9 "in respect of the same cause of action" are not satisfied and the plaintiff is entitled to reagitate the entire cause of action in the second suit. In support of this submission, learned counsel invited our attention to certain observation in a few decisions to which we do not consider it necessary to refer as we do not see any substance in the argument. We consider that the test adopted by the Judicial Committee for determining the identity of the cause of action in the two suits in Mohammed Khalil Khan and Ors. Mahbub Ali Mian and Ors. (1) is sound and expressescorrectly the proper interpretation of the provision. In that case Sir Madhavan Nair, after an exhaustive discussion of the meaning of the expression "same cause of action" which occurs in a similar context in para (1) of O. 11 r. 2 of the Civil Procedure Code, observed: "In considering whether the cause of action in the subsequent suit is the same or not, as the cause of action in the previous suit, the test (1)75 1. A. 121. 209 to be applied is: are the causes of action in the two suits in substance not technically identical?" The learned Judge thereafter referred to an earlier decision of the Privy Council in Soorijamonee Dasee vs Suddanund(1) and extracted the following passage as laying down the approach to the question : "Their Lordships are of opinion that the term 'cause of action ' is to be construed with re ference rather to the substance than to the form of action. . .". Applying this test we consider that the essential bundle of facts on which the plaintiffs based their title and their right to relief were identical in the two suits. The property sought to be recovered in the two suits was the same. The title of the persons from whom the plaintiffs claimed title by purchase, was based on the same facts viz., the position of Md. Ismail quoad his co heirs and the beneficial interests of the latter not being affected or involved in the mortgages, the mortgage decree and the sale in execution thereof. No doubt, the plaintiff set up his purchases as the source of his title to sue, but if as we have held the bar under 0. r. 9 applies equally to the plaintiff in the first suit and those claiming under him, the allegations regarding the transmission of title to the plaintiffs in the present suit ceases to be material. The only new allegation was about the plaintiffs getting into possession by virtue of purchase and their dispossession. Their addition, however, does not wipe out the identity otherwise of the cause of action. It would, of course, have made a difference if, without reference to the antecedent want of fun title in Ismail which was common to the case set up in the two plaints in Suit 58 of 1931 and Suit 18 of 1943, the plaintiffs could, on the strength of the possession and dispossession or the possessory title that they alleged, have obtained any relief. It is, however, admitted that without alleging and proving want of full title in Md. Ismail the plaintiffs could be granted no relief in their present suit. (1) ,315. 134 59S.C 14 210 The question is whether the further allegations about possession in October, 1934 have really destroyed the basic and substantial identity of the causes of action in the two suits. This can be answered only in the negative. The learned Judges of the High Court therefore correctly held that the suit was substantially barred by O. IX. It now remains to consider the claim of the plaintiffs to the 2 annas 13 odd gundas share of Ashfaq. In paragraph 52 of their plaint the plaintiffs stated that by a registered sale deed executed on April 18, 1931 Ashfaq, the son of Azam Ali sold the entire interest which he possessed in the Azamabad Tea Estate to Pir Baksh in pursuance of a Bainama dated April 7, 1930 and put him in possession, and in the succeeding paragraph they set out their purchases of this share by a Kabala dated September 2, 1943. In the joint written statement filed on behalf of the defendants 1 and 2 these allegations were controverted. The execution of the sale deed in favour of Pir Baksh was denied and it was further stated that even if the sale deed were proved to have been executed it was a sham and nominal transaction and therefore inoperative to pass title. Though no specific issue in relation to this sale to Pir Baksh was raised, there was a general issue (Issue No. 8) which related to the plaintiff 's acquiring title to the Tea Estate. Ile sale deed by Ashfaq was filed and marked as exhibit 12(i) and the sale in favour of the plaintiffs by Pir Baksh as exhibit 12(c). The effect however of this sale to Pir Baksh on the rights of the plaintiffs to relief does not appear to have been raised before the learned trial Judge. It may be pointed out that the learned trial Judge held that Ismail was the full owner of the property under the lease granted in 1928, by reason of the provisions of the Crown Grants Act and even if this were not so, he held that his co heirs had consented to put him forward as the ostensible owner of the property with the result that they were ' estopped from impeaching the mortgage and the sale of the property in execution of the mortgage decree. It is therefore possible that because of the view which the learned trial Judge was inclined to take of the title of Md. Ismail, the plaintiffs did not seriously put forward their rights under their purchase from Pir Baksh, because if the learned trial Judge was right, the sale by Ashfaq to Pir Baksh even if real 211 would not have helped the plaintiffs to obtain any relief. In this connection it may be pointed that the plaintiffs claim to the 8 pies share which was allowed in their favour by the High Court, was not pressed in the trial court. Even in the High Court, however, the point arising from the sale by Ashfaq to Pir Baksh does not seem to have been pressed. We shall presently advert to and examine the submissions made to us by Mr. Sen as regards the merits of this claim to the share of Ashfaq, but before doing so we must refer to a point raised by Mr. Sen which necessitated a prolonged adjournment of the appeal after the main arguments were heard. After pointing out that the plaintiffs did not agitate or press before the courts below any special right based on the purchase of Ashfaq 's share through Pir Baksh, he submitted that this might possibly have been because the property covered by the sale deed exhibit 12 (i) did not comprise Touza No. 911 the Azamabad Tea Estate. There was scope for this submission because in the record as printed for the use of this Court, the Schedule annexed to the sale deed exhibit 12(i) was not printed but only the portion containing the description of the parties and the words of conveyance, with the result that Mr. Desai was unable to make out whether as a fact Ashfaq 's interest in the suit property was sold under exhibit 12(i). To make matters worse the Schedule to the sale deed of 1943 executed by Pir Baksh was also not translated and printed in the record prepared for the appeal. In view, however, of the categorical statement in the plaint as regards the indentity of the property conveyed under exhibit 12(i) with Ashfaq 's share in the Azamabad Tea Estate, we considered that the appellant 's submission could not be rejected as frivolous. We therefore acceded to the request of Mr. Desai and called foe the original of exhibit 12(i) from the High Court so that counsel might make submissions to us as regards the identity of the property conveyed. The document was accordingly obtained 'and translated for the use of the Court and when the appeal was again placed before us Mr. Sen admitted that the property conveyed by exhibit 12(i) was Ashfaq 's 2 as. 13 gundas odd interest in Touza No. 911. 212 Coming now to the merits of the plaintiff 's claim, it is common ground that if the sale by Ashfaq were real and intended to pass title to Pir Baksh, the plaintiffs would be entitled to a decree for a declaration that in addition to the 8 pies share granted to them by the High Court, they would be entitled to a further 2 as. 13 gundas share of Ashfaq in the plaint A Schedule property. Mr. Sen 's submission, however, was that we should not entertain or give effect to this claim, because several circumstances throw grave suspicion on the reality of the transaction, and that in any event the claim could not be accepted without careful scrutiny of the facts. Having regard to the definite case raised in the pleadings, we are not disposed to reject the claim merely because the same was not pressed in the courts below. Besides we cannot ignore the circumstance that the sale deeds exhibit 12(i) and 12(c) on which the claim was based were filed in the trial court, and Pir Baksh was examined to formally prove these deeds as the 31st witness for the plaintiff. Moreover, even though as regards certain other transfers, the trial Judge recorded findings that they were nominal, there was no such finding as regards the sale by Ashfaq. In view of these features, we have decided not to reject the claim of the plaintiffs based on this ground. There are, however, certain features which throw some suspicion on the reality of the transaction which Mr. Sen pressed before us which have led us to desist from ourselves passing a decree for this additional share in their favour. The circumstances to which Mr. Sen drew our attention were these; (i) though Ashfaq executed the sale deed exhibit 12(i) on April 18, 1931, he figured as the first plaintiff in Suit 58 of 1931 which was filed on 28th November, 1931, without adverting to the sale, a piece of conduct certainly not consistent with the sale being real and intended to pass title; (2) though in the plaint the necessary averments were made regarding their obtaining the share of Ashfaq through Pir Baksh, the claim under this head was not pressed before the trial court; (3) when the plaintiffs preferred an appeal to the High Court from the total dismissal of the suit, they did not raise any specific ground touching their right to this share, nor were any argument 213 addressed to the High Court on this point; and (4) there had been no mutation in the revenue records when this sale was effected and Pir Baksh who was examined as a witness admitted this fact. These circumstances are certainly capable of explanation, but they show that the claim of the plaintiffs cannot be accepted by us straightaway and a decree passed in their favour. In these circumstances, we consider that the proper order to pass would be to remit the matter to the trial Court for recording a finding as regards the reality of the sale on the evidence already on the record and to pass an appropriate decree in the suit, that is, if the sale under exhibit 12(i) were held to be real, the plaintiffs would be entitled in addition to the 8 pies share decreed to them by the High Court, to a further 2 as 13 gondas odd share belonging to Ashfaq which they obtained under exhibit 12(c) through Pir Baksh, and in the event of the sale not being held to be real to no more than what the High Court has decreed. With this modification, the appeal is dismissed with costs. Appeal dismissed.

The property covered by the Tea Estate was granted by the Government by way of lease in 1898 for 30 years. In 1913 it was purchased ' by Azam Ali. When he died in 1917, he left behind 8 sons, 9 daughters and 3 widows. The name of Ismail, his eldest son, was entered in the official records as next in succession. Ismail borrowed considerable sums from National Agency Co. Ltd., and for securing the same, deposited the title deeds of the Tea Estate on the footing that he was its full owner. As the amount under the mortgage was not paid, a suite was filed for realisation of the amount by sale of mortgage property. 193 The suit was decreed and in execution the property was auctioned and sale was confirmed in 1931 in favour of the decree holder who sold the same to Azamabad Tea Estate, the principal respondent in this case. The heirs of Azam Ali brought suit No. 58 of 1931 to set aside the decree and sale in favour of the National Agency Co. Ltd., on ,various grounds but that suit was dismissed for default. The suit out of which the present appeal has arisen was filed subsequently. The plaintiffs appellants who claimed title under purchasers 'for the heirs of Azam Ali challenged the validity of the transactions by which the National Agency Co. Ltd. claimed to have purchased the entire 16 annas interest in the property at the court sale in pursuance ,of a decree obtained by them against Ismail. The trial Court held that the purchase made by the National Agency Co. Ltd. was valid and extended to the entire interest in the property and hence the venders of the plaintiffs had no title to convey to them any interests in the property. The High Court in appeal disagreed with this finding but dismissed the appeal on other grounds except to the extent of an 8 pies share in the property. The appellants came to this Court on a certificate of fitness granted by the High Court. The points raised before this Court were whether the High Court was right in holding that the present suit was barred by O. IX, r. 9 on the ,ground that when suit No. 58 of 1931 was dismissed in default, no action was taken to get it restored, this was raised by the respondent and whether in any event their claims to the 2 as 13 odd gundas share of Ashfaq, son of Ismail, should not have been decreed. HELD (i) that the suit was substantially barred by 0. TX, r. 9. The essential bundle of facts on which the plaintiffs based their title and their right to relief were identical in the two suits the property sought to be recovered in the two suits was the same. The title of the ,persons from whom the plaintiffs claimed title by purchase was based ,on the same facts. The additional allegation about possession in October 1934 did not really destroy the basic and substantial identity of the ,causes of action in the two suits. The ban imposed by 0. IX, r. 9 does not create merely a personal bar or estoppel against the particular plaintiff suing on the same cause ,of action and does not leave the matter at large for those claiming under him. The word "plaintiff" in the rule includes his assigns and legal representatives. (ii)that when the Government granted the lease in 1928, the lease was granted not only in favour of Ismail but also in favour of the ,other co sharers although the name of Ismail alone was mentioned in the lease deed. The provisions of section 3 of the Crown Grants Act did not affect the beneficial interest in the lease. Section 41 of the Transfer of Property Act did not help the respondent as there was no evidence to show that Ismail was put forward by 134 159 S.C. 13 194 the other co sharers as the ostensible owner of the property. The conduct of the co sharers in permitting Ismail to manage the common property did not by itself raise any estoppel precluding them from asserting their rights. Even a cursory enquiry by the mortgagee would have disclosed that Ismail was not the full owner. As regards the contention of the appellants that they should have been granted a decree to the extent of 2 As. 13 odd gundas share of Ashfaq in addition to the 8 pies share decreed to them by the High Court, the case was ordered to be remitted to the trial Court for giving its finding regarding the reality of the sale by Ashfaq. Gopi Ram vs Jagannath Singh, I.L.R. 9 Pat. 447, Mohammad Khalil Khan vs Muhbub Ali Mian, 75 I.A. 121 and Soorijomonee Dasee vs Suddanund, (1873) 12 Ben. L.R. 304, referred to.

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Appeal Nos. 266 267 of 1993. From the Judgment and Order dated 8.2.91 & 22.3.91 of the Central Administrative Tribunal Principal Bench, New Delhi in O.A. No. 2540/89 & M.P. No. 219 of 1991. K.T.S. Tulsi, Additional Solicitor General B. Parthasarthy, P. Parmeshwaran and C.V.S. Rao for the Appellants. Indu Malhotra for the Respondent. The Judgment of the Court was delivered by MOHAN, J. Leave granted. The respondent, while working as Income Tax Officer, Muktsar during the year 1982 83 completed certain assessments. A charge memorandum dated 2.5.1989 was served on him to the effect it was proposed to hold an inquiry against him under Rule 14 of the Central Civil Services (Classification, Central & Appeal) Rules, 1965. A statement of article of charge framed against him was to the following effect : STATEMENT OF ARTICLE OF CHARGE FRAMED AGAINST, SHRI K.K. DHAWAN, A GROUP 'A ' NOW POSTED AS ASSISTANT COMMISSIONER OF INCOME TAX, BOMBAY. Article I Shri K.K. Dhawan while functioning as I.T.O. "A" 300 Ward, Muktsar during 1982 1983 completed nine assessments in the case of : (1) M/s Chananna Automobiles, (2) N/s Gupta Cotton Industries, (3) M/s Ajay Cotton Industries, (4) M/s National Rice Mills, (5) M/s Tek Chand Buchram, (6) M/s Tilak Cotton Industries, (7) M/s Chandi Ram Behari Lal, (8) M/s Phuman Mal Chandi Ram and (9) M/s Modern Tractors in an irregular manner, in undue haste and apparently with a view to conferring undue favour upon the assessees concemed By his above acts Shri Dhawan failed to maintain absolute integrity and devotion to duty and exhibited a conduct unbecoming of a Govt. servant, thereby violating provisions of Rules 3(1) (i), 3(1) (ii) and 3(1) (iii) of the CCS (Conduct) Rules, 1964. This was accompanied by a statement of imputation of his misconduct or misbehaviour in support of the article of charge framed against him. In each of the nine cases of the assesses above referred to, the details relating to misconduct or misbehaviour were furnished. Therefore, it was charged that the respondent had violated the provisions of Rule 3(1)(i), 3(1)(ii) and 3(1)(iii) of the Central Civil Services (Conduct) Rules, 1964. The necessary documents in support of these allegations were also enclosed. Against the said memorandum dt. 2.5.1989, the respondent preferred an application O.A. No. 2540/89 before the Central Administrative Tribunal, New Delhi praying for a stay of the disciplinary proceedings and to consider his case for promotion on merits without resort to the sealed cover procedure. 301 By its order dt. 8.2.1991, Central Administrative Tribunal, Principal Bench, New Delhi directed the respondent Union of India to open the sealed cover immediately and implement the recommendations of the Departmental Promotion Committee in so far as it pertained to the petitioner and to promote him to the post of Deputy Commissioner of Income Tax if he was found fit for promotion within two weeks from the date of said order. Thereafter, by a detailed judgment dated 22.3.1991, the Tribunal relying on S.L.P. (C) Nos. 2635 36/89 in Civil Appeal No. 4986 87/90, held that the action taken by the officer was quasi judicial and should not have formed the basis of disciplinary action. Therefore, the application was allowed and the impugned memorandum dated 2.5.1989 was quashed. The earlier order dated 8.2.1991 to open the sealed cover and implement the recommendations of Departmental Promotion Committee was made absolute. Aggrieved by these two orders, the present special leave petitions have been preferred. The teamed counsel for the appellant Shri K.T.S. Tulsi submits as under: (i) That in a case where disciplinary proceedings are pending against the respondent, the procedure of opening the sealed cover should not have been resorted to. Otherwise, it would amount to putting a premium on misconduct. (ii)The Tribunal failed to appreciate the ratio of the order in C.A. Nos. 4986 87/90. In that case, the enquiry report showed that the charge framed against the officer had not been proved. That is entirely different from holding that in a case of quasi judicial action taken by the Officer no disciplinary action could be taken. The true purport of that observation is only to buttress the earlier finding that the charge had not been proved. Therefore, reliance ought not to have been placed on this ruling which turned on the peculiar facts and circumstances of that case. 302 (iii)Though nine cases were cited in the charge memorandum, only one of the cases had been discussed. (iv)Lastly, it is submitted that the respondent is charged for violation of Rule 3(1)(i), 3(1)(ii) and 3(1)(iii) of Central Civil Services (Conduct) Rules, 1964. Therefore, if the conduct of the respondent could be brought within the scope of the Rules, immunity from the disciplinary action cannot be claimed. In support of these submissions, reliance is placed on Union of India & Ors. vs A.N. Saxena, ; In Civil Appeal No. 560 of 1991, the peculiar facts art different; in disregard to the instructions of the Central Board of Direct Taxes, refund of taxes was ordered. Further, there was no allegation of corrupt motive or to oblige any person on account of extraneous considerations. Therefore, that ruling is distinguishable. The respondent would try to support the impugned order contending that the opening of the sealed cover was correctly ordered because on the date when the Departmental Promotion Committee met in March 1989, no charge sheet had been served on the respondent. The charge memorandum dated 2.5.1989 came up to be served only on 5.5.1989. Therefore, following the earlier procedure such a direction was given. This is a case in which the respondent was exercising quasi judicial functions. If the orders were wrong the remedy by way of an appeal or revision could have been resorted to. Otherwise, if in every case of wrong order, disciplinary action is resorted to, it would jeopardize the exercise of judicial functions. The immunity attached to the officer while exercising quasi judicial powers will be lost. Rightly, therefore, the Tribunal relied on Civil Appeal Nos. 4986 87/90 where this Court took the view that no disciplinary action can be taken in respect of exercising quasi judicial functions. To the same effect in Civil Appeal No. 560/91 the decision relied on by the appellant namely Union of India & Ors., ; (supra) has no application to the instant case. The charge memorandum dated 2.5.1989 states as follows 303 MEMORANDUM "The President proposes to hold an inquiry against Shri K.K. Dhawan under Rule 14 of the Central Civil Services (Classification, Central and Appeal) Rules, 1965. The substance of the imputations of misconduct or misbehaviour in respect of which the inquiry is proposed to be held is set out in the enclosed statement of article of charge. " At this stage, we will refer to Rule 3(1)(i) , 3(1)(ii) and 3(1)(iii) of the Central Civil Services (Conduct) Rules, 1964 which are as under Rule 3 (1) : Every government servant shall at all time (i) maintain absolute integrity; (ii) maintain devotion to duty and (iii) do nothing which is unbecoming of a government servant. The substance of the charge is the completion of nine assessments in an irregular manner, hastily with a view to confer undue favour upon the various assessees. By such act, the respondent failed to maintain absolute integrity and devotion to duty and exhibited a conduct unbecoming of government servant. Certainly, it cannot be contended that concerning the violation of these rules, no disciplinary action could be taken. However, what is urged is that in so far as the respondent was exercising quasi judicial functions, he could not be subject to disciplinary action. The order may be wrong. In such a case, the remedy will be to take up the matter further in appeal or revision. The question, therefore, arises whether an authority enjoys immunity from disciplinary proceedings with respect to matters decided by him in exercise of quasi judicial functions? In Govinda Menon vs Union of India, ; , it was contended that no disciplinary proceedings could be taken against appellant for acts or omissions with regard to his work as Commissioner under Madras Hindu Religious and Charitable Endowments Act, 1951. Since the 304 orders made by him were quasi judicial in character, they should be challenged only as provided for under the Act. It was further contended that having regard to scope of Rule 4 of All India Services (Discipline and Appeal) Rules, 1955, the act or omission of the Commissioner was such that appellant was not subject to the administrative control of the Government and therefore, the disciplinary proceedings were void. Rejecting this contention, it was held as under : "It is not disputed that the appropriate Government has power to take disciplinary proceedings against the appellant and that he could be removed from service by an order of the Central Government, but it was contended that I.A.S. Officers are governed by statutory rules, that ,any act or omission ' referred to in Rule 4(1) relates only to an act or omission of an officer when serving under the Government, and that 'serving under the Government ' means subject to the administrative control of the Government and that disciplinary proceedings should be, therefore, on the basis of the relationship of master and servant. It was argued that in exercising statutory powers the Commissioner was not subject to the administrative control of the Government and disciplinary proceedings cannot, therefore, be instituted against the appellant in respect of an act or omission committed by him in the course of his employment as Commissioner. We are unable to accept the proposition contended for by the appellant as correct. Rule 4(1) does not impose any limitation or qualification as to the nature of the act or omission in respect of which disciplinary proceedings can be instituted. Rule 4(1) (b) merely says that the appropriate Government competent to institute disciplinary proceedings against a member of the Service would be the Government under whom such member was serving at the time of the commission of such act or omission. It does not say that the act or omission must have been committed in the discharge of his duty or in the course of his employment as a Government servant. It is, therefore, open to the Government to take disciplinary proceedings against the appellant in respect of his acts or omissions which cast 305 a reflection upon his reputation for integrity or good faith or devotion to duty as a member of the service. It is not disputed that the appellant was, at the time of the alleged misconduct, employed as the First Member of the Board of Revenue and he was at the same time performing the duties of Commissioner under the Act in addition to his duties as the First Member of the Board of Revenue. In our opinion, it is not necessary that a member of the Service should have committed the alleged act or omission in the course of discharge of his duties as a servant of the Government in order that it may form the subject matter of disciplinary proceedings. In other words, if the act or omission is such as to reflect on the reputation of the officer for his integrity or good faith or devotion to duty, there is no reason why disciplinary proceedings should not be taken against him for that act or omission even though the act or omission relates to an activity in regard to which there is no actual master and servant relationship. To put it differently, the test is not whether the act or omission was committed by the appellant in the course of the discharge of his duties as servant of the Government. The test is whether the act or omission has some reasonable connection with nature and condition of his service or whether the act or omission has cast any reflection upon the reputation of the member of the Service for integrity or devotion to duty as a public servant. We are of the opinion that even if the appellant was not subject to the administrative control of the Government when he was functioning as Commissioner under the Act and was not the servant of the Government subject to its orders at the relevant time, his act or omission as Commissioner could form the subject matter of disciplinary proceedings provided the act or omission would reflect upon his reputation for integrity or devotion to duty as a member of the service. " In this context reference may be made to the following observations of Lopes, LJ. in Pearce vs Foster, [1866] 17 OBD 536, p.542. "If a servant conducts himself in a way inconsistent with the 306 faithful discharge of his duty in the service, it is misconduct which justifies immediate dismissal. That misconduct, according to my view, need not be misconduct in the carrying on of the service of the business. It is sufficient if it is conduct which is prejudicial or is likely to be prejudicial to the interests or to the reputation of the master, and the master will be justified, not only if he discovers it at the time, but also if he discovers it afterwards, in dismissing that servant." (emphasis supplied) Concerning, the exercise of quasi judicial powers the contention urged was to the following effect : "We next proceed to examine the contention of the appellant that the Commissioner was exercising a quasi judicial function in sanctioning the leases under the Act and his order, therefore, could not be questioned except in accordance with the provisions of the Act. The proposition put forward was that quasi judicial orders, unless vacated under the provisions of the Act, are final and binding and cannot be questioned by the executive Government through disciplinary proceedings. It was argued that an appeal is provided under S.29(4) of the Act against the order of the Commissioner granting sanction to a lease and that it is open to any party aggrieved to file such an appeal and question the legality or correctness of the order of the Commissioner and that the Government also may in revision under S.99 of the Act examine the correctness or legality of the order. it was said that so long as these methods were not adopted the Government could not institute disciplinary proceedings and reexamining the legality of the order of the Commissioner granting sanction to the leases. " That was rejected as under: 'The charge is, therefore, one of misconduct and recklessness disclosed by the utter disregard of the relevant provisions of S.29 and the Rules thereunder in sanctioning the leases. On behalf of the respondents it was argued 307 both by Mr. Sarjoo Prasad and Mr. Bindra that the Commissioner was not discharging quasi judicial functions in sanctioning leases under S.29 of the Act, but we shall proceed on the assumption that the Commissioner was performing quasi judicial functions in granting leases under S.29 of the Act. Even upon that assumption we are satisfied that the Government was entitled to institute disciplinary proceedings if there was prima facie material for showing recklessness or misconduct on the part of the appellant in the discharge of his official duty. It is true if the provisions of S.29 of the Act or the Rules are disregarded the order of the Commissioner is illegal and such an order could be questioned in appeal under S.29 (4) or in revision under S.99 of the Act. But in the present proceedings what is sought to be challenged is not the correctness or the legality of the decision of the Commissioner but the conduct of the appellant in the discharge of his duties as Commissioner. The appellant was proceeded against because in the discharge of his functions, he acted in utter disregard of the provisions of the Act and the Rules. It is the manner in which he discharged his functions that is brought up in these proceedings. In other words, the charge and the allegations are to the effect that in exercising his powers as Commissioner the appellant acted in abuse of his power and it was in regard to such misconduct that he is being proceeded against. It is manifest, therefore, that though the propriety and legality of the sanction to the leases may be questioned in appeal or revision under the Act, the Government is not precluded from taking disciplinary action if there is proof that the Commissioner had acted in gross recklessness in the discharge of his duties or that he failed to act honestly or in good faith or that he omitted to observe the prescribed conditions which are essential for the exercise of the statutory power. We see no reason why the Government cannot do so for the purpose of showing that the Commissioner acted in utter disregard of the conditions prescribed for the exercise of his power or that he was 308 guilty of misconduct or gross negligence. We are accordingly of the opinion that the appellant has been unable to make good his argument on this aspect of the case. " The above case, therefore, is an authority for the proposition that disciplinary proceedings could be initiated against the government servant even with regard to exercise of quasi judicial powers provided : (i) The act or omission is such as to reflect on the reputation of the government servant for his integrity or good faith or devotion to duty, or (ii)there is prima facie material manifesting recklessness or misconduct in the discharge of the official duty, or (iii)the officer had failed to act honestly or in good faith or had omitted to observe the prescribed conditions which are essential for the exercise of statutory power. We may also usefully refer to two English decisions. Thayre vs The London, Brighton and South Coast Railway Company, states: "Dishonesty ' included dishonesty outside the service of the company as well as dishonesty towards the company." In Thompson vs British Berna Motor Lorries Limited 33 T.L.R. 187 at page 188, it has been held as under : "It was the duty of the servant to render proper, full and clear accounts to his principals, and it was the duty of a servant to render prompt obedience to the lawful orders of his master. in this case the plaintiff had failed in both respects. There was no question as to the plaintiff 's honesty, but he had been negligent. " The Tribunal has chosen to rely on Civil Appeal Nos. 4986 87/90. The order in that case clearly shows the ultimate conclusion was that the charge framed against the delinquent officer had not been established. In support of that conclusion, it was observed as under 309 "We are also of the view that the action taken by the appellant was quasi judicial and should not have formed the basis of disciplinary action. " We do not think where to buttress the ultimate conclusion, this observation was made, that could ever be construed as laying the law that in no case disciplinary action could be taken if it pertains to exercise of quasi judicial powers. Then, we come to Civil Appeal No. 560/91 to which one of us (Mohan, J.) was a party. The ruling in this case turned on the peculiar facts. Nevertheless, what we have to carefully notice is the observation as under : "On a reading of the charges and the allegations in detail learned Additional Solicitor General has fairly stated that they do not disclose any culpability nor is there any allegation of taking any bribe or to trying to favour any party in making the orders granting relief in respect of which misconduct is alleged against the respondent. " The above extract will clearly indicate that if there was any culpability or any allegation of taking bribe or trying to favour any party in exercise of quasi judicial functions, then disciplinary action could be taken. We find our conclusion is supported by a following observations found in the said order at page 3: "In our view, the allegations are merely to the effect that the refunds were granted to unauthorized instructions of the Central Board of Direct Taxes. There is no allegation, however, either express or implied that these actions were taken by the respondent actuated by any corrupt motive or to oblige any person on account of extraneous considerations. In these circumstances, merely because such orders of refunds were made, even assuming that they were erroneous or wrong, no disciplinary action could be taken as the respondent was discharging quasi judicial function. If any erroneous order had been passed by him correct remedy is by way of an appeal or revision to have such orders set aside. " 310 In the case on hand, article of charge clearly mentions that the nine assessments covered by the article of charge were completed (i) in an irregular manner, (ii) in undue haste, and (iii) apparently with a view to confer undue favour upon the assessees concerned. (Emphasis supplied) Therefore, the allegation of conferring undue favour is very much there unlike Civil Appeal No. 560/91. If that be so, certainly disciplinary action is warranted. This Court had occasion to examine the position. In Union of India & Ors. vs A.N. Saxena; , to which one of us (Mohan, J.) was a party, it was held as under : "It was urged before us by learned counsel for the respondent that as the respondents was performing judicial or quasi judicial functions in making the assessment orders in question even if his actions were wrong they could be corrected in an appeal or in revision and no disciplinary proceedings could be taken regarding such actions. In our view, an argument that no disciplinary action can be taken in regard to actions taken or purported to be done in the course of judicial or quasi judicial proceedings is not correct. It is true that when an officer is performing judicial or quasi judicial functions disciplinary proceedings regarding any of his actions in the course of such proceedings should be taken only after great caution and a close scrutiny of his actions and only if the circumstances so warrant. The initiation of such proceedings, it is true, is likely to shake the confidence of the public in the officer concerned and also if lightly taken likely to undermine his independence. Hence, the need for extreme care and caution before initiation of disciplinary proceedings against an officer performing judicial or quasi judicial functions in respect of his actions in the discharge or purported to discharge his functions. But it is not as if such action cannot be taken at all. Where the 311 actions of such an officer indicate culpability, namely a desire to oblige himself or unduly favour one of the parties or an improper motive there is no reason why disciplinary action should not be taken. " This dictum fully supports the stand of the appellant. There is a great reason and justice for holding in such cases that the disciplinary action could be taken. It is one of the cardinal principles of administration of justice that it must be free from bias of any kind. Certainly, therefore, the officer who exercises judicial or quasi judicial powers acts negligently or recklessly or in order to confer undue favour on a person is not acting as a Judge. Accordingly, the contention of the respondent has to be rejected. It is important to bear in mind that in the present case, we are not concerned with the correctness or legality of the decision of the respondent but the conduct of the respondent in discharge of his duties as an officer. The legality of the orders with reference to the nine assessments may be questioned in appeal or revision under the Act. But we have no doubt in our mind that the Government is not precluded from taking the disciplinary action for violation of the Conduct Rules. Thus, we conclude that the disciplinary action can be taken in the following cases (i) Where the officer had acted in a manner as would reflect on his reputation for integrity or good faith or devotion to duty; (ii)if there is prima facie material to show recklessness or misconduct in the discharge of his duty; (iii)if he has acted in a manner which is unbecoming of a government servant; (iv)if he had acted negligently or that he omitted the prescribed conditions which are essential for the exercise of the statutory powers; (v) if he had acted in order to unduly favour a party , (vi) if he had been actuated by corrupt motive however, small the bribe may be because Lord Coke said long ago "though the bribe may be small, yet the fault is great. " 312 The instances above catalogued are not exhaustive. However, we may add that for a mere technical violation or merely because the order is wrong and the action not falling under the above enumerated instances, disciplinary action is not warranted. Here, we may utter a word of caution. Each case will depend upon the facts and no absolute rule can be postulated. In view of the foregoing discussion, the appeals will stand allowed. There will be no order as to costs. We make it clear that it is open to the respondent to put forth all defenses open to him in the departmental inquiry which will be considered on its merit. V.P.R. Appeals allowed.

The respondent while working as Income Tax Officer completed certain assessments during the year 1982 83. A charge memorandum, was served on him, proposing to hold an inquiry against him under Rule 14 of the Central Civil Services (Classification, Central Appeal) Rules, 1965. A statement of article of charge was framed against the respondent. The substance of the charge was the completion of nine assessments in an irregular manner, hastily with a view to confer undue favour upon the assessees, and by such act, he failed to maintain absolute integrity and devotion to duty and exhibited a conduct unbecoming of government servant. The details relating to misconduct or misbehaviour of the respondent were furnished and he was charged for violating the provisions of Rules 3 (1) (i), 3 (1) (ii) and 3 (1) (iii) of the Central Civil Services (,Conduct) Rules, 1964. In support of the allegations, he was also supplied with the necessary documents. Against the memorandum, the respondent preferred an application before the Central Administrative Tribunal, praying for a stay of the disciplinary proceedings and to consider his case for promotion on merits without resort to the sealed cover procedure. On 8.2.1991, the Tribunal directed the appellant Union of India to open the sealed cover and to implement the recommendations of the 297 Departmental Promotion Committee to promote the respondent to the post of Deputy Commissioner of Income Tax, if he was found fit for promotion within two weeks from the date of order. Later on 223.1991, the Tribunal allowed the respondent 's application, holding that the action taken by the respondent officer was quasi judicial and should not have formed the basis of disciplinary action. The Tribunal also made its earlier order dated 8.2.1991 absolute. The Union of India preferred the present appeals by special leave against the orders of the Tribunal, contending that in a case where disciplinary proceedings were pending against the respondent, the procedure of opening the sealed cover should not have been resorted to. Otherwise, it would amount to putting a premium on misconduct ; that the Tribunal failed to appreciate the ratio of the order in C.A. Nos. 4986 87/90; that as the respondent was charged for violation of Rules 3(1)(i), 3(1)(ii) and 3(1)(iii) of the Central Civil Services (Conduct) Rules, 1964; immunity from the disciplinary action could not be claimed. The respondent contended that the opening of the sealed cover was correctly ordered because on the date when the Departmental Promotion Committee met in March 1989, no charge sheet was served on the respondent; that as the respondent was exercising quasi judicial functions, orders made by him if were wrong, the remedy by way of an appeal or revision could be resorted to; that if in every case of wrong order, disciplinary action was resorted to, it would jeopardize the exercise of judicial functions; and the immunity attached to the officer while exercising quasi judicial powers would be lost. On the question, whether an authority enjoys immunity from disciplinary proceedings with respect to matters decided by him in exercise of quasi judicial functions; allowing the appeals, this Court, HELD : 1.01. The disciplinary action can be taken in the following cases : (i) Where the Officer had acted in a manner as would reflect on his reputation for integrity or good faith or devotion to duty ; (ii) if there is prima facie material to show recklessness or misconduct in the discharge of his duty; (iii) if he has acted in a manner which is unbecoming of a govern 298 ment servant; [311E F] (iv) if he had acted negligently or that he omitted the prescribed conditions which are essential for the exercise of the statutory powers; (v) if he had acted in order to unduly favour a party, (vi) if he had been actuated by corrupt motive however, small the bribe may be. [311G H] The instances above catalogued are not exhaustive. For a mere technical violation or merely because the order is wrong and the action not falling under the above enumerated instances, disciplinary action is not warranted. Each case will depend upon the facts and no absolute rule can be postulated. [312A B] 1.02. There is a great reason and justice for holding in such cases that the ' disciplinary action could be taken. It is one of the cardinal principles of administration of justice that it must be free from bias of any kind. [311B] 1.03. The officer who exercises judicial or quasi judicial powers acts negligently or recklessly or in order to confer undue favour on a person is not acting as a judge. [311C] 1.04. In the present case, this Court Is not concerned with the correctness or legality of the decision of the respondent but the conduct of the respondent in discharge of his duties as an officer. The legality of the orders with reference to the nine assessments may be questioned in appeal or revision under the Act. [311D] 1.05. In the case on hand, article of charge clearly mentions that the nine assessments covered by the article of charge were completed (i) in an irregular manner, (ii) in undue haste, and (iii) apparently with a view to confer unduefavour upon the assessees concerned. [310A B] Therefore, the allegation of conferring undue favour is very much 299 there and certainly disciplinary action is warranted. [310C] Govinda Menon vs Union of India, ; ; Thayre vs The London, Brighton and South Coast Railway Company, and Thompson vs British Berna Motor Lorries Limited, at page 188, referred to. Union of India & Ors. vs A.N. Saxena, ; , explained. SLP (C) Nos. 2635 36/89 in CA No. 4986 87/90, distinguished

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Civil Appeal No. 862 of 1968. Appeal by special leave from the Judgment and order dated the 6th December, 1964 of the Punjab & Haryana High Court in Civil Writ No.587 of 1964. G. L. Sanghi and Girish Chandra for the Appellants. section N. Anand for the Respondents. 79 The Judgment of the Court was delivered by GUPTA, J. This appeal by special leave arises out of a proceeding under the (hereinafter referred to as the Act). The only question for determination in the appeal is whether the deletion of rule 30 of the Displaced Persons (Compensation and Rehabilitation) Rules, 1955 (hereinafter referred to as the Rules) with effect from August . 13, 1963 made any difference to the rights of the parties concerned in this case. The question arises on the following facts. Shop No. 2 in Tripri township in Patiala which is a government built property was allotted in 1950 to the first respondent Khillu Ram jointly with one Tara Chand and his son by the Custodian of Evacuee Property. In 1951 both Tara Chand and his son Left Tripri to settle elsewhere and the second respondent Teju Mal applied for allotment of their share in the shop to him. By his order dated November 11, 1959 the Managing officer, Tripri and Rajpura, held that Teju Mal and Khillu Ram were in possession of the shop as allottees respectively of 2/3 and 1/3 shares therein. Aggrieved by the order of the Managing officer, the first respondent Khillu Ram preferred an appeal to the Settlement officer, Jullundur, who by his order dated February 12, 1962 set aside the order of the Managing officer and remanded the case for a fresh decision under rule 30 of the Rules. Rule 30 is in these terms: " Payment of compensation where an acquired evacuee property which is an allotable property is in occupation of more than one person. If more persons than one holding verified claims are in occupation of any acquired evacuee property which is an allotable property, the property shall be offered to the person whose gross compensation is the biggest and the other persons may be allotted such other acquired evacuee property which is allotable as may be available :" This rule has a proviso and an explanation none of which is relevant for the present purpose. After remand the case was transferred to the Assistant Settlement officer who found that the gross compensation payable to the first respondent was higher than that of the rival claimant, Teju Mal and in terms of rule 30 allotted the entire shop to the first respondent by his order dated November 27, 1962. A revision petition against this order made by Teju Mal was dismissed by the Deputy Chief Settlement Officer on September 5, 1963. In the meantime, as stated already, rule 30 had been abrogated with effect from August 13, 1963. Teju Mal then moved the Central Government under sec. 33 of the Act. Teju Mal 's application under sec. 33 was heard on February 25, 1964. The effect of deletion of rule 30 was that the properties which were in the occupation of more than one person were to be put to sale. The Joint Secretary to the Government of India who heard the application under sec. 33 held that the case should be governed by the Rules as amended in 1963 excluding rule 30, and accordingly by his order dated February 80 26, 1964 he set aside the order allotting the shop to the first respondent Khillu Ram and directed the property in question to be put to sale. The first respondent filed a writ petition in the Punjab High Court for quashing the order passed under sec. The Punjab High Court held that the subsequent deletion of rule 30 did not affect the existing rights of the first respondent and quashed the order of the Central Government made under sec. The correctness of this ` order is challenged in the appeal before us which has been preferred by the Union of India and several other authorities concerned with the administration of the . The only submission made by Mr. Sanghi appearing for the appellants is that rule 30 was a rule of procedure and its deletion in 1963 affected only the mode of proceeding by which the rival claims of Khillu Ram and Teju Mal was to be decided. It was argued that amendment of the Rules in 1963 deleting rule 30 being procedural in character would affect the proceeding between the two respondents then pending, and their rights, it was submitted, should therefore be decided on the footing as if Rule 30 had never been in force. We are unable to accept this submission. The Act provides for the payment of compensation and rehabilitation grants to displaced persons and matters connected therewith. Under the Act a displaced person has a right to get compensation in the form and manner prescribed by the Act and the Rules framed thereunder. Rule 30 is in Chapter V of the Rules which deals with payment of compensation by transfer of acquired Evacuee Properties. Though the shop in question is a government built property and not an acquired evacuee property, rule 43 in Chapter VI of the Rules which provides for payment of compensation by transfer of government built property says that the "pro visions of rules 25 to 34 shall, so far as may be, apply to the transfer of any Government built property or Government plot under this Chapter". Rule 30 prescribes that where the property is in the occupation of more persons than one, it shall be offered to the person whose gross compensation is the highest. Clearly rule 30 deals not with the form of procedure but with a substantive right conferred by the Act on displaced persons. Mr. Sanghi described this rule as only a mode or manner of payment of compensation. This may be so, but the form and manner in which compensation is payable is also part of the right to get compensation. Rule 30 is not an instrument or machinery for asserting the right conferred by the Act; it does not regulate the procedure for settlement of disputes concerning that right. Therefore, the deletion of the rule in 1963 cannot affect pending actions. The rights of Khillu Ram and Teju Mal must be governed by rule 30 which was in force in 1959 when the dispute arose and was decided by the Managing officer. A full Bench of the Punjab and Haryana High Court in Pt. Dev Raj vs Union of India & ors.(1) considering the same question which arises for determination in this appeal, held that "a displaced person has a right to the determination of his claim for compensation and its satisfaction in the 1) A. I. R. 81 prescribed manner and this is a substantive right", that so far as rule 30 is concerned "the right which a displaced person claims under this rule . cannot be adversely affected or taken away unless it is expressly stated in the amending provision, or the language of the Act This, in our opinion, is a correct statement of the law. Neither by express words nor by implication the amendment of the Rules in 1963 deleting rule 30 has been made retrospective in operation. For these reasons the appeal fails and is dismissed but without any order as to costs. V.P.S. Appeal dismissed.

Rule 30 of the Displaced Persons (Compensation and Rehabilitation) Rules, 1955, prescribes that where property is in the occupation of more persons than one, it shall be offered to the person whose gross compensation is the highest. A particular property was allotted under this rule to the first respondent. A revision petition by the rival claimant, was dismissed ill September, 1963. But on August 13, 1963, the rule had been abrogated. The effect of the deletion was that a property in the occupation of more than one person was to be put to sale. In an application under section 33 of the , by the rival claimant, the appellant held that the case should be governed by the rules as amended, that is, excluding r. 30, and set aside the order allotting the premises to the first respondent. A writ petition filed by the first respondent in the High Court was allowed. In appeal to this court, the appellant contended that the rule was one of procedure and its deletion affected only the mode of proceeding by which the rival claim was to be decided. Dismissing the appeal, ^ HELD: The rights of the two rival claimants must be governed by r. 30 which was in force when the dispute arose and was decided by the authorities under the Act. [80 G H]. (a) Rule 30 deals, not with form of procedure, but with the substantive right conferred by the Act on displaced persons. The Act provides for the payment of compensation and rehabilitation grants to displaced persons and matters connected therewith. Rule 30 is in Chapter V of the Rules which deals with payment of compensation by transfer of acquired evacuee properties. Assuming that the rule is only a mode or manner of payment of compensation, the form and manner in which compensation is payable is also a part of the right to get compensation. The rule is not an instrument of machinery for asserting a right conferred by the A t. it does not regulate the procedure for settlement of disputes concerning that right. Therefore, the deletion of the rule in 1963 cannot affect pending actions, [80 D G]. (b) Neither by express words nor by implication the amendment of the rules in 1963 deleting r. 30 has been made retrospective in operation. [81 A B]. Dev Raj vs Union of India & ors. , A.I.R. 1974 Pun 65, approved.

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Appeal No. 768 of 1972. Appeal by Special Leave from the Judgment and Order dated 24 8 71 of the Delhi High Court in R.S.A. No. 137/67. G.N. Dikshit and R.N. Dikshit, for the Appellant. O.P. Malhotra, S.N. Mehta, Uma Datta, Sat Pal and M. Iyengar, for the Respondent. The Judgment of the Court .was delivered by BEG, J. Jangbir, appellant, is a tenant of a room in a house which was purchased by the respondent Mahavir Prasad Gupta on 15th May, 1956, for Rs. 1930/ shown in his sale deed as situated in "Khasra No. 203, Khewat No. 1, situated at Village Chowkri Mubarkabad, Delhi Province, within the abadi of Onkar Nagar II". The landlord owner had filed a suit for the ejectment of the appellant and for recovery 9f rent which was dismissed by a Subordinate Judge of Delhi on 26th May, 1966 on the ground that the jurisdiction of the Civil Court was barred by the Delhi Rent Control Act, 1958, (hereinafter referred to as 'the Act ') which provided the only modes of relief for aggrieved landlords by proceeding under the Act. The respondent landlord had alleged that the suit lay in the ordinary Civil Court and that it was governed by the provisions of the Transfer of Property Act inasmuch as the house, in which the appellant was the tenant of a room, fell outside the area to which the Act was applicable. The short question on which the case was decided was whether the house of the respondent was situated in an area to which the Act had been applied by a notification under Section 507(a) of the Delhi Municipal Corporation Act, 1957, dated 7th January, 1960. published in the Delhi Gazette on 17th January, 1960 read with the notification dated 12th April, 1962 under Section 1, sub. section (2) of the Act. published in the Gazette of India on 21st April, 1962. 672 The operative part of the notification of the Delhi Administration reads as follows: "No. F. 9/5/59 R&S In exercise of the powers conferred by clause (a) of Section 507 of the Delhi Municipal Corporation Act, 1957 (66 of 1957), the Corporation with the previous 'approval of the Central Government hereby declares that the fol lowing localities mentioned in the Schedule given below, hitherto forming part of the rural areas, shall cease to be rural area". Thereafter, was given a schedule and then came the heading: "Shahdara Zone". The schedule has 5 columns. The first is for the "Serial No." The second is for the name of the "Revenue estate", which is translation of Mauza, said to be an area composed of several villages. The third column is for the name of the actual village or colony of the Mauza. It is headed "Name of Colony Village pro posed to be included in the urban area". The fourth column is for what is called the "square number". The last and the fifth column was headed: "Khasra/Killa Nos. covered by the Colo ny/Villages". We are. concerned here with serial No. 7 which has the entries indicated below made under the appropriate number of each column: "1. No. 7. 2. Chowkri Mubarakabad. Onkar Nagar. Lekhu Pura. Square No. Not given. Across "Onkar Nagar" are shown: "238, 242, 240, 234, 235, 236, 234, 231, 230 and 271"; and, across "Lekhu Pura" are shown: "215 to 217, 211,212, 199 to 203". The notification published in the Gazette of India on 21st April, 1962, may be reproduced in toto. It reads: "New Delhi, the 12th ' April, 1962. G.S.R. No. 486 In exercise of powers con ferred by the proviso to sub section (2) of Section 1 of the Delhi Rent Control Act, 1958 (59 of 1958), the Central Government hereby extends all the provisions of the said Act : (a) to the areas which immediately before the 7th April, 1958, were included in the Notified Area Committee, Najafgarh and the Notified Area Commit tee, Narela; and (b) to the localties mentioned in the schedule to the notification of the Municipal Corporation of Delhi No. F 9/5/59 R&S, dated the 28th December, 1959, published in the Delhi Gazette Part IV, dated the 7th 673 January, 1960, and which by virtue of that notifi cation have formed part of the urban areas within the limits of the Municipal Corporation of Delhi. (No. 35/8/61 Delhi I) A.V. Venkatasubban, Deputy Secretary". The Subordinate Judge, very rightly observed that there was no dispute between the parties that Mauza Chowkri Muba rakabad was included. within the limits of Delhi Municipal Corporation by the notification dated 7th January, 1960. He pointed out that there was no indication of a sub diviSion of Khasra No. 203 showing that any part of it was divided or separately numbered. The disappointed plaintiff landlord was, however, not content with so obviously correct a finding. He appealed to the District Judge who agreed entirely with the Trial Court and also recorded a finding of fact that Khasra No. 203, situated in the Mauza or Revenue Estate of Chowkri Mubara kabad, was covered by the notifications. It seems to us that no other inference was reasonably possible. The plaintiff respondent seems, in a gambling spirit, to have decided to try his luck by a second appeal to the High Court. What surprises . us is that a learned Judge of the Delhi High Court, without considering the objects of the notifications or discussing any principle of construction of documents which could indicate that a point of law had really arisen for decision before him, decided to set aside the concurrent findings of fact, and, thereby, patently exceeded the jurisdiction of the High Court under Section 100 Civil Procedure Code. We need hardly say that there cannot be any doubt that he did so. We are surprised that the law laid down by this Court, and, before that, by the Judicial Committee of the Privy Council should have been so completely ignored. By way of example we may refer to the following cases: Deity Pattabhiramaswamy vs section Hanyamayya & Ors. (1); Sri Sinha Ramanuja Jeer & Ors. vs Shri Ranga Ramanuja Jeer & Anr.(2); Nedunuri Kameswaramma vs Sampati Subba Rao(3); Bhusawal Borough Municipality vs Amalgamated Electricity Co. Ltd. & Anr.(4); Secy. of State vs Rameshwa ram Devasthanam & Ors.(5);Anup Mahto vs Mira Dusadh & Ors.,(6) Sahebrao Narayanrao Deshmukh vs Jaiwantrao Yadaorao Deshmukh & Ant.(7) It is urged on behalf of the appellants that the con struction of a document is always a question of law. Reli ance was placed upon Meenakshi Mills, Madurai vs The Commissioner of income tax, Madras,(8) and Nedunuri Kames waramma vs Sampati Subba Rao (Supra). This Court has never laid down that inferences from contents of a documents always raise questions of law. Indeed, in (1) A.I.R. 1959 S.C. 57. (2) [19621 (2)S.C.R. 509. (3) ; (4) ; (5) A.I.R. 1934 PC. (6) A.I.R. 1934 P.C. 5. (7) A.I.R. 1933 P.C. 171. (8) [1956] S.C.R. 691. 674 Nedunuri Kameshwaramma 's case (supra), this Court observed (atp. 215 216): "A construction of documents (unless they are documents of rifle) produced by the parties to prove a question of fact does not involve an issue of law, unless it can be shown that the material evidence contained in them was misunderstood by the Court of fact. The documents in this case, which have been the subject of three separate considera tions, were the Land Registers the Amarkam, and Bhooband Accounts and the Adangal Registers, to gether with certain documents derived from the Zamindari records. None of these documents can be correctly described as a document of title, whatev er its evidentiary value otherwise". We think that, unless interpretation of a document involves the question of application of a principle of law mere inferences from or the evi dentiary value of a document generally raises only a question of fact. We think that, if the learned Judge of the High Court had cared to consider the provisions of law relating to the extension of the Act to urban areas. or to bear in mind the correct principles of construction. of documents, or, tried to appreciate the true nature of the case before him, he could not have possibly interfered with the concurrent findings of the two Courts below simply because the number of the Khasra in which the house of respond ent lay was not mentioned against both the portions of Chowki Mubarakabad but wholly against Lekhu Pura. In so far as the assumption, from the en tries in column 5 of ' the notification, could be that the whole of No. 203 fell in Lekhupura, it was an obviously erroneous assumption. A clerical error was the most that was indicated by such an entry. But, even so, it left no doubt that the whole Khasra No. 203 was duly notified. "1. (1) This Act may be called the Delhi Rent Control Act, 1958. (2) It extends to the area included within the limits of the New Delhi Municipal Committee and the Delhi Cantonment Board and ' to such urban areas within the limits of the Municipal Corpora tion of Delhi as are specified in the first ScheduIe; Provided that the Central Government may, by notification in the Official Gazette, extend this Act or any provision thereof, to any other urban area included within the limits of the Municipal Corporation of Delhi or exclude any area from the operation of this Act or any provision thereof". It is evident that the proviso does not require the mention of anything more than the urban area which is to be included or excluded from the limits of the Municipal Corporation, That area was suffi ciently clearly indicated by entries in columns 2 and 3 meant for ' the Revenue 675 Estate or Mauza and for the colony or the village. It is clear from these that the whole of Mauza Chowkri Mubarakabad and the whole of Onkar Nagar and Lekhupura were meant to be notified. The mere fact that the last column was not filled up by whoever drew up the notification in such a manner as to show precisely where each Khasra number lay did not affect the question whether the area to be included was sufficiently indicated or not. The well known principles of interpretation applicable to such cases are: (a) Firstly, a document must be construed as a whole. (b) Secondly, it has to be so construed as not to reduce what was meant or being done by it to a patent absurdity. (c) Third ly, if any entry of a column appears to have been carelessly made, so as not to give a correct indi cation of what was otherwise clearly capable of being inferred from the objects and rest of the contents of such a notification, the slight error, due obviously to inadvertence, would not matter on an application of the principle: Falsa Demonstra tio non nocet. A deliberate intention to omit a part of a Khasra number the whole of which is given in the notification of 7th January, 1960, could not possibly be inferred. When we look at Section 507 of the Delhi Munic ipal Corporation Act, 1957, we find the relevant part runs as follows: "507. Notwithstanding anything contained in the foregoing provisions of this Act, (a) the Corporation with the previous approv al of the Central Government may, by notification in the Official Gazette, declare that any portion of the rural areas shall cease to be included therein and upon the issue of such notification that portion shall be included in and form part of the urban areas; (b) the Corporation with the previous ap proval of the Central Government may, by notifica tion in the Official Gazette, (i) exempt the rural areas or any portion thereof from such of the provisions of this Act as it deems fit. (ii) Levy taxes, rates, fees and other charges in the rural areas or any portion thereof at rates lower than those at which such taxes, rates, fees and other charges are levied in the urban areas or exempt such areas or portion from any such tax, rate, fee or other charge;" Thus, we find the provisions of Section 1 (2) of the Act as well as of Section 507(a) and (b) of the Delhi Municipal Corporation Act refer only to "areas" and not to mere Khasra Nos. which are convenient divisions for the purposes of indicating what lay within each area. The Khasra is often spoken of as the "village map". Khasra for "abadi" areas even indicate. the type of construction which may lie within a particular number or the use to which a piece of land was being put. The term "urban area" or "rural area" is used for much larger units than Khasra Nos. It would, obviously, be quite impossible to think of one particular number, within an "abadi" area, left out or 676 dropped deliberately, without any rhyme or reason, from the notifications mentioned above. No conceivable reason has been suggested for such an omission. Indeed, there is not even an omission the effect of which may have been helpful to the appellant. It was only a case where the whole number is shown against one village only instead of being shown against two. The learned High Court Judge, by basing his whole judg ment on a farfetched conjecture from supposed omission of No. 203 in column 5, against Onkar Nagar, adopted a con struction of the Notification, if that is what the learned Judge was doing, which was quite unintelligible with refer ence to the facts of the case or purposes of such notifica tions. The learned Judge would have been well advised to rest content with the obviously correct position that what the two Courts below had done was to arrive at a pure find ing of fact as to whether a particular Khasra number con taining the house in question was included within a Mauza to the whole of which the provisions of the Act had been plain ly extended. In view of all the facts of the case, no other conclusion was reasonably possible. Consequently, we allow this appeal, by special leave, with costs throughout, set aside the judgment of the High Court and dismiss the plaintiff 's suit. As no counsel appeared to hear the Judgment today 's costs are disallowed to both the parties. S.R. Appeal allowed.

Mauza Chowkri Mubarakabad was included within the limits of Delhi Municipal Corporation Act, 1957 by a notification dated 7th January, 1960. By a notification dated 12th April 1962, the provisions of the Delhi Rent Control Act, 1958 was extended to the localities mentioned in the schedule to the, notification dated 7th January 1960. The respondent landlord who purchased a house situated in Khasra No. 203, Khewat No. 1 situated at village Chowkri Mubarakabad, Delhi Province within the Abadi of Onkar Nagar II, filed a suit for ejectment of the appellant tenant of a room in the said house and for recovery of rent. The trial court and the first appellate court held that the juris diction of the civil court was barred by the Delhi Rent Control Act, 1958. However on second appeal, a single judge of the High Court disturbed the findings of fact and re versed the judgments of the courts below. Dismissing the appeal by special leave the Court, HELD: (i) There cannot be any doubt, that, in the in stant case, by deciding to set aside the concurrent findings of fact, ignoring the law laid down by this Court, and, before that by the judicial committee of the Privy Council, the High Court, patently exceeded its jurisdiction under section 100 .C.P.C. without considering the objects of the notifications or discussing any principle of construction of documents which could indicate that a point of law had really arisen for decision. [673 D F] Deity Pattabhiramaswamy vs section Hanyamayya & Ors., AIR 1959 SC 57; Sri Sinha Ramanuja Jeer & Ors. vs Shri Ranga Ramanuja Jeer & Anr. 1962(2) SCR 509; Nedunuri Kameswaramma vs Sampati Subba Rao, 1963(2) SCR 208; Bhusawal Borough Municipality vs Amalgamated Electricity Co. Ltd. & Am '. 1964(5) SCR 905; Secy. of State vs Rameswaram Devasthanam & Ors. , AIR 1934 PC 112; Anup Mahto vs Mita Dusadh & Ors. AIR 1934 PC 5 and Narayanrao Deshmukh vs Jaiwantrao Yadaorao Deshmnkh & Anr., AIR 1933 PC 171; applied (ii) The well known principles of interpretation of documents are: (a) firstly, a document must be construed as a whole; (b) secondly, it has to be so construed as not to reduce what was meant or being done by it to a patent ab surdity; and (c) thirdly, if any entry of a column. appears to have been carelessly made, so as not to give a correct indication Of what was otherwise clearly capable of being inferred from the objects and. rest of the contents of such a notification, the slight error. , due obviously to inadver tance, would not matter on an application of the principle: Falsa Demonstrated non nocet." [675 B C] 671 (iii) Unless interpretation of a document involves the question of application of a principle of law, mere infer ences from or the evidentiary value of a document generally raises only a question of fact. [674 C] Nedanuri Kameswaramma vs Sampati Subba Rao, ; ; explained. Meenakshi Mills, Madurai vs The Commissioner of Income Tax, Madras, ; ; referred to (iv) In the instant case, it is evident that the proviso does not require the mention of anything more than the urban areas which is to be included or excluded from the limits of the Municipal Corporation. That area was sufficiently clearly indicated by entries in columns 2 and 3 meant, for the Revenue Estate or Mauza and for the colony or the vil lage. The whole of Mauza Chowkri Mubarakabad and the whole of Onkar Nagar and Lekhupura were meant to be noti fied. The mere fact that the last column was not filled up in such a manner as to show precisely where each Khasra number lay did not affect the question whether the area to be included was sufficiently indicated or not. The provi sions of Section 1(2) of the Delhi Rent Control Act as wellas of Section 507(a) and (b) of the Delhi Municipal Corporation Act refer only to "areas" and not to mere Khasra nos. which are convenient divisions for the purpose of indicating what lay within each area. [674 H, 675 A B, GH]

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Appeal No. 696 of 1976. (Appeal by Special Leave from the Judgment and Order dated 16 4 1976 of the Madhya Pradesh High Court in M.P. No. 697/72). A.K. Sen, S.S. Khanduja and S.K. Jain for the Appellant. D.N. Mukherjee and C.L. Sahu, for Respondent No. 4. Ram Panjwani, H.S. Parihar and 1. N. Shroff, for Respondents 1 3. The Judgment of the Court was delivered by CHANDJACHUD, J. The management of Primary and Middle Schools was taken over by the Madhya Pradesh Government from the Local Authorities under the Madhya Pradesh Local Author ities School Teachers (Absorption in Government Service) Act, 1963. In 1968, the State Government decided to take over the management of Higher Secondary Schools also. One such school was Kanya Naween Vidya Bhawan, Gadarwara, which was run by a Society registered trader the Societies Regis tration Act. The appellant, Smt. Juthika Bhattacharya. who was a B.A.B.T., was the Head Mistress of that school. Her scale of pay was Rs. 275 700 and at the relevant time she was drawing a monthly salary of Rs. 500. On February 23, 1970 the Divisional Superintendent of Education, Narmada Division, Hoshangabad, wrote to the Society that the management of the school run by it would be taken over by the Government if there was no improvement in its financial position. On June 7, 1971 he informed the Society that the Government had issued directions for taking over the management of the school. In pursuance of this letter, the management of the school, along with its assets, was taken over by the Government on June 18,1971. The Government assured the Society that the staff of the school will be absorbed in the new set up. 479 The case of the appellant is that she was entitled to be appointed as a Principal since she was holding a corre sponding post in a substantive capacity on the date of her absorption viz., June 18, 1971. But the Divisional Superin tendent of Education acting under the directions of the State Government, and the Director of Public Instructions directed that the appellant should be absorbed as an Upper Division Teacher in the time scale of Rs. 150 290. Accord ing to the respondents, the appellant did not hold a post graduate degree and no person could be appointed to the post of a Principal unless he or she held a post graduate degree and possessed the stated length of experience. Appellant having had the requisite, experience, the only question for decision in this appeal is whether she is entitled to be appointed as a Principal notwithstanding the fact that she. does not hold a postgraduate degree. Relying upon a Memorandum dated December 6, 1972 issued by the Government of Madhya Pradesh in its Department of Education, the appellant contended that even assuming that she could not be appointed as a Principal for the alleged reason that she did not hold a post graduate degree, she could obtain that degree any time within 3 years from the date of her absorption and therefore the order passed by the, State Government, before the expiry of that period, appointing her on a lower post is illegal. There is no substance in this argument because the Memorandum of Decem ber 6, 1972 applies, in terms, only to the staff of the Higher Secondary, Schools run by Janpad Sabhas and Munici palities and not to the staff of schools run by private Societies like the school of, which the appellant, on the date of absorption, was the Head Mistress. Paragraph 4(b) of the aforesaid Memorandum undoubtedly affords the facili ty that where the qualification for a post is post gradua tion, the post graduate degree may be obtained within 3 years from the date of absorption. But in view of the express statement in the Memorandum that it will be "ap plicable only to previous teachers of Janpad Sabhas and municipalities", the appellant cannot claim the benefit of the ' particular facility. Any lurking doubt in this behalf stands resolved by the further statement in the Memorandum that except in regard to schools run by Janpad Sabhas and Municipalities, the Rules dated December 21, 1967 will continue to apply to nonGovernment schools without the amendments introduced by the Memorandum. The Memorandum dated December 21, 1967, the Rules con tained in which remain unaffected by the amendments intro duced by the Memorandum dated December 6, 1972 provides by paragraph 3(b) that for absorption in the post of the Prin cipal of a Higher Secondary School, the person concerned "should" possess the post graduate degree and should also possess experience of a certain number of years. The appel lant did have the requisite experience but the question is whether paragraph 3(b) of the Memorandum contains but a directory rule as it uses the word 'should ' and secondly, whether the appellant can be said to possess a 'post gradu ate degree ' since she holds the qualification of B.A.B.T. It is urged on the first limb of this argument that as contrasted with the Memorandum of December 21, 1967 which uses the word "should", 480 the one dated December 6, 1972 Says that the. person concerned "must" have obtained a post graduate degree and therefore the former rule is directory in character. We are unable to agree. The mere use of the word "should" does not mean necessarily that the compliance with the rule is dis cretionary. It is well settled that whether a provision is directory or mandatory depends on its object and purpose, not merely on the use of any particular word or phrase. The object of the Memorandum is to prescribe qualifications for the staff of non Government schools and Local Body schools taken over by the State Government. In that context, the use of the word "should" cannot justify the construction that for absorption in the post of a Principal of a Higher Secondary School, the incumbent may or may not possess a post graduate degree. In a memorandum containing a set of rules prescribing qualifications for various posts, it is meaningless to provide that the incumbent of a certain post may or may not possess a certain qualification, if the possession of the particular qualification is considered to be a matter of no importance or consequence. Paragraph 3(b) consists of a complex provision, one part of which refers to the requirement of a post graduate degree and the other to the need to. possess a certain amount of experience. Both the clauses of a single sentence are governed by the verb "should". If the requirement as to the possession of a post graduate degree is to be directory in character, the same consideration must apply equally to the requirement of experience, with the result that for eligibility for the post of a Principal, it would neither be necessary to possess any particular educational qualification nor any particular experience of teaching. The appointment then to the highest post in the school would depend upon the sweet will of the appointing authority, unguided alike in the matter of minimum qualification and minimum experience. The word "should" occurring in paragraph 3(b) of the Memorandum of 1967 must therefor be understood in a mandatory sense, so that no person who does not hold a post graduate degree and possess the requisite experience would be eligible for being appointed as the Principal of a higher secondary school. As regards the second limb of the argument that since the appellant holds the qualification of B.A.B.T., she ought to be considered as holding a "post graduate degree", regard must again be had to the context in which the particular expression occurs and the purpose of the prescription. It is not inconceivable that the expression "post graduate degree" may in a broad and general sense mean in a given context any degree obtained after graduation and which a graduate alone can obtain. But that is not the sense in which the Memorandum uses the particular expression. By "post graduate degree" is meant a Master 's degree like the M.A. or M.Sc. and not a Bachelor 's degree like the B.T. In other words, the expression connotes the successful comple tion of a course of studies at a higher level in any spe ciality, after the acquisition of a basic qualification at the graduate level. The B.T. course of studies, we are informed, is open only to graduates and in dictionary manner of speaking, the degree of "Bachelor of Teaching" may be said to be a "post" graduate degree in the sense that the degree is obtainable only "after" graduation. That is the sense in which the word "post" is used in expressions like "post nuptial", "post prandial", 481 "post operative", "post mortem" and so forth. In these expressions, "post" means simply "after", the emphasis being on the happening of an event after a certain point of time, But the expression "postgraduate degree" has acquired in the educational world a special significance, a technical content. A Bachelor 's degree like the B.T., or the LL.B is not considered to be a post graduate degree even though those degrees can be taken only after graduation. In the refined and elegant world of education, it is the holder of a Master 's degree like the M.Ed. or the LL.M. who earns ,recognition as the holder of a post graduate de gree. That is the sense in which the expression is used in the Memorandum. Mr. Sen says that in some foreign universi ties even a Bachelor 's degree, obtainable only after gradua tion, is considered as a post graduate qualification. We are concerned with the interpretation of an indigenous instrument and must have regard for local parlance and understanding. Such awareness and understanding compel the construction for which we have indicated our preference. Indeed, everyone concerned understood the rule in the same sense as is evident from the permission sought by the appel lant herself to appear for the M.A. examination. She asked for that permission in order to qualify for the Principal 's post. The appellant ' made a serious grievance that she was discriminated against in comparison with several others who have been appointed as principals in higher secondary schools run by the Government. On the record is a statement (Annexure P VIII) which does show that in schools which were from their inception run by the Government, several teachers were appointed as Principals though they did not hold the Master 's degree. Mr. Panjwani appearing on behalf of the state Government has given a valid explanation for this differentiation. Speaking generally, in schools which were always under Government control, a teacher could aspire to become a Principal only after a long period of service. Most of the 19 teachers whose names appear in Annexure P VIII had served for about 20 years before being appointed as principals. On the other hand, private schools like the one in which the appellant was working as a Head Mistress or a principal did not follow any such convention and appoint ments to the post of the head of the school were made there in directly and straightway without insistence on any worth while experience of teaching. The appellant herself was appointed to the post of a Head Mistress directly in the year 1958. The state Government had therefore a valid reason for prescribing comparatively stringent qualifica tions for the post of Principal in schools taken over by it from private institutions. It may be added that in its own schools, the Government appointed persons holding merely the qualification of B.A.B.T., to the post of Principal by reason of the long and valuable experience gained by them as teachers and not on the supposition that they held a post graduate degree. Reliance was placed by the appellant 's counsel on "Regulations of the Board of Secondary Education, Madhya Pradesh", in support of his submission that the qualifica tions of the teaching staff in any institution have to be the same as prescribed for the corresponding staff in Gov ernment institutions. But these Regulations have no rele vance in the present case. They were framed under section 28(4) of the 482 Madhya Pradesh Madhyamik Shiksha Adhiniyam, 1965. Regula tion 61 and the allied regulations on which reliance is placed show that they were framed in order to prescribe conditions with which an educational institution had to comply before seeking recognition of the Board of Second ary Education. The various conditions prescribed by the Regulations do not constitute conditions of service and can create no rights and obligations, contractual or statutory, as between a school and its employees whether the school is a Government institution non Government institution. Before concluding we would like to say that the State Government ought to consider the request which was made by the appellant long since for permission to appear for the final M.A. Examination. She has already passed Part I of that examination with Political Science as her subject but she was refused permission to complete. the course on the ground that she had not yet completed one year 's service under the State Government. That objection. can no longer hold good. We are confident that the proceedings taken by the appellant for vindicating her rights will not be allowed to stand in her way if and when she is found fit and quali fied for further ' promotion in accordance with the ' rele vant rules. For these reasons we confirm the judgment of the High Court and dismiss the appeal but there will be no order as to costs. P.B.R. Appeal dismissed.

Paragraph 3(b) of a memorandum dated December 21, 1967 issued by the State Government provides that for absorption in the post of Principal of a Higher Secondary School, the person concerned "should" possess a post graduate degree and should also possess the prescribed experience. An amendment introduced by the memorandum dated December 6, 1972 says that wherever the qualification for a post is post graduate, the person concerned will have to obtain this degree within three years of absorption. But this amendment was made applicable only to persons who had been working in schools run by Janpad Sabhas and Municipal Committees and for all teachers of non Government schools taken over by the Govern ment 1967 orders applied. The appellant, who was a B.A.B.T., was the Head Mistress of a Private school. When the administration of the school was taken over by the Government, she was fixed in a lower time scale of pay because, under the rules, no person could be appointed as Principal unless she held a post graduate degree and possessed the requisite experience. The High Court dismissed her Writ Petition. In appeal to this Court it was contended that (i) her appointment in a lower post was illegal because she could have obtained the Post graduate degree within the three years ' time from the date of her absorption; (ii) the word 'should ' used in the 1967 memorandum showed that the rule is directory in charac ter; (iii) since. she held B.A.B.T., she should be consid ered as having a post graduate qualification; (iv) she was discriminated against because in the schools run by Govern ment from their inception, teachers who did not hold a Master 's degree were appointed as Principals and (v) the qualifications of the teaching staff have to be the same as prescribed in the Regulations of the Board of Secondary Education. Dismissing the appeal, HELD: (1) In view of the express statement in the 1972 Memorandum that it would be applicable only to previous teachers of Janpad Sabhas and Municipalities, the appellant could not claim the benefit of the particular facility. [479 E F] (2) The word 'should occurring in paragraph 3(b) must be understood in a mandatory sense. The use of word "should" cannot justify the construction that for absorption in the post of a Principal of a Higher Secondary School the incum bent may or may not possess the Post Graduate Degree. In a memorandum containing a set of rules prescribing the quali fications for various posts, it is meaningless to provide that the incumbent of a certain post may or may not possess a certain qualification, if the possession of the particular qualification is considered to be a matter of no importance or consequence. Paragraph 3(b) consists of a complex provi sion one part of which refers to the requirement of a Post Graduate Degree and the other to the need to possess a certain amount of experience. Both the clauses of a single sentence are governed by the verb "should". If the require ment as to the possession of a Post graduate Degree is to be directory in character, the same consideration must apply equally to the requirement of experience, with the result that for eligibility for the post of a Principal, it would neither be necessary to possess any particular educational qualification nor any particular experience of teaching. [480 C E] 478 (3) By "Post graduate Degree" is meant a Master 's degree like the M.A. or M.Sc. and not a Bachelor 's degree like B.T. In expressions like "post nuptial", "post operative" etc., "post" means "after", the emphasis being on the happening of an event after a certain point of time. In the educational world the expression "post graduate" has acquired a special significance. It is the holder a Master 's Degree like the M.Ed. or LL.M., who earns recognition as the holder of a post graduate degree. That is the sense in which the ex pression is used in the Memorandum. [480 G, 481 A] (4) The State Government had a valid reason for pre scribing comparatively stringent qualifications for Princi pals in schools taken over from privae institutions. While a teacher in a Government school was appointed as Principal by reason of long and valuable experience gained as teacher, a Head Mistress or a. Principal of a private school was appointed directly and straightway without insistence on any worthwhile experience of teaching. [481 G] (5) Regulations of the Board of Secondary Education framed under the Madhya Pradesh Madhyamik Siksha Adhiniyam 1965 have no relevance in the present ease. They prescribe conditions with which an educational institution had to comply before seeking recognition. The various conditions prescribed ' by the Regulations do not constitute conditions of service and can create no rights and obligations, con tractual or statutory, as between a school and its employ ees, whether the school is a Government institution or a non Government institution. [482 A B]

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(Civil) No. 1155 of 1987. (Under Article 32 of the Constitution of India). S.P. Malik and Mrs. Lalitha Kaushik for the Petitioner. Anil Dev Singh, R. Venkataramani, R.B. Mishra and Ms. A. Subhashini for the Respondents. The Judgment of the Court was delivered by DUTT, J. The petitioner was the Additional Registrar of this Court. His normal date of retirement was March 31, 1987. He, however, sought for voluntary retirement from the service of this Court and on his application in that regard, the following order dated December 6, 1985 was communicated to him by the Registrar of this Court: "OFFICE ORDER The Hon 'ble the Chief Justice of India has accepted the notice of Shri section Banerjee, Offg. Additional Registrar (Perma nent Deputy Registrar), seeking voluntary retirement from service under the provisions of Rule 48A of the Central Civil Services (Pension) Rules, 1972, and has permitted him to retire voluntarily from the service of the Registry of the Supreme Court of India with effect from the forenoon of January 1, 1986. " 564 It is clear from the order extracted above that the petitioner was permitted to retire voluntarily from the service of the Registry of the Supreme Court with effect from the forenoon of January 1, 1986. After the retirement of the petitioner, the Fourth Central Pay Commission (for short 'Pay Commission ') gave its report recommending the revision of salaries and pension of the Government employees. It is not disputed that the above recommendations of the Pay Commission have been accepted by the Government and that the benefit thereof is also avail able to the employees of this Court. Paragraph 17.3 of Chapter 17 of Part II at page 93 of the Report of the Pay Commission provides as follows: "17.3 In the case of employees retiring during the period January 1, 1986 to September 30, 1986, Government may consider treating the entire dearness allowance drawn by them up to December 31, 1985 as pay for pensionary bene fits. " The petitioner claimed the benefit of the recommendation of the Pay Commission as contained in the said paragraph 17.3, but it was not allowed on the ground that he did not, as he was not entitled to, draw salary for January 1, 1986 in view of the proviso to rule 5(2) of the Central Civil Service (Pension) Rules, 1972, hereinafter referred to as 'the Rules '. Rule 5(2) reads as follows: "5(2). The day on which a Government servant retires or is retired or is discharged or is allowed to resign from service, as the case may be, shall be treated as his last working day. The date of death shall also be treated as a working day. Provided that in the case of a Gov ernment servant who is retired pre maturely or who retires voluntarily under clause (j) to (m) of Rule 56 of the Fundamental Rules or Rule 48 (or Rule 48 A) as the case may be, the date of retirement shall be treated as a non working day. " At the hearing of the writ petition, it has also been vehemently urged on behalf of the respondents that as in view of the proviso to rule 5(2) of the Rules, the date of retirement of the petitioner should be treated as a non working day or, in other words, as the petitioner was not entitled to the salary for the day of his retirement, he was not 565 entitled to the benefit of the recommendation of the Pay Commission as contained in paragraph. 17.3 of the report extracted above. Under paragraph 17.3, the benefits recommended will be available to employees retiring during the period, January 1, 1986 to September 30, 1986. So the employees retiring on January 1, 1986 will be entitled to the benefit under para graph 17.3. The question that arises for our consideration is whether the petitioner has retired on January 1, 1986. We have already extracted the order of this Court dated Decem ber 6, 1985 whereby the petitioner was permitted to retire voluntarily from the service of the Registry of the Supreme Court with effect from the forenoon of January 1, 1986. It is true that in view of the proviso to rule 5(2) of the Rules, the petitioner will not be entitled to any salary for the day on which he actually retired. But, in our opinion, that has no bearing on the question as to the date of re tirement. Can it be said that the petitioner retired on December 31, 1985? The answer must be in the negative. Indeed, Mr. Anti Dev Singh, learned counsel appearing on behalf of the respondents, frankly conceded that the peti tioner could not be said to have retired on December 31, 1985. It is also not the case of the respondents that the petitioner had retired from the service of this Court on December 31, 1985. Then it must be held that the petitioner had retired with effect from January 1, 1986 and that is also the order of this Court dated December 6, 1985. It may be that the petitioner had retired with effect from the forenoon of January 1, 1986 as per the said order of this Court, that is to say, as soon as January 1, 1986 had com menced the petitioner retired. But, nevertheless, it has to be said that the petitioner had retired on January 1, 1986 and not on December 31, 1985. In the circumstances, the petitioner comes within the purview of paragraph 17.3 of the recommendations of the Pay Commission. After the conclusion of the hearing of the writ peti tion, an additional affidavit purported to have been af firmed by Mr. P.L. Sakarwal, the Director (Justice) of the Department of Justice. In paragraph 8 of the affidavit the deponent has craved leave of this Court to file this addi tional affidavit. It does not appear from the copy of the purported additional affidavit whether it has been affirmed or not inasmuch as no date of affirmation has been mentioned therein. Be that as it may, a photocopy of the Office Memo randum dated April 14, 1987 of the Ministry of Personnel, Public Grievances and Pensions, Department of Pensions & Pensioners ' Welfare has been annexed. It is submitted in the additional affidavit that the pension of Government servants retiring between 1.1.1986 and 30.6.1987 is to be governed in terms of 566 paragraphs 10.1, 10.2 and 11 of the said Office Memorandum. Further, it has been submitted that the petitioner had ceased to be in the employment of the Supreme Court with effect from 1.1.1986 (F.N.) and, accordingly, the said Office Memorandum is not applicable to the petitioner. Paragraph 3.1 of the Office Memorandum provides, inter alia, that the revised provisions as per these orders shall apply to Government servants who retire/die in harness on or after 1.1.1986. The said Office Memorandum will, therefore, be applicable to Government servants retiring on 1.1.1986. There is, therefore, no substance in the contention that the Office Memorandum dated April 14, 1987 will not apply to the petitioner. Be that as it may, we have already held that the petitioner had retired with effect from 1.1.1986 and he comes within the purview of paragraph 17.3 of the recommen dations of the Pay Commission. In the circumstances, the writ petition is allowed and the respondents are directed to calculate and pay to the petitioner within three months from today his pension in accordance with the recommendation of the Pay Commission as contained in paragraph 17.3 extracted above. There will, however, be no order as to costs. P.S.S. Petition allowed.

Paragraph 17.3 of Chapter 17, Part II of the Report of the Fourth Central Pay Commission entitled Government em ployees retiring during the period January 1, 1986 to Sep tember 30, 1986 to consideration of the entire dearness allowance drawn by them upto December 31, 1985 as pay for pensionary benefits. Rule 5(2) of the Central Civil Services (Pension) Rules, 1972 permits the day on which a Government servant retires from service to be treated as his last working day. The proviso thereto, however, states that in the case of a Government servant who retires voluntarily under Rule 48 A the date of retirement shall be treated as a non working day. The petitioner was permitted to retire voluntarily from the service of the Registry of the Supreme Court under the provisions of Rule 48 A of the Rules with effect from the forenoon of January 1, 1986 by an order dated December 6, 1985. His claim to the benefit of paragraph 17.3 was not acceded to. In the writ petition it was contended for the respond ents that as in view of the proviso to rule 5(2) of the Rules the petitioner was not entitled to the salary for the day of his retirement, he was not entitled to the benefit of paragraph 17.3. Allowing the writ petition, HELD: Under paragraph 17.3 of Chapter 17, Part II of the Report of the Fourth Central Pay Commission the benefits recommended will be available to employees retiring during the period, January 1, 1986 to September 30, 1986. In the instant case, the petitioner was permitted to retire volun tarily from the service of the 563 Registry of the Supreme Court with effect from the forenoon of January 1, 1986. The fact that under the proviso to rule 5(2) of the Rules, the petitioner will not be entitled to any salary for the day on which he actually retired has no bearing on the question as to the date of retirement. The petitioner could not be said to have retired on December 31, 1985. It has then to be said that he had retired with effect from January 1, 1986 and that is also the order of this Court dated December 6, 1985. He, therefore, comes within the purview of paragraph 17.3 of the recommendations of the Pay Commission. [565A E] The respondents to calculate and pay to the petitioner within three months his pension in accordance with the recommendation of the Pay Commission as contained in para graph 17.3. [566D]

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Criminal Appeal No. 221 of 1986 etc. From the Judgment and Order dated 28.6.1985 of the Bombay High Court in Crl. Appeal No. 215 of 1982. S.B. Bhasme, Mrs. H. Wahi, A.S. Bhasme and A.M. Khanwil kar for the Appellants. V.D. Misra, J. Wad and Mrs. Aruna Matbur for the Re spondents. The Judgment of.the Court was delivered by AHMADI, J. This appeal by special leave is brought by the State of Maharashtra against the judgment of acquittal recorded by the Nagpur Bench of the High Court of Bombay (Maharashtra) reversing the conviction of the respondent Chandraprakash Kewalchand Jain, a Sub Inspector of Police, under Section 376, I.P.C. for having committed rape on Shamimbanu, a girl aged about 19 or 20 years on 22nd August, 1981. The learned Additional Sessions Judge, Nagpur, came to the conclusion that the prosecution had brought home the charge under Section 376, I.P.C. and sentenced the respond ent to suffer rigorous imprisonment for 5 years and to pay a fine of Rs.1,000, in default to suffer rigorous imprisonment for 6 months. He was, however, acquitted of the charge under Section 342, I.P.C. The respondent challenged his conviction in appeal to the High Court. The High Court set aside the order of conviction and sentence imposed by the trial court and acquitted the respondent. The State feeling aggrieved sought special leave to appeal. On the same being granted this appeal is before us. Briefly the facts are that the parents of Shamimbanu were residing as tenants in a part of the building belonging to the father of Mohmad Shafi while the remaining portion was occupied by the owner 's family. PW 1 Mohmad Shafi aged about 25 years fell in love with PW 2 Shamimbanu aged about 19 years. The prosecution case is that although the parents of both knew about their love affair, for some reason or the other, they were not married. Both of them left Nagpur and went to Bombay where they contracted a marriage 118 through a Kazi and returned to Nagpur by train on 20th August, 198 1. They got down at Anjani Railway Station (a suburb of Nagpur) and went to a nearby Gurudeo Lodge and occupied Room No. 204. That night i.e. on the night of 20th/12st August, 1981, PW 8 Police Sub Inspector Qureishi checked the hotel and learnt that the couple was living in the said room in the assumed names of Mohmad Shabbir and Sultana. On being questioned PW 1 Mohmad Shafi gave out the true facts and showed the Nikahnama. exhibit 10. On being satis fied about the correctness of the version, Police Sub In spector qureishi got their correct names substituted in the register of the Lodge as is evident from the entry exhibit 31, proved by PW 5 Manohar Dhote, the Manager of the Lodge. Police Sub Inspector Qureishi did not deem it necessary to take any steps against the couple. On the next night between 21st and 22nd August, 1981 the respondent accused went to the hotel room No. 204 occupied by the couple at the odd time of about 2.30 a.m. and knocked on the door. He was accompanied by PW 7 Constable Chandrab han. When Mohmad Shafi opened the door the respondent ques tioned him on seeing Shamimbanu with him. Mohmad Shafi told him that she was his wife and gave their correct names. Notwithstanding their replies the respondent insisted that they accompany him to the police station. PW 5 requested the respondent to sign his visit book since he had inspected a few rooms of his Lodge including Room No. 204 but the re spondent told him that he would do it later. So saying he left the Lodge with the couple. On reaching the police station the respondent separated the couple. He took Shamimbanu to the first floor of the police station while her husband Mohmad Shafi was taken to another room by PW 7. Shamimbanu alleges that after she was taken to the first floor, the respondent flirted with her, slapped her when she refused to respond to his flirtation and demanded that she spend the night with him. The respond ent also demanded that she should give her age as 15 years so that Mohmad Shafi could be booked. On her refusing and protesting against his behaviour he threatened her with dire consequences. In the other room Mohmad Shafi was subjected to beating by PW 7. After sometime both the boy and the girl were brought down to the main hall of the police station. By then it was around 5.00 or 5.30 a.m. Thereafter he sent Mohmad Shafi with a constable to fetch the girl 's father. The girl 's parents arrived at the police station shortly. The respondent asked the girl 's parents if they were prepared to take 119 back the girl who claimed to have married Mohmad Shafi. The girl 's parents showed annoyance and left the police station refusing to take her with them. Mohmad Shafi 's parents also adopted the same attitude. The respondent then recorded an offence under Section 110 read with 117 of the Bombay Police Act against Mohmad Shafi on the allegation that he was found misbehaving on a public street uttering filthy abuses in front of Gujarat Lodge near Gurudeo Lodge. After putting Mohmad Shaft in the lock up he sent the girl Shamimbanu to Anand Mahal Hotel with PW 7. Initially PW 4, the Hotel Manager refused to give a room to an unescorted girl but PW 7 told him that he had brought her on the directive of the respondent. Thereupon PW 4 allotted Room No. 36 to her. He made an entry in the hotel register to the effect 'Shamimbanu wife of Mohmad Shaft . . as per instructions of Police Sub Inspector Shri Jain . ' vide exhibit 25. Afterleaving the girl in Room No. 36, PW 7 left the hotel. It is the prosecution case that after the girl was allotted the room, as per the usual practice, the hotel boy changed the bed sheets, pillow covers and quilt cover. The rent was charged from the girl. Having thus separated the couple and finding the girl thoroughly helpless, the respondent visited the girl 's room and knocked on the door. The unsuspecting Shamimbanu opened the door. The respondent entered the room and shut the door behind him. Thereafter he asked the girl to undress but on the girl refusing he forcibly removed her 'kurta ' and threw it away. He gagged the girl 's mouth and threatened her with dire consequences if she did not submit. He then threw the girl on the cot, forcibly removed her 'salwar ' and denuded her. He then had sexual intercourse with her, notwithstand ing her protestations. After satisfying his lust, the re spondent left threatening that he would bury both of them alive if she complained to anyone. He told her that he would now arrange to send back her husband. Not fully satisfied the respondent returned to the hotel room after about half an hour and knocked on the door. Shamimbanu opened the door thinking that her husband had returned. When she saw the respondent she tried to shut the door but the respondent forced his way into the room and shut the door from within. He once again had sexual inter course with her against her will. He repeated his threat before leaving. On the other hand Mohmad Shaft was sent to Court on his arrest 120 under Sections 110/117 of the Bombay Police Act. He was released on bail. He returned to the police station by about 5.00 p.m. and enquired about the whereabouts of his wife. PW 7 told him she was in Room No. 36 of Anand Mahal Hotel. He immediately went to his wife. On seeing him she was in tears. She narrated to him what she had gone through at the hands of the respondent. Enraged Mohmad Shaft went back to the police station and informed PW 14 Inspector Pathak about the commission of assault and rape on his wife by the re spondent. PW 14 recorded the same in the station diary at 6.35 p.m. and informed his superiors about the same presuma bly because a police officer was involved. Thereupon Deputy Commissioner of Police Parassis and Assistant Commissioner of Police Gupta arrived at the police station. The Assistant Commissioner of Police asked Inspector Pathak to accompany Mohmad Shafi and fetch Shamimbanu. On their return with Shamimbanu Mohmad Shaft was asked to give a written account of the incident which he did. On the basis thereof an of fence under section 376, I.P.C. was registered and the investigation was entrusted to Inspector Korpe of Crime Branch. In the course of investigation a spot panchnama of Room No. 36 was drawn up and certain articles such as bed sheet, quilt cover, mattress, etc. which had semen like stains were attached. The hotel register containing the relevant entry (exhibit 25) was also seized and statements of witnesses were recorded. Both the respondent and Shamimbanu were sent for medical examination and their blood samples were taken along with that of Mohmad Shafi to determine their blood groups. Similarly the garments of the respondent and Shamimbanu were attached and sent for chemical examination along with the articles seized from the hotel room. On the conclusion of the investigation the respondent was charge sheeted and put up for trial before the Additional Sessions Judge, Nagpur. The respondent pleaded not guilty to the charge and denied the accusation made against him. His defence was that he arrested Mohmad Shaft on the charge under Sections 110/117, Bombay Police Act, and took him to Gurudeo Lodge and from there he took him and Shamimbanu to the police station. Since the parents of both the boy and the girl disowned them he had no alternative but to place Mohmad Shaft in the lock up and allow Shamimbanu to leave the police station as a free citizen since she was not accused of any crime. It was his say that after Shamimbanu left the police station she went to Anand Mahal Hotel and stayed in Room No. 36 awaiting Mohmad Shafi. According to him as Mohmad Shaft was annoyed because of his detention in the 121 lock up, he had, with the assistance of Shamimbanu, falsely involved him on the charge of rape. The trial court found that the respondent had visited Room No. 204 at an odd hour and had taken the couple to the police station where he had misbehaved with the girl. It also found that he had booked the boy on a false charge and had lodged the girl in Room No. 36 after their parents disowned them. It lastly held that the evidence of the prosecutrix clearly established that the respondent had raped her twice in that room. The trial court convicted the respondent under Section 376, I.P.C. The respondent preferred an appeal to the High Court. A learned Single Judge of the High Court allowed the appeal and acquitted the respondent. The High Court took the view that the oral information exhibit 50 furnished by Mohmad Shafi to Inspector Pathak at 6.35 p.m. constituted the First Information Report and the subsequent written information exhibit 7 given at 8.30 p.m., was inadmissible in evidence as hit by Section 162 of the Code. The High Court then took the view that except in the 'rarest of the rare cases ' where the testimony of the prosecutrix is found to be so trustworthy, truthful and reliable that no corroboration is necessary, the Court should ordinarily look for corroboration. Accord ing to it as exhibit 50 did not unfold two successive acts of rape, this was not a case where it would be safe to base a conviction on the sole testimony of the prosecutrix, more so because both the girl and the boy had reason to entertain a grudge against the respondent who had booked the latter. Lastly the High Court pointed out that the version of the prosecutrix is full of contradictions and is not corroborat ed by medical evidence, in that, the medical evidence re garding the examination of the prosecutrix is negative and does not show marks of violence. These contradictions and inconsistencies have been dealt with in paragraphs 24 to 31 of the judgment. The High Court also noticed certain infirm ities in the evidence of PW 1 Mohmad Shafi in paragraphs 32 to 34 of its judgment. The High Court, therefore, concluded that the prosecution had miserably failed to prove the guilt of the accused and accordingly acquitted him. It is against this order of the High Court that the State has preferred this appeal by special leave. The learned counsel for the appellant State submitted that the entire approach of the High Court in the matter of appreciation of evidence of the prosecution witnesses, particularly PW 2, betrays total ignorance of the psychology of an Indian woman belonging to the 122 traditional orthodox society. He submitted that the prosecu tix of this case came from an orthodox muslim family, was semi literate having studied upto the VII Standard and whose parents considered it a shame to take her back to their fold because she had eloped and married a boy of her own choice. He submitted that the statement of law in the High Court judgment that implicit reliance cannot be placed on a prose cutrix except in the rarest of rare cases runs counter to the law laid down by this Court in Bharwada Bhoginbhai Hirjibhai vs State of Gujarat, ; He also submitted that the evidence of the prosecutrix has been rejected on unsustainable grounds which do not touch the substratum of the prosecution case and which can be at tributed to nervousness and passage of time. According to him this approach of the High Court has resulted in gross miscarriage of justice which this Court must correct in exercise of its jurisdiction under Article 136 of the Con stitution. The learned counsel for the respondent, however, supported the High Court judgment. It is necessary at tile outset to state what the ap proach of the Court should be while evaluating the prosecu tion evidence, particularly the evidence of the prosecutrix, in sex offences. Is it essential that the evidence of the prosecutrix should be corroborated in material particulars before the Court basis a conviction on her testimony? Does the rule of prudence demand that in all cases save the rarest of rare the Court should look for corroboration before acting on the evidence of the prosecutrix? Let us see if the Evidence Act provides the clue. Under the said stat ute 'Evidence ' means and includes all statements which the Court permits or requires to be made before it by witnesses, in relation to the matters of fact under inquiry. Under Section 59 all facts, except the contents of documents, may be proved by oral evidence. Section 118 then tells us who may give oral evidence. According to that section all per sons are competent to testify unless the Court considers that they are prevented from understanding the questions put to them, or from giving rational answers to those questions, by tender years, extreme old age, disease, whether of body or mind, or any other cause of the same kind. Even in the case of an accomplice Section 133 provides that he shall be a competent witness against an accused person; and a convic tion is not illegal merely because it proceeds upon the uncorroborated testimony of an accomplice. However, illus tration (b) to Section. 114, which lays down a rule of practice, says that the Court 'may ' presume that an accom plice is unworthy of credit, unless he is corroborated in material particulars. Thus under Section 133, which lays down a rule of law, an accomplice is a competent witness and a conviction based solely on his uncorroborated evidence 123 is not illegal although in view of Section 114, illustration (b), courts do not as a matter of practice do so and look for corroboration in material particulars. This is the conjoint effect of Sections 133 and 114, illustration (b). A prosecutrix of a sex offence cannot be put on par with an accomplice. She is in fact a victim of the crime. The Evidence Act nowhere says that her evidence cannot be ac cepted unless it is corroborated in material particulars. She is undoubtedly a competent witness under Section 118 and her evidence must receive the same weight as is attached to an injured in cases of physical violence. The same degree of care and caution must attach in the evaluation of her evi dence as in the case of an injured complainant or witness and no more. What is necessary is that the Court must be alive to and conscious of the fact that it is dealing with the evidence of a person who is interested in the outcome of the charge levelled by her. If the Court keeps this in mind and feels satisfied that it can act on the evidence of the prosecutrix, there is no rule of law or practice incorporat ed in the Evidence Act similar to illustration (b) to Sec tion 114 which requires it to look for corroboration. If for some reason the Court is hesitant to place implicit reliance on the testimony of the prosecutrix it may look for evidence which may lend assurance to her testimony short of corrobo ration required in the case of an accomplice. The nature of evidence required to lend assurance to the testimony of the prosecutrix must necessarily depend on the facts and circum stances of each case. But if a prosecutrix is an adult and of full understanding the Court is entitled to base a con viction on her evidence unless the same is shown to be infirm and not trustworthy. If the totality of the circum stances appearing on the record of the case disclose that the prosecutrix does not have a strong motive to falsely involve the person charged, the Court should ordinarily have no hesitation in accepting her evidence. We have, therefore, no doubt in our minds that ordinarily the evidence of a prosecutrix who does not lack understanding must be accept ed. The degree of proof required must not be higher than is expected of an injured witness. For the above reasons we think that exception has rightly been taken to the approach of the High Court as is reflected in the following passage: "It is only in the rarest of rare cases if the Court finds that the testimony of the prosecutrix is so trustworthy, truthful and reliable that other corroboration may not be necessary. " 124 With respect, the law is not correctly stated. If we may say so, it is just the reverse. Ordinarily the evidence of a prosecutrix must carry the same weight as is attached to an injured person who is a victim of violence, unless there are special circumstances which call for greater caution, in which case it would be safe to act on her testimony if there is independent evidence lending assurance to her accusation. We think it proper, having regard to the increase in the number of sex violation cases in the recent past, particu larly cases of molestation and rape in custody, to remove the notion, if it persists, that the testimony of a woman who is a victim of sexual violence must ordinarily be cor roborated in material particulars except in the rarest of rare cases. To insist on corroboration except in the rarest of rare cases is to equate a woman who is a victim of the lust of another with an accomplice to a crime and thereby insult womanhood. It would be adding insult to injury to tell a woman that her story of woe will not be believed unless it is corroborated in material particulars as in the case of an accomplice to a crime. Ours is a conservative society where it concerns sexual behaviour. Ours is not a permissive society as in some of the Western and European countries. Our standard of decency and morality in public life is not the same as in those countries. It is, however, unfortunate that respect for womanhood in our country is on the decline and cases of molestation and rape are steadily growing. An Indian woman is now required to suffer indigni ties in different forms, from lewd remarks to eve teasing, from molestation to rape. Decency and morality in public life can be promoted and protected only if we deal strictly with those who violate the societal norms. The standard of proof to be expected by the Court in such cases must take into account the fact that such crimes are generally commit ted on the sly and very rarely direct evidence of a person other than the prosecutrix is available. Courts must also realise that ordinarily a woman, more so a young girl, will not stake her reputation by levelling a false charge con cerning her chastity. But when such a crime is committed by a person in au thority, e.g. a police officer, should the Court 's approach be the same as in any other case involving a private citi zen? By our criminal laws wide powers are conferred on police officers investigating cognizable offences. The infrastructure of our criminal investigation system recog nises and indeed protects the right of a woman to decent and dignified treatment at the hands of the investigating agen cy. This is evident from the proviso to sub section (2) of Section 47 of the Code which obliges the police officer desiring to effect entry to give an opportunity to the 125 woman in occupation to withdraw from the building. So also subsection (2) of Section 53 requires that whenever a female accused is to be medically examined such examination must be under the supervision of a female medical practitioner. The proviso to Section 160 stipulates that whenever the presence of a woman is required as a witness the investigating offi cer will record her statement at her own residence. These are just a few provisions which reflect the concern of the legislature to prevent harassment and exploitation of women and preserve their dignity. Notwithstanding this concern, if a police officer misuses his authority and power while dealing with a young helpless girl aged about 19 or 20 years, her conduct and behaviour must be judged in the backdrop of the situation in which she was placed. The purpose and setting, the person and his position, the misuse or abuse of Office and the despair of the victim which led to her surrender are all relevant factors which must be present in the mind of the Court while evaluating the con duct evidence of the prosecutrix. A person in authority, such as a police officer, carries with him the awe of office which is bound to condition the behaviour of his victim. The Court must not be oblivious of the emotional turmoil and the psychological injury that a prosecutrix suffers on being molested or raped. She suffers a tremendous sense of shame and the fear of being shunned by society and her near rela tives, including her husband. Instead of treating her with compassion and understanding as one who is an injured victim of a crime, she is, more often than not, treated as a sinner and shunned. It must, therefore, be realised that a woman who is subjected to sex violence would always be slow and hesitant about disclosing her plight. The Court must, there fore, evaluate her evidence in the above background. It is time to recall the observations of this Court made not so far back in Bharwada Bhognibhai Hirjibhai, (supra): "In the Indian setting, refusal to act on the testimony of a victim of sexual assaults in the absence of corroboration as a rule, is adding insult to injury. Why should the evidence of the girl or the woman who complains of rape or sexual molestation be viewed with the aid of spectacles fitted with lenses tinged with doubt, disbelief or suspicion? To do so is to justify the charge of male chauvinism in a male domi nated society. We must analyse the argument in support of the need for corroboration and subject it to relentless and remoreseless cross examination. And we must do so with a logical, and not an opinionated, eye in the light of 126 probabilities with our feet firmly planted on the soil of India and with our eyes focussed on the Indian horizon. We must not be swept off the feet by the approach made in the Western World which has its own social milieu, is own social mores, its own permissive values, and its own code of life. Corroboration may be considered essential to establish a sexual offence in the backdrop of the social ecology of the Western World. It is wholly unnecessary to import the said concept on a turn key basis and to transplate it on the Indian soil regardless of the altogether different atmos phere, attitudes, mores, responses of the Indian Society, and its profile. The identities of the two worlds are dif ferent. The solution of problems cannot therefore be identi cal. " Proceeding further this Court said: "Without the fear of making too wide a statement, or of overstating the case, it can be said that rarely will a girl or a woman in India make false allegations of sexual assault . . The statement is generally true in the context of the urban as also rural society. It is also by and large true in the context of the sophisticated, not so sophisticated, and unsophisticated society. Only very rarely can one conceivably come across an exception or two and that too possibly from amongst the urban elites. Because: (1) A girl or a woman in the tradition bound non permissive Socie ty of India would be extremely reluctant even to admit that any incident which is likely to reflect on her chastity had ever occurred. (2) She would be conscious of the danger of being ostracised by the Society or being looked down by the Society including by her own family members, relatives, friends and neighbours. (3) She would have to brave the whole world. (4) She would face the risk of losing the love and respect of her own husband and near relatives, and of her matrimonial home and happiness being shattered. (5) If she is unmarried, she would apprehend that it would be difficult to secure an alliance with a suitable match from a respectable of an acceptable family. (6) It would almost inevitably and almost invariably result in mental torture and suffering to herself. (7) The fear of being taunted by others will always haunt her. (8) She would feel extremely embrassed in relating the incident to others being over powered by a feeling of shame on account of the upbringing 127 in a tradition bound society where by and large sex is taboo. (9) The natural inclination would be to avoid giving publicity to the incident lest the family name and family honour is brought into controversy. (10) The parents of an unmarried girl as also the husband and members of the hus band 's family of a married woman would also more often than not, want to avoid publicity on account of the fear of social stigma on the family name and family honour. (11) The fear of the victim herself being considered to be promiscu ous or in some way responsible for the incident regardless of her innocence. (12) The reluctance to face interrogation by the investigating agency, to face the court, to face the cross examination by Counsel for the culprit, and the risk of being disbelieved, acts as a deterrent. " We are in complete agreement with these observations. We now proceed to examine if the High Court was justi fied in upturning the order of conviction passed by the Trial Court. The High Court refused to confirm the convic tion of the respondent as it found the evidence of the prosecutrix full of contradictions and not consistent with medical evidence as well as the findings recorded by the Chemical Analyst. We may first indicate the contradictions which prompted the High Court to look for corroboration. They are: (i) the version that the respondent had misbehaved with her in the police station and had molested her could not be believed because she did not complain about the same to the other police officers who were present in the police station main hall on the ground floor or to her relatives who were called to the police station; (ii) the conduct of the respondent in calling her par ents and in giving them an opportunity to take her with them does not smack of an evil mind; (iii) the evidence of the prosecutrix that the respondent was instrumental in lodging her in Anand Mahal Hotel room is not supported by any evidence; (iv) the conduct of the prosecutrix in not informing and seeking assistance from the hotel management after the first incident and even after the second incident of rape in the hotel 128 room is unnatural and surprising; (v) the find of semen stains on the 'salwar ' and 'kurta ' of the prosecutrix runs counter to her evidence that on both the occasions she was completely denuded before she was ravished; (vi) the absence of marks of physical violence also runs counter to her version that when she tried to raise an alarm she was slapped by the respondent; (vii) the evidence of PW 3 Dr. Vijaya and the medical report exhibit 17 do not lend corroboration to the evidence of the prosecutrix that the respondent had sexual intercourse with her notwithstanding the resistence offered by her; (viii) the report of the Assistant Chemical Analyst exhibit 71 shows that neither semen nor spermatozoa were detected from the vaginal smear and slides that were forwarded for analysis; and (ix) the evidence of PW 12 Dr. More and his report exhibit 41 shows that no physical injuries were found on the person of the respondent to indicate that he had forcible sexual intercourse shortly before his examination. Before we proceed to deal with these discrepancies we think it is necessary to clear the ground on the question whether the prosecutrix had a sufficiently strong motive to falsely involve the respondent and that too a police offi cer. It is possible that she may have felt annoyed at being dragged out of the hotel room at dead of night after they had satisfied Police Sub Inspector Qureishi that they were legally wedded only a few hours back. PW 1 may also have felt offended at being wrongly hooked under Sections 110/117, Bombay Police Act. The question is whether on account of this annoyance both PW 1 Mohmad Shaft and PW 2 Shamimbanu would be prepared to stake the reputation of the latter? As pointed out earlier ordinarily an Indian woman would be most reluctant to level false accusation of rape involving her own reputation unless she has a very strong bias or reason to do so. In the present case although the couple had reason to be annoyed with the conduct of the respondent, the reason was not strong enough for Mohmad Shafi to involve his wife and soil her reputation nor for Shamimbanu to do so. An Indian woman attaches maximum impor 129 tance to her chastity and would not easily be a party to any move which would jeopardise her reputation and lower her in the esteem of others. There are, therefore, no such strong circumstances which would make the court view her evidence with suspicion. The next question is whether the High Court was justi fied in refusing to place reliance on her evidence in view of the discrepancies and inconsistencies indicated above. It is not in dispute that the respondent had taken both PW 1 and PW 2 to the police station at dead of night. At the police station both of them were separated. She was all alone with the respondent till about 5.00 a.m. This was her first encounter with the police. She must have been nervous and considerably shaken. She must have felt helpless as she was all alone. She must be terribly worried not only about her own fate but also that of her husband. It is during the time she was alone with the respondent that the latter is alleged to have misbehaved with her. How could she complain to the other police officers in the police station about the behaviour of their colleague unless she be sure of their response? Having seen the behaviour of one of them, how could she place confidence in others belonging to the same clan? She may rather prefer to ignore such behaviour than speak of it to unknown persons. Ordinarily an Indian woman is ashamed to speak about such violations of her person, more so to total strangers about whose response she is not sure. There was no point in speaking to her parents who had disowned her. She, however, claims to have informed her husband about the same on his return. The omission on the part of her husband to make a mention about the same cannot discredit her. Even if we assume that she omitted to mention it, the said omission cannot weaken her evidence as obvious ly she would attach more importance to what happened there after in the hotel room. The respondent 's behaviour in the police station had paled into insignificance in view of his subsequent misdeeds. No wonder she would attach greater importance to the subsequent events rather than dwell on advances made earlier. We, therefore, cannot agree with the High Court 's observation that "the prosecutrix is not only prone to make improvements and exaggerations, but is also a liar disclosing a new story altogether to serve her inter est". This is a harsh comment which, we think, is totally unwarranted. The High Court has argued that the conduct of the respondent in sending for her parents and in permitting her to go with them shows that the respondent 's intentions were not evil. In the first place it must be mentioned that the suggestion to call the parents came from PW 1. 130 Secondly the evil thought may have taken concrete shape after the parents refused to take her with them. It was then that the respondents realised the helplessness of the girl and chalked out a plan to satisfy his lust. As a part of that design he falsely booked Mohmad Shaft and made arrange ments to lodge the girl in a hotel of his choice. The evi dence of PW 4 Suresh Trivedi read with the entry in the hotel register and the contradiction brought on record from his police statement leave no room for doubt that the girl was lodged in his hotel at the instance of the respondent. PW 6 and PW 7 have also resiled from their earlier versions to help the respondent. But notwithstanding their denial we see no reason to disbelieve Shamimbanu on the point of PW 7 having lodged her in Room No. 36 of Anand Mahal Hotel as the same is corroborated not only by the remark in the entry Exh. 25 of the hotel register but also by the fact that it was PW 7 who informed Mohmad Shaft that she was in Room No. 36. We are, therefore, of the view that her evidence in this behalf is supported by not only oral but also documentary evidence. How then could she seek help or assistance from the hotel staff which was under the thumb of the respondent? The hotel was situate within the jurisdiction of the re spondent 's police station. It was at the behest of the respondent that she was kept in that room. She must have realised the futility of complaining to them. Failure to complain to the hotel staff in the above circumstances cannot be described as unnatural conduct. It is true that the prosecutrix had deposed that on both the occasions she was completely denuded before the respond ent raped her. On the first occasion he had removed her 'kurta ' before she was laid on the cot. Her 'salwar ' was removed while she was lying on the cot. Therefore, the 'salwar ' may be lying on the cot itself when the act was committed. It is, therefore, not at all surprising to find semen stains on the 'salwar '. She was wearing the same clothes when she was ravished the second time. On the second occasion he first threw her on the cot and then undressed her. Therefore, both the 'kurta ' and the 'salwar ' may be lying on the cot at the time of sexual intercourse. Besides she had worn the same clothes without washing herself imme diately after the act on each occasion. It is, therefore, quite possible that her clothes were stained with semen. It must also be remembered that this is not a case where the prosecuting agency can be charged of having concocted evi dence since the respondent is a member of their own force. If at all the investigating agency would try to help the respondent. There is, therefore, nothing surprising that both these garments bore semen stains. Besides, there was no time or occasion to manipulate semen stains on her clothes and that too of the respondent 's 131 group. Her clothes were sent along with the other articles attached from Room No. 36 for chemical analysis under the requisition exhibit 67. The report of the Assistant Chemical Analyser, exhibit 69 shows that her clothes were stained with human blood and semen. The semen found on one of her gar ments and on the bed sheet attached from the room was of group A which is the group of the respondent, vide exhibit 70. Of course the other articles, viz., the mattress and the underwear of the respondent bore no stains. On the contrary the find of semen tends corroboration, if corroboration is at all needed to the version of the prosecutrix. The possi bility of the semen stains being of Mohmad Shaft is ruled out as his group was found to be 'B ' and not 'A '. In the circumstances the absence of semen or spermatozoa in the vaginal smear and slides, vide report exhibit 71, cannot cast doubts on the creditworthiness of the prosecutrix. The evidence of PW 3 Dr. Vijaya Lele shows that she had taken the vaginal smear and the slides on 23rd August, 1981 at about 1.30 p.m. i.e., almost after 24 hours. The witness says that spermatozoa can be found if the woman is examined within 12 hours after intercourse, thereafter they may be found between 48 and 72 hours but in dead form. Shamimbanu may have washed herself by then. Therefore absence of sper matozoa cannot discredit her evidence. The absence of marks of physical violence on the prose cutrix is not surprising. According to her the respondent had slapped her and threatened her with dire consequences when she tried to resist him on both occasions. Since she was examined almost 24 hours after the event it would be too much to expect slap marks on her person. It is, however, true that according to PW 12 Dr. More there were no marks of injury on the body of the respondent when he was examined on the 22nd itself at about 8.45 p.m. While it is true that the version of the prosecutrix is that she had tried to resist him, it must be realised that the respondent being a strong man was able to overpower her and take her by force. Be sides, he was a man in authority in police uniform. The prosecutrix was alone and helpless. In the circumstances as pointed out earlier the resistance would be considerably dampened. But the evidence of PW 12 Dr. More who examined the respondent on the 22nd at 8.45 p.m. reveals that he had noticed (i) absence of smegma around the glans penis and (ii) the frenum tortuous and edematous. indicative of the respondent having had sexual intercourse within the preced ing 24 hours. However, absence of marks of violence and absence of matting of pubic hair led the witness to state that no definite opinion could be given whether or not the respondent had sexual intercourse in the last 24 hours. In cross examination an attempt was 132 made to show that smegma may be absent in a man with clean habits; that the frenum may be edematous if there is fric tion with rough cloth and tortuousness of the frenum could be due to anything that causes swelling of the skin. The witness, however, said that he had not seen marks of itching thereby negativing the suggestion. Be that as it may, the evidence of this witness does show that there was evidence suggesting the possibility of the respondent having had sexual intercourse within the preceding 24 hours although the witness could not hazard a definite opinion. Therefore, the non committal opinion of this witness cannot be said to run counter to the evidence of the prosecutrix. It may be that the evidence as to resistence may have been overstated, a tendency which is generally noticed in such cases arising out a fear of being misunderstood by the society. That is not to say that she was in any way a consenting party. She was the victim of brute force and the lust of the respond ent. PW 1 Mohmad Shafi 's evidence is also brushed aside on account of so called contradictions set out in paragraphs 32 to 34 of the High Court Judgment. The first reason is the non disclosure of details in the first oral statement which was reduced to writing at exhibit 50. That was skeleton informa tion. That is why the need to record a detailed version exhibit 7 was felt. Therefore, merely because the details are not set out in exhibit 50 it cannot be said that the prosecutrix had not narrated the details. We have treated exhibit 50 as FIR for deciding this case. The previous involvement of PW 1 in a couple of cases is not at all relevant because the decision of the case mainly rests on his wife 's evidence. But even exhibit 50 shows that his wife had told him that the respondent had raped her. We, therefore, do not see how the evidence of PW 1 can be said to be unacceptable. The fact that the respondent had gone to Gurudeo Lodge at an odd hour and had taken the prosecutrix and her husband to the police station at dead of night is not disputed. The fact that the respondent refused to sign the police visit book of the Lodge, though requested by the Manager PW 5 Manohar Dhote, on the pretext that he was in a hurry and would sign it later, which he never did, speaks for itself. Then the respondent booked Md. Shafi under a false charge and put him behind the bars thereby isolating the prosecu trix. We say that the charge was false not merely because it is so found on evidence but also because of the report exhibit 46 dated 21st September, 1981 seeking withdrawal of prosecu tion for want of material to sustain the charge. Having successfully isolated the prosecutrix he sent her to Anand Mahal Hotel with PW 7 who lodged her in Room No. 36. The respondent, 133 therefore, had planned the whole thing to satisfy his lust. The subsequent attempt on the part of the respondent to commit suicide on being prosecuted as evidenced by the FIR exhibit 56 betrays a guilty conscience. We are, therefore, of the opinion that if the prosecution evidence is appreciated in the correct perspective, which we are afraid the High Court failed to do, there can be no hesitation in concluding that the prosecution has succeeded in proving the respond ent 's guilt. Unfortunately the High Court stigmatised the prosecutrix on a thoroughly erroneous appreciation of her evidence hereby adding to her woes. If the two views were reasonably possible we would have refrained from interfering with the High Court 's order of acquittal. In our opinion the trial court had adopted a correct approach and had properly evaluated the evidence and the High Court was not justified in interfering with the trial court 's order of conviction. On the question of sentence we can only say that when a person in uniform commits such a serious crime of rape on a young girl in her late teens, there is no room for sympathy or pity. The punishment must in such cases be exemplary. We, therefore, do not think we would be justified in reducing the sentence awarded by the trial court which is not harsh. In the result we allow this appeal, set aside the order of the High Court acquitting the respondent and restore the order of conviction and sentence passed on the respondent by the trial court. The respondent will surrender forthwith and serve out his sentences in accordance with law. His bail bond will thereupon stand cancelled. Criminal Appeal No. 220 of 1986. In view of the order passed in the State 's appeal, we need not pass separate orders in this appeal. The appeal will, therefore, stand disposed of in view of the order passed in the above appeal. R.N.J. Appeal al lowed.

The respondent, a Sub Inspector of police, was convicted under section 376 of I.P.C. for having committed rape on a young newly married girl of 19 or 20 years of age, by the Additional Sessions Judge, Nagpur. The respondent challenged his conviction in appeal to the High Court. The High Court set aside the order of conviction and sentence imposed by the trial court and acquitted him. The State feeling ag grieved came up in appeal by special leave. While allowing the appeal setting aside the order of the High Court and restoring that of the Trial Court, the Court, HELD: A prosecutrix of a sex offence cannot be put on par with an accomplice. She is in fact a victim of the crime. The Evidence Act nowhere says that her evidence cannot be accepted unless it is corroborated in material particulars. She is undoubtedly a competent witness under section 118 and her evidence must receive the same weight as is attached to an injured in cases of physical violence. The same degree of care and caution must attache in the evalua tion of her evidence as in the case of any injured complain ant or witness and no more. [123B C] What is more necessary is that the Court must be alive to and conscious of the fact that it is dealing with the evidence of a person who is interested in the outcome of charge levelled by her. Having regard to the increase in the number of sex violation cases in the recent past, particu larly cases of molestation and rape in custody, it is proper to remove the notion, if it persists, that the testimony of a woman who is a 116 victim of sexual violence must ordinarily be corroborated in material particulars except in the rarest of rare cases. [123C D; 124B C] Ours is a conservative society where it concerns sexual behaviour. Ours is not a permissive society as in some of the Western and European countries. Our standard of decency and morality in public life is not the same as in those countries. It is, however, unfortunate that respect for womanhood in our country is on the decline and cases of molestation and rape are steadily growing. An Indian Woman is now required to suffer indignities in different forms, from lewd remark to eve teasing, from molestation to rape. Decency and morality in public life can be promoted and protected only if we deal strictly with those who violate the social norms. The standard of proof to be expected by the Court in such cases must take into account the tact that such crimes are generally committed on the sly and very rarely direct evidence of a person other than the prosecu trix is available. [124D F] Courts must also realise that ordinarily a woman, more so a young girl, will not stake her reputation by leveling a false charge concerning her chastity. By our criminal laws vide powers are conferred on police officers investigating cognizable offences. The infrastructure of our criminal 'investigation system recognises and indeed protects the right of a woman to decent and dignified treatment at the hands of the investigating agency. [124F H] The purpose and setting, the person and his position, the misuse or abuse of office and the despair of the victim which led to her surrender are all relevant factors which must be present in the mind of the Court while evaluating the conduct evidence of the prosecutrix. A person in author ity, such as a police officer carries with him the awe of office which is bound to condition the behaviour of his victim [125C D] The Court must not be oblivious of the emotional turmoil and the psychological injury that a prosecutrix suffers on being molested or raped. She suffers a tremendous sense of shame and the fear of being shunned by society and her near relatives including her husband. Instead of treating her with compassion and understanding as one who is an injured victim of a crime, she is, more often than not, treated as a sinner and shunned. It must, therefore be realised that a woman who is subjected to sex violence would always be slow and hesitant about disclosing her plight. The Court must, therefore, evaluate her evidence in the above background. 117 Bharwada Bhognibhai Hirjibhai vs State of Gujarat, ; upon.

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Appeal No. 133 of 1965. Appeal from the judgment and decree dated February 17, 1962 of the Madhya Pradesh High Court in First Appeal No. 89 of 1959. LI 3 Sup. CI/68 7 596 S.N. Anand, for the appellant. S.S. Shukla, for legal representatives for respondent No. 1. B.C. Misra and M.V. Goswami, for respondent No. 2. The Judgment of the Court was delivered by Bachawat, J. M.R. Malhotra was working as a contractor to the military and other authorities. He needed funds for the execution of his contracts. The appellant Bank formerly known as the Bharat Bank Ltd., agreed to finance the contracts and to advance monies to Malhotra against his bills for supplies under the contracts. For the purpose of carrying out this arrangement Malhotra executed an irrevocable power of attorney in favour of the appellant on July 13, 1946. The power of attorney recited: "Whereas we are working as contractors to the Government in its various departments and have entered into certain contracts and will in future enter into other contracts and whereas an agreement dated 13 7 1946 has been made between us and the Bharat Bank Ltd., in pursuance of which the attorneys have agreed to finance contracts and to advance us sums of money, against supply bills for payments to be received by us under the contracts issued by the Government in various departments on conditions mentioned therein; and whereas we, for the purpose of carrying out the terms of the said arrangement more effectively and to secure the interest of the attorneys are desirous of appointing the Bharat Bank Ltd., as our lawful attorneys in all matters relating to the receipt of all payments under the contracts made or to be made hereafter." The document appointed the appellant to be the attorneys of Malhotra "to present and submit supply bills regarding our contracts to the proper officer and/or authority of the Government Departments concerned; to obtain cheques for sums payable to us under the contracts directly in their own name or in our names in payment of such bills or other amounts and to cash and to receive the amount thereof and appropriate such receipts towards and in repayment of the advances made or to be made hereafter and all other monies due from us to the attorneys in any account what soever." The appellant was also authorised to sue for, recover and receive the monies due in connection with the contracts with the approval of MaLhotra, to conduct and defend proceedings in consultation with him and to take steps in his name and on his behalf. Malhotra promised and declared that "all powers hereby granted are and shall be irrevocable as long as any claims of the attorneys against, us whether for principle, interest, costs, charges or otherwise remain outstanding and unpaid. " Intimation of the power of attorney was given by the appellant to the military authorifles. On July 19, 1948 Malhotra made out a bill on the military authorities for Rs. 49,633/8/7 then due to him in respect of his supplies under the contracts during 1945 46 and handed over 597 the bill to the appeLlant for collection. On the bill, Malhotra made, the following endorsement: "Please pay to Bharat Bank Ltd. ,Jabalpur. " The appeLlant sent the bill to the military authorities for payment. Before the appellant received the payment, the amount due under the bill was attached by Takhatmal in execution of a money decree obtained by him against Malhotra. The appeLlant filed objections in the execution proceedings. On September 11, 1952 the objections were dismissed. On December 12, 1952 the appellant filed a suit in the court of the 1st Additional District Judge, Jabalpur, against Malhotra and Takhatmal asking for a declaration that the appellant was an assignee of the biLl and that Takhatmal had no right to attach it. The Trial Court held that the appellant was the assignee of the bill and decreed the suit. Takhatmal filed an appeal against the decree. The High Court of Madhya Pradesh allowed the appeal and dismissed the suit. The present appeal has been filed by the plaintiff after obtaining a certificate from the High Court. The sole question in this appeal is whether the power of attorney dated July 13, 1946 coupled with the endorsement on the bill dated July 19, 1948 amounts to an equitable assignment of the monies due under the bill in favour of the appellant. There are many decisions on the question as to what constitutes an equitable assignment. The law on the subject admits of no doubt. In Palmer vs Carey(1) Lord Wrenbury said : "The law as to equitable assignment, as stated in Rodick vs Candell , 777, 778) is that: The extent of the principle to be deduced is that an agreement between a debtor and a creditor that the debt owing shall be paid out of a specific fund coming to the debtor, or an order given by a debtor to his creditor upon a person owing money or holding funds belonging to the giver of the order, directing such person to pay such funds to the creditor, will create a valid equitable charge upon such fund, in other words, wfll operate as an equitable assignment of the debts or fund to which the order refers." In construing the power of attorney it is necessary, to bear in mind that the relationship of the two parties, Malhotra and the Bank was that of borrower and lender and that the document was brought into existence in connection with a proposed transaction of financing of Malhotra 's contracts. The loans were to be advanced by the Bank against Malhotra 's bills for supplies under the contracts. The obvious intention of the parties was to provide protection for the lender and to secure repayment of the loans. With that object in view the lender was authorised to receive pay (1) ; at 706. 598 ment of the bills and to appropriate the receipts towards repayment of the loans. As the lender had an interest in the fundS the power of attorney was expressed to be irrevocable. On a proper construction of the document the conclusion is irresistible that there was an agreement between the lender and the borrower that the debt owing to the lender would be paid out of a specific fund of the borrower in the hands of the Government authorities. The power of attorney coupled with the endorsement on the bill dated July 19, 1948 was a clear engagement by Malhotra to pay the appellant Bank out of the monies receivable under the bill and amounted to an equitable assignmen of the fund by way of security. The question whether a document amounts to an equitable assignment or not is primarily one of construction but we may mention a few decisions which throw light on the matter. Jagabhai Lallubhai vs Rustamji Nauserwanji(x) the Bombay High Court held that an agreement to finance the borrower and a power of attorney of even date to receive the monies due to the borrower under certain contracts had the effect of an equitable assignment of the funds. In Loonkaran Sethiya vs State Bank of Jaipur(2) this Court held that a power of attorney authorizing a lender to execute a decree then passed in favour of the borrower or which might be passed in his favour in a pending appeal and to credit to the borrower 's account the monies realised in execution of the decree amounted to an equitable assignment of the funds. In the last case the Court held that there was no transfer of the decree, or of the claim which was the subject matter of the pending appeal as the borrower continued to be the owner and the lender was merely authorised to act as his agent. Nevertheless the Court held that the power Of attorney amounted to a binding equitable assignment. An actionable claim may be transferred under section 130 of the Transfer of Property Act. Where a document does not amount to a transfer within section 130 it may apart from and independently of the section operate as an equitable assignment of the actionable claim. In the present case the power of attorney authorised the appellant to receive all monies due or to become due to Malhotra in respect of pending or future contracts with the government authorities. Counsel argued that there was no engagement to pay out of specific fund and therefore there was no assignment. We find no substance in the contention. There can be a valid equitable assignment of future debts, see Tailby vs Official Receiver(3). As and when the debt comes into existence it passes to the assignee, (1) Born. (2) ; (3) 599 As a matter of fact when the debt due to Malhotra came into existence, he specifically appropriated it for payment to the appellant. On July 19, 1948 he made out a bill for the monies then due to him and endorsed on it: "Please pay to Bharat Bank Ltd., Jabalpur. " The bill with the endorsement was sent to and acknowledged by the military authorities. Counsel submitted that this document was a pay order. Now there is an essential distinction between a pay order and an assignment. A pay order is a revocable mandate. It gives the payee no interest in the fund. An assignment creates an interest in the fund and is not revocable. Read in the light of the power of attorney the endorsement on the bill dated July 19, 1948 created an interest in a specific fund and was irrevocable. There was thus a sufficient equitable assignment of a specific fund in favour of the appellant. The High Court was in error in holding that there was no equitable assignment. In the result, the appeal is allowed, the decree passed by the High Court is set aside and the decree passed by the 1st Additional District Judge, Jabalpur, is restored. The respondents who are the legal representatives of Takhatmal shall pay out of his assets in their hands the costs of this appeal as also the costs in the courts below. Y.P. Appeal allowed.

The appellant Bank, agreed to finance the contracts undertaken by M. and to advance monies against his bills for supplies under the contracts. For the purpose of carrying out this arrangement M executed an irrevocable power of attorney in favour of the appellant authorising the latter to receive all monies due or to become due to M in respect of pending or future contracts. M made a bill, endorsed it in favour of the appellant for collection, and handed it over to the appellant for collection. Before the appellant received the payment, the amount under the bill was attached by the first respondent in execution of a money decree obtained by him against M. The appellant filed a suit for a declaration that he was the assignee of the bill and the first respondent had no right to attach it. The suit was decreed, but in appeal, the High Court dismissed the suit. In appeal, on certificate, this Court: HELD: The appeal must be allowed. The power of attorney coupled with the endorsement on the bill was a clear engagement by M to pay the appellant Bank out of the monies receivable under the bill and amounted to an equitable assignment of the fund by way of security. The obvious intention of the parties was to provide protection for the lender and to secure repayment of the loans. With that object in view the lender was authorised to receive payment of the loans. As the lender had an interest in the funds the power of attorney was expressed to be irrevocable. [597 D, H] There can be a valid equitable assignment of future. debts. A pay order is revocable mandate. It gives the payee no interest in the fund. An assignment creates an interest in the fund and is not revocable. Read in the light of the power of attorney the endorsement on the bill created an interest in a specific fund and was irrevocable. There was thus a sufficient equitable assignment of a specific fund in favour of the appellant Bank. [598 H; 599 B] Loonkaran Sethiya vs State Bank of Jaipur, ; followed. Palmer vs Carey ; at 706; Tailby vs Official Receiver, , applied, Jagabhai Lallubhai vs Rustamji Nauserwanji, Bom. 311, referred to.

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Appeal No. 596 of 1963. Appeal from the judgment dated March 1, 1960 of the Madras High Court in Case Referred No. 11 of 1955. K. N. Rajagopal Sastri and R. N. Sachthey, for the appellant. R. Ganapathy Iyer and R. Gopalakrishnan, for the respondent. May 7, 1964 The Judgment of the Court was delivered by SUBBA RAO, J. This appeal by special leave is preferred against the order of the Madras High Court in a reference made to it by the Income tax Appellate Tribunal under section 66(1) of the Income tax Act, 1922, hereinafter called the Act. The facts leading up to the reference and relevant to the present enquiry are as follows. The Free Press of India (Madras) Ltd., hereinafter called the Free Press Company, was a private limited company carrying on business as printers and publishers of certain newspapers, namely, "Indian Express", "Dhinamani" and "Andhra Prabha" at 191 Madras, "Eastern Express" and "Bharat" at Calcutta and "Sunday Standard" and "Morning Standard" at Bombay. ,On August 31, 1946, the Free Press Company passed a resolution transferring to the Express Newspapers Limited, a new company formed on or about April 22, 1946, hereinafter called the assessee company, the right to print and publish the said newspapers from September 1. 1946. letting out its machinery and assets and authorizing the assessee company to collect the book debts and pay off the liabilities of the Free Press Company. The assessee company accordingly started publishing newspapers from September 1, 1946. On October 31, 1946, the Free Press Company resolved at a General Body Meeting to wind up the company voluntarily. The liquidator appointed thereunder was directed not to carry on the business of the company. On November 1, 1946, the liquidator ascertained the value of the assets over the liabilities taken over by the assessee company as per the balance sheet at Rs. 19,36.000/and this amount was credited to the account of the two directors of the Free Press Company in the assessee 's books. The profit of the Free Press Company was worked out to be Rs. 6,08,666, being the difference between the written down value and the sale price of the machinery. That sum was made up of, (i) the difference between the original cost price and the written down price of the machinery. ' Rs. 2,14,090/ , (ii) the amount in excess over the original cost price . Rs. 3,94,576/ . The Income tax Officer included the said two items in the total income of the assessee company under the following heads, (i) profit under proviso to section 10(2) (vii) . Rs. 2,14,090/ , and (ii) capital gains under section 12B . Rs. 3,94,576/ , and assessed each to tax. The Income tax Appellate Tribunal upheld the validity of the inclusion of the item under capital gains in the total income of the assessee but decided against the inclusion of the first item. The Appellate Tribunal referred the following two questions, among others, for the decision of the High Court of Madras under section 66(1) of the Incometax Act: "4. Whether Free Press Company made a business profit of Rs. 2,14,090/ under proviso to section 10(2);(vii) of the Act?" 192 "6. Whether the capital gain made by the Free Press Company is liable to be assessed in the hands of the Express Company, under section 26(2) of the Act?" The reference was heard by a Division Bench of the High Court, consisting of Rajagopalan and Ramachandra Iyer, JJ., who by their judgment answered the two questions in the negative and against the department. The present appeal is preferred against the said judgment of the High Court. The argument in the appeal proceeded on the basis of the following facts. During the accounting year 1946 47 the Free Press Company did not do the business of printing and publishing newspapers from September 1, 1946, and thereafter the assessee company alone was carrying on the said business. The Free Press Company went into voluntary liquidation on October 31, 1946, and the liquidator, on November 1, 1946, confirmed the transfer of the assets made by the Free Press Company to the assessee company. Therefore, on November 1, 1946, the aforesaid machinery was sold yielding a profit of Rs. 6,08,666/ to the Free Press Company being the difference between the written down value and the sale price of the machinery. Broadly stated, the machinery was sold by the Free Press Company during the accounting year after it closed down its business and after it went into voluntary liquidation. On those facts learned counsel for the Revenue raised before us the following two contentions: (1) The first item of Rs. 2,14,090/ , representing the surplus over the written down value of the machinery was assessable in accordance with the proviso to section 10 (2) (vii) of the Act; and (2) the second item of Rs. 3,94,576/ , representing the capital gains made by the Free Press Company is assessable in the hands of the assessee company, who succeeded to the said business, under section 26(2) of the Act. Learned counsel for the respondent contended that neither the conditions laid down in section 10(2)(vii) of the Act nor those laid down in section 26(2) thereof attracted the said two items of income and, therefore, they were not assessable in the hands of the assessee company. 193 The first question turns upon the relevant provisions of section 10 of the Act. To have a clear view of the scope of the relevant provisions it will be convenient to read them at one place. Section 10. (1) The tax shall be payable by an assessee under the head "Profits and gains of business, profession or vocation" in respect of the profit or gains of any business, profession or vocation carried on by him. (2) Such profits or gains shall be computed after making the following allowances, namely: (iv) in respect of insurance against risk of damage or destruction of buildings, machinery, plant, furniture, stocks or stores, used for the purposes of the business, profession or vocation. the amount of any premium paid: (v) in respect of current repairs to such buildings, machinery, plant or furniture, the amount paid on account thereof; (vii) in respect of any such building, machinery or plant which has been sold or discarded or demolished or destroyed, the amount by which the written down value thereof exceeds the amount for which the building, machinery or plant, as the case may be, is actually sold or its scrap value: Provided further that where the amount for which any such building, machinery or plant is sold, whether during the continuance of the business or after the cessation thereof, exceeds the written down value, so much of the excess as does not exceed the difference between the original cost and the written 51 S.C. 13 194 down value shall be deemed to be profits of the previous year in which the sale took place: We are concerned with the second proviso to section 10(2) (vii) of the Act. The substantive clause grants a balancing allowance in respect of building, machinery or plant which has been sold or discarded or demolished or destroyed. The allowance represents the excess of the written down value over the sale price. Under the proviso, if the sale price exceeds the written down value, but does not exceed the original cost price, the difference between the original cost and the written down value shall be deemed to be profits of the year previous to that in which the sale takes place; that is to say, the difference between the price fetched at the sale and the written down value is deemed to be the escaped profits for which the assessee is made liable to tax. As the sale price is higher than the written down value, the difference represents the excess depreciation mistakenly granted to the assessee. To illustrate: assume that the original cost of a machinery or plant is Rs. 100/ and depreciation allowed is Rs. 25/ ; the written down value is Rs. 75. If the machinery is sold for Rs. 100/ , it is obvious that depreciation of Rs. 25/ was wrongly allowed. If it had not been allowed that amount would have swelled the profits to that extent. When it is found that it was wrongly allowed that profit is brought to charge. The second proviso, therefore, in substance, brings to charge an escaped profit or gain of the business carried on by the assessee. The scope of this proviso cannot be ascertained in vacuum. The conditions for its applicability can be ascertained only in its relation to the other related provi sions. Under section 3 of the Act income tax shall be charged for any year in accordance with and subject to the provi sions of the Act in respect of the total income of the previous year of every assessee; under section 6, one of the heads of taxable income is "profits and gains of business, profession or vocationl,; under section 10(1), the tax under that head is payable in respect of profit or gains of any business carried on by the assessee during the accounting year. The 195 main condition which attracts all the other sub sections and clauses of the section is that the tax shall be payable by an assessee in respect of the profit or gains of any business etc. carried on by him. The crucial words are ."business carried on by him". If the profit or gains were not earned when the business was being carried on by the assessee during the accounting year, they would fall outside the provision of section 10(1). For instance, if the machinery sold after the business was closed or when the business was under liquidation, it would not be appropriate to hold that the profit or gains earned by the sale were in respect of the business that was being carried on by the assessee. The second condition that attracts the second proviso is implicit in the adjective "such" preceding "building, machinery or plant" sold. The adjective "such" refers back to cls. (iv), (v), (vi) and (vii) of section 10(2). Under cl. (iv) an allowance is allowed in regard to any premium paid in respect of insurance against risk of damage or destruction of buildings, machinery, plant etc. used for the purpose of the business, profession or vocation. Under this clause allowance is allowed only in respect of the machinery used for the purpose of the business. Clauses (v), (vi) and (vii) refer to such buildings, machinery, plant etc.; that is to say, such buildings, _machinery, plant etc. used for the purpose of the business. The result is that the second proviso will only apply to the sale of such machinery which was used for the purpose of the business during the accounting year. It brings in to charge the escaped profits under the guise of superfluous allowances if the machinery sold was used for the business during the accounting year when the business was being carried on. Therefore, to bring the sale proceeds to charge the following condition. ,, shall be fulfilled: (1) During the entire previous year or a part of it the business shall have been carried on by the assessee; (2) the machinery shall have been used in the business; and (3) the machinery shall have been sold when the business was being carried on and not for the purpose of closing it down or winding it up. If these were the conditions for the applicability of the said proviso, the sale of the machinery in the instant case having taken place after the business was closed and during the winding up 196 proceedings, it would fall outside the scope of the said proviso and therefore the first item is not assessable to tax This point directly arose for consideration in The Liquidators of Pursa Limited vs Commissioner of Incometax, Bihar(1). There, the assessee company carried on the business of growing sugarcane and manufacturing and selling sugar. In the year 1943 it negotiated for the sale of the factory and other assets with the object of winding up the company. It received a firm offer on August 9, 1943, and concluded the agreement of sale on December 7, 1943. Between August 9, 1943, and December 7, 1943, it never used the machinery and plant for the purpose of manufacturing sugar or for any other purpose except that of keeping them in trim and running order. In the assessment of the company to income tax for the accounting period from October 1, 1943, to September 30, 1944, the income tax authorities treated the surplus made by the company on the sale of the buildings, plant and machinery as profits under proviso (2) to section 10(2)(vii) of the Act. This Court held that the said amount was not taxable. This Court rejected the contention of the Revenue that the said excess was taxable on two grounds, namely, (1) "the sale of the machinery and plant was not an operation in furtherance of the business carried on by the company but was a realisation of its assets in the process of gradual winding up of its business which eventually. culminated in the voluntary liquidation of the company; (2) "even if the sale of the stock of sugar be regarded as carrying on of business by the company_and not a realisation of its assets with a view to winding up, the machinery or plant not being used in the accounting year at all and in any event not having had connection with the carrying on of that limited business during the accounting year, section 10(2)(vii) could have no application to the sale of any such machinery or plant". Learned counsel for the Revenue contends that the main reason for the decision was that the machinery or the plant was not used in the accounting year for the business and that the second reason, namely, that the assets were sold in the process of gradual winding up of the com 197 pany was only an observation and that the decision was not based upon the said observation. But a careful perusal of the judgment discloses beyond any reasonable doubt that the decision was based upon both the grounds. As in the present case the machinery was sold not for the business but only for closing it up during the liquidation proceedings, this decision directly covers the present case. This question again fell to be considered by this Court in The Commissioner of Income tax, Bombay Circle II vs The National Syndicate, Bombay(1). There, the National Syndicate, a Bombay firm, acquired on January 11, 1945, a tailoring business as a going concern for Rs. 89,321/ which includedthe consideration paid for sewing machines and a motor lorry. Soon after the purchase the respondent found it difficult to continue the business, and therefore it closed its business in August, 1945. Between August 16, 1945, and February 14, 1946, sewing machines and the motor lorry were sold at a loss. The respondent closed its account books on February 28, 1946, showing the two losses and writing them off. For the assessment year 1946 47, the respondent claimed a deduction under section 10 (2) (vii) of the Indian Income tax Act. The question fell to be considered on a construction of the provisions of section 10(2) (vii) of the Act. This Court, speaking through Hidayatullah, J., held that the loss was a business loss, though the machines and the motor lorry were sold after the business was closed down, as the said machines and lorry were used for the purpose of the business during a part of the accounting year and were sold during the accounting year. This Court, after noticing the decision under appeal and that of this Court in The Liquidators of Pursa Limited vs Commissioner of Income tax, Bihar (2), and the amendment introduced in the second proviso to section 10 (2) (vii) of the Act, observed: "But it is to be noticed that no such amendment was made in el. (vii) to exclude loss over buildings, machinery or plant after the closure of the business. It is thus clear that the principles which govern the proviso cannot be (1) ; (2) ; 199 used to govern the main clause, because profit or loss arise in different ways in business. The two rulings do not, therefore, apply to the facts here. " It is contended that the principle accepted by this decision is in conflict with that laid down in the case of The Liquidators of Pursa Limited(1). It is said that the con dition that the sale of the machinery at a loss should have been before the closing of the business is impliedly laid down by section 10(1) of the Act which applies equally to cl. (vii )as well as to the second proviso thereto, and that if the condition need not be fulfilled in the case falling under the substantive part of cl. (vii) of section 10(2) of the Act, it will be incongruous to apply it to a case falling under the second proviso before it was amended. So stated there is some plausibility in the argument. But this Court in express terms made a distinction between the scope of the substantive part of cl. (vii) and that of the second proviso thereto and expressly distinguished those rulings on the ground that they would not apply to the construction of the substantive part of cl. (vii). When this Court expressly confined the scope of the decision to the substantive part of cl. (vii) without disturbing the validity of the decisions governing the second proviso, it is not proper that we should rely upon it in preference to a direct decision on the second proviso to cl. (vii) of section 10(2) of the Act before it was amended. This Court in K. M. section Reddy, Commissioner of Income tax, Kerala vs The West Coast Chemicals and Industries Ltd. (in liquidation), Alleppy(2) held that a winding up sale was not trading or doing business. There. chemicals and other raw materials were sold not in the course of ordinary trading but only in realisation sale after the company had been wound up. This Court, speaking through Hidayatullah, J., posed the following question, "The question, therefore, is whether there can be said to be a sale in the carrying on of the business in respect of the chemicals and other raw materials." (1) ; (2) [1962] Supp. 3 S.C.R. 960, 965. 199 After referring to the passages in Halsbury 's Laws of Eng land, 3rd Edn., Vol. 20, pp. 115 117, wherein it was stated that "mere realisation of assets is not trading" and that there was distinction between sales forming part of the trading activities and those where the realisation was not an act of trading, the learned Judge observed that the said distinction was a sound one. The learned Judge, on a consideration of other decisions, also accepted as correct the distinction made between a sale of the entire stock as part of trading and the sale of a part of the stock as a winding up sale. Then the learned Judge applied the principles to the facts of the case and held that it was im possible to infer that the chemicals and raw materials were sold in the ordinary way of business or that the assessee company was carrying on a trading business. This decision again accepts the distinction between a sale held in the ordinary way of business and that held for the purpose of winding up the business and that in the latter case the profits accrued are not trading profits. This case no doubt did not turn upon the provisions of the second proviso to cl. (vii) of section 10(2) of the Act, but the principle accepted therein is the basis for the application of section 10 of the Act and that will apply to all provisions of section 10, unless an exception is made in a particular provision. For the fore going reasons we hold that the first item is not liable to tax and the High Court has given the correct answer to the first question submitted to it. The second item relates to capital gains. That represents the excess of the price obtained on the sale of the machinery over its original cost price. It is conceded that it does not represent profits and gains of business, but it falls under the heading "capital gains". But it is argued that, as the Free Press Company wag wound up and, therefore, could not be found. , the assessee, who had succeeded to it, would be liable to be assessed for the said capital gains under the proviso to section 26(2) of the Act. To appreciate the contention some of the relevant provisions of the Act may be read: Section 6. Save as otherwise provided by this Act, the following heads of income, profits and 200 gains, shall be chargeable to income tax in the manner hereinafter appearing, namely: (v) Profits and gains of business, profession or vocation. (vi) Capital gains. Section 10. (1) The tax shall be payable by an assessee under the head "Profits and gains of business, profession or vocation" in respect of the profit or gains of any business, profession or vocation carried on by him. (2) Such profits or gains shall be computed after making the following allowances, namely: Section 12B. (1) The tax shall be payable by an assessee under the head "Capital gains" in respect of any profits or gains arising from the sale, exchange, relinquishment or transfer of a capital asset effected after the 31st day of March, 1956, and such profits and gains shall be deemed to be income of the previous year in which the sale, exchange, relinquishment or transfer took place: Section 24. (2A) Notwithstanding anything con tained in sub section (1), ",here the loss sustained is a loss falling under the head "Capital gains," such loss shall not be set off except against any profits and gains falling under that head. (2B) Where an assessee sustains a loss such as is referred to in sub section (2A) and the loss cannot be wholly set off in accordance with the provisions of that sub section, the portion not so set off shall be carried forward to the 201 following year and set off against capital gains for that year, and if it cannot be so set off, the amount thereof not so set off shall be carried forward to the following year and so on, so however that no such loss shall be carried forward for more than eight years: Provided that where the loss sustained by an assessee, not being a company, in any previous year does not exceed five thousand rupees, it shall not be carried forward. Section 26. (2) Where a person carrying on any business, profession or vocation has been succeeded in such capacity by another person, such person and such other person shall, sub ject to the provisions of sub section (4) of section 25, each be assessed in respect of his actual share, if any, of the income, profits and gains of the previous year: Provided that, when the person succeeded in the business, profession or vocation cannot be found, the assessment of the profits of the year, in which the succession took place up to the date of succession, and for the year preceding that year shall be made on the person succeeding him in like manner and to the same amount as it would have been made on the person succeeded or when the tax in respect of the assessment made for either of such years assessed on the person succeeded cannot be recovered from him, it shall be payable by and recoverable from the person succeeding, and such person shall be entitled to recover from the person succeeded the amount of any tax so paid. A conspectus of the said sections discloses a clearcut scheme. Though income tax is only one tax levied on the total income, section 6 enumerates six heads whereunder the income of an assessee falls to be charged. This Court in United Commercial Bank Ltd. vs Commissioner of Income 202 tax, West Bengal(1) laid down that sections 7 to 12 are mutually exclusive and where an item of income falls specifically under one head it is to be charged under that head and no other. The expression "Income, profits and gains" in section 6 is a composite concept which takes in all the six heads of income mentioned therein. The 4th head is "profits and gains of business, profession or vocation" and the 6th head is "capital gains". Section 10 taxes the profits and gains of a business, profession or vocation carried on by an assessee; it also enumerates the different kinds of allowances that can be made in computing the profits. Under section 10(1), as we have already pointed out, the necessary condition for the application of the section is that the assessee should have carried on the business for some part of the accounting year. Section 26(2) indicates the manner of assessment of the income, profits and gains of any business, profession or vocation. This section does not provide for the assessment of income under any other head. It only says that if there is a succession to a person carrying on business during an accounting year, the person succeeded and the person succeeding can each of them be assessed in respect of his actual share. The proviso deals with a case where the person succeeded cannot be found; in that event, the assessment of the profits of the year in which the succession took place upto the date of the succession and for the year preceding that year shall be made on the person succeeding him. If an assessment has already been made in respect of the said years on the person succeeded, it can be recovered from the person succeeding. But both sub section (2) and the proviso deal only with income, profits and gains of 'the business, that is to say, for the assessment made in respect of profit and gains under the 4th head of section 6. Now turning to section 12B, it provides for capital gains. Under that section the tax shall be payable by the assessee under the head capital gains in respect of any profits or gains arising from, the sale of a capital asset effected during the Prescribed period. It says further that such profits or gain shall be deemed to be income of the previous year in which the sale etc. took place. This deeming clause does not lift the, capital gains from the 6th head in section 6 and place it (1) ; (4) 203 under the 4th head. It only introduces a limited fiction, named that capital gains accrued will be deemed to be income of the previous year in which the sale was effected. The fiction does not make them the profit or gains of the business. It is well settled that a legal fiction is limited to the purpose for which it is created and should not be extended beyond its legitimate field. Sub sections (2A) and (2B) of section 24 provide for the setting off of the loss falling under the head "capital gains" against any capital gains falling under the same head. Such loss cannot be set off against an income falling under any different head. These three sections indicate beyond any doubt that the capital gains are separately computed in accordance with the said provisions and they are not treated as the profits from the business. The profits and gains of business and capital gains are two distinct concepts in the Income tax Act: the former arises from the activity which is called business and the latter accrues because capital assets are disposed of at a value higher than what they cost the assessee. They are placed under different heads; they are derived from different sources; and the income is computed under different methods. The fact that the capital gains are connected with the capital assets of the business cannot make them the profit of the business. They are only deemed to be income of the previous year and not the profit or gains arising from, the business during that year. If that be the scheme of the Act, the contention of the learned counsel for the Revenue can easily be answered. He asks that if section 26(2) deals with only profits and gains of the business, why should the Legislature use the word "income" therein? As we have indicated, the expression "income, profits and gains" is a compendious term to connote the income from the various sources mentioned in section 6; therefore, the use of such an expression does not efface the distinction between the different heads, but only describes the income from the business. The expression ;,profits" in the proviso makes it clear that the income, profits and gains in sub section (2) of section 26 only refer to the profits under the 4th head in section 6. On the other hand, if the interpretation 204 sought to be put upon the expression "income" in sub section (2) of section 26 by the Revenue is accepted, then the absence of that word in the proviso destroys the argument. But the more reasonable view is that both the sub section and the proviso deal only with the profits under the 4th head men tioned in section 6 and, so construed, it excludes capital gains. The argument that sub section (2) of section 26 read with the proviso thereto indicates that the total income of the person succeeded is the criterion for separate assessment under sub section (2) and for assessment and realisation under the proviso is on the assumption that sub section (2) and the proviso deal with all the heads mentioned in section 6 of the Act. But if, as we have held, the scope of sub section (2) of section 26 is only limited to the income from, the business, the share under sub section (2) and the assessment and realisation under the proviso can only relate to the income from the business. The argument is really begging the question itself. In the result we agree with the High Court in regard to the answer it has given in respect of the second question. In this view no other question arises for our consideration. In the result, the appeal fails and is dismissed with costs. Appeal dismissed.

The Free Press Company was a private limited company Carrying On business as printers and publishers of certain newspapers. On August 31, 1946, the Free Press Company transferred the right to print and publish the newspapers to the assessee company and let out its machinery and assets to the latter with effect from September 1, 1946. The assessee company accordingly started publishing newspapers from September 1, 1946. The Free Press Company went into voluntary liquidation on October 31, 1946, and the Liquidator, on November 1, 1946, confirmed the transfer of the assets made by the Free Press Company to the assessee company. On November 1, 1946 the aforesaid machinery was sold yielding a profit of Rs. 6,08,666. That sum was made up of, of price machinery Rs. 2,14,090, (ii) the amount in excess over the original cost priceRs. 3,94,576. In assessing the assessee to income tax for the accounting year 1946 47 the Income tax Officer included the said two items in the total income of the assessee company. The first item was assessed as profit under proviso to section 10(2)(vii) of the Incometax Act and the second item was assessed as capital gains. The matter went up to the High Court. On a reference the High Court held that the assessee was not liable to tax in respect of the said two items. Held: (i) The second proviso to section 10(2)(vii) of the Act would only apply to the sale of such machinery which was used for the purpose of business during the accounting year. In order to bring the sale proceeds to charge under the second proviso the following conditions shall be fulfilled: (1) During the entire previous year or a part of it the business shall have been carried on by the assessee; (2) the machinery shall have been used in the business; and (3) the machinery shall have been sold when the business was being carried on and not for the purpose of closing it down or winding it up. On the facts of this case it was held that the sale of the machinery in the instant case having taken place after the business was closed and during the winding up proceedings therefore it would fall outside the scope of the said proviso and thus the first item i.e. the sum of Rs. 2,14,090 could not be assessed to income tax. 190 The Liquidators of Pursa Limited vs Commissioner of Income tax, Bihar; , and K. M. section Reddy, Commissioner of Income tax, Kerala vs West Coast Chemicals and Industries Ltd. (in liquidation), Alleppy, [1962] Supp. 3 S.C.R. 960, relied on. Commissioner of Income tax, Bombay Circle II vs The National Syndicate, Bombay, ; , explained. (ii) Both the sub section (2) of section 26 and the proviso deal only with profits under the 4th head mentioned in section 6 and, so construed, it excludes capital gains. The profits and gains of business and capital gains are two distinct concepts in the Income tax Act: the former arises from the activity which is called business and the latter accrues because capital assets are disposed of at a value higher than what they cost the assessee. Therefore under section 26(2) of the Act the assessee being the successor could not be liable to income tax in respect of Rs. 3,94,576 (the second item) which represented the capital gains because capital gains are excluded from the purview of section 26(2) of the Act. United Commercial Bank Ltd. vs Commissioner of Income tax, West Bengal; , , referred to.

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Appeal No.371 of 1956. Appeal from the Judgment and decree dated August 28, 1953, of the Madras High Court in A.S. No. 262 of 1949. A. V. Viswanatha Sastri, R. Sundaralingam and B. K. B. Naidu, for the appellant. Ganapathy Iyer, V. A. Seyid Muhamad and T. M. Sen, for the respondent No. 1. 1961. February 15. The Judgment of the Court was delivered by GAJENDRAGADKAR, J. This appeal has been brought with a certificate issued by the Madras High Court and it arises out of a suit filed by the Managing Trustee of the appellant Sri Vedaraneeswararswamy Devasthanam against respondents 1 and 2 the Dominion of India and the Province of Madras respectively. In this suit the appellant claimed a declaration that the properties in suit belong to the appellant and asked for a direction against respondent 1 to put the appellant in possession of the same. A further direction was claimed against the said respondent calling upon it to account for and pay to the appellant mesne profits past and future and an alternative plea was also made by which the court was requested to determine the proper rent payable by the said respondent to the appellant. This claim has been rejected by the learned Subordinate Judge of Mayuram who tried the case and an appeal preferred by the appellant against the 89 trial court 's decision has likewise failed. That is why the appellant has come to this Court. According to the appellant the suit properties which admeasure about 2,400 acres are situated in the village of Agastiyampalli and the said village was granted in inam absolutely to the appellant by the Tanjore Rajas several centuries ago. From the time of the said grant the appellant was in exclusive possession and enjoyment of the said properties, and its trustees and managers used to look after them and collect their profits for the use and benefit of the appellant. In 1806 an agreement was reached between the East India Company and the appellant, under which the Company took possession of the appellant 's properties in suit and in return promised to pay a sum of 1848 Pagodas annually. Out of this amount 1200 Pagodas represented the rent of the property. Pursuant to this agreement the Company took possession of the said property and was paying the agreed rent until 1858. In that year respondent 2 which succeeded the Company entered into possession of the property on the same terms and was making the annual payment of the said sum until 1937. Thereafter respondent 1 took over the salt revenue administration and as such the properties came into its possession. Respondent 1 has been paying the appellant the agreed amount from year to year. The appellant 's case was that the true legal relationship between the parties was that of a lessor and lessee and that the lease itself was not of a permanent character but was one in the nature of annual or yearly lease which was continued from year to year. It is on this basis that the appellant made the two alternative claims specified above. Respondent 1 disputed this claim. , It denied that it held the properties under an annual or yearly lease. Its case was that when the suit lands, were taken over by the Company compensation was fixed once for all, the average income of the appellant from the manufacture of salt carried on by the appellant during the previous ten years having been taken as the basis for the purpose of calculating the said compensation. 90 The properties came under the possession and control of the Company as a result of the proceedings taken under Regulation 1 of 1805 and the amount of Rs. 4,200/ corresponding to 1848 Pagodas represents the compensation annually payable to the appellant. Respondent 1 made certain other pleas on the merits Of and urged a bar of limitation. On these pleadings the trial court framed ten issues. On the principal point of dispute between the parties it held that a reading of the relevant documents clearly showed that "at the time when the Company took possession whatever the idea may then have been it must have been only to take over the properties permanently from the plaintiff Devasthanam and not to place themselves at the mercy of the trustees who might evict them at any time". According to the trial court the arrangement evidenced by the said documents was a permanent arrangement and that being so, the appellant was not entitled to claim possession. The trial court also held that even if the relationship between the parties could be said to be that of a lessor and lessee the lease in question was a permanent lease subject only to the payment of a fixed rent of Rs. 4,200/ per annum. On these findings the trial court dismissed the appellant 's suit. The appellant then took its case before the Madras High Court. The High Court in substance agreed with the conclusions of the trial court. It considered the whole of the documentary evidence and came to the conclusion that the trial judge was right in holding that the documentary evidence showed that the arrangement by which the Company took possession of the appellant 's properties was a permanent arrangement and that if it was held to be a lease it must be regarded as a permanent lease. According to the High Court the appellant 's claim was also barred by limitation under article 134(B) of the Limitation Act. The High Court therefore confirmed the trial court 's decree and dismissed the appeal preferred by the appellant. In the present appeal the principal question which has been raised before us by Mr. Viswanatha Sastri 91 for the appellant is about the true nature of the relationship between the parties in respect of the properties in suit. He contends that the principal document exhibit A. 1 on which reliance is placed by respondent 1 should be construed not as a permanent but as an annual lease; and according to him the contrary view taken by the High Court is not supported by the tenor of the document, and he also argues that in construing the said document the High Court has( not borne in mind relevant principles of law governing the powers of the manager of a Hindu religious institution. Let us then briefly consider the relevant documents bearing on the point. The principal document is exhibit A. 1. It purports to be a copy of the order passed by Mr. Wallace on December 31, 1806. It is addressed to the manager of the temple and it reads thus: "As the Government have taken charge of the pagoda salt pans and Sea Customs of Thopputhurai, belonging to the above temple, the sum of 1848 Pagodas shall be given to the temple annually in cash from the treasury being calculated on the average amount of 10 years ' revenue besides which every possible assistance will be given to the temple. " It would be noticed that there is no duration specified in the document, and prima facie it reads as if the Government had taken charge of the salt pans and Sea Customs permanently promising in return to pay to the temple the amount specified annually from year to year. In construing this document reference may be made to the previous correspondence that passed between the Collector and the Members of the Board of Revenue. It is not disputed that this correspondence can be considered for the purpose of construing the effect of the terms of exhibit A. 1. On July 17, 1806, a letter was addressed to the President and Members of the Board of Revenue in which the idea of acquiring this property was fully explained. In this letter in was stated that "it would be better to grant to the temple commutation in land because that would be more certain and permanent than ready money payment". In computing the compensation which may be paid to 92 the temple the accounts of the pagoda were examined. ,It was found that the pagoda enjoyed revenue from the duties levied at ports at Thopputhurai and Kodikarai. Ten years ' account showed that the average annual income in that behalf was. 283 Pagodas. To this amount was added the amount of magama or charitable and litigious fees and the total worked out at an average of 532 Pagodas. From this was deducted 46 Pagodas which was the average of charges and expenses incurred in collecting the port duties. Thus the net annual average revenue was 486 Pagodas. Then an account was made of the income received by the temple from salt manufacture in the salt pans and it was ascertained that an average income in that behalf would be Star Pagodas 1362. That is how the whole annual income was found to be 1848 Pagodas. It would thus be seen that elaborate calculations were made to determine the amount of compensation which should be legitimately paid to the temple for depriving the temple of the possession of its properties in question. It was then considered whether the commutation for the amount :.should be in land or in money, and, as we have already pointed out, a recommendation was made that payment of commutation in the form of land would be more certain and permanent. Thus the perusal of this document leaves no doubt that the property was intended to be acquired permanently for the purpose of manufacturing salt. It is on that basis that calculations were made and the amount of compensation determined. It appears that this proposal made by the Collector was not approved by the Government at Fort St. George. In the letter written by the Secretary to the Government on October 28, 1806, it was recommended that a payment should be made from the public treasury of a compensation for the loss which the pagoda had sustained by the introduction of salt monopoly in the Province of Tanjore not exceeding Star Pagodas 1848 per annum. The proposal thus made by the Government was accepted by the Board and its decision was communicated by the letter of November 17, 1806. It is in the background of this correspondence 93 that we have to decide the effect of the terms contained in exhibit A. 1. Thus considered there can be little doubt that though 'the property was not purchased outright it was taken charge of on a permanent basis for the purpose of manufacturing salt and compensation was determined on the same basis but made payable annually at the rate of 1848 Pagodas. There are, however, some other documents on which Mr. Sastri relies. An extract from the inam register prepared on November 27, 1862 (exhibit A. 18) has been pressed into service by the appellant. The main argument is that the relevant columns 16 to 20 which give particulars regarding the owners do not refer to the Company 's right under this permanent arrangement. If the transaction was a permanent lease, it is urged, the lessee 's rights would have been specified in the relevant columns. We are satisfied that this argument is not well founded. The main column deals with particulars regarding the owners. It also provides that if the inam was sub divided the name etc. of each sharer shall be entered in its columns. We are, therefore, not satisfied that the name of the permanent lessee was expected to be shown in this column. It is true that in determining the additional assessment on excess area payable by the temple the whole of the property is assumed to belong to the temple; but that is not inconsistent with the temple continuing to be the lessor of the suit property at all. There is no doubt that if the Company had become the lessee of the said suit property by a document duly executed in that behalf entries made in the inam register cannot change or affect the character of the said right. Therefore, in our opinion, there is nothing in exhibit A. 18 which militates against the case set up by respondent 1. Then Mr. Sastri has relied on exhibit A. 2 which is a title deed issued by the Inam Commissioner is favour of the temple. In this document the temple 's title to the Devadayam or pagoda inam village of Agastiyampalli is recognised and specific mention has been made of the porambokes in the said village. It is stated that the whole of the property is held for the support 94 of the pagoda in the village of Vedaranyam. What we have said about the extract from the Inam Register applies with equal force to this document. It appears that from 1806 when the Company took possession of the property until 1941 the appellant has allowed the Company and its successors to be in quiet enjoyment of the property on receipt of an annual compensation paid from year to year. In 1941 the factory officer wrote to the trustee of the appellant to let him know the name or the names of the revenue villages to which the area covered by the. salt factory was originally attached prior to the acquisition, and he enquired whether any compensation amount had been paid to the temple for the said acquisition. It is this letter which presumably started the appellant 's present claim. Soon after receiving this letter the appellant wrote to the factory officer on April 8, 1941 alleging that the property had been leased out to Government for the manufacture of salt for a monthly lease of Rs ' 350 or annually Rs. 4,200. The appellant thus set up a relationship of lessor and lessee between itself and respondent 1. Then the appellant moved the relevant authorities for appropriate relief on one ground or another. All its efforts to obtain possession of the property or even to have the amount of compensation enhanced failed and that led to the present dispute. The main argument which has been urged before us by Mr. Sastri is that in construing exhibit A. 1 we ought to bear in mind the limitations on the powers of the manager of the temple at the relevant time. Mr. Sastri has relied on the fact that the manager of a temple could not have entered into a transaction of permanent lease unless there was a compelling necessity so to do. A permanent lease amounts to an alienation of the property and would have to be justified as such. An annual lease, on the order hand, can be executed by the manager in his capacity as the manager and the same is treated as an act of prudent management. That, however, is not true about a permanent lease, and so in construing the document we should attribute to the manager the desire and intention to act within 95 his powers and not without them. In support of this argument Mr. Sastri has referred us to the decisions of the Privy Council in Maharanee Shibessouree Debia vs Mothooranath Acharjo (1), Nainapillai Marakayar vs Ramanathan Chettiar (2), and Palaniappa Chetty vs Deivasikamony Pandara (3). The argument is that a fair and reasonable rule of construction would be to treat the document as executed in pursuance of the legitimate authority available to the manager of the temple and not as one which is executed in breach of the said authority. This position cannot be and is not disputed. In the application of this rule to the present case, however, two relevant facts cannot be ignored. The first important fact is that after the execution of the document more than a century has elapsed; and so, as observed by the Privy Council in Bawa Magniram Sitaram vs Kasturbai Manibhai (4), "where the validity of a permanent lease granted by a shebait comes in question a long time (in the present case nearly 100 years) after the grant, so that it is not possible to ascertain what were the circumstances in which it was made, the Court should assume that the grant was made for necessity so as to be valid beyond the life of the grantor". In the present case more than a century has elapsed after the grant A as made, and so the principle laid down by the Privy Council in that case can well be invoked by respondent 1. Besides, it is common ground that under the relevant provisions of Regulation 1 of 1805 the manufacture and sale of salt was made subject to the immediate direction and control of the general agent appointed by the Government, and the said manufacture and sale as well as transit, export and import of salt, whether by Bear or by land, in the territory subject to the Presidency of Fort 'St. George was prohibited except on account of Government or with their express sanction. It was also provided that all salt manufactured, sold, conveyed, exported or imported, directly (1) (1869) 13 Moo. I.A. 270, 273, 275 (2) (1923) L. R. 51 I.A. 83, 97, 98. (3) (1917) L.R. 44 I.A. 147,155, 156. (4) (1921) L.R. 49 I.A. 54. 96 or indirectly, otherwise than is provided for in the said Regulation, shall be liable to seizure and confiscation. In other words, part of this property belonging to the temple on which salt was being manufactured became absolutely useless for that purpose as the temple could no longer manufacture, or permit the manufacture of, salt. Faced with this situation it is not at all unlikely that the manager of the temple was compelled to enter into an arrangement with the Company and secure for the benefit of the temple a sub stantial permanent income accruing from year to year. It is common ground that the whole of the property was marshy and the only use to which it could be profitably put was for the manufacture of salt, and that could no longer be done after Regulation 1 of 1805 was passed. That is why we think that even the test of the rule of construction on which Mr. Sastri relies can be said to be satisfied in the present case. Circumstanced as he was the then manager or trustee had no option but to enter into an agreement like the one which was evidenced by exhibit A. 1; thereby the manager provided for a recurring income to the temple and thus arranged for the upkeep of the temple, the worship of the idol and discharge his duties as trustee. We have already seen how the previous correspondence which preceded the execution of the document unambiguously shows that the intention of the Company was to take possession of the property on a permanent footing, and realising the limitations imposed by the Regulation the manager of the temple would also have wanted to give the property to the Company permanently and thereby create a permanent source of income for the temple. The subsequent conduct of the temple for over a century is consistent with the view that the temple knew that the property has been permanently given to the Company and is inconsistent with the present case that the lease is an annual lease. The payment and acceptance of the same uniform rent for over a century when so many political and other changes took place also support the same conclusion. The pleas set up by the appellant from stage 97 to stage in respect of its relationship with respondent in regard to the possession of this land have changed from time to time and that shows that the appellant was at paying to put forward a basis on which it could claim either possession or enhanced rent. The fact that respondent 1 is making large profits out of this property may explain the appellant 's desire to get some more share in the said income but that cannot assist the appellant if it has parted with the property permanently as early as 1805 oil the terms and conditions specified in exhibit A. 1. In our opinion, the High Court was right in coming to the conclusion that the transaction evidenced by exhibit A. 1 is a permanent lease and that respondent 1 is entitled to retain possession of the whole of the property on the terms and conditions specified in the said document. We must accordingly hold that the appellant 's claim either for possession or for enhancement of rent has been properly rejected by the courts below. In the result the appeal fails but there will be no order as to costs. Appeal dismissed.

The appellant Devasthanam had certain properties, granted to it in inam by the Rajas of Tanjore centuries ago, which com prised salt pans. After the passing of Regulation 1 of 1805 which prohibited manufacture of salt except on account of the Government or with their express sanction, the East India Company in 1806 took over possession of those properties and the agreement between the parties as recorded in the order passed on behalf of the Board of Revenue, was as follows, "As the Government have taken charge of the pagoda salt pans and Sea Customs of Thopputhurai, belonging to the above temple, the sum of 1848 Pagodas shall be given to the temple annually in cash from the treasury being calculated on the average amount of 10 years ' revenue besides which every possible assistance will be given to the temple." The previous correspondence between the Collector and the Board of Revenue showed that the properties were intended to be acquired permanently for the purpose of manufacturing salt and compensation was determined on that basis. From 1886 till 1941 the appellant allowed the company and its successors, the respondents 1 and 2, to be in quiet possession of the properties in dispute on receipt of the said annual compensation. Its case, negatived both by the trial Court as well as the High Court in appeal, was that the agreement represented a lease from year to year and it was contended on its behalf in this Court that in construing the document regard must be had to the limited powers of a manager of a Hindu Temple to alienate trust property and he must be held to have intended to act within his powers and not beyond them. Held, that the transaction in question was a permanent lease and the appeal must fail. Although it is indisputable that in construing a document executed by the manager of a Hindu temple the fair and reasonable rule would be to treat it as executed in pursuance of his legitimate authority and not in breach of it, that rule could have no application in the instant case, for the facts that more than a century had admittedly elapsed since the document in question had been executed and, further, that the then manager, 88 faced by the prohibition of the manufacture of salt by Regulation 1 of 1805, had no option, in the interest of the Devasthanam itself, but to enter into the agreement in order that he could provide for a recurring income to the temple, could not be ignored. Bawa Magniram Sitaram vs Kasturbai Manibhai, (1921) L.R.49 I.A. 54, applied. Maharanee Shibessouree Debta vs Mothoranath Acharjo, (1809) L.R. 13 Moo. I.A. 270, Nainapillai Marakayar vs Ramanathan Chettiar, (1923) L.R. 51. I.A. 83 and Palaniappa Chetty vs Deivasikamony Pandara, (1917) L.R. 44 I.A. 147, referred to.

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Civil Appeal No. 5 of 1954. Appeal from the judgment and decree dated April 7, 1948, of the Nagpur High Court in First 783 Appeal No. 27 of 1954 arising out of the judgment and decree dated July 7, 1944, of the Court of Third Additional District Judge, Nagpur, in Civil Suit No. 10 B of 1943. N. section Bindra and Gyan Singh Vohra, for the appellants. B. Sen and H. L. Hathi (for R. H. Dhebar), for the respondent. October 29. The following Judgment of the Court was delivered by BHAGWATI J. This appeal with a certificate of fitness under section 110 of the Code of Civil Procedure raises an important question as to the rights and remedies of a bailor in the event of non delivery of the goods by the bailee. The appellants carried on business in partnership in the firm name and style of " Ishwarsing Dhiansingh " and were the owners of two motor trucks, one bearing No. AWB 230 (V 8 Ford 1938 Model) and the other bearing No. AWB 253 (Oldsmobile Model 1938). On May 4, 1942, the appellants entered into an agreement for the hiring out of these trucks to the respondent for imparting tuition to the military personnel. Rupees 17 per day per truck was stipulated as the hire and the agreement was terminable on one month 's notice by either side. Pursuant to the said agreement truck No. AWB 230 was handed over to the respondent on April 29, 1942, and truck No. AWB 253 was given on May 4, 1942. The respondent used truck No. AWB 230 from April 29, 1942, to July 31, 1942, excepting the period from June 4, 1942, to June 9, 1942, and truck No. AWB 253 from May 4, 1942, to July 31, 1942, excepting the period from June 1, 1942, to June 9, 1942. On June 29, 1942, the respondent gave notice to the appellants terminating the agreement with effect from August 1, 1942, and asked them to remove the trucks on the expiration of that period. The appellant No. 1 attended upon the Officer Commanding 4 M.T.T. Centre, Kamptee at about 9 a.m. on August 1, 1942, for removing the trucks but they were not delivered 784 to him by the transport in charge and by his letter of the same date addressed to the section S.O., Kamptee, the appellant No. 1 put the above fact on record. The respondent did not return the trucks to the Appellants nor did it pay any hire charges to them. The respondent took up the position that the amount of hire had been paid and the trucks had been delivered by it to one Surjan Singh who was alleged to have been a partner of the appellants and thus entitled to receive the said payment and the delivery of the trucks in question. The appellants controverted the said position and claimed that the respondent was liable to pay the hire money as well as return the trucks to them. On August 4, 1942, the appellants gave the requisite notice under section 80 of the Code of Civil Procedure to the respondent and claimed (i) the hire money up to July 31, 1942, at Rs. 17 per day for AWB 230 from April 29, 1942, and for AWB 253 from May 4, 1942, and interest at 6% on the hire money from the due date till realization (ii) damages at Rs. 17 per day per truck from and inclusive of August 1, 1942, onwards till delivery of possession and (iii) return of the trucks Nos. AWB 253 and AWB 230 in good running order with spare wheels, accessories and tools and in good condition or in the alternative Rs. 3,500 being the price of the said two trucks. The respondent failed and neglected to comply with the requisitions contained in the said letter with the result that on January 8, 1943, the appellants filed a suit against the respondent and the said Surjan Singh claiming the aforesaid reliefs together with future damages from the date of suit to the date of the delivery of the trucks and costs. In the plaint as filed the cause of action was stated to be the failure of the respondent to pay hire money and the non delivery of the trucks to the appellants by reason of their having been wrongfully delivered by the respondent to the said Surjan Singh. It was averred that the appellants were entitled to the return of their trucks or their value at the date of the decree. The appellants reserved their right to claim excess 785 amount if the price of the trucks at that time was found more than what was claimed by them owing to the rise in prices thereof, by paying additional courtfee. The action was one for wrongful detention and the appellants claimed a return of the trucks or in the alternative the price thereof at the date of the decree, payment of hire and damages for wrongful detention of the said trucks. The respondent reiterated its contentions in the written statement which it filed and the parties went to a hearing on these pleadings. The Trial Court held that the respondent was not justified in paying the rent and delivering the trucks to the said Surjan Singh. It awarded to the appellants the price of the two trucks which had been fixed by the appellants at Rs. 3,500 both in the notice under section 80 of the Code of Civil Procedure and the evidence led on their behalf. It also awarded to the appellants interest on that sum at 6% per annum by way of damages. It, however, refused to grant any mesne profits holding that for either detention or conversion, the value of the goods on the date of the tort was sufficient compensation. The rent of the trucks was calculated at Rs. 2,380 and it awarded to the appellant that sum together with interest thereon at 6% per annum from August 1, 1942, to January 7, 1943. It accordingly passed a decree in favour of the appellant for Rs. 6,032 4 0 with proportionate costs against the respondent as well as Surjan Singh. The appellants preferred an appeal to the High Court of Judicature at Nagpur. They claimed a total sum of Rs. 11,985 as also the highest market value of the trucks. In so far as a decree for Rs. 6,032 had already been passed by the Trial Court in their favour, they valued the subject matter of the appeal at Rs. 5,953 and accordingly furnished court fee stamp for that amount. The Office of the Registrar took objection to the amount of that court fee and on February 19, 1945, a Bench of the High Court passed an order that the appellants must pay court fee on Rs. 16,626 being the claim for rent from the date of the suit till the date 786 of the filing of the appeal and the appellants accordingly paid the additional court fee of Rs. 1,279 11 0 on February 28, 1945. The appeal was heard by a Division Bench of the High Court On April 1, 1948. The High Court disallowed the appellants ' claim for the higher value of the trucks on the ground that the appellants had merely claimed Rs. 3,500 as the price of the said trucks in the notice under section 80 of the Code of Civil Procedure. The learned judges were of the opinion that although it might be permissible to allow some latitude when the substance of the claim was clear it would not be right to tell the respondent that only Rs. 3,500 was being claimed if the trucks were not returned and then in the suit to demand something like Rs. 14,000. They accordingly upheld the decree of the Trial Court in this regard. As regards the claim for damages for wrongful detention of the trucks the learned judges held that the appellants should be compensated for being deprived of the use of the trucks between August 1, 1942, the date of the breach and July 7, 1944, the date of the Trial Court 's decree. They, however, observed that the appellants might not have been able to keep the trucks in use for every day all over the period, that there might be days when the trucks would be out of use, that there might be days when there would not be any hirers for the trucks, and that there might be days when the trucks would lie idle for repairs and overhaul and so forth. Even though all this was taken into consideration the learned judges thought that compensation at the rate of Rs. 17 per day_ per truck for a substantial portion of the period stated above would be fair. Having arrived at the above conclusion the learned judges observed that the appellants had no doubt paid an additional court fee at a later stage but the fact that they had originally limited their claim to Rs. 5,953 showed that they considered that a fair sum in the beginning. The learned judges therefore limited the enhancement of the Trial Court 's decree to Rs. 5,953 the sum which the appellant bad originally claimed in the appeal. The Trial Court 's decree was accordingly enhanced by Rs, 5,953 thus 787 allowing the appellant a further sum of Rs. 5,477 for compensation under that head and the appeal was allowed with costs to that extent. The appellants thereafter applied for a certificate of fitness to appeal under section 110 of the Code of Civil ' Procedure and hence this appeal. The two main points which have been urged by the appellants before us are : (i) that the 'appellants ' suit was one for wrongful detention and the appellants were entitled to return of the two trucks or in the alternative to the value thereof as on the date of the decree, that the value of the two trucks at the date of the decree was Rs. 7,000 each and the Trial Court should have awarded to them a sum of Rs. 14,000 in the alternative and (ii) that in addition to the above relief the appellants were entitled to damages for wrongful detention of the trucks calculated at the rate of Rs. 17 per day per truck from August 1, 1942, being the date of the accrual of the cause of action till July 7, 1944, which was the date of the decree passed by the Trial Court in their favour. The reply of the respondent was (i) that at its worst the respondent was to the knowledge of the appellant guilty of wrongful conversion of the said trucks from August 1, 1942, and that the appellants were only entitled to damages for wrongful conversion which are commensurate with the price of the trucks at the date of such wrongful conversion and (ii) that even if the appellants were entitled to any further damages since August 1, 1942, they were merely the damages for nonpayment of the value of the trucks by the respondent and should be assessed at only 6% interest per annum from the date of such conversion till payment. The respondent further contended that even on the basis of wrongful detention the appellant would not be entitled to anything more than the price of the said trucks as at the date of the Trial Court 's decree plus nominal damages for the wrongful detention of the trucks from August 1, 1942, till July 7, 1944. In so far however as the High Court had awarded to the appellants the sum of Rs. 5,953 in addition to the sum 100 788 of Rs. 6,032 already awarded by the Trial Court in their favour, the appellants were not entitled to anything more and that therefore the appeal was liable to be dismissed. It would be relevant to consider what is the exact scope of the two forms of action, viz., action for wrongful conversion and action for wrongful detention, otherwise known as action in trover and action in detinue. A conversion is an act of wilful interference, without lawful justification, with any chattel in a manner inconsistent with the right of another, whereby that other is deprived of the use and possession of it. If a carrier or other bailee wrongfully and mistakenly delivers the chattel to the wrong person or refuses to deliver it to the right person, he can be sued as for a conversion. Every person is guilty of a conversion, who without lawful justification deprives a person of his goods by delivering them to some one else so as to change the possession. (Salmond on Torts, 11th Edition, pages 323, 324, 330). The action of detinue is based upon a wrongful detention of the plaintiff 's chattel by the defendant, evidenced by a refusal to deliver it upon demand and the redress claimed is not damages for the wrong but the return of the chattel or its value. If a bailee unlawfully or negligently loses or parts with possession he cannot get rid of his contractual liability to restore the bailor 's property on the termination of the bailment and if he fails to do, he may be sued in detinue. (Clerk & Lindsell on Torts, 11th Edition, pages 441 and 442: paras. 720 & 721). Detinue at the present day has two main uses. In the first place, the plaintiff may desire the specific restitution of his chattels and not damages for their conversion. He will then sue in detinue, not in trover. In the second place, he will have to sue in detinue if the defendant sets up no claim of ownership and has not been guilty of trespass; but the original acquisition in detinue sur bailment was lawful. Detinue lies against him who once had but has improperly parted with possession. At common law the natural remedy 789 for the recovery of chattels was the action in detinue. In that action the judgment was in the alternative that the plaintiff do recover the possession of the chattels or their assessed value in case possession cannot be had together in any case with damages for their detention. (Salmond on Torts, 11th Edition, pages 351, 352 & 353). Judgment for the petitioner in trover is for recovery of damages for the conversion: Judgment for the petitioner in detinue is for delivery of the chattel or payment of its value and damages for detention. (Halsbury 's Laws of England, Hailsham Edition, Vol. 33, p. 78, para. These forms of action are survivals of the old forms of action in trover and in detinue and it is interesting to note the evolution of the modern causes of action for wrongful conversion or for detention. Denning J. (as he then was) in Beaman vs A.R.T.S. Ltd. (1) gave the following history of their evolution at page 92:" The modern causes of action for wrongful detention or for conversion are very different from the old forms of action for detinue or for trover, and must not be confused therewith. Detinue in its original form was a real action founded on a bailment which was extended later to cases against a finder. It had, however, many procedural disadvantages, and, in particular, the defendant could wage his law. On this account, it was superseded in the course of time by trover, which for over 150 years was in practice the common remedy in all cases of taking away or detention of chattels or of their misuse or destruction. In 1833 the defendant in detinue lost his right to wage his law. In 1852 the old forms of actions were abolished. In 1854 the plaintiff gained the right to an order for specific delivery of the chattel detained. Since that time there have developed the new causes of action of conversion and wrongful detention, the names of which are derived from the old forms of action, but the substance of which is quite different. I attempt no precise definition, but, broadly speaking, the cause of action in conversion is based on an (1) , 92. 790 unequivocal act of ownership by the defendant over goods of the plaintiff without any authority or right in that behalf. The act must be an unequivocal act of ownership, i.e., an act such as acquiring, dealing with, or disposing of the goods, which is consistent only with the rights of an owner as distinct from the equivocal acts of one who is entrusted with the custody or handling or carriage of goods. A demand and refusal is not, therefore, itself a conversion, but it may be evidence of a prior conversion. The cause of action in wrongful detention is based on a wrongful withholding of the plaintiff 's goods. It depends on the defendant being in possession of the plaintiff 's goods. If such a defendant, without any right so to do, withholds the goods from the plaintiff after the plaintiff has demanded their return, he is, for such time as he so withholds them, guilty of wrongful detention: This is the tort of which a bailee or finder is guilty who is in possession of the goods and fails to deliver them up within a reasonable time after demand, though it may also, in the case of a bailee, be a breach of contract. If the bailee or finder subsequently disposes of the goods, he is guilty of conversion, but the wrongful detention then comes to an end and is swallowed up in the conversion. " Paton on " Bailment in the Common Law " (1952 Edition) has the following observations to make in regard to these two forms of causes of action at page 404: " The following maxim has been suggested as a guide for plaintiffs: if the market is falling sue in conversion, if it is rising sue in detinue. This is the orthodox view and it shows that even to day the distinction between the old forms of action is important. " Whether the plaintiff files an action for wrongful conversion or for wrongful detention this is essentially a matter for his election ; he can sue the bailee who has parted with wrongful possession of the goods in favour of a third person either in trover on in detinue or where the goods have been sold be may waive the tort and sue as upon an implied contract for money 791 had or received. (Halsbury 's Laws of England, Hailsham Edition, Vol. 33, page 69, para. 115). The defendant cannot be heard to say that the plaintiff knew or ought to have known of the conversion of the goods by him and therefore should pursue his remedy only in conversion. He cannot take advantage of his own wrong. It was held as early as 1858 in Reeve vs Palmer (1) by Cockburn C.J. " It has been held from a very early time that where a chattel has been bailed to a person, it does not lie in his mouth to set up his own wrongful act in answer to an action for detinue, though the chattel has ceased to be in his possession at the time of the demand. . . . Williams J. also observed: "All the authorities, from the most ancient time, shew that it is no answer to an action of detinue, when a demand is made for the re delivery of the chattel to say that the defendant is unable to comply with the demand by reason of his own breach of duty." The said decision was affirmed in appeal before the Exchequer Chamber and that may be taken to be the settled law on this point. Wilkinson vs Verity (2) also laid down the same principle of election of the remedies and the following observations of Willes J. at page 210 are apposite: " The misconduct of the party who acts in fraud of the bargain in such cases gives the other party thereto the election of suing either for the first violation or for non performance at the day; and it does not furnish the wrongdoer with any answer to the latter. . . . On the other hand, if the action of detinue is resorted to as it may be (Com. Detinue A) for the purpose of asserting against a person entrusted for safe custody a breach of his duty as bailee, by detention after demand, independent of any other act of conversion, such as would make him liable in an action of trover, it should seem that the owner is entitled to sue, at election, either for a wrongful parting with the (1) ; , 90, 91 (2) 792 property (if he discovers and can prove it) or to wait until there is a breach of the bailee 's duty in the ordinary course by refusal to deliver up on request and that in the latter case, it is no answer for the bailee to say that he has by_ his own misconduct incapacitated himself from complying with the lawful demand of the bailor. In that case, the principle that a man intrusted with property for safe custody cannot better his position by wrongfully parting with possession of it, but must be answerable as if he retained the possession, was applied both in this Court and in the Exchequer Chamber to the action of detinue. . . . And this is agreeable to the maxim, " Qui dolo desiit possidere pro possidente Damnatur. " It may be noted that this case of Wilkinson vs Verity (1) was followed by the Court of Appeal in England in Rosenthal vs Alderton & Sons Ltd. (2 ) and by the High Court of Australia in John F. Goulding Proprietary Limited vs The Victorian Railways Commissioners (3). It is clear therefore that a bailor in the event of the non delivery of the goods by the bailee on a demand made by him in that behalf is entitled at his election to sue the bailee either for wrongful conversion of the goods or the wrongful detention thereof and if the bailor pursues his remedy against the bailee for wrongful detention of the goods it would be no answer for the bailee to say that he was guilty of wrongful conversion of the goods at an earlier date which fact of conversion of the goods the plaintiff knew or ought to have known at or about that time and is therefore not liable to the plaintiff for wrongful detention thereof. It is the option of the plaintiff to pursue either remedy against the bailee just as it suits him having regard to all the circumstances of the case and the bailee cannot be heard to say anything to the contrary for the simple reason that he cannot take advantage of his own wrong (1) (3) ; , 167. (2) 793 and cannot ask the plaintiff to choose a remedy which may be less beneficial to him. This is of course the normal rule, though the courts have tried to soften its rigour by importing the consideration that the plaintiff should not be allowed to delay his action in order to get the advantage of a rising market. A speculative element might enter into the matter and a shrewd plaintiff might attempt to take unfair advantage of a fluctuating market. " Just as plaintiff may not waive a conversion so as to pick his own time to demand return and thus evade being statute barred, so he may not bide his time after a conversion so as to make his demand when the market price is highest." (Kialfray (12) Modern Law Review at page 427). In the present case, however, we are not fettered by any such consideration. The respondent was the bailee of the two trucks and was bound to return the same to the appellants on the termination of the bailment. The bailment came to an end on August 1, 1942, and the appellants attended the office of the Officer Commanding 4 M.T.T. Centre, Kamptee on the said date for having the trucks re delivered to them. When the said trucks were not so delivered the appellants immediately on August 14, 1948, gave the statutory notice to the respondent under section 80 of the Code of Civil Procedure. The period of the said notice expired on or about October 14, 1942, and the appellants filed their action for wrongful detention on January 8, 1943. There was no delay on the part of the appellants which would spell out any intention on their part to take advantage of the rising market or to waive their remedy in wrongful conversion with a view to take advantage of the statute of limitation. There is no evidence to show that the market value of the trucks had appreciated perceptibly between August 1, 1942, and January 8, 1943, and it is significant to note that the only claim which the appellants had made in their notice dated August 4, 1942, was for specific delivery of the said trucks by the respondent. Even though the appellants knew that the said trucks had been redelivered by the respondent to Surjan Singh and they 794 could have, if they had been so minded, sued the respondent for wrongful conversion of the said trucks, they elected to have the said trucks re delivered to them and asked for the specific delivery thereof and filed their action for wrongful detention of the said trucks. They were, in our opinion, perfectly entitled to do so and we have to consider the further questions that arise before us on the basis that the action for wrongful detention had been rightly instituted by the appellants against the respondent. This leads us to the question as to what relief the appellants are entitled to obtain against the respondent. The claim for the rent already due by the respondent to the appellants up to August 1, 1942, has been settled by the judgments of the courts below and we are not called upon to canvass these findings of fact any further. The more important questions that require to be dealt with are: (1) What is the amount which the appellants are entitled to recover from the respondent as and by way of the value of the two trucks in the alternative the respondent being admittedly not in a position to re deliver the said trucks to them and (2) what are the damages which the appellants are entitled to recover by reason of wrongful detention of the trucks till the date of judgment. As regards the first question the Trial Court unfortunately did not properly appreciate the evidence which was led by the appellants before it. That evidence was given on or about February 1, 1944, more than a year after the institution of the suit and about five months before the date of the decree. The evidence such as it stood was to the effect that the prices of similar trucks had considerably appreciated after August 1, 1942, and broadly stated were at least twice those which obtained on or about that date. The claim of the appellants as laid was no doubt exaggerated and on the evidence the Trial Court would not have been justified in awarding to the appellants anything like the sum of Rs. 7,000 per truck which had been claimed. The evidence however was sufficient to enable the Trial Court to come to the conclusion that the price of the said two trucks which had been fixed at Rs. 3,500 both in the notice under a. 80 of the Civil 795 Procedure Code as well as in the plaint had appreciated at least by 100% and if the Trial Court had come to the conclusion that the appellants were entitled to the value of the trucks as at the (late of the judgment it would certainly have been justified in awarding to the appellants an aggregate sum of Rs. 7,000 in the alternative. The Trial Court however understood the position in law to be that for either detention or conversion the value on the date of the tort was sufficient compensation and awarded to the appellants only a sum of Rs. 3,500 which was the value thereof on August 1, 1942, together with interest at 6% per annum as and by way of damages. The Trial Court was obviously wrong in awarding this sum and interest to the plaintiff for the reasons which we shall presently discuss. When the matter went to the High Court the learned judges of the High Court did not discuss this aspect of the question at all but dismissed the claim of the appellants merely on the ground that the appellants had only claimed Rs. 3,500 in the notice which they had served on the respondent under section 80 of the Code of Civil Procedure and that they were therefore not entitled to recover anything more than the sum of Rs. 3,500 and they accordingly upheld the decree of the Trial Court in this behalf We are constrained to observe that the approach of the High Court to this question was not well founded. The Privy Council no doubt laid down in Bhagchand Dagadusa vs Secretary of State (1) that the terms of this section should be strictly complied with. That does not however mean that the terms of the notice should be scrutinized in a pedantic manner or in a manner completely divorced from common sense. As was stated by Pollock C. B. in Jones vs Nicholls (2) "We must import a little common sense into notices of this kind. " Beaumont C. J. also observed in Chandu Lal Vadilal vs Government of Bombay (3): "One must construe section 80 with some regard to common sense (1) (1927) L.R. 54 I.A. 338. (2) ; , 363; ; , 150. (3) I.L.R. 101 796 and to the object with which it appears to have been passed. . . If the terms of the notice in question be scrutinized in this manner it is abundantly clear that the relief claimed by the appellant was the a re delivery of the said two trucks or in the alternative payment of Rs. 3,500 being the value thereof. The value which was placed by the appellants on the trucks was the then value according to them a value as on August 1, 1942, the date on which the delivery of the trucks ought to have been given by the respondent to the appellants. The appellants could only have demanded that sum as on the date of that notice. They could not sensibly enough have demanded any other sum. If the respondent had complied with the terms of that notice then and there and re delivered the trucks to the appellant, nothing further needed to be done. If on the other hand instead of re delivering the trucks it paid to the appellant the value thereof then also it need not have paid anything more than Rs. 3,500 to the appellant, on that alternative. If, however, the respondent failed and neglected to comply with the requisitions contained in that notice the appellants would certainly be entitled to recover from the respondent the value of the said trucks in the alternative on the failure of the respondent to re deliver the same to the appellants in accordance with the terms of the decree ultimately passed by the Court in their favour. That date could certainly not be foreseen by the appellants and it is contrary to all reason and common sense to expect the appellants to have made a claim for the alternative value of the said two trucks as of that date. The respondent was and ought to have been well aware of the situation as it would develop as a result of its non compliance with the terms of that notice and if on January 8, 1943, the appellants in the suit which they filed for wrongful detention of the said trucks claimed re delivery of the said trucks or in the alternative Rs. 3,500 as their value and reserved their right to claim the further appreciation in the value of the trucks by reason of the rise in prices thereof up to the date of the decree by paying 797 additional court fee in that behalf, it could not be laid at their door that they had not made the specific demand in their notice to the respondent under section 80 of the Code of Civil Procedure and that therefore their claim to recover anything beyond Rs. 3,500 was barred under that section. A common sense reading of the notice under section 80 would lead any Court to the conclusion that the strict requirements of that section had been complied with and that there was no defect in the same such as to disentitle the appellants from recovering from the respondent the appreciated value of the said two trucks as at the date of the judgment. It is relevant to note that neither was this point taken by the respondent in the written statement which it filed in answer to the appellants ' claim nor was any issue framed in that behalf by the Trial Court and this may justify the inference that the objection under section 80 bad been waived. The point appears to have been taken for the first time before the High Court which negatived the claim of the appellants for the appreciated value of the said trucks. Turning then to the question whether the appellants were entitled to the value of the said trucks in the alternative as at the date of the judgment or at the date of the tort, whether it be conversion or wrongful detention, the position appears to be a little confused. Recent cases indicate that there is much conflict concerning the true rule to apply as to the measure of damages in detinue and conversion. As to the time at which the value of the goods which are the subject matter of the tort should be assessed it is not certain (a) whether the rule is the same in trover as in detinue; (b) whether damages should be calculated at the moment of the wrong, or of the verdict or at some intermediate period and (c) whether the doctrine of special damage can be so used as to compensate the owner for fluctuations in value. (Paton on " Bailment in the Common Law", page 404). Up to 1946 the trend of the authorities in England was to assess the value of the goods at the date of the breach where the action was for breach of contract and as at the date of the tort where the action was for 798 wrongful conversion or for wrongful detention. There was an old authority of Mercer vs Jones (1) which laid down that the damages should be the value at the time of the conversion. This authority was relied upon by the Attorney General in Greening vs Wilkinson (2) but Abbott C.J. observed that case was hardly law, and that the amount of damages was for the jury, who might give the value at the time of the conversion, or at any subsequent time in their discretion, because the plaintiff might have had a good opportunity of selling the goods if they had not been detained. He expressed the opinion that the jury were not at all limited in giving their verdict by what was the price of the article on the day of the conversion. This case was considered and not applied in Johnson vs Hook (3) and the position which obtained was that the damages were to be assessed on the value of the property at the date of the conversion. Bodley vs Reynolds (4) was an action in trover for goods and chattels comprising of carpenters tools. Special damages were also claimed and proved and the Court awarded not only the value of the goods at the date of conversion but also special damages as laid in the declaration. Lord Denman C. J. observed that where special damage was laid and proved, there could be no reason for measuring the damages by the value of the chattel converted. In effect this confirms the position that apart from this circumstance the damages would be measured by the value of the chattel converted which value was taken as at the date of conversion. Reid vs Fairbanks (5) was also an action in trover. It was held that the proper principle on which to estimate such damages, would be, the value of the ship and all her store, etc., on the date when the third party took possession of her; and that, as a, mode of ascertaining such value, the referee should consider what would have been the value of the ship, (1) ; ; (2) ; (3) (4) ; ; (5) ; ; 799 if she had been completed by the defendant according to his contract with the plaintiff and deduct therefrom the money that would necessarily have been laid out by the defendant after that date, in order to complete her according to the contract. The value of the ship was thus calculated as at the date of the conversion even though the method of computation was prescribed by the circumstances of the case. In section section Celia vs section section Volturno (1) the House of Lords had to consider the question whether the proper date for ascertaining the rate of exchange for the purpose of converting the amount payable into English currency was the date on which the detention occurred or the date on which the damages were assessed or payment made. Lord Buckmaster at page 548 said: " A judgment, whether for breach of contract or for tort, where, as in this case, the damage is not continuing, does not proceed by determining what is the sum which, without regarding other circumstances, would at the time of the hearing afford compensation for the loss, but what was the loss actually proved to have been incurred either at the time of the breach or in consequence of the wrong. With regard to an ordinary claim for breach of contract this is plain. Assuming that the breach complained of was the non delivery of goods according to contract, the measure of damage is the loss sustained at the time of the breach measured by the difference between the contract price and the market price of the goods at that date. Similar considerations apply to an action for tort. In cases where, as in the present, the damage is fixed and definite, and due to conditions determined at a particular date, the amount of damage is assessed by reference to the then existing circumstances and subsequent changes would not affect the result. If these damages be assessed in a foreign currency the judgment here, which must be expressed in sterling, must be based on the amount required to convert this (1) [1921] 2 A.G. (H.L.) 544, 548. 800 currency into sterling at the date when the measure was properly made, and the subsequent fluctuation of exchange, one way or the other, ought not to be taken into account. " Lord Sumner expressed himself in these terms at page 555: " The matter may be tested in this way. Suppose that, as an incident of the collision, some seaman belonging to the Celia had taken possession on behalf of her owners of a parcel of Italian currency notes, the property of the owners of the Volturno, and that the former had received and kept it. The owners of the Volturno could have claimed damages for conversion of the notes or their return with damages for their detention, as they chose. In the first case the value of the notes would be taken and exchanged into sterling as at the date of the conversion, and as the foundation of the damages in the second case the same date would have been taken. " The following passage from Lord Wrenbury 's speech at page 563 clearly sets out the position in law: " The argument to the contrary is that the defendant is bound by a pecuniary payment to put the plaintiff in a position as good as that in which he stood before the tort was committed. That is true, but it is necessary to add the consideration of which we have recently heard so much, in the form of a fourth dimension namely, that of time. The defendant is bound to make such pecuniary payment as would put the plaintiff at the date of the tort in as good a position as he would have been in had there been no tort. If the date taken be that not of the tort but of the judg ment, it is giving the plaintiff not damages for the tort, but damages also for the postponement of the payment of those damages until the date of the judgment. If such later damages can be recovered as under circumstances they may be if the defendant improperly postpones payment, they would be recovered in the form of interest. They would be damages not for the original tort, but for another and a subsequent wrongful act." 801 In the Arpad (1) where the plaintiff laid alternative claims in contract and tort it was held that the true measure of damages was the value of the goods at the date of the non delivery, disregarding circumstances peculiar to the plaintiffs and that on the alternative claim in tort for damages for conversion also, the measure of damages was the same. Scrutton L.J. observed in the course of his judgment at page 205 : " In my opinion the damages in conversion should be the value to the purchaser or goods owner at the time of the conversion. " The last case in this series is that of the Caxton Publishing Co. vs Sutherland Publishing Co. (2). Lord Porter in his speech at page 201 defines conversion in the terms following: " As to (3) conversion was defined by Atkin J. as he 'then was, in Lancashire and Yorkshire Rly. Co. vs MacNicoll , 605). "Dealing", he said ' "with goods in a manner inconsistent with the right of the true owner amounts to a conversion, provided that it is also established that there is also an intention on the part of the defendant in so doing to deny the owner 's right or to assert a right which is inconsistent with the owner 's right. " This definition was approved by Scrutton L.J. in Oakley vs Lyster , 153. " Atkin J. goes on to point out that, where the act done is necessarily a denial of the owner 's right or an assertion of a right inconsistent therewith, intention does not matter. Another way of reaching the same conclusion would be to say that conversion Consists in an act intentionally done inconsistent with the owner 's right, though the doer may not know of or intend to challenge the property or possession of the true owner." After thus defining conversion the learned law Lord proceeded to Consider the measure of damages suffered from that act and he observed at page 203: " As to (4) there is no dispute as to the principle on which in general the measure of damages of (1) (2) 802 conversion is calculated. It is the value of the thing converted at the date of the conversion, and this principle was accepted by both sides in the present case. " While thus enunciating the principle on which the measure of damages for conversion is to be calculated the noble law Lord referred to the statement of Abbott C. J. in Greening vs Wilkinson (supra) and stated: " I should wish to leave open for consideration in a case in which it directly arises the question whether the statement of Abbott C. J. in Greening vs Wilkinson that the jury " may give the value at the time of the conversion or at any subsequent time " can be supported or not." The catena of authorities quoted above shows that but for the reservation made by Lord Porter in the last mentioned case in regard to the statement of Abbott C. J. in Greening vs Wilkinson (supra) the consensus of opinion was that the damages for tort were to be measured as at the date of the tort, though it may be noted that most of these cases were concerned with wrongful conversion of the goods and not with the wrongful detention thereof. In 1946 the Court of Appeal in England laid down in the case of Rosenthal vs Alderton & Sons Ltd. (supra) that in detinue the value of the goods should be measured as at the date of the judgment or verdict, and not at the date of the refusal to return the goods. The action there was one of detinue. The plaintiff who was a tenant of the defendants surrendered his tenancy in June, 1940, and, by arrangement with the defendants left on the premises certain goods belonging to him. In 1943, after his return from a period of military service, the plaintiff found that the goods were missing, some of them having been sold by the defendants. On October 6, 1943, the plaintiff through his solicitors demanded the return of the goods and, on the defendants ' refusal to comply, brought an action against them claiming the return of the goods and, in the alternative, the payment to him of their value and damages for their detention. It was con tended on behalf of the defendants that a demand by 803 the plaintiff for the return of the goods having been refused by the defendants several months before the issue of the writ; the proper assessment of the value of such of the goods as had not been returned by the defendants should have in accordance with their value on the date when the cause of action arose, which was (as it was claimed), notoriously less than their value as assessed by the official referee after action was brought. This contention of the defendants was negatived and the Court held that in an action of detinue, the value of the goods to be paid by the defendants to the plaintiff in the event of the defendants ' failing to return the goods to the plaintiff must be assessed as at the date of the verdict or judgment in his favour and not at that of the defendants ' refusal to return the goods. Evershed J. who delivered the judgment of the Court dealt with this contention at page 378 as under: "In our judgment an assessment of the value of the goods detained (and not subsequently returned) at the date of the accrual of the cause of action (i.e., of the refusal of the plaintiff 's demand) must presuppose that on that date the plaintiff abandoned his property in the goods: and such a premise is inconsistent with the pursuit by the plaintiff of his action of detinue. The significance of the date of the refusal of the plaintiff 's demand is that the defendant 's failure to return the goods after that date becomes and continues to be, wrongful. Moreover, the plaintiff may recover damages in respect of the wrongful 'detention ' after that date, e.g., where the plaintiff has suffered loss from a fall in value of the goods between the date of the defendant 's refusal and the date of actual return, (See William vs Archer ; and such damages must equally continue to run until the return of the goods or (in default of return) until payment of their value. There is (as appears from the forms of judgment mentioned) a clear distinction between the value of the goods claimed in default of their return and damages for their detention, whether returned or not. The date of the refusal of the plaintiff 's demand is the date from which the latter commence to run, 102 804 but appears to be irrelevant to the former and cannot convert a claim for the return of the goods into a claim for payment of their value on that date. " A further contention was urged on behalf of the defendants in that case that the value of certain of the goods which they had in fact sold could not in any event be assessed at any higher value than at the date of the sale. This contention was negatived by the Court in the terms following at page 379: "In other words they say "We have proved that we converted some of your goods and therefore, we can have the benefit of any lower value prevailing at the date of the conversion". It is, however, clear that it is no answer for a bailee, when sued in detinue, to say that he has by his own misconduct incapacitated himself from complying with the lawful demand of the bailor of. Wilkinson vs Verity (supra). It seems to us that the defendants are, in effect, saying "Your real remedy is in conversion," but the bailor can, in such circumstances elect to sue in detinue (at any rate where he was not aware of the conversion at the time), and there is no reason why the value of the goods in fact converted should be assessed on a different basis from the value of the goods which the bailee has not converted but which for some other reason be fails to re deliver." These observations are the basis of the headnote which says that the same principle applies whether the defendant has converted the goods by selling them or has refused to return them for some other reason. This decision of the Court of Appeal lays down that where the defendant has been guilty of wrongful conversion of the goods or the wrongful detention thereof, the plaintiff is entitled to damages for such tort committed by the defendant measured at the value of the goods which are the subject matter of the tort computed as at the date of the verdict or judgment and not at the date of the tort. If this is the true position it would run counter to the rule which had been settled all along up to 1946 that the measure of damages in an action for tort would be the value of the goods at the date of the tort. As a matter 805 of fact Denning J. (as he then was) commented on this position in Beaman vs A. R. T. section Ltd. (supra) at page 93: "A recent decision of the Court of Appeal holds that the damages in such cases are to be assessed at the date of the judgment or verdict in the plaintiff 's favour : See Rosenthal vs Alderton & Sons Ltd. (supra) ; but that does not mean that the cause of action accrues at that time. The observations of Lord Goddard C. J. in Sachs vs Miklos (1948) (I All E. R. 67) considerably limit the scope of Rosenthal vs Alderton, and, should prices hereafter fall, the courts will probably be faced with the task of reconciling Rosenthal vs Alderton with the settled rule that damages, whether in contract or tort, are to be assessed as at the date of the accrual of the cause of action and that subsequent fluctuations upwards or downwards in rates of exchange or commodity prices, before or during legal proceedings, are irrelevant: See the decision of the House of Lords in section section Celia vs section section Volturno (supra) particularly the speeches of Lord Buckmaster ([1921] 2 A. C. 544, 548), of Lord Sumner (ibid., 556), and Lord Wrenbury (ibid., 563), and the long line of cases of buyers who sue sellers for conversion of, or for failure to deliver, goods bargained and sold (such as France vs Gaudet where the damages are always assessed as at the date of the breach." The qualification added by the Court of Appeal on the bailor 's right to elect to sue in detinue, "at any rate where he was not aware of the conversion at the time",. has also been commented upon by Paton on " Bailment in the Common Law " at page 405, that on a strict historical basis, this qualification is unnecessary, but the Courts have added it to prevent a plaintiff delaying his action in order to get the advantage of a rising market. In Sachs vs Miklos (1) the Court of Appeal discussed the measure of damages in a case that raised the point very neatly. In 1940 a bailor agreed with a bailee that the latter should gratuitously store his furniture (1) [1948] 2 K .B. 23. 806 in her house. In 1944, the bailee wished to get rid of the furniture and, after fruitless attempts to get in touch with the bailor, sold it. The furniture realised pound 13 at a public auction. In 1947 the bailor sued for detinue and conversion, and the current value of the furniture was now assessed at pound 115. Lord Goddard C. J. (with whom Tucker L. J. and Jenkins J. concurred) stated "that the measure of damages is the same in conversion as in detinue, where the facts are only that a defendant has the goods in his possession and could hand them over, and would not do so" and as a result the damages fall to be assessed as at the date of the verdict or judgment. These observations of Goddard C. J. were understood by Denning J. in Beaman vs A. R. T. section Ltd. (supra) as considerably limiting the scope of Rosenthal vs Alderton (supra). The following comment oil the case by Winfield on Tort, 6th Edition at page 442 may be noted with interest: "It seems, however, that Rosenthal 's case simply laid down that where the plaintiff sues in detinue the same principle of assessment of damages applies whether the defendant refuses to return the goods because he has converted them or for some other reason fails to return the goods. This hardly warrants the conclusion that the measure of damages is the same in detinue as in conversion. As we have seen the two actions are distinct in their nature and purpose. " Paton on " Bailment in the Common Law " at page 405 has the following comment to make, on this position : " The Court reached a conclusion that was based on common sense and a desire to do justice to both parties, but in certain respects breaks new ground. The crucial question was: What was the plaintiff 's loss ? What damage did he suffer by the wrongful act of defendant ? If the plaintiff knew or ought to have known in 1944 of the defendant 's intention to sell, the damages would be justly calculated at pound 13. If he did riot know, or ought not to have known, till 1946 that his goods were sold, then the damages should be 807 assessed at pound 115. The case was remitted to the County Court judge in order that the facts might be further elucidated. The Court also emphasised one further factor. It was clear that the plaintiff knew of the sale in January, 1946, but he did not begin the action till January, 1947. If the County Court judge found that there was an undue delay in bringing the action and that there had been a rise in price between 1946 and 1947, then allowance must be made. This point disposes of the criticism that a speculative element enters into the matter and that a shrewd plaintiff might attempt to take unfair advantage of a fluctuating market. " Paton further states that this is an interesting decision, but a short survey of the cases shows that the earlier authorities, especially with regard to conversion, are by no means clear. (See also Salmond on Torts, 11th Edition at page 347). The difficulty, however, arises when there is an increase in the value of the goods which are the subjectmatter of the tort between the date of the tort and the date of the verdict or judgment and there is authority for the proposition that any increment in value due to the act of the defendant is not recoverable by the plaintiff. Salmond thus summarises the position in his treatise on Torts, 11th Edition at page 348 : " If, on the other hand, where the property increases in value after the date of the conversion, a distinction has to be drawn. If the increase is due to the act of the defendant, the plaintiff has not title to it, and his claim is limited to the original value of the chattel. Thus, in Munro vs Willmoti ([1949] 1 K. B. 295) the plaintiff in 1941 deposited a car in the defendant 's yard. In 1945, the defendant, after endeavouring without success to communicate with the plaintiff, sold the car, having spent pound 85 on repairs necessary to put it into a saleable state. Lynskey J. assessed the value of the car at the date of the judgment as pound 120, but hold " that the defendant is entitled to credit, not from the point of view of payment for what he has done, but in order to arrive at the true value of the property which the plaintiff has lost": if 808 the repairs had not been done the car could only have been sold for scrap". It may be noted that Lynslkey J. approved of this statement of the law as enunciated in Salmond. Paton, however, in his " Bailment in the Common Law " points out at p. 412 that there is a tendency to consider the merits of each case in order to reach a reasonable solution ; although the theoretical rule is that the defendant is entitled to credit, not as payment for what he has done, but rather to arrive at the true value of the property converted. He further points out that American cases also emphasise the state of mind of the tortfeasor. An innocent converter is allowed to deduct the value of his improvements, but one who knowingly commits conversion may be forced to pay damages for the, value of the res in its improved state. This is justified on the ground that it is fair to award punitive damages where the wrong was wilful. Where, however, the increase in value is not due to the act of the defendant the plaintiff is also entitled to recover the extra value as special damage resulting from the conversion in addition to the original value of the property converted. The following passage from Paton at page 409 further elucidates this position: " The plaintiff can always recover, in addition to the value of the property, any special damage which the law does not regard as too remote. Thus if a carpenter 's tools are converted, it has been held that he may recover their value and also special damages for the loss of employment. France vs Gaudet (supra) explained this decision on the ground that the defendant had some notice of the existing contract. Such special damage must be pleaded. If this rule is applied to fluctuations in value, the result is as follows: (a) If the value increases and is highest at the date of verdict, the result is the same as taking the test of the value at the time of verdict, for the plaintiff obtains the value at the time of conversion, and in addition the increase in value as special damages. (b) If the value decreases, then the plaintiff can still secure the value at the time of conversion: he can 809 claim no special damage and the defendant has no claim to reduce the damages. It is doubtful, however, whether the rule as to special damage should be applied to the question of fluctuations of value. There is some authority for it, but it cannot be regarded as established. If it is accepted, the argument as to the date of the moment of calculating damage loses much of its practical importance. A commentator in the Harvard Law Review ((1947) 61 Harv. L. R. 158) states that in measuring damages for conversion the courts started with the "traditional but over simplified value at the time and place of the wrong". But where the goods are of such a nature that their value fluctuates greatly the courts have been prepared to depart from this rule. Thus in New York, where stock is concerned, the courts allow the owner to recover the highest value to which the stock rose a reasonable time after he learnt of the conversion, the emphasis on the reasonable time being to prevent speculation by delaying unduly the initiation of the action. California allows the highest value reached between the date of the conversion and the time of trial. In Texas the highest intermediate value is allowed in cases of wilful wrong or gross negligence, but only the value at the date of the conversion as against a blameless defendant. " (See also Restatement of the Law, Volume on Torts, pages 650, 653 and 927). And further at page 410: " The decisions illustrate the way in which the merits of the defendant 's case have been allowed to determine the technical question of the method of calculating damages. In England, these considerations have not been discussed so openly, but their influence on decisions is seen in the judgments in Sachs vs Miklos (supra), where the question of reasonable speed in bringing the action was discussed and in Lord Atkin 's speech in Solloway vs McLaughlin ([1938] A.C. 247) where he finds delight in using a technical rule to award damages against the unjust steward. " It follows from the above that the position in law in regard to the measure of damages in an action for 810 wrongful conversion is far from clear and the law in regard to the same cannot be said to be perfectly well settled. Whatever be the position in regard to the same in actions for wrongful conversion, one thing is quite clear that in actions for wrongful detention the measure of damages can only be the value of the goods as at the date of the verdict or judgment. The tort is complete the moment the goods are wrongfully converted by the defendant and no question can arise in those cases of any continuing wrong. In a case of wrongful detention, however, the cause of action may certainly arise the moment there is a refusal by the defendant to re deliver the goods on demand made by the plaintiff in that behalf. But even though the cause of action thus arises on a refusal to re deliver the said goods to the plaintiff the wrongful detention of the goods is a continuing wrong and the wrongful detention continues right up to the time when the defendant re delivers the goods either of his own volition or under compulsion of a decree of the Court. There is moreover this distinction between actions for wrongful conversion and those for wrongful detention that in the former the plaintiff abandons his title to the goods and claims damages from the defendant on the basis that the goods have been wrongfully converted by the defendant either to his own use or have been wrongfully dealt with by him. In the latter case, however, the plaintiff asserts his title to the goods all the time and sues the defendant for specific delivery of the chattel or for re delivery of the goods bailed to him on the basis that he has a title in those goods. The claim for the re delivery of the goods by the defendant to him is based on his title in those goods not only at the time when the action is filed but right up to the period when the same are re delivered by the defendant to him. The wrongful detention thus being a tort which continues all the time until the re delivery of the goods by the defendant to the plaintiff, the only verdict or judgment which the Court can give in actions for wrongful detention is that the defendant do deliver to the plaintiff the goods thus wrongfully detained by him or pay in the alternative the value 811 thereof which can only be ascertained as on the date of the verdict or judgment in favour of the plaintiff. Winfield thus enunciates the position in his treatise on Tort, 6th Edition at page 414: " The significance of the date of the refusal of the plaintiff 's demand is that the defendant 's failure to return the goods after that date becomes, and continues to be, wrongful, and damages are recoverable for wrongful "detention" after that date until the goods are returned or payment of their value. The date of the defendant 's refusal cannot convert a claim for the return of the goods into a claim for payment of their value at that date. " It is, therefore, clear that in actions for wrongful detention the plaintiff is entitled on default of the defendant in re delivering the goods to him, to payment in the alternative of the value of the goods thus wrongfully detained as at the date of the verdict or judgment, in other words, at the date of the decree. We are, therefore, of opinion that the appellants were entitled to recover from the respondent the value of the said trucks which, as has been already stated, was Rs. 7,000 in the alternative, on default committed by the respondent in re delivery of the same to the appellants. The next question to consider is what damages are the appellants entitled to recover from the respondent by reason of the wrongful detention of the said trucks from August 1, 1942, up to the date of the decree. It is well settled that in an action for wrongful detention the plaintiff is entitled besides the re delivery of the chattel or payment of its value in the alternative, also to damages for such wrongful detention. There is however no definite criterion laid down by the decided cases as to what the measure of such damages should be. As was observed by Denning L. J. in Strand Electric & Engineering Co., Ltd. (1): " The question in this case is: What is the proper measure of damages for the wrongful detention of goods? Does it fall within the general rule that the plaintiff only recovers for the loss he has suffered or (1) , 253. 103 812 within some other, and if so what, rule? It is strange that there is no authority upon this point in English 'law: but there is plenty on the analogous case of detention of land. The rule there is that a wrongdoer, Who keeps the owner out of his land, must pay a fair rental value for it, even though the owner would not have been able to use it himself or to let it to anyone else. So also a wrongdoer who uses land for his own purpose without the owner 's consent, as, for instance, for a fair ground, or as a, way leave, must pay a reasonable hire for it, even though he has done no damage to the land at all: Whitwham vs Westminster Brymbo Coal Company ([1896] 2 Ch. 538). I see no reason why the same principle should not apply to detention of goods. " In that case certain portable switchboards were lent by the plaintiff to a Theatre Co., pending the manufacture and installation by the plaintiffs of permanent switchboards. The hiring out of portable switchboards was a normal part of the plaintiff 's business and it was agreed between the plaintiff and the Theatre Co., on a subsequent date that the company should pay to the plaintiff the hiring charges at a certain rate per week. Later on the defendant took possession of the theatre and gave instructions that nothing whatsoever must be removed, and the Theatre Co., disclaimed any responsibility for the plaintiffs ' hire equipment as from that date. The plaintiffs thereafter wrote a number of letters to the defendant demanding the return of their equipment but received neither their property nor any satisfactory reply, and they issued a writ claiming the return of their equipment or its value, and damages for the period of its detention, which at the trial was shown to be for 43 weeks. Tile question that arose for consideration was what was the quantum of damages which the plaintiffs were entitled to recover and it was held that in an action in detinue in respect of a chattel which the plaintiff, as part of his business, hires out to users, the plaintiff, if the defendant has during the period of detention made beneficial use of the chattel, is entitled to recover as damages the full market rate of hire for the whole 813 period of detention. After setting out the passage above quoted Denning L. J. continued at page 254: " If a wrongdoer has made use of goods for his own purpose, then he must pay a reasonable hire for them, even though the owner has in fact suffered no loss. It may be that the owner would not have used the goods himself, or that he had a substitute readily available, which he used without extra cost to himself. Nevertheless the owner is entitled to a reasonable hire. If the wrongdoer had asked the owner for permission to use the goods, the owner would be entitled to ask for a reasonable remuneration as the price of his permission. The wrongdoer cannot be better off by doing wrong than he would be by doing right. He must therefore pay a reasonable hire." Mr. B. Sen, who appeared on behalf of the respondent, urged before us on the authority of Anderson vs Passman (1) that as the gist of the grievance is mere unlawful detention, the damages will be nominal unless the plaintiff proves that he has suffered special damage. This position is, however, of no avail to the respondent because it cannot be said that the appellants ' grievance here is merely in regard to the wrongful detention of the trucks. The appellants in this instant case have also claimed to recover from the respondent future damages from the date of detention till the date of delivery of the trucks and apart from any claim laid in special damages, these are damages which naturally flow from the wrongful act of the respondent and which the appellants would be entitled to recover in the event of non delivery of the trucks to them by the respondent. This is certainly not a case of nominal damages. As Earl of Halsbury L.C. pointed out in Owners of the Steamship "Mediana" vs Owners, Master and Crew of Lightship "Comet" (2): "the unlawful keeping back of what belongs to another person is of itself a ground for real damages, not nominal damages at all. " The quantum of damages may be big or small but it (1) ; (2) 118. 814 does not make any difference to the principle. The ,principle of assessing the damages is the same and that is that where by the wrongful act of one man something belonging to another is either itself so a injured as not to be capable of being used or is taken away so that it cannot be used at all, that of itself is a ground for damages. (lbid p. 116). In the case before us the appellants were the owners of the two trucks and they used to hire out the same to others. Hiring Out of the trucks was a regular business of theirs and if the said trucks had been re delivered by the respondent to them on August 1, 1942, they would have immediately put the same to the user, viz., that of hiring them out to outsiders and earning thereby a certain sum by way of rent for each truck per day. The appellants might not have been able to hire them out for every day of the period of wrongful detention by the respondent, viz., from August 1, 1942 to July 7, 1944. As the learned judges of the High Court have observed, there might be days when the trucks would be out of use; there might be days when the trucks would lie idle for repairs and overhaul and so forth; that would only go to reduce the number of days for which the appellants would be entitled to recover the damages for such wrongful detention. If the learned judges of the High Court had on taking all the circumstances into consideration arrived at the figure of Rs. 5,953 as the amount of hire which could have been reasonably earned by the appellants in the event of the re delivery of the trucks by the respondent to them on August 1, 1942, their judgment in this behalf could not have been success fully impeached. What they did, however, was to confine the appellants ' claim to Rs. 5,953 on the ground that the appellants had claimed that amount in the first instance and had paid the court fee on the same. They, therefore, took it that that sum of Rs. 5,953 represented a fair amount of damages for wrongful detention of the trucks according to the appellants. We are of opinion that the High Court was clearly in error in adopting this basis for the award of 815 damages. The payment of court fee stamp on Rs. 5,953 was certainly not conclusive against the appellants because on its being pointed out by the Office of the Registrar, the appellants paid an additional court fee stamp of Rs. 1,279 11 0 on February 28, 1945, and that was done because the appellants did not confine their claim merely to the said sum of Rs. 5,953. If, according to the judgment of the learned judges of the High Court the appellants were entitled to damages for the wrongful detention of the said two trucks at the rate of Rs. 17 per day per truck from August 1, 1942 to July 7, 1944, they ought to have made a reasonable calculation of the number of days for which the trucks would have been put to use by the appellants and awarded damages to the appellants accordingly. This, however, they failed to do. In our opinion, the appellants are entitled to recover such damages from the respondent at the rate of Rs. 17 per truck per day for such reasonable period between August 1, 1942 to July 7, 1944, for which the appellants would have hired out the trucks to outside parties. The trucks were in a fairly good running condition but were old models of 1938 and it will be quite reasonable to hold that they would have been in commission approximately for one year during that period. Calculating the hire of these trucks at the rate of Rs. 17 per truck per day the total amount of damages which the appellants would be entitled to, recover from the respondent works out at Rs. 12,410. The appellants would therefore be entitled to recover over and above the sum of Rs. 5,953 already awarded to them by the High Court an additional sum of Rs. 6,457 by way of damages for wrongful detention of the said trucks by the respondent. We accordingly allow this appeal and pass in favour of the appellants, in addition to the enhanced decree which they have already obtained from the High Court, a decree against the respondent for Rs. 3,500 being the appreciated value of the said trucks together with interest thereon at 6% per annum from July 7, 1944, till this date as also for a sum of Rs. 6,457 by way of additional damages for wrongful detention of 816 the said trucks, additional proportionate costs both in the Trial Court as well as in the High Court as also the costs of this appeal, subject of course to the payment of additional court fee for the excess amount awarded hereby. The whole of the decretal amount as above will carry further interest at the rate of 6% per annum from this date till payment. Appeal allowed.

The appellants, by an agreement, let out two trucks on hire to the respondent. The respondent terminated the agreement but failed to return the trucks on the fixed date on the plea that they had already been returned to a partner of the appellants. The appellants served the statutory notice under section 80 of the Code of Civil Procedure and, on the respondent 's failure to comply, brought a suit for wrongful detention claiming, inter alia, return of the trucks or their value in the alternative as stated in the notice and damages for wrongful detention till delivery. Claim was also made for such appreciated value of the trucks as would prevail at the date of the decree by paying additional Court fee. The trial court held that the return of the trucks as alleged by the respondent was not justified, and, besides the rent claimed in the suit, passed a decree for recovery of the price of the trucks in the alternative as stated in the notice and interest thereon by way of damages, holding that the price as at the date of the tort was sufficient compensation in law either for wrongful conversion or for wrongful detention. The High Court affirmed the decision of the trial court so far as the recovery of the price in the alternative was concerned holding that the respondent could not be called upon to pay more than what it was asked to pay by the notice, but disagreed on the question of award of damages and enhanced the decree to the extent of the claim as tentatively laid in the appeal. Held, that the courts below were in error in deciding the matter as they did and the appeal must be allowed. Where the bailee fails to deliver the goods, the bailor has normally the right to elect his own remedy and sue him either for wrongful conversion or for wrongful detention. If he chooses to adopt the latter remedy, the bailee cannot take advantage of his own wrongful conversion and compel the bailor to choose the other remedy to his disadvantage. Reeve vs Palmer, ; , and Wilkinson vs Verity, , referred to. The cause of action in a suit for wrongful detention, unlike that in a suit for wrongful conversion is a continuing one ,and 782 the measure of damages must be the value of the goods not as at the date of the tort but as at the date of the judgment. Although the cause of action arises with the refusal of the bailee to deliver the goods, it continues till delivery is made by the bailee or he is compelled to do so by a decree of court. While in a suit for wrongful conversion the plaintiff abandons his title and claims damages in lieu of the goods, in a case of wrongful detention the plaintiff claims delivery of the goods on the basis of his title that subsists till the date of decree. Consequently, the value of the goods in the alternative on failure of delivery can be ascertained only at the date of the decree. Rosenthal vs Alderton & Sons Ltd., , referred to. Case law discussed. It is well settled that in a suit for wrongful detention the plaintiff is entitled not merely to the delivery of the goods or their value in the alternative but also to damages for the wrongful detention till the date of the decree. The principle for assessing such damages must be the same as in any other case where the wrongful act of one so injures something belonging to another as to render it unusable or something is taken away so that it can no longer be used, and the amount of damages must be ascertained by a reasonable calculation after taking all relevant circumstances into consideration. In the instant case the High Court should have made a reasonable calculation of the number of days the trucks could have been put to use by the appellants and awarded damages accordingly. Strand Electric & Engineering Co., Ltd., , Owners of the Steamship " Mediana " vs Owners, Master and Crew of Lightship "Comet", , referred to. Anderson vs Passman, ; , held inapplicable. While the terms of section 80 of the Code of Civil Procedure must be strictly complied with, that does not mean that the terms of the section should be construed in a pedantic manner or in a manner completely divorced from common sense. There can be no doubt on a reasonable construction of the terms of the section that the value of the trucks as stated in the notice in the instant case, could be no other than the value as on the date fixed for delivery and, consequently, it could be no bar to the recovery of such appreciated value as prevailed at the date of the judgment. Bhagchand Dagadusa vs Secretary of State, (1927) L.R. 54 I.A. 338, considered. Jones vs Nicholls, ; E.R. 149, and Chandu Lal Vadilal vs Government of Bombay, I.L.R. , referred to.

537.txt

Appeal No. 21. of 1962. Appeal by special leave from the judgment and order dated September 23, 1958, of the Bombay High Court in I.T. Reference No. 87 of 1957. H.N. Sanyal, Additional Solicitor General of India, N. D. Karkhanis and R. N. Sachthey, for the appellant. A.V. Viswanatha sastri, J. B. Dadwhanji, O. C. Mathur and Ravindra Narain, for the, respondent, 768 1962. October 25. The judgment of the Court was delivered by SHAH, J. For the year of account ending March 31, 1955, Afco Private Ltd. a private limited company earned a total income which was finally computed in assessment proceedings by order of the Income tax Tribunal, at Rs. 49,843/ . The company declared a dividend of Rs. 11,7121 on July 13, 1955, and before the close of the year of assessment 1955 56 declared an additional dividend of Rs.5,612/ , thereby distributing in the aggregate dividend which was not less than 60% of the total income, reduced by the income tax and super tax payable by it. The company then claimed rebate at the rate of one anna in the rupee on the amount computed according to Schedule 1, Part 1, Item B read with section 2 of the Finance Act 15 of 1955. The Income tax Officer and the Appellate Assistant Commissioner rejected the claim because in their view the claimant was a company to which the provisions of section 23A of the Income tax Act could not be made applicable. In appeal, the Income tax Appellate Tribunal, Bombay ', reversed the order of the Income tax authorities. The Tribunal opined that the expression "cannot be made applicable" in Item B of Part 1 of Schedule 1 of Finance Act 15 of 1955 must be read in conjunction with section 23A of the Income tax Act, and the benefit of rebate provided by the Finance Act, 1955, cannot be denied to a Private Company if the conditions prescribed in section 23A(1) are fulfilled. The following question referred by the Tribunal to the High Court of judicature at Bombay was answered in the affirmative : "Whether on the facts and in the circumstances of the case, the assessee company having distributed dividends of over 60% of the company 's total income less income tax and super tax payable thereon is entitled to the rebate of 769 1 anna per rupee on the undistributed balance of profits as provided in clause (1) of the proviso to item B of Part 1 of the 1st Schedule to the Finance Act of 1955 ?" By the Finance Act 15 of 1955 Schedule 1 Item B read with section 2 of the Act rates of tax were prescribed in the case of companies. Item B providedthat "in the case of every company Rate surcharge on the whole of total income Four annas one twen in the tieth of rupee the rate specified in the pre ceeding column. Provided that in the case of a company which, in respect of its profits liable to tax under the Income tax Act for the year ending on the 31st day of March, 1956, has made the prescribed arrangements for the declaration and payment within the territory of India, of the dividends payable out of such profits., and has deducted super tax from the dividends in accordance with the provisions of sub section (31) of section 18 of that Act (i) where the total income, as reduced by seven annas in the rupee and by the amount, if any, exempt from income tax, exceeds the amount of any dividends (including dividends payable at a fixed rate) declared in respect of the whole or part of the previous year for the assessment for the year ending on the 31st day of March, 1956, and the company is a corn any to which the provisions of section 23A of the Income tax Act cannot be made applicable, a rebate 770 shall be allowed at the rate of one anna per rupee on the amount of such excess ; (ii)x x x x" By section 23A(1) of the Income tax Act at the material time the Income tax Officer was authorised to order a company to pay super tax, at the rate of eight annas in the rupee in the case of a company whose business consisted wholly or mainly in the dealings in or holding of investments, and at the rate of four annas in he rupee in the case of any other company, on the undistributed balance of the total income of the previous year, that is to say, on the total income reduced by the amounts of income tax and super tax and any other tax payable under any law in excess of the amounts allowed in computing the income, and in the case of Banking companies in addition to the taxes, funds actually transferred to a reserve fund, and the dividends actually distributed, if any, where in respect of any previous year the profits and gains distributed as dividend by the company within the twelve months immediately following the expiry of that previous year were less than 60% of the total income of the company of that year as reduced by the amounts aforesaid, unless the Income tax Officer was satisfied that having regard to losses incurred by the company in earlier years or to the smallness of the profits made in the previous year, the payment of a dividend or a larger dividend than that declared would be unreasonable. It is manifest that the order under section 23A(1) would (excluding certain procedural conditions) be ordinarily made if the company has distributed by way of dividend within the twelve months immediately following the expiry of the accounting year less than the prescribed percentage of the total income as reduced by the, amount of taxes paid in the case of non Banking Companies and reserve fund in addition thereto in the case of Banking Companies 771 By the first paragraph of sub section (9) of section 23 A it is provided that "Nothing contained in this section shall apply to any company in which the public are substantially interested or to a subsidiary company of such company if the whole of the share capital of such subsidiary company has been held by the parent company or by its nominees throughout the previous year. " This clause is followed by two explanations. Explanation 1, in so far as it is material to this case, provides : "Explanation 1 For the purposes of this section, a company shall be deemed to be a company in which the public are substantially interested (a) x x x x (b) if it is not a private company as defined in the Indian Companies Act, 1913 (VII of 1913), and (i) x x x x (ii) x x x x (iii) x x x x Explanation 2. x x x x" Section 23A was enacted to prevent evasion of liability to pay super tax by shareholders of certain classes of companies taking advantage of the disparity between the rates of super tax payable by individuals and by the companies. The rates of super tax applicable to companies being lower than the highest rates applicable to individual assessees, to prevent individual assessees from avoiding the higher incidence of super tax by the expedient of transferring to companies the sources of their income, and thereby securing instead of dividends the benefit of the profits of the company, the Legislature had by Act XXI of 1930, as modified by Act VII of 1939, enacted a special 772 provision in section 23A investing the Income tax Officer with power, in certain contingencies prescribed in the section to order that the undistributed balance of the assessable income reduced by the amount of taxes and the dividends shall be deemed to have been distributed at the date of the general meeting. By the Finance Act 15 of 1955 section 23A (1) was amended and the Income tax Officer was directed to make an order that the Company shall be liable to pay super tax oil the undistributed balance at the rates prescribed under the section. But by virtue of sub. section (9) of section 23A the or der can be made only in respect of a company in which the public are not substantially interested or of a subsidiary company of such company if the whole of the share capital of such subsidiary company has been held by the parent company or by its nominees throughout the previous year, and by cl. (b) of the first explanation thereto a private company as defined in the Indian Companies Act, 1913, is not a company in which the ' public are substantially interested. It is, therefore, competent to the Income tax Officer to pass an order under section 23A (1) if the conditions thereof are fulfilled directing payment of super tax by a private company at the rates prescribed by the Finance Act 15 of 1.955 on its undistributed balance. To reduce the rigour of this provision the Legislature has provided for inducement in the form of rebate on the difference between nine annas in every rupee of the total net income, and the amount of dividend declared, to companies which have declared dividends so as not to attract the application of an order under section 23A. But that benefit is admissible only in favour of companies to which the provisions of section 23A of the Act cannot be made applicable. The Income tax authorities held that the expression company to which the provisions of section 23A of the Income tax Act cannot be made applicable ' is descriptive of a class of companies against which in no circumstances can an order under section 23A of the 773 Indian Income tax Act be made, and private limited companies being companies in respect of which an order under section 23A of the Income tax Act can be made if the conditions prescribed relating to distribution of dividend are fulfilled, the benefit of rebate is not admissible in their favour. The Tribunal and the High Court held that the expression " 'cannot be made applicable" only refers to a state of affairs in which having regard to the circumstances an order under section 23k of the Indian Income tax Act cannot be made. In our judgment the Income tax Appellate Tribunal and the High Court were right in so holding. The Legislature has used the expression "cannot be made applicable" which clearly means that the applicability of section 23A depends upon an order to be made by the Income tax Officer, and not upon any exclusion by the provisions of the Act. Before an order can be made under section 23A of the Income tax Act, the Income tax Officer has to ascertain (i) whether the company conforms to the description in sub section (9) of section 23A; if it does ' the lncome tax Officer has no power to make an order ; and (ii) if the company is not one which falls within cl. (9) of section 23A whether having regard to inadequacy of the declaration of dividend, an order for payment of super tax should not, because of the losses incurred by the company in the earlier years, or to the smallness of the profits in the previous year, be made. Satisfaction of the Income tax Officer as to the existence of several conditions prescribed thereby even if the company is one which does not fall within sub section (9) of section 23A is a condition of the making of the order. The language used by the Legislature clearly indicates that it is only when an order under section 23A will not, having regard to the circumstances ' be justified that the right to obtain rebate under the Finance Act 15 of 1955 is claimable. The Legislature has not enacted that the benefit of rebate is admissible only to companies against which the order under sub section (1) of section 23A can never be made. 774 The Legislative history as disclosed by the earlier Finance Acts supports this interpretation of the relevant provision. In the Finance Acts prior to 1955 rebate under Part I of the 1st Schedule Item B was admissible if the company had in respect of profits liable to tax under the Indian Income tax Act made the prescribed arrangements for declaration and payment of dividends payable out of the profits and had deducted super tax from the dividends in accordance with section 18(3D) & (3E), where the total income reduced by seven annas in the rupee ' and the amount exempt from income tax exceeded the amount of any dividends declared and no order had been made under sub section (1) of section 23A of the Income tax Act. The right to rebate arose under those Finance Acts if no order under section 23A was made. The Income tax Officer had therefore to decide even before completing the assessment of the company whether the circumstances justified the making of an order under section 23A, and unless an order under section 23A was made the assessee became entitled automatically to the rebate of one anna in the rupee. Such a provision led to delay in the disposal of assessment proceedings and caused administrative inconvenience. It appears that the Legislature modified the scheme of granting rebate in enacting the Finance Act of 1955 with a view to simplify the procedure and avoid delays, and not with the object of depriving the private limited companies as a class, of the benefit of rebate which was permissible under the earlier Acts. Counsel for the Income tax Commissioner invited our attention to the Finance Acts of 1956 and 1957 and contended that the Legislature in dealing with the right to rebate under Part II relating to the rates of super tax used phraseology which restricted the right of rebate only to public companies. Ie must be noticed that even under the Finance Act of 1955 by Part II of Schedule 1, item D, a rebate of three annas per rupee of the total income was to bf 775 allowed to companies in respect of profits liable to tax under the Income tax Act for the year ending March 31, 1956, if the company had made prescribed arrangements for payment of dividend payable out of profits and for reduction of super tax from dividends in accordance with the provisions of sub section 3D of section 18 of the Act and the company was a public company with a total income not exceeding Rs. 25,000/ . This provision was slightly modified in the Finance Act of 1956 where the rebate admissible was at the rate of five annas in the rupee, (other condition being fulfilled) if the company was a public company with total income not exceeding Rs. 25,000/to which the provisions of section 23A could not be made applicable. Under the Finance Act of 1957 rebate was admissible in favour of companies "referred to in sub section (9) of section 23A of the income tax Act with total income not exceeding Rs. 25,000/ . " All these provisions about rebate were enacted in prescribing the rates of super tax. In the Finance Act of 1955 the Legislature in dealing with the right of rebate under Part I prescribing rates of income tax, made it admissible in respect of companies to which provisions of section 23A of the Income tax Act could not be made applicable, whereas under Part II prescribing rates of super tax, rebate was made admissible in respect of public companies having income not exceeding the prescribed amount and rebate at a lower rate where the income exceeded the prescribed limit. If it was intended by the Legislature to exclude private limited companies from the benefit of rebate the Legislature would have adopted the same phraseology as was used in that Act in dealing with the rebates in prescribing rates of super tax. The legislative history instead of supporting the case of the Income tax Department yields inference against their interpretation. We are therefore of the view that the High Court was right in holding that the company was 776 entitled to the rebate claimed by it. The appeal therefore fails and is dismissed with costs. Appeal dismissed.

For the year of account ending March 31, 1955, the appellant, a private limited company, earned a total income of Rs. 49,843. The company declared a ' dividend of Rs. 11,712 on July 13, 1955, and before the close of the year of assessment 1955 55 declared an additional dividend of Rs. 5,612, thereby distributing in the aggregate dividend which was not less than 767 60% of the total income, reduced by the income tax and supertax payable by it. The company then claimed rebate at the rate of one anna in the rupee on the amount computed according to Sch. 1, Part 1, Item B, read with section 2 of the Finance Act, 1955. The Income tax authorities rejected the claim on the ground that the expression "company to which the provisions of section 23A of the Income tax Act cannot be made applicable" in the provision of law aforesaid in the Finance Act, 1955, on which the appellant company relied, referred to a company against which in no circumstances could an order under section 23A be made, and private limited companies being companies in respect of which an 'order under section 23A could be made if the conditions prescribed relating to distribution of dividend were fulfilled, the benefit of rebate was not admissible in favour of the appellant company. The Appellate Tribunal and the High Court took the view that the benefit of a rebate provided by the Finance Act could not be denied to a private company if the conditions prescribed in section 23.A(1) of the Income tax Act were fulfilled, because, according to their view, the expression "can not be made applicable" only refers to a state of affairs in which having regard to the circumstances an order tinder section 23A could not be made. Held, that the appellant company was entitled to the rebate claimed by it. The expression "to which the provisions of section 23A of the Income tax Act can not be made applicable" in Sch. 1, Part 1, Item B, of the Finance Act, 1955, meant that the appli cability of section 23A of the Income tax Act depended upon an order to be made by the Income tax Officer, and not upon any exclusion by the provisions of the Act. It was only when an order under section 23A would not, having regard to the circumstances, be.justified that the right to obtain rebate under the Finance Act was claimable.

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ICTION: Criminal Appeal 24 of 1976. From the Judgment and Order dated 31 9 1974 of the Punjab and Haryana High Court in Criminal Writ No. 32 of 1970. B. Sen. (for appellant No. 1), A. K. Sen (for Appellant No. 2), J. C. Bhatt (for appellant No. 3), F. section Nariman (for appellant No. 4), A. B. Diwan (for appellant No. 4), I.N. Shroff and H. section Parihar for the Appellants. D. Mukherjee, E. C. Agrawala and R. N. Sachthey for the Respondent. The Judgment of the Court was delivered by JASWANT SINGH, J. During the course of on spot check carried out by him on December 29, 1964 of B.P. sheets lying in appellant No. 1 's factory at Sonepat, the Development Officer (LME 1) of the Directorate General of Technical Development, New Delhi, discovered from an examination of the said appellant 's account books that it had during the period intervening between January 1, 1964 and January 12, 1965, acquired black plain iron sheets of prime quality weighing 1073 60.03 metric tons from various parties at a rate higher than the maximum statutory price fixed for such sheets by the Iron and Steel Controller (hereinafter referred to as 'the Controller ') in exercise of the powers vested in him under clause 15(1) of the Iron and Steel (Control) Order, 1956 (hereinafter referred to as 'the Control Order. After the Special Magistrate had framed the charges and secured in the Court of the Special Magistrate, Ambala Cantt for an offence under section 120 B of the Indian Penal Code read with section 7 of the (Act No. 10 of 1955) (hereinafter referred to as 'the Act ') as also for an offence under section 7 of the Act read with clause 15 (3) of the Control Order. After the Special Magistrate had framed the charges and examined sixteen prosecution witnesses, the appellants made an application before him on February 12, 1970 under section 251A (11) and 288 (1) of the Code of Criminal Procedure, 1898 praying that in view of the submissions made therein, the case against them be not proceeded with and they be acquitted. The trial Magistrate dismissed the application vide his order dated June 4, 1970, relevant portion whereof is extracted below for facility of reference : "In the light of the above observations, I am prevented from determining the case otherwise than by making an order of acquittal or conviction which I can pass only after recording further evidence both of prosecution and in defence. Regarding various objections raised by the learned counsel for the accused on the points that the notifications were not placed before the Parliament and within a reasonable time and also on the points of formation of opinion and delegation of powers I may submit that the prosecution cannot be prevented from adducing evidence regarding the formation of opinion and laying of the notifications before the Parliament which can be proved by the contemporaneous record. Regarding the non prosecution of the sellers of the black iron sheets it does not lie in the mouth of the accused to say that such and such person has not been prosecuted. I need not to give my observations on merits on the points regarding subsequent exemption of control mens rea, formation of opinion and delegation of powers in laying notifications before the Parliament and also need not discuss the citations as I will have to consider 1074 all these points at the time of final arguments and any order given now will not be proper. I dismiss the application of the accused on the short ground that it is not possible for this Court to hold that the cognizance was taken on an invalid report and the order of the Court ordering framing of charge is a nullity on the ground that on record no offence is committed and no cognizance could be taken. " Aggrieved by the aforesaid order of the Special Magistrate, the appellants moved the High Court of Punjab and Harayana under Articles 226 and 227 of the Constitution and section 561 A of the Code of Criminal Procedure, 1898 challenging their prosecution inter alia on the grounds that the Control Order and the notification which formed the basis of their prosecution did not have the force of law as they had not been laid before the Houses of Parliament within a reasonable time as required under section 3(6) of the Act; that the Control Order and the Notification fixing the maximum selling price of the commodity in question for the contravention of which the appellants had been hauled up were invalid as the same did not appear to be preceded by the formation of the requisite opinion under section 3(1) of the Act which was a sine qua non for issue of any order by the Central Government or by the Controller; that none of the 18 concerns which, according to the prosecution sold the aforesaid B.P. sheets to the appellants and who were equally guilty of the offence under section 7 of the Act having been proceeded against, in the Court of the competent jurisdiction, the prosecution of the appellants was violative of Article 14 of the Constitution and that the purchases of the aforesaid B.P. sheets having been openly made and entered in the account books of appellant No. 1, the mens rea which was a necessary ingredient of the offence under section 7 of the Act was totally lacking in the case. In the return filed by it in opposition to the writ petition, the respondent while denying that the Control Order had not been placed before both Houses of Parliament, as required by sub section (6) of section 3 of the Act or that the issue of the Control Order or the Notification fixing maximum selling prices of various categories of iron and steel including the commodity in question was not based on the formation of the opinion envisaged by sub section 1 of section 3 of the Act conceded that the notification fixing the maximum selling prices of the categories of iron and steel including the commodity in question had not been placed before both Houses of Parliament but contended that the provisions of sub section (6) of section 3 of the 1075 Act requiring the placing of the order contained in the aforesaid notification before both Houses of Parliament were directory and not mandatory and the omission to comply with that requirement did not have the effect of invalidating the notification. The respondent further contended that the notification fixing the maximum selling prices of various categories of iron and steel including the black plain iron sheets being a part of the Control Order and a piece of delegated legislation, it was not necessary to lay it before the Houses of Parliament. It was also pleaded by the respondent that the mensrea of the accused was manifest from various manipulations resorted to by them as also from the fact that they wanted to increase their production and earn more profits. The respondent also averred that launching of prosecution against any person depended on the availability of sufficient evidence and that non prosecution of the sellers of the iron sheets in question did not involve any discrimination as envisaged by Article 14 of the Constitution but was due to non availability of adequate and reliable evidence against them. After careful consideration of the rival contentions of the parties, the High Court by its elaborate judgment and order dated May 31, 1974 dismissed the petition overruling the contentions of the appellants. One of the learned Judges of the High Court constituting the Bench which dealt with the writ petition also observed that the Notification in question had not in reality been issued under section 3 of the Act which required it to be laid before both Houses of Parliament but was issued in exercise of the power conferred by section 4 of the Act which plainly related to issue of incidental orders arising out of the nature of the powers conferred and duties imposed thereunder and the purpose whereof was to enable the various authorities mentioned therein to provide the details to fill up gaps in the Control Orders issued under section 3 of the Act so as to ensure the harmonious and rational working of the orders. The High Court, however, being of the opinion that the case involved a substantial question of law relating to the vires of the notification fixing the maximum selling prices of various categories of iron and steel including the commodity in question certified the case as eminently fit for appeal to this Court. This is how the case is before us. At the hearing of the appeal though the learned counsel for the appellants have reiterated all the contentions raised by them in the aforesaid writ petition, the only substantial question of law with which we are concerned at the present stage is whether the aforesaid notification fixing the maximum selling price of the commodity in question is void for not having been laid before both Houses of Parliament. 1076 For a proper determination of the aforesaid question, it is necessary to notice a few provisions of the Act which are relevant for the purpose of the appeal. Section 2 is a glossary of the Act. According to clause (a)(vi) of the said section, iron and steel and manufactured products thereof fall within the ambit of the expression "essential commodity". Sub section (1) of section 3 of the Act confers on the Central Government the general power of making and issuing orders providing for regulating or prohibiting the production, supply and distribution of an essential commodity and trade and commerce therein if it is of opinion that it is necessary or expedient so to do for maintaining or increasing supplies of any essential commodity or for securing its equitable distribution and availability at fair prices or for securing any essential commodity for the defence of India or the efficient conduct of military operations. Sub section (2) of section 3 of the Act specifies the orders which without prejudice to the generality of the powers conferred by subsection (1) of section 3 can be issued thereunder. Clause (c) of sub section (2) of section 3 of the Act authorities the issue of an order for controlling the price at which any essential commodity may be bought or sold. Sub section (6) of section 3 of the Act ordains that every order made under this section by the Central or by any officer or authority of the Central Government shall be laid before both Houses of Parliament as soon as may be, after it is made. Section 4 of the Act lays down that an order made under section 3 may confer powers and impose duties upon the Central Government or the State Government or officers and authorities of the Central Government or State Government and may contain directions to any State Government or to officers and authorities thereof as to the exercise of any such powers or the discharge of any such duties. Section 5 of the Act deals with delegation of powers. It provides that the Central Government may, by notified order, direct that the power to make orders or issue notifications under section 3 shall, in relation to such matters and subject to such conditions, if any, as may be specified in the direction, be exercisable also by (a) such officer or authority subordinate to the Central Government, or (b) such State Government or such officer or authority subordinate to a State Government, as may be specified in the direction. Section 6 of the Act which embodies the non obstante clause lays down that any order made under section 3 shall have effect notwithstanding anything inconsistent therewith contained in any enactment 1077 other than this Act or any instrument having effect by virtue of any enactment other than this Act. Section 7 of the Act lays down the penalties which any person contravening any order made under section 3 shall entail. Section 10 of the Act which deals with offences by the companies provides as follows: "10. (1) If the person contravening an order made under section 3 is a company, every person who, at the time the contravention was committed, was in charge of, and was responsible to, the company for the conduct of the business of the company as well as the company, shall be deemed to be guilty of the contravention and shall be liable to be proceeded against and punished accordingly : Provided that nothing contained in this sub section shall render any such person liable to any punishment if he proves that the contravention took place without his knowledge or that he exercised all due diligence to prevent such contravention. (2) Notwithstanding anything contained in sub section (1), where an offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly. Explanation. For the purposes of this section, (a) "company" means any body corporate, and includes a firm or other association of individuals; and (b) "director" in relation to a firm means a partner in the firm. " We may also at this stage advert to the Control Order which was issued by the Central Government vide S.R.O. 1109/ESS. COMM/ IRON AND STEEL dated May, 8, 1956 in exercise of the powers conferred on it by section 3 of the Act. Sub clause (1) of clause 15 of this Order authorities the Controller to fix by notification in the Gazette of India the maximum prices at which any iron and steel may 1078 be sold (a) by a producer, (b) by a stockholder including a controlled stockholder and (c) by any person or class of persons. Sub clause (3) of clause 15 of the Control Order which is material for the purpose of the case provides: "15. (3) No producer or stockholder or other person shall sell or offer to sell, and no person shall acquire, any iron or steel at a price exceeding the maximum prices fixed under sub clause (1) or (2). " It was under sub clause (1) of clause 15 of the Control Order that the notification in question was issued. Though sub section (6) of section 3 of the Act provides that every order made by the Central Government or by any officer or authority of the Central Government shall be laid before both Houses of Parliament as soon as may be after it is made, the important point to be considered in the absence of analogous statutes like the Statutory Instruments Act, 1946 and the Laying of Documents before Parliament (Interpretation) Act, 1948 prescribing the conditions, the period and the legal effect of the laying of order before the Parliament is whether the provision is directory or mandatory. It is well to remember at the outset that the use of the word `shall ' is not conclusive and decisive of the matter and the Court has to ascertain the true intention of the legislature, which is the determining factor, and that must be done by looking carefully to the whole scope, nature and design of the statute. Reference in this connection may be made to the decision of this Court in State of U.P. vs Manbodhan Lal Srivastava. `Reference in this behalf may also be made with advantage to another decision of this Court in The State of Uttar Pradesh & Ors. vs Babu Ram Upadhya(2) where Subba Rao, J. (as he then was) after quoting with approval the passage occurring at page 516 in Crawford "On the Construction of Statutes" as well as the passage occurring at page 242 in `Craies on Statute Law ', 5th Edition, observed as follows : "The relevant rules of interpretation may be briefly stated thus: When a statute uses the word "shall", prima facie, it is mandatory, but the Court may ascertain the real intention of the legislature by carefully attending to the whole scope of the statute. For ascertaining the real intention of the Legislature, the Court may consider, inter alia, the nature and the design of the statute, and the consequences which would follow from constituting it one way or the other, 1079 the impact of other provisions whereby the necessity of complying with the provisions in question is avoided, the circumstances, namely, that the statute provides for a contingency of the non compliance with the provisions, the fact that the non compliance with the provisions is or is not visited by some penalty, the serious or trivial consequences that flow therefrom, and, above all, whether the object of the legislation will be defeated or furthered." Thus two considerations for regarding a provision as directory are : (1) absence of any provision for the contingency of a particular provision not being complied with or followed and (2) serious general inconvenience and prejudice that would result to the general public if the act of the Government or an instrumentality is declared invalid for non compliance with the particular provision. Now the policy and object underlying the provisions relating to laying the delegated legislation made by the subordinate law making authorities or orders passed by subordinate executive instrumentalities before both Houses of Parliament being to keep supervision and control over the aforesaid authorities and instrumentalities, the "laying clauses" assume different forms depending on the degree of control which the legislature may like to exercise. As evident from the observations made at pages 305 to 307 of the 7th Edition of Craies on Statute Law and noticed with approval in Hukam Chand etc. vs Union of India & Ors.(1) there are three kinds of laying which are generally used by the Legislature. These three kinds of laying are described and dealt with in Craies on Statute Law (Supra) as under. (i) Laying without further procedure, (ii) Laying subject to negative resolution, (iii) Laying subject to affirmative resolution. (i) Simple laying. The most obvious example is in section 10(2) of the 1946 Act. In earlier days, before the idea of laying in draft had been introduced, there was a provision for laying rules etc., for a period during which time they were not in operation and could be thrown out without ever having come into operation (compare Merchant Shipping Act, 1894, section 417; Inebriates Act 1898, section 21) but this is not used now. 1080 (ii) Negative resolution. Instruments so laid have immediate operative effect but are subject to annulment within forty days without prejudice to a new instrument being made. The phraseology generally used is "subject to annulment in pursuance of a resolution of either House of Parliament. " This is by far the commonest form of laying. It acts mostly as a deterrent and sometimes forces a Minister (in Sir Cecil Carr 's phrase) to "buy off opposition" by proposing some modification. (iii) Affirmative resolution. The phraseology here is normally "no order shall be made unless a draft has been laid before Parliament and has been approved by a resolution of each House of Parliament. Normally, no time limit is fixed for obtaining approval none is necessary because the Government will naturally take the earliest opportunity of bringing it up for approval but section 16(3) of the Housing (Financial and Miscellaneous Provisions) Act, 1946 did impose a limit of forty days. An old form (not much used nowadays) provided for an order to be made but not to become operative until a resolution of both Houses of Parliament had been obtained. This form was used in section 10(4) of the Road Traffic Act, 1930 (cf. Road Traffic Act, 1960, s.19 (3) . The affirmative resolution procedure necessitates a debate in every case. This means that one object of delegation of legislation (viz. saving the time of Parliament) is to some extent defeated. The procedure therefore is sparingly used and is more or less reserved to cases where the order almost amounts to an Act, by effecting changes which approximate to true legislation (e.g. where the order is the meat of the matter, the enabling Act merely outlining the general purpose) or where the order replaces local Acts or provisional orders and, most important of all, where the spending, etc. of public money is affected. Sometimes where speedy or secret action is required (e.g. the imposition of import duties), the order is laid with immediate operation but has to be confirmed within a certain period of Import Duties Act, 1958, 1081 s.13(4). This process of acting first and getting approval after has also been adopted in the Emergency Powers Act, 1920 under which a state of emergency can be proclaimed and regulations made. The proclamation must be immediately communicated to Parliament and does not have effect for longer than a month: but it can be replaced by another proclamation. Any regulations made under the proclamation are to be laid before Parliament immediately and do not continue in force after the expiration of seven days from the time when they are so laid unless a resolution is passed by both Houses providing for their continuance." Now at page 317 of the aforesaid Edition of Craies on Statute Law, the questions whether the direction to lay the rules before Parliament is mandatory or merely directory and whether laying is a condition precedent to their operation or may be neglected without prejudice to the effect of the rules are answered by saying that "each case must depend on its own circumstances or the wording of the statute under which the rules are made. " In the instant case, it would be noticed that sub section(6) of section 3 of the Act merely provides that every order made under section 3 by the Central Government or by any officer or authority of the Central Government shall be laid before both Houses of Parliament, as soon as may be, after it is made. It does not provide that it shall be subject to the negative or the affirmative resolution by either House of Parliament. It also does not provide that it shall be open to the Parliament to approve or disapprove the order made under section 3 of the Act. It does not even say that it shall be subject to any modification which either House of Parliament may in its wisdom think it necessary to provide. It does not even specify the period for which the order is to be laid before both Houses of Parliament nor does it provide any penalty for non observance of or non compliance with the direction as to the laying of the order before both Houses of Parliament. It would also be noticed that the requirement as to the laying of the order before both Houses of Parliament is not a condition precedent but subsequent to the making of the order. In other words, there is no prohibition to the making of the orders without the approval of both Houses of Parliament. In these circumstances, we are clearly of the view that the requirement as to laying contained in sub section (6) of section 3 of the Act falls within the first category i.e. "simple laying" and 1082 is directory not mandatory. We are fortified in this view by a catena of decisions, both English and Indian. In Bailey vs Williamson(1) whereby section 9 of the Parks Regulations Act, 1872 passed on June 27, 1872 "to protect the royal parks from injury, and to protect the public in the enjoyment of those royal parks and other royal possessions for the purpose of innocent recreation and exercise" it was provided that any rules made in pursuance of the first schedule to the Act shall be forthwith laid before both Houses of Parliament, if Parliament be sitting, or if not, then within three weeks after the beginning of the then next ensuing session of Parliament; and if any such rules shall be disapproved by either House of Parliament within one month of the laying, such rules, or such parts thereof as shall be disapproved shall not be enforced and Rules for Hyde Park were made and published on September 30, 1872 when Parliament was not sitting and in November 18, 1872, the appellant was convicted under section 4 of the Act for that he did unlawfully act in contravention of Regulation 8 contained in the first schedule annexed thereto by delivering a public address not in accordance with the rules of the said Park but contrary to the statute, and it was inter alia contended on his behalf that in the absence of distinct words in the statute stating that the rules would be operative in the interval from the time they were made to the time when Parliament should meet next or if Parliament was sitting then during the month during which Parliament had an opportunity of expressing its opinion upon them, no rule made as supplementing the schedule could be operative so as to render a person liable to be convicted for infraction thereof unless the same had been laid before the Parliament, it was held overruling the contention that the Rules became effective from the time they were made and it could not be the intention of the Legislature that the laying of the rules before Parliament should be made a condition precedent to their acquiring validity and that they should not take effect until they are laid before and approved by Parliament. If the Legislature had intended the same thing as in section 4, that the rules should not take effect until they had the sanction of the Parliament, it would have expressly said so by employing negative language. In Starey vs Graham(2) where it was contended that the Register of Patent Agents Rules, 1889 which had been repealed by Rules of 1890 could not be re enacted by mere reference without complying with the provisions of section 101, sub section 4 of 46 and 47 Vict. c. 57 according to which, a copy of the Rules of 1889 should also have been 1083 laid before both Houses of Parliament in order to make them valid, Channell, J. said : "I somewhat doubt whether the provisions of section 101 are more than directory and whether it is necessary in any particular case where reliance is placed on such rules to prove that in fact its provisions had been complied with." In Jan Mohammad Noor Mohammad Bagban vs The State of Gujarat & Anr.(1) where it was urged by the petitioner that the rules framed by the Provincial Government in 1941 in exercise of the powers conferred on it under section 26(1) of the Bombay Agricultural Produce Markets Act (22 of 1939) had no legal validity as they were not laid before each of the Houses of the Provincial Legislature at the session thereof next following as provided by sub section (5) of section 26 of the Act, this Court rejected the contention and upheld the validity of the said rules. The following observations made in that case by Shah, J. (as he then was) on behalf of the Constitution Bench are apposite: "The rules under Act 22 of 1939 were framed by the Provincial Government of Bombay in 1941. At that time there was no Legislature in session, the Legislature having been suspended during the emergency arising out of World War II. The session of the Bombay Legislative Assembly was convened for the first time after 1941 on May 20, 1946 and that session was prorogued on May 24, 1946. The second session of the Bombay Legislative Assembly was convened on July 15, 1946 and that of the Bombay Legislative Council on September 3, 1946 and the rules were placed on the Assembly Table in the second session before the Legislative Assembly on September 1, 1946 and before the Legislative Council on September 13, 1946. Section 26(5) of Bombay Act 22 of 1939 does not prescribe that the rules acquired validity only from the date on which they were placed before the Houses of Legislature. The rules are valid from the date on which they are made under section 26(1). It is true that the Legislature has prescribed that the rules shall be placed before the Houses of Legislature, but failure to place the rules before Houses of Legislature does affect the validity of the rules, merely because they have not been placed before the Houses of the Legislature. Granting that the provisions of sub section (5) of section 26 by reason of the failure to place the rules before the Houses of Legislature were 1084 violated, we are of the view that Sub section (5) of section 26 having regard to the purposes for which it is made, and in the context in which it occurs, cannot be regarded as mandatory. (Emphasis supplied). The rules have been in operation since the year 1941 and by virtue of section 64 of the Gujarat Act 20 of 1964 they continue to remain in operation. In D. K. Krishnan vs Secretary, Regional Transport Authority, Chittor(1) where the validity of Rule 13 A of the Madras Motor Vehicles Rules, 1940, made under the empowering the Regional Transport Authority to delegate its functions to the Secretary was challenged on the ground that it was not laid before the Legislature of the Madras State as required by section 133(3) of the Act which provided that the rules shall be laid for not less than fourteen days before the Legislature as soon as possible after they are made and shall be subject to such modification as Parliament or such Legislature may make during the session in which they are so laid, Sabba Rao, J. (as he then was) after an exhaustive review of the case law and the text books on constitutional law by eminent jurists repelled the contention observing as follows : "The aforesaid discussion in the text books and the case law indicate the various methods adopted by the Parliament or legislature to control delegated legislation. That control is sought to be effected by directing the rules or regulations made by the delegated authority to be laid before the Parliament. Where the statute makes the laying of the rules before Parliament a condition precedent or the resolution of the Parliament a condition subsequent, there is no difficulty as in the former case, the rule has no legal force at all till the condition precedent is complied with and in the latter case, it ceases to have force from the date of non compliance with the condition subsequent. Nor can there be any difficulty in a case where the Parliament or the Legislature, as the case may be, specifically prescribes the legal effect of non compliance with that condition. But more important question arises when the Parliament directs the laying of the rules before the Parliament without providing for the consequences of non compliance with the rule. 1085 In the case of a statute directing rules to be laid before the Parliament or the Legislature without any condition attached, the rule is only directory. Though the statute says that the rules shall be laid before the Parliament as the provision in the statute is conceived in public interests, the dereliction of the duty by the Minister or other officer concerned in not following the procedure should not be made to affect the members of the public governed by the rules. It may be asked and legitimately too that when the Parliament to keep its control over delegated legislation directs that the rules shall be laid before the Parliament and if that rule is construed as directory, the object itself would be defeated. But the Parliament or the Legislature, as the case may be if they intended to make that rule mandatory, they would have clearly mentioned the legal consequences of its non compliance as they have done in other cases. This rule (i.e. the one contained in Section 133(3) therefore, is not made either a condition precedent or a condition subsequent to the coming into force of the rules. It does not provide for any affirmative resolution. The role continues to be in force till it is modified by the Parliament. If sub section (3) is only directory, in view of the opinion expressed by us, it is clear from a fair reading of the words used in the section that the rules made under the section came into effect immediately they were published and they continued to be in force because it is not suggested that they were modified by the Legislature. We, therefore, hold that the rule in question is valid. " In State vs Karna(1) where the very question with which we are concerned in the present case cropped up in connection with the Rajasthan Foodgrains (Restrictions on Border Movement) Order, 1959, a bench of Rajasthan High Court said as follows: "It is important to note that laying the Order before both the Houses of Parliament is not a condition precedent for bringing into force the Order. All that sub section (6) provides is that every Order made under sec. 3 of the by the Central Government or by any officer or authority of the Central Government shall be laid before both the Houses of Parliament as soon as after it is made. It is significant that 1086 the Order is valid and effective from the date it is duly promulgated. Even the limit or period within which it must be placed before the Parliament has not been specified. It is, therefore, not possible to hold that sub sec. (6) of sec. 3 of the is mandatory. If the legislature intended that in order to provide an adequate safeguard it was necessary to make the said provision mandatory it could have done so in express words. We are, therefore, of the opinion that the order cannot be considered as invalid merely because the State was not able to put on record proof of the fact that the Order was laid before both the Houses of Parliament." In Mathura Prasad Yadava vs Inspector General, Rly. Protection Force, Railway Board, New Delhi & Ors.(1) where it was contended that Regulation 14 of the Railway Protection Force Regulations, 1966 made under section 21 of the Railway Protection Force Act (23 of 1957) was invalid as it was not laid before both Houses of Parliament as required by sub section (3) of section 21 of the Act, it was held: "What then is the consequence of failure to lay the regulation ?. A correct construction of any particular laying clause depends upon its own terms. If a laying clause defers the coming into force of the rules until they are laid, the rules do not come into force before laying and the requirement of laying is obligatory to make the rule operative. So the requirement of laying in a laying clause which requires an affirmative procedure will be held to be mandatory for making the rules operative, because, in such cases the rules do not come into force until they are approved, whether with or without modification, by Parliament. But in case of a laying clause which requires a negative procedure the coming into force of the rules is not deferred and the rules come into force immediately they are made. The effect of a laying clause of this variety is that the rules continue subject to any modification that Parliament may choose to make when they are laid; but the rules remain operative until they are so modified. Laying clauses requiring a negative procedure are, therefore, construed as directory. The matter is put beyond controversy by the decision of the Supreme Court in Jan Mohd. vs State of Gujarat (supra). Our conclusion, therefore, is that the laying requirement enacted in section 21(3) of the Act is merely directory. It logically follows that failure to lay Regulation 1087 14 has no effect on its validity and it continues to be effective and operative from the date it was made." Relying on the decision in D. K. Krishnan vs Secretary Regional Transport Authority, Chittoor (supra), Grover, J. speaking for the bench in Krishna Khanna & Anr. vs State of Punjab(1) said that sub section (6) of section 3 of the was merely of a directory nature and its non compliance did not render the Punjab Coal Control Order, 1955 invalid or void. Metcalfe & Ors. vs Cox & Ors. (2) where the Commissioners (charged with the duty of making provisions for improving the administration of the Scotish Universities) assuming to act under powers of section 16 of the Universities (Scotland) Act, 1889 executed an instrument in writing declaring that they had affiliated and did thereby affiliate the University College of Dundee to and make it form part of the University of St. Andrews which was treated as an ordinance and held to be invalid on the ground that it had not been laid before Parliament is not helpful to the appellants, as the decision in that case turned upon the construction of the language of section 20 of the said Act which provided that all ordinances made by the Commissioners are to be published in the Edinburgh Gazette, laid before Parliament and submitted to Her Majesty, the Queen for approval and no such ordinance shall be effectual until it shall have been so published, laid before Parliament and approved by Her Majesty in Council. The decision of this Court in Narendra Kumar & Ors. vs The Union of India & Ors.(3) on which counsel for the appellants have heavily leaned is clearly distinguishable. In that case, the Non ferrous Metal Control Order, 1958 was held to be invalid essentially on the ground that the principles specified by the Central Government in accordance with clause 4 of the Order were not published either on April 2, 1958 on which the order was published in the Government Gazette or any other date. It would be noticed that while considering the effect of non publication of the aforesaid principles which formed an integral part of the order by which alone the Central Government could regulate the distribution and supply of the essential commodities, it was only incidentally that a mention was made by the Court to the effect that the principles had not been laid before both Houses of Parliament. Likewise the decisions of this Court in Express Newspapers (Private) Ltd. & Anr. vs The Union of India & Ors(4) and in re: The 1088 Kerala Education Bill A.I.R. 1958 S.C. 956) are also not helpful to the appellants. The point involved in the present case was not directly in issue in those cases and the observations made therein about laying were merely incidental. From the foregoing discussion, it inevitably follows that the Legislature never intended that non compliance with the requirement of laying as envisaged by sub section (6) of section 3 of the Act should render the order void. Consequently non laying of the aforesaid notification fixing the maximum selling prices of various categories of iron and steel including the commodity in question before both Houses of Parliament cannot result in nullification of the notification. Accordingly, we answer the aforesaid question in the negative. In view of this answer, it is not necessary to deal with the other contention raised by the respondent to the effect that the aforesaid notification being of a subsidiary character, it was not necessary to lay it before both Houses of Parliament to make it valid. In the result, the appeal fails and is dismissed. N.V.K. Appeal dismissed.

The appellants were prosecuted for the offence of acquiring a controlled commodity at a rate higher than the maximum statutory price fixed for such commodity by the Iron Control Order, 1956. In the course of proceedings before the trial court the appellants made an application u/s 251A & 288 Cr. P.C. raising various objections to their prosecution including, that the notification fixing maximum selling prices of various categories of Iron & Steel including the commodity in question was not placed before the Parliament and as such was not valid. Observing that the laying of the notification before the Parliament could be proved by contemporaneous record and that it was not possible to hold that cognizance of the offence was taken on an invalid report and the order framing the charge was a nullity the trial Court dismissed the application. In its writ petition filed under articles 226 and 227 of the Constitution, the appellants challenged their prosecution on the ground that the control order and the notification did not have the force of law as they had not been laid before the Houses of Parliament within a reasonable time as required by the . The High Court dismissed the writ petition. On the question, whether the notification fixing the maximum selling price of the commodity was void, for not having been laid before both Houses of Parliament. Dismissing the appeal, the Court ^ HELD: 1. Non laying of the notification fixing the maximum selling prices of various categories of iron and steel including the commodity in question before both Houses of Parliament cannot result in nullification of the notification. The legislature never intended that non compliance with the requirement of laying as envisaged by section 3(6) of the Act should render the order void. Though section 3(6) of the Act provides that every order made by the Central Government or by any officer or authority of the Central Government shall be laid before both Houses of Parliament as soon as may be after it is made, the important point to be considered in the absence of a provision prescribing the conditions, the period and the legal effect of the laying of the order before the Parliament is whether the provision is directory or mandatory. The use of the word 'shall ' is not conclusive and decisive of the matter and the Court has to ascertain the true intention of the legislature, which is the determining factor, and that must be done by looking carefully to the whole scope, nature and design of the statute. [1078 C E] State of U.P. vs Manbodhan Lal Srivastava, ; , The State of Uttar Pradesh and Ors. vs Babu Ram Upadhya, ; referred to. Craies Statute Law 5th Edn. p. 242. Two considerations for regarding a provision as directory are: (1) absence of any provision for the contingency of a particular provision not been complied with or followed and (2) serious general inconvenience and prejudice that would result to the general public if the act of the government or an instrumentality is declared invalid for non compliance with the particular provision.[1079 C] 4. The policy and object underlying the provisions relating to laying the delegated legislation made by the subordinate law making authorities or orders passed by subordinate executive instrumentalities before both Houses of Parliament, being to keep supervision and control over the aforesaid authorities and instrumentalities, the "laying clauses" assume different forms depending on the degree of control which the Legislature may like to exercise. The three kinds of laying which are generally used by the Legislature are (i) laying without further procedure (ii) laying subject to negative resolution, (iii) laying subject to affirmative resolution. Each case must depend on its own circumstances or the wording of the statute under which the rules are made. [1079 D, E; 1081 D] Hukam Chand etc. vs Union of India and Ors. referred to. Craies Statute Law 7th Edn. 305 307. In the instant case, section 3(6) of the Act merely provides that every order made under section 3 by the Central Government or by any officer or authority of the Central Government, shall be laid before both Houses of Parliament, as soon as may be, after it is made. It does not provide that it shall be subject to the negative or the affirmative resolution by either House of Parliament. It also does not provide that it shall be open to the Parliament, to approve or disapprove the order made under section 3 of the Act. It does not even say that it shall be subject to any modification which either House of Parliament may in its wisdom think it necessary to provide. It does not even specify the period for which the order is to be laid before both Houses of Parliament nor does it provide any penalty for non observance of or non compliance with the direction as to the laying of 1072 the order before both Houses of Parliament. The requirement as to the laying of the order before both Houses of Parliament is not a condition precedent but subsequent to the making of the order. In other words, there is no prohibition to the making of the orders without the approval of both Houses of Parliament. Therefore the requirement as to laying contained in section 3(6) of the Act falls within the first category i.e. "simple laying" and is directory and not mandatory. [1081 E 1082 A] Jan Mohammed Noor Mohammed Bagban vs The State of Gujarat and Anr., ; ; relied on. D. K. Krishnan vs Secretary, Regional Transport Authority Chittor, A.I.R. 1956 AP. 129, State vs Karna Mathura Prasad Yadava vs Inspector General, Railway Protection Force, Railway Board, New Delhi and Ors. , Krishna Khanna and Anr. vs State of Punjab, A.I.R. 1958, Punjab 32; approved. Narendra Kumar and Ors. vs The Union of India and Ors., ; ; distinguished. Express Newspapers (P) Ltd. and Anr. vs The Union of India and Ors., ; In re. Kerala Education Bill ; not applicable. Bailey vs Williamson 1873 LR VIII Q.B. 118, Storey vs Graham referred to.

3891.txt

iminal Appeals Nos. 41 and 77 of 1973. Appeals under Section 19 of the from the, Judgment and Order dated the 5th February, 1973 of the Orissa High Court at Cuttack in Criminal Miscellaneous Case No. 8 of 1972. A.K. Ser, G. L. Mukhoty and C. section section Rao, for the appellant (in Cr.A. 41./73). G. Rath, and B. Parthasarathy, for the appellant (In Cr. A. 77/73). F. section Nariman, Additional Solicitor General, B. M. Patnaik and Vinoo Bhagat, for respondent No. 1 (in Cr. A. 41/73) and respondent NO. 2 (in Or. A. 77/73). G. Rath and U. P. Singh,for respondent No. 2 (in Cr. A. 41/73), A. K. Sen and C. section section Rao, for respondent No. 1 (in Cr. A. 77/73). The judgment of the Court were delivered by PALEKAR J. This is (Criminal Appeal No. 41 of 1973) an appeal by one Baradakanta Mishra from his conviction and sentence under the by a Full Bench of fiVe of the. Orissa High Court. The Judgment is reported in I.L.R. [1913] Cuttack, 134 (Registrar of the Orissa High Court vs Baradakanta Mishra and Ors.). The appellant started his career as a Munsif in 1947. His career as a Judicial Officer was far from satisfactory. In 1956 he was promoted on trial basis to the rank of a sub Judge with the observation 28 7 that if he was found incompetent, suitable action would be, taken. In due course, he, was confirmed as a Subordinate Judge. On April, 2, 1962 he was promoted, again on trial basis, to the rank of Additional District Magistrate (Judicial) which is a post in the cadre of the orissa Superior Judicial Service (Junior Branch). As his work was for unsatisfactory, he wag reverted to his substantive post of a Subordinate Judge on January 4, 1963. The order of reversion was challenged by him in a Writ Petition which was dismissible by a Bench of C.J. and , J. The case is reported in [I.L.R.] 1966, Cutback, 503. An appeal to the Supreme Court was dismissed on February 6,he 1967. While working as a Subordinate Judge, after reversion, ' was suspended from service from 15th May, 1964 to 9th April, 1967 during the pendency of a disciplinary proceeding against him. that proceeding ended in a light punishment of two of his increments being stopped. From the. above order of punishment, the appellant filed on 10 10 1967 an appeal to the State Government. The State Government by its order dated 15 7 1970 allowed tie appeal on the ground that the Public Service Commission had not heed consulted by the High Court before imposing the punishment, and that the Charge Sheet served on the appellant having indicated the proposed punishment vitiated the disciplinary proceedings. After the case, Was sent back to the High Court the charges which had been earlier established, were framed again and served on him on 13 2 1971 and we are informed that the proceeding is still pending. In the meantime, it appears, he was promoted to the post of the Additional District Maggistrate in February, 1968 though the High Court was of opinion that he was unbalanced, quarrelsome, reflect and undisciplined. The High Court specifically observed that though the appellant suffered from these defects, It was sincere and working and the other officers who had superseded him as Additional Districting Magistratres were not much better. The promotion was made on trial basis for a period of one year with the. observation that if during that period his work was found to be unsatisfactory, he 'would be reverted to the rank of Sub Judge. In that year the High Court had to face an abnormal situation by the retirement of many District Judges on account of the decision of the Government reducing the age of retirement from 58 to '55 years Many, vacancies occurred and the appellant was then promoted as an Additional District and Sessions Judge on trial basis for six months in July, 1968. In January, 1969 he was allowed to continue on a temporary basis till further orders subject to further review of his work at the time of confirmation. It is worthy of note that this decision to continue was taken on the report of the present Chief. Justice O. K. Mishra who was at that time the Administrative Judge. On May 12, 1969 his services were placed at the disposal of the Government in the Law Department, who appointed him as Joint Secretary. Law, till October 12, 1969. From October 13, 1960 to December 4, 1970 he was appointed by the Government as the Commissioner of Endowments. The Government was thoroughly dissatisfied with his work and on December 5, 1970 his services were replaced at the disposal of the High Court. The appellant went on leave. 288 On his return to the Judicial cadre, he functioned as Addison District and Sessions Judge, Cuttack till July 14, 1971 when he was ,posted to act as District and Sessions Judge for 12 days in the temporary leave vacancy of the permanent District Judge Mr. P. K Mohanty. When he was thus acting as District and Sessions Judge for a short period by way of stop gap arrangement, the High Court placed several restrictions on his administrative powers,. In the brief period that he was working as Additional District and Sessions Judge, Cuttack, the appellant showed gross indiscretion by defying a request made by the Distr ict, Judge in due course of administration. He also committed a avejuiudicial misdemeanors. He heard an appeal and posted it for judgment on June 22, 1971. The judgment was delivered on that date and the, appeal was dismissed. The Order Sheets of the judgment were signed by the appellant and the judgment was duly sealed. Later in the day, however, the appellant scored through his signatures both in the Order Sheet and in the judgment and returned the record of the appeal to the District Judge for disposal by making a false statement that the judgment had not been delivered and that the parties being known to him it was not desirable that he should further hear the appeal, after taking additional evidence for which a petition had been filed. This was something quite extraordinary from a Judge of the appellant 's standing. When these matters were brought to the notice of the High Court the Registrar by Order of the High Court recommended to the Government that the appellant be reverted to the post of the Additional District Magistrate (Judicial). There were already three departmental proceedings pending against the appellant and he had also been convicted in a contempt case. The High Court expressly informed the Government that these four matters had not been taken into consideration in recommending his reversion and that his reversion was solely due to the fact that his work was found unsatisfactory. The recommendation was accepted by the Government who on September 1, 1971 reverted the appellant to the post of the Additional District Magistrate. On September 10, 1971 the appellant made a representation to the Chief Minister praying for the withdrawal of the order of reversion and, if necessary, to suspend him after drawing up a regular depart7 mental proceeding. The representation was forwarded to the Government with the comments of the High Court. Something unusual happened. Without any further consultation with the High Court, the Governor cancelled the reversion order by notification dated March 21, 1972 And on the same day the Chief Minister wrote a confidential D.O. to the Chief Justice by name explaining the circumstances under which the reversion. order was cancelled. The Chief Minister appeared. to rely upon a decision of the Orissa High Court which had no application to the facts of this particular case. But any way. it would appear that by reason of the Order dated March 21, 1972: the reversion of the appellant to the post of the Additional District Magistrate stood cancelled and he continued to act in the post of the Additional District & Sessions Judge, Cuttack. 289 The D.O. letter of the Chief Minister remained unopened till the return of the Chief Justice from New Delhi where he had gone to attend the Chief Justices Conference. It was opened by the Chief Justice on return on March 26, 1972. But in the meantime, the appellant, who had gone on leave, having known about the order passed on March 21, 1972 asked for his posting. The rules required that on return from leave he should produce, a medical certificate and he was, accordingly directed to produce one. On March 28, 1972 the Chief Justice placed the letter of the Chief Minister for consideration before the Full Court. The Full Court took the decision to start a disciplinary proceeding against the appellant and, pending the same, to place him under suspension in exercise of their powers under Article 235 of the Constitution. Accordingly on March 30 1972 the appellant was placed under suspension and his headquarters were fixed at Cuttack. The present contempt proceedings arise out of events which took place after the suspension order. On receiving the suspension order the appellant addressed by letter an appeal to the Governor of Orissal for cancelling the order of suspension and for posting him directly under the Government. That is Annexure 8. As the High Court was of the view that no appeal lay from an order of suspension pending disciplinary charges, it did not forward the appeal to the. Governor. In fact on April 28, 1972 the Registrar of the High Court intimated the State Government that the appeal filed by the appellant to the Governor had been withheld by the High Court as no such appeal lies against the order of suspension pending disciplinary proceedings. The appellant was also intimated accordingly. On April 29, 1972 charges in 'the disciplinary proceeding were, framed by the High Court and communicated to the appellant and the appellant was directed to file his reply to the charges by a certain date. On May 14, 1972 the appellant wrote three letters. One was to the Registrar and is Annexure 13. By this letter the appellant intimated that he had moved the Governor to transfer the disciplinary proceedings to the Administrative Tribunal and that he would take all other alternative steps administrative and judicial to avoid the proceeding being dealt with by the High Court. The second letter was addressed to the Governor and is Annexure 15. It purports to be a representation with a prayer to direct the High Court to forward the appeal withheld by it. There was a third letter of the same date addressed directly to the Governor purporting to be a representation. That is Annexure 16. The prayer was that the departmental pro . seedings be reference to the Administrative Tribunal. A copy of this letter was sent to the Registrar of the High Court with the following . remark "As the Honourable Court are likely to withhold such petitions, this is submitted direct with copy to the Honourable Court for information. Honourable Court may be,, pleased to send their comments on this petition to the Governor." 29 0 On May 22, 1972 the appellant addressed a letter (Annexure 14) to the Registrar intimating him that he would not submit any explanation to the charges framed against him until his representation to the Governor was disposed of. He also stated therein that he may file a writ application for the purpose and would take the matter to the Supreme Court, if necessary. He also stated that he cannot wait for the permission of the High Court for leaving the Headquarters. It is the contents of these letters on which a show cause notice for contempt was issued to the appellant under the orders of the Full Court on July 3, 1972. On 27 7 1972 the appellant filed his preliminary objection to the show cause notice challenging its maintainability on the ground that whatever he had said had no reference to the judicial functions of any Judge of the High Court and, therefore, no contempt proceedings would lie. He pressed for a decision on the point. When the matter came before a Division Bench on 3 8 1972 the appellant was directed to file his full reply to the show cause notice. Accordingly, it was filed on 7 8 1972 and the appellant again pressed for a decision on his preliminary objection. The Division Bench refused to deal with the preliminary objection and so on 30 8 1972 the appellant filed Criminal Appeal NO. 174 of 1972 in this Court praying for cancellation of the contempt proceedings challenging therein the maintainability of the proceeding and complaining of bias and prejudice of the High Court particularly the Honourable the Chief Justice and Mr. Justice R.N. Mishra. He said apprehended that he would not get a fair deal if the matter is disposed of by the High court On 21 11 1972 the Supreme Court appeal was withdrawn. At the instance of the Division Bench, a PM Bench of five Judges was constituted by the Chief Justice, and the case came on for hearing before the Full Bench on 4 12 1972. In the meantime the appeal memo filed by the appellant in the Supreme Court was available and since it contained matter which amounted to contempt, additional, charges were framed and a show cause notice was issued to the aPPellant in respect of these additional charges. A copy of, the appeal memo containing the statements amounting to contempt is Annexure 20. The Annexures were examined by the court with a view to consider whether the statements therein amount to a criminal contempt. On a full and prolonged consideration the Fall Bench came to, the unanimous conclusion that Annexures 8,13,14,16, and 20 contain matters which accounted to gross contempt of court and since the appellant had not even offered an apology, this was a matter in Which serious notice ought to be taken, especially, in view of previous convictions for contempt, and, accordingly sentenced the appellant to two months simple imprisonment though in their opinion he deserved the maximum sentence of six months. The several Annexures referred to above have been extracted by the Fall Bench in its judgment and it as not necessary to reproduce them here. It will be sufficient to reproduce only those portions 29 1 which were regarded as grossly contemptuous and had been under lined in the judgment. Annexure 8. As already stated this is a letter in the, form of an appeal addressed to the Governor of Orissa complaining against the suspension and praying for stay of operation of the suspension order on the basis. of the advance copy sent to the Governor for its cancellation and for posting the appellant directly under the Government. it is dated 10 4 1972. The appeal had been routed through the High Court but the High Court did not forward the same. In this annexure reference is made to the previous appeal filed by him against the order of the High Court stopping his two increments after a departmental proceeding and how the Governor in appeal had cancelled even the very departmental proceeding in the appeal. An interpretation was, put on that order which it did not bear and it was made out, though falsely, that the punishment had been set aside on the basis of the allegations made by the appellant that some Honourable Judges of the High Court had been biased and prejudiced against him. The appellant also asked the Governor to appreciate that by the said departmental proceedings the High Court had put the Exchequer to a very heavy loss "all on accounts of the palpable incorrect views of the High Court. " Then the appellant says that the present action,. namely , the order of suspension clearly disclosed mala fides. He suggested that there were several "embarrassing events" which he could offer for consideration of the Governor but he was content at this stage to refer to only one of them. In this connection he referred to the fact that when he intimated to the High Court that he desired to join duties after his leave on March 20, 1972 he was informed by the High Court on March 23, 1972 that his re posting after leave would be decided after the medical board reported as to his fitness. to join after leave. This, according to the appellant, showed that the High Court had already taken a decision in the absence of the Chief Justice that the appellant should be re posted. But on the return of the Chief Justice from New; Delhi there was a sudden change. , He clearly suggested that after the Chief Justice 's return, the court took the decision to suspend him and in this connection he made the following observations : "This decision of the High Court, reached at before the Honourable the Chief Justice attended the High Court on the 27th March after his 10 days of absence, clearly indi cates that no proceeding, much less suspension, against the appellant was under contemplation till that day, but on the other hand, the appellant 's place of posting was under consideration of the High Court. Circumstances clearly disclose that after the return of the Honourable Chief Justice, the Government 's order, disapproving the High Court 's views about the appellants demotion, was not accepted gracefully by the High Court, and so subterfuge was adopted to counteract the said decision of. the Government by a novel step, thus to deprive the appellant of the result of the said decision. In view of this patent mala fide alone, such an action 292 is liable to be quashed, by any competent Court of law. " Then at a later stage the appellant says "The appellant happens to be the senior most judicial officer in the State as regards length of service, and he has already 20 more months before attaining the age of superan nuation. Hence, he may not deserve the present unwarranted, sudden and mysterious suspension. giving rise to speculations, touching his integrity. " Then again he says ". . the treatment of the High Court may require that after cancellation of this order of suspension, he be brought under the direct control of the Government in a special post for the rest of his service career of hardly 20 months more. " The High Court at para 61 of the judgment has observed as follows : "In the appeal memo (Annexure 8) the condemner attributed mala fides, bias and prejudice to the High Court. He made false insinuations that the Governor cancelled the previous disciplinary proceeding against the condemner on the ground that the same was vitiated as the High Court had prejudged the matter and the Government set aside the punishment on the ground that three of the Honourable Judges were biased and prejudiced against him. He alleged that the disciplinary proceeding involved the Government in heavy expenses on account of the palpably incorrect views of the High Court. He asserted that the order of suspension as per Annexure 6 was mala fide. He stated that he would produce more facts relating to the mala fides of the High Court before the Governor. He alleged that the High Court did not gracefully accept the Government 's order cancelling his demotion, and the High Court resorted to a subterfuge to counter act the said decision of the Government by taking a novel step, and that the High Court 's action suffered from patent mala fide. He stated that there was a turn of event after return of the Chief Justice from the Chief Justices ' Conference and that the High Court did not accept Government 's decision. gracefully and that the other Judges had no independent judgment of their own, and were influenced by the Chief Justice to take a view, different from what they had already taken, to give a posting order to the contemner, and that the High Court resorted to a subterfuge. He wanted protection of the Govern against the High Court which he insinuates as an engine of oppression. He characterised the High Court 's order of suspension as mysterious and prayed that the Government should post him directly under it. " We have no doubt that the Full Bench has correctly summarized the effect of Annexure 8, and we have nothing more, to add. 29 3 Annexures 13 and 14 should go together. Annexure 13 is a letter by the appellant to the Registrar dated May 14, 1972 in which he told him that he had moved the Governor, Orissa with a prayer to refer his matter to the Tribunal under the provisions of the Disciplinary Proceedings Rules, 1951 and also that he would take all other alternative steps "administrative and judicial" to avoid this proceeding being dealt with by the High Court and for this purpose would have to consult some prominent Advocates of Calcutta and Delhi. Annexure 14 is a further letter dated May 22, 1972 to the Registrar intimating him that he would not submit any explanation to the charges framed until his representation to the Governor was disposed of. In this letter he further pointed out that it would not be possible for him to wait for the permission of the High Court to leave headquarters, because he may be called by his legal advisers at any moment and in those circumstances he said "I hereby inform the Honourable Court that I may be absent during the entire period mentioned in my letter dated the 14th May, 1972 and the Honourable Court may kindly approve of the same. " The effect of Annexares 13 and 14 has been summarised by the Full Bench in these words : "Thus, in Annexures 13 and 14, the contemner exhibited a contemptuous defiance of the Court 's order, by declaring that he would not obey the order. and would leave the station without waiting for permission from the High Court, as his first consideration was to "go out in connection with legal advice and filing applications and appeals in the Supreme Court" in matters connocted with his suspension, and to take all steps to avoid the proceeding being dealt with by the High Court. These passages depict, in unequivocal terms, that the dispensation of justice by the Judges of the High Court on its administrative side, is most atrocious and vindictive and it is on that ground. the contemner would not obey the Court 's order, could not submit any explana tions, and would take all possible measures before the Supreme Court, the Governor and the Chief Minister not to surrender to the jurisdiction of the High Court. His entire attempt has been to present a lurid picture of the administration of justice, by the High Court. " In the context, we are not prepared to say that this summary of the effect of Annexures 13 and 14 is far wrong. Annexure 16. That brings us to Annexure 16. It Is dated May 14, 1972 and purports to be a representation made by the appellant direct to the Governor without routing it through the High Court. The following passages have been underlined by the Full Bench as being grossly contemptuous. ". the High Court have already contemplated in this departmental proceedings, a very heavy punishment for the petitioner. " 294 "If on two such allegations, bias and prejudice of the High Court was disclosed by strongly pleading for demotion of the petitioner, the multiple number of such charges may naturally make the petitioner, apprehensive of the result of the proceedings, if conducted by the High Court." ". . the High Court even without any authority or jurisdiction in this regard and on the face of the directions of the Government in Political and Servoes Department communicated in the Government 's Memo No. 3559 Gen., dated the 15th March 1958, have placed the petitioner under suspension " "The High Court have also taken unusual move in placing the petitioner under suspension in a 'contemplated proceeding ' " ". the High Court on the administrative side, is seriously prejudiced and biased against him, and they act, as if the charges stand established, requiring extreme punish ment and as such, justice, may not be meted out to the petitioner by the High Court, if they conduct this departmental inquiry." ". . the petitioner considers it risky to submit his explanation to the High Court." ". . the High Court in the best interest of justice,should not enquire into these charges. " A copy of the above representation was sent to the Registrar and the following endorsement appears thereon. As the Honourable Court are likely to withhold petitions this is submitted direct with copy to the Honourable Court for information. The Honourable Court may be pleased to send their comments on this petition to the Governor. " The summary of the effect of Annexure 16 is given by the Full Bench in para 70 of the judgment which is as follows : "In Annexure 16 the contemner has suggested that the Court has already prejudged the matter and has taken a previous decision to impose a heavy punishment. Bias and prejudice on the part of the Court were also alleged by the contemner. He suggested that the Court is not in a position to weigh the evidence. and consider the materials on record and to impose a sentence commensurate with his delinquency. The action taken by the High Court has been branded as unusual. . ." "A copy of this Annexure 16 was sent to the High Court with a contemptuous remark that since the High Court was likely to withhold the representation it was submitted direct to the Governor. Not being satisfied with that, he issued a further directive to the court to send their comments on his representation to the Governor. 295 The above summary of the effect of Annexure 16 is, in our view, correct. Annexure 20. This annexure is the memo of appeal filed by the appellant in the Supreme Court in Criminal Appeal No. 174 of 1972. The appeal had been filed because the Division Bench had refused to consider his preliminary objection with regard to the maintainability of the present contempt proceedings. The grievance before the Supreme Court was that the, Orissa High Court had taken. six contempt proceedings against him and in view. of what happened in some of those proceedings, the appellant entertained apprehension that the court may impose substantive punishment and may refuse bail or time to the appellant for getting redress from the Supreme Court if the present contempt proceedings were also to go on before the same High Court. In the first contempt proceeding though the proceedings were dropped, Adverse comments were made against his conduct thus depriving him of an opportunity to go in appeal and have the adverse comments exnged. in one of the other cases he says. . the appellant was brought down to the Court hall, and the Honourable Judges convicted and sentenced the appellant and without affording him an opportunity to obtain stay of the sentence from this Honourable Court, executed the sentence by administering admonition in the, open court and sounding warning that, if at any time such contumacious conduct of his was noticed, a very serious view would be taken about punishment. " In the other contempt matter, he alleged, a Judge wanted to add a new charge. The appellant objected to the same and went in appeal to the Suprerac, Court. The appellant says that when the appellant filed his appeal in this Court and brought this fact to the notice of the Honourable Judges,, they dropped the additional charge. In another proceeding, he says, the Honourable Judges while dropping the proceeding found out a very innocent and inconsequential mistake in the sworn counter affidavit of the appellant and on that account ordered the filing of a criminal complaint for an offence under section 199 of the I.P.C. In ground (1) the appellant alleged that the appellant fears bias of the Honourable High Court against him in view of the facts and circumstances stated above. The Full Bench in its judgment has considered each one of them allegations in the appeal memo and shows how the insinuations were false and how plain facts were distorted, They are entirely right in ,ummarising these facts of Annexure 20 in these words: "Thus in Annexure 20 the contemner has, in clearest terms, alleged bias and prejudice against the High Court and its Chief Justice. He has taken the plea that the court itself has become disqualified to deal with the case In his view the Judges of this Court have fallen from the path of rectitude, and are vindictive, and have already decided to impose substantive sentence and refuse bail, and they are not in a position to mete out even handed justice. , 522SCI/74 296 disrespectful fulminations of an angry insubordinate officer, there is hardly any doubt that Annexures 8, 16 and 20 contain statements which are deliberately made to grossly scandalize the High Court. The Judges of the High Court and especially the Chief Justice are charged with mala fides, improper motives, bias and prejudice. It is insinuated that they are oppressing the appellant, have become vindictive and are incapable of doing him justice. It is also suggested that they do not administer justice fearlessly because in one matter affecting the appellant, they dropped a charge against him for fear of the Supreme Court. All this, prima facie, amounts to gross scandalization of the High Court. The law applicable to this case is the law as contained in the No. 17 of 1971. Section 2 defines "Contempt of Court", as either "civil contempt" or "criminal contempt". Clause (c) defines "criminal contempt" as follows : (c) "criminal contempt" means the publication (whether by words, spoken or written, or by signs, or by visible repre sentations, or otherwise) of any matter or the doing of any other act whatsoever which (i) scandalises or tends to scandalise, or lowers or tends to lower the authority of, any court; or (ii) prejudices, or interferes or tends to interfere with, the due course of any judicial proceeding; or (iii) interferes or tends to interfere with, or obstructs or tends to obstruct, the administration of justice in any other manner;" It will be seen that the terminology used in the definition is borrowed from the English law of Contempt and embodies concepts which are familiar to that law which, by and large, was applied in India. The expressions "scandalize", "lowering the authority of the court", "interference", "obstruction" and "administration of justice" have all gone into the legal currency of our sub continent and have to be understood in the sense in which they have been so far understood by our courts with the aid of the English law, where necessary. The first sub clause generally deals with what is known as the scandalization of the court discussed by Halsbury 3rd Edition in Volume 8, page 7 at para 9 : "Scandalous attacks upon Judges are punished by attachment or committal upon the principle that they are, as against the public, not the judge, an obstruction to public justice; and a libel on a judge, in order to constitute a contempt of court, must have been calculated to cause such an obstruction. The punishment is inflicted, not for the purpose of protecting either the court as a whole, or the individual judges of the court from a repetition of the attack, but of protecting the public, and especially those who either voluntarily or by compulsion are subject to the jurisdiction of the court, from the mischief they will incur if the authority of the tribunal is undermined or impaired. " Sub clause (1) embodies the above concept and takes in cases when by the publication or the fact the 29 7 administration. of justice is held to ridicule and contempt. This is regarded as an "obstruction" of public justice whereby the authority of the court is undermined. Sub clause (1) refers to one species of contempt of which "obstruction" is an important element. Sub clause (ii) speaks of, interference with due course of judicial proceedings and is directly connected with administration of justice in its common acceptance. While clauses (i) and (ii) deal with obstruction and interference respectively in the particular way described therein, clause (iii) is a residuary Provision by which any other type of obstruction or interference with the administration of justice is regarded as a criminal contempt. In other words, all the three sub clauses referred to above define contempt in terms of obstruction of or interference with administration of justice. Broadly speaking our statute, accepts what was laid down by the Privy Council and other English authorities that proceedings in contempt are always with reference to the administration of justice. It is enough for our purpose to refer to Debi Prasad Sharma vs The Kin.g Emperor(1) in which Lord Atkin delivering the judgment of the Judicial Committee observed at page 223 as follows : "In 1899 this Board pronounced proceedings for this species of contempt (scandalization) to be obsolete in this country ' though surviving in other parts of the Empire, but they added that it is a weapon to be used sparingly and always with reference to the administration of Justice : McLeod vs St. Aubyn (1) In In,re a Special Referewe from the Bahama Islands [1893] A.C. 1 38) the test applied by the, ve strong Board which heard the reference was whether the words complain of were in the circumstances calculated to obstruct or interfere with the course of justice and the due administration of. the law. In Oueen vs GraY [1900](2) Q. B. 36 it was show that the offence of scandalizing the, court itself was not obsolete in this country. A very scandal us attack had been made on a fudge for his judicial utterances while sitting in a criminalase on circuit and it was with the foregoing opinions on record that lord Russell of Killowen, C.J., adopting the expression of Wilmot, C.J. in his opinion in Rex. vs Almon (1765 Wilmot 's Notes of Opinions, 243 ; ,which is the source of much of the present law on the subject, spoke of the article complained of as calculated to lower the authority of the judge. It is, therefore, clear that scandalization within the meaning of subclause (1) must be in respect of the court or the Judge with reference to admims tration of justice. The contention of Mr. Sen on behalf of the appellant is that, in the first place ', it must be remembered that the publication or acts complained of are in the course of the appellant challenging his suspension and holding of disciplinary proceedings in an appeal or representation to the Governor from the orders passed by the High Court. In Anexure 20 he was challenging the order of the High Court before (1) 70 Indian Appeals, 216. 298 the Supreme Court. The appellant in his submission, bona fide believed that he had a right to appeal and, in pursuance of the right he thus claimed he had given expression to his grievance or had otherwise acted, not with a view to malign the court or in defiance of it, but with the sole object of obtaining the reversal of the orders passed by the High Court against him. In the second place, Mr. Sen contended, the passages about which the complaint was made did not amount to contempt of court since they did not purport to criticize any judicial ' acts of the judges sitting in the seat of justice. It may be that in some places disrespectful references have been made to the Judges which Mr. Sen assures us, he should have, never done. At the same time, in his submission, criticism of administrative acts of the High Court even in vilification terms did not amount to contempt of court. So far as the first part of the argument is concerned, the same must be dismissed as unsubstantial because if, in fact the language used amounts to contempt. of court it will become punishable as criminal contempt. The right of appeal does not give the right to commit contempt of court, nor can it be used as a cover to bring the authority of the High Court into disrespect and disregard. It has been held by this Court in Jugal Kishore vs Sitamarhi Central Co op. Bank() that allegations of mala fides in the grounds of appeal to the Joint Registrar of Cooperative Societies from the Order of the Assistant Registrar would constitute gross contempt. A point of some substance is in the second part of Mr. Sen 's argument and it will be necessary to decide in the present case whether contemptuous imputations made with reference to "the administrative acts" of the High Court do not amount to contempt of Court. The answer to the point raised by Mr. Sen will depend upon whether the amputations referred to above do or do not affect administration of Justice. That is the basis on which contempt is punished and must afford the necessary test. We have not been referred to any comprehensive definition of the expression "administration of justice". But historically, and in the minds of the people, administration of justice is exclusively associated with the Courts of justice constitutionally established. Such courts have been established throughout the land by several statutes. The Presiding Judge of a court embodies in himself the court, and when engaged in the task of administering justice is assisted by a complement of clerks and ministerial officers( Whose duty it is to protect and maintain the records, prepare the writs, serve the processes etc. The acts in which they are engaged are acts in aid of administration of justice by the Presiding Judge. The power of appointment of clerks and ministerial officers involves administrative control by the Presiding Judge over them and though such control is described as administrative to distinguish it from the duties of a Judge sitting in the seat of justice such control is exercised by the Judge as a Judge, in the course of judicial administration. Judicial administration is an integrated function of the judge and cannot suffer any dissection so far as maintenance of high standards of rectitude in judicial administration is con (1) A.I.R. 1967 S.C. 14 94 299 cerned. The whole set up of a court is for the purpose of administration of justice, and the control which the Judge, exercises over his assistants has also the object of maintaining the purity of administration of justice. These observations apply to all courts of justice in the land whether they are regarded as superior or inferior courts of justice. Courts of justice have, in accordance with their constitutions. to perform multifarious functions for due administration of 'justice. Any lapse from the strict standards of rectitude in performing these functions is bound to affect administration of justice which is a term of wider import than mere adjudication of causes from the seat of justice. In a country which has a hierarchy of courts one above the other, it is usual to find that the one which is above is entrusted with disciplinary control over the one below it. Such control is devised with a view to ensure that the lower court functions properly in its judicial administration. A Judge can foul judicial administration by misdemeanors while engaged in the exercise of the functions of a Judge. It is therefore as important for the superior court to be vigilant about the conduct and behavior of the Subordinate Judge as a Judge, as it is to administer the law, because both functions are essential for administration of justice. The Judge of the superior court in whom this disciplinary control is vested functions as much as a Judge in such matters as when he hears and disposes of cases before him. The procedures may be different. The place where he sits may be different. But the powers are exercised in both instances in due course of judicial administration. If superior courts neglect to discipline subordinate courts, they will fail in an essential function of judicial administration and bring the whole administration of justice into contempt and disrepute. The mere function of adjudication between parties is not the whole of administration of justice for any court. It is important to remember that disciplinary control is vested in the court and not in a Judge as a private individual. Control, therefore, is a function as conducive to proper administration of justice as laying down the law or doing justice between the parties. What is commonly described as an administrative function has been, when vested in the High Court, consistently regarded by the statutes as a function in the administration ' of justice. Take for example the Letters Patent for the High Court of Calcutta. Bombay and Madras. Clause 8 thereof authorises and empowers the Chief Justice from time to time as occasion may require "to appoint so many and such clerks and other ministerial officers it shall be found necessary for the administration of justice End the due execution of all the powers and authorities granted and committed to the said High Court by these Letters Patent. " It is obvious that this authority of the Chief Justice to appoint clerks and ministerial officers for the administration of justice implies an authority to control them in the interest of administration of justice. This Controlling function which is commonly described as an administrative function is designed with the primary object of securing administration of justice. Therefore, 300 when the Chief Justice appoints ministerial officers and assumes disciplinary control over them, that is a function which though described a administrative is really in the course of administration of justice. , Similarly section 9 of the High Courts Act, 1861 while conferring on the High Courts several types of jurisdictions and powers says that all such jurisdiction and powers are "for and in relation to the administration of justice in the Presidency for which it is established. " Section 106 of the Government of India Act, 1915 similarly shows that the, several jurisdictions of the High Court and all their powers and authority are "in relation to the administration of justice including power to appoint clerks and other ministerial officers of the court. " Section 223 of the Government of India Act, 1935 preserves the jurisdictions of the. existing High Courts and, the respective powers of the Judges thereof in relation to the administration of justice in the court. Section 224 of that Act declares that the High Court shall have superintendence over all courts in India for the time being subject to its appellate jurisdiction and this superintendence, it is now settled, extends both to administrative and judicial functions of the subordinate courts. When we come to our constitution we find that whereas Articles 225 and 227 preserve and to some extent extend these powers in relation to administration of justice, Article 235 vests in the High Court the control over District Courts and Courts Subordinate thereto. In the State of west Bengal vs Nripendra Nath Bagchi(1) this Court has pointed out that control under Article 235 is control over the conduct and discipline of the Judges. That is a function which, as we have already seen, is undoubtedly connected with administration of justice. The disciplinary control over the misdemeanours of the subordinate judiciary in their judicial administration is a function which the High Court must exercise in the interest of administration of justice. It is a function which is essential for the administration of justice in the wide connotation it has received and, therefore, when the High Court functions in a disciplinary capacity, it only does so in furtherance of administration of justice. We thus reach the conclusion that the courts of justice in a State from the highest to the lowest are by their constitution entrusted with functions directly connected with the administration of justice, and it is the expectation and confidence of all those who have or likely to have business therein that the courts perform all their functions on a high level. of rectitude without fear or favour, affection or ill will. And it is this traditional confidence in the courts that justice will be administered in them which is sought to be, protected by proceedings in contempt. The object, as already stated, is not to vindicate the Judge personally but to protect the public against any undermining of their accustomed confidence in the Judges ' authority. Wilmot C.J. in his opinoin in the case of Rex vs Almon alreadly referred to says : "The arraignment of the justice of the Judges, is arraigning the King 's justice, it is an impeachment of his wisdom and goodness in the choice of his Judges, and excites in the minds of the people a general dissatisfaction with all judicial determination, and indisposes their minds to obey them; and whenever men 's allegiance to the laws is so fundamen (1) ; 301 tally shaken, it is the most fatal and most dangerous obstruction of justice, and in my opinion, calls out for a more rapid and immediate redress than any other obstructing whatsover; not for the sake of. the Judges, as private individuals, but because they are the channels by which the King 's justice is conveyed to the people. To be, impartial, and to be universally thought so, are both absolutely necessary for the giving justice that free, open, and uninterrupted current, which it has, for many ages, ' found all over this kingdom. . Further explaining what be meant by the words "authority of the court", he observed "the word "authority" is frequently used to express both the right of declaring the law, which is properly called jurisdiction, and of enforcing obedience to it, in which sense it is equivalent to the word power : but by the word "authority", I do not mean that coercive power of the Judges, but the deference and respect which is paid to them. and their Acts, from an opinion of their justice and integrity. " Scandalization of the court is a species of contempt and may take several forms. A common form is the vilification of the Judge. When proceedings in contempt are taken for such vilification the question which the court has to ask is whether the vilification is of the Judge, as a Judge. See Queen vs Gray(1) or it is the vilification of the Judge as an individual. If the latter, the Judge, is left to his private remedies and the court has no power to commit for contempt. If the former, the court will proceed to exercise the jurisdiction with scrupulous care and in cases which are clear and beyond reasonable doubt. Secondly, the court will have also to consider the degree of harm caused as affecting administration of justice and, if it is slight and beneath notice, courts will not punish for contempt. This salutary practice, is adopted by section 13 of the . The jurisdiction is not intended to uphold the personal dignity of the Judges. That must rest on surer foundations. Judges rely on their conduct itself to be its own vindication. But if the attack on the Judge functioning as a Judge substantially affects administration of justice it becomes a public mischief punishable for contempt, and it matters not whether such an attack is based on what a judge is alleged to have, done in the exercise of his administrative responsibilities. A Judge 's functions may be divisible, but his integrity and authority are not divisible in the context of administration of justice. An unwarranted attack on him for corrupt administration is as potent in doing public harm as an attack on his adjudicatory function. The Full Bench has considered a very large number of cases and come to the conclusion that there is no foundation. for the view that an attack on the court in its exercise of administrative functions does not amount to contempt. In Brahma prakash Sharma and others vs The State of Uttar pradesh(2) it is pointed out that the object of contempt proceedings is not to afford protection to judges personally from nations to which they may be exposed as individuals but intended,as protection to the public those interest would be very much affected, (1) [1900] (2) Queen 's 13 36 at page 40. (2 ) 302 if by the act or by the conduct of any party the authority of the court is lowered and thee sense of confidence which the people have in the administration of justice by it is weakened. The case is no authority to the proposition put forward by Mr. Sen. In Gobind Ram vs 'State of Maharashtra(1) some observations of Jagannadhadas, C.J. (as he then was) in the State vs The Editors and Publishers of Eastern Times and Prajatantra(2) were quoted by this Court with approval. These observations are : " 'A review of the cases in which a contempt committed by way of scandalization of the court has been taken notice of for punishment shows clearly that the exercise of the punitive jurisdiction is confined to cases of very grave and scurrilous attack on the court or on the Judges in their judicial capacity. the ignoring of which could only result encouraging a repetition of the same with the sense of in unity which would thereby result in lowering the prestige and authority of the court." Mr. Sen has particularly emphasised the words "judicial capacity" and argued that this only refers to the Judge functioning in the seat of justice. It does not appear from the report of the Orissa case that the High Court was in any way, concerned with the alleged dichotomy between the Judge 's administration functions and his ad judicatory functions. "Judicial capacity" is an ambivalent term which means " capacity of or proper to a Judge" and is capable of taking in all functional capacities of a Judge whether administrative, adjudicatory or any other, necessary for the administration of justice. There is no sufficient warrant to hold that the Orissa High Court used the words "judicial capacity" with a view to exclude all other capacities of the Judges except the capacity to adjudicate, nor for holding that this Court approved the use of the expression as limited to the. Judges ' adjudicatory function. On the other hand, there is high. authority for the proposition that vilificatory criticism of a Judge functioning as a Judge even in purely administrative or non adjudicatory matters amounts to criminal contempt. The case of Rex vs Almon already referred to is a case of this kind. Almon published a pamphlet in which the Chief Justice and, impliedly, all the Judges of the court of King 's Bench Were accused of deliberately delaying or defeating the issue of the process of Habeas corpus by introducing a new rule that a petition praying for the issue of that process should be accompanied by an affidavit. It was held that this constituted contempt of court. The Chief Justice and the Judges were not criticized for what they were doing in a judicial proceeding from the "seat of justice" but for making a rule which, 'in the opinion of the writer was deliberately designed to delay or defeat the process of habeas corpus. Apparently. the rule had been made by the court under its power to regulate proceedings in court and not in any judicial proceeding between parties to a cause. The rule Was Made Under the rule making function of the court and not in exercise of any adjudicatory function as narrowly interpreted now, and still it was held that the court was scandalized and its authority lowered. In Mott Lal Ghose and others(3) a strong special bench of five Judges held that an imputation made against the Chief Justice of the Calcutta High Court suggesting that he was improperly motivated in constituting a packed bench (1) [1971] 1.S.C.C. 740. (2) A I.R. 1952 orissa, 318. (3) XLV Calcutta 169. 303 to hear a particular class of appeals was held to amount to contempt. Sanderson, C. J. observed at page 180 : "I have no doubt that this article, read by itself, constitutes a very serious reflection upon the administration of the court, which everyone knows is in the hands of the Chief Justice. " Woodroffe, J. at page 199 observed : "The Court, however, in such cases does not seek to vindicate any, personal interests of the Judges, but the general administration of justice, which is a public concern. " Mookerjee, J at page, 231 observed : "it seems to me indisputably plain that the implication of the second article, whether taken along with or independently of the first, is that, at the instance of person$ interested in the Calcutta Improvement Trust, the Chief Justice has constituted a Special Bench to ensure a decision favorable to the Trust in the appeals against the judgment of Mr. Justice Greece." Proceeding further he held "an imputation of this character constitutes a contempt of court. " It was the function of the Chief Justice as Chief Justice of the Court to administratively form, front time to time, benches for the disposal of the business of the court. To attribute improper motives to him in the exercise of this function was held to be a contempt because that was bound to undermine the confidence of the people in the High Court and its Judges in relation to administration of justice. Similarly, in The state of Bombay vs Mr. P.(1)" "a scurrilous attack on. the court receiver for alleged misbehavior in his official duties and a charge against the Chief Justice and the administrative judges for deliberately conniving at it were held to constitute contempt. The same argument as is now put forward was made in that case. (See para 14 of the report), but was rejected in these words : "By making these foul attacks upon the Judges, the respondent has tried to create an apprehension in the mind of the public regarding the integrity of these Judges and has done a wrong to the public. He has attempted to shake the confidence of the public in the Judges of this Court and in the justice that is being administered by these judges of this Court. " There is no such thing as a denigration of a Judge function wise. This is brought out clearly in the judgment of the Judicial Committee in Debi Prasad Sharma vs The King Emperor(2) referred to earlier. In that case the appellant had suggested falsely that the Chief Justice of the Allahabad High Court had in his administrative capacity, issued a circular to the Judicial Officers under his jurisdiction enjoining on them to raise contributions to the warfares which, it was said, would lower the prestige of the court in the eyes of the people. In holding that the imputation did not constitute contempt of court but at the most, a personal defamation of the Chief Justice in his individual capacity, Lord Atkins said at page 224, "When the comment in question in the present case is examined it is found that there is no criticism of any judiciaries of the Chief Justice, or any imputation on him for anything done or omitted to be done by him in the administration of justice. it can hardly be said that there is any criticism of him in his administrative capacity, for, as far as their Lordships have been informed, the administrative control of the subordinate courts of the. Province, whatever it is, is exercised, not by the Chief Justice, but by the. court over, which he presides. " (1) A.I.R. 1959 Bombay 182. (2) 70 Indian Appeals 216. 304 The words underlined above are important. In holding that only ordinary remedies for defamation were open to the Chief Justice, their Lordships had to ask the substantial question, as suggested by Lord Watson during the course of the arguments in Re : Special Reference from the Bahama Islands(1) "whether the letter complained of referred to him in his official capacity. " With that case obviously in mind and the case was referred to earlier in the judgment lord Atkin showed in the words quoted above that the criticism did not refer (i) to any judicial act, meaning thereby any adjudicatory act and (ii) to any administrative act, because the Chief Justice alone had no administrative control over the subordinate courts but only the High Court as a whole. The plain implication is that if the circular had been alleged to have been issued by the Chief Justice under the authority of the High Court, then the imputation having the effect of lowering the prestige and authority of the High Court could conceivably have been regarded as contempt. Their Lordships of the Privy Council are not known to waste their words over matters not relevant to the issue. It was absolutely necessary for their Lordships to eliminate the possibility of the alleged action of the Chief Justice being connected in any manner with any adjudicatory or administrative function of the High Court by pointing out that it did not refer to any official act in the administration of justice or, as stated in Queen vs Gray already refer , red to, "the act of a Judge as a Judge", in which case alone the imputation would have amounted to scandalization of the court. The above authorities are sufficient to show that there is no warrant for the narrow view that the offence of scandalization of the court takes place only when the imputation has reference to the adjudicatory functions, of a Judge in the seat of justice. We are unable, therefore, to accept the submission of Mr. Sen on this aspect of the case. We have already shown that the, imputations in Annexures 8, 16 and 20 have grossly, vilified the Hugh Court tending to affect substantially administration of justice and, therefore, the appellant was rightly convicted of the offence of criminal contempt. As regards the sentence, it is enough to say that the Full Bench has considered the question at great length. There were six contempt proceedings against the appellant and the court had treated him generously. In two proceedings he was let off with a fine. Even in the present case the Full Bench was of the opinion that the maximum sentence under the law was deserved by the appellant but imposed on him only a sentence of simple imprisonment for two months. The appellant, throughout, took a defiant attitude and did not even think it necessary to offer an apology. Ordinarily we would be most reluctant to interfere with the sentence imposed by the High Court, but for the fact that we notice that he has almost come to the end of his judicial career and during the last few years has been gripped by a sort of mania against the High Court which clouded his reason. We think the object of punishment will be served by directing him to pay (1) at 14. 30 5 a fine of Rs. 1,000/ or in default to suffer simple imprisonment for 3. months in substitution of the sentence inflicted by the High Court. It remains now to point out that when dealing principally with the contempt of the appellant, the court also thought it fit to hear the: parties including the Advocate General on some subsidiary but important questions on the relative position of the Government of Orissa and the High Court in the matter of disciplinary control over Subordinate Judges. It appears that the State Government. framed what are known as the Orissa Civil Services (Classification and Control) Rules, 1962 and they appear to apply to all Government servants under the State. The Full Bench held that some of the rules, in their application to the Subordinate judiciary of the State, contravened Articles 235 which vested control over, the Subordinate Judiciary in, the High Court. From these findings the State of Orissa has come in appeal and that appeal is numbered Criminal Appeal No. 77/1973 In our opinion, the principal matter before the Full Bench was in, relation to the contempt committed by the appellant. The constitutional issue between the State Government and the High Court came in only by way of a side wind. In fact it would appear from the judgment that the learned Advocate General had requested the court not to. express any opinion on these constitutional matters, and the court also seems to have thought that the constitutionality of the rules had ' no relation to the commission of the contempt. However, the court thought that the issue became relevant, especially, on the question of sentence and hence applied its mind to the Constitutionality of some of the rules. It has struck down those rules which, in the opinion of the court, contravened Article 235 in their application to the Subordinate Judiciary. We have considered whether it is necessary for us to dear with those questions here, but are inclined to think that we should express no opinion on the constitutionality of the impugned rules. Accordingly, appeal No. 41 is dismissed with the modification in, the sentence as suggested above and criminal appeal No. 77 of 1973 is permitted to be withdrawn without prejudice to the contentions raised by the State in regard to the constitutionality of the rules struck down by the High Court. KRISHNA IYER, J. We have had the advantage of reading the leading opinion of our learned brother, Palekar, J., and, concurring as we do in the ultimate conclusion, to depart from the ' option of silenceneeds a word of explanation. Graver issues bearing on free speech raised in these proceedings and the correct approach to be made to what in substance is a criminal charge, bring to the fore our diver gence in legal reasoning and constitutional perspective which we proceed to set out in a separate opinion. The facts of the present case, fully laid bare in the judgment of Palekar, J., are in a sense peculiar. The contest is himself a senior district judge. The alleged multiple contempt relates partly to (i) an administrative act of the High Court preliminary to disciplinary proceedings and is stated to be contained in a representation filed 306 by him before the Governor, under a rule which apparently authorizes such appeals, against the suspension order of the High Court, and (ii) averments in a special leave petition filed by him in this Court, aggrieved by the refusal of the High Court to decide a preliminary objection in these very contempt proceedings on the judicial side. A: full Bench of the High Court convicted the appellant for contempt, the action itself having been initiated by an administrative full court. The questions we are called upon to decide are (a) whether criticism of an administrative act of the High Court or of any court could at all amount to contempt of court; (b) whether pejorative imputations about a court or judge, however offensive, true or honestly held even if contained in. an appeal to a higher court or in a remedial representation to a correctional authority, constitute contempt. The legal touchstone adopted by the High Court is that any statement which in some manner may shake the confidence of the community in a judge or in the judicial system, is straightaway contempt, regardless of context or purpose or degree of publication or absence of any clear land present danger of disaffection or its being a bona fide plea for orderly change in the judicature and its, process. On the facts, we agree that the spirit of defiance, extenuated partly by a sense of despair, is writ large in the writings of the appellant but wish to warn ourselves that his reported past violations should not prejudice a judicial appraisal of his alleged present criminal contempt. And the benefit of doubt, if any, belongs to the condemner in this jurisdiction. The dilemma of the law of contempt arises because of the constitutional need to balance two great but occasionally conflicting principles freedom of expression and fair and fearless justice remembering the brooding presence of articles 19(1) (a), 19(2), 129 and 215 of the Constitution. In a sense, the Indian approach is a little different from the English and its orientating on is more akin to American jurisprudence, although there is much,that is common to all the three. The pronouncement of Wilmot, C.J., posthumously published, has influenced the law of contempt in the Unite d States and the Commonwealth countries, but it is a moot point whether we should still be bound to the regal moorings of th e law in Rex vs Almon(1) ". by our constitution the King is the fountain of justice and . he delegates the power to the judges . arraignment of the justice of the judges is arraigning the King 's justice. It is an impeachment of his wisdom in the choice of his judges. it excites dissatisfaction with judicial determination and indisposes the minds of people to obey them". Maybe we are nearer the republican justification suggested in the American system(2) (1) Wilmot 's notes 243 (Wilmot ed. 1802 =97 ER 94. as cited in Fox,Contempt of Court (1927). (2) 18 U.S.C.A. 3691 (formerly , 389. 30 7 "In this country, all courts derive their authority from the people, and hold it in trust for their security and benefit. In this state, all judges are elected by the people, and hold their authority, in a double, sense, directly from them; the power they exercise is but the authority of the people themselves, exercised through courts as their agents. It is the authority and laws emanating from the people, which the judges sit to exercise and enforce. Contempt against these courts, the administration of their laws, are insults offered to the authority of the people themselves, and not to the humble agents of the law, whom they employ in the conduct of their government. " This shift in legal philosophy will broaden the base of the citizen 's right to criticize and render the judicial power more socially valid. We are not subjects of a king but citizens of a republic and a blanket ban through the contempt power, stifling namely, Administration of justice, thus criticism of a strategic institution, forbidding the right to argue for reform of the judicial process and to comment on the performance of the judicial personnel through outspoken or marginally excessive criticism of the instrumentalities of law. and justice, may be a tall order. For, change through free speech is basic to our democracy, and to prevent change through criticism is to petrify the organs of democratic government. The judicial instrument is no exception. To cite vintage rulings of English courts and to bow to decisions of British Indian days as absolutes is to ignore the law of all laws that the rule of law must keep pace with the rule of life. To make our point, we cannot resist quoting McWhinney(1),who wrote "The dominant theme in American philosophy of law today must be the concept of change or revolution in law. In Mr. Justice Oliver Wendell Hoimes ' own aphorism, it is revolting to have no better reason for a rule of law than that it was laid down in the time of Henry IV. The prestige argument, from age alone, that because a claimed legal rule has lasted a certain length of time it must automatically be valid and binding at the present day, regardless of changes in basic societal conditions and expectations, is no longer very persuasive. According to the basic teachings of the Legal Realist and policy schools of law, society itself is in continuing state of flux at the present day '; and the positive law, therefore, if it is to continue to be useful in the resolution of contemporary major social conflicts and social problems, must change in measure with the society. What we have, therefore, concomitantly with our conception of society in revolution is a conception of law itself, as being in a condition of flux, of movement. On this view, law is not a frozen, static body of rules but rules in a continuous process of change and adaptation and the judge, at the final appellate level anyway, is a part determinant part of this dynamic process of legal evolution." Canadian Bar Review (Vol. 45) 1967, 582 583. 308 This approach must inform Indian law, including contempt law. It is very necessary to remember the legal transformation in our Devalue system on the inauguration of the Constitution, and the dogmas of the quiet past must change with the challenges of the stormy present. The great words of Justice Homles uttered in a different context bear repetition in this context : "But when men have realized that time has upset many fighting faiths, they may come to believe even more than they believe the, very foundations of their own conduct that the ultimate good desired is better reached by free trade in ideas that the best test of truth is the power of the thought to get itself accepted in the competition of the market, and that truth is the only ground upon which their wishes safely can be carried out. That, at any rate, is the theory of our Constitution. It is an experiment, as all life is an experiment. Every year, if not every day, we have to wager our salvation upon some prophecy based upon imperfect knowledge. While that experiment is part of our system I think that we should be eternally vigilant it against attempts to check the expression of opinions that we loathe and believe to be fraught with death, unless they so imminently threaten immediate interference with the lawful and pressing purposes of the law that an immediate check is required to save the country. "(1) Before, stating the principles of law bearing on the facets of contempt of court raised in this case we would like to underscore the need to ,draw the lines clear enough to create confidence in the people that this ancient and inherent power, intended to preserve the faith of the public in public justice, will not be so used as to provoke public hostility as overtook the Star Chamber. A vague and wandering jurisdiction with uncertain frontiers, a sensitive and suspect power to punish vested in the prosecutor, a law which makes it a crime to publish regardless of truth and public good and permits a process of brevity conviction, may unwittingly trendiness upon civil liberties and so the special jurisdiction and jurisprudence bearing on contempt power must be delineated with deliberation and operated with serious circus section by the higher judicial echelons. So it is that as the palladium ,of our freedoms, the Supreme Court and the High Courts, must vigilantly protect free speech even against judicial umbrage a delicate but sacred duty whose discharge demands tolerance and detachment of a high order. The present proceedings challenge, the projection of the power to punish for contempt into administrative domains of the Court and its extension to statements in remedial proceedings. One recalls the observations of the American Supreme Court:(2) "Contempt of Court is the Proteus of the Legal World,. assuming an almost infinite diversity of forms. (1) The Suprem Court and Civil Liberties by 03m 3nd K. Fracknel Published for the American Civil Liberties Union in its 40th anniversaries year Pornea Publications, Inc. New York (1960)page 40, (2) Moskovitz, Contempt of Injunctions, Criminal and Civil, (1943). 309 Considerations such as we have silhouetted led to the enactment of the Contempt of Court Act, 1971, which makes some restrictive departures from the traditional law and implies some wholesome principles which serve as unspoken guidelines in this branch of law. Section 5 protects fair comment on the merits of, cases finally decided, and section 13 absolves from sentence all contempt which do not substan tially interfere or tend substantially to interfere with the due course of justice. Statements which disparage a subordinate judicial officer presiding over a court are not contempt if made in good faith to the High Court or any other lower Court to which the offended judge is subordinate. The emphasis in section 2(o), section 3 and section 13 to the interference with the course of justice or obstruction of the administration of justice or scandalising or lowering the authority of the Court not the judge highlights the judicial area as entitled to inviolability. and suggests a functional rather than a personal or 'institutional ' 'immunity. The unique power to punish for contempt of itself inheres in a Court qua Court in its essential role of dispenser of public justice. The phraseological image projected by the catenate of expressions like court, course of justice administration of justice, civil and criminal proceedings, judicial proceedings, merits of any case, presiding officer of the Court, judicial proceeding before a court sitting in chamber or in camera undertaking given to a court, substantial interference with the due course of justice, etc., occurring in the various sections of the Act, the very conspirator of the statutory provisions and the ethos and raison d 'etre of the jurisdiction persuade us to the conclusion that the text of the Act must take its colour from the general context and confine the, contempt power to the judicial cum para judicial areas including those administrative functions as are intimately associated with the exercise of judicial power. What then is a Court ? It is "an agency of the sovereign created by it directly or indirectly under its authority, consisting of. one or more officers, established and maintained for the purposes of hearing and determining issues of law and fact regarding legal rights and alleged violations thereof, and of applying the sanctions of the law, authorised to exercise its powers in due course of law at times and places previously determined by lawful authority. Isbill vs Stovall, Rex. App. , 1070." ". An organised body with defined powers, meeting at certain times and places for the, hearing and decision of causes and other matters brought before it, and aided in this, its proper business, by its proper officers, viz., attorneys and counsel to present and manage the business, clerks to record and attest its acts and decisions, and ministerial officers to execute its commands, and secure due order in its proceedings. Ex parte Gardner,, , 39 p. 570: Hertman vs Hertman , , 582."(1). In short the accent is on the functional personality which is pivotal to securing justice to the people. Purely administrative acts, Black 's Law Dictionary, Fourth Edu. 310 like recruitments, transfers and postings, routine disciplinary action against subordinate staff, executive acts in running the establishment and ministerial business ancillary to office keeping these are common to all departments in the public sector and merely because they relate to the judicial wing of government cannot enjoy a higher immunity from criticism. The quintessence of the contempt power is protection of the public, not judicial personnel. Excerpts from a few Anglo American authorities will attest our standpoint "The object of the discipline enforced by the Court in, case of contempt of Court is not to vindicate the dignity of the Court or the person of the Judge, but to prevent undue interference with the administration of justice." [Bowen, L.J.Helmore vs Smith , 455] "The law of contempt is not made for the protection of judges who may be sensitive to the winds of public opinion. Judges are supposed to be men of fortitude, able to thrive in a hardy climate. "[Douglas, J. Craig vs Harney ; , 376 (1947)]. Judges as persons, or courts as institutions, are entitled to no greater immunity from criticism than other persons or institutions. Just because the holders of judicial office are identified with the interests of justice they may forget their common human frailties and fallibilities. There have sometimes been martinets upon the bench as there have also been pompous wielders of authority who have used the paraphernalia of power in support of what they called their dignity. Therefore, judges must I be kept mindful of their limitations and their ultimate public responsibility by a vigorous stream of criticism expressed_with candor however blunt., [Frankfurter, J., Bridges vs California ; , 289 (1941)] If we accept this slant on judicialisation as a functional limitation on the contempt jurisdiction we mutt exclude from its ambit interference with purely administrative acts of courts and non judicial functions of judges. This dichotomy is implicit in the decided cases although the twilight of the law blurs the dividing lines now and then. To cast the net wider is unreasonable and unwarranted by precedent. To treat, as the High Court has done, "the image and personality of the High Court as an integrated one and to hold that every shadow that darkness it is contempt is to forget life, reason and political progress. For, if a judge has an integrated personality and his *He openly accuses him of neglect or worse, she would certainly reduce the confidence of the public in him as judge Will her accusation be personalised contempt? If a judge expresses on a platform crude views on moral lapses and is severely criticized in public for it, it will undoubtedly debunk him as a judge. Will such censure be branded contempt? 311 As early as 1892, the Privy Council in The matter of a Special Reference from the Bahama Islands() bad to upset a sentence of indefinite imprisonment imposed by the Chief Justice of Bahmas on one Mr. Moseley for two 'letters to the editor ' fun of snub and sarcasm about Yelverton, Esq., Chief Justice. In these there was cynical reference to the Chief Justice 's incompetence and imprudence, couched in stinging satire. The Judicial Committee held : "(a) That the letter signed "Colonist" in The Nassau Guardian though it might have been made the subject of proceedings for libel was not, in the circumstances, calculated to obstruct or interfere with the course of justice or the due administration of the law, and therefore did not constitute a contempt of Court." The Attorney General struck a sound note when in the course of the arguments he summed up the law thus "A libel upon a judge, holding him up to contempt and ridicule in his character as a judge, so as to lower him in the estimation of the public amongst whom be exercises office is a contempt of court." (emphasis supplied) Lord Atkin, in the celebrated case of Debi Prasad Sharma vs The King Emperor(2) where the printer, publisher and editor of the: Hindustan Times were found guilty of contempt by the Allahabad High Court for criticising the Chief Justice by falsely imputing to him a circular communication to the subordinate judiciary to raise collections for the war fund, set asida the conviction holding that the proceedings in contempt were misconceived, The learned Law Lord observed "When the comment in question in the present case is examined it is found that there is no criticism of any judicial act of the Chief Justice, or any imptitation on him for any thing done or omitted to be done by him in the administration of justice. It can hardly be said that there is any criticism of him in his administrative capacity, for, as far as their Lordships have been informed, the administrative control of the subordinate courts of ' the Province, whatever is, is exercised, not by the Chief Justice, but by the court over which he presides. The appellants are not charged with saying anything in contempt of the subordinate courts or the administration of justice by them. In truth, the, Chief Justice is alleged, unruly, as Is now admitted, to have committed an ill advised act in writing to his subordinate, judges asking (as the news item says), enjoining (as the comment says) them to collect fog the War Fund. If the facts were as alleged they admitted, of criticism. No doubt it is galling for any judicial personato be criticised publicly as having done something outsidethis judicial proceedings which was ill advised or indiscreet. But judicial personages can afford not to be too sensitive.simple denial in public (1) ,.149. (2) (1942) 70 I.A. 216. 8 522SCI)74 31 2 of the alleged request would at once have allayed the trouble. If a judge is defamed in such a way as not to affect the administration of justice he has the ordinary remedies for defamation if he should feel impelled to use them. " The whole emphasis and ratio of the decision consists in the impugned editorial not being an attack on the administration of justice and, therefore, not amounting to contempt of court. The learned Additional Solicitor General, however, stressed the significance of the passing observation made in the judgment that the administrative control of the subordinate judiciary vested in the whole court and not only in the Chief Justice, and argued that by implication their Lordships must be deemed to have regarded animadversion on even acts of administrative control as potential prey to the contempt law. An obscure reference to the Chief Justice not being even the exclusive administrative authority over the lower judiciary, meant perhaps to bring into bold relief the irrelevance of the criticism as reflecting even on the executive functions of the Chief Justice, cannot be considered to reach a reverse result, ignoring the setting and the thrust of the whole dictum. A Division Bench of the Kerala High Court, in Kaviath Damodaran vs Induchoodan(1), has relied on this Privy Council ruling for the proposition that administrative acts of the court in that case the transfer of a Magistrate criticised as promoted by extraneous pressure was not a fit subject for punitive action. (In that case, of course, the contemnor was convicted for another publication). The deep concern of the law of contempt is to inhibit sullying essays on the administration of justice in which the public have a vital interest and not to warn off or victimise criticisms, just or unjust, of judges as citizens, administrators, non judicial authorities, etc. K.L. Gauba 'S(2) case was naturally pressed into service at the Bar against the contemnor but such an extreme case of wild and vicious attacks on the Chief Justice rarely serves in the search for any abiding principle in an excited setting. That ruling reminds us that, whatever the provocation, a Judge by reason of his office, has to halt at the gates of controversy but as enlightenment spreads and public opinion ripens this judicial self abbegation will ' be appreciated better. and not "embolden the licentious to trample upon everything sacred in society and to overthrow those institutions which 'have hitherto been deemed the best guardians of civil liberty. " Again, while Young, C.J., in that case rules out the tenability of truth as a valid defence against contempt, action, we observe, not without pertinence in the constitutional context of restrictions on free expression having to be reasonable, that in most of the reported cases courts have hastened to hold the imputations false before proceeding to punish. Contempt is no cover for a guilty judge to get away with it but a shield against attacks on public. justice. Gauba 's case, on the facts, was a mud slinging episode on the judicial target as such and the conviction accords with the policy of the law we have set out. (1) A.I.R. 1961 Kerala 321. (2) I.L.R. , 419. 313 A Division Bench of the Allahabad High Court, in Rex. vs D. section Nayyar,(1) had to deal with a representation by a litigant against a magistrate with reference to a case adversely decided, and Kidwai, J. cleared the confused ground right in the beginning by observing : "The first thing to be remembered is that Courts are not concerned with contempt of any authority except Courts of law in the exercise of their judicial functions. Thus, any speech, writing or act which does not have the, effect of interfering with the exercise of their judicial functions by the Courts cannot be the subject of proceedings in contempt. In India very often the same officers exercise executive. as well as judicial functions. Sometimes it becomes difficult to draw a distinction between their two capacities but nevertheless a distinction must be drawn and it is only if the criticism is of judicial acts that action by way of proceedings in contempt may be taken. " A letter to the President of the Congress party complaining about the appointment of. a judicial officer who was the brothirin law of the, Private Secretary of a 'Minister (belonging to that party) and of the transfer of cases to his Court where in Congressmen were involved, was sought to be punished as contempt of court. Kidwai, J, made the following useful remarks exonerating the contemnor : "In this passage also the attack is on the appointment of the judicial officer and the transfer of, cases to him but there is no attack upon the officer himself. Both these attacks are upon the system and not upon any Magistrate in respect of the performance by him of his judicial functions. They wish to see, laid down a salutary principle by which Justice should not only be done but should also appear to be done. There is no contempt of Court in this rather it is an endeavor to free Courts from all extraneous shackles and proceedings to contempt are wholly unc alled for ' The Judicial Committee in In re. section B. Sarbadhicary (2) considered the misconduct of a barrister for publishing an article where he cast reflections upon judges of the Allahabad, High Court. The merits of the case apart, the Judicial Committee emphasized the judicial capacity of the judges which attracted the contempt jurisdiction. Sir Andrew Seoble observed : "There is no doubt that the article in question was a libel reflecting not only upon Richards J. but other judges of the High Court in their judicial capacity and in reference to their conduct in the discharge of their public duties." (emphasis added) "The public duty" in their "judicial capacity" was obviously in contradistinction to merely personal activities or administrative function It is not as if a judge doing some non judicial public duty is protected from criticism in which case, any action by him as of Law or Vice chancellor in a University or as Acting Governor or President (1)A.I.R.1950 All. 549 ,551,555. (2) (1906) 34 XX I A. 14. 314 or Member of the Law or Finance Commission would also be punishable, as contempt. The basic public duty of a judge in his judicial capacity is to dispense public justice in court and anyone who obstructs or interferes in this area does so at his peril. Likewise, personal behaviour of judicial personnel, if criticized severely or even sinisterly, cannot be countered by the weapon of contempt of court, for to use the language of Mukherjee, J. in Brahma Prakash Sharma vs State of Uttar Pradesh,(1) "the object of contempt proceedings is not to afford protection to Judges personally from imputations to which they may be exposed as individuals" (emphasis added). Otherwise, a grocer who sues a judge for price of goods with an imputation that the defendant has falsely and maliciously refused to honour the claim, or a servant of a judge who makes personal allegations of misconduct against his master may be hauled up for contempt. This is no amulet worn by judges for all purposes. "The punishment is inflicted not for the, purpose of protecting either the Court as a whole or the individual judges of the Court from a repetition of the attack, but of protecting the public, and especially those who either voluntarily or by compulsion are subject to the jurisdiction of the Court, from the mischief they will incur if the authority of the Tribunal is undermined or impaired." (Vide para 9, Halsbury 's Laws of England, 3rd Edn. Vol. VIII). Indeed, if we peer through the mists of English Judicial history, Courts of record were not qua such courts, acting in any administrative capacities. How then could contempt action, going by genesis, be warranted purely administrative matters of courts. Of course, there have 'been cases sounding a different note. In State vs H. Nagamani, (2) one Mr. Nagamani, an impetuous I.A.S. officer, wrote a letter making critical I remarks couched in disrespectful and improper language about the inspection report of his court by a Judge of the High Court of Patna. However, Mr. Nagamani tendered an unqualified apology and the court discharged the rule for contempt since in their view the contempt was purged by the apology. Of course, there was no need to consider in detail whether the letter reflecting upon the Judge who held the inspection was contempt; it Was treated as such and the apology accepted. And the High Court 's inspection of the judicial work of the sub ordinate judiciary is a judicial function or is at least para judicial. The Allahabad High Court punished the late Shri C. Y. Chintamani and, Shri K D. Malaviya for publishing a criticism to the effect that comparatively undeserving lawyers were being frequently raised to the Bench. The Court held them guilty of contempt holding the criticism of the judges as a vicious reflection and a case of Contempt. [sea In the matter of an Advocate of Allahabad(3), Borderline cases draw up to the pneumbra of law and cannot light up dark comers. The learned Additional Solicitor General, in an endeavour to expand the meaning of "administration of justice" so to rope in criticisms of executive acts of judges, drew out attention to articles '225, 227 and 235, and the provisions of earlier Government of India Acts (c.f. sec. 224(1) 1935 Act) which vest the Power to appoint the staff and do (1) (2) A.I.R. 1959 Pat. 373 (3) A.I.R. 1935 AU. 1. 315 other incidental management functions, in the High Court as part of the administration of justice. Several High Court Acts clothe Chief Justices with administrative powers and Civil Courts Acts and Letters Patents charge judges with administrative duties the,, goal being effective administration of justice. If the appointment of clerks is part of the administration of justice, denunciation of the judges in these acts interferes with the administration of justice, liable to be visited with punishment. This means that if a judge in charge of appointments chooses relations or unqualified men or takes other consideration, the public must hold its tongue on pain of contempt. The paramount but restrictive jurisdiction to protect the public against substantial interference with the stream of justice cannot be polluted or diffused into an intimidator power for the judges to strike at adverse comments on administrative, legislative (as under articles 225, 226 and 227) and extra judicial acts. Commonsense and principle can certainly accept a valid administrative area so closely integrated with court work as to be stamped with judicial character such as constitution of benches, transfer of cases, issue of administrative directions regarding submission of findings or disposal of cases by subordinate courts, supervision of judicial work of subordinate courts and the like. Not everything covered by article 225, 227 and 235 will be of this texture. To overkill is to undermine in the long run. We may now sum up. Judges and Courts have diverse duties. But functionally, historically and jurisprudentially, the value which is dear to the community and the function which deserves to be cordoned off from public molestation, is judicial. Vicious criticism of 'personal and administrative acts of judges may indirectly mar their image and weaken the confidence of the public in the judiciary but the countervailing good, not merely of free speech but also of greater faith generated by exposure to the acting light of bona fide, even if marginally overzealous, criticism cannot be overlooked. Justice is no cloistered virtue. The first part of the present case directly raises the question whether statements made in an appeal to the Governor against an order of the High Court on the administrative side attracts the contempt law. To our mind the answer arises from another question. Is the suspension of the District Judge so woven into and integrally connected with the administration of justice that it can be regarded as not purely an administrative act but a para judicial function ? The answer must, on the facts here, be in the affirmative. "he appeal was against the suspension which was a preliminary to contemplated disciplinary action. What was that action about ? Against the appellant in his judicial capacity, for acts of judicial misconduct. The control was. therefore, judicial and. hence the unbridled attack on the High Court for the step was punishable as contempt. A large margin must be allowed for allegations in remedial representations but extravagance forfeits ' the protection of good faith. In this case reckless excess has vitiated what otherwise could have been legitimate grievance at least in one flagrant instance, the others being less clear. One of the 316 grounds for taking disciplinary action ' was based on the disposal of a civil appeal by the contemnor as Additional District Judge. lie heard it, delivered judgment dismissing the appeal signed the order sheet and judgment and sealed the judgment. Later in the day, the contemnor scored off his signatures in the order sheet and judgment, and returned the record to the principal District Judge for disposal falsely stating that the judgment had not been delivered. The High took the view that this action was without jurisdiction and revealed utter disregard of truth and procedure deserving disciplinary action. Obviously, the impugned conduct of the contemnor was qua judge and the evil criticism was of a supervisory act of the High Court and the critic would and should necessarily 'court contempt action. And in his memorandum of appeal the contemnor used expressions like 'mala fides ' and 'subterfuge ' without good faith, and in such a case no shelter can be sought in the alibi of 'administrative act. ' The second part of the charge relates to objectionable statements in the special leave petition to this Court. Ordinarily they must be out of bounds for, the contempt power; for, fearless seeking of justice will otherwise be stifled. In State ' of Uttar Pradesh vs Shyam Sunder Lal (1) a complaint about the conduct of a judicial officer in a petition to the Prime Minister was held not to constitute contempt. The representation was forwarded by the Prime Minister 's office to the Chief Secretary from whom it reached the District Magistrate. Certainly there was there fore sufficient, publication in the law of libel but the Court held "A letter sent to the Prime Minister and not intended to be broadcast to the public or any section of the public cannot create an apprehension in the mind of public . regarding the integrity, ability or fairness of the judge " Similarly, in Rex. vs R. section Nayyar, "(2) the court considered a representation made to the Premier of the State about a judicial officer and also to the President of the All India Congress Committee. The Court took the view that such complaints may be addressed to the Premier about judicial officers since Government had to consider under the then rules the conduct of judicial personnel. "If these complaints are genuine and are made in a proper manner with the object of obtaining redress, and are not made mala fide with a view either to exert pressure upon the Court in the exercise of its judicial functions or to diminish the authority of the Court by lvilifying it, it would not be in furtherance of justice to stifle them by means of summary action for contempt, but rather the reverse" _(emphasis added). A pregnant observation made by the Court deserves mention "It would indeed be extraordinary if the law should provide a remedy the conduct of eve ' a member of the highest Judicial Tribunal in the exercise of his judicial office may be the subject of enquiry with a view to see whether he is fit to continue to hold that office and yet no one should be able to initiate proceedings for an enquiry by a complaint (1) A.I.R. 1954 All 308. (2) A.I.R. 1950 All. 549: 554. 317 to the appropriate authority by reason of a fear of being punished for contempt, and I can find no justification for this view. " At this stage it must be noticed that in the State of Madhya Pradesh vs Ravi Shanker(1) this Court ruled that aspersions of a serious nature made against a Magistrate in a transfer petition could be punishable as a contempt if made without good faith. However, in Govind Ram vs State of Maharashtra,(2) this Court reviewed the decisions on the point and ruled that if in the garb of a transfer application scurrilous attacks were made on a court imputing improper motives to the Judge there may still be contempt of court, although the court referred with approval to the ruling in Swarnamayi Panigrahi vs B. Nayak(3) that a latitudinarian approach was permissible in transfer applications. The core of the pronouncement is that permission remedial process like a transfer application cannot be a mask to malign a judge, a certain generosity or indulgence is justified in evaluating the allegations against the judge. Eventually, Grover J., held that the allegations made in the proceeding in question were not sufficiently serious to constitute contempt. A liberal margin is permissible in such cases but batting within the crease and observing the rules of the game are still necessary. Irrelevant or unvarnished imputations under the pretext of grounds of appeal amount to foul play and perversion of legal process. Here, the author, a senior judicial officer who professionally weighs his thoughts and words, has no justification for the immoderate abuse he has resorted to. In this sector even truth is no defence, as in the case of criminal insult in the latter because it May Produce violent breaches and is forbidden in the name of public peace, and in the former because it may demoralise, the community about courts and is forbidden in the interests of public justice as contempt of court. Even so, if judges have frailities after all they are human they need to be corrected by independent criticism. If the judicature has serious shortcomings which demand systemic correction through socially oriented reforms initiated through constructive criticism, the contempt power should not be an interdict. AR this, far from undermining the confidence of the public in courts, enhances it and, in the last analysis, cannot be recessed by indiscriminate resort to contempt power. Even bodies like the Law Commission or the ' Law Institute and researchers, legal and sociological may run risks because their professional work sometimes involves unpastoral criticism of judges, judicial processes and the system itself and thus hover perilously around the periphery of the law it widely construed. Creative legal journalism and activist statesmanship for judicial reform cannot be jeopardised by an undefined apprehension of contempt action. Even in England a refreshingly pro free speech approach has been latterly adopted. Any episode in the administration of justice may be publicly or privately criti cised, provided that the criticism is fair and (1) (2) ; , (3) A.I.R. 1959 Orissa 89. 318 temperate and made in good faith. Lord Denning, in the famous Quintin Hogg case() laid down remarkable guidelines in the matter of, actions for contempt. The learned Law Lord said : "It is a jurisdiction which undoubtedly belongs to us but which we will most sparingly exercise; more particularly as we ourselves have an interest in the matter. Let me say at once that we will never use this jurisdiction as a means to uphold our own dignity. That must rest on surer foundations. Nor will we use it to suppress those who speak against us. We do not fear criticism, nor do we resent it. For there is something far more important at stake. It is no less than freedom of speech itself. It is the right of every man, in Parliament or out of it, in the Press or over the broadcast, to make fair comment, even outspoken comment, on matters of public interest. Those who comment can deal faithfully with all that is, done in a court of justice. They can say that we are mistaken, and our decisions erroneous, whether they are subject to appeal or not. All we would ask is that those who criticise us will remember that, from the nature of our office, we cannot reply to their criticisms We cannot enter into public controversy. Still less into political controversy. We must rely on our conduct itself to be its own vindication. Exposed as we are to the winds of criticism, nothing which is said by this person or that, nothing which is written by this person or that, nothing which is written by this pen or that will deter us from doing what we believe is right; nor, I would add, from saying what the occasion requires, provided that it is pertinent to the matter in hand. Silence is not an option when things are ill done." This Court has held that the law of contempt is valid notwithstanding article 19(1). The Contention was persisted in C. K. Daphtay vs O. P. Gupta. (2) This Court came to the conclusion that the existing law of contempt imposes reasonable restrictions within the meaning or article 19(2). "Apart from this, the 'Constitution makes this Court a gudian of fundamental rights conferred by the Constitution and it would not desire to enforce any law which imposes unreasonable restrictions on the precious right of freedom of speech and expression guaranteed by the Constitution." (Sikri C.J.) The Court being the guardian of people 's rights, it has been held repeatedly that the contempt jurisdiction should be exercised "with, scrupulous care and only when the cage is clear and beyond reasonable doubt. (vide R. vs Gray) (s) (1) :1206 07. (2) All. R. , Para 52. (3) [1900] 2 O.B. 36. 319 The policy directive can be gleaned from the ruling in Special Reference No. 1 of 1964(1) where Gajendragadkar, C.J., speaking for the Court, observed : "We ought never to forget that the power to punish for contempt large as it is, must always be exercised cautiously wisely, and with circumspection. Frequent or indiscriminate use of this power in anger or irritation would not help to sustain the dignity or status of the court, but may sometimes affect it adversely. Wise Judges never forget that the best way to sustain the dignity and status of their office is to deserve respect from the public at large by the quality of their judgments, the fearlessness, fairness and objectivity of their approach, and by the restraint, dignity and decorum which they observe in their judicial conduct. " If judges decay the contempt power will not save them and so the other side of the coin is that judges, like Caesar 's wife, must be above suspicion. To wind up, the key word is "justice", not "judge"; the key note thought is unobstructed public justice, not the self defence of a judge; the corner stone of the contempt law is the accommodation of two constitutional values the right of free speech and the right to independent justice. The ignition of contempt action should be substantial land mala fide interference with fearless judicial action, not fair comment or trivial reflections on the judicial process and personnel. We have sought to set our legal sights in line with the now constitutional order and endeavoured so to draw the grey contours of the contempt law that it fulfils its high purpose but the more. We have tried to avoid subjectivism in the law, recognising by a re statement, the truth that "the great tides and currents which engulf the rest of men do not turn aside in their course and pass the judges by. (2) " The facts of the present case disclose that an incorrigible contemnor, who had made it almost his latter ,day professional occupation to cross the High Courts path, has come to this Court in appeal. He has been reckless, persistent and guilty of undermining the High Court 's authority in his intemperate averments in both petitions. But having regard to the fact that he is a senior judicial officer who has at some stage in his career displayed zeal and industry and is now in the (1) ; ; 501. (2) Benjamin N. Cardozo The Nature of the Judicial Process New Haven : Yale University Press Page 163. 320 sombre evening of an official career, a punishment short of imprisonment would have met the ends of justice and inspired in the public mind confidence in the justice administration by showing that even delinquent judges will be punished if they play with or pervert the due course of justice, as the contemnor here has done. A heavy hand is wasted severity where a lighter sentence may serve as well. A fine of Rs. 1000/ with three months ' imprisonment in default of payment will meet the ends of justice and we impose this sentence in substitution of the infliction of imprisonment by the High Court. this modification Civil Appeal No. 41 of 1973 is dismissed. On the appeal by the State the course adopted in the leading judgment of Palekar J. has our concurrence. Appeal No. 41 dismissed. P.B.R. Appeal No. 77 allowed to be withdrawn.

The appellant, a judicial officer, was convicted and sentenced under the , by a Full Bench of the Orissa High Court. Registrar of Orissa High Court vs Bardakanta Mishra & Ors. I.L.R. [1973] Cuttack 134. The appellant 's career as a judicial officer was far from satisfactory. When he was working as Additional District and Sessions Judge he showed gross indiscretion and committed grave judicial misdemeanor. The contempt proceed ings arose out of the representation he made to the Governor for canceling the order of suspension passed against him by the High Court and the allegation he made in a memorandum of appeal he had filed earlier in the Supreme Court. In his representation to the Governor the appellant made false insinuations that the Governor cancelled the previous disciplinary proceedings against him on the ground that the same was vitiated as the High Court prejudged the matter and the government set aside the punishment because three of the judges were biased and were prejudiced against him, that the proceeding involved the Government in heavy expenses on account of the "palpably incorrect views of the High Court", that the High Court did not gracefully accept the Government 's order cancelling his demotion, that the High Court resorted to "subterfuge ' to counteract the said decision of the government by taking a novel step and that the High Court 's action suffered from patent mala fides. He stated that the other judges had no independent judgment of their own and were influenced by the Chief Justice to take a view different from what they bad already taken and characterised the High Court as an "engine of oppression" and his order of suspension as "mysterious". In another representation made to the Governor the appellant alleged that the High Court on the administrative side was seriously prejudiced and biased against him and it acted as if the charges stood established requiring extreme punishment and as such justice May not be meted out to him by the High Court, if it conducted the departmental inquiry. He also stated that he considered it risky to submit his explanation to the High Court and that the High Court in the best interests of justice, should not inquire into these charges again st him. He suggested that "the Court was not in a position to weigh the evidence and consider the materials on record and impose a sentence commensurate with his delinquency. " The action taken by the High Court was branded as "unusual". A copy of this representation was sent to the High Court with the remark that since the High Court was likely to withhold the representation it was submitted direct to the Governor. In the memo of appeal filed in the Supreme Court, the appellant alleged bias and prejudice against the High Court and its Chief Justice. He took the plea that the High Court had become disqualified to deal with the case and expressed the view that "the judges of the High Court had fallen from the path of rectitude and were vindictive" and had decided to impose substantive sentence and that "they were not in a position to mete even handed justice '. In appeal to this Court. it was contended : (i) that the passages about which the complaint was made did not amount to contempt of court since they did not purport to criticize any 'judicial, acts of the judges and criticism of the administrative acts of the High Court even in vilification terms did not amount 28 3 to contempt of court, and (ii) that the acts complained of were in the court of the appellant challenging his suspension and holding of disciplinary proceedings, in an appeal or representation to the Governor from the orders of the High Court and he gave expression to his grievance or had otherwise acted not with a view to malign the court or in defiance of it but with, the sole object of obtaining the reversal of the orders passed by the High Court against him. HELD : The imputations have grossly vilified the High Court tending to affect substantially administration of justice and, therefore, the appellant was rightly convicted of the offence of criminal contempt. [304F] (i)Proceedings in contempt are always with reference to administration of justice. All the three sub clauses of section 2(c) of the , define contempt in terms of obstruction or interference with administration of justice and scandalisation within the meaning of sub clause (1) must be in respect of the court or the Judge with reference to administration of justice. [297C D] Debi Prasad Sharma vs The King Emperor. 70 Indian Appeals. 216, referred to. (a)The question whether contemptuous imputations made with reference to the administrative acts of the High Court amount to contempt of court will depend upon whether the amputations affect the administration of justice. This is the basis on which the contempt is punished and must afford the necessary test. [298E] (b)The mere functions of adjudication between the parties is not the Whole of administration of justice for any court. The presiding judge of a Court embodies in himself the Court. and when engaged in the task of administering justice is assisted by a complement of clerks and ministerial officers. The Acts in which they are engaged are acts in aid of administration of justice. Therefore, when the Chief Justice appoints ministerial officers and assumes disciplinary control over them, that is a function which through described as administrative, is really in the course of administration of justice. Judical integrated function of Judge and cannot suffer any dissection nuance of high standards of rectitude in judical administration administration is an so far as maintain concerned. The whole set up of a court is for who ' purpose of administration of justice and the controlwhich the judge exercises over his assistants has also the object of maintaining the purity of administration of justice. [298F H; 299A] (c)The disciplinary control over the misdemeanors of the subordinate judiciary in their judicial administration is a function which the High Court must exercise in the interest of administration of justice. It is a function Which is essential for the administration of justice in the wide connotation it has received and, therefore, when the High Court functions in a disciplinary capacity, it Only does so in furtherance of administration of justice. it is as important for the superior court to be vigilant about the conduct and behaviour of the subordinately judge as it is to administer the law, because both functions are essential administration of justice. The Judge of the superior court in whom this disciplinary control is vested functions as much as a Judge in such, matters as when he bears and disposes of cases before him. [300E; 299D] (d) What is commonly described as an administrative function has been when vested in the High Court, constantly regarded by statutes as a function in the administration of justice. [299F G] Letters Patent for the High Courts of Bombay, Calcutta and Madras a. 8; High Courts Act, 1861, a. 9; the Government of India Act, 1935, %. 224; Constitution of India, 1950, articles 225, 227 235; State of West Bengal V.Nripendra Nath Bagchi ; referred to. (e)Thus the courts of justice in a State froth the highest to the lowest are by their constitution entrusted with functions directly connected with the administration of justice and it is the expectation and confidence of all those who have or likely to 'have business there that the courts Perform all their functions 284 on a high level of rectitude without fear or favour, affection or ill will. And, it in this traditional confidence in the courts that justice will be administered in them which is Fought to be protected by proceedings in contempt. [300F G] Rex vs Almon [1765] Wilmot 's Notes of Opinions 243, referred to. (f) Scandalisation of the court is a species of contempt and may take several forms. A common form is the vilification of the Judge. When proceedings in contempt are taken for such vilification the question which the court has to ask is whether the vilification is of the Judge as a Judge or it is the vilification of the Judge as an individual. If the latter, the Judge is left to this private remedies and the court has no power to commit for contempt. If the former, the court will proceed to exercise the jurisdiction with scrupulous care in cases which are clear and beyond reasonable doubt. Secondly, the court with have also to consider the degree of harm caused. as affecting administration of justice and if it is slight and beneath notice, courts will not punish for contempt. Ibis salutary practice is adopted by section 13 of the . If the attack on the Judge functioning as a Judge substantially affects administration of justice it becomes a public mischief punishable for contempt, and it matters not whether such an attack is based on what a Judge is alleged to have done in the exercise of his 'administrative ' responsibilities. A Judge 's functions may be divisible, but his integrity and authority are not divisible in the context of administration of justice. [301D F] Queen vs Gray, [1900] (2) Queen 's Bench, 36, at page 40, referred to. (g)"Judicial capacity" is an ambivalent term which means "capacity of or properto a Judge" and is capable of taking in all functional capacities of a Jurodge whetheradministrative, adjudicatory or any other, necessary for the administration of justice. There is no warrant for the narrow view that the offence of scandalisation of the court takes place only when the imputation has reference to the adjudicatory functions of a Judge in the seat of justice. [302D] Rex vs Almon [1765] Wilmot 's Notes of Opinion 243; MOti Lal Ghose and Others, XLV Calcutta, 169, The State of Bombay vs Mr. P. A.I.R. 1959 Bombay, 182, Debi Prasad Sharma vs The King Emperor, 70, Indian Appeals, 216, Special Reference from the Bahama Islands, A.C. 138 at 144, Queen vs Gray , referred to. Brahma Prak ash Sharma and others vs The State of Uttar Pradesh, [1953] S.C.R. 1169, Gobind Ram vs State of Maharashtra. and State vs The Editors and Publishers of Eastern Times and Prajatantra, , held inapplicable. (ii)If in fact the language used amounts to contempt of court it will become punishable as criminal contempt. The right of appeal does not give the right to commit contempt of court nor can it be used as a cover to bring the autho rity of the High Court into disrespect and disregard. [298C D] Jugal Kishore vs Sitamarhi Central Co.op. ; referred to. Per Bhagwati & Krishna Iyer, JJ : (Concurring in ultimate decision) : The dilemma of the law of contempt arises because of the constitutional need to balance, two great but occasionally conflicting principles freedom of expression and f air and fearless justice. It is a moot point whether we should still be bound to the regal moorings of Rex vs Almon. [306E] (i)The emphasis in Ss. 2(c), 3 and 13 of the . to the interference with the course of justice or obstruction of the administration of Justice or scandalising or lowering the authority of the Court not the Judge highlights the judicial area as entitled to inviolability and suggests a functional rather than a personal or 'institutional ' immunity. The unique power to punish for contempt of itself inheres in a Court qua court, In its essential role of dispenser of public justice. The phraseological image projected 285 by the catena of expressions in the Act, the very conspectus of the statutory provisions and the ethos and raison d 'eire of the jurisdiction point to the conclusion that the text of the Act must take its colour from the general context and confine the contempt power to the judicial cum para judicial areas, including such administrative functions as are intimately associated with the exercise of judicial power. In short the accent is on the functional personality which is pivotal to securing justice to the people. Purely administrative acts like recruitmerits, transfers and postings, routine disciplinary action against subordinate staff, executive acts in running the establishment and ministerial business ancillary to office keeping these are common to all departments in the public sector and merely because they relate to the judicial wing of government cannot enjoy a higher immunity from criticism. The quintessence of the contempt power is protection of the public, not judicial personnel. If the slant on judict poalisation as a functional limitation on the contempt jurisdiction is accepted, it must exclude from its ambit interference with purely administrative acts of courts and non judicial functions of judges. This dichotomy is implicit in the decided cases. To treat as the High Court has done. "the image and personality of the lush Court as an integrated one" and to hold that every shadow that darkens it is contempt is to forget life, reason and political progress. The basic 'public duty" of a Judge in his "judicial capacity" is to dispense public justice in Court and anyone who obstructs or interferes in this area does so at his peril. Likewise, personal behaviour of judicial personnel, if criticised severally or even sinisterly. cannot be countered by the weapon of the contempt of court. [309C E, 3 10 A F] The paramount but restrictive jurisdiction to protect the public against substantial interference with the stream of justice cannot be polluted or diffused into an intimidatory power for the judges to strike. at adverse comments on administrative, legislative (as under articles 225, 226 and 227) and extra judicial acts. Commonsense and principle can certainly accept a valid administrative area so closely integrated with court work as to be stamped with judicial character such as constitution of benches, transfer of cases, issue of administrative directions regarding submission of findings or disposal of cases by subordinate courts and the like. Not everything covered by article 225, 227 and 235 will be of this texture. Thus even though Judges and courts have diverse duties functionally and historically and jurisprudentially, the value which is dear to the community and the function which deserves to be pardoned off from public molestation is judicial. Vicious criticism of personal and administrative acts of Judges may indirectly mar their image and weaken the confidence of the public in the judiciary but the countervailing good, not merely of free speech but also of greater faith generated by exposure to the acting light of bona fide even if marginally overzealous, criticism cannot be over looked. [315B E] In the instant case the suspension of the District Judge was so woven into and integrally connected with the administration of justice that it can be regarded as not purely an administrative act but a para judicial function. The appeal was against the suspension which was a preliminary to contemplated disciplinary action which was against the appellant in his judicial capacity for acts of judicial misconduct. The control was, therefore, judicial and hence the unbridled attack on the High Court for the step was punishable impugned conduct of the condemner was qua Judge and the evil a supervisory act of the High Court. [315G H] (ii)A large margin must be allowed for allegations in remedial representation; but extravagance forfeits the protection of good faith. [315H] In the matter of a Special Reference from the Bahama Islands, ; 149; Debi Prasad Sharma vs The King Emperor, [1942] 70 I.A. 216, Kayiath Damodaran vs Induchoodan, A.I.R. 1961 Kerala 321, K. L. Gauba 's case, I.L.R. [1942] Lab. 411, 419, Rex vs B. section Nayyar, A.I.R. 1950 All '. 555, In re section B. Sarbadhicary, [1906] 14 XX I.A. 41, Brahma Prakash Sharma vs State of Uttar Pradesh, , State V. N. Nagamani, A.I.R. 1959 Pat. 373 and In the matter of an. Advocate of Allahabad, A.T.R. 1935 All. 1, referred to. 28 6 Remedial process cannot be a mask to malign a judge. Irrelevant or unvarnished amputations under the pretext of grounds of appeal amount of foul play and perversion of the legal process. In the instant case the appellant, a senior officer who professionally weighs his thoughts and words has no justification for the immoderate abuse he has resorted to. In this sector even truth is no defence, as in the case of criminal insult in the latter because it May produce violent breaches and is forbidden in the name of public peace, and in, the former it may demoralise the community about courts and is forbidden in the interest of public justice as contempt of court. The Court being the guardian of the people 's rights, it has been held repeatedly that the contempt jurisdiction should be exercised with scrupulous care and only when the case is clear and beyond reasonable doubt. [317C E; 318H] State of Uttar Pradesh vs Shyam Sunder Lal, A.I.R. 1954 All. 308, Rex vs R. section Nayyar, A.I.R. 1950 All. 549; 554, State of Madhya Pradesh vs Ravi Sharker. ; Govind Ram vs State of Maharashtra, , Swarnamayi Panigrahi vs B. Nayak, A.I.R. 1959 Orissa 89, Quintin Hogg. 1206 7. C. K. Paphtary vs O. P. Gupta, A.I.R. 1971 S.C. 1132 1141 para '52, R vs Gray,, , Special ,Reference No. 1 of 1964; , 501; referred to. (iii)In sum, the key note word is 'justice, not 'judge '; the 'key note thought is unobstructed public justice, not the self defence of a judge; the corner stone of the contempt law is the accommodation of two constitutional values the right of free speech and the right to independent justice. The ignition of con, tempt action should be substantial. and mala interference with fearless judicial action, not fair comment or trivial reflections on the judicial process and personnel. [319E]

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26 and 27 of 1954, 24 and 437 of 1955, 256 of 1956, 12, 16, 17 and 73 of 1957. Petition under Article 32 of the Constitution of India for the enforcement of Fundamental Rights. M.S. K. Sastri, for the petitioners in Petitions Nos. 26 and 27 of 54 and 24 of 1955. V.N. Swami and M. section K. Sastri, for the petitioners in Petitions Nos. 437 of 55 and 256 of 56. 341 L.K. Jha, J. M. Thakur, section N. Andley and J. B. Dadachanji, for the petitioner in Petition No. 12 of 1957. N.S. Bindra and Harbans Singh, for the petitioners in Petitions Nos. 16 and 17 of 1957. N.S. Bindra and Govind Saran Singh, for the petitioner in Petition No. 73 of 1957. H. N. Sanyal, Additional Solicitor General of India, H.J. Umrigar and R. H. Dhebar, for the respondent in Petitions Nos. 26 and 27 of 1954, 24 and 437 of 1955, 256 of 1956 and 12 of 1957. M.Adhikary, Advocate General for the State Of Madhya Pradesh and I. N. Shroff, for the respondent in Petitions Nos. 16, 17 and 73 of 1957. March 9. The Judgment of the Court was delivered by HIDAYATULLAH, J. The judgment in Petition No. 12 of 1957 shall also dispose of petitions Nos. 26 and 27 of 1954, 24 and 437 of 1955, 256 of 1956 and 16, 17 and 73 of 1957. These petitions under article 32 arise out of alleged agreements by which some of the proprietors in the former State of Madhya Pradesh granted to one or other of the petitioners the right to take forest produce, mainly tendu leaves, from the forests included in Zamindari and Malguzari villages of the grantors. Government has disclaimed these agreements and auctioned the rights afresh. The petitioners state that this is an invasion of their fundamental rights. The dates on which these alleged agreements were entered into, the terms thereof and the periods during which they were to subsist are different from case to case. It is not necessary in this judgment to recite the terms of these documents, and it is sufficient to group them for purpose of decision on the bases whether the said agreements still subsist, and whether they are incorporated in a registered instrument or not. Petitions Nos. 437 of 1955 and 256 of 1956 are founded on unregistered documents. The answering respondent does not admit these documents, and contends that they cannot be looked into to prove their 342 terms, in view of the decision of this Court in Shri mathi Shantabai vs State of Bombay (1). Petitions Nos. 16, 17 and 73 of 1957 form another group, inasmuch as the period during which the alleged agreements were to operate expired in 1955. Additionally, the documents on which the 'claim is founded in those petitions are unregistered. In the last mentioned case, it is pleaded that the answering State Government had recognised the agreements in favour of the petitioner but resiled from that position subsequently, which allegation has been adequately explained by the State Government in its affidavit. The recognition was not in favour of the petitioner but in favour of one Thakur Kamta Singh, who claimed under an agreement entered into by one Vishwanath Singh on a date when he had already transferred his interest in the Zamindari to his son Onkar Prasad Singh. This point was therefore not taken before us at the hearing, and nothing more Deed be said about it. The main objection against these petitions is that the agreements having expired, there is nothing left to enforce either in favour of the petitioners or against the State Government, and the remedy, if any, of the petitioners is to sue the State and/or the proprietors for the breach. The last group consists of Petitions Nos. 26 and 27 of 1954, 24 of 1955 and the present petition (No. 12 of 1957). In these petitions, the agreements with the petitioners are made by registered documents and the terms during which they are to operate have yet to expire. These cases, it is stated, fall outside the rule in Shantabai 's case (1), to which reference has already been made. They are stated to fall within the decision of this Court reported in Firm Chhotabhai Jethabai Patel and Co. vs The State of Madhya Pradesh (2). In all these petitions, counsel argue that the view expressed in the last mentioned case is correct, while the view in Shantabai 's case (1) needs further consider ation. The argument of the petitioners in these several cases is that Government steps into the shoes of the (1) ; (2) ; 343 quondam proprietors, and is bound by the agreements into which the latter had entered, before their proprietary rights were taken over by Government. They also raise the contention that the petitioners were not proprietors as defined in the Madhya Pradesh Abolition of Proprietary Rights (Estates, Mahals, Alienated Lands) Act, 1950 (hereinafter called the Act), and thus sections 3 and 4 in terms do not apply to them. These sections, it is contended, do not apply to profit a prendre, which the petitioners enjoy under these agreements. In support of this contention, reference is made to the decision of this Court in Chhotabhai 's case (1), and to the definition of ' proprietor ' in the Act. Reference is also made to some provisions of the C. P. Land Revenue Act to be mentioned hereafter, to prove that the persons on whom the right to collect forest produce was conferred by the proprietors can not be regarded as proprietors even under that Act. This, in main, is the argument in these cases, and even those petitioners whose agreements are incorporated in unregistered documents or whose agreements have since expired, adopted the same line of argument denying the necessity for registration of such agreements. The matter in so far as it relates to the first two groups is simple. It has already been ruled in Shantabai 's case (2) that if the right be claimed on foot of an unregistered agreement, it cannot be entertained. Such documents were examined from five different angles in that case, and it was held that the document if it conferred a part or share in the proprietary right, or even a right to profit a prendre needed registration to convey the right. If it created a bare licence, the licence came to an end with the interest of the licensors in the forests. If proprietary right was otherwise acquired, it vested in the State, and lastly, if the agreements created a purely personal right by contract, there was no deprivation of property, because the contract did not run with the land. Bose, J., who delivered a separate judgment, also held that in the absence of registration no right was created. (1) ; (2) ; 344 In view of the clear pronouncement of this Court, the first two groups of petitions must fail. Petitions Nos. 16, 17 and 73 of 1957 also fail for the added reason that the agreements having expired, the only remedy, if any, is to sue for breach of contract and no writ to enforce expired agreements can issue. This brings us to the arguments advanced in the last four petitions in the third group which were also adopted by the other petitioners, whose petitions we have just considered. All these petitioners strongly relied upon Chhotabhai 's case (1). It is therefore necessary to examine attentively what was decided there. In that case, it was held at p. 483 that: " The contracts and agreements appear to be in essence and effect licenses granted to the transferees to cut, gather, and carry away the produce, in the shape of tendu leaves, or lac, or timber, or wood." Reference in this behalf was made to a decision of the Privy Council in Mohanlal Hargovind of Jubbalpore vs Commissioner of Income tax, Central Provinces and Berar (2), where it was observed: " The contracts grant no interest in land and no interest in the trees or plants themselves. They are simply and solely contracts giving to the grantees the right to pick and carry away leaves, which, of course, implies the right to appropriate them as their own property. The small right of cultivation given in the first of the two contracts is merely ancillary and is of Do more significance than would be, e.g., a right to spray a fruit tree given to the person who has bought the crop of apples. The contracts are short term contracts. The picking of the leaves under them has to start at once, or practically at once, and to proceed continuously. " The Bench next observed that there was nothing in the Act to affect the validity of the several contracts and agreements, and that the petitioners were, neither proprietors within the meaning of the Act, nor persons having " any interest in the proprietary right through the proprietors ". After quoting from Baden Powell 's (1) ; (2) I.L.R. , 898, 345 Land Systems of British India, Vol. 1,p. 217, as to what was meant by ' proprietorship ' in the Land Revenue Systems in India, it was observed that the definition of ' proprietor ' in the Act conveyed the same sense. Finally, repelling the argument that the agreements concerned " future goods ", it was held on the basis of a passage in Benjamin on Sale, 8th Edition, page 136, that a present sale of the right to goods having a " potential existence " could be made. Since possession was taken under the agreements and consideration had also passed, there could be " a sale of a present right to the goods as soon as they come into existence. " Reference was also made (at pp. 480, 481) to section 6 of the Act, which provides: " (1) Except as provided in sub section (2), the transfer of any right in the property which is liable to vest in the State under this Act made by the pro prietor at any time after the 16th March, 1950, shall, as from the date of vesting, be void. " It was observed in the case as follows: " The date, 16th March, 1950, is probably the date when legislation on these lines was actively thought of, and sub section (1) hits at transfers made after this date. This means that transfers before that date are not to be regarded as void. Even in the case of transfers after the said date, sub section (2) provides that the Deputy Commissioner may declare that they are not void after the date of vesting, provided they were made in good faith and in the ordinary course of management. The scheme of the Act as can be gathered from the provisions referred to above makes it reasonably clear that whatever was done before 16th March, 1950, by the proprietors by way of transfer of rights is not to be disturbed or affected, and that what vests in the State is what the proprietors had on the vesting date. If the proprietor had any rights after the date of vesting which he could enforce against the transferee such as a lessee or a licensee, those rights would no doubt vest in the State." 44 346 It was accordingly held that the State Government could not interfere with such agreements but had only the right to enforce rights arising therefrom " standing in the shoes of the proprietors. " It is clear from the foregoing analysis of the decision in Chhotabhai 's case (1) that on a construction of the documents there under consideration and adopting a principle enunciated by the Privy Council in Mohanlal Hargovind of Jubbalpore vs Commissioner of Incometax, Central Provinces and Berar (2) and relying upon a passage each in Benjamin on Sale and the wellknown treatise of Baden Powell, the Bench came to the conclusion that the documents there under consi deration did not create any interest in land and did not constitute any grant of any proprietary interest in the estate but were merely contracts or licenses given to the petitioners " to cut, gather and carry away the produce in the shape of tendu leaves, or lac , or timber or wood ". But then, it necessarily followed that the Act did not purport to affect the petitioners ' rights under the contracts or licenses. But what was the nature of those rights of the petitioners ? It is plain, that if they were merely contractual rights, then as pointed out in the two later decisions, in Ananda Behera vs The State of Orissa (3), Shantabai 's case (4), the State has not acquired or taken possession of those rights but has only declined to be bound by the agreements to which they were not a party. If, on the other hand, the petitioners were mere licensees, then also, as pointed out in the second of the two cases cited, the licenses came to an end on the extinction of the title of the licensors. In either case there was no question of the breach of any fundamental right of the petitioners which could support the petitions which were presented under article 32 of the Constitution. It is this aspect of the matter which was not brought to the notice of the Court, and the resulting omission to advert to it has seriously impaired, if not completely nullified, the effect and weight of the decision in Chhotabhai 's case (1) as a precedent. (1)[1953] S.C.R. 476. (3)[1955] 2 S.C.R. 265. (2) I.L.R. , 898. (4) ; 347 The argument of counsel in these cases followed the broad pattern of the decision in Chhotabhai 's case (1). and we next proceed to consider it. It is contended that what vests in the State is the right which the proprietors had on the date of vesting because section 3 of the Act is not retrospective, and that the agreements are " in essence and effect licenses granted to the transferees to out, gather and carry away the produce in the shape of tendu leaves, or lac or timber or wood ". These agreements, it is submitted, grant no 'interest in land ' or I benefit to arise out of land ', the object of the agreements can only be described as sale of ' goods ' as defined in the Indian Sale of Goods Act, and the grant of such a right is not comprehended in the firstsub section of section 3 where it says : " . . all proprietary rights in an estate, mahal in the area specified in the notification, vesting in a proprietor of such estate, Mahal or in a person having interest in such proprietary right through the proprietor, shall pass from such proprietor or such other person to and vest in the State for the purposes of the State free of all encumbrances ". It is finally contended that the interest of these peti tioners is not I proprietary right ' at all but a right to get I goods in the shape of leaves, lac, etc. We have to examine these contentions critically. Before we do so, it is necessary to set out in brief the terms of the agreements which have been produced in these cases. In Petition No. 12 of 1957 there were two agreements, Annexures A and B. The first was executed in 1944 and granted the right from 1947 to 1956; the second was executed in 1946 and granted the right from 1957 to 1966. These are long term agreements and they are typical from case to case. Indeed, the second agreement was made even before the first began, and the total period is 20 years. In addition to the right to the leaves the documents pro vided for many other matters. It is convenient to quote only from Annexure 'B ': " Before this I had given you a similar contract selling Tendu leaves produce by contract dated (1)[1953] S C.R. 476. 348 7 7 1944 registered on 12 7 1944. In pursuance of that registered contract, which is for five years from 1947 to 1951 and another for subsequent five years from 1952 to 1956 in all for ten years, you are to remain in possession and occupation of the areas and the Tendu leaves produce till the termination of the year 1956 for which time you continue your possession and thereafter in pursuance of this contract you continue for further period of ten years your possession and occupation from 1957 to 1966 as is usual and customary pruning and coppicing Tendu leaves plants, burning them, and instal Fadis for collection of Tendu leaves and construct Kothas (godowns) for storage of the leaves at your sweet will and choice on any open plot or land within the estate with my permission and you are allowed to take free of all costs any Adjat timber, bamboos, etc., from my forests for constructing them. I shall charge you no further consideration. In the same manner, for the purpose of constructing these godowns and such thing you may according to your convenience (you may) manufacture bricks at any place you like in the vicinity of any rivers, rivulet, Nala or pond at your costs. I shall not receive from you any extra amount as rent for the use and occupation of land that will be used for construction of Kothas, for manufacturing bricks and for locating Fadis (Bidi leaves collection centres). All those are included in the consideration fixed for this contract. All these rights are already conferred on you in the previous contract dated 7 7 1944 and under this contract for the entire contract period. It is also open to you to collect Tendu leaves not only those growing in the summer season but also those growing in Kartik. During the term of this contract, if for one reason or another it becomes necessary for you to sell the Tendu leaves produce and assign this contract to any other person you can do so. But you shall be responsible for me to give my consent after inquiring of the fitness of the intended transferee. However, you shall continue to be responsible to pay to me the agreed amount of instalments on or before the agreed dates; and if the agreed amount of instalment is not paid to me on or 349 before the agreed date, I shall have full right to start proper proceedings in that connection ". In Petition No. 26 of 1954, the period of the two agreements was from 1944 to 1963. There too, the rights were similar to those in Petition No. 12 of 1957, and analogous terms are to be found in Petitions Nos. 27 of 1954 and 24 of 1955. The question that arises is, what is the nature of this right? In English law, distinction was made between easements and profit a prendre and a right to take the produce of the soil was regarded as a profit a prendre. While easements were not regarded as an interest in land, a right to take the produce of the soil or a portion of it was an interest in land: Fitzgerald vs Fairbanks (1). Profit a prendre can be the subject of a grant. Where they take the form of a grant, they are benefits arising from land. In all these cases, there is not a naked right to take the leaves of Tendu trees together with a right of ingress and of regress from the land; there are further benefits including the right to occupy the land, to erect buildings and to take other forest produce not necessarily standing timber, growing crop or grass. The right of ingress and of regress over land vesting in the State can only be exercised if the State as the owner of the land allows it, and even apart from the essential nature of the transaction, the State can prohibit it as the owner of the land. Whether the right to the leaves can be regarded as a right to a growing crop has, however, to be examined with reference to all the terms of the documents and all the rights conveyed thereunder. If the right conveyed comprises more than the leaves of the trees, it may not be correct to refer to it as being in respect of growing crop ' simpliciter. We are not concerned with the subtle distinctions made in English law between emblements, fructus naturals and fructus industriales, but we have to consider whether the transaction concerns " goods " or "moveable property " or " immovable property ". The law is made difficult by the definitions which exist in the General Clauses Act, the Sale of Goods Act, the (1)[1897] 2 Ch. 350 Transfer of Property Act and the Registration Act. These definitions must be placed alongside one another to get their ambits. If the definitions are viewed together, it is plain that they do not tell us what " immovable property " ' is. They only tell us what is either included or not included therein. One thing is clear, however, that things rooted in the earth as in the case of trees and shrubs, are immovable property both within the General Clauses Act and the Transfer of Property Act, but in the latter, " standing timber ", " growing crop " and " grass " though rooted in earth are not included. Of these, " growing crop " and " grass form the subjectmatter of the sale of goods, and standing timber " comes within the last part of the definition of ' goods ' in the Indian Sale of Goods Act, to be subject thereto if the condition about severing mentioned in the definition of ' goods ' exists. It has already been pointed out that the agreements conveyed more than the tendu leaves to the petitioners. They conveyed other forest produce like timber, bamboos, etc., the soil for making bricks, the right to prune, coppice and burn tendu trees and the right to build on and occupy land for the purpose of their business. These rights were spread over many years, and were not so simple as buying leaves, so to speak, in a shop. The expression " growing crop " might appropriately comprehend tendu leaves, but would not include, Adjat timber ', bamboos, nor even tendu plants. The petitioners were not to get leaves from the extant trees but also such trees as might grow in the future. They could even burn the old trees, presumably, so that others might grow in their place. In these circumstances, the agreements cannot be said to be contracts of sale of 'goods ' simpliciter. It remains now to consider whether the rights enjoyed by the petitioners can be said to fall within section 3(1) of the Act. That section divests the proprietors of their proprietary rights, as also any other person having an interest in the proprietary right through the proprietor and vests those rights in the State. That section has to be read with the section which 351 follows, and which sets out the consequences of vesting of such rights in the State. The rights which vest can be stated briefly to be (a) all proprietary rights in the proprietor, and (b) all proprietary rights in any person having interest in such proprietary rights through the proprietor. These rights vest in the State free of all encumbrances. Section 4 of the Act provides inter alia that after the notification has been issued, then, ' notwithstanding anything contained in any contract, grant or document or in any other law for the time being in force and save as otherwise provided in this Act ' the following consequences (among others) shall ensue: " (a) all rights, title and interest vesting in the proprietor or any person having interest in such proprietary right through the proprietor in such area including Land (cultivable or barren), grassland, scrubjungle, forest, trees, fisheries, wells, tanks, ponds, water channels, ferries, pathways, village sites, hats, bazars and melas; and in all subsoil, including rights, if any, in mines and minerals, whether being worked or not, shall cease and be vested in the State for purposes of the State free of all encumbrances; and the mortgage debt or charge on any proprietary right shall be a charge on the amount of compensation payable for such proprietary right to the proprietor under the provisions of this Act; (b)all grants and confirmation of title of or to land in the property so vesting or of or to any right or privilege in respect of such property or land revenue in respect thereof shall, whether liable to resumption or not, determine: ". If these petitioners can be said to be possessing " an interest in the proprietary right ", then their rights, title and interest in the land determine under the Act, and vest in the State. The petitioners, therefore, contend that their rights under the agreements cannot be described as 'proprietary right ' or even a share of it. They rely on the definition of 'proprietor ' in the Act, and refer under the authority of section 2(b) of the Act to the Central Provinces Land Revenue Act, 1917. The definition in the Act is not exhaustive. It only 352 tells us who, besides the proprietor, is included in the term 'proprietor '. Further, the definitions in the Act are subordinate to the requirements of the context and the subject matter of any particular enactment. From the Act, we know that the proprietor 's interest in forest, trees, shrub, grass and the like passes to the State. The question thus resolves into two short ones did the former proprietors own proprietary interest in these trees, and did they part with that proprietary interest and convey it to the petitioners ? There is but little doubt that in so far as the Act is concerned, it does contemplate cesser of all proprietary rights in land, grass land, scrub jungle, forest and trees, whether owned by the proprietor or through him by some other person. The contention of the petitioners is that by the term " proprietor " is meant what that term conveys in the Central Provinces Land Revenue Act, and reference is made for this purpose to various sections therein. The term " proprietor " is defined in the Central Provinces Land Revenue Act thus: " " Proprietor " except in sections 68, 93 and 94, includes a gaontia of a Government village in Sambalpur Territory. " This definition does not advance the matter any further. In several sections, special explanations are added to define " proprietors ". In all those explanations, the term is not defined, but is said to include 'thekedars or headmen with protected status ', I mortgagee with possession ', I lessees holding under leases from year to year ' and the like. In addition, there is invariably the inclusion of I a transferee of proprietary, rights in possession ', which again leaves the matter at large. See sections 2(5), 2(21), 53 and 68. Counsel faced with this difficulty rely upon the scheme of settlement in Ch. VI of the Central Provinces Land Revenue Act , and the record of rights which consists of Khewat, a statement of persons possessing proprietary rights in the mahal including inferior proprietors or lessees or mortgagees in possession, specifying the nature and extent of the interest of each; and Khasra or field book and Jamabandi or list of persons 353 cultivating or occupying land in the village. these documents are prepard separately. The petitioners contend that by 'proprietary right ' is meant that right which can find, a place or be entered in the Khewat, and the rights enjoyed by the petitioners are not and cannot be entered in the Khewat because thay are not 'proprietary rights '. They also refer to the schemes of settlement under which proprietors subproprietors etc. , are determined and offered assessment. In our opinion, these arguments, though attractive, do not represent the whole of the matter. What these documents record and what the settlement operations determine are the kinds of ' proprietors ' among whom the entire bundle of rights is shared. Every proprietor or sub proprietor enjoys proprietary rights over land, forests, etc., falling within his interest. The right to forest trees, etc., is the consequence of proprietorship, and indeed, under section 47(3) the State Government can declare which rights and interest must be regarded as ' proprietary rights '. That sub section provides: " The State Government may declare the rights and interests which shall be deemed to be proprietary rights and interests within the meaning of sub section (2). " The second sub section provides: " The Deputy Commissioner shall cause to be recorded, in accordance with rules made under section 227, all changes that have taken place in respect of, and all transactions that have affected, any of the proprietary rights and interests in any land. " The matter is made clear if one refers to the provisions of section 202 of the Land Revenue Act. That section confers on Government the power to regulate the control and management of the forest growth on the lands of any estate or mahal. A reading of sub sections (4) to (8) of that section clearly shows that forests belong to the proprietors from whom under those sub sections they can be taken over for management, the profits of the management less expenses being paid to the proprietors or to superior and inferior proprietors as the case may be. Sub sections (9) and (10) provide 45 354 (9)" No lease, lien, encumbrance or contract with respect to the forest land held under direct manage ment shall be binding upon the Government. (10)On the expiration of the period fixed for the direct management, the forest land shall be restored to the proprietor thereof" Even here, the term ' proprietor ' is explained by the usual explanation showing the same category of persons as included in the section. From this, it is quite clear that forests and trees belonged to the proprietors, and they were items of proprietary rights. The first of the two questions posed by us, therefore, admits of none but an affirmative answer. If then the forest and the trees belonged to the proprietors as items in their ' proprietary rights ', it is quite clear that these items of proprietary rights have been transferred to the petitioners. The answer to the second question is also in the affirmative. Being a 1 proprietary right ', it vests in the State under sections 3 and 4 of the Act. The decision in Chhotabhai 's case (1) treated these rights as bare licenses, and it was apparently given per incuriam, and cannot therefore befollowed. Even assuming that the documents in question do not amount to grant of any proprietary right by the proprietors to the petitioners, the latter can have only the benefit of their respective contracts or licenses. In either case, the State has not, by the Act, acquired or taken possession of such contracts or licenses and consequently, there has been no infringement of the petitioners , fundamental right which alone can support a petition under article 32 of the Constitution. The result is that these petitions fail, and are dismissed, but in view of the fact that they were filed because of the decision in Chhotabhai 's case (1), there shall be no order about costs. Petitions dismissed.

Some of the proprietors of the former State of Madhya Pradesh granted to the several petitioners rights to take forest produce, mainly tendu leaves, from the forests included in the Zamindaris belonging to the proprietors. The agreements conveyed to the petitioners in addition to the tendu leaves other forest produce like timber, bamboos, etc., the soil for making bricks, and the right to build on and occupy land for the purpose of their business. These rights were spread over many years, but in the case of a few the period during which the agreements were to operate expired in 1955. Some of the agreements were registered and the others unregistered. After the coming into force of the Madhya Pradesh Abolition of Proprietary Rights (Estates, Mahals, Alienated Lands) Act, 1950, the Government disclaimed the agreements and auctioned the rights afresh, acting under section 3 of the Act under which " all proprietary rights in an estate . . in the area specified in the notification, vesting in a proprietor of such estate. or in a person having interest in such proprietary right through the proprietor, shall pass from such proprietor or such other person to and vest in the State for the purposes of the State free of all encumbrances". The petitioners filed petitions under article 32 of the Constitution of India challenging the legality of the action taken. by the Government on the ground that it was an invasion of their fundamental rights. They contended (1) that the Government stepped into the shoes of the quondam proprietors and was bound by the agreements into which the latter had entered, before their proprietary rights were taken over by the Government, (2) that the petitioners were not proprietors as defined in the Act and therefore sections 3 and 4 of the Act did not apply to them, (3) that the agreements were in essence and effect licenses granted to them to cut, gather and carry away the produce in the shape of 340 tendu leaves, or lac, or timber or wood, (4) that the agreements granted no 'interest in land ' or 'benefit to arise out of land ' and that object of the agreements could only be described as sale of goods as defined in the Indian Sale of Goods Act, and (5) that the interest of the petitioners was not proprietary right but only a right to get goods in the shape of leaves, etc The petitioners relied on the decision in Firm Chhotabhai jethabai Patel and Co. vs The State of Madhya Pradesh; , Held : (1) that the agreements required registration and in the absence of it the rights could not be entertained. Srimathi Shantabai vs State of Bombay, ; , followed. (2)that in cases where the period stipulated in the agree ment had expired, the only remedy, if any, was to sue for breach of contract and no writ to enforce expired agreements could issue. , (3) that on their true construction the agreements in question were not contracts of sale of goods. (4) that both under the Act in question and the Central Provinces Land Revenue Act, 1917, the forests and trees in the Zamindari area belonged to the proprietors and they were items of proprietary rights. Consequently, the rights conveyed to the petitioners under the agreements were proprietary rights, which under sections 3 and 4 of the Act, became vested in the State. (5)that assuming that the agreements did not amount to grant of any proprietary right by the proprietors to the petitioners, the latter could have only the benefit of their respective contracts or licenses. In either case, the State had not, by the Act, acquired or taken possession of such contracts or licenses and, consequently, there had been no infringement of the petitioners ' fundamental rights which alone could support a petition under article 32 of the Constitution. Chhotabai jethabai Patel and Co. vs The State of Madhya Pradesh, ; , not followed. Ananda Behera vs The State of Orissa, [1955] 2 S.C.R. gig, followed.

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Civil Appeal No. 1592 of 1969. Appeal by Special Leave from the Judgment and Order dated 12th March, 1969 of the Madras High Court in Civil Rev. Petition No. 1791/67. K. Jayaram and K. Ramkumar for the Appellant. A. V. Rangam for the Respondent. The Judgment of the Court was delivered by VENKATARAMIAH, J. This appeal by special leave is filed against the order dated March 12, 1969 passed in Civil Revision Petition No. 1791 of 1967 on the file of the High Court of Madras. 398 On the date of the commencement of the Tamil Nadu Land Reforms (Fixation of Ceiling of Land) Act, 1961 (hereinafter referred to as 'the Act ') i.e. April 6, 1960, the appellant owned approximately 47 acres of agricultural lands. He was required to file a statement under section 8 of the Act within 90 days from the date specified in the Notification issued by the Government in that behalf in respect of all lands held or deemed to have been held by him furnishing the particulars mentioned in that provision to the Authorised Officer within whose jurisdiction his holding or major part thereof was situated. Accordingly, he filed his return. In the course of the enquiry, the Authorised Officer found that under a will made by Sivagami Achi, the mother of the appellant, who died on April 20, 1962, the appellant became entitled to 4.99 standard acres and his wife, Devika got 8.81 standard acres of agricultural land. The Authorised Officer after ascertaining the true extents of the several bits of agricultural land held by the appellant on April 6, 1960, exempted 2.21 acres of land under section 73 of the Act and determined the extent of surplus land which had to be surrendered by the appellant under the Act at 12.803 standard acres on the basis that the appellant 's family which included his wife was holding 44 46 acres as also the land which the appellant and his wife got under the will of Sivagami Achi. On the above basis, he directed the final statement to be published under section 12 of the Act. Aggrieved by the order of the Authorised Officer, the appellant filed an appeal before the Land Tribunal i.e. the Subordinate Judge of Thanjavur under section 78 of the Act contending inter alia that the extent of 8.81 standard acres which had been bequeathed in favour of his wife, Devika by his mother Sivagami Achi under the will referred to above was stridhana land and had to be dealt with accordingly as required by section 5 (4) (a) of the Act. The learned Subordinate Judge accepted the case of the appellant that the extent of 8.81 standard acres acquired by Devika on the death of Sivagami Achi should be allowed to be retained by her in addition to 30 standard acres. The case was, however, remitted back to the Authorised Officer for making a fresh determination of the surplus extent of land in accordance with the order passed in appeal. The State of Tamil Nadu filed a revision petition under section 83 of the Act before the High Court against the appellate order. The High Court allowed the revision petition holding that the extent of 8.81 standard acres acquired by Devika was not 'stridhana land ' as defined under section 3 (42) of the Act and could not be treated as such while determining the surplus land. The High Court further held that the land acquired by Devika was governed by section 21(1) read with section 10(2) (b) of the Act. This appeal is filed against the said order. 399 In order to appreciate the submissions made on behalf of the parties before us, it is necessary to refer briefly to some of the provisions of the Act. The Act was passed to provide for the fixation of ceiling on agricultural land holdings and for certain other matters connected therewith in the State of Tamil Nadu. Having regard to the limited extent of the area of agricultural land available for cultivation in that State, the great disparity in the ownership of agricultural land leading to the concentration of such land in the hands of certain persons, the need for reduction of such disparity in the ownership of agricultural land in that State and the necessity for fixing a ceiling on the Agricultural land holdings, provisions were enacted in the Act fixing a ceiling on the agricultural land holdings and providing for acquisition of agricultural land in excess of the ceiling area and distribution of such land amongst the landless and other persons among the rural population. Section 3(11) of the Act defined the expression "date of the commencement of this Act" as the date on which the Tamil Nadu Land Reforms (Fixation of Ceiling on Land) Bill, 1960 was published in the Fort St. George Gazette, namely, the 6th day of April, 1960. Section 3(34) of the Act defined the expression "person" as including any trust, company, family, firm, society or association of individuals, whether incorporated or not. Under section 3(14) of the Act, 'family ' in relation to a person meant the person, the wife or husband as the case may be, of such person and his or her minor sons and unmarried daughters and minor grandsons and unmarried grand daughters in the male line, whose father and mother were dead. Section 3(7) of the Act defined "ceiling area" as the extent of land which a person was entitled to hold under section 5. Section 3(42) of the Act defined "stridhana land" as any land held on the date of the commencement of the Act by any female member of a female in her own name. During the period in question, the relevant part of section 5 of the Act read as follows: "5. (1)(a) Subject to the provisions of Chapter VIII, the ceiling area in the case of every person and, subject to the provisions of sub sections (4) and (5) and of Chapter VIII the ceiling area in the case of every family consisting of not more than five members, shall be 30 standard acres. . 400 (4)(a) Subject to the provisions of sub section (5), where the stridhana land held by any female member of a family together with the other land held by all the members of that family, is in excess of 30 standard acres, the female member concerned may hold, in addition to the extent of land which the family is entitled to hold under sub section (1), stridhana land not exceeding 10 standard acres. . " Section 7 of the Act read as follows: "7. On and from the date of the commencement of this Act, no person shall, except as otherwise provided in this Act, but subject to the provisions of Chapter VIII, be entitled to hold land in excess of the ceiling area: Provided that in calculating the total extent of land held by any person, any extent in excess of the ceiling area and not exceeding half an acre in the case of wet land and one acre in the case of dry land shall, irrespective of the assessment of such land, be excluded. " Section 21 of the Act read as follows: "21. Ceiling on future acquisition by inheritance, bequest or by sale in execution of decrees, etc. (1) If, on or after the date of the commencement of this Act (a) any person acquires by inheritance or bequest from any person; . . . . . any land, which, together with the land, if any, already held by him, exceeds in the aggregate the ceiling area, then he shall, within ninety days from the notified date or from the date of such acquisition, whichever is later, furnish to the authorised Officer within whose jurisdiction his holding or the major part thereof is situated, a return containing the following particulars, namely . . . " The lands which were bequeathed by Sivagami Achi, the mother of the appellant under a will were held by her on the date of the commencement of the Act i.e. April 6, 1960. The appellant married Devika on June 29, 1960. Sivagami Achi died on April 20, 1962 and on her death, the appellant and Devika became entitled to the land bequeathed in their favour by her. The draft statement relating to the holding of the appellant was published on May, 30, 1965 and the Authorised Officer passed his order on March 14, 1966 treating the lands bequeathed by Sivagami Achi in favour of the appellant and his 401 wife as part of the holding of the family consisting of the appellant and his wife. The case of the appellant before the Authorised Officer, the Subordinate Judge and the High Court was that in view of section 5 (4) (a) of the Act, the ceiling area should have been fixed in his case at 30 standard acres plus the extent of land bequeathed in favour of his wife i.e. 8.81 standard acres. In this Court also, the very same contention is urged. We are of the view that there is no substance in this contention. The expression "stridhana land" used in section 5(4) (a) has been given a restricted meaning by section 3(42) of the Act which defines it as any land held on the date of the commencement of the Act by any female member of a family in her own name. Admittedly on the date of the commencement of the Act i.e. April 6, 1960, Devika was not the owner of the land in question. She acquired title to it only on April 20, 1962 on the death of the testatrix. The appellant cannot, therefore, claim any benefit under section 5(4) (a) of the Act. Section 21 of the Act under which the land in question becomes liable to be included in the holding of the appellant for purposes of determination of the surplus land does not make any difference between stridhana property of a female acquired after the commencement of the Act by inheritance or bequest from any person and any other property held by her family. From a reading of the definition of the expression "stridhana land" in section 3(42) of the Act and the provisions of section 5(4) of the Act, we are of opinion that the State Legislature intended to extend the concession available under section 5(4) of the Act only to the stridhana property held by a female on the date of the commencement of the Act and not to property acquired by her thereafter. It was urged by Mr. K. Jayaram, learned counsel for the appellant that the Act was an expropriatory one and therefore, we should construe section 5 (4) (a) of the Act as being applicable to agricultural land acquired by a female even after the commencement of the Act. We do not think that there is any room for construing the said provision in that way. The object of the legislation as mentioned earlier was to acquire agricultural land in excess of the ceiling area from the holders thereof and to distribute the same amongst the landless among the rural population. If the construction urged by the appellant is placed on section 21 of the Act, the very object of the statute would be defeated. If really the Legislature intended that lands acquired by way of inheritance or bequest by a female on or after the commencement of the Act should also be dealt with in accordance with section 5(4), it would have defined the expression "stridhana land" without the words "on the date of the commencement of this Act. " It has also to be 402 borne in mind that the expression 'stridhana ' is not used in the Act in the sense in which it is used in Hindu Law. The Act is applicable to Hindus as well as others governed by other personal laws. It is, therefore, reasonable to construe the expression 'stridhana land ' as referring only to the land held by a female on the date of the commencement of the Act and not to lands inherited by her or acquired by her as a bequest at any subsequent point of time. The learned counsel for the appellant relied on the decision of the High Court of Madras in Valliammal vs The Authorised Officer, Land Reforms, Coimbatore in which a contention similar to the one urged before us on behalf of the appellant in this case had been accepted. The facts of that case were more or less similar to the facts in the case before us. The petitioner in that case was the wife of one Palanisami Gounder who was in possession of an extent of 44.061 standard acres, after excluding the exempted lands, on the commencement of the Act. She inherited 11.075 standard acres on the death of her son on March 25, 1962. In the return filed by him, the husband of the petitioner claimed that he was entitled to retain 30 standard acres as holding of the family and that his wife, the petitioner in that case, was entitled to hold 10 standard acres as stridhana property. The Land Tribunal, Coimbatore held that since the Act defined "stridhana land" as meaning any land held on the date of the commencement of the Act by any female member of the family in her own name and since the petitioner therein had inherited the land on the death of her son only on March 25, 1962 i.e. subsequent to the commencement of the Act, she was not entitled to retain any land as stridhana property in addition to the extent of land which the family could retain under section 5(1). The petitioner questioned the correctness of the order of the Tribunal before the High Court of Madras in C.R.P. No. 916 of 1971. That petition was dismissed by Ganesan, J. on the ground that in view of the definition of stridhana land in section 3 (42) of the Act, the petitioner therein was not entitled to hold 10 standard acres as stridhana property, in addition to the 30 standard acres allowed to the family consisting of herself and her husband. Thereafter a petition was filed before the High Court by the petitioner therein to review the order passed by Ganesan, J. The review petition came up for decision before another learned Judge who allowed the same by his order dated November 2, 1972. It is on the decision rendered on the review petition the reliance is placed by the appellant before us. In paragraph 6 of that decision, it is observed as follows: 403 "The learned Judge, who heard the civil revision petition, mainly relied on the definition of 'stridhana property ' for holding that no woman is entitled to hold any stridhana property if the same was acquired or inherited subsequent to the commencement of the Act. Of course, section 3(42) defines stridhana land as meaning any land held on the date of commencement of the Act by any female member of a family in her own name. But that meaning is to be adopted 'unless the context otherwise requires '. It has been repeatedly held that the word in the section will have to be interpreted and understood in the context in which it is used in the section and the definition given for that word in the definition section of the Act could not always govern the interpretation without reference to the context. In the context of sections 5, 7 and 21 and with reference to the scope and object of the Act, I am of opinion, that the properties inherited by females as stridhana property subsequent to the commencement of the Act are also entitled to the benefit of sub section (4) of section 5 of the Act. " It is true that the above passage supports the case of the appellant but we are of the view that in the context of section 21 of the Act it is not necessary to give a meaning to the expression 'stridhana land ' different from what is stated in section 3(42) of the Act. For the reasons already stated by us we hold that the aforesaid decision does not lay down the law correctly. It is also to be observed that the earlier decision of the High Court of Madras which is now under appeal does not appear to have been brought to the notice of the learned Judge who decided the above case. We, therefore, hold that the High Court was right in this case in holding that section 5 (4) of the Act was not applicable to the land in question. It was lastly urged by Mr. K. Jayaram that in view of certain subsequent amendments made to the Act, the case has to be examined afresh by us in the light of the amended law. We do not think that it is advisable to do so at this stage. It is open to the appellant if he is so advised to resort to appropriate proceedings in order to claim the benefit that he may be entitled to under the amended law. Liberty is also reserved to the State Government to take whatever action it may take under the subsequent amendments to the Act. In the result, this appeal fails and is dismissed with costs. N.V.K. Appeal dismissed.

The Tamilnadu Land Reforms (Fixation of Ceiling on Land) Act, 1961 by section 3 (42) defined "stridhana land" as any land held on the date of the commencement of the Act (April 6, 1960) by any female member of a family in her own name, and section 5 (4)(a) of the Act enabled such a female member to hold, in addition to the extent of land which the family is entitled to hold, stridhana land not exceeding 10 standard acres. The mother of the appellant had bequeathed to the appellant and his wife certain agricultural lands by a will. The appellant being married on June 29, 1960 and his mother having died on April 20, 1962 i.e. after the Act came into force, the Authorised Officer passed orders treating the lands bequeathed in favour of the appellant 's wife as part of the holdings of the family consisting of the appellant and his wife, and determined the extent of the surplus land to be surrendered. The appellant 's contention in his appeal under section 78 of the Act before the Land Tribunal, that the land which was bequeathed in favour of his wife by his mother under the will was stridhana land, was accepted by it and the Land Tribunal allowed the wife of the appellant to retain the land as stridhana land under section 5 (4)(a) of the Act and remitted back the case to the Authorised Officer for making a fresh determination of the surplus extent of the land. The respondent 's revision petition under section 83 of the Act was allowed, the High Court holding that the land held by the wife was not 'stridhana land ' as defined under section 3 (42) of the Act, and could not be treated as such while determining the surplus land. On the question whether the land in question was 'stridhana land ' and could be treated as such under section 5 (4) of the Act while determining the surplus land. ^ HELD: (1) The High Court was right in holding that section 5 (4) of the Act was not applicable to the land in question. [403 F] (2) The expression "stridhana land" used in section 5 (4) (a) has been given a restricted meaning by section 3 (42) of the Act which defines it as any land held on the date of the commencement of the Act by any female member of a family in her own name. [401C] 397 In the instant case on the date of the commencement of the Act i.e. April 6, 1960 the wife was not the owner of the land in question. She acquired title to it on April 20, 1962 on the death of the testatrix her mother. The appellant cannot therefore claim any benefit under section 5 (4) (a) of the Act. [401C] (3) section 21 of the Act under which the land in question becomes liable to be included in the holding of the appellant for purposes of determination of the surplus land does not make any difference between stridhana property of a female acquired after the commencement of the Act by inheritance or bequest from any person and any other property held by her family. [401D] (4) A reading of the definition of the expression "stridhana land" in section 3 (42) of the Act and the provisions of section 5(4) of the Act, indicate that the State Legislature intended to extend the concession available under section 5 (4) of the Act only to the land held by a female on the date of the commencement of the Act and not to land acquired by her thereafter. [401E] (5) The object of the legislation is the acquisition of agricultural land in excess of the ceiling area and distribution of the same amongst the landless among the rural population. If the construction urged by the appellant is placed on section 21 of the Act, the very object of the statute would be defeated. There is also no room for construing section 5 (4) (a) of the Act as being applicable to agricultural land acquired by a female even after the commencement of this Act. [401G, F] (6) If the Legislature intended that lands acquired by way of inheritance or bequest by a female on or after the commencement of the Act should also be dealt with in accordance with section 5(4), it would have defined the expression "stridhana land" without the words "on the date of the commencement of this Act." [401H] (7) The Act is applicable to Hindus as well as others governed by other personal laws. This indicates that the expression 'stridhana ' is not used in the Act in the sense in which it is used in Hindu law. [402A] Valliammal vs The Authorised Officer, Land Reforms, Coimbatore , over ruled.

4061.txt

Appeal No., 132 of 1959. Appeal from the judgment and decree dated March 23, 1956 of the Allahabad High Court in Special Appeal No. 291 of 1955. Veda Vyasa and C. P. Lal, for the appellant. J. P. Goyal, for the respondents. February 6. The Judgment of the Court was delivered by WANCHOO, J. This is an appeal on a certificate granted by the Allahabad High Court. The brief facts necessary for present purposes are these. The three respondents were students of G. section Hindu Intermediate College at Sikandrarao and appeared at the Intermediate (Commerce) Examination con ducted by the appellant in the year 1954. On June 12, 1954, the result of the examination was published in newspapers and the three respondents passed in the second division. Thereafter they prosecuted further studies. But in December 1954, their fathers and guardians received information from the Principal of the G. section Hindu Intermediate College that the Examinations ' Committee of the appellant (hereinafter referred to as the Committee) had cancelled the result of the respondents for the examination of 1954 and further that they had been debarred from appearing at the examination of 1955. Thereupon the respondents filed a write petition in the High Court contending that the Committee had never afforded any opportunity to them to rebut the allegations made against them and that they were never informed about the nature of the unfair means used by them in the said exa mination and the first thing they come to know was the resolution of the Committee canceling their results and debating them from appearing in the examination of 1955. They therefore contended that they were entitled to an opportunity being 39 afforded to them to meet the case against them of using unfair means at the examination before the appellant took action against them by canceling their results and debarring them from appearing at the examination of 1955. The procedure thus adopted by the appellant was said to be in violation of the principles of natural justice inasmuch as they were given no opportunity whatsoever to defend themselves and to show cause against the action contemplated against them. It was further contended that the procedure adopted by the appellant violated the provisions of the U. P. Intermediate Education Act, No. II of 1921 (hereinafter referred to as the Act) and the U. P. Education Code, and therefore, the resolution canceling their results and debarring them from appearing in the later examination was without jurisdiction and illegal. They therefore prayed for a proper writ or order canceling the resolution of the appellant. The appellant opposed the application and its case was that the respondents had used unfair means at the examination and their cases were reported to the Committee under the Regulations and the Committee had acted under the, powers conferred on it under the Act and the Regulations framed thereunder after a thorough inquiry. It was not disputed, however, that no opportunity had been afforded to the respondents to rebut the allegations against them in the inquiry made by the Committee which resulted in the resolution canceling the results of the examination. A large number of contentions appear to have been urged in the High Court; but we are here only concerned with one of them, namely, whether the respondents were entitled to a hearing before the appellant decided to cancel the results. The contention on behalf of the respondents before the learned Single Judge was that the appellant was Under a duty to act judicially and therefore the 40 respondents should have been given a hearing before any order was passed , against them. The learned Single Judge held that no duty was cast on the Committee to act judicially and there was no statutory obligation on the Committee to give an opportunity to every examine to be heard; therefore he rejected the petition. The respondents then went in appeal which was heared by Dayal and Brijmohan Lall, JJ., who however differed. Brijmohan Lall, J., was of opinion that the Committee was not required to act judicially or quasijudicially when it considered cases of this kind and was acting merely administratively; be nevertheless was of the opinion that one of the rules of natural justice contained in the maxim audi alteram partem would apply in this case, even though the Committee was acting administratively. He was therefore in favour of allowing the appeal. Dayal J., agreed with the view of Brijmohan Lall, J., that in the present case no duty was cast on the Committee to act judicially and that the action of the Committee was merely administrative. He how ever did not agree that the Committee acted in violation of the principles of natural justice inasmuch as it did not give a hearing to the respondents. He was of the view that. is the Committee was acting merely administratively it was not bound to give a hearing, as the maxim audi alteram partem applied only to judicial or quasijudicial tribunals. The two learned Judges also differed on two other points with which we are not concerned. Eventually they referred three questions to be answered by another learned Judge and one of these questions was whether the failure of the Committee to provide an opportunity to the respondents of being heard vitiated its order, which was of an administrative nature. The matter then camo before a third learned Judge, Agarwala, J. He was doubtful whether the 41 view of the bench that there was no duty cast on the Committee to act judicially in the present case was correct; but as on that matter the two learned Judges were in agreement, he dealt with the case on the basis that the Committee was acting merely administratively, Even so, he came to the conclusion that the respondents were entitled to a hearing and agreed with the view of Brijmohan Lall, J. Consequently, the appeal was placed before the Bench again and in accordance with the opinion of the third Judge it was allowed. Then followed an application by the appellant for leave to appeal to this court, which was granted; and that is how the matter has come up before us. The main contention on behalf of the appellant is that the High Court was wrong in the view it took that an opportunity for hearing was iiecessary in this case even though the Committee acted merely administratively. It is contended that where a body is acting merely administratively, it is not necessary that it should give a hearing to a party who might be affected by its decision and that the principles of natural justice, including the maxim, audi alteram partem, apply only to judicial or quasi judicial bodies, i.e., bodies on whom a duty is cast to act judicially. It is submitted that where no such duty is cast on a body and it is acting merely administratively there is no necessity for it to hear the person who might be affected by it,. , order. The respondents on the other hand contend that though the final decision of the High Court is correct, the High Court was not right in holding that the Committee was acting merely administratively in a matter of this kind; they contend that considering the entire circumstances which operate in cases of this kind, the High Court should have held that there was a duty to act judicially and therefore it was necessary to give an opportunity to the respondents to be heard before action was taken against them. It is submitted that the 42 mere fact that there was nothing express in the Act or the Regulations framed thereunder which might make it obligatory for the Committee to call for an explanation and to hear the examinees whose cases it was required to enquire into was not wholly determinative of the question whether a duty was cast on the Committee in cases like this to act judicially. The first question therefore which falls for consideration is whether any duty is cast on the Committee under the Act and Regulations to act judicially and therefore it is a quasi judicial body. What constitutes , 'a quasi judicial act" was discussed in the Province or Bombay vs Kusaldas section Advani.(1) The principle, have been summarised by Das, J. (as he was then), at p. 725 in these words: "The principles, as I apprehend them are: (i) that if a statute empowers an authority, not being a court in the ordinary sense, to decide disputes arising out of a claim made by one party under the statute which claim is opposed by another party and to determine the respective rights of the contesting parties who are opposed to each other, there is a vis and prima farcie and in the absence of any thing in the statute to the contrary it is the duty of the authority to act judicially and the decision of the authority is a quasi judicial act ; and (ii) that if a statutory 'authority has power to do any act which will prejudicially affect the subject, then, although there are not two parties apart from the authority and the contest is between the authority proposing to do the act and the subject opposing it, the final determination of the authority Will yet be a quasi. judicial act provided the authority is required by the statute to act judicially. (1) ; , 725. 43 In other words, while the presence of two parties besides the deciding authority will prima facie and in the absence of any other factor impose upon the authority the duty to act judicially, the absence of two such parties is not decisive in taking the act of the authority out of the category of quasi judicial act if the authority is nevertheless required by the statute to act judicially. " These principles have been acted upon by this Court in latter cases: see Nagendra Nath Bora vs The Commissioner of Hills Division & Appeals, Assam(1), Shri Radheshyam Khare vs The State of Madhya Pradesh(2), Gullapalli Nageswara Rao vs Andhra Pradesh State Road Transport Corporation("), and Shivaji Nathubhai vs The Union of India(4). Now it may be mentioned that the statute is not likely to provide in so many words that the authority passing the order is required to act judicially; that can only be inferred from the express provisions of the statute in the first instance in each case and no one circumstance alone will be determinative of the question whether the authority set up by the statute has the duty to act judicially or not. The inference whether the authority acting under a statute where it is silent has the duty to act. judicially will depend, on the express provisions of the statute read along with the nature of the rights affected, the manner of the disposal provided the objective criterion if any to be adopted, the effect of the decision on the person affected and other indicia afforded by the statute. A duty to act judicially may arise in widely different circumstances which it will be impossible and indeed inadvisable to attempt to define exhaustively:(vide observations of Parker, J. in R. vs Manchester Legal Aid Committee)(5). (1) ; (2) (3) [1959] Supp. 1 S.C.R. 319. (4) ; (5) , 44 We must therefore proceed to examine the pro. visions of the Act and the Regulations framed thereunder in connection with matters of this kind to determine whether the Committee can be said to have the duty to act judicially when it deals with cases of examines using unfair means in examination halls. Under s.7 of the Act, the Board constituted thereunder has inter alia powers to prescribe courses of instruction, to grant diplomas and certificates, to conduct examinations to admit candidates to its examinations to publish the results of its examinations, and to do all such things as may be requisite in order to further the objects of the Board as a body constituted for regulating and supervising High School and Intermediate education. Under section 1 3, the Board has power to appoint and constitute various committees, including the examinations ' committee, and under section 14, the Board can delegate its power. ; by Regulations to such committees. Section 15 gives power to the Board to make Regulations with respect to the constitution, powers and duties of committees, the conduct of examinations, and all matters which by the Act may be provided for by Regulations. Section 20 gives power to the Board and its committees to make bye laws consistent with the Act and the Regulations. It will be clear from the above that the Act makes no express provisions as to the powers of the committees and the procedure to be adopted by them in carrying out their duties, which are left to be provided by Regulations, and we have therefore to look to the Regulations framed under section 15 to see. what powers and duties have been conferred on various committees constituted under the Regulations. Section 13 (1) makes it incumbent on the Board to appoint the Committee and Chap. VI of the Regulations deals with the powers and duties of the Committee. Rule 1 (1) of Chap. VI with which we are particularly concerned reads as 45 follows: "It shall be the duty of the Examinations ' Committee subject to sanction and control of the Board. " "(1) to consider cases where examines have concealed any fact or made a false statement ill their application forms or a breach of rules and regulations to secure undue admis sion to an examination or used unfair means or committed fraud (including impersonation) at the examination or are guilty or a moral offence or indiscipline and to award penalty which may be one or more of the following : (1) withdrawal of certificate of having passed the examination ; (2) cancellation of the examination; (3) exclusion from the examination. " There is however no provision in Chap. VI as to how the Committee will carry out the duty imposed on it by r. 1 (1). Further, there is no express provision in the Act or the Regulations casting a duty on the Committee to act judicially when exercising its powers under r. 1 (1); and the question whether the Committee has to act judicially when exercising these powers will have to 'be decided on an examination of all the circumstances relevant in the matter. At the same time, there is nothing express in the Act from which it can be said that the Committee is not under a duty to act judicially. It is true that there is no procedure provided as to how the Committee will act in exercising its powers under r. 1 (1) and it is. further true that there is no express provision in that rule requiring the Committee to call for an explanation from the examines concerned and to hear the examines whose case,% ;it is required to consider. But we are of opinion that the mere fact that the Act or the Regulations do not make it obligatory on the Committee to call for an explanation and to 46 hear the examiner is not conclusive on the question whether the Committee acts as a quasi judicial body in exercising its powers under r. 1 (1). Even though calling for an explanation and hearing the examine may not have been made expressly oblitory by the Act or the Regulations, it is obvious that the Committee when it proceeds to decide mat ters covered by r. 1 (1) will have to depend upon materials placed before it, in coming to its decision. Before the Committee decides to award any penalty it has to come to an objective determination on certain facts and only when it comes to the conclusion that those facts are established that it can proceed to punish the examinee concerned. The facts which the Committee has to find before it takes action are (i) whether the examinee has concealed any fact or made a false statement in his application form; or (ii) whether the examinee has made a breach of the Rules and Regulations to secure under admission to an examination ; or (iii) whether the examinee has used unfair means at the examination ; or (iv) whether the examinee has committed fraud (including impersonation) at the examination ; or (v) whether the examinee is guilty of moral offence or indiscipline. Until one or other of the five facts is established before the Committee, it cannot proceed to take action under r. 1 (1). In order to come to the conclusion that one or other of these facts is established, the Committee will have to depend upon materials placed before it, for in the very nature of things it has no personal knowledge in the matter. Therefore, though the Act or the Regulations do 47 not make it obligatory on the Committee to call for an explanation and hear the examinee, it is implicit in the provisions of r. 1 (1) that the Committee must satisfy itself on materials placed before it that one or other of the facts is established to enable it to take action in the matter. It will not be possible for the Committee to proceed at all unless materials are placed before it to determine whether the examinee concerned has committed some misconduct or the other which is the basis of the action to 1 be taken under r. 1 (1). It is clear therefore that consideration of materials placed before it is necessary before the Committee can come to any decision in the exercise of its powers under r. 1 (1) and this can be the only manner in which the Commit, tee can carry out the duties imposed on it. We thus see that the Committee can only carry out its duties under r. 1 (1) by judging the Materials, placed before it. It is true that there is no lis in the present case, in the sense that there are not two contesting parties before the Committee and the matter rests between the Committee and the examinee; at the same time considering that materials will have to be placed before the Committee to enable it to decide whether action should be taken under r. 1 (1), it seems to us only fair that the examinee against whom the Committee is proceeding should also be heard. The effect of the decision of the Committee may in an extreme case blast the career of a young student for life and in any case will put a serious stigma on the examinee concerned which may damage him in later life. The nature of misconduct which the Committee has to find under r. 1 (1) in some cases is of a serious nature, for example, impersonation, commission of fraud, and perjury; and the Committee 's decision in matters of such seriousness may even lead in some cages to the prosecution of the examinee in courts. Considering therefore the serious following the 48 decision of the Committee and the serious nature of the misconduct which may be found in some cases under r. t (1), it seems to us that the Committee must be held to act judicially in circumstances as these. Though therefore there is nothing express one way or the other in the Act or the Regulations casting a duty on the Committee to act judicially, the manner of the disposal, based as it must be on materials placed before it and the serious effects of the decision of the Committee on the examinee concerned, must lead to the conclusion that a duty is cast on the Committee to act judicially in this matter particularly as it has to decide objectively certain facts which may seriously affect the rights and careers of examinees, before it can take any action in the exercise or its power under r. 1 (1). We are therefore of opinion that the Committee when it exercises its powers under r. 1 (1) is acting quasijudicially and the principles of natural justice which require that the other party, (namely, the examinee in this case) must be heard, will apply to the proceedings before the Committee. This view was taken by the Calcutta High Court in Dipa Pul vs University of Calcutta, (1) and B. C. Das Gupta vs Bijoyranjan Rakshit, in similar circumstances and is in our opinion correct. It is urged on behalf of the appellant that there are a large number of cases which come up before the Committee under r. 1 (1), and if the Committee is hold to act judicially as a quasijudicial tribunal in the matter it will find it impossible to carry on its task. This in our opinion is no criterion for deciding whether a duty is cast to act judicially in view of all the circumstances of the case. There is no doubt in our mind that considering the totality of circumstances the Committee has to act judicially when taking action under r. 1 (1). As to the manner in which it should give an opportunity to the examinee concerned to be (1) A. I. R. (2) A. 1. R. 49 heard, that is a matter which can be provided by Regulations or Bye laws if necessary. As was pointed out in Local Government Board vs Alridge, (1) all that is required is that the other party shall have an opportunity of adequately presenting his case. But what the procedure should be in detail will depend on the nature of the tribunal. There is no doubt that many of the powers of the Committee under Chap. VI are of administrative nature; but where quasi judicial duties are entrusted to administrative body like this it becomes a quasi judicial body for performing these duties and it can prescribe its own procedure so long as the principles of natural justice are followed and adequate opportunity of presenting his case is given to the examinee. It is not however necessary to pursue this matter further, for it is not in dispute that no opportunity whatsoever was given to the respondents in this case to give an explanation and present their case before the Committee. We are therefore of opinion that though the view of the High Court that the Committee was acting merely administratively when proceeding under r. 1 (1) is not correct, its final decision allowing the writ petition on the ground that no opportunity was given to the respondents to put forward their cases before the Committee is correct. We therefore dismiss the appeal. No order as to, in the circumstances. Appeal dismissed.

The three respondents were declared by the appellant to have passed the Intermediate examination. Thereafter they prosecuted further studies and subsequently the fathers and guardians of the respondents were informed that the Examination Committee of the Board had cancelled the examination results of the respondents and that they were debarred from appearing at the next examination. The respondents filed a writ petition in the High Court of Allahabad contending that since the Examination Committee had never afforded any opportunity to them to rebut the allegations made against them the Examination Committee had violated the principles of natural justice. They also contended that the Committee had violated the provisions of the U. P. Intermediate Education Act, 192 1. The appellant while admitting that no opportunity had been afforded to the respondents to rebut the allegations against them, contended that the Examination Committee was only an administrative body acting merely administratively and it was not bound to give a hearing to a party who might be affected by its decision. The Single judge who heard the writ petition held that the Committee was not bound to act judicially and there was no statutory obligation on the Committee to give an opportunity to be heard. The respondents appealed to a Division Bench and one of the judges of Bench held that even though the Committee was not bound to act judicially or quasijudicially and it was acting administratively it ought to have given an opportunity to the respondents of being heard. The other judge was of the opinion that since the committee was acting only administratively it was not bound to give a hearing. The matter then went before a third judge who held that even though the Committee was acting merely administratively the respordents were entitled to a hearing. The appellant thereupon appealed to this Court. The appellant contended that the Committee was only a body a ing administratively and that the principles of natura 37 justice, including the maxim audi alteram partem apply only to judicial or quasi judicial bodies. The respondents contended that the High Court was wrong in holding that the Committee was only an administrative body. It was further submitted by them that the mere fact that there was nothing express in the Act or the Regulations framed thereunder which might make it obligatory for the Committee to call for an explanation and to hear the examinee whose case it was required to enquire into was not wholly determinative of the question whether a duty is cast on the Committee in cases like this to act judicially. Held, that the inference whether the authority acting under a statute, where it is silent, has the duty to act judicially will depend on the express provisions of the statute read along with the nature of the rights affected, the manner of disposal provided, the objective criterion if any to be adopted, the effect of the decision on the persons affected and other indicia afforded by the statute. The mere fact that the Act in question or the relevant Regulations do not make it obligatory on the Committee to call for anexplanation and to bear the examinee is not conclusive on the question whether the Committee acts as a quasi judicial body when exercising its powers under Ch. VI, r. 1 (1), of the Regulations. It is obvious that the Committee when it proceeds to decide matters covered by r. 1 (1) will have to depend upon materials placed before it and before it decides to award any penalty it has to come to an objective determination on certain facts and this is the only manner in which it can carry out the duties impos. ed on it. Even though there is no lis in the present case in the sense that there are not two contending parties before it the Committee should hear the examinees whose lives may be seriously affected by its decision even subjecting them in some cases to criminal prosecution on charges of impersonation, fraud and perjury. Though therefore there is nothing express one way or other in the Act or the Regulation casting a duty on the Committee to act judicially, the manner of the disposal and the serious effects of the decision of the Committee lead to the conclusion that a duty to act judicially is cast on the Committee and the Committee when it acts under r. 1 (1) is acting quasi judicially and the principles of natural justice will apply to its proceedings. Province of Bombay vs Kusaldas section Advani, ; , Yagendranath Bora vs Commissioner of Ilills Division & Appeals, Assam, ; Shri Radheshyam Khore vs State of Madhya Pradesh, , Gullapalli Nageswara Rao vs Andhra Pradesh State Road Transport Corpo ration, [1959] Stipp. 1 section C. R. 319 and Nathubhai vs Union (if lndia; , , followed.

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Civil Appeals Nos. 602 and 603 of 1975. Appeal by Special Leave from the Judgment and Order/decree dated the 30 1 1975 of the Patna High Court in C. W. J. C. No. 502 of 1973. V. section Desai and section N. Prasad for Appellants in C.A. 602/75. Bishan Narain, section N. Misra, section section Jauhar and A. K. Sinha for Appellants in C. A. 603/75. section C. Misra and U. section Prasad for respondent No. 1 (In both appeals). B. P. Singh and U. P. Singh for Respondent No. 2 (In C. A. 603) and Respondents 2 and 3 (In C. A. 602). The Judgment of the Court was delivered by CHANDRACHUD, J. These appeals by special leave arise out of a judgment of the Patna High Court in a writ petition filed by the 1st respondent under articles 226 and 227 of the Constitution challenging the appointment of the appellants as Drugs Inspectors. Civil Appeal No. 602 of 1975 is filed by original respondent 7 while Civil Appeal 603 of 1975 is filed by original respondents 4 to 6 to the Writ Petition. The High Court allowed the writ petition and quashed the appointments of the appellants on the ground that they did not have the requisite qualification for appointment as Drugs Inspectors. The Government of Bihar in its Health Department advertised through the Bihar Public Service Commission 12 vacancies of Inspectors of Drugs. Twenty candidates applied for the posts out of whom 13, including respondent 1, were Pharmacy Graduates while 7 including the appellants, were Science Graduates. The Public Service Commission held interviews in April, 1972 and selected the appellants amongst others. Respondent 1 was rejected on the ground that he was not suitable for the post. The appointments of the appellants were challenged by respondent 1 on the sole ground that they were not qualified to be appointed as Drugs Inspectors. Rule 49 of the Drugs (and Cosmetics) Rules, 1945 framed by the Government of India in the Ministry of Health, prescribes qualifications for the post of a Drugs Inspector. It reads as follows: "49. Qualifications of Inspectors. A person who is 771 appointed an Inspector under the Act shall be a person who (a) has a degree in Pharmacy or Pharmaceutical Chemistry or a post graduate degree in Chemistry with Pharmaceutics as a special subject of a University recognised for this purpose by the appointing authority or the associateship Diploma of the Institution of Chemists (India) obtained by passing the examination with `Analysis of Drugs and Pharmaceuticals ' as one of the subjects; or (aa) holds the Pharmaceutical Chemists Diploma granted by the Pharmaceutical Society of Great Britain; or (b) x x x (c) is a graduate in medicine or science of a University recognised for this purpose by the appointing authority and has at least one year 's post graduate training in a laboratory under (i) a Government Analyst appointed under the Act or (ii) a Chemical Examiner, or (iii) a Fellow of the Royal Institute of Chemistry of Great Britain (Branch E), or (iv) the head of an institution specially approved for the purpose by the appointing authority; Provided that only those inspectors who have not less than three years ' experience in the manufacture and testing of substances specified in Schedule in a laboratory approved for this purpose by the licensing authority, shall be authorised to inspect the manufacture of items mentioned in Schedule C; Provided further that only Inspectors who are graduates in veterinary science or medicine or general science or pharmacy and have had not less than three years ' experience in the manufacture or testing of biological products shall be authorised to inspect the manufacture of veterinary biological products; Provided further that for a period of four years from the date on which Chapter IV of the Act takes effect in the States, persons whose qualifications, training and experience are regarded by the appointing authority as affording subject to such further training, if any, as may be considered necessary, a reasonable guarantee of adequate knowledge and competence may be appointed as Inspectors and authorised under the preceding proviso: Provided further that for the purposes of inspection of shops in any specified area any officer of the medical or Public Health Department who is a registered medical practitioner or a graduate in science may be appointed as an ex officio Inspector. 772 Appellants do not fall within the class described in clause (a) above but respondent 1 who is a Pharmacy Graduate does. The fact that respondent 1 is qualified to hold the post of ' a Drugs Inspector is undisputed and his application was rejected by the Public Service Commission not on the ground that he did not hold the necessary qualification for the post but on the ground that he was unsuitable for being appointed to the post. The appellants being Science graduates fall within clause (c) of Rule 49 and there can be no doubt that in addition to being Science graduates of a recognised University, they have to possess at least "one year 's post graduate training" in a laboratory under the authorities mentioned in clause (c). It is not disputed that the appellants and worked for a fairly large number of years in laboratories under one or the other authorities mentioned in clause (c). but the question for decision is whether they had received any "training" and if so, the training which they had received was "post graduate training" within the meaning of clause (c). The contention of respondent 1 which found favour with the High Court is that "post graduate training" means systematic training in a post graduate institution and since the appellants had not received such training through any post graduate institution, they were not qualified to hold the particular post. The High Court, in our opinion, erred in accepting this contention. The expression "post graduate training" is used in rule 49(c) in the sense of training received by a person holding a degree in medicine or science and not in the sense that such training ought to be received in or through a post graduate institution imparting instruction or education in the particular discipline. The object of clause (c) is to ensure that to be eligible for the post of a Drugs Inspector the person concerned must have received training under any of the authorities mentioned therein after graduation in medicine or science. Pre graduation training is often not as efficacious as post graduate training, for a person holding a higher educational qualification is in a better position to imbibe the training which he receives. Thus, the expression "post graduate training ought to be received and not to limit the eligibility to those who have received training after enrolment in an institution imparting post graduate training. Clause (c) specifies that the training has to be received in a laboratory under a Government Analyst or a Chemical Examiner amongst others. It is difficult to conceive in the present educational set up that a student who has enrolled himself in a post graduate institution would receive training in a laboratory under a Government Analyst or a Chemical Examiner. A fair indication of the true intendment of Rule 49(c) is also furnished by the requirement that one year 's post graduate training is enough to confer eligibility on a candidate applying for the post of a Drugs Inspector. Post graduate courses normally extend over a period exceeding one year after graduation. It could not have been intended that it would be enough to make a candidate eligible for the post of a Drugs Inspector if, after graduation in medicine or science he enrolled himself for a post graduate course and just took one year 's training as part of that course. If enrolment in an institution imparting post graduate instruction was the object of rule (c), the minimum qualification prescribed would at least have been the successful completion of the post graduate course. 773 Rule 44 which prescribed qualifications for the post of Government Analyst throws useful light on the interpretation of rule 49. Rule 44 provides that only those persons can be appointed as Government Analysts who are Graduates in medicine or science or pharmacy or pharmaceutical chemistry and who have had "not less than three years ' post graduate experience" in the analysis of drugs in a laboratory under the control of designated authorities. If a post graduate course extends over a period of 2 years only, as it normally does, it is odd that in order that in order to qualify for the post of a Government Analyst a graduate in the specified discipline should be required to spend 3 years as a post graduate student. Post graduate experience stipulated in rule 44(a) and post graduate training stipulated in rule 49(c) connote basically and for practical purposes an identical qualification. For both posts" what is required in addition to other qualifications mentioned in the respective rules is post graduate experience or training in the sense described above, namely, that the experience or training has to be gained or received after obtaining graduation. Maheshwar Prasad Srivastava the appellant in Civil Appeal No. 602 of 1975, passed his B.Sc. examination in 1960 and worked as a Demonstrator in the Pharmacy School, Patna under the Health Department, Government of Bihar from October, 1961 to December, 1966. He was appointed as a Senior Scientific Assistant in the Bihar Drugs Control Laboratory on December 23, 1966 where he worked under Dr. Sheo Bihari Lal, who was the Government Analyst in charge of the Bihar Drugs Control Laboratory. It appears that the Government of Bihar through the Health Department used to send science graduates for training under the Government Analyst. The certificate issued by Dr. section B. Lal shows that Srivastava worked under him and had been "trained" for more than three years in the Bihar Drugs Control Laboratory. A letter written by Dr. Lal to the Deputy Director of the Health Services, Bihar on December 22, 1970 shows that during his absence on leave, Srivastava was to hold charge of the Bihar Drugs Control Laboratory. These facts make it impossible to accept the contention that the appellant had not received any systematic training. In the ultimate analysis, the usefulness of any training depends as much on the ability and willingness of the student or trainee as on the academic specifications of the training itself. The appellants in Civil Appeal No. 603 of 1975 had worked as Demonstrators in Pharmacy School, Patna for a large number of years and in regard to them also it is difficult to accept the contention that the training which, they had received was not systematic. Dr. J. K. P. Sinha who was then the Deputy Director of Health Services, Bihar and who assisted the Public Service Commission as a Technical Expert when the interviews for the particular posts were held, obviously took the view that the appellants who were science graduates satisfied the further test of post graduate training for not less than one year. In matters involving consideration of questions regarding adequacy or sufficiency of "training", the Public Service Commission, having the benefit of expert opinion, is better situated to judge whether the Particular candidate is qualified for a particular post and courts should hesitated to interfere with the direction of the appointing authority, so long as it is exercised bona fide. 774 Learned counsel for the appellant in Civil Appeal No. 602 of 1975 contended that respondent No. 1 had no locus standi to challenge the appointment of the appellant since he himself, as disclosed by the affidavit filed. On behalf of the Public Service Commission in the High Court, was rejected on the ground that he "was not found suitable for appointment to the post" of Drugs Inspector. In view of our conclusion that the appellants were duly qualified for the post, it is unnecessary to go into this question. For these reasons we allow the appeals, set aside the judgment of the High Court and hold that the appointments of the appellants as Drugs Inspectors were lawful and valid. The State of Bihar will pay the costs of these appeals to the appellants.

The appellants, all science graduates with laboratory training were the successful candidates for twelve vacancies of Drug Inspectors advertised by the Bihar Public Service Commission. Respondent No. 1, Pharmacy graduate whose application was rejected on the ground of his unsuitability for being appointed to the post challenged the selection by a writ on the ground that the appellants were unqualified under Rule 49(c) of the Drugs (and Cosmetics) Rules 1945 in as much as they did not have a systematic training in a post graduate institution. The High Court accepted the contention and set aside the selection. On appeal by special leave he Court, ^ HELD: (1) The expression "post graduate training" is used in Rule 49(c) in the sense of training received by a person holding a degree in medicine or science and not in the sense that such training ought to be received in or through a post graduate institution imparting instruction or education in the particular discipline. The object of clause (c) is to ensure that to be eligible for the post of a Drugs Inspector the person concerned must have received training under any of the authorities mentioned therein after graduation in medicine or science. Pregraduation training is often not as efficacious as post graduate training, for a person holding a higher educational qualifications is in a better position to imbibe the training which he receives. The expression "post graduate training" is used in order to signify the point of time after which the training ought to be received and not to limit the eligibility to those who have received training after enrolment in an institution imparting post graduate training. [772D F] (ii) Clause (c) of Rule 49 specifies that the training has to be received in a laboratory under a Government Analyst or a Chemical Examiner amongst others. It is difficult to conceive in the present educational set up that a student who has enrolled himself in a post graduate institution would receive training in a laboratory under a Government Analyst or a Chemical Examiner. A fair indication of the true intendment of Rule 49(c) is also furnished by the requirement that one year 's post graduate training is enough to confer eligibility on a candidate applying for the post of a Drugs Inspector. It could not have been intended that it would be enough to make a candidate eligible for the post of a Drugs Inspector if, after graduation in medicine or science he enrolled himself for a post graduate course and just took one years ' training as part of that course. If enrolment in an institution imparting post graduate instruction was the object of rule (c), the minimum qualification prescribed would at least have been the successful completion of the post graduate course. [772F H] Rule 44(a) throws useful, light on the interpretation of Rule 49. Post graduate experience stipulated in Rule 44(a) and "post graduate training" cannot basically and for practical purposes identical qualifications. For both posts, what is required in addition to other qualifications mentioned in the respective rules is post graduate experience or training in the sense, namely that the experience or training has to be gained or received after obtaining graduation. [773 B C] 770 In matters involving considerations of questions regarding adequacy or sufficiency of "training" the Public Service Commission having the benefit of expert opinion, is better situated to judge whether the particular candidate is qualified for a particular post and courts should hesitate to interfere with the discretion of the appointing authority so long as it is exercised bona fide. [773 G H] [Their Lordships considered that, in view of the conclusion that the appellants were duly qualified it was unnecessary to go into the question of "Locus Standi" of respondent No. 1 a rejected candidate on the ground of his unsuitability to file the writ petition.]

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iminal Appeal No. 3 of 1962. Appeal by special leave from the judgment and order dated September 20, 1961 of the Patna High Court in Criminal Appeal No. 124 of 1960. D. Goburdhan, for the appellant. S.P. Ferma, for the respondent. July 31, 1963. The judgment of the Court was delivered by AYYANGAR J. This is an appeal by special leave against the judgment of the High Court of Patna dismissing an appeal by the appellant against his conviction and the sentence passed on him by the Sessions Judge, Champaran. The appellant was charged with an offence under section 304A of the Indian Penal Code for causing the death of one Mst. Madilen by contact with an electrically charged naked copper wire which he had fixed up at the back of his house with a view to prevent the entry of intruders into his latrine. The deceased Madilen was an inmate of a house near that of the accused. The wall of the latrine of the house of the deceased had fallen down about a week prior to the day of the occurrence July 16, 1959, with the result that her latrine had become exposed to public view. Consequently the deceased among others, started using the latrine of the accused. The accused resented this and made it clear to them that they did not have his permission to use it and protested against their coming there. The oral warnings, however, proved inef 201 fective and it was for this reason that on the facts, as found by the courts below, the accused wanted to make entry into his latrine dangerous to the intruders. Though some of the facts alleged by the prosecution were disputed by the accused, they are now concluded by the findings of the courts below and are no longer open to challenge and, indeed, learned Counsel for the appellant did not attempt to controvert them. The facts, as found, are that in order to prevent the ingress of persons like the deceased into his latrine by making such ingress dangerous (1) the accused fixed up a copper wire across the passage leading up to his latrine, (2) that this wire was naked and uninsulated and carried current from the electrical wiring of his house to which it was connected, (3) there was no warning that the wire was live, (4) the deceased managed to pass into the latrine without contacting the wire but that as she came out her hand happened to touch it and she got a shock as a result of which she died soon after. On these facts the Courts below held that the accused was guilty of an offence under section 304A of the Indian Penal Code which en acts : "304A. Whoever causes the death of any person by doing any rash or negligent act not amounting to culpable homicide shall be punished with imprisonment of either description for a term which may extend to two years, or with fine, or with both. " The accused made a suggestion that the deceased had been sufficiently warned and the facts relied on in this connection were two : (1) that at the time of the accident it was past day break and there was therefore enough light, and (2) that an electric light was burning some distance away. But it is manifest that neither of these could constitute warning as the conditions of the wire being charged with electric current could not obviously be de tected merely by the place being properly lit. The voltage of the current passing through the naked wire being high enough to be lethal, there could be no dispute that charging it with current of that voltage was a 'rash act ' done in reckless disregard of the serious consequences to people coming in contact with it. It might be mentioned that the accused was also cliar 14 2 section C. India/64 202 ged before the learned Sessions Judge with an offence under section 304 of the Indian Penal Code but on the finding that the accused had no intention to cause the death of the deceased he was acquitted of that charge. The principal point of law which appears to have been argued before the learned judges of the High Court was that the accused had a right of private defence of property and that the death was caused in the course of the exercise of that right. The learned judges repelled this defence and in our opinion, quite correctly. The right of private defence of property which is set out in section 97 of the Indian Penal Code is, as that section itself provides, subject to the provisions of section 99 of the Code. It is obvious that the type of injury caused by the trap laid by the accused cannot be brought within the scope of section 99, nor of course of section 103 of the Code. As this defence was not pressed before us with any seriousness it is not necessary to deal with this at more length. Learned Counsel, however, tried to adopt a different approach. The contention was that the deceased was a trespasser and that there was no duty owed by an occupier like the accused towards the trespasser and therefore the latter would have had no cause of action for damages for the injury inflicted and that if the act of the accused was not a tort, it could not also be a crime. There is no substance in this line of argument. In the first place, where we have a Code like the Indian Penal Code which defines with particularity the ingredients of a crime and the defences open to an accused charged with any of the offences there set out we consider that it would not be proper or justifiable to permit the invocation of some Common Law principle outside that Code for the purpose of treating what on the words of the statute is a crime into a permissible or other than unlawful act. But that apart, learned Counsel is also not right in his submission that the act of the accused as a result of which the deceased suffered injuries resulting in her death was not an actionable wrong. A trespasser is not an outlaw, a Caput lupinem. The mere fact that the person entering a land is a trespasser does not entitle the owner or occupier to inflict on him personal in jury by direct violence and the same principle would 203 govern the infliction of injury by indirectly doing some thing on the land the effect of which he must know was likely to cause serious injury to the trespasser. Thus in England it has been held that one who sets springguns to shoot at trespassers is guilty of a tort and that the person injured is entitled to recover. The laying of such a trap, and there is little difference between the spring gun which was the trap with which the English Courts had to deal and the naked live wire in the present case, is in truth "an arrangement to shoot a man without personally firing a shot". It is, no doubt true that the trespasser enters the property at his own risk and the occupier owes no duty to take any reasonable care for his protection, but at the same time the occupier is not entitled to do willfully acts such as set a trap or set a naked live wire with the deliberate intention of causing harm to trespassers or in reckless disregard of the presence of the trespassers. As we pointed out earlier, the voltage of the current fed into the wire precludes any contention that it was merely a reasonable precaution for the protection of private property. The position as to the obligation of occupiers towards trespassers has been neatly summarised by the Law Reform Committee of the United Kingdom in the following words: "The trespasser enters entirely at his own risk, but the occupier must not set traps designed to do him bodily harm or to do any act calculated to do bodily harm to the trespasser whom he knows to be or who to his knowledge is likely to be on his premises. For example, he must not set man traps or spring guns. This is no more than ordinary civilised behaviour." judged in the light of these tests, it is clear that the point urged is wholly without merit. The appeal fails and is dismissed. Appeal dismissed.

The appellant was charged under section 304 A of Indian Penal Code for causing the death of a woman. The deceased was residing near the house of the accused. The wall of the latrine of the house of the deceased had fallen down about a week prior to the day of occurrence and so the deceased along with others started using the latrine of the accused. The accused protested against their coming there. The oral warnings however, proved ineffective and so he fixed up a naked copper wire across the passage leading upto his latrine and that wire carried current from the electrical wiring of his home to which it was connected. On the day of the occurrence, the deceased went to the latrine of the appellant and there she touched the aforesaid fixed wire as a result of which she died soon after. The trial and the appellate court convicted and sentenced the appellant under section 304A of the Indian Penal Code. Hence this appeal. 200 Held : (1) The plea of the right of private defence of property was not sustainable for the reason that the type of injury caused by the trap laid by the accused could not be brought within the purview of section 99 or 103 of the Indian Penal Code. (2) A trespasser was not an outlaw, a caput lupinem. The mere fact that the person entering a land was a trespasser did not entitle the owner or occupier to inflict on him personal injury by direct violence and the same principle would govern the infliction of injury by indirectly doing something on the land the effect of which he must know was likely to cause serious injury to the trespasser.

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l Leave Petition (Civil) No. 890 of 1964. Petition for special leave to appeal to the Supreme Court from the judgment and decree dated December 16, 1963 of the Rajasthan High Court in Civil First Appeal No., 54 of 1956. Mukat Behari Lal Bhargava, Zalim Singh, Meeratwal and Naunit Lal, for the petitioner M. C. Setalvad, and I. N. Shroff, for the respondent. The Judgment of the Court was delivered by Shah, J. The petitioner applies for special leave to appeal under article 136 of the Constitution, against the judgment of the High Court of Rajasthan dated December 16, 1963 in Civil First Appeal No. 54 of 1956 on two grounds (1) that the judgment of the High Court involves a claim or question respecting property of not less than Rs. 20,000 in value, and the High Court erred in refusing a certificate under article 133(1) (b) of the Constitution; and (2) that the case is otherwise fit for appeal to the Supreme Court. The material facts bearing on the plea raised are these. The petitioner commenced on July 2, 1951 in the Court of the Subordinate Judge, First Class, Ajmer an action against the respondents claiming a decree for Rs. 10,665 and for rendition of accounts in respect of the balance of sale proceeds of 104 bales of cotton purchased by him through the agency of the respondents. The petitioner claimed that 104 bales of cotton purchased by him were sold by the respondents as his agents on May 14, 1948 for Rs. 27,267/13/6 and without settling the account the respondents delivered towards that amount a demand draft for Rs. 11,000 which was encashed and four cheques of the aggregate value of Rs. 13,000 which because of lack of arrangement with the respondents ' bankers were not encashed, and the petitioner on that account was entitled to receive from the respondents Rs. 10,665 being the amount due on the foot of dishonoured cheques and interest thereon at the rate of 6% per annum between July 2, 1947 to July 1, 1951, less Rs. 4,000 subsequently received by him. The petitioner also claimed a decree for the balance of the price. 753 after giving credit for commission, dalali and godown charges incurred by the respondents as his agents and as he was not in a "position to know" the amounts due to or disbursed by the respondents, he claimed a decree for rendition of account. The subject matter of the suit was, therefore, a claim for Rs. 10,665 due to the petitioner on a cause of action arising on cheques dishonoured and a claim for the balance of the price due as may be ascertained on taking accounts. The trial Court passed a decree directing that account be taken for ascertaining the amount due in respect of the entire transaction of 104 bales and for taking accounts appointed a Commissioner. The High Court of Rajasthan reversed the decree passed by the Trial Court and dismissed the suit, holding that the transactions in respect of which the claim was made by the petitioner were those of an unregistered firm constituted by the petitioner and another person named Duli Chand and the suit was barred because the firm was not registered. An application filed by the petitioner for certificate under article 133 of the Constitution was rejected by the High Court. The judgment of the High Court proceeds entirely upon appre ciation of evidence and on the findings recorded the petitioner 's suit must stand dismissed. But counsel for the petitioner urged that the judgment of the High Court directly involves a claim or question respecting property of value not less than Rs. 20,000 and he was entitled as a matter of right to a certificate from the High Court under article 133(1) (b) of the Constitution. This argument is sought to be presented in two ways. It is urged in the first instance that the judgment of the High Court involves a question relating to the right of the petitioner respecting 104 bales of cotton belonging to him and sold by the respondents for an amount exceeding Rs. 27,000. Secondly, it is urged that pursuant to the order of the Trial Court a Commissioner was appointed and the Commissioner reported that Rs. 12,089/14/6 with interest at the rate of 6% per annum from May 14, 1948 were due to the petitioner and as the amount due to the petitioner on that footing was not less than Rs. 20,000 at the date of the decree of the High Court, the judgment of the High Court involved a claim respecting property of that amount or value. In our view the contention raised by the petitioner under either head has no substance. It is conceded, and in our judgment counsel is right in so conceding, that the petitioner could not seek a certificate under cl. (a) 754 of article 133(1). The claim in the court of first instance did not Teach Rs. 20,000 and one of the conditions for a certificate under that clause being absent, the claim could not be maintained. To attract the application of article 133(1) (b) it is essential that there must be omitting from consideration other conditions not material a judgment involving directly or indirectly some claim or question respecting property of an amount or value not less that Rs.20,000. The variation in the language used in cls. (a) and (b) of article 133 pointedly highlights the conditions which attract the application of the two clauses. Under cl. (a) what is decisive is the amount or value of the subject matter in the court of first instance and "still in dispute" in appeal to the Supreme Court: under cl. (b) it is the amount or value of the property respecting which a claim or question is involved in the judgment sought to be appealed from. The expression "property" is not defined in the Code, but having regard to the use of the expression "amount" it would apparently include money. But the property respecting which the claim or question arises must be property in addition to or other than the subject matter of the dispute. If in a proposed appeal there is no claim or question raised respecting property other than the subject matter, cl. (a) will apply : if there is involved in the appeal a claim or question respecting property of an amount or value not less than Rs. 20,000 in addition to or other than the subject matter of the dispute cl. (b) will apply. In the present case the subject matter in dispute was a claim for money. A part of that claim was definite and the rest was to be ascertained on taking accounts. The judgment did not involve any claim or question relating to property in addition to or other than the subject matter in dispute of the value of Rs. 20,000. It was admitted by the petitioner in his plaint that the bales of cotton were sold by the respondents as his agents. The right of the respondents to sell the bales was not in dispute. what was challenged was the right of the respondents to retain the price received by them. It cannot be said that a judgment dealing with a claim to money alleged to be due from an agent for price of property belonging to the principal sold by the agent either directly or indirectly involves a claim or question respecting property which is sold. Nor does the alternative ground assist the petitioner. It is true that by his petition the petitioner claims restoration of the decree of the Trial Court, and by adding interest at the rate of 6% per annum to the petitioner 's claim as awarded under the report 755 of the Commissioner, the claim of the petitioner on appeal exceeds Rs. 20,000. But this is still the subject matter in dispute : the Judgment does not involve any claim or question respecting property in addition to or other than the subject matter of the suit. The petition therefore fails and is dismissed with costs. Petition dismissed.

The petitioner filed a suit in the court of the Sub Judge claiming a decree for Rs. 10,665 and any balance ascertained as due to him on taking account, being proceeds of sales made by the respondents as the petitioner 's agents. The trial court passed a decree directing that an account be taken of the amount due and appointed a Commissioner for the purpose. In appeal the High Court reversed the decree and dismissed the suit. An application filed by the petitioner for a certificate under article 133 was rejected by the High Court. Upon a petition for special leave to appeal tinder article 136, it was contended on behalf of the petitioner, that the judgment of the High Court involved a claim or question respecting property of a value exceeding Rs. 20,000 and the petitioner was entitled as a matter of right to a certificate from the High Court under article 133(1)(b). HELD : Under cl. (a) what is decisive is the amount or value of the subject matter in the court of first instance and "still in dispute" in appeal to the Supreme Court; under el. (b) it is the amount or value of the property respecting which a claim or question is involved in the judgment sough, to be appealed from. The expression "property" is not defined in the Code, but having regard to the use of the expression " amount" it would apparently include money. The property respecting which the claim or question arises must be property in addition to or other than the subject matter of the dispute. If in a proposed appeal there is no claim or question raised respecting property other than the subject matter, cl. (a) will apply : if there is involved in the appeal a claim or question respecting property of an amount or value not less than Rs. 20,000 in addition to or other than the subject matter of the dispute el. (b) will apply. [754 B E] In, the present case, the claim in the court. of first instance did not reach Rs. 20,000, and therefore a certificate could not be granted under article 133(1)(a). [754 A] It could not be said that a judgment dealing with a claim to money alleged to be due from an agent for price of goods belonging to the principal, sold by the agent, involved a claim or question respecting the goods which had been sold. Furthermore, although the petitioner 's claim on appeal including interest exceeded Rs. 20,000, this was still the subject matter in dispute; the judgment did. not involve any claim or question respecting property in addition to or other than the subject matter of the suit. Article 133(1)(b) was, therefore, also not applicable. [754 G H; 755 A] 752

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N: Criminal Appeal No. 381 of 1975. Appeal by Special Leave from the Judgment and order dated the 10th January, 1973 of the Punjab and Haryana High Court at Chandigharh in Criminal Revision No. 606 of 1974. V. C. Mahajan, section K. Mehta and K. R. Nagaraja for the Appellant. Ram Sarup and R. A. Gupta for Respondent No. 1 H. section Marwah and section P. Nayar for Respondent No. 2 The Judgment of the Court was delivered by j, GOSWAMI, J. On April 19, 1973, the respondent Om Parkash (hereinafter to be described as the accused) inflicted as many as five stab wounds on the appellant Suraj Bhan. The injuries were very severe as will be found from the description given below: "1. Incised wound 5 cm x 2 cm x oblique spindle shape on the left side of the front of abdomen, 8 cm below the xiphisternum and 6 cm to the left of mid line. Depth `not probed edges were fresh. Incised wound 2 1/2 cm x 1 cm oblique, 6 cm on the left and 2 cm above injury No. 1, spindle J shaped. Edges were fresh and depth was not probed. Incised wound 2 1/2 cm x 1 cm horizontal, spindle shaped 6 cm above the left anterior superior iliac spine Depth was not probed and edges were fresh. Incised wound 1 cm X 1/4 cm X 2 mm deep, horizontal 6 cm inner to end at the level of f left anterior superior iliac spine, edges were fresh. Penetrating wound 5 cm x 2 1/2 cm x cavity deep, horizontal on the front of abdomen 2 cm to the right of mid line 10 cm below the level of xiphisternum, edges were clean cut and fresh the coils of small intestine protruding through the wound. " The appellant had also to under go an operation. There is no doubt that prompt and proper medical attention alone saved the i` appellant from death. The accused was convicted under section 307 IPC by the trial court by its judgment dated February 26, 1974 and sentenced to 10 years ' rigorous imprisonment and also to a fine of Rs. 200/ in default rigorous imprisonment for one year. Although the accused gave his 301 age as 19 years, according to the trial court he appeared to be aged about 23 years. The accused appealed to the High Court against his conviction and sentence. The appeal was numbered as Criminal Appeal No. 442 of 1974. The injured Suraj Bhan also filed a Criminal Revision Application being numbered as 606 of 1974 for enhancement of the sentence passed on the accused. The appeal was decided by a learned single Judge of the High Court of Punjab and Haryana on January 10, 1975. It appears from the judgment of the High Court in that appeal that conviction of the accused was not challenged. The only point that was argued was that the accused was entitled to set off the period of his detention as an under trial prisoner against the period of imprisonment imposed upon him under section 428 of the Criminal Procedure Code 1973 (Act No. 2 of 1974) which came into force from April 1, 1974. It appears also from the judgment that the State did not oppose the aforesaid submission on behalf of the accused. The learned single Judge, therefore, passed the order in the following terms: There is force in this submission of the learned counsel which is not opposed by the State counsel. I am of the view that the ends of justice will be met if the term of imprisonment of the convict appellant is reduced to that already undergone by him." Having said. so the learned single Judge dismissed the appeal maintaining the conviction and reduced the accused 's term of imprisonment to that already undergo by him and also maintained the sentence of fine. Including ' the pre conviction detention the accused served only one year and eight months of the sentence. It appears the State did not choose to prefer any appeal against the grossly inadequate sentence passed by the High Court. On the other hand the injured Suraj` Bhan made an application to the High Court for a certificate of fitness for leave to appeal to this Court under article 134(1)(c) of the Constitution without success and thereafter obtained special leave from this Court after notice to the respondents including the State to show cause why special leave to appeal should not be granted. We have described the above facts in some detail as we fail to appreciate why the State in this case should have ordinarily ignored to take notice of such a grossly lenient sentence. G The order of the High Court was clearly unsustainable even in terms of section 428, Criminal Procedure Code, as the only set off which was urged for under the section and which was admissible, was a period of about nine months which the accused had served as an under trial prisoner prior to the conviction. It is also clear from section 428, Criminal Procedure Code itself that even though the conviction was prior to the enforcement of the Code of Criminal Procedure, benefit of section 428 would be avail able to such a conviction. Indeed section 428 does not contemplate any 5 L522SCI/76 302 challenge to a conviction or a sentence. It confers a benefit on a convict reducing his liability to undergo imprisonment out of the sentence imposed for the period which he had already served as an under trial prisoner. The procedure to invoke section 428, Criminal Procedure Code, could be a miscellaneous application by the accused to the court at any time while the sentence runs for passing an appropriate order for reducing the term of imprisonment which is the mandate of the section. In the appeal before the High Court there was no scope for the High Court to reduce the sentence only to the period already under gone under section 428, Criminal Procedure Code, in view of the only point argued before it. Since in an attempt to murder hurt was caused, the maximum punishment under second part of section 307 IPC would be imprisonment for life. The injured was not satisfied with the maximum punishment of ten years contained in the first part of the section and moved the High Court in revision for enhancement of the sentence. The revision was separately discussed by the High Court for the "reasons recorded in Criminal Appeal No. 442 of 1974" and it is this order of the High Court in revision that special leave was obtained by the appellant. In the absence of an appeal against the judgment of the High Court in Criminal Appeal No. 442 of 1974. either by the State or by the injured, that Judgment has become final which means that the accused 's sentence remains to be for a period of one year and eight months and a fine of Rs. 200/ in default rigorous imprisonment for one year. The scope of the criminal revision before the High Court was whether the sentence of ten years should be further enhanced but that sentence itself disappeared by virtue of the Judgment of the High Court in the criminal appeal. The criminal revision, therefore, be came infructuous and we can do nothing about it while the Judgment of the High Court remains operative. Unfortunately that judgment in the criminal appeal is not before us in this Court. Although, therefore, we cannot approve of such a grossly lenient sentence in the present case, we have no other alternative than to dismiss the present appeal. The appeal is, therefore, dismissed. S.R. Appeal dismissed.

The respondent "OP" inflicted five stab wounds on the appellant "S" on 19 4 1973 but the appellant survived thanks to prompt medical attention and are immediate operation. The trial court convicted "OP" under section 307 I.P.C. by its judgment dated 26 2 74 and sentenced him to 10 years rigorous imprisonment and also to a fine of Rs. 200/ The accused "OP" filed a Criminal Appeal No. 442/74) in the Punjab High Court on the ground that he was entitled to set off u/s 428 of the Crl. P.C. 1973 (Act 2 of 1974), the period of his detention as an under trial prisoner against the period of imprisonment imposed upon him. The appellant "S" also filed a Criminal Revision No. 606/ 74 74 in the High Court for enhancement of the sentence against the accused. Since there was no opposition from the State to the plea in the criminal appeal, the High Court accepting the appeal, reduced the sentence of the term of imprisonment to that already undergone by him. Against the said appeal, there was no further appeal either by the State or by "S" and therefore the orders became final. The criminal revision filed by "S" was however dismissed separately by the High Court for the "reasons recorded in Criminal Appeal No. 442/74". Unable to obtain leave under article 134(1)(c) of the Constitution, "S" obtained special leave after notice to the accused "OP" and the State. Dismissing the appeal, the Court ^ HELD: (1) It is clear from section 428 of the Criminal Procedure Code, 1973 (Act 2 of 1974) itself that even though the conviction was prior to the enforcement of the code of criminal procedure benefit of Section 428 would be available to such a conviction. Indeed section 428 does not contemplate any challenge to a conviction or a sentence. It confers a benefit on a convict reducing his liability to undergo imprisonment out of the sentence imposed for the period which he had already served as an under trial prisoner. [301H, 302A] (2) The procedure to invoke Section 428 Criminal Procedure Code could be a Miscellaneous application by the accused to the court at any time while the sentence runs for passing appropriate order reducing the term of imprisonment which is the mandate of the section. [302A] (3) In the instant case, in the absence of an appeal against the judgment of the High Court in Criminal Appeal No. 442/74 either by the State or by the injured, that judgment has become final. The scope of criminal revision before the High Court was whether the sentence of ten years should be further enhanced, but that sentence itself disappeared by virtue of the judgment of the High Court in the Criminal Appeal. The criminal revision therefore became infructuous and the Supreme Court can do nothing about it while the judgment of the High Court remains operative. 1302D, E P] Obiter: The order of the High Court was clearly unsustainable even in terms of section 428 Criminal Procedure Code as the only set off which was 300 urged for under the section and which was admissible, was a period of about nine months of pretrial detention. [The Court disapproved of such a grossly lenient sentence imposed by the High Court and deprecated that the State ignored to take notice of such a grossly lenient sentence and for not preferring an appeal to the Court.]

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

On June 14, 1958, the President of India promulgated an Ordinance to amend the . By section 8 of the Ordinance, the Statutes of the University were amended, and in place of Statute NO. 30, another statute was substituted, which set up a " Screening Committee " to examine the cases of all persons holding teaching, administrative or other posts in the University at the commencement of the Ordinance, in respect of whom there was reason to believe that their continuance in office would be detrimental to the interests of the University, and to forward its recommendations to the Executive Council to take such action as it may deem fit. The Ordinance was repealed by the Banaras Hindu University (Amendment) Act, 1958, which re enacted Statute No. 30. Under the re enacted Statute before any action could be taken by the Executive Council as referred to above, the matter had first to be referred to the Solicitor General of the Government of India, who, if he was of the opinion that there was prima facie case for inquiry, shall refer the case of the person concerned to a committee, known as the Reviewing Committee. On receipt of the recommendations of the Reviewing Committee, the Executive Council was to take such action thereon as it thought fit, after giving the person concerned a reasonable opportunity for being heard. Apart from Statute No. 30, added by Parliament, the Executive Council could terminate the engagement of an employee by taking action under the terms of the agreement, where such agreement existed, or under Ordinance No. 6, framed under the Act, without assigning a cause, on four months ' notice or four months ' salary in lieu of notice. The cases of the appellants who held posts under the Univer sity were considered in accordance with the procedure laid down in Statute No. 30 by the Solicitor General who then sent up their cases to the Reviewing Committee. The appellants appeared before the Committee and made their representations. The Committee sent its findings in respect of the appellants except one to the Executive Council who then called upon four of them to show cause why their services should not be terminated, in view of the 387 findings of the Committee that the continuance in office of those appellants was detrimental to the interests of the University. No notices, however, were sent to appellants 2, 4, 5 and 6. Appellants 1, 3, 7 and 8 having filed petitions in the High Court of Allahabad under article 226 of the Constitution of India for relief against the proposed action and proceedings having been stayed, the Executive Council passed a resolution, No. 89, on May 15, 1960, that the consideration of their cases was postponed till after the writ petitions were disposed of by the High Court. On the same day, however, the Executive Council passed resolutions, Nos. 90, 94 to 96 and 99 to 102, terminating the services of all the appellants giving them four or six months ' salary in lieu of notice. The appellants challenged the validity of the resolutions on the grounds, inter alia, (1) that the Executive Council could not take recourse to the provisions of Ordinance No. 6 having started action under Statute NO. 30, (2) that Ordinance No. 6 was subordinate to Statute NO. 30 and could not prevail where Statute NO. 30 applied, (3) that action against respondents 1, 3, 7 and 8 was stayed by the High Court and resolution No. 89 and that any action thereafter under the agreement or Ordinance No. 6 was incompetent, and (4) that, in any case, the action of the Executive Council was mala fide and a fraud upon the Univer sity Act and Statute NO. 30. The case for the University authorities was that the Executive Council could take action under the terms of the agreements, where such agreements existed or under Ordinance No. 6 or Statute NO. 30 at its option, and that where alternative remedies were provided by law, all or any of the remedies could be invoked: Held, that the impugned resolutions were ultra vires and should be quashed. The power of terminating services without notice could not be invoked in the present case, where allegations of conduct detrimental to the interests of the University had already been made and scrutinised by the Solicitor General and the Reviewing Committee and the matter was pending before the Executive Council. The powers granted by the Ordinances were expressly subject to the Statutes, and the Ordinances could not prevail over the Statutes. State of Keyala vs C. M. Francis and Co. [1961] 3 S.C.R. 181, distinguished. The words " shall take such action thereon as it may think fit " in Statute No. 30, gave liberty of action on the recommendations of the Reviewing Committee but lay a duty to form an opinion. The words did not give a discretion to take action outside the Statute. The action taken by the University authorities could only be questioned if it was ultra vires and proof of alien or irrelevant motive was only an example of the ultra vires character of the action. The court was not concerned so much with the motives, 388 nor even with the justice of the action taken by a public body, like the University, as with its legality. Short vs Poole Corporation , relied on.

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Appeal No. 185 of 1952. Appeal from the judgment and order dated December 15, 1948, of the Madras High Court in Appeal No. 155 of 1946 arising out of the decree dated October 27, 1945, in Original Suit No. 132 of 1944. Alladi Kuppuswami and M. section K. Sastri, for the appellants. T. V. R. Tatachari and T. M. Sen, for respondent No. 4. 1957. May 10. The Judgment of the Court was delivered by GAJFNDRAGADKAR J. This is an appeal by defendants 47 and 48 and the principal question which is raised for our decision in the appeal is whether the properties in suit are the subject matter of public charitable trust or are merely burdened or charged with the obligation in favour of the specified charities. The suit from which this appeal arises was filed with the sanction of the Collector under section 92 of the Cc de of Civil Procedure and the plaintiffs alleged that the properties in suit were the subject matter of a public charitable trust and that a scheme may be framed for the ad ministration of the said trust. The present, appellants who are in possession of a substantial portion of the properties in suit as alienees have resisted this claim. They conceded that the properties in their hands were subject to the charge in favour of the charities but they denied that the said properties were the subject matter of a charitable trust. Several other pleas were made by the parties but the principal question in dispute between them was in regard to the character of the properties in suit. Both the learned 1125 trial judge and the High Court of Madras have upheld the plaintiffs ' plea. It has been declared that the properties in question are trust properties and a direction has been issued that a scheme of management should be framed in respect of the trust with a view to carry out the charitable intentions of the settlor. It is this decree which is challenged before us by Mr. Alladi Kuppuswami on behalf of defendants 47 and 48 and his argument is that the view taken by the Courts below about the character of the properties is based upon a misconstruction of the decree in question. In the plaint, it was alleged that one Purushottam had been earning and purchasing large properties and endowing and dedicating them for public charitable purpose since 1896. In about 1919 Purushottam who had then become old wanted to place the charities which he had been till then personally administering on a permanent and enduring basis. That is why he executed and registered a deed of trust on March 17, 1919. By this document, a trust in respect of his properties was created and three trustees were appointed to administer the trust. Purushottam himself was one of these trustees and two Advocates, Mr. Reballa Subbarayudu and Mr. C. Viswanadha Rao, were his co trustees. It would appear that Purushottam 's son Ramakrishnayya did not approve of this arrangement and he began to obstruct the administration of the trust. As a result of this obstructive attitude adopted by Ramakrishnayya, two suits had to be filed by the trustees against Ramakrishnayya and his associates who interfered with the management of the trust. These two suits were O.S. No. 599 of 1919 and O.S. No. 68 of 1920 on the files of the District Munsiff 's Court, Kavali, and the District Court, Nellore, respectively. They were subsequently transferred to the Sub Court, Nellore, and numbered as O.S. No. 39 of 1921 and O.S. No. 67 of 1921 in the said Court. Pending the hearing of these suits, the two advocates trustees withdrew from the suits leaving the conduct of the suits solely in charge of Purushottam. Ultimately the two suits ended in a compromise. According to the plaint in the present suit out of the which this 1126 appeal has arisen, this compromise decree was fraudulent and collusive the object of the parties being to efface the character of the trust properties completely and to create individual rights in Purushottam, his son Ramakrishnayya and the other defendants who claimed to be alienees from Ramakrishnayya. The plaint even alleged that, in persuading the Court to pass the said compromise decree, the parties effectively played fraud on the Court and the trust. Since the compromise was thus null and void, it cannot affect the original trust created by Purushottam in 1919. That is why the plaint alleged that the properties mentioned in sch. A which were covered by the original deed of trust of 1919 were trust properties and asked in substance for the framing of a scheme for the administration of the said trust. At the date of this suit both Purushottam and his son Ramakrishnayya were dead. Ramakrishnayya 's son Ramalingeswara Rao was therefore impleaded as defendant No. 1. A large number of defendants had to be impleaded to the suit because the properties had been alienated both by Ramakrishnayya and Ramalingeswara Rao to several purchasers. Defendants 47 and 48 were two of such purchasers. On June 7, 1942, an agreement of sale by defendant No. 1 in favour of defendants 47 and 48 was executed and a decree for specific performance was ultimately passed in their favour. It was then that defendants 47 and 48 were impleaded to this suit on January 3, 1944. These defendants substantially adopted the defence raised by the other contesting defendants who were already on the record. The principal contention raised on their behalf was that the compromise decree was not fraudulent or collusive, that it represented a fair and bona fide family settlement between Purushottam and his son Ramakrishnayya and as such the decree was binding against Purushottam and the trust alleged to have been created by him in 1919. On the pleadings of the parties, the learned trial judge framed ten issues. He found that the suit was competent, that the compromise decree was not shown to be collusive or fraudulent and it was binding on the 1127 trust. Even so, the said compromise decree itself created a trust in favour of public charities and in respect of the properties which had been allotted by" the compromise decree to the share of Purushottam. It would be noticed that according to the plaint the trust for the administration of which a scheme was claimed by the plaintiffs was the trust created by Purushottam in 1919. Since the learned trial judge held that this trust deed had been effectively substituted by the arrangement evidenced in the compromise decree, he proceeded to consider the effect of this compromise decree and since he thought that this compromise decree itself created a trust in substitution of the original trust of 1919 he proceeded to pass a decree in favour of the plaintiffs in respect of the substituted trust. This decree was passed on October 27, 1945. The matter was taken to the High Court of Madras by defendants 47 and 48. On December 15, 1948, the appeal preferred by defendants 47 and 48 was dismissed and the decree passed by the trial Court was confirmed. The learned Judges of the High Court of Madras dealt substantially with the question of the construction of the compromise decree and, since they came to the conclusion that the said decree constituted a public charitable trust in respect of the properties assigned to the share of Purushottam, they saw no reason to interfere with the decree under appeal. Two other points were raised before the High Court. They were, whether the obligation arising out of the trust is annexed to the property that fell to the share of Purushottam under the compromise decree and whether the said decree was collusive and not binding on the trust. The High Court took the view that, since the. compromise decree itself created a trust and it was possible to give relief to the plaintiffs on that view, it was not necessary to consider the said two points. Defendants 47 and 48 then preferred the present appeal to this Court. By our interlocutory judgment on March 30, 1955, we sent the case back to the High Court of Andhra with the direction that they should record their findings on the two additional points which were urged before them but on which they thought it 1128 unnecessary to make findings. In pursuance of this interlocutory judgment, the High Court of Andhra to whom the proceedings were transferred owing to the creation of the new State of Andhra have now recorded their findings on the two issues in question. They have held that the obligation in question is annexed to the property that fell to the share of Purushottam under the compromise decree and they have found that the said compromise decree was not collusive and was binding on the trust. That is how the principal question which we have to consider in the present appeal is the construction of the compromise decree in question. The principles of Hindu Law applicable to the consideration of questions of dedication of property to charity are well settled. Dedication to charity need not necessarily be by instrument or grant. It can be established by cogent and satisfactory evidence of conduct of the parties and user of the property which show the extinction of the, private secular character of the property and its complete dedication to charity. On the other hand, in many cases Courts have to deal with grants or gifts showing dedication of property to charity. Now it is clear that dedication of a property to religious or charitable purposes may be either complete or partial. If the dedication is complete, a trust in favour of public religious charity is created. If the dedication is partial, a trust in favour of the charity is not created but a charge in favour of the charity is attached to, and follows, the property which retains its original private and secular character. Whether or not dedication is complete would naturally be a question of fact to be determined in each case in the light of the material terms used in the document. In such cases it is always a matter of ascertaining the true intention of the parties; it is obvious that such intention must be gathered on a fair and reasonable construction of the document considered as a whole. The use of the word "trust" or "trustee" is no doubt of some help in determining such intention; but the mere use of such words cannot be treated as decisive of the matter. Is the private title over the property intended 1129 to be completely extinguished ? Is the title in regard to the property intended to be completely transferred to the charity ? The answer to these questions can be found not by concentrating on the significance of the use of the word "trustee" or "trust" alone but by gathering the true intent of the document considered as a whole. In some cases where documents purport to dedicate property in favour of public charity, provision is made for the maintenance of the worshipper who may be a member of the family of the original owner of the property himself and in such cases the question often arises whether the provision for the maintenance of the manager or the worshipper from the income of the property indicates an intention that the property should retain its original character and should merely be burdened with an obligation in favour of the charity. If the income of the property is substantially intended to be used for the purpose of the charity and only an insignificant and minor portion of it is allowed to be used for the maintenance of the worshipper or the manager, it may be possible to take the view that dedication is complete. If, on the other hand, for the maintenance of public charity a minor portion of the income is expected or required to be used and a substantial surplus is left in the hands of the manager or worshipper for his own private purposes, it would be difficult to accept the theory of complete dedication. It is naturally difficult to lay down a general rule for the solution of the problem. Each case must be considered on its facts and the intention of the parties must be determined on reading the document as a whole. In Maharani Hemanta Kumari Debi vs Gauri Shankar Tewari and Others (1), Sir George Rankin, who delivered the judgment of the Board has observed, "In the usual case of complete dedication made to an idol, for example, the property ceases altogether to belong to the donor, and becomes vested in the idol as a juristic person. Complete relinquishment by the owner of his proprietary right is, however, by no means the only form of dedication known to Hindu law, and is (1) (1940) L.R. 68 I.A. 53, 63. 145 1130 very different from anything that could ordinarily be inferred from the public user of a highway. From the standpoint of the Hindu law 'it is not essential to a valid dedication that the legal title should pass from the owner, nor is it inconsistent with an effectual dedication that the owner should continue to make any and all uses of the land which do not interfere with the uses for which it is dedicated ' per Mookerjee J. in Chairman of the Howrah Municipality vs Khetra Krishna Mitra (1). " The learned Judge has further added that when the dedication is only partial the property in some parts of India might none the less in Common parlance be described as debotter, but whether it be charged with a sum of Money for the worship of an idol or be subjected to a right of limited user on the part of the public,it would descend and be alienable in the ordinary way. The only difference, as Mr. Mayne observes, is that it passes with it a charge upon it. In Jadu Nath Singh vs Thakur Sita Ramji (2) the Privy Council was dealing with a deed of dedication which provided that after the death of the grantor certain female members of his family should succeed him as managers, that half the income should be enjoyed by the managers without power of alienation, that upon the death of the named managers the Government should become manager and the whole net income should then be applied to the expenses of the temple. The Privy Council held that the deed was a valid endowment of the whole property to the temple and that the donor had no rights in it against either the idol or the managers. Dealing with the argument that in the hands of the female members of the grantor 's family liberty was given to the said members to enjoy half the income, Lord Haldane observed that " If the income of the property had been large, a ques tion might have been raised, in the. circumstances, as throwing some doubt upon the integrity of the settler 's intention, but, as the entire income is only 800 rupees, it is obvious that the payment to these ladies is of the most trifling kind, and certainly not an amount which one would expect in a case of that kind." Lord (1) , 348. (2) (1917) L.R. 44 I.A. 187, 190. 1131 Haldane then emphasized the clear expression of the initial intention of the donor to apply the whole estate of the donor to the benefit of the temple and he added that the rest is only a gift to the idol sub modo by a direction that of the whole which had already been given part is to be applied for the upkeep of the idol itself and the repair of the temple and the other is to go for the upkeep of the managers. That is how in the end it was held that the document showed complete dedication in favour of the idol. In Pande, Har Narayan vs Surja Kunwari (1), the Privy Council has observed that in determining whether the will of a Hindu gives the testator 's estate to an idol subject to the charge in favour of the heirs of the testator or makes the gift to the idol a charge upon the estate, there is no fixed rule depending upon the use of particular terms in the will. The question depends upon the construction of the will as a whole. In this particular case, though the will had provided that the property of the testator shall be considered to be property of a certain idol, there were further provisions which showed that the residue after defraying the expenses of, the temple shall be used by the testator 's legal heirs to meet their own expenses and it appeared that only a small proportion of the total income could be utilised for the idol whereas a large balance was available to the heirs. On these facts, it was held by the Privy Council that the intention disclosed by the document was that the heirs should take the property subject to the charge for the performance of the religious purposes named in the will. Lord Shaw, who delivered the judgment of the Board, cited with approval the earlier observations of Turner L. J. in Sonatun Bysack vs Sreemutti Juggutsoondree Dossee (2 ). Turner L. J. had stated: " although the will purports to begin with an absolute gift in favour of the idol, it is plain that the testator contemplated that there was to be some distribution of the property according as events might turn out; and that he did not intend to give this property absolutely to the idol seems to their Lordships to be clear from the directions (1) (1921) L.R. I.A. 143. (2) 8 Moo. I. A. 66. 1132 which are contained in the various clauses of the will. " Similarly, in Gopal Lal Sett vs Purna Chandra Basak(1), the Privy Council held that the will of the Hindu testatrix with which they were concerned in this case conferred the properties specified on the grandson charged with the maintenance of the worship but that no shebaitship was created. The will in question had provided that out of the income of the specified property, her grandson should perform the worship of certain family idols and that he should be in charge of the worship. The will contained no gift, express or implied, to the idols, and there was no provision for the worship after the death of the grandson. It is in the light of these decisions that we will have to construe the compromise decree in the present case. Before considering the terms of the compromise decree, however, it would be relevant to mention some more facts. After Purushottam had executed a deed of trust in 1919, troubles arose in his own family. His son apparently began to assert his share in the property which was the subject matter of the said trust and he actually started to alienate his alleged undivided share in the said property. That indeed was the genesis of the two suits initially filed by the three trustees in 1919 1920. In O.S. No. 30 of 1921 itself, an alternative claim appears to have been made by Purushottam when he was left in sole charge of the suit after the withdrawal from the suit by his co trustees. He claimed a declaration that he was entitled to recover the possession of the property as mentioned in sch. A and A 1 of the claim, or, in the alternative, that he should be declared to be entitled to the title of the property jointly with his son Ramakrishnayya and the partition in the two shares of the same may be directed and he may be put in possession of such property as would fall to his share. In other words, the first claim was based on the validity of the original trust deed created by Purushottam and the second )#as based on the assumption that the trust was not valid, that the property, the subject matter of the said trust was liable to be divided between (1) (1921) L.R. 49 I.A. 100. 1133 Purushottam and his son and a prayer was made that Purushottam should be allotted his share by a partition of all the property by metes and bounds. As a result of the compromise decree passed in this suit, the property over which Purushottam had created a trust in 1919 was divided between himself and his son Ramakrishnayya and some of the property which was not included in the trust deed of 1919 but which was also the subject matter of the suit itself was allotted to the share of Purushottam. The property thus allotted to the share of Purushottam formed part of sch. 1 and it is in respect of this property that a public charitable trust has been created according to the findings of the Courts below. For the appellants, it is urged before us that this view is erroneous. We will now consider the relevant terms of the compromise decree. Clause (1) of the decree provides that the property described in sch. 1 attached to the decree should go to the share of the third plaintiff, viz., Purushottam. It appears that four items included in sch. 1 had been sold by defendant I to defendants 13 and 14. These alienees, however, agreed to give up their claim in respect of these properties. Clause (1) then reads as follows: "that as regards the aforesaid schedule property, the third plaintiff should be the ' sole trustee ' till his lifetime for the purpose of conducting the charities described in the trust deed, dated 17th March, 1919, and he should utilise the income derived therefrom, for the charities according to the necessity and should enjoy the said property till his lifetime without rights to gift, sale etc. , therein; that after his death, the said entire property should pass on to his grandson Ramalingeswara Rao subject to the (performance of) the aforesaid kainkaryams (charities); that if the third plaintiff should die before the expiry of the minority of the aforesaid Ramalingeswara Rao arrangement should be made to have a guardian appointed through Court for the property made to pass to the said Ramalingeswara Rao the ,said guardian should take possession of the property 1134 and conduct the aforesaid charities and deliver possession of the same to the said Ramalingeswara Rao as soon as the minor attains majority; that, thereafter the said Ramalingeswara Rao should conduct the above mentioned charities and enjoy the properties;" Then cls. (2) and (3) deal with the claims of defendant 1 and defendants 10, 11 and 12. Clause (4) directs that the properties allotted to the share of the third plaintiff should be immediately delivered to him by the defendants; and el. (5) provides that the third plaintiff should give up all other claims in respect of the suit and the parties should bear their own respective costs. At this stage it may be relevant to refer to the particulars of charities for whose benefit admittedly the decretal provision in el. (1) has been made. These particulars are mentioned in para. 6 of the original deed of trust and it is not disputed that the burden imposed by cl. (1) of the decree is in favour of the same charities. These charities are nine in number and they are thus enumerated in the deed of trust: "(1) In the choultry constructed in the land in Survey No. 81, all persons who pass to and fro in Doranala Road, should be given drinks to quench thirst, everyday two brahmin travellers should be given food at noon. (2) For the purpose of Mahanaivaidyam (food offering) taking place every night to Sree Malleswaraswami Varu enshrined in the aforesaid Damaramadugu village, 12 tooms of paddy and Rs. 6 in cash should be given to the trustee of the said Devasthanam. (3) During the time of Brahmotsavam of Sri Malleswaraswami and Sri Kamakshi Thayi Garu, in Jonnavada which is taking place every year, Rs. 10 (rupees ten) should be paid every year in respect of the Ravana Seva Ubbayam that is being conducted by the Damaramadugu villagers. (4) During the Brahmotsavam time of Sri Jonnavada Kamakshi Thayi that takes place every year, 1135 Rs. 40 (rupees forty) should be spent for 'Ekanthaseva ' and the trustees should be present and see that the said Ubbayam is properly conducted. (5) Rs. 12 should be paid every year towards Deeparadhana expenses during nights to Sri Veeranjaneyaswami Varu enshrined in Pata Santhapeta, Nellore, to the trustee of the said Devasthanam. (6) From out of the said fund, Rs. 42 per year should be paid to poor Brahmin boys reading in classes commencing from fourth form and upward in the High School, towards the school fees. Now, this amount shall be paid to Amperayani Venkatakrishnayya who is reading in the Kurnool School, till he stops his study; and after he stops his study, the then trustees are hereby empowered to give the money to poor Brahmin boy whom they consider as the suitable recipient. (7) If there should be difference of opinion, on any matter relating to the management of the aforesaid charities, the opinion of the majority trustees shall prevail and it will be given effect to. (8) The trustees shall exercise all powers in the matter of the management of these charities, viz., to appoint the necessary staff; to remove them; to suspend them; to impose fine; and to make all arrangements for the staff to discharge their duties efficiently. (9) The trustees are fully empowered to now and then grant cowles in respect of the schedule mentioned property to individuals and to have muchilikas executed and in the event of any disputes arising at any time through any person, in respect of the said property, to institute and conduct suitable proceedings in proper Courts, to get over such disputes; and also to incur the necessary expenditure from out of the income from the aforesaid endowments. " It would be clear that el. (1) of the compromise decree is the foundation of the theory, that a public trust had been created in respect of the properties allotted to the share of Purushottam. In dealing with this clause, the High Court of Madras appears to have attached considerable importance to the fact that 1136 Purushottam had already, in unequivocal terms, expressed his intention to create a trust of his own properties in 1919. There is no doubt that the document of 1919 creates a public charitable trust. In construing cl. (1) of the compromise decree, the learned Judges of the High Court of Madras appear to have assumed that this clause was really intended to confirm the earlier creation of the trust though in respect of different properties. With respect, in making this assumption, the learned Judges appear to have over looked the sharp distinction between the words used in the trust deed of 1919 and in cl. (1) of the compromise decree. The trust deed had appointed three trustees and by cl. (12) had specifically provided that the amounts described in the schedule and the income that will increase and accrue in future shall be utilised for the above charities only and it shall not be used for private purposes. In other words, el. (12) emphatically prohibits the use of the income from the property for any private purpose and in terms dedicates entirely the whole of the property and its income for public charitable purposes. Clause (3) of the trust deed had appointed three trustees, had provided for the management of the trust and the keeping of the accounts. Under this clause, all the trustees should join together and hold a meeting once a month in the choultry and examine the accounts and consider the other details of management. The deed has further provided for the appointment of other trustees in case of vacancy occurring either by death or resignation. Now let us look at cl. (1) in the compromise decree. It is true that the third plaintiff is described in this clause as the sole trustee till his lifetime. It is also true that, as the sole trustee, he is allowed to enjoy the said property till his lifetime " without rights to gift, sale etc., in the same. " The use of the word "sole trustee" is no doubt relevant and its full effect must be taken into account but its significance cannot be exaggerated. It is really difficult to understand how a sole trustee could enjoy the property. The enjoyment of the property inevitably suggests the right to enjoy the property in one 's right and this notion is not easily 1137 reconcilable with the theory of complete dedication of the property in favour of charity. Even so, we will assume that the use of the word " sole trustee " is a factor in favour of the plaintiffs. In the same clause, there is, however, another indication which is inconsistent with this theory of complete dedication. The income of the property has to be utilised for charities according to the necessity. The contrast between this provision and the provision in cl. (12) of the earlier deed of trust is obvious. Whereas, under the earlier deed the whole of the income had to be utilised only for the purpose of charity, under el. (1) of the decree a part of the income is to be utilised according to the need of the charity. Then, after the death of Puru shottam, the clause provides that the property should pass on to his grandson Ramalingeswara Rao subject to the purpose of the aforesaid charities. The notion that the property has to pass from Purushottam to Ramalingeswara Rao is consistent with Purushottam 's title to the property and is inconsistent with the title of the idol in the said property. This clause about the devolution of the title in favour of the grandson clearly and unequivocally suggests that all that Purushottam wanted to achieve by this clause was to leave his private title unimpaired except with the burden or charge in favour of charity. This clause can be contrasted with cl. (4) of the trust deed which provides for the subsequent appointment of trustees. Then the provision about the appointment of the guardian of Ramalingeswara Rao during his minority is also inconsistent with the theory of complete dedication. It is difficult to appreciate how a guardian of a minor trustee can be appointed in this way in respect of properties which do not belong to the minor but are trust properties. It is, however, urged that Purushottam as the sole trustee is positively prohibited from making the gift of the property or selling the property by the first part of el. (1) and that Prima facie indicates that Purushottam was not an absolute owner of the property; but in judging the effect of this prohibition, we cannot lose sight of the fact that a similar prohibition is not included in the decree when the decree deals 146 1138 with the rights of the grandson of Purushottam. Reading the clause as a whole, it seems to us fairly clear that Purushottam wanted the property to devolve on his grandson and treated the property as his private property in that behalf. Since that was the intention of Purushottam no restraint has been imposed on the absolute title of Ramalingeswara Rao and he has been apparently given full liberty to deal with the property as he likes except that he was under an obligation to the charity in question. The last portion of the clause authorises Ramalingeswara Rao to conduct the above mentioned charities and to enjoy the property. This clause again is wholly inconsistent with the theory of complete dedication and merely suggests that in the hands of Ramalingeswara Rao as well as in the hands of his successors or transferees the property would stand burdened with the obligation to perform the charities in question. We have carefully considered the terms of cl. (1) of this decree and we are satisfied that it is difficult to hold on these terms that the property allotted to the share of Purushottam under the decree was intended to be completely dedicated in favour of charities. In our opinion, the learned Judges of the High Court of Madras were in error in construing this clause as evidencing the creation of a public charitable trust. We are satisfied that the properties continue to be the properties of Purushottam until his death and on his death they devolved upon his grandson Ramalingeswara Rao subject always to the burden of performing the charities mentioned in the earlier deed of trust. For the Advocate General of Andhra who has been allowed to represent charities in the present case after the death of the original plaintiffs, Mr. Tatachari has urged that even though the compromise decree may not indicate the creation of a public trust that would not necessarily defeat the plaintiffs ' claim. He contends that the trust of 1919 which had been validly created by Purushottam cannot be effectively effaced by the subsequent compromise decree between Purushottam and his son and the alienees from his son. Mr. Tata chari has referred us to the material allegations in the 1139 plaint where it has been suggested that in agreeing to the compromise decree Purushottam was in substance guilty of breach of trust. We do not propose to consider the merits of this interesting argument because, in our opinion, it is too late for the plaintiffs to raise such a point. We have already mentioned that one of the issues specifically raised between the parties in the present litigation was in regard to the nature and effect of the compromise decree. In fact we have already indicated that, when we found that the learned Judges of the High Court of Madras had not considered this issue, by our interlocutory judgment we invited the High Court to consider this issue along with another. The position now is that both the Courts below have found that the compromise decree was not collusive or fraudulent 'and it binds the trust. The respondent has not filed any objection to the finding submitted by the High Court of Andhra in pursuance to our interlocutory judgment. Indeed, if the plaintiffs had adhered to their original case they should have insisted upon obtaining a decree for a scheme of the original trust of 1919. It is true that a decree for a scheme was passed in favour of the plaintiffs but this decree was passed on the assumption that a subsequent compromise decree had created a public trust. It is clear from the plaint that the plaintiffs had not alternatively asked for a scheme of the subsequent trust. That being so, it was really necessary for the plaintiffs to have preferred an appeal against the trial Court 's decree and urged that the original trust deed had not been effaced and that it was still subsisting not with standing the compromise decree and that a scheme should be framed in respect of the said original trust. It appears that the plaintiffs were content to acquiesce in the finding that the subsequent compromise decree bound the original trust deed and, as matters then stood, it did not make any practical difference to the plaintiffs ' case because they got a scheme for the administration of the trust though new properties were substituted for the old to constitute the subject matter of the trust; but in law the conduct of the plaintiffs amounted to an admission that the compromise decree 1140 offaced the original trust in that the properties of the trust were changed in the manner indicated in the decree. Before the High Court of Madras, the only point which the plaintiffs urged was that the compromise decree created a trust. It is true that this compromise decree was intended for the benefit of the charities covered by the earlier deed of trust and the argument was that the properties which were allotted to the share of Purushottam by the compromise decree should be deemed to have been substituted for the original properties of the trust. Having adopted this attitude it is now not open to the plaintiffs to contend that the terms of the compromise decree do not bind the trust, that the decree per se constituted a breach of trust and that the original trust is wholly unaffected by whatever Purushottam did in the subsequent litigation. In our opinion, therefore, it is unnecessary to consider the merits of the contention which Mr. Tatachari attempted to raise before us. Since we hold that the compromise decree had not created a public trust, it is unnecessary to consider any other point. We wish to make it clear that Mr. Alladi Kuppuswami expressly told us that his clients have always agreed that the properties in their hands are burdened with the obligation to discharge the charities mentioned in the deed of trust executed by Purushottam in 1919. We accordingly declare that the properties in the hands of the appellants are subject to the charge in favour of the said charities. However since the plaintiffs ' case for a scheme has failed the appeal must be allowed and the plaintiffs ' suit dis missed. As the Advocate General has appeared before us to support the case of the charities, we direct that the parties should bear their costs throughout. Appeal allowed.

A Hindu father executed a registered deed of trust giving away his properties to public charities and appointed himself and two others as trustees. The son in assertion by his right to a moiety share therein started to alienate them. There was litigation between the trustees and the son which ultimately ended in a compromise decree for partition between the father and the son, the two other trustees having retired pending litigation. After the death of both the father and the son a suit was brought under 1123 section 92 of the Code of Civil Procedure for the framing of a scheme for the administration of the trust. The trial court held that the trust deed had been substituted by the compromise decree which itself created a trust and decreed the suit on that basis. On appeal by two of the defendants who were transferees in possession of some of the properties in suit, the High Court affirmed the decision of the trial court holding that the compromise decree created a trust for public charities in respect of the properties allotted to the third plaintiff, meaning the father. The said defendants appealed to this Court. The principal question for decision was one of construction of the compromise decree, whether it created a trust or a charge. The relevant terms of the compromise decree were as follows: " that as regards the aforesaid schedule property, the third plaintiff should be the 'sole trustee ' till his lifetime for the purpose of conducting the charities described in the trust deed, dated 17th March, 1919, and he should utilise the income derived therefrom for the charities according to the necessity and should enjoy the said property till his lifetime without rights to gift, sale etc. , therein ; that after his death, the said entire property should pass on to his grandson Ramalingeswara Rao subject to the (performance of) the aforesaid kainkaryams (charities) ; that if the third plaintiff should die before the expiry of the minority of the aforesaid Ramalingeswara Rao arrangement should be made to have a guardian appointed through Court for the property made to pass to the said Rainalingeswara Rao, the said guardian should take possession of the property and conduct the aforesaid charities and deliver possession of the same to the said Ramalingeswara Rao as soon as the minor attains majority ; that, thereafter the said Ramalingeswara Rao should conduct the above mentioned charities and enjoy the properties :" Hald, that the courts below were in error in construing the compromise decree in the way they did and the appeal must succeed. There can be no doubt from the terms of the compromise decree read as a whole that what was intended to be created was a charge and not a trust in respect of the properties allotted to the father which retained their private character. The principles of Hindu Law applicable to questions relating to charitable trust are well settled. Whether or not a dedication to charity is complete must depend on the intention of the donor which has to be gathered from the terms of the document in any particular case read as a whole. If the dedication is complete, a trust is created, if not, a charge follows. The mere use of the word 'trust ' or 'trustee ' cannot by itself be conclusive as to the intention of the donor and the real test is whether private title 1124 over the property is sought to be extinguished by a complete transfer of it to the charity. Maharani Hemanta Kumati Debi vs Gauri Shankar Tewari, (1940) L. R. 68 I.A. 53, Jadu Nath Singh vs Thakur Sita Ramji, (1917) L.R. 44 I.A. 187, Pande Har Narayan vs Surja Kunwari, (1921) L.R. 48 I.A. 143, Sonatun Bysack vs Sreemutti juggul soondyee Dossee, 8 Moo. I.A. 66 and Gopal Lal Sett vs Purna Chandya Basak, (1921) L.R. 49 I.A. 100, applied.

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Civil Appeal Nos. 1491 and 1693 of 1971. Appeals by Special Leave from the Judgment and order dated the 13th January 1971 of the Calcutta High Court in I.T. Reference No. 192 of 1966. K. Kay and D. N. Gupta, for the Appellant in CA No. 1491/71 for respondent in C.A. 1693/71. Hardayal Hardy, B. B. Ahuja and section P. Nayar for Respondent in CA1491/71 and for Appellant in 1693/71. The Judgment of the Court was delivered by KHANNA, J. This judgment would dispose of two cross civil appeals Nos. 1491 and 1693 of 1971 which have been filed by special leave by the assessee M/s Tea Estate India (P) Ltd. and the Commissioner of Income tax West Bengal respectively against the judgment of the Calcutta High Court answering the following question referred to it under section 66(1) of the Indian Income tax Act 1922 (hereinafter referred to as the Act) partly in favour of the assessee and partly in favour of the revenue: Whether on the facts and in the circumstances of the case the balances in the under noted accounts are includible in the accumulated profits within the meaning of section 2(6A)(c) and if so to what extent? 148 Dibru Darang Taikrong Tea Tea Co. Ltd. Co. Ltd. Rs. Rs. Land A/o 19,30,374, 10,11,216/ Profit & Loss Account 16,69,285/ 18,73,125/ General Reserves and liabilities for taxation 3,50,799/ 2,243/ Reserve created on writing up the value of the assets of the ten estates 15,69,828/ 58,772/ The matter relates to the assessment year 1956 57, the corresponding accounting year for which ended on June 30, 1955. The assessee company held 52,350 shares out of the total issued shares of 54,600 in Dibru Darang Tea Co. Ltd (hereinafter referred to as DDT Co.) and 22,998 shares out of the total issued shares of 23,000 in Taikrong Tea Co. Ltd. (hereinafter referred to as TT Co.). DDT Co. and TT Co. were tea companies growing, manufacturing and selling tea. For this purpose, those two companies owned large tea estates consisting of land, building, plant and machinery. On August 11, 1947 the said tea companies sold their entire lea estates, including all the assets, to Brooke Bond Estate India Ltd. As a result of these sales, DDT Co. received a surplus of Rs. 17,l8,081 over the book value of its assets. Likewise, TT Co. received a surplus of Rs. 13,11,339 over the book value of its assets. The amount relating to the land of the tea estate of DDT Co. was Rs. 19,30,374 and that relating to TT Co. was Rs. l0,11,216. DDT Co. realized Rs. 2,12,313 less than their book value on the sale of the other assets. It may also be mentioned that in 1936 the assets of the two companies were revalued. On such revaluation the hook value of the assets of DDT Co. appreciated by an amount of Rs. l 5,69,828 and Those of TT Co. by an amount of Rs. 58,772. These amounts were carried to the respective reserves of the two companies. DDT Co. and TT Co. went into voluntary liquidation on october 29, 1954. On account of the liquidation of the two companies, the assessee company became entitled to receive Rs. 57,69,186 out of the total distributable assets of DDT Co. and Rs. 36,53,453 out of the total distributable assets of TT Co. During the relevant accounting period the assessee received Rs. 52,23,786 and Rs. 34,15,500 (in all Rs. 86,39,286) from the liquidators of DDT Co. and TT Co. respectively. On behalf of the assessee company, it was urged before the lncome tax officer that apart from Rs. 2,47,921 which had been assessed as capital gain under section 12B of TT Co. for the assessment year 1949 SO, no other amount could be included in the computation of the accumulated profits available for distribution under section 2(6A) (c) of the Act. The Income tax officer rejected this 149 contention and allowed only a deduction of Rs. 27,000 being payment on share premium account and included the balance of Rs. 86,11,986 (grossed up to Rs. 91,64,075) as the assessees dividend income under section 2(6A)(c) of the Act. On appeal the Appellate Assistant Commissioner allowed a further deduction of Rs. 1,77,964 representing pre incorporation advances in the case of TT Co. The Appellate Assistant Commissioner rejected all other contentions of the assessee including the contention that 60 per cent of the amounts appearing under the head balance of appropriation account in the balance sheets as also the general reserves and liabilities for taxation appearing in the books of the two tea companies should be excluded from the computation of accumulated profits. On further appeal before the Tribunal two main contentions were raised on behalf of the assessee: (1) that in determining the quantum of the accumulated profits the surplus arising from sale of land of the two tea estates as also the reserves created on the revaluation of the agricultural assets should be left out and (2) that only 40 per cent of the balance in the profit and loss account and the general reserves of the two companies should be included as only 40 per cent of these amounts had been assessed under the Act. Regarding the first contention the Tribunal observed: In the case before us since the lands of the two tea estates were utilised for producing and selling the tea it can not be said that the said assets could be termed as land from which the income derived was agricultural income. At best what can be said is that barring 40% of such income the balance was agricultural income. We must, therefore hold that only 40% of the profits derived on sale of the land of tea estates as also the reserves created on writing up the value of the assets of the land of the tea estates was referable to land from which income derived was agricultural income. To that extent therefore the total of the profit on sale of the land of tea estates and reserves created on revaluation were to be excluded in computing the accumulated profits for finding out the section 2(6A) (c) dividend. Dealing with the second contention of the assessee the Tribunal observed that the ratio of 60:40 as laid down in rule 24 of the Income tax Rules 1922 could not be applied for finding out the proportion of accumulated profits in a tea business and that profit whether capitalised or did not admit of such a bifurcation for determination of accumulated profits. General and taxation reserves having been included in the pool of distributable surplus could. in the opinion of the Tribunal only be held to be excess provisions out of the profit of the two tea companies which were not required to be paid out in discharge of any liability. The Tribunal accordingly held that balance left over after making the deduction indicated above from the total distributable pool, was accumulated profits of the two tea companies 150 and the share received by the assessee on distribution of such accumulated profits was dividend within the meaning. Of section 2(6A) (c) of the Act. Accumulated profits in the case of two tea companies immediately before the liquidation were determined as under: "DDT Co. 40% of (Rs. 19,30,374+Rs. 15,69,828)+the whole of (Rs. 16,69,285+Rs. 3,50,799)=Rs. 34,20,165. TT Co. 40% of (Rs. 10,11,216 Rs. 58,772) the whole of (Rs. 18,73,125 + Rs. 2,243)=Rs. 23,03,363". The Tribunal accordingly came to the conclusion that out of the distributable surplus an amount of Rs. 57,23,528 was attributable to accumulated profits and hence was dividend within the meaning of section 2(6A) (c) of the Act. The assessee s appeal was allowed to that extent. Both the assessee company as well as the Commissioner applied to the Tribunal for reference of certain questions arising from the order of the Tribunal to the Court. The Tribunal thereupon referred the question reproduced above in a composite reference to the High Court. Dealing with items 1 and 4 mentioned in the question the High Court held as under: "As both the learned counsel agree that the same treatment should be given to the reserves created on writing up the value of the assets as to the excess and/or profit realised on sale either of the lands or of the assets or the tea estates it should be sufficient to consider the case of such excess arising from the sale and or transfer by the two tea companies. Whether the excess of the price realised over the book value of the lands as shown in the land account balance and as envisaged in the question referred or whether the excess on the sale of the entire tea estates over the book value of the assets are to be considered for inclusion in the accumulated profits under section 2(6A)(c) there can be no doubt that such excess or profit is a realisation of capital rise and not profit of the business. As according to the decision of the Supreme Court in Short Brothers '(1) case unless such appreciation has been included in capital gains distribution thereof by the liquidator will not be deemed to be divided for the purpose of the Income tax Act we have to find out how much of such excess or profit has been included in the computation of capital gains of the two tea companies on the transfer of the tea estates in 1947. In his order the Appellate Assistant Commissioner has recorded that for the assessment year 1949 50 the assessment order on Dibru Darang Tea Company Ltd. showed that the com 151 pany was not liable to capital gains tax while the assessment order for that year of M/s. Taikrong Tea Co. Ltd. showed that a sum of Rs. 2,47,921 was brought under tax under the head of Capital gains. It must therefore be held that it is only the sum of Rs. 2,47,921 which could be included in accumulated profits for the purpose of determining the dividend under section 2(6A) (c). Mr. B. L. Pal contended that there was no conclusive finding in the order of the Appellate Assistant Commissioner as to the capital gains of the two tea companies in respect of the transfer of the tea estates and the proper determination of capital gains payable in respect thereof had not been established. We are unable to accept this contentions. Accordingly so far as the first and last items in the referred question are concerned the answer would be that only the sum of Rs. 2,47,921 was includible in the accumulated profits within the meaning of section 2(6A) (c) . Regarding items 2 and 3 in the question the finding of the High Court was as under: The balance in the profit and loss account is arrived at after deducting or providing for all out goings including the estimated liability for both income tax and agricultural income tax. Therefore the balance carried to the balance sheet is pure profit that is to say the commercial profit of the undertaking. We are unable to accept Mr. Rays contention that each item in the balance sheet contains in itself the proportion of the income attributable to the business activity and to the agricultural activity of the tea companies and must be distintegrated into its component parts at the time of inclusion in dividends. Tea companies carry on a business activity though such activity may include agricultural operation as part thereof. Overall excess of incomings over out goings as reflected in the balance of profit and loss account, would represent the commercial profits of the business undertaking of the tea companies and though a bifurcation is necessary for the purpose of assessment and imposition of tax no further bifurcation could be made once the balance of profit was finally determined of such balance it could not be said that a part represents agricultural income and the rest represents income from business. So far as the general and taxation reserve is concerned, Mr. Ray agrees that such reserve is usually built up out of the profits to meet future liabilities but contends that is in this case also such reserve had been built up of 60 per cent. agricultural profit such reserve should again be disintegration into the component parts. We are entirely unable to accept this contention As pointed out by Mr. Pal the Supreme Court in Girdhar das 's(2) case advocated disintegration of the amount distributed into two components namely, capital and accumulated profits. There is no scope for further distintegration of profits into its component parts. (1) 63 I.T.R.300 152 The amounts mentioned in terms 2 and 3 of the question were accordingly held to be wholly includible in the accumulated profits within the meaning of section 2(6A) (c) of the Act. Before dealing with the contentions advanced by the counsel for the parties it would be convenient to set out the relevant provisions of the Act. section 2(1) defines agricultural income to mean, inter alia "(a) any rent or revenue derived from land which is used for agricultural purposes and is either assessed to land revenue in the taxable territories or subject to a local rate assessed and collected by officers of the Government as such; (b) any income derived from such land by (1) agriculture or (ii) the performance by a cultivator or receiver of rent in kind of my process ordinarily employed by a cultivator or receiver of rent in kind to render the produce raised or received by him fit to be taken to market, or (iii)the sale by a cultivator or receiver of rent in kind of the produced raised or received by him in respect of which no process has been performed other than process of the nature described in sub clause (ii); (c). . "Capital asset in section 2(4A) means property of any kind held by an assessee whether or not connected with his business profession or vocation but does not include (1) . . . . (ii) . . . . (iii)any land from which the income derived is agricultural income. "Dividend" according to section ? (A) (c) includes any distribution made to the shareholders of a company on its liquidation to the extent to which the distribution is attributable to the accumulated pro fits of the company immediately before its liquidation whether capitalised or not. The explanation to clause 2(6A) reads as under: "Explanation. The expression `accumulated profits, wherever it occurs in this clause shall not include capital gains arising before the 1st day of April 1946 or after the 31st day of March 1948, and before the 1st day of April 1956. "Income" has been defined in section 2(C6) to include dividend. Total income has been defined in section 2(15) to mean the total amount of income profits and gains referred to sub section (1) of section 4 computed in the matter laid down in the Act. Section 3 153 provides inter alia that income tax shall be charged for a year in respect of the total income of the previous year of every individual and company. Section 4 relates to total income of a previous year of any person. According to clause (8) of sub section (3) of that section agricultural income shall not be included in the total Income chargeable to tax under section 3 of the Act. Section 6 enumerated the six heads of income to be: (1)salaries (ii) interest on securities (iii) income from property. (iv) profits and gains of business profession or vocation (v) income from other sources and (vi) capital gains. According to section 12(1A) income from other sources shall include dividends. Under section 12B as it stood at the relevant time capital gains tax shall be charged in respect of any profits or gains arising from the sale exchange relinquishment or transfer of a capital asset affected after the 31st day of March 1946 and before the 1st day of April 1948 and such profits and gains shall be deemed to be income of the previous year in which the sale, exchange relinqishment or transfer took place. Section 59 empowers the Central Board of Revenue subject to the control of the Central Government to make rules for carrying out the purposes of the Act. Indian Income tax Rules 1922 were framed in pursuance of that section. Rule 23 of the said rules provides for assessment of income which is partly agricultural and partly income chargeable to income tax. Rule 24 with which we are concerned reads as under: "Income derived from the sale of tea grown and manufactured by the seller in the taxable territories shall be computed as if it were income derived from business and 40 per cent. Of such income shall be deemed to be income profits and gains liable to tax. " There is a proviso to this rule but it is not necessary to reproduced the same. In appeal filed by the assessee company, its learned counsel Mr. Ray, has contended before us in respect of items 2 and 3 of the question that 60 per cent of the amounts mentioned in these items were agricultural income and as such were not income for the purpose of the Act. To that extent it is urged the amounts did not constitute accumulated profits within the meaning of section 2(6A)(c) of the Act. The High Court according to the contention was in error in holding to the contrary. The above contentions has been controverted by Mr. Hardy on behalf of the revenue and in our opinion is not well founded. In Inland Revenue Commissioners vs George Burrell(1) it was held that super tax was not payable on the undivided profits of past years and of the year in which the winding up of a company occurred were distributed among the shareholders, because in the winding up (1) 154 they had ceased to be profits and were assets only. It was further observed in Burrell 's case that the only thing the liquidator of a company in liquidation may do is to turn the assets into money and divide the money among the shareholders in proportion to their shares. Surplus of trading profit made in a particular year are distributable rateably among all the shareholders as capital and it is not right to built up the sums received by the shareholders into capital and income and thus disintegrate the sums received by the shareholders subsequently into component parts based on an estimate of what might possibly have been done but was not done. As the Indian Companies Act 1913. closely followed the scheme of the English Companies Act and the view expressed in Burrell 's case (supra) applied to the Indian Income tax Act a special definition of "dividend" was devised by the legislature by the enactment of the Income tax (Amendment) Act 7 of 1919 with a view to undo the effect of Burrell 's (supra) case. Clause (c) of sub section (6A) as originally enacted stood as follows: " `Dividend ' includes (c) any distribution made to the shareholders of a company out of accumulated profits of the company on the liquidation of the company: Provided that only the accumulated profits so distributed which arose during the six previous years of the company preceding the date of liquidation shall be so included. By the Finance Act 1955 the proviso to sub clause (c) of clause (6A) was omited. There was a further amendment made by the Finance Act,. 1956 and clause (c) to the amended section read as follows: " `Dividend ' includes (c) any distribution made to the shareholders of a company on its liquidation to the extent to which the distribution is attributable to the accumulated profits of the company immediately before its liquidation whether capitalised or not. As a result of the above distribution which is attributable to the accumulated profits of the company immediately before its liquidation is deemed to be dividend and as such liable to be taxed. Sixty per cent of the profits made by DDT Co. and TT Co. by sale of tea grown and manufactured by them were not liable to be taxed under the Act in view of rule 24 of 19?.2 Rules because they were to be treated as agricultural income of these two companies. The question with which we are concerned however is that even though 60 per cent of the said profits constitute agricultural income in the hands of DDT Co. and TT Co, once these profits got accumulated with those two companies did they answer to the description of accumulated profits as used in the definition of dividend in section 2(6A) (c) ? The answer to this question in our opinion should plainly be in the affirmative. We were unable to accede to the contention of Mr. Ray that as only 40 per cent of the profits which got 155 accumulated were liable to be taxed in the hands of DDT and TT companies under the Act and 60 per cent were not liable to be so taxed only 40 per cent of the amount of accumulated profits should be treated as accumulated profits for the purpose of section 2(6A) (c). The acceptance of the contention would necessarily postulate reading in section 2(6A) (c) the words accumulated profits as are liable to be taxed under the Act . The words as are liable to be taxed under the Act are not there in the definition and it would not in our opinion be permissible to so construe the clause as if these words were a part of that clause. There is also nothing in the language or context of that clause as would warrant such a construction. Accumulated profits would remain their character as such even though a part of them were not taxed as profits under the Act. It is pertinent to mention in this connection that we are concerned in the appeal of the assessee with items 2 and 3 of the question which relate to accumulated profits in the ordinary sense and not to accumulated profits arising out of capital gains which are dealt with by the explanation to section 2(6A) of the Act. There can also be no doubt that whatever amount has been distributed to the assessee company and is attributable to accumulate profits in items 2 and 3 mentioned in the question would constitute dividend in the hands of the assessee and the whole of the amount so received would be liable to be taxed as such. This is clear from the Constitution Bench decision of this Court in the case of Mrs. Bacha F. Guzdar, Bombay vs Commissioner of Income tax Bombay(1). The assessee in that case was a shareholder in certain tea companies. 60 per cent of whose income was exempt from tax as agricultural income under section 4(3) (viii) of the Indian Income tax Act. The assessee claimed that 60 per cent of the dividend income received by her on her shares in those companies was also exempt from tax as agricultural income. This claim was rejected and it was held that the dividend income received by the assessee was not agricultural income but was income assessable under section 12 of the Act. Agricultural income as defined in the Act according to that decision was intended to refer to revenue received by direct association with the land which is used for agricultural purposes and not by indirectly extending it to cases where that revenue or part thereof changes hands either by way of distribution of dividends or otherwise. Mr. Ray has assailed the correctness of the view taken by the Constitution Bench of this Court in the above decision and has submitted that the matter should be reconsidered. Apart from the fact that this Bench is bound by the decision of the Constitution Bench we find nothing in that decision as warrants reconsideration of the matter. We would therefore uphold the answer given by the High Court in respect of items 2 and 3 of the question. In appeal by the Commissioner of Income tax his learned counsel Mr. Hardy has submitted in respect of items 1 and 4 that as 60 per cent of the income from the land held by DDT Co. and TT Co. was to be treated as agricultural income in view of rule 24 of 1922 Rules (1) 156 the said land to the extent of only 60 per cent would not answer to the description of capital asset as defined in section 2(4A) of the Act. As 40 per cent of the income derived from that land was not agricultural income 40 per cent interest in that land according to the submission should be held to be capital asset for the purpose of section 2(4A) of the Act. Forty per cent interest in that land it is further submitted. would not be taken out of the definition of capital by virtue of clause (iii) of section 2(4A) and any appreciation in the value of the land to the extent of 40 per cent would constitute capital gain. As such gain arose during the period from April 1 1946 to March 31 1948 the same according to Mr. Hardy would answer to the description of accumulated profits as mentioned in the explanation to section (6A) of the Act. The above contention of Mr. Hardy, in our opinion is not well founded. Income which is realised by sale of tea by a tea company which grows tea on its land and thereafter subjects it to manufacturing process in its factory is an integrated income. Such income consists of two elements or components. One element or component consists of the agricultural income which is yielded in the form of green leaves purely by the land over which tea plants are grown. The second element or component consists of non agricultural income which is the result of subjecting green leaves which are plucked from the tea plants grown on the land to a particular manufacturing process in the factory of the tea company. Rule 24 prescribes the formula which should be adopted for apportioning the income realised as a result of the sale of tea alter it is grown and subjected to the manufacturing process in the factory. Sixty per cent is taken to be agricultural income and the same consists of the first element or component while 40 per cent represents non agricultural income and the same comprises the second element or component. We are fortified in the above conclusion by two decisions of this Court in the cases of Karimtharuvi Tea Estates Ltd. vs State of Kerala(1) and Anglo American Direct Tea Trading Co. Ltd. vs Commissioner of Agricultural Income tax, Kerala(2). In the case of Karimtharuvi Tea Estates Ltd. it was observed while dealing with the income derived from the sale of tea grown and manufactured by the seller in the context of rule 24: Of the income so computed 40 per cent is under rule 24 to be treated as income liable to income tax and it would follow that the other 60 per cent only will be deemed to be agricultural income within the meaning of that expression in the Income tax Act. In the case of Anglo American Direct Tea Trading Co. Ltd. the Constitution Bench of this Court held that income from the sale of tea grown and manufactured by the assessee is derived partly from business and partly from agriculture. This income Las to be computed as if it were income from business under the Central Income tax Act and the Rules made thereunder. Forty per cent of the income or com (1) (2) 157 puted is deemed to be income derived from business and assessable to non agricultural income tax. The balance of 60 per cent of the income so computed is agricultural income within the meaning of the Central Income tax Act. So far as the lands held by DDT Co. and TT Co. were concerned they yielded purely agricultural income in the shape of green tea leaves. Forty per cent of the income on sale of tea which was received by DDT Co. and TT Co. was not income from land. It was income which should be ascribed to manufacturing process to which the green tea leaves were subjected in the factories of those companies. As the lands held by DDT Co. and TT Co. yielded agricultural income it would allow that those lands did not constitute capital asset as defined in section (4A) of the Act. Clause (iii) appended to section 2(4A) expressly states that capital asset does not include any land from which income derived is agricultural income . Any gain arising from the transfer of such land would not constitute capital gain under the Act and consequently would not be liable to be taxed as such. The distribution; of that amount on the liquidation of the companies would also not partake of the character of dividend. It may be apposite in this context to refer to the case of First Income tax officer, Salem vs Short Brothers (P.) Ltd. (supra) wherein this Court dealt with the sale of a coffee estate by a company which went into liquidation was held by this Court that the capital appreciation ill respect of the lands for which the income was derived as agricultural income and was not to able in the hands of the company as capital gains would not of distribution be liable to be so taxed as dividend under section 12 of the Act. We therefore see no reason to interfere in the appeal filed by the Commissioner of Income tax with the answer given by the High Court in respect of items 1 and 4 or the question. It is the common case of the parties that items 1 and 4 share the same fate. As a result of the above we dismiss both the appeals. In view of the divided success we leave the parties to bear their own costs of the appeals.

The assessee company held certain shares in Dibru Darang Tea Co. Ltd. (D.D.T. Company) and Taikron Tea Company Ltd. (TT Company) . Both the Companies were companies growing, manufacturing and selling tea and owned large tea estates consisting of land, building plant, machinery etc. In 1947, both the said companies sold their entire tea estates including all assets to Brooke Bond Estate India Ltd. Consequently DDT Company received a surplus is Rs. 17,18,081/ over the book value of its assets. The amount relating to the land of DDT Company was Rs. 19,30,374/ and that relaung to the T.T. company was Rs. 10,11,216/ . Both the companies went into voluntary liquidation in 1954. On account of the liquidation of the two companies the assessee company became entitled to receive Rs. 57,69,186/ out of the total distributable assets of DDT Company and Rs. 36,53,453/ out of the total distributable assets of T.T. Company. Section 2(1) defines agricultural income. Section 2(4A) defines capital asset to mean property of any kind held by an assessee whether or not connected with his business, profession or vocation but does not include any land from which the income derived is agricultural income. It was defined to include any distribution made to the shareholders of a company on its liquidation to the extent to which the distribution is attributable to the accumulated profits of the company immediately before its liquidation, whether capitalised or not. Explanation provides that expression "accumulated profits" shall not include capital gain arising during certain periods. The income has been defined by section 2(6C) to include dividend. Section 2(3)(8) provides that; agricultural income shall not be included in the total income chargeable to tax under section 3 or the Act. Rule 23 provides for assessment of income which is partly agricultural income and partly income chargeable to income tax. Rule 24 provides that income derived from the sale of tea grown and manufactured by the seller in the taxable territories shall be computed as if it were income derived from business and 40 per cent or such income shall be deemed to be income, profits and gains liable to tax. The assessee contended before the Income Tax officer that apart from Rs. 2,47,921/ which had been assessed as capital gain under section 12B of Income Tax Act 1922 in respect of T.T. company, no other amount could be included in the computation of the accumulated profits available for distribution under section 2(6A)(c) of the Act. The Income Tax officer rejected the claim of the assessee. On an appeal, the Appellate Assistant Commissioner rejected the main claim of the assessee. On further appeal the Tribunal held as far as item 1 (land) and item 4 (reserve on revaluation) are concerned that since the lands of the two tea estates were utilised for producing and selling tea it cannot be said that the said assets were lands from which the income derived was agricultural income. At best, what could be said is that barring 40 per cent of such income the balance was agricultural income. As far as item 2 (profit and loss a/c) 12 833Sup CI/76 146 and item 3 (general reserve) are concerned, the Tribunal held that the ratio of 60 : 40 as laid down in rule 24 of the Income Tax Rules, 1922 could not be applied for finding out the proportion of accumulated profits in a tea business and that profits whether capitalised or not did not admit of such a bifurcation for the determination of accumulated profits. The Tribunal held that the general and taxation reserves were accumulated profits and the share received by the assessee company on the distribution of such accumulated profits was taxable as dividend within the meaning or section 2(6A) (c) of the Act. Both the assessee as well as Revenue approached the High Court in two references arising out of the judgment of the Tribunal. The High Court held: (1) Regarding item No. 1 and 4 the excess of the prices is not profit of the business, unless such appreciation has been included in the capital gains. The High Court arrived at certain figures of excess profit which was included in the computation of capital gains and held that only that figure was includible in the accumulated profits within the meaning of section 2(6A) (c). (2) Regarding items 2 and 3 the High Court held that the balance in the profit and loss account is arrived at after deducting or providing for all out goings including the estimated liability for both the income tax and agricultural income tax. Therefore, the balance carried to the balance sheet is pure profit, i.e. the accumulated profit. The High Court negatived the contention that each item in the balance sheet contains in itself the proportion of the income attributable to business activity and to the agricultural activity of the companies or that they must be disintegrated into 6 components parts at the time of inclusion in dividends. Tea companies carry on a business activity though such activity may include agricultural operation as part thereof. Overall excess of incomings over out goings as reflected in the balance of profit and loss account would represent the commercial profits of the business undertaking and though in bifurcation is necessary for the purpose of assessment and imposition of tax no further bifurcation could be made once the balance of profit was finally determined. In appeals filed by both the assessee and Revenue by special leave the assessee contended that 60 per cent of the amounts mentioned in items 2 and 3 were agricultural income and as such, were not income for the purpose of the Act. To that extent the said amount did not constitute accumulated profits within the meaning of section 2(6A) (c). Revenue contended that 10% of income derived in respect of item 1 not being agricultural should be held to be capital asset and, therefore, accumulated profits. Dismissing both the appeals, ^ HELD: (1) Clause 2(6A) (c) provides that dividend shall include any distribution made to the shareholders of a company on its liquidation to the extent to which the distribution is attributable to the accumulated profits of the company immediately before its liquidation whether capitalised or not. The proviso is, however, to the effect that only the accumulated profits so distributed which arise during the 6 previous year of the company proceeding the date of liquidation shall be so included. 60 per cent of the profits made by both the companies by sale of tea grown and manufactured by them were not liable to be taxed in view of rule 24. However, once those profits got accumulated with the two companies they became accumulated profits within the meaning of h. 2(6A)(c). The contention of the assessee that only 40 per cent of the profits which got accumulated were liable to be taxed and therefore only 40 per cent should be treated as accumulated profit for the purpose of 147 section 2(6)A) (c) cannot be accepted. I`he assessee wants to add to section 2(6A) (c) the following words: "as are liable to be taxed under the Act" It is not permissible for us to construe the clause by adding those words. [152 F G, 154 G H, 155 A B] (2) The decision of the case in Mrs. Bacha F. Guzdar Bombay vs Commissioner of Income Tax Bombay 27 I.T.R. 1, followed with approval. [155 E] (3) The contention of the Revenue that the land in question to the extent of 60 per cent would not answer the description of capital asset, and as 40 per cent of the income derived from that land was not agricultural income 40 per cent interest in that land should be held to be capital asset for the purpose of section 2(4A), is not well founded. The income which is realised by sale of tea by a tea company which grows tea on its land and thereafter subject is to manufacturing process in its factory is an integrated income consisting of agricultural and non agricultural components. Rule 24 prescribes the formula which should be adopted for apportioning the income realised as a result of the sale of tea after it is grown and subjected to manufacturing process in the factory. So far as the lands held by the company were concerned they yielded purely agricultural income in the shape of green tea leaves. 40 per cent of the income on sale of tea which was received by both the companies was not income from land. It was income which could be ascribed to manufacturing process to which the green tea leaves were subjected in the factories of those companies. As the lands held by both the companies yielded agricultural income it would follow that those lands did not constitute capital asset as defined in section 2(4A). Section 2(4A) expressly states that capital asset does not include any land from which income is derived as agricultural income. Any gain arising from the transfer of such land would not constitute capital under the Act and consequently would not be liable to be taxed as such. [155H, 156 A D, 157 B D]

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Civil appeal No.387(N) of 1981 . From the Judgment and order dated 11.2.1980 of the High Court of Calcutta in Appeal from Original order No. 588 & 594179. Gobind Das and R.P. Singh for the Appellant. O.P. Sharma, R.C. Gubrel and R.K. Sharma for the Respondents. The Judgment of the Court was delivered by SEN, J. This appeal by special leave raises a question as to whether the appellant upon his transfer from the North Eastern Railway, at his own request, to the South Eastern Railway was entitled under r. 312 of the Railway Establishment Manual, to be placed in the seniority list below the existing confirmed and officiating staff in the relevant grade and not below the temporary staff. Put very shortly, the essential facts are these. The appellant was holding the substantive post of a Clerk in the Commercial Department of the North Eastern Railway w.e.f. May 22, 1956 and had applied for his transfer to the South Eastern Railway in the same post. On October 15, 1958, he was transferred from the North Eastern Railway, at his own request, to the South Eastern Railway and was posted at the Sealdah Division on his existing pay and scale against an existing vacancy. In 1967, the seniority list of the Clerks in the Sealdah Division was prepared by the South Eastern Railway and in that list the appellant was placed below the temporary staff. Immediately upon his being placed below the temporary staff, the appellant made two representations, one dated March 4, 1967 and the other dated April 11, 1967, in the matter complaining that he could not be placed below the temporary staff, but without any avail. Finding that there was no redressal of the wrong done to him, the appellant sent a reminder to the Chief Personnel Officer by name dated December 21, 1973. The Chief Personnel Officer by his communication dated October 19, 1974, informed the appellant that his representation was rejected On April 30, 1975, the appellant moved the Calcutta High Court under article 226 of the Constitution for the issue of an appropriate writ, direction or order in the matter 21 of his inter se seniority, and the High Court issued a rule nisi. A During the pendency of that rule, respondents Nos. 7 to 45 arrayed in that petition whom the appellant considered to be junior to him were promoted to a higher post. On August 10, 1976, the appellant filed another petition under article 226 of the Constitution challenging their promotion. On the same day, the High Court issued a rule nisi and also directed that the South Eastern Railway would be at liberty to confirm respondents nos. 7 to 45 in their post of promotion but such confirmation would be subject to the result of the rule. In view of the interim order passed by the High Court, the Chief Personnel Officer by his letter dated October 10, 1976 clarified. "The above promotion orders arc issued on provisional basis subject to result of the rule obtained by Sri Arun Kumar Chatterjee, Clerk CCS (Refunds) Office, in the Hon 'ble High Court at Calcutta. " A learned Single Judge by his judgment and order dated February 9, 1979 following the decision of Anil Kumar Sen, J. in Lal Mohan Paul v The General Manager. Eastern Railway, Calcutta & Ors.(l) held that in pursuance of r. 312 the relative seniority of the appellant was governed by the Railway Board 's Circular No. 1565A dated January 31, 1950 and not by its subsequent circular dated December 31, 1966,. The learned Single Judge accordingly set aside the impugned order of the Chief Personnel Officer, South Eastern Railway dated October 7, 1974 and ordered that the Railway Administration should re fix his seniority below all permanent and officiating Clerks on the date of his transfer in the Sealdah Division of the South Eastern Railway but above the temporary Clerks in that Division. He further directed that the appellant would be entitled to promotion w.e.f. such date as he was eligible for such promotion according to the seniority so fixed. The General Manager, South Eastern Railway preferred an appeal under cl. 15 of the Letters Patent against the judgment of the learned Single Judge. A Division Bench of the High Court by its judgment dated February 11, 1980 while upholding the view expressed by the learned Single Judge as to the construction and effect of r. 312 of the Manual, held that the Circular No. 1565A (1) Civil Rule No. 620 (W)/70 dated April 23, 1974. 22 dated January 31, 1950 governed by the inter se seniority of the appellant. It however observed that due to inordinate delay on his part in moving the Court, there was no justification for interfering with the promotions already made of respondents nos. 7 to 45 and made the following direction: "In the circumstances, we do not think that we shall be justified in interfering with the promotions granted to the respondents. We, however, feel that the appellants should have placed the respondent No. I in the seniority list above the temporary staff. The Board 's circular may be given effect to in the case of the transfer which had taken place after the date of the said Circular, but before that date we find no justification why in the face of Rule 312 the respondent No. 1 should not have been given the proper security by placing him above the temporary staff. In our opinion. The respondent No. 1 should be placed immediately below the Remaining respondents in FMA 588 of 1979, the seniority list. 'I he judgment of the learned Judge is modified to the extent indicated above. " It accordingly modified the judgment and order of the learned Judge to the extent indicated above. We have set out the facts at some length. It would appear from these facts that there was no delay, much less inordinate delay, on the part of the appellant in filing the petition under article 226 of the Constitution for the protection of his right as to inter se seniority. Earlier, he had made three representations to the departmental authorities in the matter without any redress. If the attention of the learned Judges had been drawn to these facts, they would not have made the aforesaid modification. It is, however, argued that the order of posting on transfer communicated by the Chief Personnel Officer dated October 14, 1958 specifically stated that the seniority of the appellant would be counted from the date of his posting below all permanent and temporary Clerks. In his supple mentary rejoinder, the appellant has controverted this there is nothing on record to show that the said order of posting was ever communicated to him. Rule 312 of the Railway Establishment Manual reads as follows: 23 "Transfer on request Seniority of Railway Servants transferred on their own request from one Railway to another should be allowed below that of the existing confirmed/officiating railway servants in the relevant grade in the promotion group in the new establishment irrespective of the date of confirmation or length of officiating service of the transferred railway servant. " We may then set out the two circulars issued by the Railway Board explaining the purport and effect of r. 312. Circular No. 1565A dated January 31, 1950 was explanatory and, insofar as material, reads: "On transfer at the employee 's own request or to save his own interests his position should be at the bottom of the seniority list of all permanent, employees of his grade, if he is permanent, and at the bottom of the whole list of employees (both permanent and temporary) in his grade, if he is temporary. " The Railway Board 's subsequent circular dated December 31, 1966 sought to clarify that the term 'officiating ' in r. 312 includes temporary staff as well and that an employee transferred at his own request to a new establishment should be placed at the bottom of the seniority list in his relevant grade in that establishment. It Provides: "It has been brought to the notice of the Railway Board that the orders contained in their letter No. E55SR6/3 dated 19.5.55 have been interpreted by your administration so as to exclude temporary staff from the purview of the term officiating staff, occurring therein. The Board desire to point out that the term officiating ' occurring in Board 's letter dated 19.5.1955 includes temporary staff as well. That is to say that an employee transferred at his own request to a new establishment should be placed at the bottom of the seniority list in the relevant grade in that Establishment . " There can be no doubt on the terms of r. 312 of the Manual read with Railway Board 's Circular No. 1565A dated January 31, 1950 that the appellant having been transferred, at his own request, from one railway to another, had to be placed below all the existing 24 confirmed and officiating staff in the relevant grade, irrespective of the date of his confirmation or the length of his service. The appellant on the date of his transfer i.e. On October 15, 1958 was not governed by the Railway Board 's Circular dated December 31, 1966. In Lal Mohan Paul 's case, supra, Anil Kumar Sen, J. in a case where a railway employee was transferred on September 30, 1959, at his own request, from one railway to another held that he was governed by the Railway Board 's Circular No. 1565A dated January 31, 1950 and not by the subsequent circulars and therefore was entitled to be placed in the seniority list below the existing confirmed and officiating staff in the relevant grade and not below the temporary staff. We uphold the view expressed by Sen J. in Lal Mohan Paul 's case, supra. That apart, the Railway Board 's interpretation in the aforesaid Circular dated December 31, 1966, of the term 'officiating ' in r. 312 of the Railway Establishment Manual, as including both officiating as well as temporary staff, was apparently wrong. According to its ordinary connotation, the word 'officiating ' is generally used when a servant having held one post permanently or substantively, is appointed to a post in a higher rank, but not permanently or substantively while still retaining his lien on his substantive post i.e. Officiating in that post till his confirmation. Such officiating appointment may be made where there is a temporary vacancy in a higher post due to the death or retirement of the incumbent or otherwise In contrast, the word 'temporary ' usually denotes a person appointed in the civil service for the first time and the appointment is not permanent but temporary i.e. for the time being, with no right to the post. We find no justification for the attitude adopted by the Rail way Administration in depriving the appellant of his legitimate rights. Loss of seniority of a Government servant with consequent lose of promotional prospects, higher pay and emoluments is a matter of serious consequence to him. When the appellant by his representations drew the attention of the departmental authorities to the injustice done to him, it was their duty to have rectified the mistake and re fixed the seniority of the appellant. It was precisely to meet a situation of this kind that the Railway Board 's Circular dated October 16, 1964 was issued. To provides that if a person has been promoted but not on the date on which he should have been promoted due to some administrative error then the employee should be assigned correct seniority vis a vis his juniors 25 already promoted irrespective of the date of promotion. It further provides that the pay of such employee in higher grade on promotion will be fixed proforma at the stage which he would have reached if he had been promoted at the proper time. There was no reason for the Railway Administration to have deprived the appellant of the benefit of the aforesaid circular, particularly in view of the decision of Anil Kumar Sen, J. in Lal Mohan Paul 's case, supra. The result therefore is that the appeal must succeed and is allowed with costs throughout. The order passed by the Division Bench of the Calcutta High Court making a modification in the judgment of the learned Single Judge is set aside and the judgment and order of the learned Single Judge allowing the writ petition filed by the appellant is restored. M.L.A. Appeal allowed .

Rule 312 of the Railway Establishment Manual provides that seniority of railway servants transferred on their own request from one railway to another should be allowed below that of the existing confirmed officiating railway servants in the relevant grade. To explain the purport and effect of r. 312, the Railway Board ' issued a Circular No. 1565A dated January 31, 1950 which provided that on transfer at the employee 's own request his position should be at the bottom of the seniority list of all permanent employees of his grade, if he is permanent and at the bottom of the whole list of permanent and temporary employees if he is temporary. The Railway Board 's subsequent Circular dt. 31st Dec. 1966 sought to clarify that the term 'officiating ' in Rule 312 includes temporary staff as well. The appellant, who was holding a substantive post of a clerk in the Northern Eastern Railway was transferred on October 15, 1958 on his own request to The South eastern Railway and was posted at the Sealdah Division. He was however placed below the temporary staff, namely, respondents 7 to 45 in the seniority list of the clerks in the Sealdah Division prepared he the respondent Southern Eastern Railway in 1967. After rejection of his two representations in the year 1967 and a reminder to the Chief Personnel Officer dated December 21, 1973 against the wrong fixation of his inter se seniority, he filed a writ petition in the High Court on 30th April 1975 challenging the said seniority list. The learned Single Judge held that in pursuance of Rule 312, the relevant seniority of the appellant was governed by the Railway BOARD 'S Circular No. 1565A and not by its subsequent Circular dated December 31, 1966, and ordered the Railway Administration to refix his seniority below all permanent 19 ent and officiating clerks on the date of his transfer in the Sealdah Division, but above the temporary clerks in that Division with consequential benefits. On appeal by the respondent the Division Bench upheld the view of the learned single Judge but, observed that due to inordinate delay on the part of the appellant in moving the court, there was no justification for interfering with the promotions already made of respondents No. 7 to 45 and ordered that he should be placed immediately below the remaining respondents. Allowing the appeal, ^ HELD: (1) It would appear from the facts that there was no delay, much less inordinate delay, on the part of the appellant in filing the petition under article 226 of the Constitution for the protection of his right as to inter se seniority. In fact, he had made three representations in the matter but without any redress [22E F] (2) There can be DO doubt on the terms of r. 312 of the Manual road with Railway Board 's Circular No. 1565A dated January 31, 1950 that the appellant had to be placed below all the existing confirmed and officiating staff in the relevant grade, irrespective of the date of his confirmation or the length of his service. He was not governed by the Railway Board 's Circular dated December 31, 1966 on the date of his transfer. [23H; 24A] (3) According to the ordinary connotation, the word 'officiating ' is generally used when a servant having held one post permanently or substantively, is appointed to a post in a higher rank, but not permanently or substantively, while still retaining his lien on his substantive post i.e. officiating in That post till his Confirmation. In contrast, the word 'temporary ' usually denotes a person appointed in the civil service for the first time and the appointment is not permanent but temporary i.e. for the time being, with no right to the post. Therefore, the Railway Board 's interpretation in the aforesaid Circular dated December 31, 1966 of the 'officiating ' in r. 312 of the Railway Establishment Manual, as including both officiating as well as temporary staff, was apparently wrong. [24D E] (4) The Railway Board 's Circular dated October ],1964 also provides that if a person has been promoted not on the date on which he should have been promoted to some administrative error then the employee should assigned correct seniority vis a vis his juniors already promoted irrespective of the date of promotion and the the pay of such employee in higher grade on promotion be fixed proforma at the stage which he would have reached if he bad been promoted at the proper time Was no reason for the Railway Administration to have deprived the appellant of the benefit of the aforesaid circular, particularly in view of an earlier decision of the High Court in Lal Mohan Paul 's case. [24H; 25A B] Lal Mohan Paul vs The General Manager, Eastern Railway, Calcutta & Ors Civil Rule No. 620 (W)/70 dated April 23 1974 approved. 20

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No. 457 of 1972 (Under Article 32 of the Constitution of India) Soli J. Sorabji, section Rangarajan, Harish N. Salve, D .N. Mukharji, Ranjan Kukherjee, Udey K. Lalit, S.K. Nandi and section Parekh for the Petitioner. Dr. Shankar Ghosh, G.L. Sanghi, P. Chowdhary, C.S. Vaidyanathan, C.V. Subba Rao, for the Respondents. Mrs. A.K. Verma for the Intervener. The following Judgments of the Court were delivered: SABYASACHI MUKHARJI, J. I agree with Brother Venkata chaliah, that the contentions urged on behalf of the peti tioner in support of the challenge to the impugned legisla tions must fail and the writ petitions must be dismissed. I would, however, like to express my 553 views only on one aspect of the matter, which is common to this case as well as the writ petition No. 458/72, civil appeal No 4113/85 and writ petition No. 5(N)/74, i.e. the scope of judicial review of legislation where there is declaration in the legislation under article 31C of the Consti tution. In these writ petitions we are concerned with two legis lations, namely, the Indian Electricity (Assam Amendment Act, 1973, (Assam Act IX of 1973), and the Tinsukhia & Dibrugarh Electric Supply Undertakings (Acquisition) Act, 1973 (Act X of 1973). The main point which is significant in these writ petitions, is the extent and scope of judicial review of legislation where there is 'declaration under article 31 C of the Constitution, which enjoins that no law giving effect to the policy of the State towards securing all or any of the principles laid down, inter alia, namely, Arti cles 38, 39, 39A, 40, 41, 42, 43A, 44 to 48, 48A and 49 to 51 shall be deemed to be void on the ground that those are inconsistent or take away or abridge any of the rights conferred by Article 14 or 19, and further provides that no law containing a declaration that it is for giving effect to such a policy, shall be called in question in any court on the plea that it does not give effect to such a policy. The two legislations in question are covered by the declaration under Article 31C of the Constitution. The principal question which falls for consideration is, whether that declaration is justiciable and open to judicial review and the extent of that judicial review. Article 39(b) of the Constitution enjoins that the State in particular should direct its policy towards securing that the ownership and control of the material resources of the community are so distributed as to best subserve the common good and that the operation of the economic system does not result in concentration of wealth and means of production to the common detriment. See, in this connection, the observations of Ray J. as the learned Chief Justice then was, in Kesava nanda Bharati vs State of Kerala, at 45 1 452. Hence, in order to decide whether a Statute is within Article 31C, the Court, if necessary, may examine the nature and the character of legislation and the matter dealt with as to whether there is any nexus between the law and the principles mentioned in Article 39(b) and (c). On such an examination if it appears that there is no such nexus be tween the legislation and the objectives and the principles mentioned in Article 39(b) & (c), the legislation will not enjoy the protection of Article 31C. In order to see the real nature of the Statute, if need be, the court may also tear the veil. 554 Justice Jaganmohan Reddy in the same decision at page 530 of the report reiterated that a law not attracting Article 31C cannot be protected by a declaration by just mixing it with other laws really failing within Article 31 C with those that do not fall under that Article. Hence, in such a case the Court will always be competent to examine the true nature and character of the legislation in the particular instance and its design and the primary matter dealt with its object and scope. In this connection, reli ance was placed on the observations of the Privy Council in Charles Russel vs The Queen, [1882] VII AC 829 at 838 840. Justice Palekar in the same decision at page 63 1 also reiterated that if the court comes to the conclusion that the object of the legislation was merely a pretence and the real object was discrimination or something other than the object specified in Article 39(b) and (c), Article 31C would not be attracted and the validity of the Statute would have to be tested independently of Article 31C. Whenever a question is raised that the Parliament or the State legislature have abused their powers and inserted a declaration in a law for not giving effect to securing the Directive Principles specified in Article 39(b) & (c), the court can and must necessarily go into that question and decide. See the observations of Justice Mathew in Kesavanan da Bharati 's case (supra) at page 855 of the report. If the court comes to the conclusion that the declaration was merely a pretence and that the real purpose of the law is the accomplishment of some object other than to give effect to the policy of the State towards securing the Directive Principles as enjoined by Article 39(b) & (c), the declara tion would not debar the court from striking down any provi sion therein which violates Articles 14, 19 or 31. In other words, if a law passed ostensibly to give effect to the policy of the State is, in truth and substance, one for accomplishing an unauthorised object, the Court would be entitled to tear the veil created by the declaration and decide according to the nature of the law. Also see pages 851 & 856 of the report. Justice Beg, as the learned Chief Justice then was, at pages 884 885 of the report reiterated that a colourable piece of legislation with a different object altogether but merely dressed up as a law intended for giving effect to the specified principles would fail to pass the test laid down by the first part, and the declara tion by itself would not preclude a judicial examination of the nexus, so that the courts can still determine whether the law passed is really the one covered by the niche carved out by Article 31C or merely pretends to be so protected by parading under cover of the declaration. Justice Dwived at page 934 of the report said that the Court still retains power to determine whether the law has relevancy to the distribution of the ownership and 555 control of the material resources of the community and to the operation of the economic system. If the Court finds that the law has no such relevancy, it can declare the law void. The declaration cannot be utilised as a clog to pro tect law bearing no relationship with the objectives men tioned in the two clauses of Article 39. With respect, I am inclined to agree with the observa tions of Justice Chandrachud, as the learned Chief Justice then was, at page 996 of the said report that the declara tion under Article 31 C does not exclude the jurisdiction of the Court to determine whether the law is for giving effect to the policy of the State towards securing the principles specified in Article 39(b) & (c). Chief Justice Chandrachud in Minerva Mills Ltd. vs Union of India, ; at 261 observed that the clear intendment of Article 31C is that the power to enquire 'into the question whether there is a direct and reasonable nexus between the provisions of a law and a Directive Principle can not confer upon the courts the power to sit on judgment over the policy itself of the State. At the highest, courts can, under Article 31C, satisfy themselves as to identity of the law in the sense whether it bears a direct and reasona ble nexus with the directive principles. If the court is satisfied as to the existence of such nexus, the inevitable consequence provided for by Article 31C must follow. He recorded that all the 13 Judges in Kesavananda Bharati 's case (supra) agreed. The only question open to judicial review under Article 31 C is whether there is a direct and reasonable nexus between the impugned law and the provisions of Article 39(b) & (c). Reasonableness is evidently regard ing the nexus and not regarding the law. Justice Bhagwati, as the learned Chief Justice then was, reiterated at pages 337 338 of the report that if the Court finds that the law though passed seemingly for giving effect to a Directive Principle is, in pith and substance, one for accomplishing an unauthorised purpose unauthorised in the sense of not being covered by any Directive Principle, such law would not have the protection of the amended Article 31C, which does not give protection to a law which has merely some remote or tenuous connection with a Directive Principle. What is necessary is that there must be a real and substantial connection and the dominant object of the law must be to give effect to the Directive Principles. Also see the observations of this Court in Sanjeev Coke Mfg. Co. vs Bharat Coking Coal Ltd. & Anr., ; at 1020. 556 Looked at from this point of view, it cannot be said that the principles of colourable legislation would not be applicable. If it was demonstrated that there was no direct and reasonable nexus between these two impugned laws and the principles as enshrined under Article 3 l(b) & (c) of the Constitution, then that would have been colourable legisla tions and would have been bad on that score. It was contended on behalf of the petitioner by Mr. Sorabji as well as Mr Rangarajan that in order to bye pass 'the payment of compensation for acquisition of property of the petitioner in negotiations the device of the impugned Acts was envisaged. In that context, the substitution of the book value in place of market value was, therefore, depriva tion of property and is illusory and would amount to taking away of ' property without compensation. I do not and cannot agree. It is indisputed that the electric energy generated by the supplier petitioner compa nies constitutes material resources of the community within the scope and meaning of Article 39(b), and having regard to the true nature and the purpose of the legislations, reading the legislations entirely the object of the legislations have a direct and reasonable nexus with the objective of distributing the material resources so as to subserve the common good. The determination of value thereof and the substitution of the bookvalue in place of market value, are only methods for such acquisition and do not disclose the true nature and character of the legislation, but are inci dental provisions thereof. If that is the position then it is incorrect to say that what was acquired, was not the material resources but choses in action. The true nature and character of the legislations in. question was to acquire the material resources, namely, the electric energy for better supply and distribution. In that view of the matter the principles of the decision of the Division Bench of the Calcutta High Court in Bihar State Electricity Board & Ors. vs Patna Electricitv Supply Co. Ltd., would have no scope of application to this case. A Constitution Bench of this Court in State of Tamil Nadu & Ors. vs L. Abu Kavur Bai & Ors., has expressed the view that the Act giving effect to Article 39(b) & (c) is pro tected if a reasonable nexus is established. In that view of the matter, I agree having regard to the true nature and character of the legislations that the impugned legislations are not colourable legislations in the sense that there was no direct and reasonable nexus with Article 31(b) & (c) of the Constitution. 557 On the other aspects of the matter, I agree with re spect, with the conclusion indicated in the judgment of Justice Venkatachaliah. VENKATACHALIAH, J. 1. In these two writ petitions invok ing Article 32 of the Constitution of India, the Tinsukia Electric Supply Company Limited and the Dibrugarh Electric Supply Company Limited, which are licensees under the 19 10 for the supply of electricity within the areas of the municipal boards of Tinsukhia and Dibrugarh towns respectively, in the. State of Assam and the share holder Managing Directors of the two companies assail the constitutional validity of the Indian Electricity (Assam Amendment) Act, 1973, and of the Tinsukia and Dibrugarh Electric Supply Undertaking (Acquisition) Act, 1973. By the latter enactments, the undertakings of the two companies were sought to be acquired so as to vest them in the Govern ment with effect from 27.9. The petitioners also urge, in the petitions, a challenge to the validity of the Twentyfourth and Twenty fifth Amend ments to the Constitution. This part of the petition, in view of the subsequent pronouncements of this court on these amendments, does not survive. The petitioner companies are Public Limited Companies registered under the Indian Companies Act, 1913, and are existing companies under the with their registered offices at Tinsukhia and Dibrugarh respectively in the State of Assam. The two companies, Tinsukhia Electric Supply Company Ltd., and the Dibrugarh Electric Supply Company Ltd. hereinafter referred to respectively as the 'Tinsukhia Co. ' and 'Dibrugarh Co. ' were granted 'licences under the provisions of the ( 1910 Act for short) for supply of electricity within the respective licenced areas viz. of the Tinsukhia and Dibru garh Municipal Boards. The 'Dibrugarh Company ' was granted the 'Dibrugarh Electricity Licence, 1928 ' on terms and conditions particularised in the grant, incorporating, inter alia, an option to the State to purchase the undertaking on the expiration of 50 years from 13.2.1928 the date of com mencement of the licence and thereafter on the expiration of every subsequent period of twenty years. The Tinsukhia Company was similarly granted the 'Tinsuk hia Electricity Licence, 1954 ', incorporating, inter alia, a condition as to the option exercisable by the State of Assam to purchase the electricity undertaking of the licencee on the expiration of 20 years from 21.7. 1954, the date of commencement of the licence, and thereafter on 558 the expiration of every subsequent decennial period. However, by two Ordinances, namely, The Indian Elec tricity (Assam Amendment) Ordinance, 1972: (Assam Ordinance VII, 1972) and the Tinsukhia & Dibrugarh Electricity Supply Undertakings (Acquisition) ordinance, 1972, (Assam Ordinance VIII of 1972) promulgated by the Governor in exercise of his legislative powers under Article 2 13 of the Constitution, the Electricity Supply Undertakings of the two companies were acquired by, and stood vested in, the Government with effect from 23.30 hrs. on 27.9.1972. Possession and control of the two undertakings were, accordingly, taken over by the Government of Assam that day. The two ordinances were subse quently replaced by the two corresponding legislative enact ments viz., the Indian Electricity (Assam Amendment) Act, 1973, (Assam Act IX, 1973) and the Tinsukhia & Dibrugarh Electric Supply Undertakings (Acquisition) Act, 1973, (Assam Act, X of 1973). At the time of filing of the writ petitions the two Ordinances had not been replaced by the legislative meas ures. However, after the coming into force of the two legis lative enactments, with retrospective effect from:the date of promulgation of the earlier ordinances, petitioners sought, and were granted by an order of this Court dated 18.12.1973, leave to amend the petitions so as to direct the challenge against the enactments. An advertence, though brief, to the factual anteced ents leading upto to the promulgation of the Ordinances and to certain earlier steps taken by the State Government to acquire the said undertakings, first by negotiations, and later by exercise of the option to purchase, is necessary in order to put the grounds of challenge in their proper per spective. Respondent No. 4 i.e. the Assam State Electricity Board, it would appear, had been expressing its intention to take over the undertaking of the Tinsukia Co. by private negotia tions even from the year 1964. Pursuant to and in implemen tation of this proposal the Board had constituted a commit tee of 3 members for assessing the value of the assets of the Tinsukhia 's undertaking. On the valuation so made and the inventories so prepared, the Board, on 27.3.1970, in formed the Tinsukia Co. that the Board had approved the valuation of the assets of the undertaking at Rs.30,54,246, excluding, the value of the land, whose value was later estimated at Rs.2,40,000. By letter dated 4.3.1971, the Chairman of the Assam State Electricity Board 559 informed Tinsukia Co., that the company should immediately signify and communicate its acceptance of the proposal to transfer the undertaking to the Board at the valuation of Rs.33,00,000. The company, appears to have tarried and did not signify and communicate its immediate and unqualified acceptance of the offer; but appears to have had some coun ter proposal in mind and, in the expectation of pursuading the Board to its view, requested the Chairman of the Board to visit Tinsukia for holding further discussions in the matter of valuation of the Undertaking. Thereafter the Chairman along with the officers of the Board visited Tinsu kia sometime in June, 1971, and held discussion with the company. The company avers that pursuant to these discus sions, the Executive Engineer of the Board was asked by the Chairman to prepare a fresh inventory as on 31.10.1971 in collaboration with the company. However, the Secretary of the Board sent a communication dated 10.12.1971 to the company to the effect that as the company had not conveyed its concurrence to the offer con tained in the Board 's letter dated 25.3.1970 the said offer be treated as withdrawn. Thereafter, the Board issued the notice dated 15/23 May 1972 to the company conveying the Board 's intention to exercise its option of purchasing the undertaking under Section 6(1) of the 1910 Act read with clause 12(iv) of the licence on the expiration "the term of the licence" and, accordingly, required the company to sell the undertaking to the Board on the expiration of 21.9.1974 when the 20 year period of the licence would come to an end. In response to this notice, the company sent its communica tion dated 17.8.1972 seeking confirmation of its expectation that the purchase price for the statutory sale would be determined in accordance with the provisions of section 7A of the 1910 Act and that such price would also be tendered to the company on or before the date of taking over. Nothing further appears to have happened pursuant to this notice to purchase. But, as stated earlier, the two Ordinances were promulgated on 27.9.1972 for the compulsory acquisition of the undertaking of the company. So far as the Dibrugarh company is concerned, similar negotiations for purchase by private negotiations had been initiated and the Chief Engineer of the Board accompanied by the Finance and Accounts Member of the Board visited Dibru garh on 27.1.1965 for discussions as to the valuation of the undertaking. Nothing moved in the matter for some years. However, in the communication dated 3.8.1970 addressed by the Secretary to Government of Assam, Power (Electricity), Mines and Minerals Department, to the Secretary of the 560 Board, it was reiterated that Government had decided that the undertaking of the Dibrugarh Co. should be taken over by negotiation. While matters remained thus, the company 's undertaking was taken over on 27.9.1972 pursuant to the two ordinances promulgated by the Governor. We may briefly turn to the provisions of the two enactments which have since replaced the two Ordinances: The amendments made to Sections 5, 6 and 7A of the , by the Indian Electricity (Assam Amendment) Act, 1973, are substantial and far reach ing. Section 2 of the Amending Act amended Section 5 of the Principal Act by substituting the expression "the purchase price of the undertaking" in sub sec. (2) of Section 5 by the expression 'an amount '. Section 3 of the Amending Act which amended sub Sec. (7) of Section 6 of the Principal Act substituted the words 'the purchase price ' occurring in sub Sec. (7) of Section 6 by the words "an amount". The amendments brought about by Section 4 of the Amending Act to Section 7 A of the Principal Act were equally substantial. Section 7A of the Principal Act, ' it may be recalled, pro vided that where an undertaking of a licensee, not being a local authority, was sold under sub Sec. (1) of Section 5 the purchase price of the undertaking shah be the market value of the undertaking at the time of purchase, or where the undertaking had been delivered before the purchase under sub Sec. (3) of Sec. 5, at the time of delivery of the undertaking, and that if there was any difference of dispute regarding such purchase price, the same shall be determined by arbitration. But Section 4 of the Amending Act substitut ed an entirely different provision in the place of the old section 7 A. It substituted "book value" in place of "mar ket price". Sections 5(2), 6(7) and 7 A, of the Principal Act after their amendment read thus: "Section 5(2): Where an undertaking is sold under sub section (1) the purchaser shall pay to the licencee an amount in accord ance with the provisions of sub sections (1) and (2) of Section 7 A." Sub sec. (7) of Section 6, after the amend ment, reads: Section 6(7): Where an undertaking is purchased under this section, the purchaser shall pay to the license an amount determined in accordance with the provisions of sub sections (1), (2) and (3) of Section 7A. 561 Section 7A reads: "7 A. Determination of amount pay able. (1) where an undertaking of a licensee is sold under sub section (1) of Sec. 5 or purchased under Sec. 6, the amount payable for the undertaking shall be the book value of the undertaking at the time of purchase or where the undertaking has been delivered before the purchase under sub Section (3) of Sec. 5, at the time of delivery of the undertaking. (2) The book value of an undertaking for the purpose of sub section (1) shall be deemed to be the depreciated book value as shown in the audited balance sheet of the licensee under the law for the time being in force, of all lands, buildings, works, materi als and plant of the licensee, suitable to and used by him for the purpose of the undertak ing, other than (i) a generating station declared by the licensee not to form part of the undertaking for the purpose of purchase, and (ii) service lines or other capital works or any part thereof which have been construct ed at the expense of the consumers, but with out any addition in respect of compulsory purchase or of goodwill or any profit which may be or might have been made from the under taking or of any similar consideration. (3) Notwithstanding anything contained in any licence or any instrument, order agreement or law for the time being in force in respect of any additional sum by whatever name may it be called, payable to a licensee for compulsory purchase, the licensee shall be entitled only to a solatium of ten per centum of the book value as determined under sub sections (1) and (2) for compulsory purchase of his undertaking under Sec. (4) No provision of any Act for the time being in force including the other provi sions of this Act and of any rules made there under or of any instrument including licence have effect by virtue of any of such Acts or any rule made thereunder, shall, in so far as it is inconsistent with any of the provisions of this section, have any effect. " It is material to point out that sub section (3) of Section 1 of the Amending Act provides that the Amending Act shall be deemed to 562 have come into force on 27.9.1972, which was the date of promulgation of the earlier Ordinance. We may now notice some of the material provisions of the Acquisition Act i.e. Assam Act X of 1973. Section 1(3) provides that the Act shall be deemed to have come into force on 27.9.1972. Clauses (f), (h), (j) & (l) of the interpretation clause (Sec. 2) may be noticed: 2(f) 'Fixed Assets ' includes works, spare parts, stores, tools, motor and other vehicles, office equipment and furniture; 2(h): 'Licensee ' means the Tinsukia Electric Supply Company Ltd. and/or the Dibrugarh Electric Supply Company Private Ltd., as the case may be; 2(j): 'Undertaking ' means the Tinsukia Elec tric Supply Undertaking owned and managed by the Tinsukia Electric Supply Company Ltd., and/or the Dibrugarh Electric Supply Undertak ing owned and managed by the Dibrugarh Elec tric Supply Company Private Ltd., as the case may be; 2(1): 'Works ' includes electric supply lines and any lands, buildings, machinery or appara tus required to supply energy and to carry into effect the object of a licence granted under the Electricity Act; Section 3(2) provides: 3(2): Any notice given under any of the provisions of the Electricity Act or the Electricity Supply Act to the licensee for the purchase of the undertaking and in pursuance of which notice the undertaking has not been purchased before the commencement of this Act, shall lapse and be of no effect. Explanation: There shall be no obliga tion on the part of the Government or the Board to purchase any undertaking in pursuance of any notice given as aforesaid, nor shall the service of such notice ' be deemed to prevent the Government from taking any pro ceeding de novo in respect of the undertaking under this Act. Section 4 provides: 4. Vesting date. The Tinsukia and Dibrngarh Electric Sup 563 ply Undertakings shall be deemed to be trans ferred to and shall vest in the Government, on the 27th day of September, 1972, at 11.30 P.M. Section 5 provides for the transfer of the undertaking so acquired by Government to the Board. Section 6 provides for the gross amount pay able to the licensee. Gross amount payable to Licensee. (1) The gross amount payable to a licensee shall be the aggregate value of the amounts specified below: (i) the book value of all completed works in beneficial use pertaining to the undertaking and taken over by the Government (excluding works paid for by consumers) less depreciation calculated in accordance with Schedule I; (ii) the book value of all works in progress taken over by the Government, exclud ing works paid for by consumers or prospective consumers; (iii) the book value of all stores including spare parts taken over by the Gov ernment and in the case of used stores and spare parts, if taken over, such sums as may be decided upon by the Government; (iv) the book value of all other fixed assets in use on the vesting date and taken over by the Government less depreciation calculated in accordance with Schedule I; (v) the book value of all plants and equipments existing on the vesting date, if taken over by the Government, but no longer in use owing to wear and tear or to obsolescence, to the extent such value has not been written off in the books of the licensee less depreci ation calculated in accordance with Schedule I; (vi) the amount due from consumers in respect of every hire purchase agreement referred to in Sec. 7(i)(ii) less a sum which bears to the difference between the total amount of the instalments and the original cost of the material or equipment, the same proportion as the amount due bears to the total amount of the instalments; 564 (vii) any amount paid actually by the licensee in respect of every contract referred to in Section 7(i)(iii). Explanation The book value of any fixed asset means its original cost and shall com prise (i) the purchase price paid by the licensee for the asset, including the cost of delivery and all charges properly incurred in erecting and bringing the asset into benefi cial use as shown in the books of the under taking; (ii) the cost of supervision actually incurred but not exceeding fifteen per cent of the amount referred to in paragraph (i); Provided that before deciding the amounts under this subsection, the licensee shall be given an opportunity by the Govern ment of being heard, after giving him a notice of at least 15 days therefor. (2) In addition a sum equal to 10 per cent of the amounts assessed under Clauses (i) to (iv) of sub section (1) shall be paid to the licensee by the Government. (3) When any asset is acquired by the licensee after the expiry of the period to which the latest annual accounts relate, the book value of the asset shall be such as may be decided upon by the Government; Provided that before deciding the book value of any such asset, the licensee shall be given an opportunity by the Government of being heard after giving him a notice of at least 15 days therefor. Section 7 provides: 7. Vesting of undertakings. (1) The property, rights, liabilities and obligations specified below in respect of the undertaking shall vest in the Government of the vesting date; (i) all the fixed assets of the licensee and all the documents relating to the under taking; 565 (ii) all the rights, liabilities, and obligations of the licensee under hire pur chase agreements, if any, for the supply of materials or equipment made bona fide before the vesting date; (iii) all the rights, liabilities and obligations of the licensee under any other contract entered into bona fide before the vesting date, not being a contract relating to the borrowing or leading of money, or to the employment of staff. (2) All the assets specified in sub Section (1)(i) shall vest in the Government free from any debts, mortgages or similar obligations of the licensee or attaching to the undertaking; Provided that such debts, mortgages or obligations shall attach to the amount payable under this Act for the assets. (3) In the case of an undertaking which vests in the Government under this Act, the license granted to it under part II of the Electricity Act shall be deemed to have been terminated on the vesting date and all the rights, liabilities and obligations of the licensee under any agreement to supply elec tricity entered into before that date shall devolve or shall be deemed to have devolved on the Government; Provided that where any such agreement is not in conformity with the rates and condi tions of supply approved by the Government and in force on the vesting date, the agreement shall be voidable at the option of the Govern ment. (4) In respect of any undertaking to which Sec. 4 applies, it shall be lawful for the Government or their authorised representa tive on and. after the vesting date, after removing any obstruction that may be or might have been offered, to take possession of the entire undertaking, or as the case may be the fixed assets and of all documents relating to the undertaking which the Government may require for carrying it on. (5) All the liabilities and obliga tions, other than those vesting in the Govern ment under sub Sections (1) and (3), shall continue to be the liabilities and obligations of the licensee, after the vesting date. Explanation. All liabilities and obligations in respect of 566 staff, taxes, provident fund, employees ' state Insurance, Industrial disputes and all other matters, upto and including the vesting date, shall continue to be the liabilities and obligations of the licensee, after the vesting date. Section 9 provides: 9. Deductions from the gross amount. The Government shall be entitled to deduct the following sums from the gross amount payable under this Act to a licensee (a) the amount, if any, already paid in ad vance; (b) the amount if any, specified in Sec. 8; (c) the amount due, if any, 'including interest thereon, from the licensee to the Board, for energy supplied by the Board before the vesting date; (d) all amounts and arrears of interest, if any thereon, due from the licensee to the Government, (e) the amount, if any, equivalent to the loss sustained by the Government by reason of any property or rights belonging to the undertaking not having been handed over to the Government, the amount of such loss being deemed to be the amount by which the market value of such property or rights exceeds the amount payable therefor under this Act, to gether with any income which might have been realized by the Government, if the property or rights had been handed over on the vesting date; (f) the amount of all loans due from the licensee to any financial institutions consti tuted by or under the authority of the Govern ment and arrears, or interest, if any, there on; (g) all sums paid by consumers by way of security deposit and arrears of interest due thereon on the vesting date, in so far as they have not been paid over by the licensee to the Government, less the amounts which according to the books of the licensee are due from the consumers to the licensee for energy supplied by him before that date; (h) all advances from consumers and prospec tive consum 567 ers, and all sums which have been or ought to be set aside to the credit of the consumers ' fund, in so far as such advances or sums have not been paid over by the licensee to the Government; (i) the amounts remaining in Tariffs and Dividends Control Reserve, Contingencies Reserve and Development Reserve, in so far as such amounts have not been paid over by licen see to the Government; (j) the amount, if any, as specified in Ss. 11(2) and 11(3): (k) the amount, if any, relating to debts, mortgages or obligations as mentioned in proviso to sec. 7(2); Provided that before making any deduc tion under this section, the licensee shall be given a notice to show cause against such deduction, within a period of fifteen days from the date of receipt of such notice. Section 10 enables the Government to appoint, by order in writing, a person having adequate knowledge and experience in matters relating to accounts as Special Officer to assess the net amount payable under this Act, after making the deductions enumerated in section 9. Section 20 provides: 20. Arbitration. (1) Where any dispute arises in respect of any of the matters speci fied below, it shall be determined by an arbitrator appointed by the Government, who shall be a sitting or retired District or High Court Judge (a) whether any property belonging, or any right, liability or obligation attaching to the undertaking, vests in the Government; (b) whether any fixed asset forms part of the undertaking; (c) whether any contract or hire pur chase agreement or other contract referred to in SEC. 7(1)(ii) or (iii) has been entered into bona fide or not; (d) whether any agreement to supply electricity entered into by the licensee prior to the vesting date is of the nature referred to in proviso to section 7(3). 568 (2) Subject to the provisions of this section, the provisions of the (Central Act 10 of 1940) shall supply to all arbitrations under this Act. Section 23 of the Act incorporates a declaration to the effect that the legislation is for giving effect to the policy of the State to secure the principle of State Policy contained in Article 39(b) of the Constitution of India. The two legislations, one amending the provisions of Sections 5(2) 6(7) and 7 A of the , and the other providing for the acquisition of the two undertakings are challenged by the petitioner on several grounds, the principal attack, however, being that the legislations, brought forth, as they were, in the wake of the private negotiations and the exercise of the option to purchase, are not bona .fide, but constitute a mere colour able exercise of the legislative power and that, at all events the real objects of the two legislations have no direct and reasonable nexus to the objects envisaged in clause (b) of Article 39 of the Constitution and that a careful and critical discernment of the context in which the legislation was brought forth would lay bare before the judicial eye that what was sought to be acquired was not the "undertakings" of the two companies but really the differ ence between the "market value" of the undertakings which the State has agreed, under the private treaties, to pay and what, in any event, the State was obliged to pay under the provisions of Section 7A, as it then stood on the one hand and the "Book Value" of the undertaking, which the law seeks to substitute on the other. If the protective umbrella of Article 31 C is, thus, out of the way, the 'amount ' payable under the impugned law, it is urged, would be illusory even on the judicially accepted tests applied to Article 31(2) as it then stood. The validity of some of the specific provi sions of the acquisition law which excluded certain items from valuation and envisaged and authorised certain deduc tions in the amount are also assailed. These writ petitions were heard along with a batch of writ petitions, viz, WP Nos. 5, 14, and 15 of 1974, where the constitutionality of an analogous statute of the State of Tamil Nadu was assailed by the companies whose undertak ings were similarly sought to be acquired and civil appeal No. 243 of of 1985 and C.A. 4113 of 1985 arising out of the Judgment, dated 20.7.1984, of the High Court of Bombay striking down certain amendments to the , made by the Maharashtra State Legislature in the matter of statutory purchase of some of the private 569 electricity supply undertakings in the State of Maharashtra. The three batches of cases arising from Assam, Tamil Nadu and Maharashtra were heard together as there were certain aspects common to them. However, in view of the distinctiveness and particularities of the facts of the cases and the situational variations even in respect of the legal context in which questions arise for decision, the three batches of cases are disposed of by separate Judg ments. The present Judgment disposes of the challenge made to the Assam Legislation. We have heard Shri Soli J. Sorabji, learned Senior Advocate, and Shri Harish Salve, learned Advocate, for the petitioner in W.P. 457 of 1972 and Sri Rangarajan, learned Senior AdVocate for the petitioner in W.P. 458 of 1972 and Dr. Shankar Ghosh, learned Senior Advocate, for the State of Assam and Sri G.L. Sanghi, learned Senior Advocate for the Assam State Electricity Board and its authorities. On the contentions urged at the hearing, the points that fall for consideration in the writ petitions admit of being formulat ed thus: (a) That the declaration in Sec. 23 of Assam Act X 1973 is invalid as the impugned Act has no reasonable and direct nexus to the principles in Article 39(b) of the Constitu tion and is merely a cloak which the law is made to wear to undo the legitimate obliga tions arising out of the intended statutory sale of the undertakings and, accordingly, Article 31 C is not attracted. That, at all events, not every provision of a statute is entitled to the protection of Article 31 C but only those provisions which are basically and essentially necessary for giving effect to the principle in Article 39(b) and that, accordingly, the provisions in the impugned law relating to the determination of the amount do not attract Article 31 C. (b) That in effect and substance the law is not one for the acquisition electricity undertakings but is merely one to acquire a 'chose in action ' and to extinguish the legal rights of the Tinsukhia Co. for the difference between the "market price" of the undertakings which the State was obliged to pay under the intended statutory purchase and the "Book Value" to which the liability is sought to be limited under the impugned legislations. (c) That, if the immunity under Article 31 C for the legis 570 lations is not available, the 'amount ' payable in accordance with the provision of the ac quiring law is wholly "illusory" and is an attempt to take away a 'fortune for a far thing '. And accordingly, the law is ultra vires and violative of Article 31(2) of the Consti tution (as it then stood). Payment of "Book Value" of the assets acquired irrespective of their 'market value ' renders the 'amount ' unreal and illusory. (d) That the exclusion of "service lines", which are part of the assets of the licensee as from valuation, renders the law unconstitutional and ultra vires. (e) That the provision of Section 9(i) for the deduction of the 'Reserves ' from the "Amount", in addition to the takingover of the same in the form of 'fixed assets ' and the omission to value the unexpired period of licence are unreasonable and arbitrary. (f) That the continued liability of the petitioner licensee under Section 11(3) for payment to employees retrenched by Government after the vesting date and the provision for deduction of such sums from the "Amount" payable for the acquisition are arbitrary and unreasonable. (g) That while Section 7(5) makes all the liabilities of the licensee, other than those specifically referred to and expressly taken over by Government under the Act, as the continuing liabilities of the licensee, yet some of those liabilities referred to in clauses (c) (d) and (f) of Section 9, are yet made deductible from the "Amount", without the corresponding express obligation on the part of the Government to hold the sums so deducted in trust for, and for benefit of the concerned creditors and without statutory discharged to the petitioner in that behalf. This is unjust enrichment. (h) That there is no machinery envisaged by and set up under the 'Act ' to adjudicate upon and determine either the amounts deducti ble under clauses (c) (d) and (e) of Section 9 or the "loss" deductible under Section 8. This renders the provisions of the 'Act ' intracta ble and liable to be declared unworkable. 571 (i) That Section 20 limits arbitrabili ty only to matters enumerated in clauses (a) to (d) of that section, leaving many other disputes arising under the 'Act ' between the Government and the licensee without any ma chinery for their resolution, also rendering the 'Act ' unworkable. The contentions noticed at (a), (b) and (c) cover amongst them certain overlapping areas. The central attack, however, remains that Assam Act X of 1973 has no reasonable and direct nexus with the effectuation of the principles envisaged in clause (b) of Article 39 of the Constitution and that the relationship of the impugned legislation to the objects of Article 39(b), being merely remote and tenuous, the legislation is a colourable legislation. The contentions are, however, noticed distinctively to make due acknowledge ment for the shifts of emphasis in the course of the argu ments. In this case the legal and constitutional position has to be examined with reference to the provisions of the Constitution as they stood as in 1972. Article 31C was inserted by the 25th Amendment with effect from 20.4.1972 prior to its more comprehensive expansion to extend its protection to the laws giving effect to "All or any of the provisions laid down in Part IV ' brought about by the Con stitution (Fortysecond Amendment) 1976. Article 31C gave protection in respect of a law giving effect to the policy of the State towards securing the principles specified in clause (b) or clause (c) of Article 39. Then again, though Article 31 had not, by then, been deleted, its content had been cut down so much, so that even under a law providing for acquisition of property which did not have the protec tion of 31C the adequacy of the "Amount" determined was not justiciable and all that was necessary was that it should not be unreal or illusory. By then the Constitution had done away with the idea of a Just equivalent or full idemnifica tion principle and substituted therefore the idea of an "Amount" and rendered the question of the adequacy or the inadequacy of the amount non justiciable. The Indian Constitutional experiments with the 'right to property ' offer an interesting illustration of how differ ences in the interpretation of the fundamental law sometimes conceal or, perhaps, expose conflicts of economic idealog ics and philosophies. With the right to property conceived of as a fundamental fight at the inception of the Constitu tion, it found so strong an entrenchment that in its pris tine vigour it tended to be overly demanding and sought the sacrifice of too many social and economic goals at its alter and made 572 the economic cost of social and economic change unaffordably prohibitive and the fulfilment of the constitutional ethos of the promise of an egalitarian social order difficult. Inevitably the constitutional process of de escalation of this right in the constitutional scale of values commenced culminating, ultimately, in the deletion of this right from the fundamental rights part. Articles 31 A and 31 C were significant Constitutional milestones in the harnessing and socialisation of the concept of the right to property which, in its laissez faire trappings, became an unruly horse. Article 31 C in effect and substance is to urban property what Article 31 A is to agricultural property. The arguments in this case in regard to what, if at all, survives for judicial scrutiny in the matter of the Constitutional tests of the validity, under Article 31(2) of the 'amount ' if the law has the protection of Article 31C, were marked by a forensic resourcefulness aimed at a resus citation and re kindling of the relics and embers of old and hard fought but lost legal battles. Sri Rangarajan, learned Senior Advocate, relying upon the construction suggested by him of certain observations of Chandrachud, J. in the Keshavananda case and certain observations of Fazl Ali J. in State of Tamil Nadu vs Abu Kavur Bai, ; strenuously, and quite seriously, attempted the exercise that even if a law had the protection of Article 31C, yet the court would be required when the provision is challenged to go into the question of the "Amount" being illusory or the principles for its determina tion being arbitrary. Learned Counsel further propounded that despite Article 31 C, the burden of proving that the amount is not illusory and principles for its determination not arbitrary is on the State. We may excerpt the substance of the contention from the written submissions filed by Sri Rangarajan: " . . Therefore, where the law provides for compensation, fin spite of the same being protected by Article 31 C the Court can go into the question of the amount being illusory or the principles being arbitrary. Not merely that, the burden of providing that the amount is not illusory and the principles are not arbitrary, is on the State. " We shah later examine how far this contention is at all available in the light of the authoritative pronouncements of this Court on the effect of Article 31C and whether if a law has such protection, the plenitude of its constitutional immunity would not extend to all attacks based on Articles 14, 19 and 31 (as it then stood). 573 We may now examine the contentions seriatim. Contentions (a) and (b) admit of being dealt with together. Re: Contentions (a) and (b): Shri Soli J Sorabjee submitted that in the present case, notwithstanding the legislative declaration in Sec. 23 of Assam Act X of 1973, the question whether there is any real nexus between the legislation and the principles envisaged in Article 39(b) is justiciable and indeed the existence of such nexus or connection is a condition precedent for the attraction and applicability of Article 31 C. Learned Coun sel submitted that in order to decide whether a Statute is within Article 31 C or not, the Court has to examine the nature and character of the legislation and if upon such scrutiny it appears that there is no nexus between the legislation and the principles in Article 39(b) the legisla tion must be held to fall outside the protection of Article 31 C. Shri Sorabjee said, stripped of its veils and vest ments, the law, would show its real nature as one whose avowed nexus to Article 39(b) is merely a pretence and that its purpose is other than the objects envisaged in Article 39(b). The validity of the legislation, learned counsel says, would have to be examined independently of the immuni ty under Article 31C. The proposition that the legislative declaration of the nexus between the law and the principles in Article 39 is in conclusive and justiciable is well settled. Indeed that part of Article 31 C which sought to impart a Constitutional sanctity, conclusiveness and nonjusticiability to such legislative declarations was struck down in the Keshavanada case. The sequintor is that whenever any immunity is claimed for a law under Article 31 C, the Court has the power .to examine whether the provisions of the law are basically and essentially necessary for the effectuation of the principles envisaged in Article 39(b) and (c). The observations of Mathew, J. in Keshvananda case ( may be recalled: " . . Whenever a question is raised that the Parliament or State Legisla tures have abused their power and inserted a declaration in a law not for giving effect to the State Policy towards securing the direc tive principles specified in Article 39 B or 39 C, the Court must necessarily go into that question and decide it . . " (P. 855) 574 " . . If the Court comes to the conclusion that the declaration was merely a pretence and that the real purpose of the law is the accomplishment of some object other than to give effect to the policy of the State towards securing the directive principles in Article 39(b) and (c) the declaration would not be a bar to the court from striking down any provision therein which violates Article 14, 19 or 31. In other words, if a law passed ostensibly to give effect to the policy of the State is, in truth and substance, one for accomplishing an unauthorised object, the court would be entitled to tear the veil created by the declaration and decide accord ing to the real nature of the law . " (P. 855 56) Chandrachud, J. observed in the Keshavananda case: " 'Laws passed under Article 31 C can, in my opinion, be upheld only, and only if, there is a direct and reasonable nexus between the law and the directive policy of the State expressed in Article 39 B or C." (P. 996) To the same effect are the observations of the learned Chief Justice in Minerva Mills Ltd. vs UOL. ; " . . the Courts can, under Article 31 C, satisfy themselves as to the identity of the law in the sense whether it bears direct and reasonable nexus with a directive principle." "The only question open to judicial review under the unamended Article 31 C was whether there is a direct and reasonable nexus between the impugned law and the provisions of Article 39(b) and (c)" (P. 261) (Emphasis Supplied) In the same case, Bhagwati, J. observed: " . . The point that I wish to emphasis is that the amended Article 31 C does not give protection to a law which has merely some remote or tenuous connection with a directive principle." 575 " . . Even where the dominant object of a law is to give effect to a direc tive principle it is not every provision of the law which is entitled to claim protec tion . " (P. 338) " . . it is not every provision of a statute which has been enacted with the dominant object of giving effect to a direc tive principle, that it entitled to protec tion, but only those provisions of the statute which are basically and essentially necessary for giving effect to the directive principles are protected under the amended Article 31 C " . (P. 339) (Emphasis Supplied) 13. The proposition of Sri Sorabjee, in principle, is, therefore, unexceptionable; but the question remains wheth er, upon the application of the appropriate tests, the impugned statute fails to measure up to the requirements of the Constitution to earn the protection under Article 31 C. Learned counsel sought to contend that the Assam State Electricity Board having exercised the option of purchasing the undertaking of the Tinsukia Co., under Section 6(1) of 1910 Act by the statutory notice dated 23.5.1972 requiring the company to sell the undertaking to the Board on the expiration of the period of the licence, the question of any further need to acquire the undertaking for the purpose of effectuating the objects envisaged in article 39(b) of the Constitution by the expedience of a separate and independent legislation was, indeed, unreal or non existent. The real object, therefore, of the enactment of Assam Act X of 1973 it was urged, was not to enact a law for purposes of effec tuating the objects envisaged by Article 39(b) of the Con stitution which had already been accomplished by the exer cise of the option to purchase; but was only to deprive the petitioner of its legitimate entitlements under the statuto ry sale. What was sought to be acquired by the impugned law, it is contended, was not the undertaking but the difference between the 'Market price ' and the 'Book value ' which the impugned legislation envisaged. It is urged that the purpose of the impugned law is, therefore, something other than the effectuation of principles in Article 39(b). It is also urged that with the exercise of the option to purchase what remained to. be acquired and what really was sought to be acquired was a mere actionable claim or a chose in action. It is further urged that, at all events, since not all the provisions of a legislative enactment need necessarily qualify for protection of Article 31 C but only those provi sions that have a direct nexus with the principles of Arti cle 39(b), the 576 provisions in the impugned legislation touching the determi nation of the quantum of the "Amount" are not so protected as they are intended merely to inter dict and extinguish the vested rights of the Tinsukhia Co. under the intended statu tory sale. The object of the legislation, it was urged, was not the legitimate one of securing the objects envisaged in Article 39(b) but a less honourable and less sanctimonious one of depriving the petitioner of the benefit of the statu tory contract for the sale of the undertaking pursuant to and in terms of the statutory notice dated 23.5.1972. The court, so goes the argument, is entitled to pierce the apparent veil under which the acquiring legislation masquer ades as one for securing the object of Article 39(b). Dr. Shankar Ghosh and Sri G.L. Sanghi for the State of Assam and the Assam State Electricity Board,. the contest ing Respondents, however, say that the Assam Act X, 1973, is entitled to the protection of Article 31 C as, indisputably, Electrical energy is a material resource of the community and any legislative measure to nationalise the undertaking falls squarely within the ambit of Article 39(b). Any appeal by the petitioner to the doctrine of colourable legislation, they say, is wholly inapposite as, indeed, where, as here, legislative competence is undisputed, any speculation as to the motives of the legislative is impermissible. No mala fides could be attributed to the Legislature. Respondents further submit that on the question of even the possible 'illusory ' nature, let alone the adequacy, of the "Amount" could not be agitated if the law has the protection of Article 31 C. They, however, assert that 'Book value ' is a well accepted accountancy concept of value and could never be characterised as illusory, even if the law did not come under Article 31 C. The questions that arise for consideration are, sequen tially, whether the electrical energy generated and supplied by the petitioner companies is a "material resource of the community" within the meaning of Article 39(b); whether the impugned legislation has a reasonable and direct nexus to the objective of distributing this materials resource so as to subserve the common good and what are the appropriate tests to ascertain this nexus. The incidental questions that arise on certain specific contentions centre around the effect of the option to purchase the undertaking exercised by the Assam State Electricity Board in the case of Tinsukia Co. and whether immediately upon the exercise of the option the proprietory rights respecting the undertaking of the company get transformed into a mere "actionableclaim" or "chose in action", as contended for by the petitioners. 577 Apropos of the contention that, at all events, the provi sions pertaining to the "amount" could have no reasonable or direct nexus to the principles envisaged in Article 39(b), but are merely intended to extinguish the legitimate rights of the petitioner company to receive the price of the under taking under the 1910 Act, as the law then stood, pursuant to the option exercised by the 'Board ', it would, perhaps, be necessary to ascertain the composite elements that make for a law of nationalisation and whether provisions touching the quantification of the "amount" payable for the acquisi tion are not an essential and integral part of such law. On the contention urged by Shri Rangarajan as to what could be said to survive for consideration under Article 31(2), (as it then stood), if the law has the protection of Article 31 C the question that arises is whether anything at all survives for consideration under Article 31. The conten tion indeed, runs in the teeth of several pronouncements of this Court which lay down that when Article 31 C comes in, Articles 14, 19 and 31 (the last mentioned article as it then stood) go out. This we will consider under point (c). It is not disputed that the electricity generated and distributed by the undertakings of the petitioner compa nies constitute "material resources of the community" for the purpose and within the meaning of Article 39(b). In Sanjeev Coke Manufacturing Company vs Bharat Coking Coal Ltd., ; this Court, referring to what constitute "material resources of the community" and whether resources produced by, or at the command of, private, as distinguished from the State agencies, constitute such resources as the resources of the community, noticed the contention urged in that case thus: " . . The submission of Shri A.K. Sen was that neither a coal mine nor a coke oven plant owned by private parties was a 'material resources of the community '. Accord ing to the learned counsel they would become material resources of the community only after they were acquired by the State and not until then. In order to qualify as material re sources of the community the ownership of the resources must vest in the community i.e. the State . . A law providing for acquisition was not a law for distribution . " (P. 1022) 578 Repelling this argument which suggested a limited concept of "Material resources of the Community" the Court observed: " . . We are unable to appreciate the submission of Shri Sen: The expression 'material resources of the community ' means all things which are capable of producing wealth for the community. There is no warrant for interpreting the expression in so narrow a fashion as suggested by Shri Sen and confine it to public owned material resources, and exclude private owned material resources. The expression involves no dichotomy . " ( P. 1022 & 23) It can, therefore, hardly be gain said that the electri cal energy generated and distributed by the undertakings of the petitioner constitutes "material resources of the commu nity". This takes us to the question whether the provisions of the impugned Assam Act X 1973 have any reasonable and direct nexus to the principles in Article 39(b) of the Constitution. It is true that if such a relationship is merely remote and tenuous the protection under Article 31 C may not be available. The idea of distribution of the mate rial resources of the community in Article 39(b) is not necessarily limited to the idea of what is taken over for distribution amongst the intended beneficiaries. That is one of the modes of "distribution". Nationalisation is another mode. In State of Tamil Nadu vs L. Abu Kavur Bai, ; this Court had occasion to refer to this aspect. It was held: "In other words, the word 'distribu tion ' does not merely mean that property of one should be taken over and distributed to others like land reforms where the lands from the big landlords are taken away and given to landless laboureft, . . That is only one of the modes of distribution but not the only mode . " "By nationalising the transport as also the units the vehicles would be able to go the farthest comer of the State and pene trate as deep as possible . "This would undoubtedly be a distri bution for the common good of the people and would be clearly covered by clause (b) of Article 39. " 579 On an examination of the scheme of the impugned law the conclusion becomes inescapable that the legislative measure is one of nationalisation of the undertakings and the law is eligible for and entitled to the protection of Article 31 C. 16. It was then contended that not all the provisions of a law can and need be eligible for the protection of Article 31 C and that accordingly, in the present case the provi sions as to the quantification of the "amount", which were meant to achieve an oblique motive of interdicting and extinguishing the vested rights of the petitioner company to receive payment in accordance with the provisions of the 1910 Act, as they then stood, should not have the protection of Article 31 C. We are afraid this contention proceeds on an impermissible dichotomy of the components integral to the idea of nationalisation. The economic cost of social and economic reform is, perhaps, amongst the most vexed problems of social and economic change and constitute the core ele ment in Nationalisation. The need for constitutional immuni ties for such legislative efforts at social and economic change recognise the otherwise unaffordable economic burden of reforms. The observations of Mathew J. in Keshavananda case on the point are worth recalling: "If full compensation has to be paid, concentration of wealth in the form of immova ble or movable property will be transformed into concentration of wealth in the form of money and how is the objective underlined in Article 39(b) and (c) achieved by the trans formation? And will there be enough money in the coffers of the State to pay full compensa tion?" " . . I am unable to understand the purpose of substituting the word 'amount ' for the word 'compensation ' in the sub Article unless it be to deprive the Court of any yard stick or norm for determining the adequa cy of the amount and the relevancy of the principles fixed by law. I should have thought that this coupled with the express provision precluding the Court from going into the adequacy of the amount fixed or determined should put it beyond any doubt that fixation of the amount or determination of the princi ple for fixing it is a matter for the Parlia ment alone and that the Court has no say in the matter." (1973 Supp. SCR 1 at page 846) It is, therefore, not possible to divorce the economic considera 580 tions or components from the scheme of nationalisation with which the former are inextricably integrated. The financial cost of a scheme of nationalisation lies at its very heart and can not be isolated. Both the provisions relating to the vestiture of the undertakings in the State and those per taining to the quantification of the "Amount" are integral and inseparable parts of the integral scheme of nationalisa tion and do not admit of being considered as distinct provi sions independent of each other. The memorandum of the writ petition contains aver ments as to the efficiency and public utility of the serv ices rendered by the undertakings and that on the date of the take over the market value of the Tinsukhia and Dibru garh undertakings were Rs.55 lakhs and Rs.35 lakhs respec tively and that. the undertakings were discharging their obligations to the consumers efficiently and satisfactorily. The case of the petitioners is that there was no justifica tion at all for the nationalisation as the undertakings were efficient and fully catered to the needs of the consumers. It was also averted that it was the Government and the Board the had come in the way of the expansion envisaged by the undertakings by withholding the requisite permission for the installation of additional capacity for generation of elec tricity. The Respondents have sought elaborately to traverse these grounds and to justify the measure for nationalisa tion. We are afraid, the debate whether nationalisation is by itself to be considered as fulfilling a public purpose or whether the nationalisation should be shown to be justified by the actual effectuation of the avowed objectives of such nationalisation the choice between the pragmatic and the doctrinaire approaches is concluded and no longer avail able. In Akadasi Padhan vs State of Orissa and Ors. , ; this debate on the philosophy of nationalisa tion is concluded. was held: " . . Broadly speaking, this discussion discloses a difference in approach. To the socialist, nationalisation or State ownership is a matter of principle and its justification is the general notion of social welfare. To the rationalist, nationalisation or. State ownership is a matter of expediency dominated by considerations of economic effi ciency and increased output of production . . ". " . The amendment made by the Legislature in article 19(6) shows that according to the Legislature, a law 581 relating to the creation of State monopoly should be presumed to be in the interests of the general public . " " . . In other words, the theory underlying the amendment in so far as it relates to the concept of State monopoly, does not appear to be based on the pragmatic ap proach, but on the doctrinaire approach which socialism accepts . .". Indeed, in the United States of America after the hey days of the substantive due process, the Supreme Court in 1963 in Ferguson vs Skrupa, ; said: "We refuse to sit as a 'superlegis lature to weigh the wisdom of legislation ', and we emphatically refuse to go back to the time when courts used the Due Process Clause 'to strike down state laws, regulatory of business and industrial conditions, because they may be unwise, improvident, or out of harmony with a particular school of thought ' . . Whether the legislature takes for its textbook Adam Smith, Herbert Spencer, Lord Keynes, or some other is no concern of ours." (Emphasis Supplied) 18. Equally untenable is the contention based on the assumption that immediately upon the exercise of the option to purchase, the proprietory rights of the Tinsukhia Company in relation to the undertaking stood transformed into, and was crystalised in the form of, a mere actionable claim or a "chose in action" and that, therefore, what was sought to be acquired by the present legislative measure was merely a "chose in action". It was contended that no public purpose is achieved by the acquisition of a "chose in action". This needs examination of the legal character and incidents of the consequences that flow from the exercise of the option to purchase under the 19 10 Act. The contention presupposes that contemporaneous with the service of the notice on the licensee, the proprietory rights of the licensee in relation to the undertaking, proprio vigore, get transformed into a mere "chose in action". This consequence does not flow from the pro: visions of 1910 Act. In Fazilka Electric Supply Company Limited vs The Commissioner of Income Tax, Delhi, [1962] Supp. 3 SCR 496 this court, referring to the nature of the transaction emerging from the exercise of the option, said: 582 "It merely provides for an option of purchase to be exercised on the expiration of certain periods agreed to between the parties, and section 10 further provides that in an appropriate case Government may even forego the option. This section does not provide for a compulsory purchase or compulsory acquisi tion without reference to and independently of any agreement by the licencee. " (See Page 505). (Emphasis Supplied) In Gujarat Electricity Board vs Shantilal, ; referring to the legal conse quences that ensue by a mere exercise of the option, it was held: " . that the right to purchase the undertaking accrues only at the expiration of the period of licence but for exercising that right, the authority must make its elec tion within the period prescribed in sec. 7(4) and issue a notice as required by that sub section . . " (Emphasis Supplied) That the right, title and interest of the licensee in the undertaking does not get transferred to the Board or the State, as the case may be, immediately upon the mere exer cise of the option to purchase is further clear from what is implicit in the observa tions of this Court in Godra Electricity Company Limited and another vs The State of Gujarat and another; , at page 54. The proposition contended for by the Learned Additional Solicitor General in that case was noticed thus: "In support of the contention that when once the notice exercising the option to purchase the undertaking has been served, the licensee has no further right to carry on the business, the learned Additional Solicitor General placed reliance on the decision of this Court in Kalyan Singh vs State of U. P . . " This Court held that the exercise of the option would have no such effect on the licen see 's right to carry on his business until the undertaking was actually taken over and paid for. It was held: "A licensee cannot be told that he has no right to carry on the business unless a valid purchase is made at the expiry of the period . . " 583 " . Admittedly, the undertak ing belonged to the licencee and if delivery of the undertaking is to be taken by the State Electricity Board, the purchase price must be paid before the delivery or, there must be a provision for payment of interest on the purchase price for the period during which payment is withheld. Otherwise, the licence will not cease to have operation and the licensee wilt be entitled to carry on the business." (See Page 54). The contentions that immediately upon the exercise of the option, ipso facto, the relationship between the parties get transformed into one as between a Debtor and a Creditor and that the interest of the licensee in the undertaking becomes an "actionableright", or a "chose in action" and that no public purpose could be said to be served by the acquisition of a "chose in action" are all out of place in this case. It is not necessary, therefore, to go into the question whether a "chose in action" can at all be acquired. Certain observations of this Court in Madan Mohan Pathak vs Union of India and Ors., ; do suggest that "chose in action" could also be acquired. It will also not be necessary to go into the legal concept of a "chose in action" in Indian law and its distinctiveness from the principles in English law. Williams on "Personal property" refers to "chose in action" thus: " . . another important distinction exists among personal things. Such things are said to be in possession or in action; or they are called, in law French, choses in posses sion or choses in action. Choses in possession are movable goods, of which their owner has actual possession and enjoyment, and which he can deliver over to another upon a gift or sale; tangible things, as cattle, clothes, furniture, or the like . " "The term choses in action appears to have been applied to things, to recover or realise which, if wrongfully withheld, an action must have been brought; things, in respect of which a man had no actual posses sion or enjoyment, but a mere right enforce able by action. The most important personal things recoverable by action only were 584 money due from another, the benefit of a contract and compensation for a wrong; and .these have always been the most prominent choses in action, though not the only things to which the term has been applied . . "(see page 29 and 30) Indeed, in English law the difficulties in the precise definition of chose in action arise out of the fact that the meaning attributed to the expression has been expanded from time to time by judicial decisions and the principles pertaining to the concept did not develop on any logical or scientific basis. W.S. Holdsworth also refers to this diffi culty in apprehending the precise incidents of the concept of a "chose in action": "It is sometimes difficult to ascer tain the sense in which the legislature has used the term 'chose in action 'we have seen that Bankruptcy Act affords one illustration, and, as we can see from the case of Edwards vs Dicard the modifications introduced by the Courts have some times occasioned a similar difficulty. Some of these difficulties might be perhaps mitigated by a codifying Act, for which there is plenty of material. But, it is probable that a branch of the law which comes at the meeting place of the law of property and the law of obligation can never be any thing but difficult to formulate and apply." (Emphasis Supplied) (See: "The History of the treatment of chose inaction by the common law": Vol. 33 Harvard Law Review 997 at 1030). Petitioners, however, placed strong reliance upon a decision of the Calcutta High Court in Bihar State Electricity Board vs Patna Electricity Supply Co. Ltd., and in particular on the following observations of the Division Bench of the High Court in para 22: " . The purported acquisition of part of the debt or chose in action by Sections 2(ii) and 3 of the Bihar Act 7 of 1976 with retrospective effect is, therefore, without any public purpose. Sections 2(ii) and 3 also do not provide for payment of compensa tion. In the circumstances, it must be 585 held that Sections 2(ii) and 3 of the Bihar Act 7 of 1976 are ultra vires article 31(2) of the Constitution. " It is not necessary to consider the correctness of this pronouncement in view of the circumstance that even to the extent the decision goes it is distinguishable. On 5.1.1973, the Electricity Board exercised its option to purchase the undertaking. On 2.2.1974, the Board paid a sum of Rs.36,00,000 "on account" to the licensee. On 6.2.1974, possession was taken. On 2.2.1974, Ordinance 50 of 1974 was promulgated amending Section 7A of the 19 10 Act reducing the price payable under Section 7A to the book value of the assets. This Ordinance was renewed by two successive ordi nances No. 83 of 1974 and 123 of 1974. The last ordinance was replace by Bihar Act 15 of 1975. On 10.2.1976, the Indian 'Electricity (Bihar Amendment) Act 7 of 1976 was brought into force validating the substitution of Section 6 and 7A, made by Bihar Act 15 of 1975 with retrospective effect from 2.2.1974. The Validating Act sought to affect the rights and obligations of the parties retrospectively. The High Court was persuaded to the view that the purported acquisition, virtually, pertained to the debt or "chose inaction" and not the undertaking itself. It is, therefore, not necessary to consider the submissions of the learned counsel for the respondent that it does not lay down the law correctly in as much as the arguments based on Article 31 C were neither advanced nor considered in that case. It requires, therefore, to be held that the impugned legislation viz., Assam Act X, 1973, was broughtforth for securing the principles contained in Article 39(b) of the Constitution and is protected under Article 31 C. The amend ment made to the provisions of the , by Assam Act IX of 1973, amending the basis for quan tification of the amount payable in the case of a statutory purchase pursuant to the exercise of the option in terms of the licence would apply to and govern cases of statutory sales and would not assume any immateriality in this case as the Assam Act X of 1973 is itself as we have held a valid piece of legislation. We find, therefore, no substance in the contentions (a) and (b) urged by the petitioner. Re. contention (C): This pertains to the question whether the principles laid down in the Act for determination of the "amount" payable for the acquisition 586 are so arbitrary as to render the "amount" unreal and merely illusory. This contention would not, in law, be available to the petitioners inasmuch as the law providing for the acqui sition has the protection of Article 31 C of the Constitu tion. The arguments of Shri Soli J. Sorabjee in regard to the alleged "illusory" nature of the "amount" presupposes and proceeds on the premise that the impugned law does not have the protection of Article 31 C. Now that we have held that Article 31 C is attracted, the argument in regard to the alleged illusory nature of the amount does not survive at all. Shri Rangarajan, however, contended that notwith standing that a law has the protection of Article 31 C, the question would yet be justiciable under Article 31(2), as it then stood, if the "amount" is illusory or the principles for its determination arbitrary. To support this, somewhat difficult, proposition Shri Rangarajan relied upon certain observations of Chandrachud, J. in the Keshavananda case; whose import and importance, according to the learned coun sel, has not been fully and properly comprehended in subse quent cases. The passages relied upon are: " . But to say that an amount does not bear reasonable relationship with the market value is a different thing from saying that it bears no such relationship at all, none whatsoever. In the later case the payment becomes illusory and may come within the ambit of permissible challenge." (See para 2 137 at page 2051 of AIR 1973). " . . Courts would have the powers to question such a law if an amount fixed thereunder is illusory; if the princi ples, if any are stated, for determining the amount are wholly irrelevant for fixation of the amount; if the power of compulsory acqui sition or requisition is exercised for a collateral purpose; if the law offends Consti tutional safeguards other than the one con tained in Article 19(1)(f); or if the law is in the nature of a fraud on the Constitution ". (See: para 2138 at page 2051 of AIR 1973). These observations. Sri Rangarajan says, were intended to govern even a law which had the protection of Article 31 C. Shri Rangara jan also relied upon certain observations of Fazal Ali, J. in State of Tamil Nadu vs L. Abu Kaur Bai ; which say: "87. Thus, so far as this aspect of the matter is con 587 cerned, two conclusions broadly emerge: (1) that in view of the express provisions of Article 31 C which excludes article 31(2) also where a property is acquired in public interest for the avowed purpose of giving effect to the principles enshrined in article 39(b) and (c), no compensation is neces sary and article 31(2) is out of the harm 's way, and (2) that even if the law provides for compensation, the courts cannot go into the details or adequacy of the compensation and it is sufficient for the State to prove that the compensation was reasonable and not monstrous or illusory so as to shock the conscience of the court." (Emphasis of counsel) Sri Rangarajan would say that the observations empha sised would show that even if Article 31 C was attracted yet the State should show that compensation was reasonable and not illusory. We are afraid, these passages are quoted out of context and, if properly understood, were not intended to support the proposition now propounded by Shri Rangarajan. Indeed in the Keshavananda case itself Chandrachud J. referring to the effect of Article 31 C observed: ". In fact article 31 C is a logi cal extension of the principles underlying article 31(4) and (6) and article 31A. . . The true nature and char acter of article 31 C is that it identifies a class of legislation and exempts it from the operation of articles 14, 19 and 31 . . " (1973 supp. SCR 1 at 995) Khanna J. observed in that case: Both articles 31A and 31C deal with right to property. Article 31 A deals with certain kinds of property and its effect is, broadly speaking, to take those kinds of property from the persons who have rights in the said property. The objective of article 31C is to prevent concentration of wealth and means of production and to ensure the distri bution of ownership and control of the materi al resources of the community for the common good. Article 588 31C is thus essentially an extension of the principle which was accepted in article 31A . "(page 743) Beg, J said: "Article 31 C has two parts. The first part is directed at removing laws passed for giving effect to the policy of the State towards securing the principles specified in clause (b) or clause (c) of Article 39 of the Constitution from the vice of invalidity on the ground that any such law "is inconsistent with or takes away or abridges any of the rights conferred by Articles 14, 19 and 31 of the Constitution." . the effect of invalidity for alleged violations of Articles 14 or 19 or 31 would vanish so long as the law was really meant to give effect to the princi ples of Article 39(b) and (c) . " In State of Karnataka vs Ranganath Reddy, ; this Court had occasion to observe: " . . For the purpose of deciding the point which fails for consideration in these appeals, it will suffice to say that still the over whelming view of the majority of judges in Kesavandanda Bharati 's case is that the amount payable for the acquired property either fixed by the legislature or determined on the basis of the principles engrafted in the law of acquisition cannot be wholly arbitrary and illusory. When we say so we are not taking into account the effect of Article 31 C inserted in the Constitution by the 25th Amendment (leaving out the invalid part as declared by the majority)." (p. 653) (Emphasis Supplied) In Sanjeev Coke Manufacturing Co. vs Bharat Coking Coal Company Lt.; , this Court said: " . . To accept the submission of Shri Sen that a law rounded on discrimination is not entitled to the protection of Article 31 C, as such a law can never be said to be to further the Directive Principle affirmed in article 39(b), would indeed, be, to use a hack neyed phrase, to put the cart before the horse. If the law made to further the Direc tive Principle iS necessarily non discrimina tory or is based 589 on a reasonable classification, then such law does not need any protection such as that afforded by article 31 C. Such law would be valid on its own strength, with no aid from article 31 C. To make it a condition precedent that a law seeking the haven of article 31 C must be non discriminatory or based on reasonable classification is to make article 31 C meaning less . " (p.1019) "We are firmly of the opinion that where article 31 C comes in article 14 goes out . " (p. 1021) What applies to Article 14 would equally apply to Article 31 (as it then stood before its deletion by the Constitution Fortysecond (Amendment) Act, 1978). In State of Tamil Nadu vs L. Abu Kavur Bai, ; on which Shri Rangarajan relied, Fazal Ali J. categorily said: "It is manifest from a bare reading of the newly added article 31 C that any law effectuating the policy of the State in order to secure or comply with the directive princi ples specified in clauses (b) and (c) of article 39 would not be deemed to be void even if it is inconsistent with or violates Articles 14, 19 or 31 . . " (P. 332) In the same case Fazal Ali J. further said: " . If, once the conditions mentioned in Article 31C are fulfilled by the law, no question of compensation arises because the said Article expressly excludes not only Arti cles 14, and 19 but also 31 which, by virtue of the 25th amendment, had replaced the word 'amount ' for the word 'compensation ' in Arti cle 31(,2) . . " (p. 334) (Emphasis supplied) Sri Rangarajan cannot, therefore, draw any sustenance from Fazal Ali J. for his argument. Sri Rangarajan then placed reliance on the following observa 590 tions of Krishna Iyer J. in Gwalior Rayon vs UOL, " . the legislature is expected except in exceptional socio historical set ting, to provide just payment for the deprived persons. To exclude judicial review is not to block out the beneficient provisions of Arti cles 14, 19 and 31." (p. 695) But we see nothing in these observations which can lend support to justiciability of an alleged violation of Article 31 by a law protected under Article 31 C. Ideally, perhaps, it may not be just to deprive a recompence that is just and fair, in all cases. But that is not to say that even under a law which has the protection of 31 A or 31 C, the adequacy, or justness or fairness of the compensation would, yet, be justiciable. The contention of Shri Rangarajan in our opinion, is wholly unsupportable. Indeed, the purpose of Article 31 C is, amongst others, to exclude Article 31, as it then stood. The effect of accepting Sri Rangarajan 's contention would be to let in Article 31 by the backdoor, frustrating the very object of Article 31 C and to unsettle the law laid down in a series of authoritative pronouncements of this Court. The contention really, is not available to the petitioners at all. Even if the impugned law did not have the protection of Article 31 C, a hypothesis on which contention (c) is based, the adequacy or inadequacy of the amount is not justiciable. The limitations of the courts ' scrutiny explic it in Article 31(2), are referred to by Mathew J. in the Keshavananda case: " . the word 'amount ' conveys no idea of any norm. It supplies no yard stick. It furnishes no measuring rod. The neutral word 'amount ' was deliberately chosen for the purpose. I am unable to understand the purpose in substituting the word 'amount ' for the word 'compensation ' in the sub article unless it be to deprive the Court of any yard stick or norm for determining the adequacy of the amount and the relevancy of the principles fixed by law (para 1765) Referring to what might, yet, be open to judicial scrutiny, under 591 Article 31(b), Shelat and Grower, JJ observed in the Keshavananda case: "But still on the learned Solicitor General 's argument, the right to receive the amount continues to be a fundamen tal right. That cannot be denuded of its iden tity. The obligation to act on some principle while fixing the amount arises both from Article 31(2) and from the nature of the legislative power for, there can be no power which permits in a democratic system an arbi trary use of power." "But the norm or the principle of fixing or determining the 'amount ' will have to be disclosed to the Court. It will have to be satisfied that the 'amount ' has reasonable relationship with the value of the property acquired or requestioned and one or more of the relevant principles have been applied and further that the 'amount ' is neither illusory nor it has been fixed arbitrarily, nor at such a figure that it means virtual deprivation of the right under Article 31(2). The question of adequacy or inadequacy, however, cannot be gone into." Justice Chandrachud observed: "The specific obligation to pay an 'amount ' and in the alternative the use of the word 'principles ' for determination of that amount must mean that the amount fixed or determined to be paid cannot be illusory. If the right to property still finds a place in the Constitution, you cannot mock at the man and ridicule his right. You cannot tell him: 'I will take your fortune for a farthing '. All the same, the concept of "Book Value" is an accepted accountancy concept of value. It cannot be held to be illusory. In Eswari Khetan Sugar Mills vs State of U.P., ; at page 359 it has been held that even the concept of "written down value" which is more disadvantageous to the owner than the "Bookvalue" is not irrelevant: " . . This Court has in terms accepted that payment of compensation on the basis of written down value calculated accord ing to the income tax law for used 592 machinery is not irrelevant as a principle for determining compensation. That principle appears to have been adopted for valuing used machinery though the legislation fixes compen sation payable to each undertaking in round Sum . ." 28. Accordingly, even if the impugned law had no protec tion of Article 31 C and tests appropriate to and available are applied, in the circumstances of this case, it cannot be said that the principles envisaged in the impugned law lead to an "amount" which can be called unreal or illusory. Contention (c) is accordingly held and answered against the petitioners. Re: Contention (d): This point is again, available only if the impugned law is outside Article 31 C. The contention that "Service Lines" which are expressly excluded from the valuation do consti tute the property of the licensee and their exclusion from valuation would make the principles for determination of the 'amount ' arbitrary does not have much to commend it. Learned counsel for the petitioner placed reliance on the definition of 'works ' in Section 2(n) of the 1910 Act and on the pronouncement of this Court in Calcutta Electric Supply Corporation vs Commissioner of Wealth tax, ; The question in that case was whether in the computation of net wealth of the licensee, the "Service lines" should be included. That was a converse case where the licensee rely ing upon the statutory provisions of the Electricity Act contended that "Service lines" were not a part of his wealth. This Court negatived that contention for purposes of assessment to wealth tax. Learned counsel placed some store by this pronouncement to contend that the exclusion of this 'wealth ' from valuation is arbitrary. But, in our opinion, the pronouncement relied upon does not advance petitioners ' case on the point. While it is true that the expression 'works ' in Section 2(n) of the 1910 Act includes 'Service lines ', the reason why 'Service lines ' could justifiably be excluded from valuation for purposes of determination of the 'amount ' is indicated in page 166 the report: "It is true that in view of Sec. 7(A)(2) of the Electricity Act, in computing the market value of the undertaking sold under sub section (1) of section 5 of that Act the value of service lines which had been con structed at the expense 593 of the consumers will not be taken into con sideration. The reason for this provision is obvious. It will be the duty of the new licen see to not only maintain and repair those lines but also to replace them when they become unserviceable. " Under the law when a requisition is made by an intend ingconsumer for electrical energy, the licensee has an obligation tO lay down Service lines. But, according to the provisions the entire cost of service line is not required to be borne by the licensee. The licensee is entitled to call upon the consumer to pay part of the cost of service line which may in a given case amount to a substantial part in accordance with the provisions in the Schedule to the Electricity Supply Act. Dealing with a similar provision the Gujarat High Court in Dakor Umreth Electricity Company Ltd. vs State of Gujarat, ( 13 Gujarat Law Reporter 88 at page 106) held: " . The question is whether the exclusion of such service lines from the valuation can be said to have rendered the principle of compensation irrelevant or inap propriate. We do not think so . . The petitioner is not constituted .the owner of these service lines for all purposes. More over, even after the purchase, these service lines would continue to be utilised for sup plying electrical energy to the consumers who paid for them. It would be most inequitable in these circumstances to provide for payment of compensation to the petitioner for these service lines. There is no reason in logic or principle why the petitioner should be allowed to make unjust and undeserved profit from transfer of these service lines for which it has paid nothing and which are not the product of its own labour . . " This reasoning, if we may say so with respect, is sound and should be accepted. Contention (d) is, therefore, insub stantial and is answered against the petitioners. Re: Contention (e): The apprehensions of the petitioners on this point is that while under Section 9(1)(i) of the impugned Act X of 1973, Government 594 would be entitled to deduct from the 'amount ' such sums as remain in the "Tariffs and Devidend Control Reserve"; "Contingency Reserve" and the "Development Reserve", in so far as such amounts have not been paid over by the licensees to the Government, the provision, however, does not take into account and provide for cases where such reserves are invested in 'fixed assets ' and as such "fixed assets" vest in the Government under the Acquisition. There would, there fore, it is urged be, a duplication of the liability of the licensee on this score, in the sense that while the "Re serves" in the form of fixed assets vest in the Government, the licensee is still exposed to the liability for the deduction of the amount shown in the accounts. Section 9(1)(i) provides: "Deductions from the Gross amount: The Government shall be entitled to deduct the following sums from the gross amount payable under this Act to the licensee. (a) (to) (h) Omitted as unnecessary (i) The amounts remaining in tariffs and dividends control reserve, contingencies reserve and development reserve, in so far as such amounts have not been paid over by licen see to the Government; (j) (k) Omitted as unnecessary On a reasonable construction, the expressions 'amounts remaining ' and 'in so far as such amounts have not been paid overl ' necessarily exclude any such duplication of the ac countability of the licensee for these 'Reserves '. If any part of the reserves is invested in "fixed assets" and the reserves in the form of such "fixed assets" are takenover by the Government pursuant to the acquisition, what remains to be accounted for by the licensee is only the 'amounts re maining ' in the pertinent accounts. The liability of the licensee for deduction of the 'Reserves ' from the 'amount ' would arise only if the balance remaining in those accounts are not paid. Indeed, Dr. Shankar Ghosh, learned counsel for the State of Assam, submitted that this is the correct interpretation to be placed on Section 9(1)(i) of the Act. With this construction of the provision, the contention of the petitionercompany on this point, does not survive. 595 31. The other contention raised under this point is that the property of the licensees represented by the unexpired portion of the licence has not been taken into account in computing the amount payable for the acquisition. As already indicated, the law having the protection of Article 31C the contention is not available at all. Section 7(3) of the impugned Act provides: "In the case of an undertaking which vests in the Government under this Act, the licence granted to it under Part II of the Electricity Act shall be deemed to have been terminated on the vesting date and all the rights, liabilities and obligations of the licensee under any agreement to supply elec tricity entered into before that date shall devolve or shall be deemed to have devolved on the Government: Provided that where any such agree ment is not in conformity with the rates and conditions of supply approved by the Govern ment and in force on the vesting date, the agreement shall be voidable at the option of the Government." This provision is a part of a scheme of nationalisation and is protected by Article 31C. 32. Contention (e) is accordingly held and answered against the petitioners. Re: Contention (f): This contention pertains to the liability of the licen see under Section 11(3) of the Act in respect of the amounts payable to employees retrenched by the Government or the "Board ' as the case may be, within one year from the vest ing date after the take over. Section 11(3) provides that if the Board or the Government, as the case may be, retrenches any employee within a period of one year from the vesting date, the liability for the amounts payable to the re trenched employee shall be deducted from the 'amount '. This provision, it is contended, imposes a liability which is arbitrary. Dr. Shankar Ghosh submitted that this point is purely academic inasmuch as there has been no such case of retrenchment. Dr. Ghosh further submitted that the provision is not unreasonable because in the case of employees so 596 retrenched, the amounts payable would substantially relate to the period during which the employment subsisted under the licensee and that it is not unreasonable to take this circumstances into account in continuing the licensee 's liability which would, even otherwise, be substantially be that of the licensee. 'On a consideration of the matter, we are inclined to the view even if this question is justicia ble that the provision is not unreasonable or arbitrary as it envisages the continuance of a liability which was, otherwise, substantially that of the licensee. There is no merit in this contention (f) either. Re: Contention (g): The grievance of the petitioners on this aspect, we are afraid, proceeds on a total misconception of the effect of the statutory provisions. The contention, in substance, is that while certain liabilities of the licensee arising out of its Quondam business operations are not expressly taken over by the Government and are declared to be the subsisting and continuing liabilities of the licensee, however, Section 9(7) authorises the deduction of some of those very liabilities from the 'amount ' without a corre sponding statutory obligation on the part of the GOvernment, in turn, to pay the same to the creditors on whose account and for whose benefit the deductions are made and without providing an express statutory discharge to the petitioners in that behalf. There is no substance in this contention. The legisla tive intention is plain and manifest. Though some of the liabilities arising out of the conduct of the licensees ' business prior to vesting are not taken over by Government, some of those liabilities are, yet, authorised to be deduct ed from the amount. The purpose of this provision is too obvious to require any statutory declaration of the obliga tions that arise in law and are attendant upon these sums coming to the hands of and retained by the Government. Quite obviously, the provision is not intended for an unjust enrichment in the hands of Government. The purpose is obvi ously to facilitate recovery of certain types of debts owing to public institutions etc., and the deduction is for the benefit of those creditor institutionS. Government would, plainly, be under a legal obligation to pay the sums so deducted to the concerned creditors. The provisions of the Statute must be read along, and in consonance, with the general principles of law which import such obligations on the part of the Government and an implied corresponding discharge to the petitioners to the extent of such deduc tions in their liabilities. There is a resulting, statuto ry trust in the hands of the Gov 597 ernment to pay the sums so deducted to the respective credi tors, even in the absence of express provisions in this behalf in the Statute the general principles of law operate. As a matter of construction it requires to be held that these obligations and consequences follow. There is really no justifiable grievance on this score. Contention (g) is, accordingly, held and answered against the petitioners. Re: Contentions (h) and (i): These two contentions pertain to the machinery envisaged by and set up under the impugned law for resolution of disputes on questions essential for the determination of the amount in accordance with the provisions of the Act. The contention of the petitioners, in substance, is that there is no machinery set up under the Act to determine the amounts under Section 9(c), (d) and (e) and to assess the loss referred to in Section 8. The Other contention on the point is that the arbitra tion clause is a limited one and is confined only to dis putes in four areas specifically enumerated in clauses (a) to (d) of sub section (1) of Section 20 of the Act. These lacunae in the Statute, it is contended, render the scheme of the Act for the determination of the 'Amount ' unreasonable and the scheme of the 'Act ' in relation to the determination of the 'Gross Amount ', the deductions to be made therefrom and the assessment of the 'amount ' payable for the acquisition, unworkable. The Courts strongly lean against any construction which tends to reduce a Statute to a futility. The provision of a Statute must be so construed as to make it effective and operative, on the principle "ut res majis valeat quam periat". It is, no doubt, true that if a Statute is abso lutely vague and its language wholly intractable and abso lutely meaningless, the Statute could be declared void for vagueness. This is not in judicial review by testing the law for arbitrariness or unreasonableness under Article 14; but what a Court of construction, dealing with the language of a Statute, does in order to ascertain from, and accord to, the Statute the meaning and purpose which the legislature in tended for it. In Manchester Ship Canal Co. vs Manchester Racecourse Co., Farwell J. said: "Unless the words were so absolutely senseless that I could do nothing at all with them, I should be bound to find 598 some meaning and not to declare them void for uncertainty." (See page 360 and 361) In Fawcett Properties vs Buckingham Coun try Council, Lord Denning approving the dictum of Farwell, J. said: "But when a Statute has some mean ing, even though it is obscure, or several meanings, even though it is little to choose between them, the Courts have to say what meaning the Statute to bear rather than reject it as a nullity." (Vide page 516) It is, therefore, the Court 's duty to make what it can of the Statute, knowing that the Statutes are meant to be operative and not inept and that nothing short of impossibility should allow a Court to declare a Statute unworkable. In Whitney vs Inland Revenue Commissioner, Lord Dunedin said: "A Statute is designed to be worka ble, and the interpretation thereof by a Court should be to secure that object, unless cru cial omission or clear direction makes that end unattainable." (vide page 52) 37. On consideration of the Statute on hand, it is not possible to subscribe to the view that the impugned law has not envisaged any machinery for the due ascertainment of the sums referred to in clauses (c), (d) and (e) of Section 9 which require, on such ascertainment and quantification, to be deducted from the gross amount. Section 10 enjoins upon the Government to appoint a person having adequate knowledge and experience in matters reling to accounts "to assess the net amount payable under this Act by the Government to the licensee after making the deductions mentioned in Section 9". Sub Section (2) of Section 10 provides that the Special Officer may call for the assistance of such Officer and staff of the Government or the Board or the undertaking as he may deem fit "in assessing the net amountpayable". These provisions, contemplate the determination by the Special Officer, who is constituted as a statutory authority under the Act, of the net amount payable. The functions of the Special Officer include an examination of the correctness of all the determinations made by the Government in the matter of the deductions, except where Government is statutorily specially constituted as an appellate authority in respect of certain matters under the Act. The Proviso to Sections 8 and 9 envisages prior notice to be 599 issued to the licensee by the Government to show cause against any deduction proposed to be made under Section 8 or 9, as the case may be, within the period specified in the Provisos. Even after the Government so makes such determina tion of the amounts which, according to it, are deductible from the gross amount, such determination would not be final. The assessment of the net amount payable to the licensee will have to be made by the "Special Officer". It is reasonable to construe that the decision of the Govern ment both under Sections 8 and 9 arrived at, even after giving an opportunity to the licensee of being heard, would not be final, but the final determination will have to be made by the "Special Officer" appointed under Section 10 of the Act. Section 10(1) and (2) of the Act must be so con strued as to enable the "Special Officer" to take into account the determinations respecting the deduction under Section 9 and 10 of the Act made by the Government and take a decision of his own in the matter. The power to "assess" the net amount by necessary implication takes within its sweep the power to examine the validity of the determination made by the Government in the matter of deductions from the gross amount. This power to determine and assess the 'net amount ' payable by necessary implication cover matters envisaged in Sections 8 and 9. Though only Section 9 is specifically referred to in sub section (1) of section 10, the language of sub section (1) and (2) which enable the Special Officer to "assess" the net amount paybale would, by necessary implication, attract the power to decide as to the validity and correctness of the deduction to be made under Section 8 as well. So construed, the provisions of Section 10 would furnish a reasonably adequate machinery for the assessment of the "net amount" payable to licensee. So far as Arbitration is concerned, even after the decision of the "Special Officer", there is the further Arbitral forum to decide disputes in respect of the specific areas in which disputes are rendered arbitrable under Sec tion 20. In view of these circumstances, we think the grievance of the petitioners on these points questions are not sub stantial. The points (h) and (i) are also, accordingly, held and answered against the petitioners. In the result, for the foregoing reasons all the contentions urged by the petitioners in support of their challenge to the impugned legislations fail. The Writ peti tions are, accordingly, dismissed; but in the circumstances, there will be no order as to costs. G.N. Petitions dis missed.

The petitioners Public Limited Companies were grant ed licences under the provisions of the for supply of electricity within the respective licensed areas of Tinsukhia and Dibrugarh Municipal Boards. The Dihrugarh Company was granted licence in 1928 on certain terms and conditions with an option to the State to purchase the under. taking on the expiry of 50 years and thereafter on the expiry of every subsequent period of twenty years. So also, the Tinsukhia company was granted licence in 1954 on certain terms and conditions with an option to the State Government to purchase the undertaking on the expiry of 20 years and thereafter on the expiry of every 20 years. The State Government negotiated with the companies for pur 545 chasing them. The negotiations were going on for several years. On 27.9.1972 the Governor promulgated two ordinances for the compulsory acquisition of the undertakings of the two companies. Subsequentiy, the ordinances were replaced by the Indian Electricity (Assam Amendment) Act, 1973 and the Tinsukhia & Dibrugarh Electric Supply Undertakings (Acquisi tion) Act, 1973. The two legislations, one amending the provisions of Section 5(2), 6(7) and 7 A of the and the other providing for the acquisition of the two undertakings viz. the Tlnsukhia and Dibrugarh Electric Supply Undertaking (Acquisition) Act, '1973 were Challenged in this Court by the writ petitioners on several grounds. It was contended that in view of the private negotiations and the exercise of the option to purchase, the legislations were not bona fide, but constituted a mere colourable exer cise of legislative power and that the real objects of the two legislations have no direct and reasonable nexus to the objects envisaged in Article 39(b) of the Constitution. It was also contended that what was sought to be acquired was not the undertakings of the two companies, but the differ ence between the market value of the undertakings agreed to by the State Government and the Book value of the undertak ings which the law has substituted by virtue of the amend ments made in the . The Article 31 C protection given to the legislations, and some of the specific provisions of the acquisition law which excluded certain items from the computation of compensation and authorised certain deductions in the amount of compensation have also been challenged. On behalf of the Respondents, it was contended that electrical energy has been a material source of the communi ty and any legislative measure to nationalise the undertak ing fell squarely within the ambit of Article 39(b) and was entitled to Article 31 C protection. It was also asserted that book value has been a well accepted concept of valua tion in accountancy and it cannot be characterised as illu sory even if the legislations did not enjoy the protection of Article 31 C. Dismissing the writ petitions, HELD: [R.S. Pathak. CJ, M.N. Venkatachaliah, section Natara jan and section Ranganathan, J J per Venkatachaliah, J.] 1.1. The proposition that the legislative declaration of the nexus between the law and the principles in Article 39 is inconclusive and justiciable is well settled. The sequen tor is that whenever any immunity 546 is claimed for a law under Article 31 C, the Court has the power to examine whether the provisions of the law are basically and essentially necessary for the effectuation of the principles envisaged in Article 39(b) and (c). It can, hardly be gain said that the electrical energy generated and distributed by the undertakings of the petitioners constitutes "material resources of the communi ty". The idea of distribution of the material resources of the community in Article 39(b) is not necessarily limited to the idea of what is taken over for distribution amongst the intended beneficiaries. That is one of the modes of "distri bution". Nationalisation is another mode. The economic cost of social and economic reform is, perhaps, amongst the most vexed problems of social and economic change and constitute the core element in Nationalisation. The need for constitu tional immunities for such legislative efforts at social and economic change recognise the otherwise unaffordable econom ic burden of reforms. It is not possible to divorce the economic considerations or components from the scheme of nationalisation with which the former are inextricably integrated. The financial cost of a scheme of nationalisa tion lies at its very heart and cannot be isolated. Both the provisions relating to the vestiture of the undertakings in the State and those pertaining to the quantification of the "Amount" are integral and inseparable parts of the integral scheme of nationalisation and do not ambit of being consid ered as distinct provisions independent of each other. The debate whether nationalisation is by itself to be considered as fulfilling a public purpose or whether the nationalisa tion should be shown to be justified effectuation of the avowed objectives of such nationalisation the choice be tween the pragmatic and the doctrinaire approaches is concluded and no longer available. [578C. D, E, 579C, D, H, 580A, B, E] 1.3. The right, title and interest of the licensee in the undertaking does not get transferred to the Board or the State, as the case may be, immediately upon the mere exer cise of the option to purchase. The exercise of the option would have no such effect on the licensee 's right to carry on his business until the undertaking was actually taken over and paid for. The contentions that immediately upon the exercise of the option, ipso facto, the relationship between the parties get transformed into one as between a Debtor and a Creditor and that the interest of the licensee in the undertaking becomes an "actionable right", or a 'chosein action" and that no public purpose could be said to be served by the acquisition of a "chose in action" are all out of place in the instant case. [582E, 583C] 547 1.4. The acquisition legislation was brought forth for securing the principles contained in Article 39(b) of the Constitution and is protected under Article 31 C. The Assam amendment made to the provisions of the , amending the basis for quantification of the amount payable in the case of a statutory purchase pursuant to the exercise of the option in terms of the licence would apply to and govern cases of statutory sales and would not assume any immateriality in the instant case. [585E, F] Kesavananda Bharati vs State of Kerala; [1973] Suppl. SCR 1; Minerva Mills Ltd. vs Union of India, ; ; Sanjeev Coke Mfg. Co. vs Bharat Coking COal Ltd., ; ; State of Tamil Nadu vs L. Abu Kavar Bai; , ; Akadasi Padhart vs State of Orissa and Ors., ; ; Godra Electricity Co. Ltd. and Anr. vs The State of Gujarat and Anr., ; and Madan Mohan Pathak vs Union of India and Ors., , relied on. Fergusan vs Skrupa, ; ; Fazilka Electric Supply Co. Ltd. vs The Commissioner of Income Tax, Delhi, [1962] Suppl. 3 SCR 496 and Gujarat Electricity Board vs Shantilal; , , referred to. Bihar State Electricity Board vs Patna Electricity Supply Co. Ltd., ; distinguished. "History of the treatment of choses in action by the common law" by W.S. Holdsworth Vol. 33 Harvard law Review referred to. 2. It may not be just to deprive a recompence that is just and fair, in all cases. But that. is not to say that even ,under a law which has the protection of article 31 A or 31 C, the adequacy, or justness or fairness of the compensa tion would, yet, be justiciable. Article 31 C is in effect and substance is to 'urban property ' of what Article 31 A is to 'agricultural property '. All the same, the concept of "Book Value" is an accepted accountancy concept of value. It cannot be held to be illusory. Even if the impugned law had no protection of Article 31 C and tests appropriate to and available are applied, in the circumstances of the present case, it cannot be said that the principles envisaged in the acquisition law lead to an "amount" which can be called unreal or illusory. [590C, 592B] 548 Eswari Khetan Sugar Mills vs State of U.P., ; ; relied on. Gwalior Rayon vs Union of India, ; 671; referred to. Under the law when a requisition is made by an in tending consumer for electrical energy, the licensee has an obligation to lay down service lines. But, according to the provisions the entire cost of service line is not required to be borne by the licensee. The licensee is entitled to call upon the consumer to pay part of the cost of service line which may in a given case amount to a substantial part in accordance with the provisions in the Schedule to the Electricity Supply Act. While it is true that the ex pression 'works ' in Section 2(h) of the Indian Railways Act, 1910 includes 'Service lines ', the reason why 'Service lines ' could justifiably be excluded from valuation for purposes of determination of the 'amount ', is that the new licensee is to repair and maintain them. [593B, C; 592F, G] Dakor Umreth Electricity Co. Ltd. vs State of Gujarat, ; ; approved. On a reasonable construction, the expressions 'amounts remaining ' and 'in so far as such amounts have not been paid over ' necessarily exclude any such duplication of the accountability of the licensee for these 'Reserves '. If any part of the reserves is invested in "fixed assets" and the reserves in the form of such "fixed assets" are taken over by the Government pursuant to the acquisition, what remains to he accounted for by the licensee is only the 'amounts remaining ' in the pertinent accounts. The liability of the licensee for deduction of the 'Reserves ' from the 'amount ' would arise only if the balance remaining in those accounts are not paid. [594F, G] 5. As regards the liability of the licensee under Sec tion 11(3) of the Acquisition Act in respect of the amounts payable to employees retrenched by the Government or the 'Board ' as the case may be, within one year from the vesting date after the take over even if this question is justicia ble it is not unreasonable or arbitrary as it envisages the continuance of a liability which was, otherwise, sub stantially that of the licensee. [595F, G, H, 596A, B] 6. Though some of the liabilities arising out of the conduct of the licensees ' business prior to vesting are not taken over by Government, some of those liabilities are, yet, authorised to be deducted from the 549 amount. The purpose of this provision is too obvious to require any statutory declaration or the obligations that arise in law and are attandant upon these sums coming to the hands of and retained by the Government. Quite obviously, the provision is not intended for an unjust enrichment in the hands of Government. The purpose is obviously to facili tate recovery of certain types of debts owed to public institutions etc., and the deduction is for the benefit of those creditor institutions. The Government would, plainly, be under a legal obligation to pay the sums so deducted, to the concerned creditors. The provisions of the Statute must be read along, and in consonance, with the general princi ples of law which import such obligations on the part of the Government and an implied corresponding discharge to the petitioners to the extent of such deductions in their li abilities. There is a resulting statutory trust in the hands of the Government to pay the sums so deducted to the respec tive creditors, even in the absence of express provisions in this behalf in the Statute, the general principles of law operate. As a matter of construction it requires to be held that these obligations and consequences follow. [596E, F, G, H, 597A] 7. The Courts strongly lean against any construction which tends to reduce a Statute to a futility. The provision of a Statute must be so construed as to make it effective and operative, on the principle "but res majis valeat quam periat". It is, no doubt, true that if a Statute is abso lutely vague and its language wholly intractable and abso lutely meaningless, the Statute could be declared void for vagueness. This is not in judicial review by testing the law for arbitrariness or unreasonableness under Article 14; but what a Court of construction, dealing with the language of a Statute, does in order to ascertain from, and accord to, the Statute the meaning and purpose which the legislature in tended for it. It is, therefore, the Court 's duty to make what it can of the Statute, knowing that the statutes are meant to be operative and not inept and that nothing short of impossibility should allow a Court to declare a Statute unworkable. [597F, G, 598C] Manchester Ship Canal Co. vs Manchester Race Course Co., and Fawcet Properties vs Buckingham County Council, [1960] 3 AII.E.R. 503, referred to. Section 10 of the Acquisition Act enjoins upon the Government to appoint a person having adequate knowledge anti experience in matters relating to accounts "to assess the net amount payable under the Act by the Government to the licensee after making the deductions mentioned in sec tion 9". Proviso to Sections 8 and 9 envisages prior 550 notice to be issued to the licensee by the Government to show cause against any deduction proposed to be made under Section 8 or 9, as the case may be, within the period speci fied in the provisos. Even after the Government so makes such determination of the amounts which, according to it, are deductible from the gross amount, such determination would not be final. The assessment of the net amount payable to the licensee will have to be made by the "Special Offi cer". It is reasonable to construe that the decision of the Government both under Sections 8 and 9 arrived at, even after giving an opportunity to the lincensee of being heard, would not be final, but the final determination will have to be made by the "Special Officer" appointed under section 10 of the Act. Section 10(1) and (2) of the Act must be so construed as to enable the "Special Officer" to take into account the determination respecting the deduction under Sections 9 and 10 of the ACt made by the Government and take the decision of his own in the matter. The power to "assess" the net amount by necessary implication takes within its sweep the power to examine the validity of the determination made by the Government .in the matter of deduction from the gross amount. This power to determine and assess the 'net amount ' payable by necessary implication cover matters envisaged in Sections 8 and 9. Though only Section 9 is specifically referred to in sub sections (1) and (2) of section 10, the language of sub sections (1) and (2) which enable the Special Officer to "assess" the net amount pay able would by necessary implication, attract the power to decide as to the validity and correctness of the deduction to be made under Section 8 as well. So construed. the provi sions of Section 10 would furnish a reasonably adequate machinery for the assessment of the "net amount" payable to the licensee. [598E H; 599A E] 9. So far as Arbitration is concerned, even after the decision of the "Special Officer", there is the further arbitral forum to decide disputes in respect of the specific areas in which disputes are rendered arbitrable under Sec tion 20. There is a provision for appointment of a sitting or retired District or High Court Judge as arbitrator under the said section. Hence it cannot be said that there is no proper machinery for resolving the disputes between the Government and the licensee rendering the Acquisition Act unworkable. [599F, G] Per Mukharji, J. (Concurring) 1. Article 39(b) of the Constitution enjoins that the State in particular should direct its policy towards secur ing that the ownership and control of the material resources of the community are so distri 551 buted as to best subserve the common good and that the operation of the economic system does not result in concen tration of wealth and means of production to the common detriment. In order to decide whether a Statute is within Article 31 C, the Court, if necessary, may examine the nature and the character of the legislation and the matter dealt with as to whether there is any nexus between the law and the principles mentioned in Article 39(b) and (c). On such an examination if it appears that there is no such nexus between the legislation and the objectives and the principles mentioned in Article 39(b) and (c), the legisla tion will not enjoy the protection of Article 31 C. In order to see the real nature of the Statute, if need be, the Court may also tear the veil. [553E H] Kesavananda Bharati vs State of Kerala, [1973] Suppl. SCR 1; relied on. Charles Russel vs The Queen, [1882] VII AC 829; referred to. Whenever a question is raised that the Parliament or the State Legislature have abused their powers and inserted a declaration in a law for not giving effect to securing the Directive Principles specified in Article 39(b) and (c), the Court can and must necessarily go into that question and decide. If the Court comes to the conclusion that the decla ration was merely a pretence and that real purpose of the law is the accomplishment of some object other than to give effect to the policy of the State towards securing the Directive Principles as enjoined by Article 39(b) and (c), the declaration would not debar the Court from striking down any provision therein which violates Articles 14, 19 or 31. In other words, if a law passed ostensibly to give effect to the policy of the State is, in truth and substance, one for accomplishing an unauthorised object, the Court would be entitled to tear the veil created by the declaration and decide according to the nature of the law. The only question open to judicial review under_Article 31 C is whether there is a direct and reasonable nexus between the impugned law and the provisions of Article 39(b) and (c). Reasonableness is evidently regarding the nexus and not regarding the law. [554D, E, F, 555B, C] Kesavananda Bharati vs State of Kerala, [1973] Suppl. SCR 1; Minerva Mills Ltd. vs Union of India, ; and Sanjeer Coke Mfg. Co. vs Bharat Coking Coal Ltd. & Anr. , ; , relied on. It is indisputed that the electric energy generated by the petitioner companies constitutes material resources of the community 552 within the scope and meaning of Article 39(b), and having regard to the true nature and the purpose of the legisla tions, reading the legislations entirely, the legislations have a direct and reasonable nexus with time objective of distributing the material resources so as to subserve the common good. The determination of value thereof and the substitution of the book value in place of market value, are only methods for such acquisition and do not disclose the true nature and character of the legislation, but are inci dental provisions thereof. if that is the position then it is incorrect to say that what was acquired, was not the material resources but chose in action. The true nature and character of the legislations in question was to acquire the material resources, namely, the electric energy for better supply and distribution. [556D, E, F] State of Tamil Nadu & Ors. vs L. Abu Kavur Bai & Ors., , relied on. Bihar State Electricity Board & Ors. vs Patna Electrici ty Supply Co. Ltd., distinguished. Having regard to the true nature and character of the legislations in question the legislations are not colourable legislations in the sense that there was no direct and reasonable nexus with Article 31(b) and (c) of the Constitu tion. [556H]

6041.txt

Appeal No. 729 of 1964. Appeal by special leave from the order dated February 1964 of the Rajasthan High Court in D.B. Civil Appeal No. 2 of 1963. O. P. Varma, for the appellants. Mohan Behari Lal, for the respondent. The Judgment of the Court was delivered by Gajendradkar, C.J. This appeal by special leave arises from an application made by the respondent Puniya in the Court of the Senior Civil Judge at Jhalawar under section 25 of the (No. 8 of 1890) (hereinafter called 'the Act '), for the custody of his daughter Mt. Chitra. To this application, the 103 respondent had impleaded the two appellants, Gulab Bai and her, husband Onkar Lal. The respondent is a Kumhar by caste, whereas the appellants are fat. The respondent 's case was that the minor Chitra who was about 11 years of age at the date of the application, had been living with the appellants for the last 4 or 5 years with his consent. Whilst the minor girl was living with the appellants, she used to come to spend some time with the respondent and his wife; but for some time past, the appellants did not allow Chitra to visit her parents. That is why the respondent thought it necessary to move the Court for an order under section 25 of the Act. The claim thus made by the respondent was disputed by the appellants. They alleged that the respondent and his wife had lost some children in their infancy, and so, they decided to leave the minor in the custody of the appellants, in the hope that their custody would save the child. Accordingly, the minor was entrusted to the appellants a few hours after her birth and in fact, she was given away by the respondent and his wife to the appellants to be looked after as if she was their adopted child. During all these years, the appellants have looked after the minor as their own child, have taken fond care of her, and have looked after her education. The appellants. and the respondent and his wife are neighbours, and the appellants denied the allegation made by the respondent that they ever obstructed the minor from visiting her parents. According to the appellants, recently an unfortunate incident had taken place between appellant No. 1 and the wife of the respondent and that was the real cause of the present application. They pleaded that as a result of the ugly incident that took place between the two ladies, the minor was frightened and appeared to be disinclined to visit her parents any longer. On these pleadings, the parties led evidence to support their respective contentions. The learned trial Judge held that the child had been entrusted to the appellants soon after she was born, and that she was looked after by the appellants as if she was their daughter. He felt satisfied that in case the child was removed from the homely atmosphere which she enjoyed in the house of the appellants, that would definitely be detrimental to her welfare and would also affect her health, because she had come to look upon the appellants as her parents. The learned trial Judge examined the child in order to ascertain her own wishes, because he thought that she had attained the age of discretion and could express her wishes intelligently. He was convinced that the child definitely preferred to stay with the appellants. Having come to the conclusion that it would be inconsistent with the interests of the child to allow the application made by the respondent, the learned Judge ordered that 104 appellant No. 2 should be appointed the guardian of the person of the minor under sections 7 and 8 of the Act. He directed that the said Guardian shall give an undertaking to the. Court not to remove the child from the territorial jurisdiction of the Court and not to marry her without the permission of the Court. A direction was also issued that the child shall not, of course, be married outside her caste without the consent of her parents even if she so desires. Against this order, the respondent preferred an appeal before the Rajasthan High Court. This appeal was heard by a learned single Judge of the said High Court who reversed the decision of the trial Judge. He came to the conclusion that it would be in the interests of the minor to deliver her to the custody of the respondent and his wife. He held that under section 6 (a) of the Hindu Minority and Guardianship Act, 1958, the respondent was entitled to be the guardian of his daughter in the absence of any allegation or proof that he was in any way unsuitable to be such a guardian. The learned single Judge also took into account the fact that the appellants and the respondent belonged to different castes. and he held that since the minor was then about 12 years of age, it was in her interest that she went back to be looked after by her own parents. ion this view, the learned single Judge set aside the order passed by the learned trial Judge by which appellant No. 2 was appointed the guardian of the minor and directed him to deliver the minor to the custody of the respondent. The order passed by the learned Judge further provided that if the appellants did not deliver the minor Chitra to her parents on the expiry of three months, the respondent shall apply for execution of the order and that it would be executed as a decree under section 25 (2) of the Act by issue of a warrant under section 100 of the Code of Criminal Procedure. Against this decision, the appellants preferred an appeal under clause 18 of the Rajasthan High Court Ordinance, 1949 (No. 15 of 1949) (hereafter called 'the Ordinance '). This appeal was dismissed by a Division Bench of the High Court on the ground that the appeal was incompetent having regard to the provisions of sections 47 and 48 of the Act. The appellants then moved the High Court for certificate to prefer an appeal to this Court, but the said application was dismissed. That is how the appellants applied for and obtained special leave from this Court, and it is with the said leave that this appeal has come before us. The short question of law which arises for our decision is whether the High Court was right in holding that the appeal under clause 18 (1) of the Ordinance was incompetent and that raises the question about the construction of sections 47 and 48 of the Act. 105 Before dealing with this point, two relevant facts ought to be mentioned. The Act was extended to Rajasthan by the Part B States (Laws) Act, 1951 (Act III of 1951) on the 23rd February; 1951; but before the Act was thus extended to Rajasthan, the Ordinance had already been promulgated. Clause 18(1) of the Ordinance provides, inter alia, that an appeal shall lie to the High Court from the judgment of one Judge of the High Court; it excepts from the purview of this provision certain other judgments with which we are not concerned. It is common ground that the judgment pronounced by the learned single Judge of the High Court on the appeal preferred by the respondent before the High Court, does not fall within the category of the exceptions provided by clause 1 8 ( 1 ) of the ordinance; so that if the question about the competence of the appeal preferred by the appellants before the Division Bench of the High Court had fallen to be considered solely by reference to clause 18(1), the answer to the point raised by the appellants before us would have to be given in their favour. The High Court has, however, held that the result of reading sections 47 and 48 together is to make the present appeal under clause 18(1) of the Ordinance incompetent. The question which arises before us is : is this view of the High Court right ? Section 47 of the Act provides that an appeal shall lie to the High Court from an order made by a Court under sections specified in clauses (a) to (j) thereof. Clause (c) of the said section refers to an appeal against. an order made under section 25, making or refusing to make an order for the return of a ward to the custody of his guardian. It is thus clear that the order passed by the learned trial Judge in the present proceedings was an order under section 25 of the Act, and as such, is appealable under section 47; and when as a result of the rules framed by the Rajasthan High Court the present appeal was placed before a learned single Judge of the said High Court for hearing and was decided by him, his decision became appealable to a Division Bench of the said High Court under cl. 1 8 (1 ) of the Ordinance. Thus far, there is no difficulty or doubt. But the High Court has held that section 48 of the Act, in substance, amounts to a prohibition against an appeal to a Division Bench under cl. 18(1) of the Ordinance; and that makes it necessary to examine the provisions of section 48 carefully. Section 48 reads thus "Save as provided by the last foregoing section and by section 622 of the Code of Civil Procedure, an order made under this Act I shall be final, and shall not be liable to be contested by suit or otherwise. " 106 It is clear that what is made final by section 48 is an order made under this Act; and the context shows that it is an order made by the trial Court under one or the other provision of the Act. This position is made perfectly clear if the first part of section 48 is examined. The finality prescribed for the order made under this Act is subject to the provisions of section 47 and section 622 of the earlier Code which corresponds to section 115 of the present Code. In other words, the saving clause unambiguously means that an order passed by the trial Court shall be final, except in cases where an appeal is taken against the said order under section 47 of the Act, or the propriety, validity, or legality of the said order is challenged by a revision application preferred under section II 5 of the Code. It is, therefore, essential to bear in mind that the scope and purpose of 'section 48 is to make the orders passed by the trial Court under the relevant provisions of the Act final, subject to the result of the appeals which may be preferred against them, or subject to the result of the revision applications which may be filed against them. In other words, an order passed on appeal under section 47 of the Act, or an order passed in revision under section II 5 of the Code, are, strictly speaking, outside the purview of the finality prescribed for the orders passed under the Act, plainly because they would be final by themselves without any such provision, subject, of course, to any appeal provided by law or by a constitutional pro vision, as for instance, article 136. The construction of section 48, therefore, is that it attaches finality to the orders passed by the trial Court subject to the provisions prescribed by section 47 of the Act, and section 115 of the Code. That is one aspect of the matter which is material. The other aspect of the matter which is equally material is that the provisions of section 47 are expressly saved by section 48, and that means that section 47 will work out in an ordinary way without any restriction imposed by, section 48. In considering the question as to whether a judgment pronounced by a single Judge in an appeal preferred before the High Court against one or the other of the orders which are made appealable by section 47 will be subject to an appeal under clause 1 8 (1) of the Ordinance, section 48 will have no restrictive impact. The competence of an appeal before the Division Bench will have to be judged by the provisions of cl. 18 itself. Section 48 saves the provisions of section 47, and as we have already indicated, considered by themselves the provisions of section 47 undoubtedly do not create any bar against the competence of an appeal under cl. 18(1) of the Ordinance where the appeal permitted by section 47 is heard by a learned single Judge of the High Court. Therefore, we are satisfied that the High Court was in error in coming to the conclusion that an appeal before a Division Bench of the said High Court under clause 18 (1) of the Ordinance was incompetent. 107 It is true that in upholding the respondent 's plea that the appeal preferred by the appellants under clause 18(1) of the Ordinance was incompetent, the High Court has no doubt purported to rely upon and apply its earlier decision in the case of Temple of Shri Bankteshwar Balai Through Rampal vs The Collector, Ajmer(1). The said decision, however, was concerned with the effect of the provisions prescribed by section 66(3) of the Ajmer Abolition of Intermediaries and Land Reforms Act (No. III of 1955) in relation to clause 18 of the Ordinance, and since we are not called upon to consider the correctness of the conclusion reached in that behalf, it is unnecessary for us to examine whether the High Court was right in holding that the provisions of the said section 66(3) created a bar against the competence of the appeal under cl. 18(1) of the Ordinance. All that we are concerned to deal with in the present appeal is the effect of section 48 of the Act, and in our opinion, the High Court was in error in holding that section 48 excluded the application of clause 1 8 (1) of the Ordinance to the decision of the learned single Judge in the present proceedings. In this connection, we may incidentally refer to the decision of this Court in Union of India vs Mohindra Supply Company(1). In that case, this Court has held that an appeal against the appellate order of the single Judge was barred under section 39(2) of the Indian , because the expression "second appeal" in section 39(2) means a further appeal from an order passed in appeal under section 39 (1) and not an appeal under section 100 of the Code, and as such, the said expression "second appeal" includes an appeal under the Letters Patent. In substance. the effect of the decision of this Court in the case of Mohindra Supply Co.(2) is that by enacting section 39(2) the has prohibited an appeal under the Letters Patent against an order passed under section 39 (1). This decision again turned upon the specific words used it section 39(1) & (2) of the and is not of any assistance in interpreting the provisions of section 48 of the Act with which. we are concerned in the present proceedings. The question a,, to whether an appeal permitted by the relevant clause of the Letters Patent of a High Court can be taken away by implication, had been considered in relation to the provisions of section 588 of the Codes of Civil Procedure of 1877 and 1882. The first part of the said section had provided for an appeal from the orders specified by clauses (1) to (29) thereof, and the latter part of the said section had laid down that the orders passed in appeals under this section shall be final. Before the enactment of (1) LL.R. (2) ; Sup CI/66 8 108 the present Code, High Courts in India had occasion to consider whether the provision as to the finality of the appellate orders prescribed by section 588 precluded an appeal under the relevant clauses of the Letters Patent of different High Courts. There was a conflict of decisions on this point. When the matter was raised before the Privy Council in Harrish Chunder Chowdhry vs Kali Sundari Debia(1), the Privy Council thus tersely expressed its conclusion: "It only remains to observe that their Lordships do not think that section 588 of Act X of 1877, which has the effect of restricting certain appeals, applies to such a case as this, where the appeal is from one of the Judges of the Court to the Full Court". Basing themselves on these observations, the High Courts of Calcutta, Madras, and Bombay had held that section 588 did not take away the right of appeal given by clause 15 of the Letters Patent, vide Toolsee Money Dassee & Others vs Sudevi Dassee & Others(2), Sabhapathi Chetti & Others vs Narayanasami Chetti(3), and The Secretary of State for India in Council vs Jehangir Maneckji Cursetji (4 ) respectively. On the other hand, the Allahabad High Court took a different view, vide Banno Bibi and others vs Mehdi Husain and Others(5), and Muhammad Naim ul Lah Khan vs Ihsan Ullah Khan(6). Ultimately, when the present Code was enacted, section 104 took the place of section 588 of the earlier Code. Section 104(1) provides that an appeal shall lie from the following orders, and save as otherwise expressly provided in the body of this Code or by any law for the time being in force, from no other orders. It will be noticed that the saving clause which refers to the provisions of the Code, or to the provi sions of an law for the time being in force, gives effect to the view taken by the Calcutta, Madras and Bombay High Courts. In fact, later, the Allahabad High Court itself has accepted the same view in L. Ram Sarup vs Mt. Kaniz Ummehani (7 ). We have referred to these decisions to emphasise the fact that even where the relevant provision of section 5 8 8 of the earlier Code made certain appellate orders final, the consensus of judicial opinion was that the said provision did not preclude an appeal being filed under the relevant clause of the Letters Patent of the High Court. In the present case, as we have already indicated, section 48 in terms saves the provisions of section 47 of the Act as well as those of section 115 of the (1) 10 I.A. 4 at p. 17. (2) (3) (1902))5 Mad. (4) (5) (1889) 11 Alld. (6) (1892) 14 AIId. 226 (F.P.) (7) A.I.R. 1937 Alld. 109 Code, and that gives full scope to an appeal under clause 18 of the Ordinance which would be competent when we deal with the question about appeals under section 47 of the Act considered by itself. The result is, the appeal is allowed, the order passed by the Division Bench of the High Court dismissing the appeal preferred by the appellants under cl. 18(1) of the Ordinance on the ground that it is incompetent, is set aside, and the said appeal is remitted to the High Court for disposal in accordance with law. In view of the unusual circumstances of this case, we direct that parties should bear their own costs incurred so far.

The respondent 's application under section 25 of the Guardians and Wards Act for the custody of respondent 's daughter was rejected by the Civil Judge. When the decision was reversed in appeal by a single Judge of the Rajasthan High Court, the appellants preferred an appeal to the Division Bench under cl. 18 of the Rajasthan High Court Ordinance. This was dismissed on the ground that the appeal was incompetent having regard to sq. 47 and 48 of the Guardians and Wards Act. In appeal to this Court, HELD:The appeal before the Division Bench of the Rajasthan High Court under cl. 18(1) of the Ordinance was competent. [106 H] The competence of an appeal before the Division Bench will have to be judged by the provisions of cl. 18 of the Ordinance itself and section 48 of the Act has no restrictive impact. Section 48 saves the provisions of section 47 of the Act and section 115 of the Code of Civil Procedure; and considered by themselves the provisions of section 47 do not create any bar against the competence of an appeal under cl. 18(1) of the Ordinance where the appeal permitted by section 47 is heard by a single Judge. [106 G] Section 48 attaches finality to the order passed by the trial Court subject to the provisions prescribed by section 47 of the Act and section 115 of the Code of Civil Procedure. [106 E]

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rit Petition (Civil) NO. 194 of 1988. etc etc. 764 (Under Article 32 of the Constitution of India). D.D. Thakur, T.S. Krishnamurthi Iyer, Rajesh Mitra, Ms. Santosh Kalra, H.K. Puri, R.L. Roshan, S.S. Sabharwal, S.K. Sabharwal, and M.K.D. Namboodiri for the Petitioners. P.P. Rao, S.N. Kacker, G. Rath, Mrs. A. Mathur, A. Mariarputham, C.M. Nayyar, D.S. Narula, Kailash Vasudev, Mrs. Uma Jain and P.K. Mehta for the Respondents. The following Order of the Court was delivered: O R D E R The writ application under Article 32 and the transferred writ petitions from the Delhi High Court relate to selection of medical graduates for undertaking post graduate study for the year 1988 under the Delhi University. In Dr. Dinesh Kumar vs Motilal Nehru College, Allahabad & Ors., this Court emphasised the desirability of post graduate education in the Medical Faculty as far as possible to have uniformity throughout the country. It, therefore, commended to the educational institutions which followed the system of one year house job followed by two years ' post graduate course to switch over to the pattern of a three year post graduate course with house job in the first year. On September 25, 1987, in the very same matter, when the Court made an order reported in ; , it was pointed out that in some States the post graduate course is for a term of two years with one year housemanship while in the other States it is a full term of three years. This Court, therefore, directed with a view to bringing about uniformity on the basis of the principle accepted in the earlier decision that for admission beginning from 1993, there would be only one pattern, namely, a three year integrated course without any separate housemanship. The University of Delhi decided to adopt the three year course for the post graduate degree and a two year course for the diploma commencing from the academic Session of 1988. With a view to mitigating hardship to candidates/students who had already completed the house job and had become entitled to undergo the postgraduate course in two years, as a transitory provision, the University decided to continue the practice prevailing prior to 1988 for a year. The University evolved a scheme where under the number of seats for the post graduate course and diploma course available in the previous year for a student who had completed one year 's housemanship were left untouched. The number of such seats are 198 for the degree course 765 and 111 for the diploma course. Out of these 25% being placed at the disposal of the Government of India to be filled up on all India selection basis, the exact number available to be filled up by the University worked out to 149 and 84 respectively. As a transitional provision intended for the 1988 Session only the University agreed to fix 75% quota (representing 139 seats in the three year degree course and 66 seats in the two year diploma course). The following was specified a part of the Scheme: "Important Note Candidates who have done house job/junior Residency for a period of one year are not eligible for admission to 3 years Post Graduate Degree and 2 years PostGraduate Diploma Course. " The prospectus, however, prescribed one common selection test. A set of writ petitions were filed before the Delhi High Court challenging the scheme of the University mainly on the basis that when there was one selection test, merit should prevail and classification in the manner indicated by the scheme was bad. Reliance was placed before the High Court on observations of this Court that for post graduate degree the test of excellence should prevail and the level of high proficiency should be maintained. The High Court made an interim order requiring the University to have the selection completed on the basis of merit adjudged in the common selection test. This is a dispute essentially between the University and the freshers who have not done housemanship on one side and the seniors who have already completed housemanship for one year on the other. There can be no dispute that the seniors and the freshers belong to two separate categories and cannot be said to be equals. If the University had not prescribed a common selection test for these two categories, the question of test of comparative merit would not have arisen. If that had not been done perhaps the High Court would not have made its direction and the difficulty which has arisen would not have cropped up. The classification of freshers and those who have completed a year 's housemanship, though a perceptible one, loses its importance in view of the traditional situation that in the system prevailing prior to 766 1987, both the groups were treated as qualified for appearing at the selection test for post graduate study. We are told by learned members at the Bar that after transitory Note extracted above disappears in the coming year, the old practice shall again revive. This is an unfortunate situation. There being no limit to participation in the selection test for post graduate study candidates who become unsuccessful year after year, in the absence of any limit, keep on taking chances. This certainly is not a desirable feature and should be looked into by the appropriate authorities quickly. If the merit list of the selection examination is followed, more of seniors are entitled to admission and the scheme of reservation would not work. As we have already pointed out in the name of what counsel calls convenience (and how inconvenient it was is not known), the Delhi University made an initial mistake of having a common selection test for two categories of candidates. While we reiterate the view expressed by this Court on more than one occasion that selection in the higher courses should be on the basis of merit, in the peculiar facts and circumstances arising in this case purely confined to a transitory measure, the situation has to be handled not by first principles but by a somewhat informed pragmatic adhocism. This has to be so because the situation would not reoccur. Again the initial mistake of the Delhi University had brought some amount of confusion and it has mounted up following the intervention by the High Court. The time available is too short as under the Scheme intended to apply to the whole country the course has to begin on the 2nd of May, 1988. In this background we are of the view that the impasse created on account of the rival claims advanced by the freshers and the seniors has to have a rough and ready solution yet not arbitrary and as acceptable and satisfying as possible. We find that the two year degree course speciality wise has 149 seats while the three year degree course has 139 seats. For convenience we extract the particulars made available at page 4 of the Bulletine of Information. It may be pointed out that there are 1003 candidates as against total 270 vacancies (degree and diploma courses together) for the seniors; and there are 331 candidates as against 205 vacancies for the two courses for the freshers. With a view to providing some more seats for seniors we suggested to Mr. Rao appearing for the University that the number of seats may be increased and he has on instructions agreed, provided the Union of India provides funds and the Medical Council agrees to accommodate. There are 21 specialities as indicated above. We direct that the University shall create one seat in every speciality and thus 21 additional seats will 767 be available over and above the 149 seats fixed by the University representing the 75% quota. To this enhanced number of seats the 25% reservation of All India Selection shall not apply. From the reserved seats made for the freshers, 21 seats being one from every speciality shall be taken away and made available to the seniors. Thus 42 seats in all will be available for the seniors in the Post Graduate course to be filled up on the basis of inter se merit keeping the senior group apart. The creation of the 21 seats will involve additional funds to be provided by the Union of India. It will also require approval of the Medical Council of India and there will perhaps also be necessity for permitting the variation of guide student ratio. Since it is for one year and there would be no scope for recurrence and this has arisen in peculiar circumstances explained above, we direct the Government of India to take our order made without hearing it with a sense of understanding and make the necessary provisions. We also suggest to the Indian Medical Council to provide the necessary accommodation by relaxing the requirements. These may be done quickly so that the time schedule may not be affected. N.P.V. Petitions disposed of.

Pursuant to the directions of the Supreme Court in Dr. Dinesh Kumar & Ors vs Motilal Nehru Medical College Allahabad, & Ors. ; regarding uniformity in post graduate medical education, respondent No. 1 the University of Delhi, decided to adopt the three years course for the post graduate degree and a two years course for the diploma commencing from the academic session of 1988. However, with a view to mitigating hardship to candidates/students who had already completed the house job and had become entitled to undergo the post graduate course in two years, as a transitory provision, the respondent University decided to continue the practice prevailing prior to 1988 for a year. It evolved a scheme whereunder, the number of seats for the post graduate course and diploma course available in the previous year for a student who had completed one year 's housemanship were left untouched. As a transitional provision, the University agreed to fix 75% quota, for the 1988 session only. As per a Note in the scheme, candidates who had done house job/Junior Residency for period of one year were not eligible for admission to 3 years post graduate degree and 2 years post graduate diploma course. The prospectus, however, prescribed one common selection test for both the categories. A set of writ petitions were filed before the High Court challenging the scheme of the University mainly on the basis that when there was one selection test, merit should prevail and classification in the manner indicated by the scheme was bad. The High Court made an interim 763 order requiring the University to have the selection completed on the basis of merit adjudged in the common selection test. Disposing of the Writ Petitions and some cases transferred from the High Court, ^ HELD: The seniors who have already done one year 's housemanship and freshers belong to two categories and cannot be said to be equal. The question of test of comparative merit would not have arisen if the University had not prescribed a common selection test for these two categories. If the merit list of the selection test is followed, more seniors are entitled to admission and the scheme of reservation would not work. [765F G] While selection in the higher course should be on the basis of merit in the peculiar facts and circumstances of this case, purely confined to a transitory measure, the situation has to be handled not by first principles but by a somewhat informed pragmatic adhocism especially because the situation would not reoccur. [766D] The impasse created on account of rival claims by freshers and seniors has to have a rough and ready solution yet not arbitrary and as acceptable and satisfying as possible. [766F] With a view to providing some more seats for seniors, the respondent University should create one seat in every speciality. Thus, 21 additional seats will be available over and above the seats fixed by the University representing 75%. From the reserved seats made for the freshers, 21 seats, being one from every speciality, should be taken away and made available to the seniors. Thus, 42 seats in all will be available for the seniors in the Post Graduate course to be filled up on the basis of inter se merit, keeping the senior group apart. [766G H; 767A B] The Central Government should make the necessary provisions for funds. The Indian Medical Council may provide the necessary accommodation by relaxing the requirements. [767D] Dr. Dinesh Kumar vs Motilal Nehru College, Allahabad & Ors., ; , referred to.

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ivil Appeal No. 1573 of 1968. Appeal under section 116 A of the Representation of the People Act, 1951 from the judgment and order dated April 12, 1968 of the Allahabad High Court in Election Petition No. 19 of 1967. The appellant appeared in person. L.M. Singhvi, Veda Vyasa, Rishi Ram, Bishambhar Lal, H.K. Puri, U.P. Singh and K.K. Jain for respondent No. 1. The Judgment of the Court was delivered by Ray, J. This is an appeal against the judgment and order of the High Court at Allahabad dated 12 April, 1968 dismissing the election petition filed by the appellant. 895 The appellant contested the General Election to the Lok Sabha from Hapur Parliamentary Constituency in the year 1967. There were seven rival candidates numbered respondents 1 to 7. The appellant contested the election on the ticket of the Republican Party. He was then a sitting member of Parliament. Among the rival candidates, Prakash Vir Shastri was an independent candidate. The election symbol of the appellant was elephant and the election symbol of Prakash Vir Shastri was lion. Prakash Vir Shastri secured 1,49,943 votes while the appellant secured 1,01,875 votes. The Swatantra candidate Sri Naseem secured 34,274 votes. The Congress candidate respondent Smt. Kamla Chaudhury secured 33,988 votes. The appellant challenged the election on grounds of corrupt practices as mentioned in sub sections (2), (3) and (4) of the Representation of the People Act, 1951 (hereinafter referred to as the Act). At the hearing of the appeal the appellant appeared in person after counsel on his behalf had obtained leave of this Court to withdraw and to allow the appellant to appear in person. The various corrupt practices on which the appellant relied relate to occurrences at six places. The appellant did not press the other occurrences. The first occurrence relates to. a meeting held at the Town Hall Maidan at Hapur on 7 February, 1967. The appellant alleged that at the Hapur meeting respondent Prakash Vir Shastri and his supporters delivered inflammatory speeches against the appellant and thereafter the said respondent Shastri 's supporters entered the office of the Republican Party, to which the appellant belonged, assaulted the workers of the appellant, tore posters, abused the appellant and threatened his workers. In support of the allegations the appellant relied on Exhibit 28 the news report in the 'Hindustan ' published on 8 February, 1967 and also on Exhibit 23 the ' news. report in the newspaper named 'Vir Arjun ' published on 8 February, 1967 and exhibit 22 being the editorial in the Vir Arjun published on 7 February, 1967. The newspaper report in the 'Hindustan ' Exhibit 28 published on 8 February, 1967 contains the note of the correspondent from Hapur bearing the date 7 February, 1967 stating that a big meeting was held in support of respondent Shastri Lok Sabha candidate from Hapur Ghaziabad Constituency. In the 'Vir Arjun ' dated 8 February, 1967 Exhibit 23 it is stated that the supporters of the Republican Party were raising slogans that they were championing the cause of Harijans and Muslim youths from Aligarh University were brought for that purpose. It was also stated in the said newspaper that Muslim students of Aligarh were raising the slogans "Harijan Muslim are brothers and where from Hindu community has come. Black face be of Brahmin, barbar and lala. Throw shoes on Bhat, Gujar and Rajput". The appellant in paragraph 11 L15SupCI/69 13 896 Of the petition further alleged that respondent Shastri was associated with the 'Vir Arjun ' and K. Narendra, Editor of Vir Arjun who was a colleague of respondent Shastri wrote an editorial by way of an appeal to support the candidature of respondent Shastri in that newspaper on 7 February, 1967 Exhibit 22 and the said appeal was also an instance of corrupt practice. The further allegations in the petition were that at the meeting which was held at the Town Hail Maidan at Hapur on 7 February, 1967 respondent Shastri and the said K. Narendra, Editor of Vir Arjun delivered inflammatory speeches. The appellant generally impeached the judgment of the High Court on two grounds. First, that there was no discussion of the entire evidence and, secondly, that there was rejection of the evidence on behalf of the appellant on consideration that the appellant 's witnesses belonged to particular castes and sects. The criticism on behalf of the appellant with regard to Hapur meeting was that respondent Shastri in answer to the petition did not state that there was a meeting on 6 February, 1967 and thereby the appellant was denied the opportunity of meeting that case. The appellant relied on the decision of this Court in Badat & Company vs E. I. Trading(1) and the observations appearing at page 547 of the report in support of the contention that under the provisions of the Code of Civil Procedure 'and, in particular, the provisions contained in Order VIII of the Code, respondent Shastri should have alleged in the pleadings that the meeting was held on 6 February, 1967 and in the absence of such allegations respondent Shastri should not have been allowed to make that case. The decision of this Court is of no aid to the appellant. In the case of Badat & Company(1) the question was whether there was a contract between the parties and it was alleged by the plaintiff with reference to two letters that the letters would indicate some of the terms of the transaction. The defendant in the written statement did not specifically deny the said two letters. This Court observed that a mere denial of the contract was not sufficient and the rules of the Code enjoined denial of the existence of the letters. In the present case, the question was whether a meeting was held at Hapur Town Hail Maidan on 7 February, 1967. The respondent denied such a meeting. The respondent was not called upon to state as to whether there was a meeting on 6 February, 1967. The news item in the newspaper 'Hindustan ' Exhibit 28 gave news from Hapur under the date 7 February, 1967 that a meeting was held at Hapur. Exhibit 23 was a news item in the newspaper 'Vir Arjun ' under the date 7 February, 1967 that Shri Narendra, Editor of Vir Arjun spoke at an election meeting 'at Hapur. Neither (1) ; :A.I.R. 1964 S.C. 539. 897 the Vir Arjun news item dated 7 February, 1967 nor the news item appearing under the date 7 February, 1967 Hapur published in the Hindustan on 8 February, 1967 contains any intrinsic evidence that a meeting was held at Hapur on 7 February, 1967. Further, of the witnesses on behalf of the appellant P.W. 25 Bal Kishan spoke of the meeting at the Hapur Town Hall Maidan on 7 February, 1967 and he also stated that three pamphlets were distributed and two issues of newspapers were also distributed, namely, the Vir Arjun and Pratap. No such pamphlet was produced. The two witnesses on behalf of respondent Shastri, Bhagwati Prasad Jain D.W. 16 and Rameshwar Prasad Goel D.W. 18 said that a Congress election meeting was held at the Town Hall Maidan, Hapur and no election meeting was held in support of respondent Shastri at the Town Hall Maidan, Hapur on 7 February, 1967. With regard to the meeting at the Town Hail Maidan at Hapur 'alleged by the appellant to have been held on 7 February, 1967, the oral evidence on behalf of the appellant is that the meeting was held and the oral evidence on behalf of the respondent is that the meeting was not held. In the case of conflicting oral testimony it is safer to place reliance on documentary evidence. First, the newspaper report on which the appellant relies contained intrinsic evidence which totally nullifies the appellant 's case. Exhibit 28 being the 'Hindustan ' dated 8 February, 1967 indicates the news about Hapur under the date 7 February, 1967 that a meeting was held "yesterday night" meaning thereby 6 February, 1967, in support of respondent Prakash Vir Shastri. Secondly, the newspaper 'Vir Arjun ' published on 8 February, 1967 gave the news at Hapur under the date 7 February, 1967. The news referred to an election meeting at Hapur but did not mention that the meeting was held on 7 February or on 6 February., 1967. Thirdly, Exhibit A 12 which is an application by one Lakhi Ram seeking permission from the Municipal Board for holding a meeting on 7 February, 1967 in the Town Hall Maidan, Hapur throws light on this aspect. The permission given by the authorities which is marked Exhibit A 13 required the persons holding the meeting to pay certain charges towards the use of the electricity. Exhibit A 14 is a receipt for payment of Rs. 5. These three documents indicate that the meeting which was held on 7 February, 1967 was a meeting organised by the supporters of the Congress Party. Fourthly, Exhibit A 2 which is a General Diary of Thana Hapur bearing the date 7 February, 1967 shows that a constable was sent to the Town Hall Maidan to make arrangements in connection with the meeting which was to be 'addressed by one Kailash Prakash. The witnesses on behalf of the respondent Shastri mentioned the name of Kailash Prakash and Smt. Kamla Chaudhury as speakers on behalf of the Congress candidate. It is highly improbable that two meetings of 898 the two rival candidates, namely of the Congress and of the respondent Prakash Vir Shastri would both be held on the same date and at the same place. Fifthly, the reports which were lodged by the supporters of the appellant with regard to the attack on the office of the Republican Party on 7 February, 1967 do not mention or refer at all to any meeting on behalf of respondent Prakash Vir Shastri on 7 February, 1967 at the Town Hall Maidan, Hapur. It would be natural if a meeting had been held on 7 February, 1967 that there would have been reference to the same. The other allegations of the appellant were that respondent Shastri 's supporters on 7 February, 1967 attacked the office of the Republican Party, to which the appellant belonged. There was the First Information Report dated 7 February, 1967 about the attack on the office of the Republican Party. This report is significantly silent about any meeting having been held on 7 February, 1967 at Hapur Town Hall Maidan. Though there was the alleged complaint about the attack on the office of the Republican Party, it appears that there was no investigation. The attack on the party office was not proved by the appellant to have been made by respondent Shastri 's workers and supporters. The High Court correctly came to the conclusion that no meeting was held at Hapur on 7 February, 1967 and there was no attack on the office of the Republican Party. With regard to. the 'attack on the office of the Republican Party to which the appellant belonged though the first information report gave the news about the art, ok it is strange that there was no investigation. The report of the Joint Secretary of the Republican Party to the President of the Republican Party bearing the date 8 February, 1967 alleged that the supporters of Prakash Vir Shastri attacked the office of the Republican Party on 7 February, 1967, forcibly took necessary papers and a flag of the Party. Dal Chand Nimesh, Joint Secretary of the Republican Party, P.W. 71 in his evidence stated that none of the processions went to his office and further he hid himself in an adjoining room. He did not prove the truth of the statements contained in his report which was marked as Exhibit 11. The attack on the office of the Republican Party was not mentioned at all either in the Vir Arjun of 8 February, 1967 or in the Hindustan dated 8 February, 1967. It is obvious that if in fact any attack had been made on the office of the Republican Party, the supporters of the appellant would have taken steps for investigation and publication. The second occurrence on which the appellant relied is. alleged to have happened at a place called Nagola. The appellant 's case was that on 18 February, 1967, Prakash Vir Shastri and his 899 supporters who were mostly Tyagi by caste asked the Tyagis to stop the Jatav voters from going to the polling station to cast their votes. It was alleged that Thawariya made the announcement by beat of drums that the Muslim, Chamar, Bhangi and Jatav voters would not be allowed to go to the polling station to cast their votes. The other part of the appellant 's case about the Nagola incident was that there was an assault on Shamshad Elahi, a worker of the appellant. The appellant relied on the oral testimony of PW. 11, P.W. 12, P.W. 15, P.W. 16, P.W. 17, P.W. 19, P.W. 23, P.W. 65 and P.W. 80. The witnesses on behalf of the respondent were D.W. 4, D.W. 12, D.W. 13, D.W. 30 'and D.W. 33. The oral evidence is in support of the rival contentions, namely, that the Jatav voters would not be allowed to vote and the denial of the same by the respondent. The appellant also lied on Exhibit N that the Jatav voters would not be allowed to cast their votes by the Tyagis. In support of the case with regard to assault on Shamshad Elahi the appellant relied on the oral evidence of Shamshad Elahi P.W. 11 and the injury report Exhibit 30 and other documents, namely, Exhibits 31, 32 and 35. The 'appellant criticised the judgment by contending that there was no discussion of the oral evidence of P.W. 17, Satya Pal Malik. P.W. 11, Shamshad Elahi said that he went to Nagola at about 3.30 p.m. on 19 February, 1967, the date of the election and the voters told him about the proclamation by beat of drums on the previous night and the voters further said that they would be insulted and they should remain there. Shamshad Elahi further said that he met Sevak Ram and Surajbhan Tyagi and 10 or 12 other persons were with them and they beat the witness with lathis and he received a number of injuries. The other witnesses on whose testimony the appellant relied said that people wearing lion badges which was the election symbol of Prakash Vir Shastri asked the witnesses not to cast their votes and they also said that it was announced by beat of drums that no Chamar or Bhangi should cast a vote. Nagola is a village within the circle of Badhnauli. R. K. Aggarwal, D.W. 33 who was the Presiding Officer at Badhnauli polling station gave evidence. He said that the votes of village Nagola were polled and no Harijan or Mohammedan voter was stopped from casting votes and that there was no complaint that Harijan and Mohammedan voters were being stopped from casting their votes. In cross examination the witness said that no voters from Haidernagar or Nagola were brought to the polling station under police protection. 900 P.W. 80, Sukhbir Singh who was posted as Station Officer Thana Kharkoda said that he received information from Shamshad Elahi that voters at Badhnauli were being stopped from casting their votes. Sukhbir Singh went to Badhnauli. He also went to Nagola. He said that 30 or 40 Harijan voters went to Badhnauli to cast their votes. He said that there was no voter who was taken by him to a polling station in a truck. Sukhbir Singh proved Exhibit 35 which was a contemporaneous report to the effect that no one was stopped from voting at Nagola. Satya Pal Malik on whose testimony the appellant relied said that Prakash Vir Shastri came to Badhnauli polling station on 19 February, 1967 and there were 40 to 50 persons around him with lion badges on. His further evidence was that Prakash Vir Shastri asked the Pradhan to beat the voters to make them run away. Prakash Vir Shastri however denied having asked Sheoraj Singh Pradhan to drive away the voters. Thanwaria, P.W. 23 on whose evidence the appellant relied said that he beat the drum in Nagola village on 'a day before the polling. He said that there were two parties of the Tyagis. One was of Sheoraj Singh and the other was of Pyare Lal. The Jatavs, according to his testimony, were in Pyare Lal 's party and the Bhangis were in Sheoraj 's party. The appellant said that Thanwaria was disbelieved only because he belonged to the Chamar caste. That is misreading the judgment. The High Court said that the evidence of Thanwaria did not inspire confidence. That criticism of the evidence of Thanwaria is justified because he came to support the case of the appellant and he belonged to the appellant 's camp. Pyare Lal, D.W. 12 said that no Harijan was stopped from casting his vote at Badhnauli polling station and no worker of Prakash Vir Shastri threatened any Harijan voter at the polling station. The appellant criticised the evidence of Pyare Lal that he did not know as to what was happening in the village. Satya Pal Malik, P.W. 17 mentioned the name of Pyare Lal as the leader of one of the parties and Sheoraj Singh as Pradhan of the village Nagola. The oral evidence on behalf of the appellant is not acceptable for two reasons. First, if there had been any incident of a voter being prevented from voting 'a complaint would have been made to the polling officer of the polling station. Secondly, Vireshwar Tyagi and Mahendra Singh Verma who were the supporters of the appellant and who are alleged to have said that voters at Nagola were prevented from voting did not lodge any report about the alleged corrupt practice particularly when it was said to be committed by Prakash Vir Shastri himself. 901 The assault on Shamshad Elahi which was also said to be an incident of corrupt practice is unacceptable for these reasons. First the injury report Exhibit 30 has to be considered along with the statement of Shamshad Elahi being Annexure M and the report of the appellant being Exhibit 32 and the complaint of Shamshad Elahi being Annexure N being Exhibit 30. The appellant. , in the report dated 17 February, 1967 Exhibit 32 spoke of voters not being allowed to exercise their votes. Shamshad Elahi in his complaint said that 10 or 12 persons beat him with lathis. All this happened on 19 February, 1967. The doctor 's report was about the injuries. First it is peculiar that there was no complaint about the injuries after the injury report. Secondly, there is no evidence that the assault was by the workers of Prakash Vir Shastri. Shamshad Elahi in his evidence mentioned the names of Sevak Singh and Surajbhan Tyagi. These names were not mentioned in the complaint being Exhibit 30. In cross examination Shamshad Elahi was asked 'as to how he had obtained the names and his answer was that he met the grass cutter who gave the names. It is curious that the grass cutter who gave the names was not examined. The third incident on which the appellant relied took place at Chhajjupur. The allegations are that on 2 February, 1967 an election meeting was organised in support of the candidature of the appellant 'and the supporters of respondent Prakash Vir Shastri created disturbance with the result that the meeting could not be continued and the supporters of respondent Prakash Vir Shastri are alleged to have chased the appellant. The High Court rightly commented on the absence of any report having been made by the appellant to the Election Commissioner or the police about the alleged occurrence. It is Obvious that if the appellant had been chased he would have made report to the Election Commission or to the police. The appellant relied on the news item in the Patriot dated 5 February, 1967. The news item was referred to by Mahesh Chandra Agarwal, P.W. 14 who, however, was not present at the meeting at Chhajjupur. He referred to a conversation with the Superintendent of Police. The Senior Superintendent of Police was not examined. No police report was produced. The truth of the newspaper report was not corroborated nor was the statement in the ,news item proved. On the contrary, Mahesh Chandra Agarwal nullified the news item by admitting that he was not present at the meeting. P.W. 18 Tejpal Singh spoke of the incident of 2 February, 1967 and mentioned about the shouting of slogans and throwing of brick bats. P.W. 10, Som Prakash spoke of charge sheet under sections 147, and 342 of the Indian Penal Code against certain persons. He spoke of the report of 3 February, 1967 and a report of 9 February, 1967. The report dated 3 February, 1967 902 relates to the occurrence on 2 February, 1967 at Chhajjupur. The report of 9 February, 1967 also relates to the alleged incident of 2 February, 1967 at Chhajjupur. The witness Sofa Prakash P.W. 10 admitted that no investigation was made. It is significant that the name of the appellant is not mentioned in either of complain,rs or reports. The allegations in the report are that some disturbances was created and names of various persons are mentioned as having tried to run towards. the jeep which carried the leaders of the Republican Party. One of the witnesses Devi Dayal Sen, P.W. 63 said that when the appellant rose to speak some people pelted stones at him. The alleged incident at Chhajjupur is unacceptable because, first, there was no complaint by the appellant to the Election Commissioner, secondly, there was no police case and no investigation, thirdly, the reports did not mention the name of the appellant as having been assaulted or chased and fourthly, the news item in the Patriot was not proved as to the truth of the contents therein. The ,fourth occurrence on which the appellant relied was at a place called Opehra. The appellant alleged that some persons were stopped from casting their votes. The appellant relied of the oral evidence of PWs. 58, 59 and 60. P.W. 60 is Manzoor Ahmad, M.L.A. The other two witnesses were Durga Das and Ram Prasad. The appellant criticised the judgment that there was no mention of the name of Manzoor Ahmad. The diaries being Exhibits A 23, A 32 and A 29 were produced to show that the election at Opehra polling station passed off peacefully and therefore no one stopped any voter from casting vote. Manroof Ahmad his oral evidence said that he saw people armed with lathis and ballams. He said that he made a complaint to the Presiding Officer and admitted in cross examination that there was no written complaint. Manzoor Ahmad did not prove that any person was stopped from voting. The fifth and the sixth occurrences on which the appellant relied took place at Datiyana and Bankhanda. It is alleged by the appellant that at Datiyana the agents and the supporters of respondent Prakash Vir Shastri threatened the Scheduled Caste and Harijan voters and prevented them from going to the polling station. The allegations about the occurrence at Bankhanda are to similar effect. The appellant relied on Exhibit 18 which was a memorandum addressed by several voters who stated that they remained within the house and could not vote because the village Tyagi Kailash Chand threatened to kill them if they would vote. P.W. 65, Vireshwar Tyagi spoke of the incidents at Nagola, Bankhanda and Hapur and his wife Smt. Prakash Vireshwar Tyagi spoke of the alleged ;incident at Datiyana. The respondents 903 witnesses denied that any person was prevented from casting vote at Datiyana. The 'allegations with regard to the Bankhanda were referred to by Vireshwar Tyagi and other witnesses. The diary which produced with regard to the polling station disproved any such incident. The diaries are Exhibits A 19 and A 21. D.W. 20, Chandoo Singh stated that he was at the polling station at Bankhanda and no one was stopped from exercising the right of franchise. 21 and 22 also spoke of polling at Bankhanda having been peaceful. The appellant referred to. religious songs which were said to be praise of respondent Prakash Vir Shastri. Mere praise worthy songs will not be an instance, of corrupt practice. All the allegations about the voters having been stopped from casting their franchise followed the same pattern of oral evidence. The absence of any report either to the Election Commission or to the Police authorities is an important and noticeable feature and therefore the oral evidence is not acceptable. The other allegations relied on by the appellant are that respondent Prakash Vir Shastri is guilty of corrupt practice under sub sections (3), (3A) and (4) of section 123 of the said Act. The appellant contended that respondent Prakash Vir Shastri made communal propaganda against the appellant and also published false statements in relation to the personal character of the appellant. In aid of the contentions the appellant relied on annexures KK and MM. The appellant relied on the upper portion of annexure KK in support of the contention that the slogans amounted to communal propaganda. The lower portion of annexure KK was contended by the appellant to be allegations against the personal character of the appellant. Annexure MM was said by the appellant to contain slogans amounting to communal propaganda against the appellant. It was said by the appellant that respondent Prakash Vir Shastri promoted feelings of enmity or hatred against the appellant and further raised communal propaganda. The appellant also relied on Exhibit 22 being the editorial in Vir Arjun dated 7 February, 1967 in support of the contention that the editorial constituted communal propaganda against the appellant. In Guruji Shrihar Baliram Jivatode vs Vithalrao and Others,(1) this Court dealt with the scope and content of subsection (4) of section 123 of the Act. The Act is intended to protect freedom of speech on the one hand and to restrain malicious propaganda on the other. The provisions contained in subsection (4) of section 123 were said by this Court to be contra (1) 904 vened when "any false allegation of fact pierces the politician and touches the person of the candidate". It is the personal character and conduct of the candidate which is to be protected from malicious or false attacks. The statement in question has to be first a false statement bearing. on the personal character and conduct of the candidate and secondly, the statement complained of must be one which is reasonably calculated to prejudice the prospects of the election of the person. Under the provisions contained in sub section (3A) of the said Act the promotion of, or attempt to promote, feelings of enmity or hatred between different classes of citizens of India on grounds of religion, face, caste, community, or language, is the mischief which is sought to be avoided by making the same a corrupt practice. The sub section further says that such promotion or attempt to promote enmity or hatred is for the furtherance of the election of the candidate or for prejudicially affecting the election of any candidate. Th.e words "personal character or conduct" were explained by this Court in T.K. Gangi Reddy vs M.C. Anjaneya Reddy and others(1) "to be equated with his mental or moral nature. Conduct connotes at person 's actions o.r behaviour". Annexure KK was not proved and therefore it cannot be said to constitute any communal propaganda. Assuming it were proved there is no appeal to vote for a person on the ground of religion nor is there any appeal not to vote for a person on the ground of his religion. Further, the provisions contained in sub section (4) of section 123 require the publication with the consent of the candidate or his election agent. In the present case, annexure KK has not been established to be published with the consent of the respondent Prakash Vir Shastri or his election agent. It, therefore, follows that annexure KK offends neither the provisions contained in sub section (3A) nor in sub section (4) of section 123 of the Act. Annexure MM was said by the appellant to be a communal propaganda. Arnexure MM was not proved. Even if it were proved the slogans do not offend the provisions of either subsection (3A) or sub section (4) of section 123 of the Act. The publication in the newspaper 'Vir Arjun ' Exhibit 22 is to the effect that differences between Hindus and Harijans were being spread by the supporters of the Republican candidate meaning thereby the appellant and if students from Muslim University were brought in by them then students from Ghaziabad would be brought into the field. The newspaper certainty (1) ; 905 Was inclined in favour of respondent Prakash Vir Shastri but the newspaper publication said that Prakash Vir Shastri would not unlike the Congress candidate preach communal hatred. The statements in Exhibit 22 do not make any reflection on the moral or mental nature of the appellant and they do not touch the personal character of the appellant, nor do they promote enmity or hatred on grounds of religion. The appellant failed to prove that respondent Prakash Vir Shastri committed any corrupt practice in relation to the personal character and conduct of the appellant. The newspaper publication Exhibit 22 was an appeal on behalf of respondent Prakash Vir Shastri. As long as the publication is not tainted by corrupt practice, such an appeal will not be an infraction of the provisions as to corrupt practices as contemplated in the Representation of the People Act. Suggestions that attempts are made to accentuate the differences between the Hindus and Harijans in the article cannot be extracted in isolation from the entire context. The electorate at the time of the election has to be kept in the forefront in judging whether the article can be said to offend the provisions relating to corrupt practices. The Court is to ascertain whether the statement is reasonably calculated to prejudice the prospects of the candidate 's election. This Court observed in Kultar Singh vs Mukhtiar Singh(1) that in reading the documents it would be unrealistic to ignore that When appeals are made by candidate there is an element of 'partisan feeling and there is 'extravagance of expression attacking one another and "it would be unreasonable to. ignore the question as to what the effect of the pamphlet would be on the mind of the ordinary voter who reads the pamphlet". In the light of these principles, we are of opinion that there is no infraction of the provisions contained in sub sections (3A) and (4) of section 123 of the Act. For the reasons mentioned above, this appeal fails and is dismissed with costs.

The appellant challenged the election of the respondent on the ground that the respondent committed various corrupt practices including that of publication of false statements in relation to the personal character of the appellant. The High Court held the allegations not proved. Dismissing the appeal, HELD: The provisions contained in sub section (4) of section 123 are traveled when "any false allegation of fact pierces the politician and touches the person of the candidate". It is the personal character and conduct of the candidate which is to. be protected from malicious or false attacks. The words "personal character and conduct" are to be equated with mental or moral nature and the word "conduct" connotes a person 's actions and behavior. The statement in question has to be first a false statement bearing on the personal character and conduct of the candidate. and secondly, the statement complained of must be one which is reasonably calculated to. prejudice the prospects of the election of the person. [903 H] T.K. Gangi Reddy vs M.C. Anjaneya Reddy, [1965] 1 S.C.R. 175, reference to. The electorate at the time of the election has to be kept in the forefront in judging whether a publication can be said to offend the provisions relating to corrupt practices. The Court is to ascertain whether the statement is reasonably calculated to prejudice the prospects of the candidate 's election. In reading the documents it would be unrealistic to ignore that when appeals are made by candidate there is an element of partisan feeling and there is extravagance of expression in attacking one another and it would be unreasonable to ignore the question as to what the effect of the pamphlet would be on the mind of the ordinary voter who reads the pamphlet. [905 D] Kultar Singh vs Mukhtiar Singh, ; , referred to.

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N: Criminal Appeal No. 129 of 1971 . Appeal by Special Leave from the Judgment and order dated the 4th March, 1971 of the Bombay High Court at Bombay in Criminal Appeal No. 1502 of 1969. R B. Datar and Rajen Yash Paul, for the Appellant. M. N Shroff, for the Respondent. The Judgment of the Court was delivered by BHAGWATI, J. The appellant and one Mohd. Yusuf Gulam Mohd. were charged for an offence under section 379 read with s 34 of the Indian Penal Code for snatching two sarees from one Govind whilst he was carrying them from the show of his master to that of a washer and dyer. The learned Presidency Magistrate, who tried the case, accepted the prosecution evidence and found the appellant and Mohd. Yusuf Gulam Mohd. guilty of the offence under section 379 read with section 34 and 664 Sentenced each of their to suffer rigorous imprisonment for six months. It does not appear from the judgment of the learned Presidency Magistrate that, though the appellant was only seventeen years and three months old at the date of the offence and the offence was not punishable with imprisonment for life, the attention of the learned presidency Magistrate was invited to the provisions of section 6 of the Probation of offenders Act, 1958. The appellant preferred an appeal against the order of conviction and sentence to the High Court of p Bombay but the appeal was unsuccessful. The High Court took the same view of the evidence as the learned Presidency Magistrate and confirmed the conviction of the appellant under section 379 read with section 34. So far as the question of sentence was concerned, a submission was made on behalf of the appellant that since he was a young boy of about seventeen years and three months and this was his first offence, leniency should be shown tow him. But the High Court r observed that age alone was not sufficient to invoke the mercy of the Court and the appellant had not done anything since the date of the offence to deserve the mercy of the Court and it did not, therefore, see any reason to interfere with the sentence of imprisonment passed against the appellant. It appears that once again the provisions of section 6 of the Probation of offenders Act, 1958 were not specifically brought to the notice of the High Court and the sentence of imprisonment was maintained by the High Court without applying its mind to those provisions. Hence the appellant preferred a petition for special leave to this Court and on that petition, this Court granted special leave limited to the question "whether the provisions of the Probation of offenders Act should have been applied in the case". We are concerned in this appeal with section 6 of the Probation of offenders Act, 1958, for it is only under that section that the appellant claims the benefit of the provisions contained in the Act. Subsection (1) of section 6, on a plain grammatical reading of its language, provides that when any person under twenty one years age is found guilty of having committed an offence punishable with imprisonment, but not with imprisonment for life, the Court, by which the person is found guilty, shall not impose any sentence of imprisonment, unless it is satisfied that, having regard to the circumstances of the case, including the nature of the offence and the character of the offender it would not be desirable to deal with him 665 him under section 3 or section 4. This inhibition on the power of the Court to impose a sentence of imprisonment applies not only at the state of trial court but also at the stage "High court or any other Court when the case comes before it on appeal or in revision. '. Vide section 11, sub section (1) of the Act. It is, therefore, obvious that even though the point relating to the applicability of section 6 was not raised before the learned Presidency Magistrate or the High Court, this Court is bound to take notice of the provisions of that section and give its benefit to the appellant, particularly since it is a section which is intended for the benefit of juvenile delinquents, reflecting the anxiety of the Legislature to protect them from contact or association with hardened criminals in jails and retrieve them from a life of crime and rehabilitate them as responsible and useful members of society. Here, we find that whatever date be taken as the relevant date for determining the applicability of section 6 whether the date of the offence or the date of the judgment of the learned Presidency Magistrate or the date of the judgment of the High Court the appellant was below twenty one years age. The offence of which he is found guilty is an offence under section 379 read with section 34 and it is clearly an offence punishable with imprisonment but not with imprisonment for life. The conditions requisite for the applicability of section 6 are, therefore, plainly satisfied and under section 6, Sub section (1) it is not competent to the Court to impose ant sentence of imprisonment on the appellant, unless the Court is satisfied that, having regard to the circumstances of the case, including the nature of the offence and the character of the appellant, it would not be desirable to deal with him under section 3 or section 4. It is true that sub section (2) of section 6 requires that for the purpose of satisfying itself whether it would not be desirable to deal with the appellant under section 3 or section 4, the Court is required to call for a report from the Probation officer and consider the report, if any, but we do not think it necessary in the present case to call for any report from the Probation officer nor to remand the case to the learned Presidency Magistrate for passing an appropriate order after calling for a report from the Probation officer and considering it. We have on record the antecedent history giving the background of the appellant. The appellant was at one time a well known child film actor and he actually won several awards for acting in films. It appears that at some subsequent stage he fell in bad company and took to evil ways The offence which he is convicted is, no doubt, an offence as theft which cannot be lightly ignored, but it is comparatively of a minor characters in that only two sarees were snatched away from the hands of Govind, perhaps under the stress of economic necessity. Moreover, this is a false offence of the appellant. We are, therefore, not at all satisfied 12 L925SupCI/75 666 that it would not be desirable to deal with the appellant under section 3 or section 4 and consequently, the sentence of imprisonment passed on the appellant must be set aside. We accordingly set aside the sentence of imprisonment passed on the appellant and direct that he be released on his entering into a bond wit one surety in the sum of Rs. 500/ to appear in the Court of the Presidency Magistrate to receive sentence, whenever called upon to do so within a period of six months and during that period to keep the peace and be of good behaviour. The learned Presidency Magistrate is directed to take the necessary bond from the appellant and the necessary surety bond from a surety to his satisfaction. The appellant will continue on bail till such time as these directions are carried out, after which the bail bond will stand canceled. P.B.R. Appeal allowed.

On the question whether the provisions of the Probation of offenders Act 1958 should have been applied in this case, Allowing the appeal, ^ HELD: (1) Even though the point relating to the applicability of s.6 was not raised before the Presidency Magistrate or the High Court, this Court is bound to take notice of the provisions of that section and give its benefit to the appellant, particularly since it is a section which is intended for the benefit of juvenile delinquents reflecting the anxiety of the Legislature to protect them from contact or association with hardened criminals in jails and retrieve them from a life of crime and rehabilitate them is responsible and useful members of society. [665 B C] (2) Section 6 lays down an injunction not to impose a sentence of imprisonment on a reason who is under 21 years of ' age and is found guilty of having committed an offence punishable with imprisonment other the that for if unless it is satisfied that it would not be desirable to deal with him under section 3 or section 4. 'This inhibition on the power of the court to impose a sentence of imprisonment applies not only at the state of trial but also at the stage of "High, Court or any other court when the case comes before it in appeal or revision" section 11 (i) [664 H] In the instant case the appellant was below 21 years of age. The appellant was at one time a well known child film actor and won several awards for acting in films. Subsequently he fell in bad company and took to evil ways. The offence of theft of two Sarees, though it could not be lightly ignored. was of minor. character and this was the first offence of the appellant. It Count be said that it would not be desirable to deal with the appellant under section 3 or section 4 of the Act. [665 G H]

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Appeal No. 1223 of 1967. Appeal from the judgment and decree dated March 5, 1964 of the Allahabad High Court in Income tax Reference No. 71 of 1959. section K. Mitra, B. B. Ahuja, R. N. Sachthey and B. D. Sharma, for the appellant. Ram Lal and A. T. M. Sampat, for the respondent. The Judgment of the Court was delivered by Shah, C.J. The respondent who is the Karta of a Hindu Un divided Family entered on behalf of the family into a partnership with one Devi Sharan Garg to carry on the business of 407 manufacturing and selling pharmaceutical products and literature relating thereto. On July 27, 1946 the partnership was dissolved . The assets of the firm which included goodwill, Machinery, furniture, medicines, library and copyright in respect of certain publications were valued at the date of dissolution at Rs. 2,50,000/ . The respondent was paid a sum of Rs. 1,25,000/ in lieu of his share and the business together with the goodwill was taken over by Devi Sharan Garg. In proceedings for assessment of the respondent for the year 1947 48 the Income tax Officer sought to bring an amount of Rs. 70,000/ to tax as capital gains. The contention raised by the respondent that no part of the amount of Rs. 1,25,000/received by the respondent represented capital gains was rejected by the Income tax Officer, Appellate Assistant Commissioner and the Income tax Appellate Tribunal. The Tribunal however reduced the amounts capital gains brought to tax to Rs. 65,000/ . The Tribunal referred the following question to the High Court of Allahabad under section 66(1) of the Indian Income tax Act, 1922 "Whether on a true interpretation of sub section (1) of section 12 B of the Income tax Act, the sum of Rs. 65,000/ has been correctly taxed as capital gains". The High Court answered the question in the negative. Against that order, with certificate granted by the High, Court, this appeal has been preferred. Section 12 B(1), insofar as it is relevant provides "The tax shall be payable by an assessee under the head "Capital gains" in respect of any profits or gains arising from the sale, exchange or transfer of a capital asset effected after the 31st day of March 1946 . and such profits and gains shall be deemed to be income of the previous year in which the sale, exchange or transfer took place Provided. Provided further. Provided further that any transfer of capital assets . . on the dissolution of a firm or other association of persons. . . shall not for the purposes of this section, be treated as sale, exchange or transfer of the capital assets; 408 Liability to pay capital gains arises under section 12 B(1) if there be a sale, exchange or transfer of capital assets. There was no sale or exchange of his share in the capital assets of the firm by the respondent to Shri Devi Sharan Garg. Nor did he transfer his share in the capital assets. The assets of the firm included the goodwill, machinery, furniture, medicines library and the copyright in respect of certain publications. A large majority of the assets were incapable of physical division, and the partners agreed that the assets be taken over by Devi Sharan Garg at a valuation, and the respondent be paid his share of the value in money. Such an arrangement, in our judgment, amounted to a distribution of the assets of the firm on dissolution. There is no clause in the partnership agreement providing for the method of dissolution of the firm or for winding up of its affairs. In the course of dissolution the assets of a firm may be valued and the assets divided between the partners according to their respective shares by allotting the individual assets or paying the money value equivalent thereof. This is a recognized method of making up the accounts of a dissolved firm. In that case the receipt of money by a partner is nothing but a receipt of his share in the distributed assets of the firm. The respondent received the money value of his share in the assets of the firm; he did not agree to sell, exchange or transfer his share in the assets of the firm. Payment of the amount agreed to be paid to the respondent under the arrangement of his share was therefore not in consequence of any sale exchange or transfer of assets. To persuade us to take a different view, reliance was placed on behalf of the Revenue upon James Anderson vs Commissioner of Income tax Bombay City(1). In that case the assessee held a power of attorney from the executor of a deceased person, in the course of the administration of his estate. He sold certain shares and securities belonging to the deceased for distribution among the legatees. The excess realized by sale was treated by the Income tax Department as Capital gains. The contention of the assessee that since the sale of the shares and securities fell within the purview of the third proviso to section 12 B (1) it could not be treated as a sale of capital assets within the meaning of section 12 B(1) was rejected by this Court. This Court observed that the object of the third proviso to section 12 B(1), in providing that "any distribution of capital assets under a will" shall not be treated as sale, exchange or transfer of capital assets for the purpose of section 12 B was that as long as there was distribution of capital assets in specie and no sale, there was no transfer for the purposes of that section, but if, there was a sale of the capital assets and profits or gains arose therefrom, the liability to tax (1) 409 arose, whether the sale was by the administrator or executor or a legatee, and that the expression "distribution of capital assets" in the third proviso to section 12 B(1) meant distribution in specie and not distribution of sale proceeds. That case has no application. There was no distribution of capital assets between the legatees : the assessee had pursuant to the authority reserved to him from the executor of the deceased person sold the shares and securities, and from the sale of shares and securities capital gains resulted. In the case in hand there is no sale and payment of price, but payment of the value of share under an arrangement for dissolution of the partnership and distribution the assets. The rights of the parties were adjusted by handing over to one of the partners the entire assets and to the other partner the money value of his share. Such a transaction is not in our judgment a sale, exchange or transfer of assets of the firm. In Commissioner of Income tax, Madhya Pradesh, Nagpur & Bhandara vs Dewas Cine Corporation(1) in dealing with the meaning of the expressions "Sale" and "sold" as used in section (10) (2) (vii) of the Income tax Act, 1922, this Court observed that the expression "sale" in its ordinary meaning is a transfer of property for a price, and adjustment of the rights of the partners in a dissolved firm by allotment of its assets is not a transfer for a price. In that case the assets were distributed among the partners and it was contended that the assets must in law be deemed to be sold by the partners to the individual partners in consideration of their respective shares, and the difference between the written down value and the price realised should be included in the total income of the partnership under the second proviso to section 10(2) (vii). This Court observed that a partner may, it is true, in an action for dissolution insist that the assets of the partnership be realised by sale of its assets, but property allotted to a family in satisfaction of his claim to his share, cannot be deemed in law to be sold to him. We therefore agree with the High Court that the question referred must be answered in the negative. The appeal fails and is dismissed with costs. G.C. Appeal dismissed.

The respondent who was the karta of his Hindu undivided family entered into partnership with one D to carry on the business of manufacturing and selling pharmaceutical products etc. On July 27, 1946 the partnership was dissolved. The assets of the firm which included goodwill, machinery, furniture etc. were valued on the date of dissolution at Rs. 2,50,000 and the respondent was paid the sum of Rs. 1,25,000 in lieu of his share and the business together with the goodwill was taken over by D. The question in income tax proceedings was whether the transaction was one of sale liable to capital gains tax under section 12B(1) of the Income tax Act. The assessing and appellate authorities held against the respondent. The High Court in reference, however, held in his favour. The revenue appealed. HELD : There was no clause in the partnership agreement providing for the method of dissolution of the firm or for winding up of its affairs. In the course of dissolution the assets of the firm may be valued and the assets divided between the partners according to their respective shares by allotting the individual assets or paying money value equivalent thereof. This is a recognised method of making up the accounts of the dissolved firm. In that case the receipt of money by a partner is nothing but a receipt of his share in the distributed assets of the firm. The respondent received the money value of his share in the assets of the firm; he did not agree to sell, exchange on transfer his share in the assets of the firm. Payment of the amount agreed to be paid to the respondent under the arrangement of his share was therefore not consequence of any sale, exchange or transfer of assets. [408 C E] James Anderson vs Commissioner of Income tax, Bombay City, and Commissioner of Income tax, Madhya Pradesh and Nagpur & Bhandara vs Dewas Cine Corporation, 68 I.T.R. 240, distinguished.

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: Criminal Appeal No. 145 of 1966. 559 Appeal by special leave from the judgment and order dated January 29, 1966 of the Patna High Court in Criminal Appeal No. 231 of 1963. D. Goburdhun, for the appellants. B.P. Jha, for the respondent. The Judgment of the Court was delivered by Shah, J. At mid day on July 2, 1962, an unlawful assembly about 30 persons armed with lethal weapons made an assault upon certain villagers of Mananki Khandha who were engaged in agricultural operations and caused injuries to six persons. Budhia one of the persons injured died as a result of the injuries, a few hours after the assault. The seven appellants in this appeal and one Harihar Gope were tried before the Additional Sessions Judge, Patna, for offences under section 302 read with sections 149, 147, 148, 323, 324, 325 read with 34 and 326 I.P. Code, on the charge that they had formed an unlawful assembly and had committed rioting and in prosecution of the common object of the unlawful assembly, viz. to rescue their cattle which had damaged the maize crop of Budhia and had on that account been detained by the villagers, and to assault persons resisting the rescue, and had caused injuries to the victims as a result of which Budhia died. The Sessions Judge held, relying on the evidence of four witnesses P.Ws. 5, 8, 12 and 18, that Harihar Gope had caused injuries with a spear to Budhia which resulted in her death. He accordingly recorded an order of conviction against Harihar Gope of the offence under section 302 I.P. Code and against the other appellants for the offence under section 302 read with section 149 I.P. Code. The High Court of Patna in appeal acquitted Harihar Gope for the offence under section 302 I.P. Code for they entertained doubt about Harihar Gope 's presence in the unlawful assembly in question. The High Court observed that Harihar Gope was a resident of another village and had no reason to bring his cattle to the village .Mananki Khandha for grazing,. and that the name of Harihar Gope was not mentioned in the first information which was given at the police station in the presence of the witnesses who deposed to the assault made on Budhia by Harihar Gope. The State has not appealed against that order of acquittal. The High Court has however, confirmed the conviction of the other appellants for the offence under section 302 read with section 149 I.P. Code. In this Court, counsel for the appellants contends that because of the order of acquittal passed by the High Court in favour of Harihar Gope, conviction of the other appellants for the offence under section 302 read with section 149 I.P. Code cannot, in law, be sus 560 tamed. Counsel argues that if Harihar Gope who was according to the case of the prosecution responsible for causing the death of Budhia is acquitted the appellants who were charged with sharing the common object of the unlawful assembly cannot be convicted for the vicarious liability arising out of the offence committed in prosecution of the common object of the unlawful assembly. There is no substance in that argument. The case for the prosecution when analysed consists of four parts (1) that there was an unlawful assembly of 30 persons the common object of which was to forcibly rescue cattle detained by the villagers of Mananki Khandha and to beat up all those who resisted; (2) that six villagers of Mananki Khandha were beaten up by the members of the unlawful assembly and Budhia died in consequence of the injuries suffered by her; (3) that the injuries were caused to the six victims by the members of the unlawful assembly in prosecution of the common object of the unlawful assembly or the injuries were such that the members of the assembly knew to be likely to he caused; (4) that Harihar Gope was a member of the unlawful assembly, and he caused injuries to Budhia in prosecution of the common object of the assembly in consequence of which she died. The result of the findings of the High Court is that the first three parts are made out but not the last. On that account however we are unable to hold that the appellants who are proved to be members of the unlawful assembly escape liability for conviction under section 302 read with section 149 I.P. Code. On the finding recorded by the High Court it inevitably follows that fatal injuries were caused to Budhia by a member of the unlawful assembly which the members of the assembly knew to be likely to be caused in prosecution of the common object of the unlawful assembly. The State, however, failed to establish that it was Harihar Gope who caused those injuries. Failure to establish that a member or members of the unlawful assembly named by .the witnesses for the State cause the particular injury which resulted in the death of Budhia will not result in the rejection of the case of the State against persons proved to be members of the unlawful assembly, if the common object of the unlawful assembly and the commission of the offence in the prosecution of the common object or which the members knew to be likely to be committed be proved. Where a member of an unlawful assembly is named as an offender who committed an. offence for which the members of the unlawful assembly are liable under section 149 I.P. Code, and the evidence at the trial is insufficient to establish that the named person committed the act attributed to him, he may still be convicted of the offence if it is proved that he was a member of the unlawful assembly and that the act was done by some member of the assembly in prosecution of the common object or which the members knew was likely to be committed in prosecution of that 561 object. In our judgment, failure to prove the presence of the named offender among the members of the unlawful assembly will not affect the criminality of those who are proved to be members of the assembly if the other conditions of the applicability of section 149 I.P. Code be established. If the Court refuses to accept the testimony of witnesses who speak to the presence of and part played by a named offender, the weight to be attached to the testimony of those witnesses insofar as they involve others may undoubtedly be affected, but it cannot be said that because the testimony of witnesses who depose to. the assault by the named offender is not accepted, other members proved to be members of the unlawful assembly escape liability arising from the commission of the offence in prosecution of the common object of the assembly. The High Court found that on the day in question more than 30 persons formed an unlawful assembly, the common object of which was to rescue cattle detained by the villagers of Mananki Khandha, and to kill those who resisted, and that members of the unlawful assembly committed 'an assault on the villagers and severely beat up the villagers including Budhia in prosecution of the common object. The offence being such that it was known to be likely to be committed, every person who was a member of that unlawful assembly at the time of the commission of the offence would by virtue of section 149 I.P. Code be guilty of the offence committed. The argument that Harihar Gope alone had the object of causing the death of Budhia cannot on the evidence be accepted as correct. The object to beat up and kill those who resisted the rescue of the cattle detained was according to the case for the prosecution common to all members of the unlawful assembly, and that object was established by abundant evidence. Proof of the common object of the unlawful assembly did not depend upon the presence therein of Harihar Gope. Failure to establish that Harihar Gope was a member of the unlawful assembly did not, in our judgment, affect the liability of the persons proved to be members of the unlawful assembly for the acts done in prosecution of its common object, or which they knew to be likely to be committed in prosecution of the object thereof. When a concerted attack is made on the victim by a large number of persons it is often difficult to determine the actual part played by each offender. But on that account for an offence committed by a member of the unlawful assembly in the prosecution of the common object or for an offence which was known to be likely to be committed in prosecution of the common object, persons proved to be members cannot escape the consequences arising from the doing of that act which amounts to an offence. There is clear evidence on the record to show that Budhia was one of those persons upon whom an attack was made by the unlawful assembly of which the appellants and others were members. 562 In the assault made by the members of the assembly Budhia as well as other persons were injured. On the findings of the High Court, the offender who actually caused injuries to Budhia cannot be ascertained: it follows that the injuries were caused to Budhia by some member of the unlawful assembly, and that Budhia succumbed to those injuries. In our judgment, the order of conviction of the appellants, other than Harihar Gope, for the offence under section 302 read with section 149 I.P. Code is not rendered illegal, because Harihar Gope is held not to have been a member of the unlawful assembly. The appeal fails and is dismissed. R.K.P.S. Appeal dismissed.

The appellants and one H were tried on the charge that on July 2, 1962 they had formed an unlawful assembly and in prosecution of the common object of the unlawful assembly i.e., to rescue their cattle which had damaged the maize crop of one B and had on that account beer detained by the villagers, made an assault on persons resisting the rescue causing injuries to various persons including B as a result of which B died. The Trial Court, relying on the evidence of certain witnesses, held that H had caused injuries with a spear to B which resulted in her death. It therefore convicted H of an offence under section 302 I.P.C. and the appellants for an offence under section 302 read with section 149 I.P.C. The High Court appeal acquitted H as it entertained a doubt about his presence in the unlawful assembly, but confirmed the conviction of the other appellants. In appeal to this Court it was contended on behalf of the appellants that because of the acquittal of H, the conviction of the other appellants for an offence under section 302 read with section 149 I.P.C. could not, in law, be sustained; when according to the prosecution case H was responsible for causing the: death of B and he was acquitted, the appellants who were charged with sharing the common object of the unlawful assembly could not be convicted for the vicarious liability arising out of the offence committed in prosecution of the common object of the unlawful assembly. HELD: Dismissing the appeal: The order of conviction of the appellants for the offence under section 302 read with section 149 I.P.C. was not rendered illegal because H was held not to have been a member of the unlawful assembly. [56.2 B] There was clear evidence to show that B was one of the persons upon whom an attack was made and injuries inflicted by the unlawful assembly of which the appellants and others were members. On the findings of the High Court, the offender who actually caused injuries to B could not be ascertained: it follows that the injuries were, caused to B by some members of the unlawful assembly. [561 H] Failure to prove the presence of the named offender among the members of the unlawful assembly will not affect the criminality of those who are proved to be members of the assembly if the other conditions of the applicability of section 149 I.P.C. be established. [56.1 A]

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minal Appeal No. 138 of 1970. From the judgment and order dated the 4th May 1970 of the Allahabad High Court at Allahabad in Criminal Revision No. 1649 of 1968. K. L. Arora and M. M. Kshatriya, for the appellant. O. P. Rana, for the respondent. The Judgment of the Court was delivered by BEG, J. This appeal comes up before us by a certificate of fitness of the case for appeal to this Court granted by the Allahabad High Court under Article 134 (1 ) (c) of the Constitution. The appellant was convicted under Section 60 (a) of the U.P. Excise Act and sentenced to six months rigorous imprisonment and a fine of Rs. 1000/ , and, in default of payment of the fine, to undergo imprisonment for a further period of two months. His conviction and sentence were confirmed by the Sessions ' Judge as well as by the High Court of Allahabad. On 27 10 1967, at about 6.45 p.m., he was found by the raiding Excise staff in a room of a bungalow in Meerut apparently preparing something with the aid of materials found there which were seized. These were said to be 1. Five drums, each containing about 20 liters liquor of O.P. strength, the sample whereof was taken in five bottles from each tin. Three empty drums of five gallons capacity. Thirty empty bottles bearing labels. Labels. 120 in number, bearing the words "Khody 's Herecules ". Different types of capsules, 142 in number". His plea was that he had no concern with the bungalow in question and that he was not present at the time when its search was taken. He said that the Excise Inspector came to the liquor shop of Gyan Chand Chander Mohan. situated in Sadar Bazar. Meerut, where he was working as a salesman. According to him, the Excise Inspector wanted to check the stock of spirit and, demanded the register from him. As the register was locked in a drawer the Excise Inspector is alleged to 823 have abused the appellant and implicated him falsely for alleged possession of the objects mentioned above. It may be mentioned here that the search of bungalow No. 243, Circular Road, Meerut Cantonment, from where the recovery was made, was taken after the issue of a regular search warrant (exhibit Ka. 1) under Section 52 of the U.P. Excise Act, 1910, by a First Class Magistrate on 26 10 1967. The very detailed recovery Memo (Exhibit Ka. 2) dated 27 10 1967 was signed by as many as six witnesses, in addition to having been signed by the officer who conducted the search and by the appellant himself. In this Memo, in the column for remarks, the result of the test report of the liquor is given as follows "Test report of the liquor. The contents of all the five (paper torn) of dirty white colour like, (paper torn) characteristics smell of the (paper torn) Hydrometer test is as under (paper torn) Drum No. 1 77 F x 13.2 50.9 O.P. Drum No. 2 77 F x 13.4 50.7 O.P. Drum No. 3 76 F x 13.8 50.6 O.P. Drum No. 4 76 F x 14.2 50.2 O.P. Drum No. 5 77 F x 13.6 50.5 O.P. Hence the contents of each drum are liquor of O.P. strength". Two questions have been raised in this case for our consideration Firstly, whether the smelling test employed by the Excise Inspector together with other circumstances were enough to justify the conclusion that the liquid recovered was illicit liquor of "O.P" strength ? And, secondly, whether the Excise Inspector could be considered an expert whose opinion about the nature of the liquid found was opinion evidence admissible under Section 45 of the. Evidence Act ? It will be seen from the statement of the appellant under Section 342 Criminal Procedure Code that he had professed ignorance about the nature of the liquid recovered from. the room of the house in which he was found. The false defence taken, that he was not present at the house in question when it was searched, could indicate that he wanted to keep his distance from the recoveries made as he was aware of their incriminating nature. Moreover, the appellant, who was an employee in a liquor shop, could not be so ignorant about the nature of the liquid recovered as not to be able to raise the question before the Trial Court that the liquid under consideration was not "liquor" as defined by the Act. In the Trial Court, he examined a number of witnesses to substantiate his plea that he was not present at the house from which the recovery was made but was taken from the shop in Sadar Bazar. And, that was the only question of fact which seems to have been raised and considered in the Trial Court at considerable length. Before the Sessions Judge also the main question raised was whether the at was arrested from the shop in Sadar Bazar or from the Kothi at Cir 824 cular Road, Meerut Cantt. The learned Counsel for the appellant had, however, at the end of his arguments also contended, before the Sessions Judge, that the liquid recovered had not been proved to be illicit liquor even if it was established that the recovery was from the possession of the appellant. He had relied on State of Andhra Pradesh vs Madiga Boosenna & Ors. (1) The learned Sessions Judge, had distinguished Boosenna 's case (supra) on the ground that the Excise Inspector in the case before us, who had the required technical knowledge and training behind him, had tested the contents of the drums with the aid of litmus paper, hydrometer, and thermometer and not confined himself to smelling the contents of the drums. The question of the admissibility of the opinion of the Excise Inspector was, however, not raised before the Sessions Judge. It appears that both the questions formulated above were raised before the High Court when the appellant 's revision application came up before it. The High Court had also distinguished Boosenna 's case (supra) on the ground that there were sufficient number of surrounding circumstances to buttress the, opinion evidence of the Excise Inspector in the case before us. It pointed out that this was not so in Boosenna 's case (supra). The High Court had also held that it appeared, from the Excise Manuals and various rules framed by the U.P. Government which had been placed before it, that the Excise Inspectors have to undergo rigorous training in all branches of knowledge involved in the performance of their duties including knowledge of the process of distillation and that the Excise Inspector C. D. Misra, P.W. 1, was a senior man incharge of raids and detection of important cases so that his opinion evidence was admissible, presumably as "expert" evidence, and could be relied upon. In certifying the case under Article 134(1) (c) of the Constitution, the High Court had observed that it was desirable that this Court may decide the question whether, despite the corroboration facts and circumstances which supported the smelling test employed by the Excise Inspector in the case before us, the test to which liquor was to be subjected in such cases was not to be more scientific and accurate than the one actually employed by the Excise Inspector. Learned Counsel for the appellant had cited State vs Madhukar Gopinath Lalge(2) where it was held in a prosecution under Bombay Prohibition Act, that, although, the circumstances in which an accused was discovered carrying liquid in rubber tubes may raise grave suspicion against him, yet, the Court would not be content with anything less than a chemical or Ido form test to determine the composition of the liquid. It was held that the Sykes ' or the Hydrometer test could not help in determining whether the liquid under consideration there really contained alcohol or not. It, however, also held that, once it is known that the liquid contained alcohol, the percentage of alcohol in it could be found out by employing the hydrometer test. In other words, according to this decision, the Hydrometer test would be enough if the liquid was known to contain alcohol because it would help to determine, the strength of alcoholic contents. (1) ; (2) I.L.R. [1965] Bombay 257. 825 Another case cited was Ram Jus vs State (1), where a Division. Bench of the Allahabad High Court had held that evidence based on chemical analysis was essential in order to establish that a substance alleged to be Ganja, recovered from an accused person, was really Ganja. In that case, reliance was placed upon the judgment of this Court in Boosenna 's case (supra) from which the following passage was cited "Except for a general statement contained in the evidence of the witnesses, particularly P.Ws. 1 and 4 that there was a strong smell of alcohol, emanating from the tins, which were pierced open, there is no other satisfactory evidence to establish that the article is one coming within the definition of the expression 'liquor '. Merely trusting to the smelling sense of the prohibition officers, and basing a conviction, on an opinion expressed by those officers, under the circumstances, cannot justify the conviction of the respondents. In our opinion, better proof by a technical person, who has considered the matter from a scientific point of view, is not only desirable, but even necessary, to establish that the article seized is one coming within the definition of 'liquor '. " We think that it is not desirable to lay down an inflexible rule on questions of fact even though their determination requires the adoption of scientific methods and tests. It is really for the, Court of fact to decide whether upon a consideration of the totality of the facts in a case. it has been satisfactorily established that the objects recovered from the possession of the accused included liquor of prohibited strength. We see no reason why an accused person in the position of the appellant, who could be presumed to have enough knowledge about the composition and strength of the prohibited liquor could not raise this question in the Trial Court so that the prosecution may cure whatever weakness there might be in the evidence on that point. We do not think that he should be allowed to raise it at a stage when it may be difficult or impossible to adopt a conclusive test. Another question before us is whether the Excise Inspector, whose evidence was under consideration, had sufficient knowledge to be deemed to be an expert within the meaning of Section 45 of the Evidence Act so that the tests adopted by him, together with all the attendant circumstances, could establish beyond doubt that the appellant was in possession of illicit liquor. We think that these are also essentially questions of fact. If there is sufficient evidence led by the prosecution o establish its case it becomes the duty of the defence to rebut that, evidence. In the case before us, the appellant 's Counsel cross examined Shri C. D. Misra, P.W. 1, Excise Inspector, at considerable length, but the whole of this cross examination was directed at showing that the recoveries were not made from the possession of the appellant. No question was put to him in cross examination to suggest that the appellant questioned the composition or strength of the liquid recover (1) 826 ed as alcohol of prohibited strength or the competence of the Excise Inspector to give his conclusion on the strength of tests adopted by him. Again, no defence evidence was led to indicate that the liquid could be anything else. These considerations would be sufficient to dispose off the points raised on behalf of the appellant in the case before us. We may, however, observe that we agree with the High Court that the proposition contained in Boosenna 's case (supra) must be confined to its own facts. We find that the Excise Inspector who had deposed, at the very outset of his evidence, that he had put in 21 years service as Excise Inspector and had tested lacs of samples of liquor and illicit liquor. As already pointed out, the competence of C. D. Misra to test the composition and strength of the liquid under consideration was not questioned at all. We, therefore,, think that this particular Excise Inspector could be treated as an expert within the meaning of Section 45 of the Evidence Act. The Excise Inspector had, in addition to employing the smelling test, used all the other tests he could reasonably adopt. If his competence to give his opinion or the sufficiency of the tests adopted by him had been questioned in the Trial Court, the prosecution would have been in a position to lead more evidence on these questions. We also find that the objects recovered from the possession of the appellant almost proclaim the nature of his activity and of the liquid which could be in his possession. On the facts and circumstances of this case, neither Boosenna 's case nor any other case) would, we think, help the appellant. Consequently, we dismiss this appeal and affirm the conviction and sentence of the appellant. The appellant should surrender to his bail and serve out the sentence. P.B.R. Appeal dismissed.

The appellant was found preparing illicit liquor when the raiding excise party searched the room in which he was present. The appellant pleaded that he had no concern with the bungalow searched and that he was not present when the search was taken and that he was falsely implicated in the case. All the materials found in the room were seized. The Excise Inspector had tested the contents of the drums with the aid of litmus paper, hydrometer, and thermometer and did not confine himself to smelling the contents of the drums. The appellant was convicted by the trial court under section 60(a), U.P. Excise Act, 1910 for preparing illicit liquor and was sentenced to imprisonment and fine. His conviction and sentence were confirmed both by the sessions Judge and the High Court. The questions raised in this Court were (i) whether the smelling test employed by the Excise Inspector together with other circumstances were enough to justify the conclusion that the liquid recovered was illicit liquor of O.P. strength and (ii) whether the Excise Inspector could be considered an expert whose opinion about the nature of the liquor found was opinion evidence under section 45 of the Evidence Act. Dismissing the appeal, HELD : (i) It is not desirable to lay down an inflexible rule on questions of fact even though their determination requires the adoption of scientific methods and tests. It is really for the court of fact to decide whether, upon a consideration of the totality of the facts in a case, It has been satisfactorily established that the objects recovered from the possession of the accused included liquor of prohi bited strength Hydrometer test would be enough if the liquid was known to contain alcohol because it would help to determine the strength of alcoholic contents. [825 D] In the instant case the false defence taken, that the appellant was not present at the house in question when it was searched, could indicate that he wanted to keep his distance from the recoveries made as he was aware of their incriminating nature. Secondly, the appellant who was an employee in a liquor shop, could not be so ignorant about the nature of the liquid recovered as not to be able to raise the question before the trial court that the liquid under consideration was not "liquor" as defined in the Act. There was no reason why the accused, who could be presumed to have enough knowledge about the composition and strength of the prohibited liquor, could not raise this question in the trial court so that the prosecution might cure whatever weakness there might be in the evidence on that point. The Excise Inspector was cross examined at considerable length but the whole of it was directed at showing that the recoveries were not made from the possession of the appellant. No question was put to him In cross examination to suggest that the appellant questioned the composition or strength of the liquid recovered as alcohol of prohibited strength or the competence of the Excise Inspector to give his conclusion on the strength of tests ad opted by him. The appellant should not be allowed to raise it at a stage when it may be difficult or impossible to adopt a conclusive test. The objects recovered from the possession of the appellant almost proclaim the nature of his activity and of the liquid which could be in his possession. (ii)The competence of the Excise Inspector to test the composition and strength of the liquid was not questioned at all. Nor was his competence questioned to give his conclusion on the strength of the tests adopted by him. No defence evidence was led to indicate that the liquid could be anything else. [826A] 822 In the instant case, the question of admissibility of the opinion of the Excise Inspector was, however, not raised before the Sessions Judge. The Excise Inspector had deposed that he had put in 21 years ' service as Excise Inspector and had tested lakhs of samples of liquor and illicit liquor. On the facts of this case this particular Excise Inspector could be. treated as an expert within the meaning of section 45 of the Evidence Act. The evidence was sufficient to prove the prosecution case beyond reasonable doubt. [826 C] State of Andhra Pradesh vs Madiga Boosenna & Ors., ; , distinguished. State vs Madhukar Gopinath Lalze, I.L.R. [1965] Bombay 257, and Ram Jus vs State, , referred to.

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: Special Leave Petition (Crl.) No. 679/1980. F From the Judgment and order dated 6 12 1979 of the Punjab & Haryana High Court in Crl. A. No. 880/78. A. N. Mulla, T. L. Garg and N. D. Garg for the Petitioner. The order of the Court was delivered by KRISHNA IYER, J., The criminal scenario with a tragic crescendo which has been unfurled in this Special Leave Petition starts with ' a bunch of 'suspects ' being brought up to the police post which was in charge of the petitioner, an Assistant Sub Inspector. A case of theft in some officers house had been reported to the police the previous night and so as part of the investigation the suspects were picked up and suffered as part of the process of 'investigation ' severe flagellation. Chhabila, one of those so tortured, succumbed to his injuries. This 278 triggered off investigation into the murderous conduct of the investigator, the petitioner, and another. Medical examination revealed the cruel cause of death as asphyxiation. One of the injuries which, according to the doctor, made the deceased unconscious was torture on both the soles of the foot of the victim. A trial for murder fol. lowed, a conviction under section 302 was enter and eventually the High Court confirmed the conviction and sentence of life imprisonment so far as the petitioner was concerned. A false explanation of suicidal hanging was set up by the police officer accused but this was rejected and eventually on a study of the circumstances and the incontrovertible facts of flagellation and asphyxiation within police premises and the testimony of eyewitnesses about nocturnal detention within the police station and beating up of the victim, the courts below concurrently found the guilt of the petitioner proved beyond reasonable doubt. Strenuous submissions have been made to us by Shri Mulla to discredit the prosecution version of murder but we are not in the least convinced that there is any error in the appreciation or the conclusion. We are deeply disturbed by the diabolical recurrence of police torture resulting in a terrible scarce in the minds of common citizens that their lives and liberty are under a new peril when the guardians of the law gore human rights to death. The vulnerability of human rights assumes a traumatic, torture some poignancy when violent violation is perpetrated by the police arm of the State whose function is to protect the citizen and not to commit gruesome offences against them as has happened in this case, Police lock up if reports in newspapers have a streak of credence, are becoming more and more awesome cells. This development is disastrous to our human rights awareness and humanist constitutional order. The State, at the highest administrative and political levels, we hope, will organise special strategies to prevent and punish brutality by police methodology. Otherwise, the credibility of the rule of law in our Republic vis a vis the people of the country will deteriorate. We conclude with the disconcerting note sounded by Abraham Lincoln: "If you once forfeit the confidence of your fellow citizens you can never regain their respect and esteem. It is true that you can fool all the people some of the time, and some of the people all the time, but you cannot fool all the people all the time. 279 These observations have become necessary to impress upon ' the State police echelons the urgency of stamping out the vice of 'third degree ' from the investigative armoury of the police. P. B. R. Petition dismissed.

The prosecution alleged that the petitioner, an Assistant Sub Inspector of Police, subjected one of the suspects in a theft case to severe flagellation which resulted in the death of the suspect. Medical examination of the deceased revealed that death was due to asphyxiation. On a study of the circumstances and the incontrovertible facts of flagellation and asphyxiation within police premises and the testimony of eye witnesses, the trial court found the petitioner guilty of the offence with which he was charged and sentenced him to imprisonment for life. His explanation that death was due to suicidal hanging was rejected by the trial court as well as by the High Court. Dismissing the petition, ^ HELD: There was no error either in the appreciation of evidence or the conclusion reached by the courts below. [278 D] [It is disturbing to find diabolical recurrence of police tortures resulting in a terrible scare in the minds of common citizens that their lives and liberty are under a new peril when the guardians of the law gore human rights to death. Police lock ups are becoming more and more awesome cells. This development is disastrous to the human rights awareness and the humanist constitutional order.] [278 E]

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ivil Appeal No. 2912 of 1986. From the Judgment and Order dated 1.4.85 of the Bombay High Court in Appeal No. 262 of 1985. J.P. Cama and Mukul Mudgal for the Appellant. V.N. Ganpule for the Respondents; The Judgment of the Court was delivered by, VENKATARAMIAH, J. The appellant is M/s. Isha Steel Treatment, Bombay A firm carrying on the business of metal processing, i.e., heat treatment of metals. In the year 1963 it established a factory (hereinafter referred to as the 'I Unit ') for the purpose of carrying on the business of metal processing with about 32 workmen. Nearly 12 years after the establishment of the I Unit it established a second factory (hereinafter referred to as the "II Unit ') for carrying on the same kind of business employing about 75 workmen about 200 yards 418 away from the I Unit. Both the units had independent loca tion, separate factory licences and separate municipal licences. The said two units also had separate stores and maintained separate accounts and balance sheets. The workmen of both the units were also employed independently and there was a separate muster roll in respect of each of the two units. There was no rule or condition regarding the inter transferability of the workmen. On finding that the workmen of the I Unit were wilfully slacking their work and that there was growing indiscipline among them, the appellant decided in the year 1981 82 to reduce the three shifts working previously to two shifts. The indiscipline and the lack of production continued and on it becoming impossible for the appellant to carry on with even the aforesaid two shifts as reduced, the appellant came to the unhappy conclu sion that it had no alternative but to close down the I Unit altogether. The aforesaid closure of the I Unit (set up in 1963) took effect on 15.12.1982 and closure compensation was offered to the entire staff of the 32 workmen. The workmen of the I Unit raised through their Union, namely, Associa tion of Engineering Workers, Bombay, an industrial dispute before the Deputy Commissioner of Labour (Conciliation), Bombay District Office, Bombay, who in exercise of the powers delegated to him, under clause (d) of sub section (1) of section 10 read with section 12(5) of the (hereinafter referred to as 'the Act ') referred to Shri B.L. Borude, Industrial Tribunal, Maharash tra, Bombay the dispute between the appellant and the work men employed in the I Unit over the demand for reinstatement with full back wages and continuity of service with effect from 15.2. 1982. The said reference was registered as Refer ence (IT) No. 218 of 1982 before the Tribunal. In the statement of claim filed by the workmen it was urged that the two units which were being run by the appel lant had functional integrality and were for all purposes parts of the establishment and that the workmen were mutual ly transferable from one unit to the other. It was further stated that the workmen were originally members of Mazdoor Congress which, according to them, could not improve their service conditions. Therefore, they decided to join another union, namely, the Association of Engineering Workers and were canvassing amongst themselves for organising under the banner of the Association of Engineering Workers. They further pleaded that on the management coming to know about it, it tried to persuade the workers not to join the said Association. On the workmen not agreeing to the suggestion made by the management, the management in an attempt to retaliate against the move of the workmen, removed 22 work men on 419 15.2. 1982 alleging that the I Unit was making a loss, that the workmen had resorted to giving less production, that there was indiscipline in the 1 Unit and, therefore, the management was closing down the said unit. The workmen pleaded that the action of the management was arbitrary and was a colourable exercise of the management 's power of closure. It was alleged that the impugned action was by way of victimisation for the trade union activities of the said workmen. They claimed that the principle of 'last come, first go ' while terminating the services of the workmen having not been followed as required by section 25 G of the Act, the termination was illegal. The appellant resisted the claim made by the workmen. It pleaded inter alia that the closure of the I Unit was due to the non co operation and indiscipline on the part of the workmen, that the two units were independent of each other and there was no functional integrality between them. The management denied that there was any rule or service condition permitting transfer of workmen from one factory to another. The management stated that it was always willing to pay the compensation payable on closure to the workmen concerned and that section 25 G of the Act was inapplicable to the case. After recording the evidence tendered by the parties and hearing the arguments urged on their behalf, the Tribunal held that the two units were independent of each other, there was no common seniori ty list of the workmen of the two units and there was no rule or practice of transferring workmen from one factory to the other. The Tribunal rejected the case of the workmen that the closure was in retaliation to the trade union activities of workmen. It also found that there was no victimisation of the workmen and the workmen concerned were not entitled to be reinstated as the closure of the I Unit had become legally effective from 15.2. Accordingly, it rejected the demand made by the workmen by its Award dated September 6, 1983. Aggrieved by the Award passed by the Tribunal, the workmen filed a petition under Article 226 of the Constitution of India before the High Court of Bombay challenging the legality of the Award. The learned Single Judge, before whom the writ petition came up for considera tion, reversed the Award of the Tribunal and remanded the proceedings back to the Tribunal for afresh disposal. By the time the decision was rendered, there were only 14 workmen, who were interested in the dispute. The learned Single Judge, therefore, directed the Tribunal to consider whether the termination of services of any of the 14 workmen, whose claim for reinstatement still subsisted, was done in viola tion of the principles laid down under section 25 G of the Act. The learned Single Judge also directed the Tribunal to determine whether the workmen were entitled to reinstatement and if the Tribunal found that they were entitled to such reinstatement the 420 question as to the grant of back wages should also be con sidered by it. It should be stated here that the learned Single Judge made it clear that the finding of the Tribunal that the Association of workmen had 'failed to establish that the services of the workmen were terminated because of their joining the petitioner union ' was not disturbed. The learned Single Judge, however, found that there was func tional integrality between the two units and in that connec tion observed thus: "In my judgment the fact that the two units are situate within a distance of 200 meters, the fact that both the units are controlled by the same employer and the fact that the busi ness of heat treatment process carried on in the two units was identical, it leaves no manner of doubt that the two units were really integral and were known separately only be cause the business in the two units commenced on different dates. In my judgment, the find ing recorded by the Tribunal that the two units were separate and independent is clearly erroneous and cannot be sustained. " With these observations, the learned Single Judge set aside the finding recorded by the Tribunal to the effect that the two units were independent and separate and held that they were one and the same. In view of his finding the learned Single Judge held that section 25 G of the Act was applicable. He accordingly set aside the Award and remanded the case to the Tribunal with the directions already set out above. Aggrieved by the judgment of the learned Single Judge, the appellant preferred an appeal before the Division Bench of the High Court. That appeal was dismissed with the obser vation that the finding of the learned Single Judge that the two units had functional integrality was correct and the remitting of the matter to the Tribunal was in order. This appeal by special leave is filed against the decision of the Division Bench of the High Court. It is not disputed before us that after 15.2. 1982 when the work in the I Unit was completely stopped no work is being carried on in the premises where the I Unit had been established. It is also not disputed that the II Unit has been working as usual and the stoppage of the work in the I Unit had no effect on the work of the II Unit. The finding recorded by the Tribunal that the management had not closed down the I Unit by way of retaliation to the alleged trade union activities of the workmen of the I Unit has not been shown to be untenable. It is 421 also seen that the findings of the Tribunal that the two units had been established in two different places although at a distance of about 200 yards from each other; that the muster rolls of the two units were separate; that the two units had separate factory licences and municipal licences; that the balance sheets of the two units were separate; and that there was no rule or condition of service that the workmen were transferable from one unit to the other are not set aside by the learned Single Judge. It is true that in the course of the evidence of one of the witnesses for the management it had been brought out, that the name of workman Kishore Ram of the 1 Unit had been by mistake entered in the Muster Roll of the II Unit in October, 1980 and it had been scored out. This was a stray case. There was no evidence in the case showing that Kishore Ram had actually worked in the II Unit. Neither Kishore Ram nor anybody else had been examined to give evidence in support of the said fact. On a consideration of the entire evidence including the fact that there was no common seniority list of workmen of the two units and the fact that the name of Kishore Ram had been entered in the Muster Roll of the II Unit in October, 1980 and that it had been scored out, the Tribunal came to the conclusion that the workmen of the two units were not trans ferable from one unit to the other. The first question which arises for consideration in this case is whether the two units should be treated as having functional integrality. In the Workmen of the Straw Board Manufacturing Company Limited vs M/s. Straw Board Manufacturing Company Limited, this Court had occasion to consider a similar question. At page 507 this Court considered the above question as follows: "20. After giving due consideration to all the aspects pointed out by the learned counsel for the appellants, we are unable to hold that the R. Mill is not an independently functioning unit and that there is any func tional integrality as such between the R. Mill and the section Mill. The fact of the unity of ownership, supervision and control and some other common features, which we have noticed above, do not justify a contrary conclusion on this aspect in the present case. There is considerable force in the submission of Mr. Chitaley that the R. Mill is a different line of business and the closure of the section Mill has nothing to do with the functioning of the R. Mill. The matter may be absolutely different when in an otherwise going concern or a func tioning unit some workmen 's services are 422 terminated as being redundant or surplus to requirements. That most of the conditions of service of the two mills were substantially identical can be easily explained by the fact that, being owned by the same employer and the two units being situated in close proximity, it will not be in the interest of the manage ment and peace and wellbeing of the company to treat the employees different creating heart burning and discrimination. For the same reason, there is no particular significance in this case even in the application of the standing orders of the company to the employ ees of the R. Mill which, because of the non requisite number of employees employed in the latter, is not even required under the law to have separate standing orders. It is, in our opinion, a clear case of closure of an inde pendent unit of a company and not a closure of a part of an establishment. " In the above decision this Court has held that the unity of ownership, supervision and control that existed in re spect of the two mills involved in that case and the fact that the conditions of the service of the workmen of the two mills were substantially indentical were not by themselves sufficient in the eye of law to hold that there was func tional integrality between the two mills. It held that it was a clear case of closure of an independent unit and not of a part of an establishment. The decision of the learned Single Judge of the High Court that the fact that the two units were situate in a distance of 200 meters, the fact that both the units were controlled by the same employer and that the business of heat treatment processing carried on in the two units was identical had left no room for doubt that the two units were really integral cannot be sustained. The decision in S.G. Chemicals and Dyes Trading Employees ' Union vs S.G. Chemicals and Dyes Trading Limited and Another, ; is not of much assistance to the work men. The management in that case was running its business in pharmaceuticals at three places. The Pharmaceutical Division was at Worli, the Laboratory and Dyes Division was at Trom bay and the Marketing and Sales Division was at Churchgate. In 1984 the company which was managing the said three divi sions of business was sold out. As the buyers proposed to handle the future sales of the Company through their own distribution channels, they found that the services of the staff working at the Churchgate office were no longer re quired. Therefore, the management closed down the office at Churchgate. The question was whether there was functional integrality between the office at the Churchgate and the factory at Trombay. This Court on a 423 consideration of the material before it in that case, held that the functions of the Churchgate division and the Trom bay factory were neither separate nor independent but were so integrally connected as to constitute the Churchgate and the Trombay factory into one establishment, because the Churchgate division used to purchase the raw material re quired by the Trombay factory for producing or processing the goods. it used to market and sell the goods so manufac tured or processed by that factory and it also used to disburse the salary and other employment benefits and main tain accounts etc. of the workmen. These were considered to be integral parts of the manufacturing activities of the factory at Trombay, because the factory could never have functioned independently without the Churchgate division being there. It is not the case of the workmen in the present case that the II Unit could not continue to function after the closure of the I Unit. As already mentioned, the II Unit is continuing to function as usual even now notwith standing the stoppage of the activities at the I Unit. The question of application of section 25 G of the Act arises only when the services of the workmen are retrenched. In Santosh Gupta vs State Bank of Patiala, ; it is laid down that if the termination of service of a workman in a given case falls either under section 25 FF or under section 25 FFF of the Act it would not be a termina tion falling under section 25 F of the Act. This Court has observed in that case that after the enactment of section 25 FF and section 25 FFF retrenchment included every kind of termination of service except those not expressly included in section 25 F or not expressly provided for by other provisions of the Act such as sections 25 FF and 25 FFF. Hence if the case is one of genuine closure then the ques tion of applying section 25 G of the Act which is applicable to a case of retrenchment would not arise. It is not necessary that in order to effect closure of business the management should close down all the branches of its business. In Management of Hindustan Steel Ltd. vs The Workmen & Others, ; this Court has held that the word 'undertaking ' used in section 25 FFF seems to have been used in its ordinary sense connoting thereby any work, enterprise, project or business undertak ing. It is not intended to cover the entire industry or business of he employer. Even the closure or stoppage of a part of the business or activities of the employer would seem in law to be covered by the said provision. In deciding the above case this Court relied upon its earlier decision in Workmen of the Indian Leaf 'Tobacco Development Company Limited, Guntur vs Management of the Indian Leaf Tobacco Development Co. Ltd., Guntur, ; In that case the Court 424 observed that a genuine closure of depots or branches, even though it did not amount to closure of the business could not be interfered with by an Industrial Tribunal. It further held that the closure was stoppage of part of the activity or business of the management and such stoppage is an act of management which is entirely in the discretion of the man agement. The Court further observed that no Industrial Tribunal could interfere with the discretion exercised in such a matter. It was, however, argued in this case on behalf of the workmen that since the Provident Fund accounts of the em ployees and the Employees ' State Insurance accounts of the two units had common numbers with the authorities concerned and settlements containing similar terms (copies which are not produced before us) had been entered into in 1974 be tween the management and the workmen of the two units, it should be held that the two units had functional integrality between them. We are of the view that even these factors are not sufficient to hold that the two units were one and the same notwithstanding the fact that the nature of the busi ness carried on in them was the same. In Indian Cable Co. Ltd. vs Its Workmen, this Court has held that the fact that the balance sheet was prepared incorpo rating the trading results of all the branches or that the employees of the various branches were treated alike for the purpose of provident fund, gratuity, bonus and for condi tions of service in general, could not lead to the conclu sion that all the branches should be treated as one unit for purposes of section 25 G of the Act. On a consideration of the entire material before it, the Tribunal had reached the conclusion that the closure of the I Unit was bona fide, that it did not have any functional integrality with the II Unit and that there was no victimi sation of workmen for their trade union activities. On going through the Award passed by the Tribunal we feel that it had not committed any error in recording the said findings which called for interference at the hands of the High Court under Article 226 of the Constitution of India. We are satisfied that this case is one of bona fide closure of an independent unit of business. The learned Single Judge and the Division Bench 'of the High Court were, therefore, in error in hold ing that the termination of service of the workmen in this case amounted to retrenchment and not closure and the case of the workmen had to be considered on remand by the Tribu nal in the light of section 25 G of the Act. They overlooked that it would result in a wholly unjust situation in which a corresponding number of workmen in the II Unit would be prejudicially affected even though they had nothing to do with the I Unit. 425 We, therefore, set aside the judgments of the Division Bench and of the learned Single Judge and restore the Award passed by the Tribunal. Before concluding we should record that the learned counsel for the management submitted that the management was willing to pay ex gratia a sum of Rs.10,000 to each of the workmen who had not received till now any compensation payable to them under section 25 FFF of the Act for closure of the I Unit. He submitted that as on date 11 workmen had not received the compensation payable to them on closure and that each of them would be paid the compensation payable to them on closure and Rs. 10,000. The names of those 11 work men are as under: S/Shri 1. Madanlal Surajbali Jaiswal 2. Sukhdev 3. Dulsinger Rasharak Jaiswal 4. Motilal Pawar Kurmi 5. Mohanram Katwaro Jaiswal 6. Udaychand Keshavasingh 7. Zagaro Palveer Singh 8. Murlidhar Govind Javane 9. Wandev Prasad 10. Radhashyam Rajpati Yadav 11. Karmraj Lakshman Yadav We, therefore, direct the management to pay each of the above workmen compensation payable to them on closure and a sum of Rs. 10,000. The management is given two months ' time to pay the amount due to each of the above eleven workmen. The appeal is accordingly allowed. There shall, however, be no order as to costs. S.R. Appeal al lowed.

The appellant carries on the business of metal process ing i.e. beat treatment of metals. In 1963 it established a factory with about 32 workmen called "No. I Unit". In the year 1975 another factory called "No. II unit" was estab lished for carrying on the same kind of business employing about 75 workmen about 200 yards away from the No. 1 Unit. Both the Units had independent location, separate factory licences and separate municipal licences. The two Units had separate stores and maintained separate accounts and balance sheets. The workmen of both the units were also employed independently and there was a separate muster roll in re spect of each of the two units. There was no rule or condi tion regarding the inter transferability of the workmen. However, there was by mistake the name of one workman by name Kishore Ram of Unit 1 entered in the muster roll of the II Unit in October 1980 and it had been scored out later. On finding that the workmen of No. 1 Unit were wilfully slacking their work and that there was growing indiscipline among them, the appellant decided in the year 1981 82 to reduce the three shifts working previously to two shifts. The indiscipline and the lack of production continued and on it becoming impossible for the appellant to carry on 415 with even the two shifts as reduced, the appellant came to the unhappy conclusion that it had no alternative left but to close down the No. 1 Unit altogether with effect from 15.2.82 and closure compensation was offered to the entire staff of 32 workmen. The workmen of the I Unit raised through their Union, namely, Association of Engineering Workers, Bombay an indus trial dispute reference (IT) No. 218 of 1982. In the state ment of claim filed by the workmen it was urged; (i) that the two units which were being run by the appellant had functional integrality and were for all purposes parts of one establishment and that the workmen were mutually trans ferable from one unit to the other; (ii) that the reasons given by the management for closing down Unit No. 1 is false, the action of the management was arbitrary and was colourable exercise of the management 's power of closure; (iii) the impugned action was by way of victimisation for the trade union activities of the said workmen in Unit No 1 and the principle of "last come, first go" while terminating the services of the workmen having not been followed as required by section 25 G of the Act, the termination was illegal. The Tribunal rejected the case of the workmen that the closure was in retaliation to the trade union activities of workmen and found that there was no victimisation of the workmen and the workmen concerned were not entitled to be reinstated as the closure of the 1 Unit had become legally effective from 15.12.1982 and passed its award to that effect on September 6, 1983. Aggrieved by the Award passed by the Tribunal, the workmen filed a petition under Article 226 of the Constitution of India before the High Court of Bombay challenging the legality of the Award. The learned Single Judge, before whom the writ petition came up for consideration, reversed the Award of the Tribunal and re manded the proceedings back to the Tribunal for afresh disposal. By the time, the decision was rendered, there were only 14 workmen, who were interested in the dispute, and therefore, the learned Single Judge directed the Tribunal to consider whether the termination of services of any of the 14 workmen, whose claim for reinstatement still subsisted, was done in violation of the principles laid down under section 25 G of the Act. Aggrieved by the judgment of the learned Single Judge, the appellant preferred an appeal before the Division Bench of the High Court. That appeal having been dismissed the appellant has come by way of special leave to the Supreme Court. Allowing the appeal, the Court, HELD: 1. The existence of the unity of ownership, supervi sion 416 and control in respect of the two units, the fact that the conditions of the service of the workmen of the two Units were substantially indentical, the fact that both the units are situate at a distance of 200 meters and that the busi ness of heat treatment processing in the two Units are the same are not by themselves sufficient in the eye of law for holding that there was functional integrality between the two Units. This is a clear case of closure of an independent unit and not of a part of an establishment. [422D E] Workmen of the Straw Board Manufacturing Co. Ltd. vs M/s Straw Board Manufacturing Company Ltd., followed. S.G. Chemicals and Dyes Trading Employees ' Union vs S.G. Chemicals and Dyes Trading Ltd. & Anr., ; distinguished. The question of application of section 25 G of the Act arises only when the services of the workmen are re trenched within the meaning of section 25F and not when sections 25FF, and 25FFF are applicable. If the case is one of genuine closure then the question of applying section 25 G of the Act which is applicable to a case of retrench ment would not arise. It is not the case of the workmen in the present case that the II Unit could not continue to function after the closure of the I Unit. In fact the II Unit is continuing to function as usual even now notwith standing the stoppage of the activities at the I Unit. [423C E] Santosh Gupta vs State Bank of Patiala, ; , relied on. It is not necessary that in the order to effect closure of business the management should close down all the branches of its business. A genuine closure of a Unit even though it did not amount to closure of the business could not be interfered with by an industrial Tribunal. The clo sure was stoppage of part of the activity or business of the management and such stoppage is an act of management which is entirely in the discretion of the management. No Indus trial Tribunal could interfere with the discretion exercised in such a matter. [423F H; 424A B] Management of Hindustan Steel Ltd. vs The Workmen & Ors., ; ; Workmen of the Indian Leaf Tobacco Development Co. Ltd. Guntur vs Management of the Indian Leaf Tobacco Development Co. Ltd., Guntur ; fol lowed. 417 4. The two factors; namely: (i) the provident fund accounts of the employees and the Employees ' State Insurance accounts of the two units had common numbers with the au thorities concerned and (ii) settlements containing similar terms had been entered into in 1974 between the management and the workmen of the two units are not sufficient for holding that the two units were one and the same notwith standing the fact that the nature of the business carried on in them was the same. [424B D] 5. On a consideration of the entire material it is clear that (i) the Tribunal had not committed any error in record ing the findings which called for interference at the hands of the High Court under Article 226 of the Constitution; (ii) this case is one of bona fide closure of an independent unit of business and not a case of termination of services of workmen requiring consideration on remand, by the Tribu nal in the light of s.25 G of the Act; (iii) it was a case where the judgment of the High Court if maintained would result in a wholly unjust situation in which a corresponding number of workmen in the II Unit would be prejudicially affected even though they had nothing to do with the 1st Unit. [424E H] Indian Cable Co. Ltd. vs Its Workmen, , followed.

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N: Criminal Appeal No. 506 of 1979. Appeal by special leave from the Judgment and Order dated 3 5 79 of the Punjab & Haryana High Court in Crl. A. No. 166/76. Harbans Singh Marwah for the Appellant. R. N. Sachthey for the Respondent. The Judgment of the Court was delivered by KRISHNA IYER, J. A philanderer of 22, appellant Phul Singh, overpowered by sex stress in excess, hoisted himself into his cousin 's house next door, and in broad day light, overpowered the temptingly lonely prosecutrix of twenty four, Pushpa, raped her in hurried heat and made an urgent exist having fulfilled his erotic sortie. The screaming victim complained to her mother working in the field; thereafter a first information, prosecution and conviction ensued, a sentence of 4 years R.I. was imposed by the Sessions Court, and the High Court affirmed it in appeal. The broad facts bearing on the instant act of carnal assault look too probable for pettifogging legalistics about poor corroboration, consent and false implication to devalue their credibility. The culpability is beyond doubt and we uphold the conviction. Ordinarily, rape is violation, with violence, of the private person of a woman an outrage by all canons. In our conditions of escalating sex brutality a four year term for rape is not excessive. But here, the offender is in his early twenties and signs of repentance are seen. The victim and her parents have forgiven the molester who is a first cousin, says counsel. An affidavit from the father in law of the woman has been filed and, if needed, counsel is ready to produce the victim 's statement that she has forgiven the criminal. While it is possible that the accused may procure such condonation from unwilling victim, the fact remains that the two families being close cousins are ready to take a lenient view of the situation. Of course, this does not bind the Court in any manner. Therefore, taking an overall view of the familial and the criminal factors involved, we reduce the imprisonment from 4 years to 2 years R.I. We must, however, direct our attention in a different penological direction. For sentencing efficacy in cases of lust loaded criminality cannot be simplistically assumed by award of long incarceration, for, 591 otten that remedy aggravates the malady. Punitive therapeutics must be more enlightened than the blind strategy of prison severity where all that happens is sex starvation, brutalisation, criminal companionship, versatile vices through bio environmental pollution, dehumanised cell drill under 'zoological ' conditions and emergence, at the time of release, of an embittered enemy of society and its values with an indelible stigma as convict stamped on him a potentially good person 'successfully ' processed into a hardened delinquent, thanks to the penal illiteracy of the Prison System. The Court must restore the man. A hyper sexed homo sapiens cannot be habilitated by humiliating or harsh treatment, but that is precisely the perversion of unreformed Jail Justice which some criminologists have described as the crime of punishment. This Court has held, in Sunil Batra 's case and later that, constitutionally viewed, punitive deprivation of personal freedom must be goal oriented and humanely restorative, apart from being deterrent. The insulated years behind the insensitive bars must possess a hospital setting if correction is a social purpose, as Gandhiji often insisted. In prison treatment must, therefore, be geared to psychic healing, release of stresses, restoration of self respect and cultural normalisation, apart from training to adapt oneself to the life outside. The functional failure of our pachydermic prison projects, exacerbated by its tension and trauma on the one hand and the reverse ethos inside on the other, deserves judicial cognizance. The current efforts of Governments, Central and State, to reform jail regimen, we hope, will give a better deal to the caged community. For these reasons, in this case, we deem it desirable to superadd to the sentence of imprisonment a few directives to ensure that the carceral period reforms the convict. The appellant is not a 'habitual ' and has no vicious antecedents except this fugitive, randy molestation which is bad enough in a society where women are often socially weak and sexually victimised. It may be marginally extenuatory to mention that modern Indian conditions are drifting into societal permissiveness on the carnal front promoting proneness to pornos in life, what wit libidinous 'brahmacharis ', womanising public men, lascivious dating and mating by unwed students, sex explosion in celluloid and book stalls and corrupt morals reaching a new 'high ' in high places. The unconvicted deviants in society are demoralisingly large and the State has, as yet, no convincing national policy on female flesh and sex sanity. We hope, at this belated hour, the Central Government will defend Indian Womanhood by stamping out voluptuous meat markets by merciless criminal action. 592 Isolated prosecutions and annual suppression rhetoric will stultify the law where the vice is widespread and the larger felons are often let loose. This reflection apart, we must, as part of the sentencing package, design a curative course for this prisoner to rid him of his aphrodisiac overflow and restore him into safe citizenship. He is a youth barely 22 with no criminal antecedents save this offence. He has a young wife and a farm to look after. Given correctional courses through meditational therapy and other measures, his erotic aberration may wither away. A man like the appellant has a reasonable prospect of shaping into a balanced person, given propitious social environs, curative and congenial work and techniques of internal stress release or of reformatory self expression. In this background, we regard a four year term of rigorous imprisonment more hardening than habilitative, even though we deplore the sex violence the young appellant has inflicted on his cousin 's wife snatching a tricky opportunity. Even so, the incriminating company of lifers and others for long may be counter productive, and in this perspective, we blend deterrence with correction and reduce the sentence to rigorous imprisonment for two years. We wish to emphasise that the special circumstances of this case constrain us to relent a little on principle because the restorative approach to sentencing has been jettisoned by the courts below. The task is not done by a negative reduction in the prison term. What is more important is a set of positive prescriptions which will ensure his turning a new leaf. One major method in securing this goal is to keep alive the family tie of the person in prison so that he may not deteriorate into a non person. Within limits of the Prison Act and Rules thereunder, the State Government or the Inspector General of Prisons will ensure that on parole, furlough or orders, the young appellant turns a new leaf of normal life. N.K.A. Appeal allowed in part.

The appellant who was 22 committed rape on the wife of his cousin who was a next door neighbour in broad day light. The Sessions Judge found the appellant guilty of the offence of rape and sentenced him to four years R.I. On appeal, the High Court affirmed it. It was urged that the appellant was in his early twenties and that there were signs of repentance. The fact remains that the two families being close cousins are ready to take a lenient view of the situation which of course does not bind the court in any manner. Partly accepting the appeal, the Court ^ HELD: The appellant is not a 'habitual ' and has no vicious antecedents except this fugitive, randy molestation which is bad enough in a society where women are often socially weak and sexually victimized. It may be marginally extenuatory to mention that modern Indian conditions are drifting into societal permissiveness on the carnal front promoting proneness to pornos in life, what with libidinous 'brahmacharis ', womanizing public men, lascivious dating and mating by unwed students, sex explosion in celluloid and book stalls and corrupt morals teaching a new 'high ' in high places. [591 F H] The appellant is a youth barely 22 with no criminal antecedents save this offence. He has a young wife and a farm to look after. Given correctional courses through meditational therapy and other measures, his erotic aberration may wither away. A man like the appellant has a reasonable prospect of shaping into a balanced person, given propitious social environs, curative and congenial work and techniques of internal stress release or of reformatory self expression. In this background the court regarded a four year term of rigorous imprisonment more hardening than habilitative, even though the court deplored the sex violence the young appellant had inflicted on his cousin 's wife snatching a tricky opportunity. [592 B D] A hyper sexed homo sapiens cannot be habilitated by humiliating or harsh treatment. In prison treatment must, therefore, be geared to psychic healing, release of stresses, restoration of self respect and cultural normalisation, apart from training to adapt oneself to the life outside. The functional failure of our pachydermic prison projects, exacerbated by its tension and trauma on the one hand and the reverse ethos inside on the other, deserves judicial cognisance. [591 A, D E] The current efforts of Governments, Central and State, to reform jail regimen, it was hoped, will give a better deal to the caged community. For these reasons, in this case, it is desirable to superadd to the sentence of imprisonment a few directives to ensure that the carceral period reforms the convict. A set of positive prescriptions will ensure appellant turning a new leaf. One major method in securing this goal is to keep alive the family ties of the person in 590 prison so that the appellant may not deteriorate into a non person. Within the limits of the Prison Act and Rules thereunder, the State Government or the Inspector General of Prisons will ensure that on parole, furlough or orders, the young appellant turns a new leaf of normal life. [591 E F, 592 F]

4073.txt

MINAL APPEAL No. 193 of 1962. Appeal from the judgment and order dated March 12,1962 of the Allahabad High Court (Lucknow Bench) at Lucknow in Criminal Reference No. 21 of 1961. O. P. Rana, Atiqur Rehman and C. P. Lal, for the appellant. The respondent did not appear. March 24, 1964. The Judgment of the Court was delivered by HIDAYATULLAH, J. This is an appeal by certificate granted by the High Court of Allahabad (Lucknow Bench) against its order dated March 12, 1962 quashing the trial of the respondents for an offence under section 15(1) of the Uttar Pradesh Private Forests Act (VI of 1949). This trial com menced on February 11, 1959 on a complaint by the District Magistrate Bahraich. The charge against the first respondent was that he sold one tamarind tree to respondent No. 2 for the purpose of felling and removing it without obtaining permission from the competent authority and that against respondent No. 2 was that he felled the tree and removed it. The complaint was transferred from one Magistrate to another 437 till it came on the file of Mr. T. B. Upadhaya who was a Magistrate of the Second Class. After Mr. Upadhaya had re corded all the evidence and examined the two respondents the powers of Magistrate, First Class were conferred on him. Thereafter he pronounced judgment in the case and finding respondents guilty he sentenced them to pay a fine of Rs. 501 each or to, undergo simple imprisonment for one month. The respondents filed an appeal before the Additional Sessions Judge, Bahraich which was later converted into a revision. The learned Additional Sessions Judge made a reference to the High Court recommending that the trial before the Magistrate, First Class be quashed as he had no jurisdiction to try the offence. This reference was heard by Mulla, J. who did not agree with the opinion of Beg, J. In Jaddu and others vs State,(1) on which the Additional Sessions Judge had relied. Beg, J. had taken the same view in a subsequent case also Harbans Singh and others vs State.(2) Mulla, J. was of the opinion that the trial was proper, but as these rulings stood in his way, he made a reference of the case to a larger Bench. The case was heard by a Division Bench consisting of B. N. Nigam and section D. Singh, JJ. The learned Judges differed amongst themselves: Mr. Justice Nigam was of the view that the trial was valid but Mr. Justice Singh did not agree with him. The case was then placed before Mr. Justice Verma who agreed with Mr. Justice Singh. As a result, the conviction and sentence passed on the respondents were set aside. The case was, however, certified by the High Court as fit for appeal and the present appeal has been filed. Which of the two views is the right one is the short question in this appeal. Section 15(2) of the Uttar Pradesh Private Forests Act confers jurisdiction to try offences under the first sub section on Magistrates of the Second and the Third Class. The trial in the present case was by a Magistrate of the First Class, and if there was no jurisdiction in him to try the offence then the proceedings were rightly declared void under section 530(p) of the Code of Criminal Procedure. According to the opinion of Mr. Justice Nigam which finds support from the order of reference made by Mulla, J., there is nothing to prevent the First Class Magistrate from trying an offence under section 15(1) of the Act, because under Schedule III of the Code of Criminal Procedure the ordinary powers of a Magistrate, First Class include the ordinary powers of a Magistrate of the Second Class. According to the other view, the Forests Act confers jurisdiction on Magistrates of the Second and the Third Class and this excludes jurisdiction of any superior Magistrate. (1) A.I.R. 1952 All.873. (2) A.I.R. 1953 All.179. 438 Section 15 of the Forests Act reads as follows "15, Offences under this Chapter and trial of such offences and penalties thereof: (1) Any person who contravenes any of the provisions of this Chapter or deviates from the prescriptions of a sanctioned working plan without the previous sanction of the Forest Officer shall be punishable with fine not exceeding one hundred rupees for the first offence and with fine not exceeding one thousand rupees or simple imprisonment not exceeding three months or both for the second or any subsequent offence. (2) Offences under this section shall be triable by a Magistrate of the Second or Third Class, and proceedings under this section may be instituted on a complaint made by the landlord of the notified area or forest in respect of which the offence is alleged to have been committed or by any right holder of such a notified area or forest or by the Forest Officer or by any officer specially empowered by the Provincial Government in this behalf. (3) (4) The question is one of interpretation of the first part of sub section (2) which says that offences under section 15 shall be triable by a Magistrate of the Second or Third Class. It does riot use the phrase "any Magistrate" nor does it specify "a Magistrate of the First Class". The question is whether the words of the sub section exclude a First Class Magistrate. The answer to this, in our opinion, is furnished by sections 28 and 29 of the Code of Criminal Procedure. They provide as follows: "28. Offences under Penal Code Subject to the other provisions of this Code any offence under the Indian Penal Code may be tried (a) by the High Court, or (b) by the Court of Session, or (c) by any other Court by which such offence is shown in the eighth column of the second schedule to be triable". Offences under other laws (1) Subject to the other provisions of this Code, any offence under any other law shall, when any Court is mentioned in this behalf in such law, be tried by such court. 439 (2) When no Court is mentioned, it may be tried by the High Court or subject as aforesaid by any Court constituted under this Code by which such offence is shown in the eighth column of Second Schedule to be triable". The scheme of the Criminal Procedure Code is that it Provides separately for trial of offences under the Penal Code and for offences under any other law. The court which is to try them is indicated in the Code in the eighth column of the Second Schedule. The first part deals with offences under the Penal Code and the second part with offences under any other law. The last entry in the Second Schedule provides for the trial for offences under any other law which are punishable with imprisonment for less than one year or with fine only and they are made triable by "any Magistrate". If the matter were governed by the Second Schedule, the last entry would undoubtedly have comprehended a Magistrate, First Class. But section 29 says that offences under any other law shall be tried by that court which that law mentions and it is only when no court is mentioned that the eighth column of the Second Schedule is applicable. Here sub section (2) of section 15 mentions the courts by which offences under section 15(1) are triable and section 29(1) excludes the application of the second part of the Second Schedule. The words of sub section (1) of section 29 are peremptory. There is no escape from them. They say that 'subject to the other provisions of the, Code ' any offence under any other law shall be tried by the court when such court is mentioned in that law. A case under section 15(1) therefore, is triable only by the two courts named therein, namely, Magistrates of the Second and the Third classes and not by any other Magistrate. The appellant relies upon the words 'subject to the other provisions of the Code ' and refers to the Third Schedule. But that Schedule deals with the ordinary powers of the Magistrates under the Criminal Procedure Code. The words of the second sub section of section 15 are not rendered ineffective by the prescription of the ordinary powers of the Magistrates. To call in aid Schedule III would render the provisions of section 29 redundant and useless at least in those cases where the second part of the Second Schedule applies. What section 15(2)) does is to prescribe a particular court and in view of the words of section 29(1) no other court can try offences under section 15(1) even though the powers of those courts may be superior to those of Magistrates of the Second and the Third Class. If the Second Schedule itself, which prescribes the courts for the trial of offences under laws other than the Penal Code, is excluded, the Third Schedule cannot bring about the same result indirectly. The provisions of the Third Schedule must 440 therefore be taken to define general powers and not to create jurisdictions to try offences which the Second Schedule does. It was argued before us that there is no point in prescrib ing that the Magistrates of the Second and the Third Class can try subsequent offences because their powers under section 32 do not extend as far as the punishment prescribed by section 15(1). This question does not arise directly but it may be said that two views are possible: one is that by implication the powers of these Magistrates are extended beyond what is prescribed under section 32. The other is that in a case where the Magistrate feels that a heavier punishment should be imposed he can take recourse to the provisions of section 349 of the Code and make a recommendation to a Magistrate who can impose adequate punishment in the case. The words "subject to the other provisions of the Code" would enable this to be done. In our opinion, therefore, the scheme of the Code read with the provisions of section 15 of the Forests Act clearly show that offences under section 15 are not triable by any Magistrate as it would be if the Second Schedule were applicable. They are therefore triable by such Magistrates as have been named in the second sub section. There is good reason for holding this, because a conviction by a Magistrate of the Second or the Third Class, as the case may be, is open to an appeal whereas a conviction by a Magistrate of the First Class and a sentence of fine of Rs. 501 or under or a fine of Rs. 200/ after a summary trial is not appealable. It is possible that it was intended that a right of appeal should be conferred and therefore the trial of these offences was restricted to Magistrates of the Second and the Third Class. This was pointed out by Mr. Justice Beg in Harbans Singh and others vs State(1) and was also referred to by Mr. Justice Verma in the opinion in the present case. In our opinion, it is a circumstance which may be taken into account. It is forcefully illustrated in this case. An appeal would have lain against the same decision if the Magistrate had not been given the powers of a First Class Magistrate during the trial. The respondents were robbed of a right of appeal. In any event, in view of the clear words of section 29(1), the trial of these cases ought to have been before a court designated in section 15(2) and as the trial was before a Magistrate who was not empowered to try the offence the proceedings were rightly declared void under section 530(p) of the Code of Criminal Procedure. We accordingly hold that the decision under appeal was correct. The appeal fails and is dismissed. Appeal dismissed. (1) A.I.R. 1953 All.

On a complaint by the District Magistrate the respondents were put on trial for an offence under section 15(1) of the Uttar Pradesh Private Forests Act, 1949. The charge against the first respondent was that he sold one tamarind tree to respondent No. 2 for the purpose of felling and removing it without obtaining permission from the competent authority and that against respondent No. 2 was that he felled the tree and removed it. The complaint was transferred from one Magistrate to another till it came on the file of Mr. Upadhya, a Magistrate of Second Class. After he had recorded all the evidence and examined the two respondents, the powers of Magistrate, First Class were conferred on him. Thereafter, by his judgment the respondents were found guilty and sentenced to pay a fine of Rs. 50/ each or to undergo simple imprisonment for one month. On appeal, which was later converted into a revision the Additional Sessions Judge made a reference to the High Court recommending that the trial before the Magistrate, First Class be quashed as he had no jurisdiction to try the offence. The reference was heard by Mulla, J., who was of the opinion that the trial was proper but as the rulings of the same Court stood in his way, he referred the case to a larger Bench. The case was heard by a Division Bench and the learned Judges differed amongst themselves. Mr. Justice Nigam was of the view that the trial was valid but Mr. Justice Singh did not agree with him. The case was then placed before Mr. Justice Verma who agreed with Mr. Justice Singh and the conviction and sentence passed on the respondents were set aside. According to the opinion of Mr. Justice Nigam which found support from the order of reference made by Mulla, J., there was nothing to prevent the First Class Magistrate from trying an offence under section 15(1) of the Act, because under Schedule III of the Code of Criminal Procedure the ordinary powers of a Magistrate, First Class include the ordinary powers of a Magistrate of the Second Class. According to the other view, the Forests Act confers jurisdiction on Magistrates of the Second and Third Class and this excludes jurisdiction of any superior Magistrate. On appeal by certificate: Held: (i) The words of the second sub section of section 15 of the Act or not rendered ineffective by the prescription of the ordinary powers of the Magistrates. To call in aid Schedule III would render the provisions of section 29 of the Code of Criminal Procedure redundant and useless at least in those cases where the second part of the second schedule applies. What section 15(2) does is to prescribe a particular court and in view of the words of section 29(1) no other court can try offences under section 15(1) even though the powers of those courts may be superior to those of 436 Magistrates of the Second and Third Class. In the Second Schedule itself, which prescribes the courts for the trial of offences under law other than the Penal Code, is excluded, the Third Schedule cannot bring about the same result indirectly. The provisions of the Third Schedule must therefore be taken to define general powers and not to create jurisdiction to try offences which the second schedule does. (ii) The scheme of the Code read with the provisions of triable by any Magistrate as it would be if the Second Schedule were applicable. They are therefore triable by such Magistrates as have been named in the second sub section. There is good reason for holding this, because a conviction by a Magistrate of the second or the third class, as the case may be is open to an appeal whereas a conviction by a Magistrate of the First Class and a sentence of fine of Rs. 50/ or under a fine of Rs. 200/after a summary trial is not appealable. It is a circumstance which must be taken into account. It is forcefully illustrated in this case. An appeal would have laid against the same decision if the Magistrate had not been given the powers of a First Class Magistrate during the trial. The respondents were robbed of a right of appeal. In any event, in view of the clear words of section 29(1) the trial of these cases ought to have been before a court designated in section 15(2) and as the trial was before a Magistrate who was not empowered to try the offence the proceedings were rightly declared void under section 530(p) and of the Code of Criminal Procedure. Jaddu vs State, A.I.R., 1952 All.372 and Harbans Singh vs State, A.I.R. 1953 All. 179, referred to.

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Appeal No. 520 of 1967. Appeal from the judgment and order dated December 19, 1966 of the Punjab and Haryana High Court in Civil Revision No. 934 of 1966. Rajinder Sachhar, Mahinderjit Singh Sethi and Ravinder Narain, for the appellant. R.M. Haz arnavis, Rameshwar Nath and Mahinder Narain, for respondent No. 1. The Judgment of the Court was delivered by Bachawat, J. On March 28, 1966 the election of four members to the Council of States (Rajya Sabha) by the members of the Punjab Legislative Assembly (Vidhan Sabha) was held, and as a result of the election, respondent No. 1, Raghbir Singh and one Narinder Singh were declared elected. Appellant Ravindra Nath was one of the unsuccessful candidates. On May 10, 1966, the appellant filed an election petition asking for a declaration that the election of respondent No. 1 and Narinder Singh was void and for a further declaration that he be declared duly elected as a member of the Rajya Sabha to one of those seats. On July 1, 1966, the date fixed for the respondents to the petition to appear before the Tribunal and answer the claims made in the petition, respondent No. 1 filed a written statement in reply to the election petition and gave a written notice under the proviso to 106 s.97(1) of the Representation of the People Act, 1951 of his intention to give evidence to prove that the election of the appellant would have been void if he had been the returned candidate and if a petition had been presented calling in question his election. The notice under s.97(1) was accompanied by the prescribed statement and particulars and a treasury receipt evidencing the deposit of Rs. 1,000 as security under section 117 of the Act. An objection was taken on behalf of the appellant that the amount of security deposited by respondent No. 1 was insufficient and consequently the notice under the proviso to s.97(1) was invalid. On this objection, the Tribunal raised the following preliminary issue being issue No. 10: "Whether the notice under section 97 of the Representation of the People Act, 1951, given and the recrimination statement filed on behalf of respondent No. 1 are invalid because of the insufficiency, if any, of the security deposit made by res pondent No. 1 within the time allowed, if any?". It is now common case that under the law as it stood at the relevant time respondent No. 1 was required to deposit a sum of Rs. 2,000 as security under s.117 of the Representation of the People Act, 1951. On October 7, 1966, the date fixed for argument on the preliminary issues, respondent No. 1 deposited a further sum of Rs. 1,000 as security and produced the relevant treasury receipt before the Tribunal. By its order dated October 11, 1966 the Tribunal held that as the production of a receipt showing the deposit of Rs. 2,000 as security along with the notice was the condition precedent to the right of respondent No. 1 under s.97(1) to lead evidence, this right was lost by his omission to file with the notice the treasury receipt showing a deposit of Rs. 2,000 and the subsequent deposit of Rs. 1,000 by him did not entitle him to lead any evidence under s.97(1). The Tribunal answered the preliminary issue accordingly. On or about October 24, 1966, respondent No. 1 filed in the High Court for the States of Punjab and Haryana at Chandigarh a petition under article 227 of the Constitution asking for an order quashing the order of the Election Tribunal dated October 11, 1966 and a direction that respondent No. 1 be allowed to lead evidence under s.97(1). Several preliminary objections to the maintainability of the petition under article 227 of the Constitution were raised before the High Court, but they were subsequently abandoned and counsel for the appellant agreed that the High Court should deal with the order of the Tribunal on the merits. By its order dated December 19, 1966 the High Court held that it is only in cases in which the provisions of ss.117 and 118 with regard to security of deposit were not complied with before the date fixed for recording evidence under s 97(1) that the Tribunal could refuse to admit the evidence, and where, as in the present case, the entire amount of the security had been deposited before the date fixed for recording evidence, the Tribunal must admit the evidence. On this finding, the High Court 107 allowed the petition under article 227 and quashed the order of the Election Tribunal dated October 11, 1966 in so faras it related to issue No. 10. From this order of the High Court, the present appeal has been filed by certificate. The question in this appeal is what time limit, ifany, is prescribed for furnishing the security referred to in the proviso to s.97(1) read with ss.117 and 118 of the Representation of the People Act, 1951 as it stood before its amendment by the Representation of the People (Amendment) Act, 1966. Section 97 is in these terms: "97(1). When in an election petition a declaration that any candidate other than the returned candidate has been duly elected is claimed, the returned candidate or any other party may give evidence to prove that the election of such candidate would have been void if he had been the returned candidate and a petition had been presented calling in question his election. Provided that the returned candidate or such other party as aforesaid shall not be entitled to give such evidence unless he has, within fourteen days from the date of commencement of the trial, given notice to the Tribunal of his intention to do so and has also given the security and the further security referred to in sections 117 and 118 respectively. (2) Every notice referred to in sub section I shall be accompanied by the statement and particulars required by section 83 in the case of an. election petition and shall be signed and verified in like manner. " The Explanation to sub section (4) of section 90 provided that for purposes of that sub section and of s.97 the trial of a petition would be deemed to commence on the date fixed for the respondents to appear before the Tribunal to answer the claim or claims made in the petition. Sections 117 and 118 read: " 117. The petitioner shall enclose with the petition a Government Treasury receipt showing that a deposit of two thousand rupees has been made by him either in a Government Treasury or in the Reserve Bank of India in favour of the Election Commission as security for the costs of the petition. During the course of the trial of an election petition the Tribunal may at any time call upon the petitioner to give such further security for costs as it may direct, and may, if he fails to do so, dismiss the petition. " It is to be noticed that the words "within fourteen days from he date of commencement of the trial" in the proviso to s.97(1) govern the giving of the notice and not the giving of the security. 108 Moreover, the period of fourteen days from the date of commencement of the trial cannot be the time limit for giving the further security under s 118. The amount of the further security under section 118 and the time for giving it must be fixed by the Tribunal before it can be given by the recriminator. He may be asked to furnish the further security at any time during the course of the trial if the original security is found to be insufficient. We have to examine the provisions of ss.117 and 118 more closely to see if there is any time limit for the giving of security under the proviso to s.97(1). The object of s.97 is to enable recrimination when a seat is claimed for the petitioner filing the election petition or any other candidate. In his election petition the petitioner may claim a declaration that the election of all or any of the returned candidates is void on one or more of the grounds specified in sub section (1) of s.100 and may additionally claim a further declaration that he himself or any other candidate has been duly elected on the grounds specified in section 101. (see ss.81, 84, 98, 100 and 101). It is only when the election petition claims a declaration that any candidate other than the returned candidate has been duly elected that s.97 comes into play. If the respondent desires to contest this claim by leading evidence to prove that the election of the other candidate would have been void if he had been the returned candidate and an election petition had been presented calling in question his election, the respondent must give a formal notice of recrimination and satisfy the other conditions specified in the proviso to s.97. The notice of recrimination is thus in substance a counter petition calling in question the claim that the other candidate has been duly elected. In this background, it is not surprising that the legislature provided that notice of recrimination must be accompanied by the statement and particulars required by s.83 in the case of an election petition and signed and verified in like manner and the recriminator must give the security and the further security for costs required, under sections 117 and 118 in the case of an election petition. Looking at the object and scheme of s.97 it is manifest that the provisions of ss.117 and 118 must be applied mutatis mutandis to a proceeding under s.97. The recriminator must produce a government treasury receipt showing that a deposit of Rs. 2,000 has been made by him either in a Government Treasury or in the Reserve Bank of India in favour of the Election Commissioner as costs of the recrimination. As the notice of recrimination cannot be sent by post, it must be filed before the Tribunal, and reading s.117 with consequential adaptations for the purposes of the proviso to s.97(1), it will appear that the treasury receipt showing the deposit of the security must be produced before the Tribunal along with the notice of recrimination. It follows that the recriminator must give the security referred to in section 117 by producing the 109 treasury receipt showing the deposit of the security at the time of the giving of the notice under the proviso to s.97(1). If the recriminator fails to give the requisite security under s.117 at the time of giving the notice of recrimination, he loses the right to lead evidence under s.97 and the notice of recrimination stands virtually rejected. It was suggested that as under s.90(3) the Tribunal could not dismiss an election petition for non compliance with the provisions of s.117, the legislature could not have intended that the notice of recrimination would stand rejected for failure to give the security under s.117. This argument overlooks the fact that under s.85 it is the duty of the Election Commission to dismiss the election petition for noncompliance with the provisions of s.117. Likewise, reading s.118 with the proviso to s.97(1) it will appear that during the course of the trial of the recrimination the Tribunal may at any time call upon the recriminator to give such further security for costs as it may direct and may, if he fails to do so, reject the notice of recrimination given under the proviso to s.97(1). It was suggested that the proviso to s.97(1) having enacted that the forfeiture of the right to lead evidence would be the penalty for failure to give the further security under s.118, the legislature could not have intended that the rejection of the notice of recrimination would be an additional penalty for this default. This suggestion is based on fallacious assumptions. The only right conferred on the recriminator satisfying the conditions of the proviso to s.97(1) is the right to lead evidence that the election of the other candidate would have been void if he had been the returned candidate. If the recriminator fails to fulfil the conditions of the proviso, he loses this right, and the Tribunal is entitled to record an order to this effect. An order recording that the recriminator has no right to give evidence under s 97 is tantamount to an order rejecting the notice of recrimination. There is thus no substantial difference between the penalty prescribed by the proviso to s 97(1) and the penalty prescribed by s.118 for the default in giving the further security. The High Court held that the recriminator loses his right to lead evidence under s.97 for failure to give security only in cases in which the provisions of ss.117 and 118 are not complied with before the date fixed for recording evidence. In N. R. Shikshak vs R. P. Dikshit(1), a Full Bench of the Allahabad High Court also held that since, no period is fixed within which the security is to be given, the security may be given at any time before the recriminator gives evidence. We are unable to agree with this decision on his point or with the judgment under appeal. We have already seen that the time for giving the initial security for the recrimination is fixed on a combined reading of the proviso to s.97(1) and (1)[1965] A.L.J. 25, 41 42. 110 S.117 and the initial security must be given at. the time of giving the notice of recrimination. Other considerations also show that the date fixed for recording the evidence cannot be the date within which the security referred to in sections 117 and 118 is to be given under the proviso to s 97(1). The recrimination starts on the giving of the notice under the proviso. Though the taking of the recriminatory evidence may be postponed, preliminary directions for dis covery, inspection and other matters are given long before the evidence is taken. It is, therefore, desirable that the initial security referred to in section 117 should be given along with the notice of recrimination at the very commencement of the recrimination proceeding. Moreover, the date fixed for recording the evidence cannot be the time limit for giving further security under section 118. The Tribunal may demand the further security under section 118 at any time in course of the trial of the recrimination even after the evidence has been partly taken. The High Court thought that the decision in Kumaranand vs Brij Mohan(1) lends support to its conclusion that the Tribunal could not refuse to admit the evidence under s.97 if the security under s.117 is given before the date fixed for recording the evidence. That decision turned on the construction of s.119 A and is not relevant on the questions under consideration in this appeal. As section I 19 A did not expressly provide the penalty for failure to furnish the security for costs of an appeal at the time of filing the memorandum of appeal, the failure to furnish the security did not automatically result in dismissal of the appeal, and, it was for the High Court to decide having regard to the circumstances of each case whether it should decline to proceed with the hearing of the appeal. But the proviso to s.97(1) expressly provides that the recriminator shall not be entitled to give evidence unless inter alia he gives the security referred to in section 117. The Tribunal rightly held that the respondent No. 1 was re quired to produce with the notice under the proviso to s 97(1) a government treasury receipt showing a deposit of Rs. 2,000 as security for costs of the recrimination. The High Court was in error in quashing this order. In the result, the appeal is allowed with costs, the judgment and order of the High Court are set aside, and the 'petition under article 227 of the Constitution is dismissed.

By an election petition filed on May 10, 1966, the appellant challenged the election of the first respondent held on March 28. 1966 to the Rajya Sabha by members of the Punjab Vidhan Sabha and sought a declaration that he be declared duly elected as a member of the Rajya Sabha instead. On July 1, 1966 the date fixed for the respondents to appear before the Tribunal and answer the claims made in the petition, the respondent filed a written statement in reply to the election petition and gave a notice under the proviso to section 97(1) of the Representation of the People Act, 1951, of his intention to give evidence to prove that, the election of the appellant would have been void if he had been the returned candidate and if a petition challenging his election had been presented. The notice under section 917(1) was accompanied by the prescribed statement and particulars and a treasury receipt evidencing the deposit of Rs. 1,000 as security under section 117 of the Act. An objection was taken on behalf of the appellant that the amount of security deposited by the respondent was insufficient in that he should have deposited Rs. 2,000 and consequently the notice under the proviso to section 97(1) was invalid. On October 7, 1966, the date fixed for argument on the preliminary issues, the respondent deposited a further sum of Rs. 1,000 as security and produced the relevant treasury receipt before the Tribunal, but the Tribunal upheld the appellant 's objection on the view that as the production of a receipt showing the deposit of Rs. 2,000 as security along with the notice was the condition precedent to the right of the respondent under section 97(1) to lead evidence in view of his failure to comply with this requirement, this right was lost to him and the subsequent deposit of Rs. 1,000 by him did not entitle him to lead in evidence under section 97(1). The respondent thereupon filed a petition in the High Court under article 227 of the Constitution challenging the decision of the Tribunal and the High Court allowed the petition holding that it is only in cases in which the provisions of sections 117 and 118 with regard to deposit of security were not complied with before the date fixed for recording evidence under section 97(1) that the Tribunal could refuse to admit the evidence, and where, as in the present case, the entire amount of the security had been deposited before such date, the Tribunal must admit the evidence. On appeal to this Court, HELD:Allowing the appeal: the Tribunal had rightly held that the respondent was required to produce with the notice under the proviso to section 97(1) a Government Treasury Receipt showing a deposit of Rs. 2,000 as security for costs of the recrimination and the High Court was in error in quashing this order. [110 F G]. 105 The notice of recrimination under section 97 is in substance a counter petition calling in question the claim that the other candidate has been duly elected. Looking at the object and scheme of section 97 it is manifest that the provisions of sections 117 and 118 be applied mutatis mutandis to a proceeding under section 97. The recriminator must produce a Government Treasury Receipt showing that a deposit of Rs. 2,000 has been made by him in favour of the Election Commissioner as cost of the recrimination. As the notice of recrimination cannot be sent by post, it must be filed before the Tribunal, and reading s.117 with consequential adaptations for the purposes of the proviso to, S.97(1), it will appear that the Treasury Receipt showing the deposit of the security must be produced before the Tribunal along, with the notice of recrimination. If the recriminator fails to give the requisite security under section 117 at the time of giving the notice of recrimination, he loses the right to lead evidence under s.97 and the notice of recrimination stands virtually rejected. [18E H; 109A B.] N.R. Shikshak vs R. P. Dikshit, 1965 [A.L.J] 25, 4142, disapproved. Kumaranand vs Brij Mohan, ; , distinguished. There was no force in the contention that the proviso to section 97(1) having enacted that the forfeiture of the right to lead evidence would be penalty for failure to give the further security under section 118, the legislature could not have intended that the rejection of the notice of recrimination would be an additional penalty for this default, An order recording that the recriminator has no right to give evidence under section 97 is tantamount to an order rejecting the notice of recrimination and there is no substantial difference between the two. [110 D F].

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Civil Appeal No. 1700 (NT) of 1974. From the Judgment and Order dated 23.9.1972 of the Allahabad High Court in Writ No. 2956 of 1972. S.K. Dhingra for the Appellant. M.K. Banerjee, Additional Solicitor General, Miss A. Subhashini and B.B. Ahuja for the Respondent. The appellant is a private limited company carrying on the business of the manufacture and sale of locks used in suit cases. It filed a return of its income for the assessment year 1963 64 and was assessed to income tax by an assessment order dated March 12, 1968. No claim was made by the assessee for rebate under section 84 of the Income Tax Act, 1961. There was an appeal by the assessee to the Appellate Assistant Commissioner of Income Tax but no claim was made for rebate at that stage either. Subsequently on August 20, 1969 the appellant made an application under section 154 of the Income Tax Act praying for rectification of the assessment order by the grant of relief under section 84 of the Act. The application was rejected by the Income Tax Officer. A revision application moved by the appellant before the Commissioner of Income tax was also rejected on March 6, 1972. Against the order of the Commissioner the appellant now filed a writ petition in the High Court of Allahabad. The High Court dismissed the writ petition on September 23, 1972. And now this appeal by special leave. Section 84 of the Income Tax Act, as it stood at the relevent time, provided that income tax would not be payable by an assessee on so much of the profits and gains derived from any industrial undertaking to which the section applied as did not exceed 6 per cent per annum on the capital employed in such undertaking computed in the prescribed manner. The section applied to an industrial undertaking which satisfied certain conditions detailed in the section. It may be observed that section 84 was deleted with effect from April 1, 1968 and now finds place as section 80J in the Act. 226 The appellant contends that the Income tax authorities were obliged to exercise the jurisdiction conferred by section 154 of the Act and grant relief to the appellant under section 84. Section 154 empowers the Income Tax Officer to rectify any mistake apparent from the record and for that purpose to amend an assessment order passed by him. It is urged that the income tax authorities and the High Court erred in holding that no mistake was apparent from the record merely because no claim to relief under section 84 had been made by the appellant before the Income Tax officer during the assessment proceedings. It is contended that an obligation was imposed on the Income Tax Officer by the statute to grant such relief and it could not be refused merely because the appellant had omitted to claim the relief. While we believe the appellant is right in his contention, we do not think that the mere existence of such an obligation on the Income Tax Officer is sufficient. Before the Income Tax Officer can grant relief there must be clear data on the assessment record sufficient to enable him to consider whether the relief should be granted. In the absence of such material, no fault can be found with the Income Tax Officer for not making an order under section 84 favouring the assessee. It will be noticed from the provisions of section 84 that several conditions must be satisfied before the grant of relief can be considered. The industrial undertaking should not have been formed by the splitting of, or the reconstruction of, a business already in existence. It should not have been formed by the transfer to a new business of a building, machinery or plant previously used for any purpose. It should manufacture or produce articles in any part of India, which manufacture or production should have begun at any time within 23 years next following April 1, 1948 or such other further period as the Central Government may specify. An industrial undertaking manufacturing or producing articles should be found to employ 10 or more workers in a manufacturing process carried on with the aid of power or to employ 20 or more persons in a manufacturing process carried on without the aid of power. These are some of the conditions which need to be fulfilled before relief under section 84 can be granted. It is apparent that precise factual material must be contained in the record in order to enable the Income Tax Officer to discharge his obligation to grant relief under section 84. It has not been shown to us that the record before the Income Tax Officer contained all that information. Our attention was drawn to Subhash Chandra Sarvesh Kumar vs Commissioner of Income tax and Another, where the Allahabad High Court quashed an order of the Commissioner of 227 Income tax rejecting revision applications for the grant of relief under section 80J and section 80HH of the Income Tax Act, on the ground that the Commissioner should have considered whether there was material on the record to sustain the claim of the assessee to relief, and the fact that claim was not made formally in the return or during the pendency of the assessment proceedings before the Income Tax Officer should not have prevented the Commissioner from considering whether the assessee was entitled to relief. That was a case where the assessee complained in the writ petition that it lay within the jurisdiction of the Commissioner to entertain the claim of the assessee even though the claim had not been made before the Income Tax officer. The present is a case, however, where the appellant sought to invoke the jurisdiction of the Income Tax Officer to rectify the assessment order. That can only be justified on the ground of a mistake apparent from the record. If the record does not contain any material, it cannot be said that the Income Tax Officer has committed a mistake in omitting to grant relief under section 84. We are conscious that the jurisdiction under section 154 of the Income Tax Act is, as pointed out by this court in Income tax Officer, Alwaye vs Asok Textiles Ltd., , wider than that provided under rule 1 of Order XLVII of the Code of Civil Procedure. Rule 1 of Order XLVII of the Code confines the jurisdiction of the Court to the rectification of "an error apparent on the face of the record" while section 154 of the Income Tax Act, 1961 (which corresponds to section 35 of the Income Tax Act 1922) uses wider language and empowers the Income tax authorities to rectify any mistake "apparent from the record". Nonetheless there must be material to support the claim to relief under section 84, and unless such material can be referred to no grievance can be made if the Income Tax Officer refuses to rectify the assessment and refuses relief under section 84. Learned counsel for the appellant says that the material is contained in the record of the assessment made on the appellant under the . He contends that the record of the Super Profits Tax assessment must be regarded as an integral part of the record of the income tax assessment and, therefore, it must be inferred that the material necessary for granting relief under section 84 in the income tax assessment lay before the Income Tax Officer. The was enacted to impose a special tax on certain companies. The tax is charged on the excess of the chargeable profits of a company over the standard deduction and the "chargeable profits", according to the definition in sub section (5) of section 2 of 228 that Act, means the total income of an assessee computed under the Income Tax Act, 1961 adjusted in accordance with the provisions of the First Schedule. In many respects, the borrows its provisions from the Income Tax Act, and the scheme for assessment, appeals, revision and rectification in the follows closely the pattern set forth in the Income Tax Act. As has been noted the computation of chargeable profits turns on the computation of the total income determined under the Income Tax Act. Where any order of rectification is made under section 154 or under section 155 of the Income Tax Act recomputing the total income of an assessee, a consequential recomputation of the chargeable profits is provided for by section 15 of the . Moreover, the Super Profits Tax payable by a company for the assessment year is deductible from the total income of the company for that assessment year in computing the distributable income of a company for the purposes of section 104 and section 105 of the Income Tax Act. There is undeniably a close relationship between the and the Income tax Act and any change in the assessment made under the Income Tax Act has its consequential impact on the assessment made under the . It is apparent therefore, that the record of an income tax assessment can be regarded as part of the record of a Super Profits Tax assessment. The converse can also be true that is made abundantly clear by sub section (2) of section 20 of the which provides that all the information contained in any statement or return made or furnished under the provisions of the or obtained or collected for the purposes of that Act may be used for the purposes of the Income Tax Act. To the extent that information contained in the Super Profits Tax record is employed for the purpose of the Income Tax proceeding, it cannot be doubted that the Super Profits Tax record becomes part of the Income Tax record. It is apparent that if the record of the Super Profits Tax assessment contains material pertaining to the claim under section 84 of the Income Tax Act, such material can be considered by the Income Tax Officer for the purpose of granting relief under section 84 in the Income Tax assessment. In that sense and to that degree learned counsel for the assessee is perfectly right in contending that the record of the Super Profits Tax assessment becomes part of the record of the Income Tax assessment. That does not suffice, however, to entitle the assessee to relief. As has been mentioned earlier, there are a number of conditions which must be satisfied before relief can be granted under section 84. All that data was evidently not contained in the Super Profits Tax assessment record at the time when the Income Tax assessment was completed. The 229 Additional Commissioner of Income Tax, while dismissing the revision petition of the assessee against the order of the Income Tax Officer refusing to rectify the Income Tax assessment under section 154, went through the Income Tax record and the Super Profits Tax record of the assessee and found that no attempt had been made at any stage by the assessee to place facts on the record indicating that the undertaking belonging to the assessee was a new one and was entitled to relief under section 84. He noted that in the return relating to the the assessee had made a claim for relief under section 84, but he pointed out that the claim had not yet been examined. It has also not been shown to us that all the material required for satisfying the conditions requisite for the grant of relief under section 84 existed on the Super Profits Tax record at the time when the income tax assessment was completed. When that is the position, it can hardly be said that in omitting to grant relief under section 84 when making the assessment order the Income Tax Officer committed a mistake apparent from the record. We must remember that we are dealing with a challenge to an order refusing rectification and not to an order directly assailing the assessment. In the result, the appeal fails and is dismissed with costs. P.S.S. Appeal dismissed.

Section 84 (now redesignated as section 80J) of the Income tax Act, 1961 as it stood at the relevant time, provided that income tax would not be payable by an assessee on so much of the profits and gains derived from an industrial undertaking to which the section applied as did not exceed six per cent per annum on the capital employed in such undertaking computed in the prescribed manner. Several conditions laid down therein had to be satisfied before the grant of relief could be considered. Section 154 empowers the Income tax Officer to rectify any mistake apparent from the record and for that purpose to amend an assessment order. The appellant who did not make a claim for rebate under section 84 either during the assessment proceedings or at the appeal stage subsequently made an application to the Income tax Officer under section 154 praying for rectification of the assessment order by grant of relief under section 84, which was rejected. The revision sought before the Commissioner also failed. The writ petition filed before the High Court having been dismissed, the appeal by special leave was preferred. It was contended: (1) that an obligation was imposed on the Income tax officer by the statute to grant relief which could not be refused merely because the appellant had omitted to claim the same, and (2) that the record of the super profits tax assessment containing the material, which lay before the 224 Income tax Officer, must be regarded as an integral part of the record of the income tax assessment for granting relief under section 84. Dismissing the appeal, the Court, ^ HELD: Rectification could only be justified on the ground of a mistake apparent from the record. If the record did not contain any material, it could not be said that the Income tax Officer had committed a mistake in omitting to grant relief under section 84. [227C D] Although the jurisdiction under section 154 to rectify any mistake apparent from the record is wider than that provided under r. 1 of Order XLVII of the Code of Civil Procedure to rectify an error apparent on the face of the record, nonetheless there must be material to support the claim to relief under section 84, and unless such material can be referred to, no grievance can be made if the Income tax Officer refuses to rectify the assessment and refuses relief under section 84.[227D F] There is a close relationship between the Super Profits Tax Act and the Income Tax Act, and any change in the assessment made under the latter has its consequential impact on the assessment made under the former. The converse is equally true, especially in view of section 20(2) of the Super Profits Tax Act which provides that all the information contained in any statement or return made or furnished under the provisions of that Act or obtained or collected for the purpose of that Act may be used for the purpose of the Income Tax Act. Therefore, if the record of the super profits tax assessment contains material pertaining to the claim under section 84 of the Income tax Act, such material can be considered by the Income tax Officer for the purpose of granting relief under section 84 in the income tax assessment.[228D G] In the instant case, the appellant has failed to show that all the material required for satisfying the conditions requisite for the grant of relief under section 84 existed on the super profits tax record at the time when the income tax assessment was completed. Therefore, it cannot be said that in omitting to grant relief under section 84 when making the assessment order, the Income tax Officer committed a mistake apparent from the record.[229C D] Subhash Chandra Sarvesh Kumar vs Commissioner of Income tax and Another, and Income tax Officer, Alwaye vs Asok Textiles Ltd., , referred to. 225

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Civil Appeal No. 1339 of 1977. Appeal by Special leave from the Judgment and order dated the 16th September, 1976 of the Andhra Pradesh High Court in L.P.A., No. 199 of 1975. K. Ram Kumar for the Appellant. A. V. Rangam for the Respondent. The Judgement of the Court was delivered by TULZAPURKAR, J. The short question involved in this appeal is whether upon redemption of a usufructuary mortagage a tenant mortgagee could be directed to deliver actual or physical possession of the mortgaged property to the lessor mortgagor? By reason of the grant of a limited special leave the appeal has been confined to that question. Facts relevant to the question may be stated: One Behara Audinarayana Patro, the original owner of suit property executed two usufructuary mortgage deeds dated 30.8.1939 and 25.8.1942 in favour of the first defendant Sambangi Thavitinaidu, who was then a sitting tenant of that property. In 1951 the mortgagor filed a suit for redemption of the mortgages and obtained a preliminary decree on 31.12.1952. Subsequently, the mortgagor died and the respondents were brought on record as his legal representatives. On 21.10.1963 the respondents filed an application for passing a final decree by way of ascertainment of the amount due and for delivery of possession upon deposit of entire dues so ascertained. The application was resisted by the first defendant and other defendants (the appellants before us) on several grounds. Inter alia the appellants contended that even after depositing the entire amount found due to them no decree directing delivery of actual or physical possession in favour of the respondents should be passed but delivery of symbolical possession alone should be ordered insomuch as the appellants ' possession of the suit property as a tenant or lessee could not be disturbed. In other words, the appellants contended that on redemption the original relationship of landlord and tenant would revive which needed to be protected. The learned District Munsif, Parvatipuram took the view that the relationship 654 of landlord and tenant had ceased to subsist after the mortgages came into existence, that the mortgage bonds did not provide that the said relationship would be restored or revived upon redemption and that therefore the respondents were entitled to delivery of physical possession upon their depositing the entire dues payable to the appellants. The tenant mortagees (the defendants) preferred an appeal against the order of the learned District Munsif and the learned Additional District Judge Srikakulam who heard the appeal took the contrary view relying upon a decision of Andhra Pradesh High Court in Varada Bangar Raju vs Kirthali Avatharam & others and held that the defendants mortgagees were sitting tenants of the mortgaged property at the time of the execution of the mortgage deeds, that there was nothing in those deeds to suggest that their rights as lessees were extinguished either by merger or implied surrender, that the landlord tenant relationship continued to exist after termination of mortgagor mortgagee relationship and therefore the respondents were not entitled to delivery of physical possession; he, therefore, allowed the appeal. The respondents preferred a second appeal to the Andhra Pradesh High Court and the learned Single Judge relying upon a subsequent decision in P. Satyanarayana vs Janardhan Chetty which had distinguished the earlier decision, reversed the view of the learned Addl. District Judge and restored the decree passed by the District Munsif. The learned Judge took the view that the question whether the relationship of landlord and tenant would subsist even after the execution of the usufructuary mortgage depended upon the intention of the parties to be gathered from the terms of the mortgage transaction and held that on the terms of mortgage deeds there was no doubt that the landlord tenant relationship had ceased to exist after the relationship of mortgagor and mortgagee came into existence and the mortgage bonds had not specifically provided that the landlord and tenant relationship would be restored after the redemption of the mortgages. A Letters Patent Appeal preferred by the tenant mortgagees to the Division Bench of the High Court failed and hence this appeal to this Court. Counsel for the appellants urged upon us to accept the view taken by the learned District Judge that the two transactions 655 namely a lease and a usufructuary mortgage could co exist and there was nothing in the two mortgage deeds to suggest that the appellants ' rights as lessee were extinguished either by merger or by implied surrender and in that behalf strong reliance was placed upon the earlier decision of the Andhra Pradesh High Court in Varada Bangar Raju 's ease (supra), while counsel for the respondents contended that the High Court, both in second appeal as well as Letters Patent Appeal, was right in restoring the learned District Munsif 's decision by relying upon the later decision in P. Satyanarayana 's case (supra) and prayed for dismissal of this appeal. In our view there can be no merger of a lease and a mortgage, even where the two transactions are in respect of the same property. It is well settled that for a merger to arise, it is necessary that lesser estate and a higher estate should merge in one person at one and the same time and in the same right and no interest in the property should remain outstanding. In the case of a lease, the estate that is outstanding in the lessor is the reversion; in the case of a mortgage, the estate that is outstanding is the equity of redemption of the mortgagor. Accordingly, there cannot be a merger of a lease and a mortgage in respect of the same property since neither of them is a higher or lesser estate than the other. Even, if the rights of the lessee and the rights of the mortgagee in respect of a property were to be united in one person the reversion in regard to the lease and the equity of redemption in regard to the mortgage, would be outstanding in the owner of the property and accordingly, there would not be a complete fusion of all the rights of ownership in one person. This position in law as explained by the Bombay High Court in Narayana Dogra Shetty vs Ramchandra Shivram Hingne, has been fully approved by this Court in Shah Mathuradas Maganlal & Co. vs Nagappa Shankarappa & Ors. In our view the answer to the question raised in this appeal must depend upon whether there was an implied surrender of the lessee 's rights when the usufructuary mortgage was executed in his favour by the lessor mortgagor. And this obviously depends upon what was the intention of the parties at the time of the execution 656 of the mortgage deed in favour of the sitting tenant to be gathered from the terms and conditions of the mortgage transaction in light of the surrounding circumstances of the case. It may be stated that in both the decisions of the Andhra Pradesh High Court on which reliance was placed by the respective counsel of the parties in support of his own contention the question was ultimately decided on proper construction of the terms and conditions of the mortgage transactions; in the earlier decision the court took the view that there was nothing in the mortgage deed to suggest that there was an implied surrender of the lessee 's rights while in the later case the court held that the terms of the mortgage deed showed that the lessee had impliedly surrendered his rights. In other words, it all depends upon whether by executing a possessory or usufructuary mortgage in favour of a sitting tenant the parties intended that there should be a surrender of lessee 's rights or not, and only if an implied surrender of lessee 's rights could be inferred then the mortgagor would be entitled to have delivery of physical possession upon redemption but not otherwise. In the instant case the earlier usufructuary mortgage deed of 1939 is not on record before us but the parties have produced a copy of Exhibit A 3 which is the later usufructuary mortgage deed dated 23.8.1942, the terms thereof are required to be construed. It runs thus: Exhibit A 3 "Deed of mortgage of land accompanied by delivery of possession of land for Rs. 250 (in words two hundred and fifty rupees) executed on 23rd August, 1942 in favour of Sambangi Taviti Naidu, son of late Jogi Naidu ' of Koppula Velama Caste, living by cultivation, resident of Dathivalasa village, hamlet of Tummalavalasa of Parvatipuram Sub District by Behara Adinarayana Patro, son of late Behera Narayana Patro Sista Karnam, Inamdar resident of Markonduputti village of the same Sub District. The amount of principal and interest due on the promissory note executed by me in your favour previously on 24th April, 1940 for my necessity, the amount paid by you on my behalf to the Estate towards the cist etc., due on this land and the amounts borrowed from you by 657 me in instalments subsequent thereto all those amounts are found to be Rs. 200 and I have found due to you in this sum. The amount borrowed now for paying the cist to the Estate and for my own maintenance is Rs. 50. In all, Rs. 250 (in words two hundred and fifty rupees). I shall pay interest at the rate of Rs. 0 4 0 (four anna) per cent per mensum and shall discharge the principal and interest. For this, the produce of all kinds of crops raised on the half share of the lands previously being cultivated by you as my sub tenant on condition of paying 1/4 (?) share out of the Jarayathi dry and wet lands bearing No. 1 and know as "Tummulamanu Polam" which passed to me as my self acquired property, which has been in my possession and enjoyment till this day, which is situate in Tummalavalasa village and the boundaries etc. of which are given hereunder, shall be utilised for paying interest due on this deed and the interest due on the deed executed previously on 30th August, 1939 and get registered in the office of the Sub Registrar of Parvatipuram as No. 1148/39 and for paying the cist due to the Govt. on my behalf and obtaining receipt in my name. The remaining amount shall be paid to me by 15th January of every year and the receipt obtained from me. When the above mentioned principal and interest are paid to you in full, payment shall be endorsed on this deed and this deed shall be returned and the land mentioned herein shall be delivered possession of to me. " Three or four things become amply clear on a fair reading of the aforesaid document (1) that though the deed commences by reciting that possession of the land has been delivered thereunder it refers to the fact that the original mortgage (Ist defendant) was actually cultivating the lands as a tenant of the mortgagor on crop share basis; that is to say the rental was payable by the tenant in the shape of a crop share; (2) that the mortgagor had agreed to pay interest at the specified rate on the total loan of Rs. 250 and had undertaken to discharge the principal and interest; (3) that the rental of the land payable by the Ist defendant was to be adjusted against the interest payable by the mortgagor under this deed as well as the earlier deed and the cist payable by him to the Government; and excess, if any, to be paid to mortgagor; (4) that when the principal and interest are fully repaid such payment was to be endorsed on this deed and the deed as also the land shall be "delivered to the 658 possession of mortgagor". It may be noted that the last portion of the document is equivocal in that it does not mention whether on redemption physical possession is to be delivered or symbolical possession is to be delivered to the mortgagor. But under the terms of the deed one thing is clear that during the currency of the mortgage the liability to pay rent to the lessor mortgagor (albeit to be discharged by adjustment) is kept alive. If anything such a term clearly runs counter to any implied surrender of the lessee 's rights. Secondly, there is no term fixed for redemption of mortgage property which means that it was open to the mortgagor to redeem the mortgage at any time that is to say even within a very short time and if that be so, would a sitting tenant cultivating the lands under a lease, who has obliged his lessor by advancing monies to him to tide over his financial difficulties give up his rights as a lessee no sooner redemption takes place? In our view, it does not stand to reason that he would do so. This circumstance coupled with a fact that the mortgage deed keeps alive the lessee 's liability to pay rent during the currency of the mortgage clearly suggests that no implied surrender was intended by the parties. In the result, we are of the view that the only effect of the execution of usufructuary mortgage deeds in this case was that the lessee 's rights were kept in abeyance and they revived upon the redemption of mortgage. We therefore, allow the appeal, set aside the impugned judgments of the High Court and restore the direction given by the learned Additional District Judge that the respondents are not entitled to delivery of physical possession. Respondents will pay the cost of the appeal to the appellants. S.R. Appeal allowed.

Respondents, predecessor Behara Venkataramanayya Patro executed two deeds dated 30 8 1939 and 25 8 1942 in favour of one Sambangi Thavitinaidue, who was then a sitting tenant of the property. In 1951 the mortgagor filed a suit for redemption of the mortgages and obtained a preliminary decree on 31 12 1952. Subsequently, the mortgagor died and the present respondents were brought on record as his legal representatives. On 21 10 1963 the respondent filed an application for passing a final decree by way of ascertainment of the amount due and for delivery of possession upon deposit of entire dues so ascertained. The application was resisted by the appellants on several grounds. According to them, on redemption, relationship of landlord and tenant would revive which needed to be protected and the delivery should be of symbolical possession only. The learned trial judge allowed the application but on an appeal preferred, the Additional District Judge Srikakulam took a contrary view relying upon Varada Bangar Raju 's case AIR (1965) A.P. 86 The respondents, therefore, preferred a second appeal and the learned Single Judge of the A.P. High Court relying upon a subsequent decision in P. Satyanarayana 's case ILR set aside the decision of the first Appellate Court. Letters Patent Appeal preferred by the tenant mortgagees to the Division Bench of the High Court failed and hence this appeal by Special Leave to this Court. Allowing the appeal, the Court ^ HELD:1: 1 There can be no merger of a lease and a mortgage, even where the two transactions are in respect of the same property. [655C] 1:2 It is well settled that for a merger to arise, it is necessary that lesser estate and a higher estate should merge in one person at one and the same time and in the same right and no interest in the property should remain 652 outstanding. In the case of a lease, the estate that is outstanding in the lessor is the reversion, in the case of a mortgage, the estate that is outstanding is the equity of redemption of the mortgagor. Accordingly, there cannot be a merger of a lease and a mortgage in respect of the same property since neither of them is a higher or lesser estate than the other. Even, if the rights of the lessee and the rights of the mortgagee in respect of a property were to be united in one person the reversion in regard to the lease and the equity of redemption in regard to the mortgage, would be outstanding in the owner of the property and accordingly, there would not be a complete fusion of all the rights of ownership in one person. [655D F] Shah Mathurdas Maganial & Co, vs Naogappa Shankarappa & ors A.I.R followed. Narayana Dogra Shetty vs Ramchandra Shivram Hingne , approved. Whether upon redemption of usufructuary mortgage a tenant mortgagee could be directed to deliver actual or physical possession of the mortgaged property to the lessor mortgagor and whether the original relationship of landlord and tenant would revive upon redemption of usufructuary mortgage by a tenant mortgagee in possession of the mortgaged property by delivering possession to the lessor mortgagor, will depend upon whether there was an implied surrender of the lessee 's right when the usufructuary mortgage was executed which in turn depends upon what was the intention of the parties at the time of the execution of the mortgage deed in favour of the sitting tenant to be gathered from the terms of and conditions of the mortgage transaction in light of the surrounding circumstance of the case. [656C D 655G H; 656A] 2:2 In the instant case, the only effect of the execution of usufractutary mortgage deeds was that the lessee 's right were kept in abeyance and they revive upon redemption of the mortgage. [658E] The mortgage deed does not mention whether on redemption physical possession is, to be delivered or symbolical possession is to be delivered to the mortgagor. [657H] During the currency of the mortgage the liability to pay rent to the lessor mortgagor (albeit to be discharged by adjustment) is kept alive. If any thing such a term clearly runs counter to any implied surrender of the lessee 's right. There is no term fixed for redemption of mortgage property which mean that it was open to the mortgagor to redeem the mortgagor at any time that is to say even within a very short time and if that be so a sitting tenant cultivating the lands under a lease, who has obliged his lessor by advancing monies to him to tide over his financial difficulties would not give up his right as a lessee no sooner redemption takes place, coupled with a fact that the mortgage deed keeps alive the lessee 's liability to pay rent during the currency of the mortgage clearly suggests that no implied surrender was intended by the parties.

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ivil Appeal No. 785 of 1988. From the Judgment and Order dated 6.3. 1987 of the Bombay High Court in Writ Petition No. 1166 of 1981. Appellant in person. Dr. Y.S. Chitale and V.B. Joshi for the Respondents. The Judgment of the Court was delivered by AHMADI, J. This is an appeal by Special Leave under Article 136 of the Constitution of India from the Judgment of Bombay High Court dated 6th March, 1987 in Writ Petition No. 1166 of 1981. The appellant, C.D. Tase, joined the college run by Vidhya Prasarak Mandal, Thane, on June 15, 1971 as a lectur er in the pay scale of Rs.300 25 600 prescribed by the Uni versity Grants Commission pursuant to the recommendations made by the Second Pay Commission. By Government Resolution No. USG 1167 U dated November 6, 1967, the Government of Maharashtra had accepted in principle the Government of India scheme based on the recommendations of the University Grants Commission for improvement of salary scales of uni versity teachers and teachers in affiliated Arts, Science, Commerce and Secondary Training Colleges. Accordingly, the Government of Maharashtra directed all the Universities in the State to implement the pay scales recommended by the Commission. The scales recommended were to take effect from April 1, 1966. Three scales were recommended for lecturers, namely, Rs.300 25 600 (Lecturers, Junior Scale), Rs.400 30 640 40 800 (Lecturers, Senior Scale) and Rs.700 40 1100 (Senior Lecturers). The Universities in turn directed col leges affiliated to them to implement the recommendations accepted by the State of Maharashtra. The appellant 's col lege was at the material time affiliated to the University of Pune. The Additional Director of Education, Maharashtra State by his letter No. S 95/127 A 739 dated January 18, 1968 addressed to the Principals of non Government Arts, Science, Commerce and S.T. Colleges in the State directed the colleges to implement the recommendations made by the Second Pay Commission as approved by the State of Maharashtra. The University in turn by its letter No. PU/Stat/F.3/A/67 68/236 dated February 7, 1968 directed the Principals of all colleges to implement the new pay scales with effect from April 1, 1966. Thus, in the category of lecturers (excluding Principals) three scales as stated above were prescribed subject to the condition that the number of senior lecturers and lecturers, senior scale, was not to exceed 1/4th of the total strength of lecturers. It was left to the Universities to formulate norms which the lecturers must satisfy for being considered for the posts of senior lecturers and/or lecturers, senior scale, as the case may be. The High Court while disposing of the writ petition filed by the appellant and his two companions, Writ Petition No. 1166 of 1981, observed: "There does not appear to be much dispute that if the report of the Second Pay Commission of University Grants Commission was implemented in letter and spirit, the petitioners would have respectively qualified for the category of Senior Lecturers in the pay scale of Rs.700 40 1100 on 2nd March, 1974, 15th June, 1974 and 15th June, 1975 respectively. " It is evident from the above observation of the High Court that the appellant was entitled to placement in the senior scale of Rs.700 401100 with effect from June 15, 1975. In the meantime, sometime in 1978, a decision was taken to implement the Third Pay Commission Report prescribing a running scale of Rs.700 1600 for teachers with effect from January 1, 1973. All the Universities in the State were directed to implement the new scale of Rs.700 1600 pre scribed for senior lecturers. This raised the question whether placement of teachers already made after January 1, 1973 in the higher pre 1973 scales would be valid on the implementation of the revised scale w.e.f. January 1, 1973. By Government Resolution No. USG 1178/24585/XXXII (Cell) dated June 27, 1978, it was clarified that placement of teachers made in one of the higher pre 1973 scales of 400 800 and Rs.700 1100 on or after January 1, 1973 would be considered valid and protected subject to the prescribed conditions. The High Court points out that if the above clarification is accepted as correct the appellant would be entitled to placement in the high scale of Rs.700 1100. However, relying on the University of Pune 's subse 740 quent letter of March 10, 1978 whereby the college manage ments were directed to ignore the pay scales prescribed pursuant to the recommendations of the Second Pay Commission in the case of teachers who became entitled to the higher scale after January 1, 1973, it was submitted before the High Court that since the new pay scale of Rs.7001600 was made operative from January 1, 1973, lecturers who were not given the benefit of the revised scale of Rs.700 40 1100 could be fixed in the new scale of Rs.700 1600 with effect from January 1, 1973 as per the Circular No. Aff/Recg/193 of 1977 dated May 19, 1977. This submission made on behalf of the University authorities found favour with the learned Judges of the High Court as they thought that there was 'nothing very inequitable ' about the decision taken by the university authorities. The appellant who argued the case in person submitted that the High Court failed to appreciate the fact that the decision of the university authorities was highly prejudi cial to the appellant and others similarly situated, as it resulted in substantial monetary loss. It must be realised that the. decision to implement the recommendation of the Third Pay Commission w.e.f. January 1, 1973 was taken some time in 1978. In the meantime, several lecturers of affili ated colleges were placed in the higher scale of Rs.700 1100. That is why, it became necessary to seek a clarifica tion from the Government whether the placement allowed to such lecturers in the higher scale would be treated as valid having regard to the implementation of the new scale of Rs.700 1600 w.e.f. January 1, 1973. As pointed out earlier, the Government by their Resolution of June 27, 1978 clari fied that such placement in the higher scale of Rs.700 1100 was valid subject to the fulfilment of the prescribed condi tions. The placement of such lecturers in the higher scale of Rs.700 1100 was therefore directed to be protected while bringing them on the revised scale of Rs.700 1600. It fol lows that if the appellant had been placed in the higher scale of Rs.700 1100 when he became entitled to it on June 15, 1975 his pay would have been protected as per the clari fication while being placed in the revised scale of Rs.700 1600. The appellant is, therefore, justified in making a grievance that merely because the college/ university au thorities did not place him in the higher scale of Rs.7001100 w.e.f. June 15, 1975 he cannot be made to suffer on the ground that he will get the benefit of two reports simultaneously if he is first placed on the scale of Rs.700 1100 and, thereafter brought on the scale of Rs.700 1600. It is evident from the letter No. BY/Genl/1981 82 dated January 28, 1982 addressed to all the Principals of Arts, Science and Commerce Colleges by the Administrative Officer of Higher Edu 741 cation Grants, Bombay Region, Bombay that the college au thorities were directed to furnish information in the pre scribed form in respect of teachers who were entitled to the benefit of the pre revised scales of Rs.700 1100 and Rs.400 800. The Principal of the college forwarded the information to the Administrative Officer under his letter ACC/ TNE/2080 dated March 13/15, 1982 in the prescribed proforma which includes the name of the appellant as one of the persons entitled to the same benefit. We may incidental ly mention that his two companions in the High Court Dr. M.P. Kendurkar and Professor N. Krishnan were also included in the list of eligible lecturers entitled to the higher scale of Rs.700 1100. The subsequent Resolution No. USG 1178/ 160692(19) UNI/4 dated April 7, 1983 issued by the State of Maharashtra also stipulates as under: "The question of placement of these teachers was, therefore, under consideration of Govern ment for sometime past. Government is now pleased to direct that the placement of only those teachers whose names were recommended for placement in the senior lecturers scale of I.S.S. viz. Rs. 1100 and 400 800 to the universities by the respective colleges man agements prior to 4th October, 1975 i.e. the date of issue of Government Resolution assign ing revised University Grants Commission recommended scales but their placement was not effected due to some reason or the other, should be made with effect from the dates the placement is approved by the concerned Univer sities. " It is evident from the above decision that lecturers whose name were recommended for placement in the higher scale before October 4, 1975 were entitled to such placement before being brought over to the revised scale of Rs. 700 1600. The appellant was entitled to placement in the higher scale of Rs.700 1600 w.e.f. June 15, 1975. The college authorities failed, for no fault of the appellant and his companions, to forward their names to the University in the prescribed proforma for reasons best known to them. To deny the benefit to which the appellant and his companions were entitled on account of the lapse on the part of the college authorities would be highly unfair and unjust. The High Court, however took the view that there was 'nothing very inequitable ' about the decision of the University to deny such placement to the appellant and his companions, but it is obvious that if they had been granted placement on the due dates they would have been entitled to higher salary and allowances related to basic salary e.g. dearness allowance which is a certain percentage of basic 742 salary, would have gone up. In addition they would have earned increments by the time they became entitled to the revised scale of Rs.7001600. It is, therefore, obvious that the decision of the university not only appears to be 'ine quitable but also discriminatory inasmuch as it sought to treat equals as unequals by protecting those who had secured the placement and denying the same to others whose names the college managements had failed to forward in good time. We are, therefore, of the opinion that the appellant was enti tled to placement in the higher scale of Rs.700 1100 before being brought over to the revised scale of Rs.700 1600. For the above reasons, we allow the appeal and set aside the impugned order of the High Court dated March 6, 1987. We direct the respondents to grant the benefit of placement in the higher scale of Rs.700 1100 to the appellant from the date he became entitled to the same i.e. June 15, 1975 and thereafter fix his pay in the revised scale of Rs.700 1600. The appellant will be entitled to the monetary benefit accruing to him on the implementation of the above directive which should be worked out and paid to him within three months from today. The appellant will also be entitled to cost from the University of Bombay which we quantify at Rs.2500. Before we part, we may mention that the two companions of the appellant who were writ petitioners in the High Court have not approached this Court under Article 136 of the Constitution but we find that they were similarly situated and were entitled to placement in the higher scale of Rs.700 1600 w.e. L March 2, 1974 and June 15, 1975. We hope that the authorities will extend the same benefit to them also notwithstanding their failure to approach this Court, perhaps on account of cost constraint. It would be highly unfair to deny to them the monetary benefits to which they are legally entitled. We do hope that the concerned authori ties will not drive them to another round of litigation. G.N. Appeal al lowed.

The appellant joined as a Lecturer in 1971, in a College affiliated to Pune University in the scale of Rs.300 600 prescribed by the University Grants Commission. Earlier, in 1967 the State Government accepted in principle the Govern ment of India Scheme based on recommendations of the Univer sity Grants Commission for improvement of pay scales of all university and college teachers, and issued directions to all universities in the State. The Universities in turn directed all the affiliated colleges accordingly. The new scales were Rs.300 25 600 (Lecturers, Junior Scale), Rs.400 30 640 40 800 (Lecturers, Senior Scale) and Rs.700 40 1100 (Senior Lecturers) and were to take effect from 1.4.1966. The number of Senior Lecturers and Lecturers (Sr. Scale) was not to exceed 1/4 of the total strength of Lecturers. Again, in 1978, it was decided to implement the next report, viz, the Third Pay Commissioner 's report which prescribed a running scale of Rs.700 1600 with effect from 1.1.1973. All the Universities in the State were directed to implement the same. A question was raised as to whether placement of teachers already made after 1.1.1973 in the pre 1973 scales would be valid on the implementation of the revised scale with effect from 1.1.1973. The Government clarified that such a placement would be valid and protect ed, subject to the prescribed conditions. However, the Pune University directed the College Managements to ignore the pay scales prescribed by the earlier Pay Commission in case of teachers who became entitled to the higher scale after 1.1.73. Against this, the appellant and two others ap proached the High Court by way of a Writ Petition. However, the High Court felt that there was 737 nothing very inequitable about the decision taken by the University authorities and declined to interfere. This appeal, by special leave, is against the said judgment of the High Court. Before the Court, the appellant argued that the High Court failed to appreciate the fact that the decision of the University authorities was highly prejudicial to the appel lant and others who were similarly situated, as it resulted in substantial monetary loss. Allowing the appeal, HELD: 1. The decision of the university not only appears to be 'inequitable ' but also discriminatory inasmuch as it sought to treat equals as unequals by protecting those who had secured the placement and denying the same to others whose names the college managements had failed to forward in good time. The appellant was entitled to placement in the higher scale of Rs.700 1100 before being brought over to the revised scale of Rs.700 1600. [742B] 2. The Lecturers whose names were recommended for place ment in the higher scale before October 4, 1975 were enti tled to such placement before being brought over to the revised scale of Rs.700 1600. The appellant was entitled to placement in the higher scale of Rs.700 1600 w.e.f. June 15, 1975. The college authorities failed, for no fault of the appellant and his companions, to forward their names to the University in the prescribed proforma for reasons best known to them. To deny the benefit to which the appellant and his companions were entitled on account of the lapse on the part of the college authorities would be highly unfair and un just. The High Court, however took the view that there was 'nothing very inequitable ' about the decision of the Univer sity to deny such placement to the appellant and his compan ions, but it is obvious that if they had been granted place ment on the due dates they would have been entitled to higher salary and allowances related to basic salary e.g. dearness allowance which is a certain percentage of basic salary, would have gone up. [741F H; 742A] 3. The respondents are directed to grant the benefit of placement in the higher scale of Rs.700 1100 to the appel lant from the date he became entitled to the same i.e. June 15, 1975 and thereafter fix his pay revised scale of Rs.700 1600. The appellant will be entitled to the monetary benefit accruing to him on the implementation of the above 738 directive which should be worked out and paid to him within three months. [742C D] [The Court expressed the hope that the authorities will extend the same benefit also to the two companions of the appellant notwithstanding their failure to approach this Court, perhaps on account of cost constraint, and not drive them to another round of litigation.] [742F]

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Appeal No. 370 of 1959. Appeal by special leave from the judgment and order dated August 6, 1957, of the Bombay High Court, Nagpur, in Misc. Petition No. 512 of 1956. M. N. Phadke and Naunit Lal, for the appellant. Shankar Anand and A. G. Ratnaparkhi, for the respondents Nos. 2 4. N.P. Nathvahi, K. L. Hathi and R. H. Dhebar, for the Intervener (State of Bombay). December 9. The Judgment of the Court was delivered by WANCHOO, J. This is an appeal by special leave in an industrial matter. The appellant is the manager of a biri factory in Nagpur. Respondents 2 to 4 are working in that factory. They applied for leave for fifteen days from December 18, 1955, to January 1, 1956, and did not go to work during that period. The appellant did not pay their wages for these days and in consequence they applied to the Payment of Wages Authority (hereinafter called the Authority) for payment to them of wages which had been withheld. Their claim was that they were entitled to fifteen days ' leave in the year under sections 79 and 80 of the . The Authority allowed the claim and granted them a sum of Rs. 90/16/ in all as wages which had been withheld for the period of leave. Thereupon, the appellant filed an application under article 226 of the Constitution before the High Court at Nagpur. His main contention was that respondents 2 to 4 were not workers within the meaning of the and could not therefore claim the benefit 163 of a. 79 thereof The respondents contended that they were workers within the meaning of the and were entitled to the sum awarded to them by the Authority. The High Court on a consideration of the circumstances came to the conclusion that respondents Fir2 to 4 were workers under section 2(1) of the and therefore the order of the Authority was correct and dismissed the petition. The appellant then applied for a certificate to appeal to this Court which was refused. He then obtained special leave from this Court and that is how the matter has come up before US. 2(1) defines a worker to mean a person employed, directly or through any agency, whether for wages or not, in any manufacturing process, or in cleaning any part of the machinery or premises used for a manufacturing process or in any other kind of work incidental to, or connected with, the manufacturing process, or the subject of the manufacturing process. The main contention of the appellant is that respondents 2 to 4 are not employed in the factory within the meaning of that word in section 2(1). Reliance in this connection is placed on two decisions of this Court, namely, Dharangadhara Chemical Works Ltd. vs State of Saurashtra (1) and Shri Chintaman Rao vs The State of Madhya Pradesh (2). In Dharangadhara Chemical Works (1), this Court held with reference to section 2 (s) of the Industrial Disputes Act, which defined "workman" that the word "employed" used therein implied a relationship of master and servant or employer and employee and it was not enough that a person was merely working in the premises belonging to another person. A distinCtion was also drawn between a workman and an independent contractor. The prima facie test whether the relationship of master and servant or employer and employee existed was laid down as the existence of the right in the employer not merely to direct what work was to be done but also to control the manner in which it was to be done, the nature or extent of such control varying in different industries and being (1) ; (2) ; 164 by its nature incapable of being precisely defined. The correct approach therefore to the question was held to be whether having regard to the nature of the work, there was due control and supervision of the employer. The matter came up again for consideration in Chintaman Rao 's case (1) which also happened to relate to biri workers, and section 2(1) of the had to be considered in it. It was held that the test laid down in Dharangadhara Chemical Works (2) with respect to section 2(s) of the Industrial Disputes Act would also apply to section 2(1) of the . Finally, it was pointed out that the question whether a particular person working in a factory was an independent contractor or a worker would depend upon the terms of the contract entered into between him and the employer and no general proposition could be laid down, which would apply to all cases. Thus in order to arrive at the conclusion whether a person working in a factory (like respondents 2 to 4 in this case) is an independent contractor or a worker the matter would depend upon the facts of each case. Let us then turn to the facts which have been found in this case. It has been found that the respondents work at the factory and are not at liberty to work at their homes. Further they work within certain hours which are the factory hours, though it appears that they are not bound to work for the entire period and can go away whenever they like; their attendance is noted in the factory; and they can come and go away at any time they like, but if any worker comes after midday he is not supplied with tobacco and is thus not allowed to work, even though the factory closes at 7 p.m. in accordance with the provisions of the and when it is said that they can return at any time, it is subject to the condition that they cannot remain later than 7 p.m. There are standing orders in the factory and according to those standing orders a worker who remains absent for eight days (presumably without leave) can be removed. The payment is made on piece rates according to the amount of work done but the management has the (1) ; (2) ; 165 right to reject such biris as do not come up to the proper standard. It is on these facts that we have to decide the question whether respondents 2 to 4 were employed by the appellant. It will be immediately noticed that the facts in this case are substantially different from the facts in Shri Chintaman Rao 's case (1). In that case the factory entered into contracts with independent contractors, namely, the Sattedars, for the supply of biris. The Sattedars were supplied tobacco by the factories and in some cases biri leaves also. The Sattedars were not bound to work in the factory nor were they bound to prepare the biris themselves but could get them prepared by others. The Sattedars also employed some coolies to work for them and payment to the coolies was made by the Sattedars and not by the factory. The Sattedars in their turn collected the biris prepared by the coolies and took them to the factory where they were sorted and checked by the workers of the factory and such of them as were rejected were taken back by the Sattedars to be remade. The payment by the factory was to the Sattedars and not to the coolies. In these circumstances it was held that the Sattedars were independent contractors and the coolies who worked for them were not the workers of the factory. The facts of the present case, however, are different. Respondents 2 to 4 have to work at the factory and that in itself implies a certain amount of supervision by the management. Their attendance is noted and they cannot get the Work done by others but must do it themselves. Even though they are not bound to work for the entire period during which the factory is open it is not in dispute that if they come after midday, they are not given any work and thus lose wages for that day, the payment being at piece rates. Further though they can stay away without asking for leave, the management has the right to remove them if they so stay away for a continuous period of eight days. Lastly, there is some amount of supervision inasmuch as the management has the right of rejection of the biris prepared if they do not come up to the proper standard. (1) ; 166 The question therefore that arises is whether in these circumstances it can be said whether the appellant merely directs what work is to be done but cannot control the manner in which it has to be done; of course, the nature or extent of control varies in different industries and cannot by its very nature be precisely defined. Taking the nature of the work in the present case it can hardly be said that there must be supervision all the time when biris are being prepared and unless there is such supervision there can be no direction as to the manner of work. In the present case the operation being a simple one, the control of the manner in which the work is done is exercised at the end of the day, when biris are ready, by the method of rejecting those which do not come up to the proper standard. In such a case it is the right to supervise and not so much the mode in which it is exercised which is important. In these circumstances, we are of opinion that respondents 2 to 4 who work in this factory cannot be said to be independent con tractors. The limited freedom which respondents 2 to 4 have of coming and going away whenever they like or of absenting themselves (presumably without leave) is due to the fact that they are piece rate workers; but the mere fact that a worker is a piece rate worker would not necessarily take him out of the category of a worker within the meaning of section 2(1) of the . Considering the entire circumstances and particularly the facts that if the worker does not reach the factory before midday he is given no work, he is to work at the factory and cannot work else where, he can be removed if lie is absent for eight days continuously and finally his attendance is noted and biris prepared by him are liable to rejection if they do not come up to the standard, there can be no doubt that respondents 2 to 4 are workers within the meaning of section 2(1) of the . This is also the view taken by the Bombay High Court in State vs Shankar Balaji Waje (1) in similar circumstances and that we think is the right view. Then it was urged that even if the respondents are (1) A.I.R. 1960 Bom. 167 workers under section 2(1), section 79 should not be applied to them as they can absent themselves whenever they like. In this very case it is said that the respondents remained absent for a longer period than that provided in the Act and therefore they do not need any leave. This argument has in our opinion no force. The leave provided under section 79 arises as a matter of right when a worker has put in a minimum number of working days and he is entitled to it. The fact that the respondents remained absent for a longer period than that provided in s, 79 has no bearing on their right to leave, for if they so remained absent for such period they lost the wages for that period which they would have otherwise earned. That however does not mean that they should also lose the leave earned by them under section 79. In the circumstances they were entitled under section 79 of the to proportionate leave during the subsequent calendar year if they had worked during the previous calendar year for 240 days or more in the factory. There is nothing on the record to show that this was not so. In the circumstances the appeal fails and is hereby dismissed with costs. One set of hearing costs. Appeal dismissed.

The appellant employed workmen in his bidi factory who had to work at the factory and were not at liberty to work at their houses; their attendance were noted in the factory and they had to work within the factory hours, though they were not bound to work for the entire period and could come and go away when they liked; but if they came after midday they were not supplied with tobacco and thus not allowed to work even though the factory closed at 7 p.m.; further they could be removed from service if absent for 8 days. Payment was made on piece rates according to the amount of work done, and the bidis which did not come upto the proper standard could be rejected. The respondent workmen applied for leave for 15 days and did not go to work, for which period the appellants did not pay their wages; in consequence the concerned workmen applied to the Payment of Wages Authority for payment of wages to them. The appellant 's contention that the respondent workmen were not his workmen within the meaning of the , was rejected and the claim for payment of wages was allowed. The question therefore was whether the appellants were workmen within the meaning of the . Held, that the nature of extent of control varies in different industries and cannot by its very nature be precisely defined. When the operation was of a simple nature and could not be supervised all the time and the control was at the end of day by the method of rejecting the work done which did not come up to proper standard, then, it was the right to supervise and not so much the mode in which it was exercised which would determine whether a person was a workman or an independent contractor. The mere fact that a worker was a piece rate worker would not necessarily take him out of the category of a worker within the meaning of section 2(1) Of the . In the instant case the respondent workmen could not be said to be independent contractors and were workmen within the meaning of section 2(1) of the . Held, further, that the leave provided for under section 79 of the arose as a matter of right when a worker had put 21 162 in a minimum number of working days and he was entitled to it. The fact that the workman remained absent for a longer period had no bearing on his right to leave. State vs Shankar Balaji Waje, A.I.R. 1960 Bom. 296, approved. Dharangadhara Chemical Works Ltd. vs State of Saurashtra, ; and Shri Chintaman Rao vs The State of Madhya Pradesh, ; , referred to.

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Appeal No. 433 of 1957. Appeal from the judgment and order dated August 24, 1956, of the Rajasthan High Court at Jodhpur in Civil Misc. Case No. 17 of 1955. B. D. Sharma, for the appellant. A. N. Kripal, R. H. Dhebar and D. Gupta, for the respondent 1958. October 17. The Judgment of the Court was delivered by VENKATARAMA AIYAR J. This is an appeal against the judgment of the High Court of Rajasthan in a reference under section 66(1) of the Indian Income tax Act, 1922, hereinafter referred to as the Act. The facts, so far as they are material, are these The appellant is a resident of what was once the independent State of Udaipur. There was in that State a Company called the Mewar Industries, Ltd., registered under the provisions of the law in force in that State, and the appellant held 266 shares in that Company. On January 18, 1950, the Company went into liquidation, and on April 22, 1950, the liquidator distributed a portion of the assets among the shareholders, and the appellant was paid a sum of Rs. 26,000 under this distribution. It is common ground that this sum represents the undistributed profits of the Company which had accrued during the six accounting years preceding the liquidation. It should be mentioned that there was in the State of Udaipur no law imposing tax on income, and that it was only under the Indian Finance Act, 1950 that the residents of the State of Rajasthan, in which the State of Udaipur had merged, became liable for the first time to pay tax on their income. That Act came into force on April 1, 1950. We are concerned in these proceedings with the assessment of tax for the year 1951 52, and that, under section 3 of the Act, has to be on the income of the previous year, i.e., 1950 51. Now, the dispute in the present case relates to the sum of Rs. 26,000 paid by the liquidator to the appellant on April 22, 1950. By his order dated July 3, 1952, the Income tax Officer held 206 that this was dividend as defined in section 2(6A)(c) of the Act and included it in the taxable income of the appellant in the year of account. The appellant took this order in appeal to the Appellate Assistant Commissioner who by his order dated January 12, 1953, confirmed the assessment. There was a further appeal by the appellant to the Appellate Tribunal, who also dismissed it on November 10, 1953. On the application of the appellant, the Appellate Tribunal referred the following question for the decision of the High Court: " Whether on the facts and in the circumstances of this case, the aforesaid sum of Rs. 26,000 was liable to be taxed in the assessee 's hands as dividend within the meaning of that term in section 2(6A)(c) of the Indian Income tax Act. " The reference was heard by Wanchoo, C. J. and Modi, J. who by their judgment dated August 24, 1956, answered it in the affirmative. It is against this judgment that the present appeal has been preferred on a certificate granted by the High Court under section 66A(2) of the Act. The sole point for determination in this appeal is whether the sum of Rs. 26,000 received by the appellant on April 22, 1950, is dividend as defined in. section 2(6A)(c) of the Act. That definition, as it stood on the relevant date and omitting what is not material, was in these terms: " 6(A) 'dividend ' includes (a) any distribution by a company of accumulated profits whether capitalised or not if such distribution entails the release by the company to its shareholders of all or any part of the assets of the company ; (c) any distribution made to the shareholders of a company out of accumulated profits of the company on the liquidation of the company: Provided that only the accumulated profits so distributed which arose during the six previous years of the company preceding the date of liquidation shall be so included;". 207 The definition of " previous year " as given in section 2(l 1), omitting what is not material, is as follows: " Previous year " means in respect of any separate source of income, profits and gains (a) the twelve months ending on the 31st day of March next preceding the year for which the assessment is to be made. " On these provisions, the contention of the appellant is that under the definition in section 2(6A)(c) the assets of a company distributed after it has gone into liquidation will be dividend only if they represented the profits thereof accumulated during the six previous years preceding the date of the liquidation, and that, in the present case, though the amounts distributed came out of the accumulated profits of the Company, those profits had not been accumulated within the six previous years of the liquidation of the Company. It is not in dispute that the profits which were distributed had been accumulated during the years 1943 44 to 1948 49, i.e., during the six years preceding the liquida tion. The point in controversy is whether those years can be said to be " previous years " within section 2(6A)(c) of the Act. The appellant contends that " previous year " as defined in section 2(l 1) of the Act means the year which is previous to the assessment year, that accordingly when there is no year of assessment, there can be no previous year, that construing the words " six previous years " in section 2(6A)(c) in the light of the definition of "previous year" in section 2(l 1) of the Act, the years 1943 44 to 1948 49 cannot be held to be previous years, because the Indian Income tax Act came into force in the State of Rajasthan only on April 1, 1950, and prior to that date there was at no time any law imposing tax on income in the State of Udaipur, that there was therefore no year of assessment, and that, in consequ ence, the sum of Rs. 26,000 received by the appellant on April 22, 1950, is not a dividend as defined in section 2(6A)(c). The contention of the respondent which has been accepted by the Income tax authorities and by the learned Judges in the Court below is that the expression " six previous years" is used in section 2(6A)(c) not in the technical and restricted sense in which the 208 words " previous year " are used in section 2(11) of the Act, and that, in the context, it means six consecutive accounting years preceding the liquidation of the company. The question is which of these two interpretations is the right one to be put on the language of section 2(6A)(c). The argument of Mr. Sharma for the appellant is that section 2(11) having defined the meaning which the expression 'previous year" has to bear in the Act, that meaning should, according to the well settled rules of construction, be given to those words wherever they might occur in the statute, and that that is the meaning which must be given to the words " six previous years " in section 2(6A)(c). It is to be noticed that the definitions given in section 2 of the Act are, as provided therein, to govern " unless there is anything repugnant in the subject or context ". Now, the appellant contends that the words " unless there is anything repugnant " are much more emphatic than words such as " unless the subject or context otherwise requires ", and that before the definition in the interpretation clause is rejected as repugnant to the subject or context, it must be clearly shown that if that is adopted, it will lead to absurd or anomalous results. And our attention was invited to authorities in which the above rules of construction have been laid down. It is unnecessary to refer to these decisions as the rules themselves are established beyond all controversy, and the point to be decided ultimately is whether the application of the definition ins. 2(l 1) is repelled in the context of section 2(6A)(c). Turning to the language of section 2(II), we have this that according to the definition contained therein, " previous year " is the year which is previous to the year of assessment, and that means that there can be only one previous year to a given year of assessment. When section 2(6A) (c) speaks of six previous years, it is obvious that it uses the expression " previous year " in a sense different from that which is given to it in section 2(l 1), because it would be a contradiction in terms to speak of six previous years in relation to any specific assessment year. It was argued that under section 13(2) of 209 the , words in the singular should be read as including the plural, and that, therefore, the definition of "previous year" in section 2(l 1) could be read as meaning " previous years ". But section 13 only enacts a rule of construction which is to apply " unless there is anything repugnant in the and to read a " previous year " in section 2(l 1) would be to nullify the previous year " enacted therein, and such a construction must therefore be rejected as repugnant to the context. It was then suggested that all the six previous years might be regarded as previous each to the next following year if that was itself a year of assessment, and that such a construction would, consistently with the contention of the appellant, give full effect to the definition in section 2(11) of the Act. But this argument overlooks that while there may be several preceding years to a given year of assessment there can be only one previous year in relation to it, and that it would make no sense to speak of six previous years with reference to a year of assessment. We are satisfied that it would be repugnant to the definition of " dividend " in section 2(6A)(c) to import into the words " six previous years " the definition of previous year" in section 2(l 1) of the Act. An examination of the policy underlying section 2(6A)(c) also leads to the same conclusion. When a company makes profits and instead of distributing them as dividend accumulates them from year to year and at a later date distributes them to the shareholders, the amounts so distributed would be dividend under section 2(6A) (a), but when a company which has so accumulated the profits goes into liquidation before declaring a dividend and the liquidator distributes those profits to the shareholders, it was held in Commissioners o Inland Revenue vs Burrell (1) that such distribution was not a dividend because when once liquidation intervenes, there was no question of distribution of dividends, and all the assets of the company remaining after the discharge of its obligations were surplus divisible among (1) 210 the shareholders as capital. It was to remove this anomaly that the Indian legislature, following similar legislation by British Parliament in the year 1927, enacted section 2(6A) (1) in 1939. The effect of this provision is to assimilate the distribution of accumulated profits by a liquidator to a similar distribution by a company which is working; but subject to this limitation that while in the latter the profits distributed will be dividend whenever they might have been accumulated, in the former such profits would be dividend only in so far as they came out of profits accumulated within six years prior to liquidation. Now, the reason of it requires that those years must be a cycle of six years preceding the liquidation, arid that is what is meant by the words " previous years ". It was argued for the appellant that if that was what was intended by the legislature, that was sufficiently expressed by the words " preceding the liquidation ", and that the words previous years " would be redundant. But the words preceding years " would have meant calendar years, whereas the accounting years of the company for ascertainment of profits and loss might be different from the calendar years, and the words " previous year " would be more appropriate to connote the financial year of a company. Now, it should be mentioned that when a company in liquidation distributes its current profits,, that would also be not dividend as held in Burrell 's case (1), and the law to that extent has been left untouched by section 2(6A)(c). And it has accordingly been held by the High Courts that the current profits of a company in liquidation which are distributed to the shareholders are not dividend within section 2(6A)(c), Vide Appavu Chettiar vs Commissioner of Income tax (2) and Girdhardas & Co. Ltd. vs Commissioner of Incometax (3). Therefore, accumulated profits which are sought to be caught in section 2(6A) (c) would be the profits accumulated in the financial years preceding the year in which the liquidation takes place, and it is this that is sought to be expressed by the words " previous years " in section 2(6A) (c). In the present case, as the Company went into liquidation on January 18, 1950, (1) (2) (3) 211 excluding the current year which commenced on April 1, 1949, the six previous years will be the years 1943 44 to 1948 49. So far, we have considered the question on the language of section 2(6A)(c) and the policy underlying it. On behalf of the respondent, certain authorities were cited as supporting his contention that the expression it previous years " in section 2(6A) (c) is not to be interpreted in the sense in which the expression " previous year" is defined in section 2(l 1) of the Act. It is sufficient to refer to one of them, and that is the decision of this Court in Commissioner of Income tax, Madras vs K. Srinivasan and K. Gopalan (1). There, the point for decision was as to the interpretation to be put on the words " end of the previous year " in section 25, sub sections (3) and (4) of the Act which dealt with discontinuance of or succession to a business, and it was held that the expression " previous year " in those provisions meant an accounting year expiring immediately preceding the date of discontinuance or succession. The decision is not itself relevant to the present discussion, but certain observations therein are relied on as bearing on the point now under consideration. Mahajan, J. delivering the judgment of the Court observed: " The expression 'previous year ' substantially means an accounting year comprised of a full period of twelve months and usually corresponding to a financial year preceding the financial year of assessment. It also means an accounting year comprised of a full period of twelve months adopted by the assessee for maintaining his accounts but different from the financial year and preceding a financial year. For purposes of the charging sections of the Act unless otherwise provided for it is co related to a year of assessment immediately following, but it is not necessarily wedded to an assessment year in all cases and it cannot be said that the expression 'previous year ' has no meaning unless it is used in relation to a financial year. In a certain context it may well mean a completed accounting year immediately preceding the happening of a contingency." (I) , 501 212 The learned Judges in the Court below have relied on these observations, and quite rightly, as supporting their conclusion that the expression " six previous years " in. section 2(6A) (c) means only the six accounting years of a company preceding the date of liquidation. The appellant sought to raise one other contention, and that is that the Indian Companies Act came into operation in the Udaipur territory on April 1, 1951, only by force of the Part B Stater, Laws Act (111 of 1951), that during the relevant period the Mewar Industries Ltd. was not a company as defined in section 2(5A) of the Act, and that therefore the distribution of assets made by that Company on April 22, 1950, could not be held to be a dividend as defined in section 2 (6A) (c). But that is not a question which was referred for the opinion of the High Court under section 66(1) of the Act; nor is it even dealt with by the Tribunal and therefore cannot be said to arise out of its order. Moreover, whether the Mewar Industries Ltd., is a Company as defined in the Indian Income tax Act is itself a question over which the parties are in controversy. The definition of " Company " under the Indian Income tax Act has undergone several changes from time to time, and on the relevant date it stood as follows: " 2(6) 'Company ' means (i) any Indian Company or (ii) any association, whether incorporated or not and whether Indian or non Indian, which is or was assessable or was assessed as a company for the assessment for the year ending on the 31st day of March, 1948, or which is declared by general or special order of the Central Board of Revenue to be a company for the purposes of this Act. " It is contended for the respondent that the Mewar Industries Ltd., was an association which was assessable as a Company for the year ending March 31, 1948, and that it was, in fact, assessed; but the appellant disputes this. As the point turns on disputed question of fact. , it cannot be allowed to be raised at this stage. 213 In the result, we hold that the sum of Rs. 26,000 received by the appellant on April 22, 1950, ",as dividend as defined in section 2(6A) (c) of the Act and is chargeable to tax. The appeal fails, and is dismissed with costs. Appeal dismissed.

The appellant, a resident of the once independent State of Udaipur, held 266 shares in the Mewar Industries Ltd., a company registered in that State. There was no law in the State of Udaipur imposing tax on income and it was on April 1, 1950that for the first time the residents of Rajasthan, in which the State had merged, became liable to pay such a tax. On January 18, 1950, the Company went into liquidation and on April 22, 1950, the liquidator distributed a portion of the assets among the shareholders, the appellant receiving a sum of Rs. 26,000. This sum represented the undistributed profits of the company which had accrued during the six accounting years preceding the liquidation. The income tax authorities included this sum in the taxable income of the appellant for the assessment year 1051 52 holding that it was dividend as defined in section 2(6A)(c) of the Indian Income tax Act. Under section 2(6A)(c) the distribution of accumulated profits which arose during the " six previous years " preceding the date of liquidation would be dividend. Section 2(1) defined " previous year " to mean the year which was previous to.the assessment year. The appellant contended that " previous years " in section 2(6A)(c) must be read in the light of the definition is section 2(1) and as in the present case there had been no law imposing a tax prior to April 1, 1950, the profit for the years 1943 44 to 1948 49 cannot be held to be profits which " arose during the six previous years ", and consequently could not be taxed as dividend as defined in section 2(6A)(c) of the Indian Income tax Act. Held, that the said sum was dividend within the meaning of section 2(6A)(c) of the Act and was liable to tax. The definitions given in section 2 Of the Act applied unless there was anything repugnant in the subject or context. It would be repugnant to the definition of " dividend " in section 2(6A)(c) to import into the expression " six previous years " the definition of " previous year " in section 2(ii) of the Act. By the expression "previous years " in section 2(6A)(c) of the Act was meant the financial years preceding the year in which liquidation took place. Commissioner of Income tax, Madras vs K. Srisivasan and Gopalan, , referred to. 205

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on (Civil) No. 491 of 1991. (Under Article 32 of the Constitution of India) WITH TRANSFER PETITION (CIVIL) No, 278 of 1991. (Under Article 139 A(i) of the Constitution of India) WITH WRIT PETITION (CIVIL) Nos. 541,542 & 560/91 G. Ramaswamy, Attorney General, Altar Ahmad, Addl. Solicitor General, Shanti Bhushan, Ram Jethmalani, P.P. Rao, Kapil Sibal, P.R.Krishnan, Ms. Indira Jaisingh, Ashok Desai, Hardev Singh, P.S. Poti, Danial Latifi, Rajinder Sachhar, M.K. Ramamurthy, R.K. Garg, S.K. Dholakia, Santosh Hegde, V.N. Ganpule, Tapas Ray, N.B. Shetye, Jayant Bhushan, Mohan Rao, Prashant Bhushan, Ms. Kamini Jaiswal, A.K. Srivastava, Manoj Wad, Ms. Rashmi Kathpalia, Ms. Nina Dikshit, E.M.S. Anam, Rajiv K. Garg, N.D. Garg, G.D. Sharma, Sudhir Walia, A.M. Khanwilkar, Mrs. Anil Katiyar, Ms. A. Subhashini, R.S. Suri, M. Veerappa, K.R. Nambiar, Harish Uppal (appeared in person) and P.H. Parekh for the appearing parties. The Judgment of the Court was delivered by B.C. RAY, J. These writ petitions raise certain consti tutional issues of quite some importance bearing on the construction of Articles 121 and 124 of the Constitution of India and of the "The Judges 25 (Inquiry) Act, 1968" even as they in the context in which they are brought, are somewhat unfortunate. Notice was given by 108 members of the 9th Lok Sabha, the term of which came to an end upon its dissolution, of a Motion for presenting an Address to the President for the removal of Mr. Justice V.Ramaswami of this Court. On 12th March, 1991, the motion was admitted by the then Speaker of the Lok Sabha who also proceeded to constitute a Committee consisting of Mr. Justice P.B. Sawant, a sitting Judge of this Court, Mr. Justice P.D. Desai, Chief Justice of the High Court of Bombay, and Mr. Justice O. Chinappa Reddy, a distinguished jurist in terms of Section 3(2) of The . The occasion for such controversy as is raised in these proceedings is the refusal of the Union Government to act in aid of the decision of the Speaker and to decline to notify that the services of the two sitting Judges on the Committee would be treated as "actual service" within the meaning of Para 11(b) (i) of of the II Schedule to the Constitu tion. It is said that without such a notification the two sitting Judges cannot take time off from theft court work. The Union Government seeks to justify its stand on its understanding that both the motion given notice of by the 108 Members of the Lok Sabha for presenting an Address to the President for the removal of the Judge concerned as well as the decision of the Speaker of the 9th Lok Sabha to admit the motion and constitute a Committee under the provisions of the have lapsed with the dissolution of the 9th Lok Sabha. Constitutional issues of some importance, therefore, arise as to the constitutional and the legal position and status of a Motion for the removal of a Judge under a law made pursuant to Article 124(5) of the Constitution and as to whether the Doctrine of Lapse would apply to such a Motion upon the dissolution of the Lok Sabha and whether, in view of the contention that such motions for removal, im peachment etc. of holders of high constitutional offices are in their very nature politically introduced, debated and decided in the Houses of Parliament and not elsewhere, the matters arising out of or relating to a Motion for removal of a Judge in either House of the Parliament are at all justiciable before courts of law. It is also urged that even if these issues have some degree of adjudicative disposition and involve some justiciable areas, the Court should decline to exercise jurisdiction as its decision and its writ might become infructous in view of the fact that in the ultimate analysis, the final arbiter whether at all any Address is to be presented rests exclusively with the Houses of Parliament and which, are wholly outside the purview of the Courts. The foregoing serves to indicate broadly the com plexities of the constitutional issues on which the Court is invited to pronounce and, as in all constitutional litiga tion, the views inevitably tend to reflect a range of policy options in constitutional adjudications and, in some meas ure, value judgments. Writ Petition No. 491 of 1991 is by a body called the "SubCommittee on Judicial Accountability" represented by its convener, Sri Hardev Singh, a Senior Advocate of this Court. Petitioner body claims to be a Sub Committee consti tuted by an "All India Convention on Judicial Accountabili ty" "to carry forward the task of implementing the resolu tions of the conventions". Writ Petition No. 541 of 1991 is by the Supreme Court Bar Association represented by its Honorary Secretary. The Bar Association seeks to prosecute this petition "in the larger public interest and in particu lar in the interests of litigant public". The two prayers common to both the petitions are, first, that the Union of India be directed to take immediate steps to enable the Inquiry Committee to discharge its functions under the "The " and, secondly, that during the pendency of the proceedings before the Committee the learned Judge should be restrained from performing judicial func tions and from exercising Judicial powers. Writ Petition No. 542 is by a certain Harish Uppal. This writ petition is more in the nature of a counter to the second prayer in the WP No. 541/1991 and WP No. 491/1991. Petitioner, Sri Harish Uppal says that till the Inquiry Committee actually finds the learned Judge guilty of the charges there should be no interdict of his judicial func tions and that if such a finding is recorded then thereafter till such time as the Motion for the presentation of the Address for the removal of the Judge disposed of by the Houses of Parliament which petitioner says should not be delayed beyond 180 days the President may ask the Judge concerned to recuse from judical functions. In Writ Petition No. 560/1991 brought by Shyam Ratan Khandelwal, a practising Advocate, the constitutional valid ity of the is challenged as ultra vires Articles 100, 105, 118, 121 and 124(5) of the Consti tution of India. It also seeks a declaration that the Motion presented by 108 Members of Parliament for the removal of the Judge has lapsed with the dissolution of the 9th Lok Sabha. It also seeks quashing of the decision of the Speaker admitting the Motion on the ground that an opportunity of being heard had been denied to the Judge before the Speaker admitted the Motion and proceeded to constitute a Committee. On the question of the validity of The , 27 1968 the petitioner contends that the law properly construed vests the powers of admitting a Motion and of constituting a Committee under Section 3 in the Speaker in his capacity as Speaker of the House and subject to the well known and well settled principles of law. procedure and conventions of the Houses of Parliament and the statute does not depart from these principles. On the contrary, the statute admits of a construction which accords with the powers and privileges of the House and that the Motion even at that stage of admis sion would require to be debated by the House. It is urged that if that be ' the construction, which the language of the statute admits then there should be no vice of unconstitu tionality in it. But if the statute is construed to vest such power exclusively in the Speaker, to the exclusion of the House, the statute, on such constitution would be uncon stitutional as violative of Articles 100 (1), 105,118 and 121 of the Constitution. Transfer Petition No. 268/1991 is for the withdrawal by this Court to itself from the High Court of Delhi, the Writ Petition (Civil) No. 1061/1991 in the Delhi High Court where reliefs similar to those prayed for by Sri Khandelwal in WP (Civil) No. 560/1991 are sought. The prayer for trans fer has not yet been granted; only the further proceedings in the High Court are stayed. But full dress arguments in all these matters have been heard. It is appropriate that this writ petition should also be formally withdrawn and finally disposed of along with the present batch of cases. All that is necessary is to make a formal order withdrawing WP (Civil) No. 1061/1991 from the Delhi High Court, which we hereby do. Certain allegations of financial improprieties and irregularities were made against Justice V. Ramaswami, when he was the Chief Justice of the High Court of Punjab & Haryana. There were certain audit reports concerning certain items of purchases and other expenditure. The then Chief Justice of India, Justice Sabyasachi Mukharji, took note of the reports in this behalf and of representations submitted to him in this behalf and advised Justice Ramaswami to abstain from discharging judicial functions until those allegations were cleared. Thereafter, a Committee of three Judges was constituted by the then Chief Justice of India, to look into the matter and to advise him whether on the facts Justice Ramaswami might be embarrassed in discharging judicial functions as a Judge of this Court. The Committee tendered its advice to the Chief Justice. It noted that Justice Ramaswami had declined to acknowledge the jurisdic tion of any Committee to sit in judgment over his conduct. The Committee, accordingly, abstained from an inquiry on the charges but. on an evaluation of the matter before it, expressed the view that as long as the charges of 28 improper conduct involving moral turpitude were not estab lished in the various enquiries then pending the operation of the constitutional warrant appointing him a Judge of the Court could not be interdicted. Thereafter, in February, 1991, 108 Members of the Lok Sabha presented a Motion to the Speaker of the 9th Lok Sabha for Address to the President for the removal of the learned Judge under Article 124(4) of the Constitution read with the provisions of the . On 12.3.1991 the Speaker of the Lok Sabha in purported exercise of his powers under Section 3 of the said Act, admitted the Motion and constituted a Committee as aforesaid to investigate the grounds on which the removal was prayed for. Soon after the decision of the Speaker to admit the Motion and constitute a Committee to investigate the charges was made, the term of the Ninth Lok Sabha came to premature end upon its dissolution. The petitioners question the legality of the Speaker 's order and assert that, at all events, the Motion had lapsed with the dissolution of the House. This contention is supported by the Union of India. They say that the effect of dissolution of the Ninth Lok Sabha is to "pass a sponge across the Parliamentary slate" and all pending motions lapse. The motion for removal, it is urged, is no exception. 'We have heard Sri Shanti Bhushan, Sri Ram Jethmala ni, Sri P.P. Rao, Sri R.K. Garg and Ms. Indira Jaising learned senior counsel in support of the prayers in writ petitions Nos. 491 and 541 of 1991 filed by the Sub Commit tee on Judicial Accountability and the Supreme Court Bar Association respectively; Sri G. Ramaswamy, learned Attorney General for the Union of India; Sri Kapil Sibal for the petitioners in writ petition No. 560/91 and transfer peti tion No. 278/91. Sri Harish Uppal, petitioner in person in writ petition No. 542/91 has filed his written submissions. The arguments of the case covered a wide constitutional scheme relating to the removal of members of the superior judiciary in India and tO the problems of justiciability of disputes arising therefrom. We shall refer to the arguments when we assess the merits of these contentions. The contentions urged at the hearing in support of the petitions which seek enforcement of Speaker 's decision as well as those urged in support of the petitions which say that the Motion has lapsed can be summaried thus: 29 Contention A: The motion for removal of the Judge moved by 108 Members of Parliament as well as the purported decision of the Speaker to admit that motion and to constitute a committee to investigate into the grounds on which removal is sought have lapsed upon the dissolution of the 9th Lok Sabha. The general rule is that no House of Parliament can seek to bind its successor. All pending business at the time of dissolution of House lapses. A motion for removal of a judge is just another motion and perishes with the expiry of the term or the earlier dissolution of the House. The question whether the motion for the remov al of the judge has lapsed or not is a matter pertaining to the conduct of the business of the House of which the House is the sole and exclusive judge. No aspect of the matter is justiciable before Court. Contention B: The constitutional process of removal of a Judge, both in its substantive and procedural aspects, is a political process within the exclusive domain of the Houses of Parliament. The conduct of the Speaker in regulating the procedure and business of the House shall not be subject to the jurisdiction of any Court. The Speaker of the Lok Sabha in the exercise of his powers under the , 1%8, acts in an area outside the courts ' jurisdiction. There is nothing in the which detracts from this doctrine of lapse. On the contrary, the provi sions of the 'Act ' are consistent with this Constitutional position. Contention C: Article 124(5) pursuant to which the , is a mere enabling provi sion. Prior 'proof of misconduct is not a condition precedent before the bar under Article 121 against the discussion of the conduct of the Judge is lifted. Contention D: The action of the Speaker in admitting the notice of motion without reference to the House and constituting a committee for inves tigation without the support of the decision of the 30 House is ultra vires Articles 100(1), 105, 121 and the rules made under Article 118 of the Constitution. The provisions of the ; 1968 can be read consistently with the Consti tutional Scheme under the aforesaid Articles. But if the provisions of the Act are so con strued as to enable the Speaker to exercise and perform those powers and functions without reference to and independently of the House, then the provisions of the Act would be uncon stitutional. Contention E. The decision of the Speaker to admit the motion and to constitute a committee for investigation is void for failure to comply with the rules of natural justice as no oppor tunity, admittedly, was afforded to the Judge of being heard before the decision was taken. Contention F. ' The process of removal by means of a motion for address to the President is a political remedy. But the fundamental right to move the Supreme Court for enforcement of fundamental rights take within its sweep the right to access to a court comprising of Judges of sterling and unsullied reputation and integri ty which is enforceable. This judicial remedy is independent of the constitutional remedy and that the court has jurisdiction to decide as to its own proper constitution. In exercise of this jurisdiction it should examine the grounds of the alleged misbehaviour and re strain the Judge from judicial functioning. Contention G. ' The Speaker 's decision is vitiated by mala fides and oblique and collateral motives. Contention H. ' The Supreme Court Bar Association and the Sub Committee on Judicial Accountability the petitioners in Writ Petition No. 491 of 1991 and Writ Petition No. 541 of 1991, respective ly, do not have the requisite standing to sue and the writ petitions are, accordingly, not maintainable at their instance. 31 Contention L ' At all events, even if the Speaker is held to be a statutory authority acting under the Statute and not as part of the proceedings or business of the Lok Sabha and is amenable to the jurisdiction of the Court, any judgment rendered and writ issued by this Court have the prospect of being infructuous in view of the undisputed constitutional position that, in the ultimate analysis, the decision to adopt or turn down the motion is exclusively within the power of the House and the Court would have no jurisdiction over that area. The Court would, therefore, decline to exercise its jurisdiction on grounds of infructuousness. Before we discuss the merits of the arguments it is necessary to take a conspectus of the constitutional provi sions concerning the judiciary and its.independence. hi interpreting the constitutional provisions in this area the court should adopt a construction which strengthens the foundational features and the basic structure of the Consti tution. Rule of law is a basic feature of the Constitution which permeates the whole of the Constitutional fabric and is an integral part of the constitutional structure. Inde pendence of the judiciary is an essential attribute of Rule of law. Articles 124(2) and 217(1) require, in the matter of appointments of Judges, consultation with the Chief Jus tices. These provisions also ensure fixity of tenure of office of the Judge. The Constitution protects the salaries of Judges. Article 121 provides that no discussion shall take place in Parliament with respect to the conduct of any Judge of the Supreme Court or of a High Court in the dis charge of his duties except upon a motion for presenting an address to the President praying for the removal of the Judge as hereinafter provided. Articles 124(4) and 124(5) afford protection against premature determination of the tenure. Article i 24(4) says "a Judge of the Supreme Court shall not be removed from his office except" etc. The grounds for removal are again limited to proved misbehaviour and incapacity. It is upon a purposive and harmonious con struction and exposition of these provisions that the issues raised in these petitions are to be resolved. In construing the Constitutional provisions the law and procedure for removal of Judges in other countries afford a background and a comparative view. The solution must, of course, be found within our own Constitutional Scheme. But a comparative idea affords a proper perspective for the understanding and interpretation of the Constitu tional Scheme. 32 10. In England a Judge of the superior courts can be removed only on presentation of an address by both the Houses of Parliament to the Crown. Proceedings may be initi ated by a petition to either House of Parliament for an address to the Crown or by a resolution for an address to the Crown to appoint a committee of inquiry into the conduct of the person designated, though preferably they should be commenced in the House of Commons. Sometimes [as in Barring tons Case (1830)], a Commission of Inquiry is appointed and the matter is considered in the light of the report of the said Commission. The motion for removal is considered by the entire House. In case any enquiry is to be conducted into the allegations, it is either referred to a Select Committee of the House or to the Committee of the whole House Opportu nity is given to the Judge whose conduct is impugned to make defence on public inquiry. The report of the Committee and its recommendation are placed before the House where the matter is debated.(See: Halsbury 's Laws of England, 4th Ed. p. 1108). This process has been subjected to following criticism (i) legislative removal is coloured by political partisanship inasmuch as the initia tion of the process as well as the ultimate result may be dictated by political considera tions and process of fact finding and deliber ations also suffer from party spirit. (ii) the government has considerable control not only on the ultimate result of the pro ceedings but also on parliamentary time which enables them to prevent motions for an address from being adopted if it suits them. (iii) the legislative procedure is not adequate for adjudicative fact finding; and (iv) since Parliament is the master of its own procedure, the procedures and rules of evidence appropriate to judicial proceedings which would seem to be required in a case of judicial removal are unlikely to be allowed in Parliament. (See: Shetreet Judges on Trial (1976) p. 405 407) 12. The Justice Sub Committee on the Judiciary consid ered the question whether the existing process for removal by address of the Houses should be substituted for or sup plemented by a new mechanism designed to meet changing needs and conditions. The Sub Committee, in its 1972 Report, answered the said question in the affirmative and has pro posed a new procedure for removal of judges. The Sub Commit tee has recommended the establishment of an adhoc judicial commission to be ap 33 pointed by the Lord Chancellor, if he decides that the question of removing a judge is to be investigated. The Commission should include a majority of, and in any event not less than three, persons who hold or have held high judicial office. Members of Parliament or persons who hold or have held any political appointment would be excluded. Upon completing its inquiry the ad hoc Commission shall report the facts and recommend whether the question of removal of a judge should be referred to the Judicial Com mittee of the Privy Council. If the Commission so recommend ed, the Privy Council would consider the matter and if it concluded that the judge should be removed, it would so advise Her Majesty. [see: Shetreet 'Judges on Trial ', (1976); pp. 404 405]. Dr. Shetreet has suggested a via media and has favoured the establishment of a Judicial Commission for removal (but not for discipline short of removal) along the lines sug gested by the Sub Committee but has expressed the view that the existing process of address should also be preserved. [See: Shetreet 'Judges an Trial ', (1976); p. 409]. Similar view has been expressed by Margaret Brazier. (See: Rodney Brazier 'Constitutional Texts ' (1990) pp.606 607). In Canada, under section 99(1) of the Constitution Act of 1867, the judges of the superior courts hold office during good behaviour, and are removable by the Governor General on address of the Senate and House of Commons. On petition for removal submitted in 1868 and 1874 the matter was referred to a Select Committee of the House. In a third case in 1874 the judge died before any action could be taken on motion for appointment of a Select Committee. Recently in 1966 67, a motion for removal of Mr. Justice Leo Landreville of the Supreme Court of Ontario was moved and in that con nection a Royal Commission consisting of Mr. Justice Ivan C. Rand, a retired judge of the Supreme Court of Canada was appointed under the Inquiries Act R. section C. 1952 C. 154 to conduct an enquiry. After considering the report of the said Commission, a Joint Committee of the Houses recommended removal but the judge resigned while Parliament was prepar ing for his removal by joint address. Thereafter, Judges Act was enacted in 1971 whereby Canadian Judicial Council has been created. The functions of the said Council as set out in section 39(2) include making the enquiries and the investiga tion of complaints or allegations described in section 40. Sec tion 40 provides that the council may conduct an enquiry to determine whether a judge of superior, district or county court should be removed from office and it may recommend to the Minister of Justice of Canada that a Judge should be removed from office. The grounds on which such a recommenda tion can be made are set out in section 41(2) of the Act and they are: (a) age or infirmity, Co) having been 34 guilty of misconduct, (c) having failed in the due execution of his office, or (d) having been placed, by his conduct or otherwise, in a position incompatible with the due execution of his office. (Gall 'The Canadian Legal System ' ( 1983 ); pp. 184 186). In 1 '982 the matter of Mr. Justice Thomas Berger, a Judge of the Supreme Court of British Columbia, was investi gated by the Canadian Judicial Council prompted by certain remarks made by the judge. The Council concluded that the public expression of political views in the nature of those made by Mr. Justice Berger constituted an "indiscretion", but that they were not a basis for a recommendation that he be removed from office and on the basis of the said recom mendation, no further action was taken though Mr. Justice Berger tendered his resignation as a judge a few months later. (See: Gall. ' The Canadian Legal System, (1983) p. 189) 14. Under section 72(ii) of the Commonwealth of Austra lia Constitution Act, 1900, the justices of the High Court and of the other courts created by the Parliament cannot be removed except by the GovernorGeneral in Council, on an address from both Houses of the Parliament in the same session praying for such removal on the ground of proved misbehavior or incapacity. Similar provisions are contained in the Constitutions of the States with regard to removal of Judges of State Courts. Proceedings were initiated for removal of Mr. Justice Murphy of the High Court of Australia in 1984 under section 72(ii) of the Commonwealth of Australia Constitution Act. In connection with those proceedings at first a select Commit tee of the Senate was appointed to enquire and report into the matter. It consisted of six senators drawn from three political parties. The Committee by majority decision (3: 2, one undecided) found no conduct amounting to misbehaviour under section 72(ii). In view of the split vote a second Committee of four senators from the same three political parties was established and it was assisted by two retired judges one from the Supreme Court of Western Australia and the other from Supreme Court of the Australian Capital Territory and the said Committee recorded its finding but the judge did not appear before either of the committees. The judge was also prosecuted before the Central Criminal Court of New South Wales and was found guilty of an attempt to pervert the course of justice but the said verdict was set aside by the Court of Criminal Appeal. Fresh trial was held where under the judge was found not guilty. Thereafter, an ad hoc legislation, namely, Parliamentary Commission of Inquiry Act, 1986 was enacted by the Commonwealth Parliament and a Commission consisting of three retired judges respec tively of Supreme Court of Victoria, Supreme Court of Aus tralia Capital Territory 35 and the Federal Court and Supreme Court of South Australia was constituted to investigate into the allegations of misbehaviour. Before the said commission could give its report, the judge became gravely ill and the Act was re pealed [Lane 's Commentary on the Australian Constitution, (1986) p. 373]. In one other case, proceedings for removal were initiated against Mr. Justice Vasta of the Supreme Court of Queensland and for that purpose, the Queensland Legislature enacted the Parliamentary (Judges) Commission of Inquiry Act, 1988 whereby a commission comprised of three retired judges respectively of the High Court of Australia, Supreme Court of Victoria and the Supreme Court of New South Wales was constituted. In Australia, there has been criticism of the exist ing procedure with regard to removal of judges both by judges as well as by lawyers. Mr. Justice L.J. King, Chief Justice of the Supreme Court of South Australia, has ob served: "The concept of removal by an address of both Houses of Parliament is itself the subject of a good deal of criticism. Curiously, common criticism which are made are contradictory. One criticism is that the necessity for the involvement of the legislature ensures that the procedure will not be used and that the judges therefore have a practical immunity from removal. Removal by this means is cer tainly extremely tare. That may be, however, because in the countries in which this proce dure prevails, conditions are such that a judge who commits a serious act of judicial misconduct would certainly resign. That con sideration, together with the fact that stand ards of judicial conduct are generally very high in those countries, renders removal by the legislature a rarity. The opposite criti cism, however, is that there is no established procedure for the trial of a judge whose removal by the legislature is sought. It is assumed that the legislature would itself institute some form of inquiry at which the judge would be able to defend himself against the accusations, but that would be a matter for the legislature in each case. There are some who fear that a parliamentary majority, encouraged by inflamed public feeling about an unpopular judicial decision, might some day act to remove a judge, without due process. It is at least questionable whether the system of removal by an address of both Houses of Parliament accords to a judge the 30 degree of security which is required by the concept of judicial independence. [ 'Minimum Standards of Judicial Independence ' 1984 (58) ALl 340, at p. 345] Similarly, Mr. Justice M.H. Mclelland of the Supreme Court, of New South Wales has expressed the view: "In lieu of measures of the kinds already discussed, some permanent, and preferably Australia wide, machinery should be provided by legislation for the purpose of establishing an effective procedure for the determination by a judicial tribunal of the existence of misbehaviour or incapacity which could warrant a judge 's removal from office. The design of that ma chinery should be such as to produce as little damage to judicial independence, public confi dence in the judicial system, and the authori ty of the courts, as is consistent with its effective operation. It should also be such as to ensure to a judge both procedural fairness and protection from public vilification or embarrassment pending the making of the deter mination". (Disciplining Australian Judges, at p. 401) Mr. Justice Mclelland has also suggested that the tribu nal should be subject to the supervisory jurisdiction of, and an appeal should lie from the tribunal to, the High Court of Australia. In this context, he has stated: "Furthermore, the protection of judicial tenure and independence which the Act of Settlement provisions were intended to effect, has in the intervening period lost a great deal of its strength. In 1701, the Crown, the House of Lords and the House of Commons were three powerful but relatively independent entities. It was necessary for a judge to incur the displeasure of all three concurrent ly to be at risk of removal under the parlia mentary address procedure. The subsequent development of the party system and cabinet government (especially with modern ideas of strict party discipline) has radically altered the position. In modern times, the executive government and the lower house (and frequently the upper house, where there is one) are effectively under the control of a single individual or cohesive group, so that now a judge may be at risk of removal under the parliamentary address procedure if 37 he or she were to incur the sole displeasure of that individual or group." (Disciplining Australian Judges, 8 8 at p. 402 3) Sir Maurice Byers, former Solicitor General of the Commonwealth has also spoken in the same vein: "A federal system involves a tension between the High Court and the Parliament and the executive. Recent years have seen this in crease because interpretations of the Consti tution have become party dogma. The Court 's constitutional decisions are seen by many of the uninformed and quite a few of the informed as bearing upon party political questions. When, as in the case of Mr. Justice Murphy and to a much less degree Sir Garfield Barwick, a former political figure, hands down a judgment he attracts the animus and often the abuse of some in Parliament. Section 72 of the Consti tution leaves him exposed to the attack of his opponents and the often doubtful support of his former friends. Whether Parliament may itself decide the judicial question of his fitness for office or "proved misbehaviour or incapacity" is at the least doubtful. But the Court should not be exposed to this hazard, A Commission of Judges whose membership rotates is called for." (From the other side of the Bar Table: An Advocates ' view of the Judici ary; , at p. 185). A Constitutional Commission was set up in Australia for suggesting reforms in the Commonwealth Constitution. The said Commission has recommended that provision should be made by amendment to the Commonwealth Constitution for (a) extending the security of tenure provided by section 72 to all judges in Australia, and (b) establishing a national judicial tribunal to determine whether facts found by that tribunal are capable of amounting to misbehaviour or inca pacity warranting removal of a judge from office. (Mclelland 'Disciplining Australian Judges ', , at p. 403) 17. In the United States, the removal of a judge of the U.S. Supreme or a Federal judge is governed by the provisions of the U.S. Constitution wherein Article 11(4) provides for the removal from office of the President, Vice President and all civil officers of the United States on impeachment for, and conviction of, treason, bribery or other high crimes 38 and misdemeanours. Impeachment may be voted by a simple majority of the members of the House of Representatives, there being a quorum on the floor and trial is then held in the Senate, which may convict by a vote of two thirds of the members of the Senate present and voting, there being a quorum. With regard to state judiciary, the process of removal is governed by the State Constitutions. Majority of the States follow the federal pattern an4 provide for im peachment as the normal process of removal of appointed judges. In some States, provision is made for removal by an address of the Governor to both Houses of legislature or by a joint resolution of the legislature. In some States, the removal power is vested in the State Supreme Courts while in some states, special courts are provided to hear removal charges. In the State of New York, the Court is known as the Court on the judiciary. (See Henry J. Abraham: The Judicial Process, 3rd Ed. p.45). For judicial administration at the national level, there is Judicial Conference of the United States which consists of the Chief Justices of the United States, the chief judges of each of the eleven numbered circuits and of the District of Columbia and federal circuits but also, since 1957, a district judge representative from each circuit with the exception of the federal circuit, which lacks a trial court tier. By an Act of the Congress passed in 1932 (incorporated in Title 28 of the U.S. Code) the Judicial Conference is charged with the duty to make a comprehensive survey of the condition of business in the courts; to prepare plans for assignment of judge, ' to or from circuits or districts where necessary; and to submit suggestions and recommendations to the various courts to promote uniformity of management procedures and the expeditious conduct of court business. The work of the Judicial Conference is performed in special committees which include the special committee on judicial ethics. Another Act of Congress passed in 1939 makes provi sion for a judicial council for each circuit composed of circuit judges of the circuit who is empowered to make all necessary orders for the effective and expeditious adminis tration of the business of the courts within its circuit. The mandate of the Judicial Councils embraces the business of the judiciary in its institutional sense (administration of justice), such as avoiding of loss of public esteem and confidence in respect to the court system, from the actions of a judge or other person attached to the courts. The Judicial Councils have exercised the power of review of allegations of misconduct on the part of court personnel, officers and judges. In view of the increased number of judges, who can be removed only by the process of impeach ment, Congress has enacted the Judicial Councils Reform and Judicial Conduct and Disability Act of 1980 whereby the Judicial Councils have been explicitly empowered to receive complaints about judicial 39 conduct opaquely described as "prejudicial to the effective and expeditious administration of the business of the courts, or alleging that such a Judge or magistrate is unable to discharge all the duties of office by reason of mental or physical disability. " It prescribes an elaborate judicilised procedure for processing such complaints within the administrative system of the councils and the Judicial Conference. Should a Council determine that the conduct constitutes grounds for impeachment the case may be certi fied to the Judicial Conference of the United States which may take appropriate action and if impeachment is deemed warranted, the Conference is empowered to transmit the record and its determination to the House of Representa tives. In so far as the States are concerned, all the fifty States have central Institutions for disciplining their judges and in each a variously constituted commission is organised in either a single tier or in many tiers depending on the perceived desirability of separating fact finding from judgment recommendation tasks. Commission recommenda tions are transmitted to the State Supreme Court for its authoritative imprimatur, except in states where they are received by legislatures that retain judicial removal power. (See Robert J.Janosik Encyclopaedia of the American Judicial System, Vol. II pp.575 to 578). This study of the practice prevailing in the above mentioned countries reveals that in Canada, Australia and the United States, the process of removal of a judge incor porates an investigation and inquiry into the allegations of misconduct or incapacity against a judge by a judicial agency before the institution of the formal process of removal in the legislature. England is the only exception where the entire process is in Parliament but there also views are being expressed that it should be replaced by a judicial process of investigation by a judicial tribunal before the matter is taken up by the Houses of Parliament. This is also the trend of the recommendations in the resolu tions adopted by the United Nations General Assembly and international conferences of organisations of lawyers. International Bar Association at its 19th Biennial Conference held at New Delhi in October 1982 adopted Minimum Standards of Judicial Independence. Paras 27 to 32 relating to 'Judicial Removal and Discipline ' are as under: "27.The proceedings for discipline and removal of judges should ensure fairness to the judge, and adequate opportunity for hearing. 40 28. The procedure for discipline should be held in camera. The judge may however request that the heating be held in public, subject to final and reasoned disposition of this request by the Disciplinary Tribunal. Judgments in disciplinary proceedings whether held in camera or in public, may be published. (a) The grounds for removal of judges should be fixed by law and shall be clearly defined. (b) All disciplinary action shall be based upon standards of judicial conduct promulgated by law or in established rules of court. A judge shall not be subject to removal unless, by of a criminal act or through gross or repeated neglect or physical or mental incapacity, he has shown himself manifestly unfit to hold the position of judge. In systems where the power to discipline and remove judges is vested in an institution other than the Legislature, the tribunal for discipline and removal of judges shall be permanent and be composed predominantly of members of the Judiciary. The head of the court may legitimately have supervisory powers to control judges on administrative matters. The First World Conference on the Independence of Justice held at Montreal on June 10, 1983 adopted a UniVer sal Declaration on the Independence of Justice. It relates to international judges as well as national judges. The following paragraphs deal with 'Discipline and Removal ' in relation to national judges: "2.32 A complaint against a judge shall be processed expeditiously and fairly under an appropriate practice, and the judge shall have the opportunity to comment on the complaint at its initial stage. The examination of the complaint at its initial stage shall be kept confidential, unless otherwise requested by the judge. 2.33 (a) The proceedings for judicial removal or discipline, when such are initiated, shall be held before a court or a board predominant ly composed of members of the judiciary and selected by the judiciary. (b) However, the power of removal may be vested in the Legislature by impeachment or joint address, preferably upon a recommenda tion of a court or board as referred to in 2.33(a). 41 [Explanatory Note: In countries where the legal profession plays an indispensable role in maintaining the rule of law and judicial independence, it is recommended that members of the legal profession participate in the selection of the members of the court or board, and be included as members thereof. ] 2.34 All disciplinary action shall be based upon established standards of judicial con duct. 2.35 The proceedings for discipline of judges shall ensure fairness to the judge and the opportunity of a full hearing. 2.36 With the exception of proceedings before the Legislature, the proceedings for disci pline and removal shall be held in camera. The judge may, however, request that the hearing be held in public, subject to a final and reasoned disposition of this request by the Disciplinary Tribunal. Judgments in discipli nary proceedings, whether held in camera or in public, may be published. 2.37 With the exception of proceedings before the Legislature or in connection with them, the decision of a Disciplinary Tribunal shall be subject to appeal to a court. 2.38 A judge shall not be subject to removal except on proved grounds of incapacity or misbehaviour, rendering him unfit to continue in office. 2.39 In the event that a court is abolished judges serving in this court shall not be affected, except for their transfer to another court of the same status. The Seventh United Nations Congress on the Preven tion of Crime and the Treatment of Offenders held at Milan from August 26 to September 6, 1985 adopted the Basic Prin ciples on the Independence of the Judiciary. Paragraphs 17 to 20 dealing with 'Discipline, Suspension and Removal ' are as under: "17.A charge or complaint made against a judge in his/her judicial and professional capacity shall be processed expeditiously and fairly under an appropriate procedure, The judge shall have the right to a fair heating. The examination of the matter at its initial stage shall be kept confidential, unless otherwise requested by the judge. Judges shall be subject to suspension or removal only for reasons of incapacity or behaviour that renders them unfit to 42 discharge their duties. All disciplinary, suspension or removal proceedings shall be determined in accordance with established standards of judicial con duct. Decisions in disciplinary, suspension or removal proceedings should be subject to an independent review. This principle may not apply to the decisions of the highest court and those of the legislature in impeachment or similar proceedings. " The Congress Documents were endorsed by the U.N. General Assembly in its Resolution 40/32 on November 9, 1985 and Resolution 40/ 146 on December 13, 1985. Resolution 40/146 dated December 13, 1985 of the General Assembly specifically welcomed the Basic Principles on the Independence of the Judiciary and invited Government "to respect them and to take them into account within the framework of their nation al legislation and practice" (para 2). Unlike the judges of the Superior courts in England, the judges in the colonies did not enjoy the security of tenure as guaranteed under the Act of Settlement, 1700 and they held office at the pleasure of the Crown. (See: Terrell vs Secretary of State for the Colonies and Another, 1953(2), 482). The position was not different in India till the enactment of Government of India Act, 1935. In Clause (b) of the proviso to sub Section 2 of Section 200 of the said Act which related to judges of the Federal Court, it was pre scribed that "a judge may be removed from his office by order of the Governor General on the ground of misbehaviour or of infirmity of body or mind, if the Judicial Committee of the Privy Council, on reference being made to them, report that the judge ought on any such ground to be re moved". Similar provisions were made with regard to judges of the High Court in Section 220. It would thus appear that prior to the coming into force of the Constitution of India, it was necessary to have a determination by a judicial body about the alleged grounds of misbehaviour or infirmity of mind and body before a judge of the Federal Court or High Court could be removed. Does the Constitution seek to alter this position in a way, as to exclude investigation and proof of misbehaviour or incapacity by a judicial body and to rest the power of removal including the investigation and proof of misbehaviour or incapacity in Parliament alone. Basically, the process of removal or impeachment of a judge is a political process. A learned author in "The Impeachment of the Federal 43 Judiciary: ' [Wrisley Brown Harward Law Review 1912 1913 684 at page 698) says: ". Thus an impeachment in this country, though judicial in external form and ceremony. is political in spirit. It is directed against a political offence. It culminates in a polit ical judgment. It imposes a political forfei ture. In every sense, say that of administra tion, it is a political remedy, for the sup pression of a political evil, with wholly political consequences. This results in no confusion of the political and the judicial powers. The line of demarca tion is clearly discernible even through the labyrinth of formal non essentials under which ingenious counsel in various cases have sought to bury it. The judgment of the High Court of Parliament upon conviction of an impeachment automatically works a forfeiture of political capacity; but this is simply an effect of the judgment, which is to be distinguished from the judgment itself. " Mauro Cappelletti in 'The Judicial Process in Comparative Perspective '[Clarendon Press Oxford 1989 at page 731 says: "Two main features of this accountability type can be identified; first, the fact that ac count has to be given to 'political ' bodies, ultimately to the legislative and/or the executive branches by means of essentially 'po litical ', non judicial processes; second, and perhaps even more characteristically, the fact that account has to be given not, or not primarily, for 'legal ' violations, but rather for behaviour (and this might include private, out of office behaviour) which is evaluated on the basis of 'political ' criteria. Perhaps the best illustration of political accountability can be found in the systems of the common law tradition. In England, judges (like any other officials) can be impeached 'before the House of Lords, at the suit of the House of Commons ', although this practice has fallen into desuetude; moreover, higher court judges can be 'removed from office by the Crown on an address presented to Her Majesty by both Houses of Parliament '. The idea behind this 'address ' procedure is that judges are appointed 'during good behaviour ', hence, they can be removed upon breach of the condition. Misbehaviour includes such situations as 'the case of conviction upon an indictment for any infamous offence of such a nature as to render the 44 person unfit to exercise the office ', but also 'improper exercise of the functions appertain ing to the office, or non attendance, or neglect of or refusal to perform the duties of the office '. Of course the decision of the Houses and the Crown can only be an essential ly political one, not a purely juridical decision, even though we are informed that the removal procedure is subject to some extent 'to the rules of natural justice '. " 24. But the Constitutional scheme in India seeks to achieve a judicious blend of the political and judicial processes for the removal of Judges. Though it appears at the first sight that the.proceedings of the Constituent Assembly relating to the adoption of. clauses, (4) and (5) of Article 124 seem to point to the contrary and evince 'an intention to exclude determination by a judicial process of the correctness of the allegations of misbehaviour or inca pacity on a more careful examination this is not the correct conclusion. In the submissions of the learned counsel who contend against the manifestation of an intention to bring in a judicial element, reliance has been placed on the proceedings of the Constituent Assembly dated July 29, 1947 relating to adoption of Clause 18 of the report of the Union Constitution Committee relating to the Supreme Court. Shri Alladi Krishnaswami Ayyar had moved the said clause subject to modifications and conditions in the said clause which related to appointment and removal of judges of Supreme Court. It was provided that "a judge of the Supreme Court of India shall not be removed from his office except by the President on an address from both the Houses of Parliament of the Union in the same session for such removal on the ground of proved misbehaviour or incapacity. Further provi sion may be made by Federal law for the procedure to be adopted in this behalf '. Shri K. Santhanam had moved an amendment in the said Clause relating to removal of judges and he wanted the last sentence about further provision being made by Federal law for the procedure to be adopted in that behalf, to be omitted. Shri M.Ananthasayanam Ayyanagar proposed amendments suggesting two alternative clauses in the place of the Clause with regard to removal of the judges. In one clause, it was suggested that "a judge may be removed from office on the ground of misbehaviour or infirm ity of mind or body by an address presented in this behalf by both the Houses of the legislature to the President provided that a committee consisting of not less than 7 High Court Chief Justices chosen by the President, investigates and reports that the judge on any such ground be removed". The other alternative clause suggested by Shri M.Anantha sayanam Ayyangar was that "a judge of the Supreme Court may be removed from office by the President on the ground of misbehaviour or of infirmity of mind or body, if on refer ence being made to it (Supreme Court) by the President, a special 45 tribunal appointed by him for the purpose from amongst judges or exjudges of the High Courts or the Supreme Court, report that the" 'judge ought on any such grounds to be removed. " The Constituent Assembly adopted clause 18 with the amendments as proposed by Shri Alladi Krishnaswami Ayyar and rejected the amendments suggested by Shri M. Anantha sayanam Ayyangar. Shri Santhanam did not press his amendment and it was withdrawn. There is no doubt that in the amend ments which were suggested by Shri M.Ananthasayanam Ayyan gar, it was provided that there should be investigation into the allegations of misbehaviour or infirmity by a committee consisting of Chief Justices of the High Courts or the special tribunal consisting of judges or ex judges of the High Court or the Supreme Court, but the rejection of the said amendments moved by Shri Ayyangar does not mean that the Constituent Assembly was not in favour of determination about the correctness of such allegations by judicial body because Shri Alladi Krishnaswami Ayyar, while moving Clause 18 had emphasised the word 'proved misbehaviour ' and had stated: "While the ultimate power may rest with the two Houses, the Clause provides that the charges must be proved. How exactly to prove the charges will be provided for in the Feder al law. We need not be more meticulous or more elaborate, than the people who have tried a similar case in other jurisdictions. I chal lenge my friend to say whether there is any detailed provision for the removal of judges more than that in any other Constitution in the world. The general principle is laid down in the Constitution and later on the Federal law will provide for adequate machinery and that is the import of the clause". . There is sufficient safeguard in the reference "proved misbehaviour" and we might make elabo rate and adequate provision for the way in which ',he guilt could be brought home to a particular judge in any Federal law that may be passed but that is a different matter". "But I do not think that in a Constitution it is necessary to provide de tailed machinery as to the impeachment, the charges to be framed against a particular judge. To make a detailed machinery for all these could be a novel procedure to be adopted in any Constitution". (Constituent Assembly Debates, vols. I to VI at pp. 899 900) 25. Reference was also made to the debates of the Con stituent Assembly dated May 24, 1949 on Article 103 of the Draft Constitution. Shri Tajamul Hnsain moved an amendment in Clause (4) of Article 103 which related to the removal of a judge of Supreme Court and suggested an amendment in the said clause so as to provide that "a judge of the Supreme 46 Court shall not be removed from his office except by an order of the President passed, after a Committee consisting of all the judges of the Supreme Court had investigated the charge and reported on it to the President and etc. " The said amendment was negatived by the Constituent Assembly. (Constituent Assembly Debates, vol. VIII at pp. 243 and 262). The said amendment was similar to those moved by Shri M. Ananthasayanam Ayyangar at the stage of adoption of Clause 18 of the report of the Union Constitution Committee noticed earlier. The reasons which were given by Shri Alladi Krishnaswami Ayyar for opposing the said amendments would apply to this amendment also. The proceedings in the Constituent Assembly, there fore, do not give an indication that in adopting Clauses (4) and (5) of Article 124 of the Constitution, the intention of the Costituent Assembly was to exclude_ investigation and proof of misbehavior or incapacity of the judge sought to be removed, by a judicial body. Having regard to the views expressed by Shri Alladi Krishnaswami Ayyar, who was a member of the Drafting Committee, while opposing the amend ments proposed by Shri M.Ananthasayanam Ayyangar, it is possible to infer that the intention of the Constituent Assembly was that the provision with regard to the machinery for such investigation and proof was a matter which need not be contained in the Constitution and it is a matter for which provision could be made by Parliament by law. This is some of the historical material and back ground on the topic. We may now proceed to consider the merits of the contentions. RE: CONTENTION A: 28. This contention has two aspects: whether a motion for removal of a Judge lapses upon the dissolution of the House of Parliament and secondly, the question whether it so lapses or not is a matter within the exclusive domain and decision of that House itself. On the first aspect, the contention of the learned Attorney General and Shri Kapil Sibal, learned Senior Counsel, are similar. On the second aspect, the learned Attorney General would say that the question whether a motion lapsed or not is to be decided on the basis of the provisions of law guiding the matter and the House itself is not its final arbiter. Learned Attorney General would say that the Court alone has jurisdiction to examine and pronounce on the law of the matter. On the question of lapse reliance was placed on the classic treatise of Erskine May 's "The Law, Privileges, Proceedings and Usage 47 of Parliament" [Twenty first Edition, London Butterworths 1989]. A motion is described as a "proposal made for the purpose of illustrating the decision of the House". Accord ing to Erskine May, certain matters may be raised by only a substantive motion. He says: "Certain matters cannot be debated, except on a substantive motion which allows a distinct decision of the House. Amongst these are the conduct of the sovereign, the heir to the throne or other members of the Royal Family, a Governor General of an independent territory, the Lord Chancellor, the Speaker, the Chairman of Ways and Means, Members of either House of Parliament and judges of the superior courts of the United Kingdom, including persons holding the position of a judge, such as a judge in a court of bankruptcy and a county court, or a recorder. " 30. 'Sri Sibal placed strong reliance on the following statements in M.N.Kaul and S.L.Shakdher in "Practice and Procedure of Parliament" as to the effects of the dissolu tion of the House: "Dissolution, as already stated, marks the end of the life of a House and is followed by the constitution of a new House. Once the House has been dissolved, the dissolution is irrevo cable. There is no power vested in the Presi dent to cancel his order of dissolution and revive the previous House. The consequences of a dissolution are absolute and irrevocable. In Lok Sabha, which alone is subject to dissolu tion under the Constitution, dissolution "passes a sponge over the parliamentary slate". All business pending before it or any of its committees lapses on dissolution. No part of the records of the dissolved House can be carried over and transcribed into the records or registers of the new House. In short, the dissolution draws the final curtain upon the existing House". Adverting to the effect of dissolution on other business such as motions, resolutions etc. , the learned authors say: "All other business pending in Lok Sabha, e.g., motions, resolutions, amendments supple mentary demands for grants etc., at whatever stage, lapses upon dissolution, as also the petitions presented to the House which stand referred to the Committee on Petitions." Learned Attorney General urged that a combined reading of Articles 107, 108 and 109 leads irresistibly to the conclusion that upon dissolution 48 of the House, all bills will lapse subject only to the exception stipulated in Article 108. It is further urged that on first principle also it requires to be accepted that no motion should survive upon the dissolution of the House unless stipulated otherwise under the Rules of Procedure and conduct of business. The doctrine of lapse, it is urged, is a necessary concomitant of the idea that each newly consti tuted House is a separate entity having a life of its own unless the business of the previous House is carried over by the force of statute or rules of procedure. Both the learned Attorney General and Shri Kapil Sibal took us through the Rules of Procedure and Conduct of Business in Lok Sabha made under Article 118 of the Constitution to show that invaria bly all pending business come to an end with the expiry of the term of the House or upon its earlier dissolution. Shri Ram Jethmalani for the petitioner sub committee referred to the conventions of the British Parliament and urged that pending business lapses on prorogation and as a general practice the House is usually prorogued before it is dissolved. Learned counsel said that impeachment motions are sui generous in their nature and that they do not lapse. It is. however, necessary to distinguish the Indian Parliamen tary experience under a written Constitution from the Brit ish conventions. Indeed, referring to the doctrine of lapse this Court in Purushothaman Nambudiri vs The State of Kerala [1962] Suppl. 1 SCR 753 Gajendragadkar J said: ". In support of this argument it is urged that wherever the English parliamentary form of Government prevails the words "prorogation" and "dissolution" have acquired the status of terms of art and their significance and conse quence are well settled. The argument is that if there is no provision to the contrary in our Constitution the English convention with regard to the consequence of dissolution should be held to follow even in India. There is no doubt that, in English, in addition to bringing a session of Parliament to a close prorogation puts an end to all business which is pending consideration before either House at the time of such prorogation; as a result any proceedings either in the House or in any Committee of the house lapse with the session Dissolution of Parliament is invariably pre ceded by. prorogation, and what is true about the result of prorogation" is, it is said, a fortiori true about the result of dissolution. Dissolution of Parliament is sometimes de scribed as "a civil death of Parliament". Ilbert, in his work on 'Parliament ' has ob served that "prorogation means the end of a session (not of a Parliament)"; and adds that "like dissolution, it kills all bills which have not yet passed". He also describes disso lution as an "end of a Parliament (not merely of 49 a session) by royal proclamation", and ob serves that "it wipes the slate clean of all uncompleted bills or other proceedings". "[p.759 & 760]. After referring to the position in England that the dissolution of the House of Parliament brought to a close and in that sense killed all business of the House at the time of dissolution, the learned Judge said: " . . Therefore, it seems to us that the effect of cl. (5) is to provide for all cases where the principle of lapse on dissolution should apply. If that be so, a Bill pending assent of the Governor or President is outside cl. (5) and cannot be said to lapse on the dissolution of the Assembly." [p. 768] " . . In the absence of cl. (5) it would have followed that all pending business, on the analogy of the English convention, would lapse on the dissolution of the Legisla tive Assembly. It is true that the question raised before us by the present petition under Pal. 196 is not free from difficulty but, on the whole, we are inclined to take the view that the effect of cl. (5) is that all cases not falling within its scope are not subject to the doctrine of lapse of pending business on the dissolution of the Legislative Assem bly. In that sense we read cl. (5) as dealing exhaustively with Bills which would lapse on the dissolution of the Assembly. If that be the true position then the argument that the Bill which was pending assent of the President lapsed on the dissolution of the Legislative Assembly cannot be upheld." [P. 769] 31. It is true that Purushothaman Nambudiri case dealt with a legislative measure and not a pending business in the nature of motion. But, we are persuaded to the view that neither the doctrine that dissolution of a House "passes a sponge over parliamentary slate" nor the specific provisions contained in any rule or rules flamed under Article 118 of the Constitution determine the effect of dissolution on the motion for removal of a judge under Article 124. the reason is that Article 124(5) and the law made thereunder exclude the operation of Article 118 in this area. Section 3 of the Act provides: "3(1) If notice is given of a motion for presenting an address to the President praying for the removal of a Judge signed, (a) in the case of a notice given in the House of the People, by not less than one hundred members of that House; 50 (b) in the case of a notice given in the Council of States, by not less than fifty members of that Council; then, the Speaker or, as the case may be, the Chairman may, after consulting such persons, if any, as he thinks fit and after considering such materials, if any, as may be available to him, either admit the motion or refuse to admit the same. (2) If the motion referred to in sub section (1) is admitted, the Speaker or, as the case may be, the Chairman shall keep the motion pending and constitute, as soon as may be, for the purpose of making an investigation into the grounds on which the removal of a Judge is prayed for, a Committee consisting of three members of whom (a) One shall be chosen from among the Chief Justices and other Judges of the Supreme Court; Co) one shall be chosen from among the Chief Justices of the High Courts; and (c) one shall be a person who is, in the opinion of the Speaker or, as the case may be, the Chairman, a distinguished jurist; Proviso &) Omitted Sub sections) as (3) to (9)) unnecessary here. Section 6.(2) provides: "(2) If the report of the Committee contains a finding that the Judge is guilty of any misbe haviour or suffers from any incapacity, then, the motion referred to in sub section (1) of section 3 shall, together with the report of the Committee, be taken up for consideration by the House or the Houses of Parliament in which it is pending. " The effect of these provisions is that the motion shall be kept pending till the committee submits its report and if the committee finds the Judge guilty, the motion shall be taken up for consideration. Only one motion is envisaged which will remain pending. No words of limitation that the motion shall be kept pending subject to usual effect of dissolution of the House can or should be imported. The reason is that a law made by the Parliament and binding on the House can provide against the doctrine of lapse. The law envisaged in article 124(5) is Parliamentary law which is of higher quality and efficacy than rules made by the House for itself under Article 118. Such a law can, and under the present statute does 51 provide against the doctrine of lapse. Further, article 118 expressly states that each House of Parliament may make rules "for regulating, subject to the provisions of this Constitution". In State of Punjab vs Sat Pal Dang & Ors. ; this Court held that the law for purposes of Article 209 (analogues to Article 119) could even take the form of an Ordinance promulgated by the Governor of a State under Article 213 and that wherever there is repugnance between the Rules of Procedure framed under Article 208 (Article 118 in the ease of Parliament), the law made under Article 209 shall prevail. In the constitutional area of removal of a Judge, the law made under Article 124(5) must be held to go a little further and to exclude the operation of the Rules under Article 118. Indeed, no question of repugnance could arise to the extent the field is covered by the law under Article 124(5). Such a view would indeed obviate some anomalies which might otherwise arise. Rajya Sabha is not dissolved and a motion for presentation of address for the removal of the Judge can never lapse there. Section 3 applies to both the Houses of Parliament. The words "shall keep the motion pending" cannot have two different meanings in the two different contexts. It can only mean that the consideration of the motion shall be deferred till the report of the committee implying that till the happening of that event the motion will not lapse. We are of the view that the argument that such a motion lapses with the dissolution of the House of Parliament is not tenable. The second limb of Contention A is that the question whether a motion has lapsed or not is a matter pertaining to the conduct of the business of the House of which the House is the sole and exclusive master. No aspect of the matter, it is contended, is justificiable before a Court. Houses of Parliament, it is claimed, are privileged to be the exclu sive arbiters of the legality of their proceedings. Strong reliance has been placed on the decision in oft quoted decision in Bradlaugh vs Gosserr, There the exclusiveness of parliamentary jurisdiction on a matter related to the sphere where Parliament, and not the Court, had exclusive jurisdiction even if the matters were covered by a statute. But where, as in this country and unlike in England, there is a written constitution which constitutes the funda mental and in that sense a "higher law" and acts as a limi tation upon the Legislature and other organs of the State as grantees under the Constitution, the usual incidents of parliamentary sovereignty do not obtain and the concept is one of 'limited Government '. Judicial review is, indeed, an incident of and flows 52 from this concept of the fundamental and the higher law being the touchstone of the limits of the powers of the various organs of the State which derive power and, authori ty under Constitution and that the judicial wing is the interpreter of the Constitution and, therefore, of the limits of authority of the different organs of the State. It is to be noted that the British Parliament with the Crown is Supreme and its powers are unlimited and courts have no power of judicial review of legislation. This doctrine is in one sense the doctrine of ultra vires in the constitutional law. In a federal set up the judiciary becomes the guardian of the Constitution. Indeed, in A.K. Gopalan vs The State of Madras, ; Arti cle 13 itself was held to be ex abundante cautela and that even in its absence if any of the fundamental rights were infringed by any legislative enactment, the court had always power to declare the enactment invalid. The interpretation of the Constitution as a legal instrument and its obligation is the function of the Courts. "It is emphatically the province and duty of the judicial department to say what the law is". In Re: Special Reference Case; , Gajendragadkar, CJ said: ". .though our Legislatures have plenary powers, they function within the limits pre scribed by the material and relevant provi sions of the Constitution. In a democratic country governed by a written Constitution, it is the Constitution which is supreme and sovereig. . " But it is the duty of this Court to interpret the Con stitution for the meaning of which this Court is final arbiter. Shri Kapil Sibal referred us to the following obser vations of Stephen J. in Bradlaugh vs Gosserr, supra: ". It seems to follow that the House of Commons has the exclusive power of interpret ing the statute, so far as the regulation of its own proceedings within its own walls is concerned; and that even if that interpreta tion should be erroneous, this court has no power to interfere with it directly or indi rectly. " [p. 280 & 281] ". The House of Commons is not a Court of Justice; but the effect of its privilege to regulate its own internal concerns practically invest it with the judicial character when it has to apply to particular cases the provi sions of Acts of Parliament. 53 We must presume that it discharges this func tion properly and with due regard to the laws, in the making of which it has so great a share. If its determination is not in accord ance with law, this resembles the case of an error by a judge whose decision is not subject to appeal. There is nothing startling in the recognition of the fact that such an error is possible. If, for instance, a jury in a crimi nal case gives a perverse verdict, the law has provided no remedy. The maxim that there is no wrong without a remedy does not mean, as it is sometimes supposed, that there is legal remedy for every moral or political wrong. . " [p. 285] The rule in Bradlaugh vs Gossett, supra, was held not applicable to proceedings of colonial legislature governed by the written constitutions Barton vs Taylor, and Redillusion (Hong Kong) Ltd. vs Attorney General of Hong Kong, ; The principles in Bradlaugh is. that even a statutory right if it related to the sphere where Parliament and not the courts had exclusive jurisdiction would be a matter of the Parliament 's own concern. But the principle cannot be extended where the matter is not merely one of procedure but of substantive law concerning matters beyond the Parliamen tary procedure. Even in matters of procedure the constitu tional provisions are binding as the legislations are en forceable. Of the interpretation of the Constitution and as to what law is the Courts have the constitutional duty to say what the law is. The question whether the motion has lapsed is a matter to be pronounced upon the basis of the provisions of the Constitution and the relevant laws. In deed, the learned Attorney General submitted that the ques tion whether as an interpretation of the constitutional processes and laws, such a motion lapses or not is exclu sively for the courts to decide. The interpretation of the laws is the domain of the courts and on such interpretation of the constitutional provisions as well as the , it requires to be held that under the law such a motion does not lapse and the Courts retain jurisdiction to so declare. Contention A is answered accordingly. RE: CONTENTIONS (B), (C) AND (D): 34. These contentions have common and over lapping areas and admit of being deal with and disposed of together. On tile interpretative criteria apposite to the true meaning and scope of Articles 121, 124(4) and 124(5), indeed, three constructional options become avail able: 54 First: The entire power for taking all steps for the removal of a Judge, culminating in the presentation of an address by different Houses of Parliament to the Presi dent, is committed to the two Houses of Par liament alone and no initiation of any investigation is possible without the initiative being taken by the Houses them selves. No law made by Parliament under Article 124(5) could take away this power. The bar of Article 121 is lifted the moment any Member of Parliament gives notice of motion for the removal of a Judge and the entire allegations levelled by him would be open for discussion in the House itself. It will be for the majority of the Members of the House t decide if and how they would like to have the allegations investigated. Any abridging this power is bad. Second: Since a motion for presenting an address to the President referred to in Arti cles 121 and 124 (4) has to be on ground of "proved" misbehaviour and incapacity, no such motion can be made until the allegations relating to misbehaviour or incapacity have first been found to be proved in some forum outside either Houses of Parliament Law under Article 124(5) is mandatory and until the Parliament enacts a law and makes provision for an investigation into the alleged misbeha viour or incapacity and regulates the proce dure therefor, no motion for removal of a Judge would be permissible under Article 124(4) and the House of Parliament would not be brought into the picture till some authori ty outside the two Houses of Parliament has recorded a finding of misbehaviour or incapac ity. The emphasis is on the expression 'proved '. Third: That Article 124(5) is only an enabling provision and in the absence of any enactment by the Parliament under that provi sion it would be open to either House to entertain a motion for the removal of a Judge. However, it is open to the Parliament under Article 124(5) to enact a law to regulate the entire procedure starting with the investiga tion of the allegations against the Judge concerned and ending with the presentation of the address by the two Houses of Parliament. It would be open to the Parliament to desig nate any authority of its choice for investi gating the allegations and also to regulate the 55 procedure for the consideration of the matter in either House. As soon as a law has been enacted all its provisions would be binding on both Houses of Parliament and would even override any Rules flamed by the two Houses under Article 118 of the Constitution. It will not be permissible for either House to act contrary to the provi sions of such Act. The question as to when and in what circumstances motion would be allowed to be moved in either House of Parliament to lift the ban against the discussion of conduct of a Judge under Article 121 would be accord ing to such Act of Parliament. In regard to the first and the second alternative propo sitions, the deliberations of the Joint Select Committee would indicate a sharp divide amongst the eminent men who gave evidence. Particularly striking is the sharp contrast between the opinions of Mr. K.K. Shah and Mr. M.C. Setalvad. The first view would tend to leave the matter entirely with the House, which can adopt any procedure even differing from case to case. The matter would be entirely beyond judicial review. Then there is the inevitable ' element of political overtone and of contemporary political exacerbations arising from inconvenient judicial pronouncements thus endangering judicial independence. The third view would suffer from the same infirmities except that Parliament might itself choose to discipline and limit its own powers by enacting a law on the subject. The law enacted under Article 124(5) might be a greatly civi lized piece of legislation deferring to values of judicial independence. But then the Parliament would be free to repeal that law and revert hack to the position reflected in the first view. The third view can always acquire back the full dimensions of the first position at the choice of the Parliament. The second view has its own commendable features. It enables the various provisions to be read harmoniously and, together, consistently with the cherished values of judicial independence. It also accords due recognition to the word "proved" in Article 124(4). This view would also ensure uniformity of procedure in both Houses of Parliament and serve to eliminate arbitrariness in the proceedings for removal of a Judge. It would avoid duplication of the inves tigation and inquiry in the two Houses. Let us elaborate on this. 56 36. Article 121 ,and the material parts of Article 124 read as under: "121. Restriction on discussion in Parlia ment. No discussion shall take place in Parliament with respect to the conduct of any Judge of the Supreme Court or of a High Court in the discharge of his duties except upon a motion for presenting an address to the Presi dent praying for the removal of the Judge as hereinafter provided. Establishment and constitution of Supreme Court. (1). . . . . . (2) Every Judge of the Supreme Court shall be appointed by the President by warrant under his hand and seal after consultation with such of the Judges of the Supreme Court and of the High Courts in the States as the President may deem necessary for the purpose and shall hold office until he attains the age of sixty five years: Provided that in the case of appointment of a Judge other than the Chief Justice of India shall always be consulted: Provided further that (a) a Judge may, by writing under his hand addressed to the President, resign his office; (b) a Judge may be removed from his office in the manner provided in clause (4). (4) A Judge of the Supreme Court shall not be removed from his office except by an order of the President passed after an address by each House of Parliament supported by a majority of not less than two thirds of the members of that House present and voting has been pre sented to the President in the same session for such removal on the ground of proved misbehaviour or incapacity. (5) Parliament may by law regulate the proce dure for the presentation of an address and for the investigation and proof of the misbe haviour or incapacity of a Judge under clause (4). " Article 121 suggests that the bar on discussion in Parliament with respect to the conduct of any Judge is lifted 'upon a motion for presenting an address to the President praying for the removal of a Judge as hereinaf 57 provided '. The word 'motion ' and 'as hereinafter provid ed ' are obvious references to the motion for the purpose of clause (4) of Article 124 which in turn, imports the concept of "proved" misbehaviour or incapacity. What lifts the bar under Article 121 is the 'proved ' misbehaviour or incapaci ty. Then arises the question as to how the investigation and proof of misbehaviour or incapacity preceding the stage of motion for removal on the ground of "proved" misbehaviour or incapacity under Article 124(4) is to be carried on. Clause (5) of Article 124 provides for enactment of a law for this purpose. The seminal question is whether clause (5) is merely an enabling provision particularly in view of the use of the word 'may ' therein, or it incorporates a condition precedent on the power of removal of the parliament. In other words, can the function of removal under Article 124(4) be per formed without the aid of a law enacted under clause (5)?If it can be, then the power for investigation and proof of misbehaviour or incapacity of a Judge must be found in clause (4) itself and the scope of clause (5) limited only to enactment of a law for this limited purpose if the Par liament so desires and not otherwise. The other view is that clause (5) contains a constitutional limitation on the power of removal contained in clause (4) so that it can be exer cised only on misbehaviour or incapacity "proved" in accord ance with the law enacted under clause (5). In such situa tion, the power of the Parliament would become available only for enacting the law under clause (5) and if misbeha viour or incapacity is "proved" in accordance with such law. The motion which lifts the bar contained in Article 121 is really a motion for such removal under clause (4) of Article 124 moved in the House after the alleged misbehavior or incapacity has been proved in accordance with the law enact ed by the Parliament under clause (5) of Article 124. In this connection, the parliamentary procedure commences only after proof of misbehaviour or incapacity in accordance with the law enacted under clause (5), the machinery for investi gation and finding of proof of the misbehaviour or incapaci ty being statutory. governed entirely by provisions of the law enacted under clause (5). This also harmonises Article 121. The position would be that an allegation of misbeha viour or incapacity of a Judge has to be made, investigated and found proved in accordance with the law enacted by the Parliament under Article 124(5) without the Parliament being involved upto that stage; on the misbehaviour or incapacity of a Judge being found proved in the manner provided by that law, a motion for presenting an address to the President for removal of the Judge on that ground would be moved in each House under Article 124(4); on the motion being so moved after the proof of misbehaviour or incapacity and it being for presenting an address to the President praying for removal of the Judge, the bar. on 58 discussion contained in Article 121 is lifted and discussion can take place in the Parliament with respect to the conduct of the Judge; and the further consequence would ensue de pending on the outcome of the motion in a House of Parlia ment. If, however, the finding reached by the machinery provided in the enacted law is that the allegation is not proved, the matter ends and there is no occasion to move the motion in accordance with Article 124(4). If it be accepted that clause (4) of Article 124 by contains the complete power of removal and the enactment of a law under clause (5) is merely enabling and not a consti tutional limitation on the exercise of the power of removal under clause (4), then some other questions arise for con sideration. If clause (5) is merely an enabling provision, then it cannot abridge the scope of the power in clause (4) and, therefore, the power of a House of Parliament under clause (4) cannot be curtailed by a mere enabling law enact ed under clause (5) which can be made only for the purpose of aiding or facilitating exercise of the function under clause (4). In that situation, enactment of the enabling law under clause (5) would not take the sphere covered by the law outside the ambit of Parliament 's power under clause (4). The argument that without enactment of the law under clause (5), the entire process from the time of initiation till presentation of the address to the President, including investigation and proof of the misbehaviour or incapacity, is within the sphere of Parliament, but on enactment of a law under clause (5) that area is carved out of the Parlia ment 's sphere and assumes statutory character appears tenu ous. If the argument were correct, then clause (5), would merely contemplate a self abnegation. The other view is that clause (4) of Article 124 gives power to the Parliament to act for removal of the Judge on the ground of proved misbehaviour or incapacity in the manner prescribed if the matter is brought before it at this stage; and for reaching that stage the Parliament is required to enact a law under clause (5) regulating the procedure for that purpose. This means that making of the allegation, initiation of the proceedings, investigation and proof of the misbehaviour or incapacity of a Judge are governed entirely by the law enacted by the Parliament under clause (5) and when that stage is reached, the Parliament comes into the picture and the motion for removal of the Judge on the ground of proved misbehaviour or incapacity is moved for presentation of the address to the President in the manner prescribed. The matter not being before the Parliament prior to this stage is also indicated by Article 121 which lifts the bar on discussion in Parliament only upon a motion for presenting an address to the President as provided later in Article 124(4). The bar in 59 Article 121 applies to discussion in Parliament but investi gation and proof of misconduct or incapacity cannot exclude such discussion. This indicates that the machinery for investigation and proof must necessarily be outside Parlia ment and not within it. In other words, proof which involves a discussion of the conduct of the Judge must be by a body which is outside the limitation of Article 121. The word 'proved ' also denotes proof in the manner understood in our legal system i.e. as a result of a judicial process. The policy appears to be that the entire stage upto proof of misbehaviour or incapacity, beginning with the initiation of investigation on the allegation being made, is governed by the law enacted under Article 124(5) and in view of the restriction provided in Article 121, that machinery has to be outside the Parliament and not within it. If this be so, it is a clear pointer that the Parliament neither has any role to play till misconduct or incapacity is round proved nor has it any control over the machinery provided in the law enacted under Article 124(5). The Parliament comes in the picture only when a finding is reached by that machinery that the alleged misbehaviour or incapacity has been proved. The enacted under Article 124(5) itself indicates that the Parliament so understood the integrated scheme of Articles 121, 124(4) and 124(5). The general scheme of the Act conforms to this view. Some ex pressions used in the Act, particularly sections 3 and 6 to suggest that the motion is initiated in the House or is kept pending in the House during investigation can be reconciled, if this Constitutional Scheme is accepted. Those expressions appear to have been used since the authority tO entertain the complaint is 'Speaker/Chairman ', the complaint is de scribed as 'motion ' and the complaint can be made only by the specified number of Members of Parliament. In substance it only means that the specified number of M.Ps. alone can make such a complaint; the complaint must be made to the 'Speaker/Chairman '; on receiving such a complaint if the Speaker/Chairman form the opinion that there is a prima facie case for investigation, he will constitute the judi cial committee as prescribed; and if the finding reached is 'guilty ' then the Speaker/Chairman commences the parliamen tary process in accordance with Article 124(4) for removal of the Judge and the bar in Article 121 is lifted. If this be the correct position, then the validity of law enacted by the Parliament trader clause (5) of Arti cle 124 and the stage upto conclusion of the inquiry in accordance with that law being governed entirely by statute would be open to judicial review as the parliamentary proc ess under Article 124(4) commences only after a finding is recorded that the alleged misbehaviour or incapacity is proved in the inquiry conducted in accordance with the law enacted under clause (5). For this reason the argument based on exclusivity of Parliament 's jurisdiction over 60 the process and progress of inquiry under the Judges (in quiry) Act, 1968 and consequently exclusion of this Court 's jurisdiction in the matter at this stage does not arise. For the same reason, the question of applying the doctrine of lapse to the motion made to the Speaker giving rise to the constitution of the Inquiry Committee under the Act, also does not arise and there can be no occasion for the House to say so at any time. If the House is, therefore, not required to consider this question since the parliamentary process can commence only after a finding of guilt being proved, the further question of a futile writ also does not arise. The argument that the House can decide even after a finding of guilt that it would not proceed to vote for removal of the Judge is not germane to the issue since that is permissible in the Constitutional Scheme itself under Article 124(4) irrespective of the fact whether Article 124(5) is a mere enabling provision or a constitutional limitation on the exercise of power under Article 124(4). It is not the law enacted under Article 124(5) which abridges or curtails the parliamentary process or exclusive ly of its jurisdiction but the Constitutional Scheme itself which by enacting clauses (4) and (5) simultaneously indi cated that the stage of clause (4) is reached and the proc ess thereunder commences only when the alleged misbehaviour or incapacity is proved in accordance with the law enacted under clause (5). It is only then that the need for discussing a Judge 's conduct in the Parliament arises and, therefore, the bar under Article 121 is lifted. in short, the point of time when the matter comes first before the Parliament in the Constitutional Scheme, Article 121 provides that the bar is lifted. The other view creates difficulties by restricting discussion in Parliament on a motion which would be before it. The suggestion to develop a convention to avoid discus sion at that stage or to prevent it by any other device adopted by the Speaker after admitting the motion, does not appear to be a satisfactory solution or explanation. That this obvious situation could have been left unprovided for and the field left to a convention to be developed later, while enacting these provisions with extreme care and cau tion in a written Constitution, is extremely unlikely. This indicates that this area is not left uncovered which too is a pointer that the stage at which the bar in Article 121 is lifted, is the starting point of the parliamentary process i.e. when the misbehaviour or incapacity is proved; the stage from the initiation of the process by ' making the allegation, its mode, investigation and proof are covered by the law enacted under clause (5); in case the allegation is not proved, the condition precedent to invoke the Parlia ment 's jurisdiction under clause (4), does not exist, which is the reason for section 6 of 1968 Act saying so; and in case it is proved, the 61 process under clause (4) commences, culminating in the result provided in it. In Part V of the Constitution relating to 'The Union ', Article 124 is in 'Chapter IV The Union Judiciary ' while Articles 118 and 119 relating to Parliament 's power to make rules or enact a law to regulate its procedure and the conduct of its business are in 'Chapter II Parliament ' under the heading 'Procedure Generally ' wherein Article 121 also finds place. The context and setting in which clause (5) appears along with clause (4) in Article 124 indicate its nature connected with clause (4) relating to curtailment of a Judge 's tenure, clause (4) providing the manner of removal and clause (5) the pre requisite for removal distin guished from Articles 118, 119 and 121, all of which relate to procedure and conduct of business in Parliament. Article 124(5) does not, therefore, operate in the same field as Article 118 relating to procedure and conduct of business in Parliament. Accordingly, the scheme is that the entire process of removal is in two parts the first parts under clause (5) from initiation to investigation and proof of misbehaviour or incapacity is covered by an enacted law, Parliament 's role being only legislative as in all the laws enacted by it; and the second part only after proof under clause (4) is in Parliament, that process commencing only on proof in accordance with the law enacted under clause (5) Thus the first part is entirely statutory while the second part alone is the parliamentary process. The Constitution intended a clear provision for the first part covered fully by enacted law, the validity of which and the process thereunder being subject to judicial review independent of any political colour and after proof it was intended to be a parliamentary process. It is this synthesis made in our Constitutional Scheme for removal of a Judge. If the motion for presenting an address for removal is envisaged by Articles 121 and 124(4) 'on ground of proved misbehaviour or incapacity ' it presupposes that misbehaviour or incapacity has been proved earlier. This is more so on account of the expression 'investigation and proof used in clause (5) with specific reference to clause (4). This indicates that 'investigation and proof ' of misbehaviour or incapacity is not within clause (4) but within clause (5). Use of the expression 'same session ' in clause (4) without any reference to session in clause (5) also indicates that session of House has no significance for clause (5) i.e., 'investigation and proof ' which is to be entirely governed by the enacted law and not the parliamentary practice which may be altered by each Lok Sabha. 62 45.The significance of the word 'proved ' before the expression 'misbehaviour or incapacity ' in clause (4) of Article 124 is also indicated when the provision is compared with Article 317 providing for removal of a member of the Public Service Commission. The expression in clause (1) of Article 317 used for describing the ground of removal is 'the ground of behaviour ' while in clause (4) of Article 124, it is, 'the ground of proved misbehaviour or incapaci ty '. The procedure for removal of a member of the Public Service Commission is also prescribed in clause (1) which provides for an inquiry by the Supreme Court on a reference made for this purpose. In the case of a Judge, the procedure for investigation and proof is to be in accordance with the law enacted by the Parliament under clause (5) of Article 124. In view of the fact that the adjudication of the ground of misbehaviour under Article 317 (1) is to be by the Su preme Court, in the case of a Judge who is a higher consti tutional functionary, the requirement of judicial determina tion of the ground is re inforced by the addition of the word 'proved ' in Article 124(4) and the requirement of law for this purpose under Article 124(5). Use of the word 'may ' in clause (5) indicates that for the 'procedure for presentation of address ' it is an enabling provision and in the absence of the law the general procedure or that resolved by the House may apply but the 'investigation and proof ' is to be governed by the enacted law. The word 'may ' in clause (5) is no impediment to this view. On the other hand, if the word 'shall ' was used in place of 'may ' in clause (5) it would have indicated that it was incumbent on the Parliament to regulate even the proce dure for presentation of an address by enacting such a law leaving it no option even in the matter of its procedure after the misbehaviour or incapacity had been investigated and found true. 'Sometimes, the legislature uses the word "may" out of deference to the high status of the authority on whom the power and the obligation are intended to be conferred and imposed. ' (See: State of Uttar Pradesh vs Joginder Singh; , at 202. Indeed, when a provision is intended to effectuate a right here it is to effectuate a constituational protection to the Judges under Article 124 (4) even a provision as in Article 124 (5) which may otherwise seem merely enabling, becomes mandatory. The exercise of the powers is rendered obligatory. In Fred eric Guilder julius vs The Right Rev. The Lord Bishop of Oxford; the Rev. Thomas Tellsson Carter, [1879 80] 5 A.C. 214 at p. 24zt, Lord Blackburn said: ,.The enabling words are construed as compulsory whenever the object of the power is to effectuate a legal right. " 63 In Punjab Sikh Regular Motor Service, Moudhapura vs The Regional Transport ,Authority, Raipur & Anr, ; , this Court referring to the word 'may ' in Rule 63 (a) in Central Provinces and Berar Motor Vehicles Rules, 1940, observed: ". On behalf of the appellant attention was drawn to the expression 'may ' in Rule 63. But in the context and the language of the rule the word 'may ' though permissive in form, must be held to be obligatory. Under Rule 63 the power to grant renewal of the counter signa ture on the permit in the present case is conferred on the Regional Transport Authority, Bilaspur. The exercise of such power of renew al depends not upon the discretion of the authority but upon the proof of the particular cases out of which such power arises. 'Ena bling words are construed as compulsory when ever the object of the power is to effectuate a legal right '. (See: Julius vs Bishop of Oxford, 5 A.C. 214, 244). " If the word 'may ' in Article124 (5) is given any other meaning that sub Article would render itself, to be treated by the Parliament, as superfluous, redundant and otiose. The power to prescribe a procedure for the exercise of power under Article 124 (4) could otherwise also be available to the House. The law envisaged under Article 124(5) is not such a law; but one which would effectuate the constitution al policy and philosophy of the machinery for removal of Judges. The use of the word 'may ' does not, therefore, neces sarily indicate that the whole of clause (5) is an enabling provision leaving it to the Parliament to decide whether to enact a law even for the investigation and proof of the misbehaviour or incapacity or not. The mere fact that clause (5) does not form a part of clause (4) itself, as appears to have been considered at one stage when the constitution was being drafted, does not reduce the significance or content of clause (5). It is likely that the framers of the Constitution thought of clearly demarcating the boundaries and, therefore, indicated that upto the stage of proof of misbehaviour of incapacity the field is covered by a law enacted by the Parliament, the first pan being covered by clause (5) and the latter by clause (4) with the only difference that the Parliament was given the option to regulate even the procedure for the presentation of an address after the misbehaviour or inca pacity had been proved by enacting a law for the purpose to make it more definite and consistent. 64 48. Similarly, use of word 'motion ' to indicate the process of investigation and proof in the because the allegations have to be presented to the 'Speaker ' does not make it 'motion in the House ' not withstanding use of that expression in Section 6. Otherwise, section 6 would not say that no further step is to be taken in case of a finding of 'not guilty '. It only means that when the allegation is not proved, the Speaker need not commence the process under clause (4) which is started only in case it is proved. The Speaker is, therefore, a statutory authority under the Act chosen because the further process is parliamentary and the authority to make such a complaint is given to Members of Parliament. Moreover, to the enact ment under Article 124(5) cannot be a safe guide to deter mine the scope of Article 124(5). If this construction of the inter connection amongst Articles 118,121, 124 (4) and 124 (5) is the proper one to be placed on them, as indeed we so do, the provisions of the do not foul with the Constitutional Scheme. On scope of the law under Article 124(5), the idea of regulating procedure for (i) Presentation of the address; (ii) Investigation and proof of misbehaviour or incapacity admit of two possible options of interpretation. The idea of "Presentation of the address" may be confined to the actual presentation of address by both Houses of the Parliament; or may be held to cover the entire process from initiation by the motion in the House till the final act of delivery of the address. If the first view is correct the law under Article 124(5) would apply at the stage of investigation and proof of misbehaviour or incapacity and at the final stage of presentation of address after the motion is adopted by both the Houses. The motion and its consideration and adop tion by the House would be outside the ambit of such law and it would be regulated by the rule of procedure made under Article I 18. This view is too narrow. By bringing in the rules of procedure of the House made under Article 118 it introduces an element of uncertainty and might affect inde pendence of the judiciary. Second view is to be preferred. It enables the entire process of removal being regulated by a law of Par liament ensures uniformity and reduces chances of arbi trariness. Article I 18 is a general provision conferring on each House of Parliament the power to make its own rules of procedure. These rules are not binding on the House and can be altered by the House at any time. A breach of such rules amounts to an irregularity and is not subject to judicial review in view of Article 122. Article 124(5) is in the nature of a special provi sion intended to regulate the procedure for removal of a Judge under Article 124(4) which 65 iS not a part of the normal business of the House but is in the nature of special business. It covers the entire field relating to removal of a Judge. Rules made under Article 118 have no application in this field. Article 124(5) has no comparison with Article 119. Articles 118 and 119 operate in the same field viz. normal business of the House. It was, therefore, necessary to specifically prescribe that the law made under Article 119 shall prevail over the rules of procedure made under Article 118. Since Article 118 and 124(5) operate in different fields a provision like that contained in Article 119 was not necessary and even in the absence of such a provision, a law made under Article 124 (5) will override the rules made under Article 118 and shall be binding on both the Houses of Parliament. A violation of such a law would constitute illegality and could not be immune from judical scrutiny under Article 122(1). Indeed, the Act reflectS the constitutional philoso phy of both the judicial and political elementS of the process of removal. The ultimate authority remains with the Parliament in the sense that even if the Committee for investigation records a finding that the Judge is guilty of the charges it is yet open to the Parliament to decide not to present an address to the President for removal. But if the Committee records a finding that the Judge is not guilty, then the political element in the process of removal has no further option. The law is, indeed, a civilised piece of legislation reconciling the concept of accountability of Judges and the values of judicial independence. Indeed, the dissenting note of Dr. L.M. Singhvi, in the Report of the Joint Committee on the Judges (Inquiry) Bill, 1964 brings into sharp focus the thrust of the report of the majority. It is to be recalled that the 1964 Bill vested the power to initiate the process of removal with the Executive. That was found objectionable and inconsistent with the idea of judicial independence. However, as to the nature of the authority which was the repository of the power to investigate, the dissenting opinion, by necessary implication, emphasises the majority view which ultimately became the law. Dr. Singhvi in his dissent says: "10. The present Bill seeks to provide only the modality of a tribunal clothed in the nomenclature of a Committee. The Committee contemplated in the Bill may well be consid ered a tribunal or an "authority" within the meaning of Articles 226 and 227 of the Consti tution, rendering itS work subject to judicial review and supervision. What is more, the Parliament is not left with any choice in the matter and procedure of parliamen 66 tary committee has been wholly excluded. With this I am not in agreement. In both these matters in respect of which I have dissented from my esteemed colleagues in the Joint Select Committee, there appears to be an imprint on the provisions of the Bill of the now defunct Burmese Constitution, which provided that a notice of such resolution should be signed by not less than one fourth of the total membership of either Chamber of Parliament and further that the charge would be investigated by a special tribunal (section 143 of the Burmese Constitution). In the Burmese case, the special tribunal was to consist of the President or his nominee and the Speakers of the Chamber of Nationalities and the Cham ber of Deputies. I feel that the Burmese analogue is neither inspiring nor instructive, and that the more highly evolved procedures of other democratic constitutions which have been tried and tested for centuries would have served us better". Our conclusions, therefore, on contentions B, C and D are as under: The constitutional process for removal of a Judge upto the point of admission of the motion, constitution of the Committee and the recording of findings by the Committee are not, strictly, proceedings in the Houses of Parliament. The Speaker is a statutory authority under the Act. Upto that point the matter cannot be said to remain outside the Court 's jurisdiction. Contention B is answered accordingly. Prior proof of misconduct in accordance with the law made under Article 124(5) is a condition precedent for the lifting of the bar under Article 121 against discussing the conduct of a Judge in the Parliament. Article 124 (4) really becomes meaningful only with a law made under Article 124(5). Without such a law the constitutional scheme and process for removal of a Judge remains inchoate. Contention C is answered accordingly. The Speaker while admitting a motion and constituting a Committee to investigate the alleged grounds of misbehaviour or incapacity does not act as part of the House. The House does not come into the picture at this stage. The provisions of the are not unconstitutional as abridging the powers and privileges of the House. The is constitutional and is intra vires. Contention D is disposed of accordingly. 67 RE: CONTENTION (E) 56. It is urged by Shri Sibal that having regard to the serious consequences that flow from the admission of a motion by the Speaker and the decision to constitute a Committee for investigation, it is incumbent upon the Speak er to afford an opportunity to the Judge of being heard before such a decision is taken. It is urged that such decision has momentous conseqences both to the Judge and to the judicial system as a whole and that any politically motivated steps to besmear a Judge will not merely affect the Judge himself but also the entire system of administra tion of justice. If a motion brought up with collateral and oblique motives, it would greatly advance the objects and purposes of if the Judge con cerned himself is heard before a decision to admit a ,"notion which has shattering consequences so far as the Judge is concerned is taken. The minimum requirements of natural justice, appropriate in the context, says learned counsel, require that the Judge should have an opportunity of being heard. Shri Jethmalani, on the contrary, contended that it would be highly inappropriate that the Speaker should issue notice to a Judge and call upon him to appear before the Speaker. That apart, Shri Jethmalani said at that stage of the proceedings where the Speaker merely decides that the matter might bear investigation no decisions affecting the rights, interests or legitimate expectation can be said to have been taken. Shri Jethmalam sought to point out that these proceedings could not be equated with disciplinary or penal proceedings. The Speaker does not decide anything against the Judge at that stage. Referring to the nature and purpose of such preliminary proceedings Corpus Juris Secundum (Vol. 48A) says: "As a general rule, disciplinary or removal proceedings relating to Judges are sui generis and are not civil or criminal in nature; and their purpose is to inquire into judical conduct and thereby maintain standards of judicial fitness". [p.614] As to the stage at which there is a need for notice and opportunity to the Judge to be heard the statement of the law is: "The general rule is that before a Judge may be disciplined, as by removal, he is entitled to notice and an opportunity to defend even though there is no statute so requiring. Ordinarily, 68 the right to defend is exercised in a trial or hearing, as considered infra 51. More specifi cally the Judge is entitled to notice of the particular charges against him. In addition, notice of the charge should be given suffi ciently in advance of the time for presenting a defence to permit proper preparation of a showing in opposition". (pp. 613 614) But negativing the position that the Judge would be entitled to notice even at the preliminary stage it is stated: "Investigations may be conducted into matters relating to judicial conduct as a preliminary to formal disciplinary proceedings. A judiciary commission may conduct an investi gation into matters relating to judicial conduct as a preliminary to formal discipli nary proceedings, and a court may, under its general powers over inferior courts, appoint a special commissioner to preside over a prelim inary investigation. A court rule providing that a Judge charged with misconduct should be given a reasonable opportunity in the course of a preliminary investigation to present such matters as he may choose, affords him more protection than is required by constitutional provisions". [p. 615] 58. The position is that at the stage of the provisions when the Speaker admits the motion under section 3 of the , a Judge is not, as a matter of right, entitled to such notice. The scheme of the statute and rules made thereunder by necessary implication, exclude such a right. But that may not prevent the Speaker, if the facts and circumstances placed before him indicate that hearing the Judge himself might not be inappropriate, might do so. But a decision to admit the motion and constitute a Commit tee for investigation without affording such an opportunity does not, by itself and for that reason alone, vitiate the decision. Contention E is disposed of accordingly. RE:CONTENTION (F) 59. The substance of this contention as presented by the learned counsel for the petitioner, "Sub Committee" argued with particular emphasis by Shri R.K. Garg is that the constitutional machinery for removal of a Judge is merely a political remedy for judicial misbehaviour 69 and does not exclude the judicial remedy available to the litigants to ensure and enforce judicial integrity. It is urged that the right to move the Supreme Court to enforce fundamental rights is in itself a fundamental right and that takes within its sweep, as inhering in it, the right to an impartial judiciary with persons of impeccable integrity and character. Without (his the fundamental right to move court itself becomes barren and hollow. It is urged that the court itself has the jurisdiction nay a duty to ensure the integrity and impartiality of the members composing it and restrain any member who is found to lack in those essential qualities and attainments at which public confidence is built. It is true that society is entitled to expect the high est and most exacting standards of propriety in judicial conduct. Any conduct which tends to impair public confidence in the efficiency integrity and impartiality of the court is indeed forbidden. In Corpus Juris Secundum (Vol. 48A) refer ring to the standards of conduct, disabilities and privi leges of Judges, it is observed: "The State which creates a judicial office may set appropriate standards of conduct for a Judge who holds that office, and in many jurisdictions, courts acting within express or implied powers have adopted or have followed certain canons or codes of judicial conduct. The power of a particular court in matters of ethical supervision and the maintenance of standards for the judiciary may be exclusive. Guidelines for judicial conduct are found both in codes of judicial conduct and in general moral and ethical standards expected of judi cial officers by the community. Canons or codes are intended as a statement of general principles setting forth a wholesome standard of conduct for judges which will reflect credit and dignity on the profession and illsolar as they prescribe conduct which is malum in so as opposed to malum prohibitum they operate to restate those general prinici ples that have always governed judicial con duct. Although these canons have been held to be binding on judges and may have the force of law where promulgated by the courts, except as legislatively enacted or judicially adopted they do not of themselves have the force and effect of law". [pp. 593 594] the nature of prescribed conduct it is stated: 70 "A Judge 's official conduct should be free from impropriety and the appearance of impro priety and generally, he should refrain from participation in activities which may tend to lessen public respect for his judicial office. It is a basic requirement, under general guidelines and canons of judicial conduct, that a Judge 's official conduct be free from impropriety and the appearance of impropriety and that both his official and personal beha viour be in accordance with the highest standard society can expect. The standard of conduct is higher than that expected of lay people and also higher than that expected of attorneys. The ultimate standard must be conducted which constantly reaffirms fitness for the high responsibilities of judicial office and judges must so comfor '. themselves as to dignify the administration of justice and deserve the confidence and respect of the public. It is immaterial that the conduct deemed objectionable is probably lawful albeit unjudicial or that it is perceived as lowhu mored horseplay. In particular, a judge should refrain from participation in activities which may tend to lessen public respect for his judicial office and avoid conduct which may give rise to a reasonable belief that he has so participated. In fact even in his private life a judge must adhere to standards of probity and propriety higher than those deemed acceptable for oth ers. While a judge does have the right to entertain his personal views on controversial issues and is not required to surrender his rights or opinions as a citizen his right of free speech and free association are limited from time to time by his official duties and he must be most careful to avoid becoming involved in public controversies". 594~596] In Sampath Kumar & Ors. vs Union of India & Ors, [1985 ] 4 S.C.C. 458, dealing with the qualifications, accomplish ments and attainments of the members of the Administrative Tribunal, which were intended to substitute for the High Courts, this court emphasised the qualities essential for discharging judicial functions. But we are afraid the proposition that, apart from the constitutional machinery for removal of a Judge, the judiciary itself has the jurisdiction and in appropriate cases a duty to enquire into the integrity of one of its members and restrain the Judge from exercising judicial functions is beset with grave risks. The court would then indeed be acting as a tribunal1 for the removal of a Judge. Learned counsel supporting the proposition 71 stated that the effect of restraining a Judge from exercis ing judicial functions is not equivalent to a removal be cause the conditions of service such as salary etc. of a Judge would not be impaired. But we think that the general proposition that the court itself has such a jurisdiction is unacceptable. It is productive of more problems then it can hope to solve. The relief of a direction to restrain the Judge from discharging judicial functions cannot be granted. It is the entire Constitutional Scheme including the provisions relat ing to the process of removal of a Judge which are to be taken into account for the purpose of considering this aspect. It is difficult to accept that there can be any right in anyone running parallel with the Constitutional Scheme for this purpose contained in clauses (4) and (5) of Article 124 read with Article 121. No authority can do what the Constitution by necessary implication forbids. Inciden tally, this also throws light on the question of interim relief in such a matter having the result of restraining the Judge from functioning judicially on initiation of the process under the Judge (Inquiry) Act, 1968. The Constitu tional Scheme appears to be that unless the alleged misbeha viour or incapacity is 'proved ' in accordance with the provisions of the law enacted under Article 124(5) and a motion for presenting an address for removal of the Judge on the ground of proved misbehaviour or incapacity is made, because of the restriction contained in Article 121, there cannot be a discussion about the Judge 's conduct even in the Parliament which has the substantive power of removal under Article 124(4). If the Constitutional Scheme therefore is that the Judge 's conduct cannot be discussed even in the Parliament which is given the substantive power of removal, till the alleged misconduct or incapacity is 'proved ' in accordance with the law enacted for this purpose, then it is difficult to accept that any such discussion of the conduct of the Judge or any evaluation or inferences as to its merit is permissible according to law elsewhere except during investigation before the Inquiry Committee constituted under the statute for this purpose. The indication, therefore, is that interim direction of this kind during the stage of inquiry into the alleged misbehaviour or incapacity is not contemplated it being alien to our Constitutional Scheme. The question of propriety is, however, different from that of legality. The absence of a legal provision, like Article 3 17(2) in the case of a Member of Public Service Commission, to interdict the Judge faced with such an inquiry from contining to discharge judicial functions pending the outcome of the inquiry or in the event of a finding of misbehaviour or incapacity being proved till the process of removal under Article 124(4) is complete, does not necessarily indicate that the Judge shall continue to function during that period. That area is to be covered by the 72 sense of propriety of the learned Judge himself and the judicial tradition symbolised by the views of the Chief Justice of India. It should be expected that the learned Judge would be guided in such a situation by the advice of the Chief Justice of India, as a matter of convention unless he himself decides as an act of propriety to abstain from discharging judicial functions during the interregnum. Since the learned Judge would continue to hold the office of a Judge unless he resigns or is removed, an arrangement to meet the situation has to be devised by the Chief Justice. The Constitution while providing for the suspension of a Member of a Public Service Commission in Article 3 17 (2) in a similar situation has deliberately abstained from making such a provision in case of higher constitutional function aries, namely, the Superior Judges and President and Vice President of India, facing impeachment. It is reasonable to assume that the framers of Constitution had assumed that a desirable convention would be followed by a Judge in that situation which would not require the exercise of a power of suspension. Propriety of the desirable course has to be viewed in this perspective. It would also be reasonable to assume that the Chief Justice of India is expected to find a desirable solution in such a situation to avoid embarrass ment to the learned Judge and to the Institution in a manner which is conducive to the independence of judiciary and should the Chief Justice of India be of the view that the interests of the institution of judiciary it is desirable for the learned Judge to abstain from judicial work till the final outcome under Article 124(4), he would advise the learned Judge accordingly. It is further reasonable to assume that the concerned learned Judge would ordinarily abide by the advice of the Chief Justice of India. All this is, however, in the sphere of propriety and not a matter of legal authority to, permit any court to issue any legal directive to the Chief Justice of India for this purpose. Accordingly Contention F is rejected. RE:CONTENTION (G) 63. This relates to the mala fides alleged against the Speaker. The averments in this behalf are identical in both Raj Birbal 's and Sham Ratan Khandelwal 's peti tions. We may notice the relevant averments: "It is, therefore, disconcerting to note that the Speaker acted contrary to Constitutional practice. It is assumed that this high Consti tutional functionary would have known of the well settled and established constitutional practice in regard to the fact that motions lapse with the dissolution of the House. The action of the Speaker, therefore, in admitting the motion in the manner that he did, smacks of mala fides and, therefore, de 73 serves to be struck down. The action of the Speaker is mala fide on yet another count. The Speaker has not resigned from the primary membership of the Janta Dal. The petitioners verily believe that the first signatory to the motion is the erstwhile Prime Minister of India Shri V.P. Singh who happens also to be the leader of the Janta Dal. The signatories to the said motion, the petition ers verily believe, belong mostly to the Janta Dal, though the details of this fact are not precisely known to the petitioners. The Speak er, as has been indicated earlier, ought to have allowed parliament to look into the matter and discuss as to whether or not the motion ought to be admitted. The Speaker ought to have at least tabled the motion in the House to ascertain the views of the Members of parliament belonging to various Houses. The Speaker, to say the least, ought to have transmitted all materials to Justice Ramaswami and sought a response from him before attempt ing to admit the motion. The Speaker ought to have dealt with the motion much earlier and transmitted to Justice Rammaswami all the materials as well as the views that might have been expressed to him in the course of his consultations which enabled him to come to a decision. The Speaker in the very least ought to have ascertained the wishes of the House in this regard. The Speaker ought not to have decided to admit the motion in the manner he did on the last evening of the 9th Lok Sabha amidst din and noise, when what he spoke was also not entirely audible in the House. The Speaker is a high Constitutional functionary and ought to have exercised his functions in the highest traditions of the office of this high constitutional function ary. The Speaker ought also not to have dealt with the motion, the prime movers of which are members of his own party. 'the Speaker ought to have disqualified himself in this regard and placed the matter for the discussion of the House. The conduct of the Speaker in this entire episode was unbecoming of a high Con stitutional functionary. The action of the Speaker is mala fide and deserves to be struck down on this count alone." The averments as to mala fides are intermixed with and inseparable from touching the merits of certain constitu tional issues. Indeed, mala fides are sought to be impugned to the Speaker on the grounds that he did 74 not hear the Judge, did not have the motion discussed in the House etc. We have held these were not necessary. But a point was made that the Speaker not having entered appearance and denied these allegations on oath must be deemed to have admitted them. It appears to us that even on the allegations made in the petition and plea of mala fides which require to be established on strong grounds, no such case is made out. A case of mala fides cannot be made out merely on the ground of political affiliation of the Speaker either. That may not be a sufficient ground in the present context. At all events, as the only statutory au thority to deal with the matter, doctrine of statutory exceptions or necessity might be invoked. Contention G cannot therefore be accepted. RE :CONTENTION (H) 65. This pertains to the locus standi of "Sub Committee on the Judicial Accountability" and the Supreme Court Bar Association to maintain the proceedings. If this is true, then the petitioners in Transfer Petition No. 278 of 1991 and other writ petitions challenging the Speaker 's decision would not also have the necessary standing to sue. The law as to standing to sue in public interest actions had under gone a vast change over the years and liberal standards for determining locus standi are now recognised. The matter has come to be discussed at considerable care and length in S.P. Gupta & Ors. vs Union of India & Ors. etc. , [1982] 2 SCR 365. The present matter is of such nature and the constitutional issues of such nature and importance that it cannot be said that members of the Bar, and particularly the Supreme Court Bar Association have no locus standi in the matter. An elaborate re survey of the principles and prece dents over again is unnecessary. Suffice it to say that from any point of view the petitioners satisfy the legal equip ments of the standing to sue. We, therefore, reject the Contention H. 66. We are constrained to say that certain submissions advanced on the prayer seeking to restrain the learned judge from functioning till the proceedings of the committee were concluded lacked as much in propriety as in dignity and courtesy with which the learned judge is entitled. The arguments seemed to virtually assume that the charges had been established. Much was sought to be made of the silence of the Judge and his refusal to be drawn into a public debate. If we may say so with respect, learned judge was entitled to decline the invitation to offer his explanation to his detractors, No adverse inference as to substance and validity of the 75 charges could be drawn from the refusal of the learned judge to recognise these forums for his vindication. While the members of the bar may claim to act in public interest they have, at the same time, a duty of courtesy and particular care that in the event of the charges being found baseless or insufficient to establish any moral turpitude, the judge does not suffer irreparably in the very process. The ap proach should not incur the criticism that it was calculated to expose an able and courteous judge to public indignity even before the allegations were examined by the forum constitutionally competent to do so. We wish the level of the debate both in and outside the Court was more decorous and dignified. Propriety required that even before the charges are proved in the only way in which it is permitted to be proved, the Judge should not be embarrassed. The constitutional protection to Judges is not for theft person al benefit; but is one of the means of protecting the judi ciary and its independence and is, / therefore, in the larger public interest. Recourse to constitutional methods ' must be adhered to, if the system were to survive. Learned Judge in his letter to the Registrar General which he de sired to be placed the Court had, indeed, expressed deep anguish at the way the petitioners had been permitted them selves to sit in judgment over him and deal with him the way they did. RE: CONTENTION (I) 67. This argument suggests that the court should, having regard to the nature of the area the decision of the court and its writ is to operate in, decline to exercise its jurisdiction, granting it has such jurisdiction. It is urged that any decision rendered or any writ issued might, in the last analysis, become futile and infructuous as indeed the Constitution of and investigation by the committee are not, nor intended to be, an end by themselves culminating in any independent legal consequences but only a proceeding prelim inary to and preceding the deliberations of the House on the motion for the presentation of an address to the President for the removal of a Judge. The latter, it is urged, is indisputably with in the exclusive province of the Houses of parliament over which courts exercise no control or juris diction. The constitution of and the proceedings before the committee are, it is urged, necessarily sequential to and integral with the proceedings in the Houses of Parliament. SinCe the committee and its investigations have neither any independent existence nor separate legal effect otherwise than as confined to, and for the purposes and as part of the possible prospective proceedings in the Houses of Parlia ment, the court should decline to exercise jurisdiction on a matter which is of no independent legal consequence of its own and which, in the last analysis, falls and remains entirely in an area outside the courts ' jurisdiction. It is urged 76 that both from the point of view of infructuousness, propri ety and futility, the court should decline the invitation to interfere even though that part of the proceedings pertain ing to the constitution of the committee might not strictly be within the exclusive area of Parliament. Courts, it is urged, would not allow its process to expect in a matter which will eventually merge in something over which it will have no jurisdiction. The elements of infructuousness, it is suggested, arise in two areas. The first is, as is posited, what should happen if the Houses of Parliament choose to say that in their view the motion has lapsed? Would the court then go into the legality of the proceedings of the Houses of Par liament and declare the decision of the House void? The second area of the suggested source of infructuous ness is as to the consequences of the position that the Houses of Parliament would, notwithstanding the report of the committee, be entitled to decide not to present an address to the President to remove the Judge. It is, it is said, for the House of Parliament to discipline the Govern ment if the House is of the view that Government is guilty of an illegal inaction on the Speaker 's decision as ulti mately the House has dealt with the committee 's report. On the first point there is and should be no diffi culty. The interpretation of the law declared by this court that a motion under section 3(2) of the , does not lapse upon the dissolution of the House is a binding declaration. No argument based on an assumption that the House would act in violation of the law need be entertained. If the law is that the motion does not lapse, it is erroneous to assume that the Houses of Parliament would act in violation of the law. The interpretation of the law is within the exclusive power of the courts. So far as the second aspect is concerned, what is now sought by the petitioners who seek the enforcement and implementation of the Speaker 's decision is not a direction to the committee to carry out the investigation. Such a prayer may raise some issues peculiar to that situation. But here, the Union. Government has sought to interpret the legal position for purposes of guiding its own response to the situation and to regulate its actions on the Speaker 's decision. That understanding of the law is now found to be unsound. All that is necessary to do is to declare the correct constitutional position. No specific writ of direction need issue to any authority. Having regard to the nature of the subject matter and the purpose it is ultimately intended to serve all that is necessary is to declare the legal and constitu 77 tional position and leave the different organs of the State to consider matters falling within the orbit of their re spective jurisdiction and powers. Contention I is disposed of accordingly. In the result, for the foregoing reasons, Writ Petition Nos. 491 and 541 of 1991 are disposed of by the appropriate declarations of the law as contained in the judgment. Writ Petition Nos. 542 and 560 of 1991 are dismissed. Transfer Petition No. 278 of 1991 is allowed. Writ Petition No. 1061 of 1991 is withdrawn from the Delhi High Court. The transferred writ petition is also dismissed. SHARMA, J. I have gone through the erudite Judgment of my learned Brothers, and I regret that I have not been able to persuade myself to share their views. In my opinion, all these petitions are fit to be dismissed. The stand of the petitioners in W.P. (C) Nos. 491 of 1991 and 541 of 1991 is that the inquiry with respect to the alleged misbehaviour of Mr. Justice V. Ramaswami, the third respondent in W.P. (C) No. 491 of 1991, which was referred to a Committee under the provisions of the ought to proceed and accordingly the Union of India must take all necessary steps. The main arguments on their behalf have been ad dressed by Mr. Shanti Bhushan, Mr. Ram Jethmalani and Mr. R.K.Garg, all appearing for the petitioners in W,P. (C) No. 491 of 1991, which has been treated as the main case. Al though in substance their stand is similar, they are not consistent on some of the points debated during the heating of the case. They have been supported in general terms by Ms. Indira Jaising and Mr. P.P. Rao, the learned counsel representing the Supreme Court Bar Association, the peti tioner in W.P. (C) No. 541 of 1991, and for the sake of convenience the petitioners in these two cases shall be hereinafter referred to as the petitioners. The opposite point of view has been pressed by Mr. Kapil Sibal, on behalf of Mrs. Raj Birbal, the petitioner in T.P. (C) No. 278 of 1991, Mr. V.R.Jayaraman intervenor in W.P. (C) No. 491 of 1991 and Mr. Shyam Ratan Khandelwal, the petitioner in W.P.(C) No. 560 of 1991; and in view of their stand, they shall be referred to as respondents in this judgment. The Committee for the investigation into the alleged misbehaviour of the third respondent was constituted on 12.3.1991 under the provi 78 sions of the (hereinafter re ferred to as the Act) by Shri Rabi Ray, the then Speaker of the Lok Sabha, not a party in W.P. (C) Nos. 491 of 1991 and 541 of 1991, but impleaded by Mr. Shyam Ratan Khandelwal as respondent No. 1 in W.P. (C) No. 560 of 1991. The Lok Sabha was dissolved the very next day, i.e. 13.3.1991. Mr. Attorney General appearing on behalf of the Union of India has contended that this Court should affirm the views expressed by the Union of India in its affidavit that on dissolution of the last Lok Sabha, the Motion against the third respondent lapsed and the matter cannot proceed further. According to the case of the petitioners, once the Committee was constituted, the entire inquiry must be com pleted in accordance with the provisions of the Act, and the stand of the Union Government that the Motion in this regard lapsed on the dissolution of the House is fit to be reject ed. The Union Government, in the circumstances, is under a duty to act in such manner by way of providing funds et cetera, that it may be practically possible for the Commit tee to complete its task. Since the obligation to act ac cordingly, arises under the Act, this Court has full author ity to enforce the performance of the statutory duty; and having regard to the circumstances in the present case it is appropriate to exercise that power. The petitioners further pray that in the meantime the third respondent should not undertake to dispose of judicial matters, and since he has not himself refrained from so doing, no judicial work should be allotted to him. The Chief Justice of India has also been impleaded as a party respond ent but this Court while issuing Rule Nisi after hearing learned counsel for the parties, did not consider it expedi ent to issue notice to the Chief Justice. A prayer for interim direction in this regard was also rejected. During the hearing of the cases another application to the same effect was filed and was heard at considerable length and ultimately rejected by a reasoned order. Mr. Sibal, the learned counsel for the respondents has challenged the maintainability of the writ petitions, on the ground that the matter is not justiciable. It was fur ther argued that since the Speaker proceeded to admit the Notice of Motion initiated by 108 Members of the Lok Sabha without reference to the House, the order of the Speaker was void, and the constitution of the Committee is ultra vires. The Speaker 's order has been challenged also on the grounds of violation of principles of natural justice and mala fides. So far as the effect of the dissolution of the 79 last Lok Sabha is concerned the respondents have supported the stand of the Union Government that the Motion has lapsed, but consistent with their plea. of non justiciabili ty, Mr. Sibal has indicated that it is for the House to decide this issue. Long arguments were addressed by the learned counsel for the parties on the correct interpretation of Article 124(4) and (5) and the Act, and Mr. Sibal has contended that if the construction suggested by him of the provisions of the Act are not accepted, the Act has to be struck down either in its entirety or in part as ultra vires the Constitution. In W.P. (C) No. 560 of 1991 Mr. Shyam Ratan Khandelwal has, inter alia, prayed for declaring the and the Rules framed thereunder as ultra vires Article 121 and 124(5) of the Constitution; for quashing the decision of the Speaker; and, for issuing a Writ of Mandamus to the Committee not to embark upon or proceed with the inquiry. He also wants a declaration that the Chief Justice of India cannot withhold allocation of work to the third respondent for discharging his judicial functions, and seeks for consequential directions in this regard. During the course of his argument, Mr. Sibal, in reply to a query from the Bench, clarified the position that if his plea of non justiciability is accepted, all the petitions may have to be dismissed. It is appropriate that the point relating to the jurisdiction of this Court, and for that matter of any court in India, is considered first. If the stand of the respond ents is correct on this issue, it may not be necessary to deal with the other questions raised by the parties. In support of his argument, Mr. Sibal has relied upon the provisions of Article 122(2) of the Constitution read with Article 93, and has urged that the present matter relates to the conduct of the business of the Lok Sabha and is included within the functions of regulating its procedure, and as such the Speaker who is a Member and officer of the Parlia ment cannot be subjected to the jurisdiction of any Court in respect of the exercise of those powers. The questions whether the Motion on the basis of which the present inquiry by the Committee has been ordered has lapsed or not and whether the inquiry should further proceed or not are for the House to determine, and its decision will be final. Reference was also made to Article 100, but the learned counsel clarified his stand that in the present context a special majority as indicated in Article 124(4) will have to be substituted for a simple majority mentioned in Article 100(1). It has been contended that the Speaker was not free to take a decision by himself to refer the matter to the Committee for inquiry and that too without hearing the Judge concerned; and in any event his order is subject to any decision 80 to the contrary of the House arrived at, at any stage. Emphasis was laid on the concept of Separation of State powers amongst its three wings, and it was claimed that all matters within the House including moving of motions, ad journment motions and debates are beyond the purview of judicial scrutiny. Counsel said that it does not make any difference that in the present case it is the Union Govern ment, which has taken a decision for itself on the disputed issue; and the petitioners cannot use this as an excuse for approaching the Court. The Court should refuse to entertain the writ petitions on this ground, as it cannot be persuaded to do indirectly what it cannot do directly. The crux is that the matter is in the exclusive domain of the Parlia ment. Although in my final conclusion I agree with the respondents that the courts have no jurisdiction in the present matter, I do not agree with Mr. Sibal 's contention based on an assumption of the very wide and exclusive juris diction of the Parliament in the general terms, as indicated during his argument. His stand that the Speaker could not have taken a decision singly also does not appear to be well founded. He strenuously argued that since the matter relat ing to the removal of a Judge is from the very beginning within the exclusive control of one of the Houses of the Parliament every decision has to be taken by the entire House and if necessary a debate will have to be permitted. As a result, the bar on discussion in the House on the Judges ' conduct will disappear from the initial stage it self, but that cannot be helped. He relied upon the inter pretation of Mr. M.C.Setalvad on clauses 4 & 5 of Article 124 as stated by him before the Joint Committee on the Judges (inquiry) Bill, 1964 (being Bill No. 5 of 1964 which was ultimately dropped) and his view that the desired object of avoiding debate on the conduct of a Judge in the Parlia ment can be achieved only by the Speaker carefully exercis ing his discretion after taking into account the impropriety of such a debate. Although the powers of State has been distributed by the Constitution amongst the three limbs, that is the Legis lature, the Executive and the Judiciary, the doctrine of Separation of Powers has not been strictly adhered to and there is some overlapping of powers in the gray areas. A few illustrations will show that the courts ' jurisdiction to examine matters involving adjudication of disputes is sub ject to several exceptions. Let us consider a case in which an individual citizen approaches the Court alleging serious violation of his fundamental rights resulting in grave and irreparable injury, arising as a consequence of certain acts, and the decision of his claim is dependent on the adjudication of a dispute covered by Article 262 or Article 363. He does not have a legal remedy before the courts. Similarly a Member of Parliament or of a State Legislature who 81 may have a just grievance in matters covered by Article 122(2) or 212(2) cannot knock the doors of the courts. Let us take another example where a group of citizens residing near the border of the country are in imminent danger of a devastating attack from an enemy country in which they are sure to lose large number of lives besides theft property. This can be averted only by accepting the terms offered by the enemy country, which are in their opinion reasonable and will be highly in the interest of the nation as a whole. The concerned authorities of the State, however, hold a differ ent view and consider starting a war immediately as an unavoidable strategy, even in the face of imminent danger to the border area. On an application by the aggrieved citi zens, the Court cannot embark upon an inquiry as to the merits and demerits of the proposed action of the State nor can it direct that the residents of the threatened area must be shifted to some safe place before starting of the war. The examples can be multiplied. Generally, questions involv ing adjudication of disputes are amenable to the jurisdic tion of the courts, but there are exceptions, not only those covered by specific provisions of the Constitution in ex press terms, but others enjoying the immunity by necessary implication arising from established jurisprudential princi ples involved in the Constitutional scheme. It was observed by this Court in Smt. Indira Gandhi vs Raj Narain, at page 415, that rigid Separation of Powers as under the American Constitution or under the Australian Constitution does not apply to our country and many powers which are strictly judicial have been excluded from the purview of the courts under our Constitution. Judicial power of the State in the comprehensive sense of the expression as embracing all its wings is dif ferent from the judicial power vested or intended to be vested in the courts by a written Constitution. The issue which arises in the present case is whether under the Con stitutional scheme a matter relating to the removal of a Judge of the superior courts (Supreme Court or High Courts) is within the jurisdiction of the courts or in any event of this Court. On a close examination of the Constitution it appears to me that a special pattern has been adopted with respect to the removal of the members of the three organs of the State The Executive, the Legislature and the Judici ary at the highest level, and this plan having been con sciously included in the Constitution, has to be kept in mind in construing its provisions. The approach appears to be that when a question of removal of a member of any of the three wings at the highest level i.e. the President; the Members of the Parliament and the State Legislatures; and the Judges of the Supreme Court and the High Courts arises, it is left to an organ other than where the problem has arisen, to be decided. 82 11. The President has to be elected by the members of an electoral college as prescribed by Article 54, in the manner indicated in Article 55. Since he has to exercise his func tions in accordance with the advice tendered by the Council of Ministers, the matter relating to his impeachment has been entrusted by Article 61 to the Parliament. In the constitution of the two Houses of the Parliament and the Legislatures of the States, the people of the country are involved more directly, through process of election and any dispute arising therefrom is finally settled judicially. When it comes to a disqualification of a sitting member, the matter is dealt with by Article 103 or 192 as the case may be and what is significant for the purpose of the present case is that instead of entrusting the matter to the rele vant House itself, the Constitution has provided for a different machinery, not within the control of the Legisla ture. The decision on such a dispute is left to the Presi dent, and he is not to act on the advice of the Council of Ministers, but in accordance with the opinion of the Elec tion Commission which has been held by this Court to be a Tribunal falling squarely within the ambit of Article 136 of the Constitution in All Party Hill Leaders Conference vs M. A. Sangma; , at 411. Thus, the power to decide a dispute is not to be exercised by the Legislature, but lies substantially with the courts. Consistent with this pattern clause (4) of Article 124 in emphatic terms declares that a Judge of the Supreme Court or the High Court shall not be removed from his office except on a special majority of the Members of each House of Parliament. Both the Execu tive and the Judiciary are thus excluded in this process. The provisions of the Constitution and the Act and relevant materials which ,viII be discussed later all unmistakably indicate this Constitutional plan. The scheme, as mentioned above, which according to my reading of the Constitution has been adopted, cannot be construed as lack of trust in the three organs of the State. There are other relevant considerations to be taken into account while framing and adopting a written constitution, which include the assurance to the people that the possibil ity of a subjective approach clouding the decision on an issue as sensitive as the one under consideration, has been as far eliminated as found practicable in the situation. And where this is not possible at all, it cannot be helped, and has to be reconciled by application of the doctrine of necessity, which is not attracted here. Hamilton, in "The Federalist", while discussing the position in the United States, observed that when questions arise as to whether a person holding very high office either in the Judiciary or the Legislature or the President himself has rendered him self unfit to hold the office, they are of a nature which relates chiefly to the injuries done immediately to the society itself. Any proceeding for their removal will, 83 for this reason seldom fail to agitate the passions of the whole community and divide it into parties more or less friendly or inimical to the person concerned. The delicacy and the magnitude of a trust which so deeply concerns the reputation and existence of every man engaged in the admin istration of public affairs speak for themselves. Mr. Sibal has further relied on Hamilton stating that "the awful discretion which a court of impeachment must necessarily have to doom to honour or to infamy the most confidential and the most distinguished characters of the community, forbids the commitment of the trust, to a small number of persons. " The counsel added that presumably that is the reason that the question of removal of a Judge of the superior court has been exclusively entrusted to the parlia ment and further in that spirit the Act requires a large number of Members of the parliament to even give the Notice of Motion. Quoting from 'Harvard Law Review ' (1912 1913 vol.), counsel argued that judicial office is essentially a public trust, and the right of the public to revoke this trust is fundamental. In a true republic no man can be born with a right to public office, Under such a system of gov ernment, office, whether elective or appointive, is in a sense a political privilege. The grant of this privilege flows from the political power of 'the people, and so, ulti mately must it be taken away by the exercise of the politi cal power resident in the people. After referring to the view of many Jurists of international repute Mr. Sibal again came back to "The Federalist", considering the inappropri ateness of the Supreme Court of United States of America to be entrusted with the power of impeachment in the following words: "It is much to be doubted whether the members of that Tribunal at all times be endowed with so eminent a portion of fortitude, as would be called for in the execu tion of so difficult a task, and it is still more to be doubted whether they would possess the degree of credit and authority, which might, on certain occasions be indispens able towards reconciling the people to their decision". I am not sure whether these are the.precise considerations which appealed to the framers of our Constitution to adopt the Scheme as indicated earlier, but there is no doubt that the subject dealing with the removal of the very high function aries in three vital limbs of the State, received special treatment by the Constitution. My conclusion is further supported by the materials discussed below. Learned counsel for the parties referred to the historical background of the relevant provisions of the Constitution and the Act, as also to the constitutional provisions of several other countries, as aid to the inter pretation of the legal position in relation to removal of Judges of the superior courts. Mr. Sibal laid great emphasis on the evidence of Mr. 84 Setalvad and several other persons before the Joint Commit tee on the Judges (inquiry) Bill, 1964. His argument is that the Bill was dropped as a result of the opinion expressed before the Joint Committee, and consequently another Bill was drafted which was ultimately adopted by the Parliament as the 1968./Act. The provisions of the earlier Bill, objec tions raised thereto, and the fact that the Act of 1968 was passed on a subsequent Bill, reconstructed immediately after the decision to drop the original Bill, are all permissible aids to the interpretation of the legal position which has to be ascertained in the present cases before us. Although the learned counsel for the petitioners challenge their admissiblity, portions of the documents referred to by Mr. Sibal were attempted to be construed on behalf of the peti tioners as supporting their stand. In my view, it is permis sible to take into consideration the entire background as aid to interpretation. The rule of construction of statutes dealing with this aspect was stated as far back as in 1584 in Heydon 's case: 76 E.R. 637, and has been followed by our Court in a large number of decisions. While interpreting Article 286 of our Constitution, reliance was placed by this Court in the Bengal Immunity Company vs The State of Bihar, at 632 & 633, on Lord Coke 's dictum in Heydon s case and the observations. of the Earl of Halsbury in Eastman Photographic Material Company vs Comptroller General of Patents L R., at p. 576 reaffirm ing the rule in the following words: "My Lords, it appears to me that to construe the statute in question, it is not only legit imate but highly convenient to refer both to the former Act and to the ascertained evils to which the former Act had given rise, and to the later Act which provided the remedy. These three being compared I cannot doubt the con clusion". In B. Prabhakar Rao vs State of Andhra Pradesh, [1985] Suppl. 2 SCR 573, the observa tions at p. 591, quoted below, are illuminat ing: "Where internal aids are not forthcoming, we can always have recourse to external aids to discover the object of the legislation. Exter nal aids are not ruled out. This is now a well settled principle of modern statutory con struction. Thus 'Enacting History ' is rele vant: "The enacting history of an Act is the surrounding corpus of public knowledge rela tive to its introduction into Parliament as a Bill, and subsequent progress through, and ultimate passing by, Parliament. In particular it is the extrinsic material assumed to be within the contemplation of Parliament when it passed the Act." Again "In the period im 85 mediately following its enactment, the history of how an enactment is understood forms part of the contemporanea expositio, and may be held to throw light on the legislative inten tion. The later history may, under the doc trine that an Act is always speaking, indicate how the enactment is regarded in the light of development from time to time". "Official statements by the government department admin istering an Act, or by any other authority concerned with the Act, may be taken into account as persuasive authority on the meaning of its provisions". Justice may be blind but it is not to be deaf. Judges are not to sit in sound proof rooms. Committee reports, Parliamentary debates, Policy statements and public utterances of official spokesmen are of relevance in statu tory interpretation. But 'the comity, the courtsey and respect that ought to prevail between the two prime organs of the State, the legislature and the judiciary ', require the courts to make skilled evaluation of the extra textual material placed before it and exclude the essentially unreliable. "Nevertheless the court, as master of its own procedure, retains a residuary right to admit them where, in rare cases, the need to carry out the legisla tor 's intention appears to the court so to require". With a view to correctly interpret the Act which was the subject matter of that case, the history and the succession of events including the initial lowering the age of superan nuation, the agitation consequent upon it, and the agreement that followed the agitation were all taken into considera tion. I, accordingly, propose to briefly state the relevant background of both the Constitutional provisions and of the Act. At the time of framing of the Constitution of India, the Constitutions of several other countries, which appeared to be helpful were examined, and a Draft was initially prepared. On the amendment moved by Sir Alladi Krishnaswamy Iyyar the relevant provision was included in the Draft in terms similar to section 72(ii) of the Commonwealth of Australia COnstitution Act (1900) except the last sentence in the following terms: "Further provision may be made by the Federal Law for the procedure to be adopted in this behalf. " When the matter was finally taken up by the Constituent Assembly the Debates indicate that there was a categorical rejection of the suggestion to entrust the matter to the Supreme Court or a Committee of a 86 number of sitting Judges of the Supreme Court; and while doing so, the law of the other Commonwealth countries were taken into consideration. So far the last sentence of the draft was concerned, Sir Alladi explained the position by stating "that such a provision does not occur in other Constitutions, but there is a tendency to overelaborate the provisions on our side and that is the only justification for my putting in that clause. Before further considering the Debates and the other steps in flaming of the Constitution, it may be useful to appreciate the relevance and importance of the point which has an impact on the controversial issue before us. Accord ing to the petitioners, the question relating to the removal of a Judge comes to the Parliament only on receipt of a report by the Committee under the Act. The Parliament or any of its Houses, not being in the picture earlier, does not have any control over the Committee, which is to function purely as a statutory body, and, therefore, amenable to the jurisdiction of this Court. If this stand is correct, what was the position before 1968, when there was no Act? The question is whether the Parliament did not have any power to take any action even if an inquiry in the alleged misbeha viour or incapacity of a Judge was imminently called for. In other words whether the exercise of the power under clause (4) of Article 124 by the Parliament was dependent on the enactment of a law under clause (5) and until this condition was satisfied no step under clause (4) could be taken. If on the other hand the Parliament 's power was not subject to the enactment of a law, was it divested of this jurisdiction when it passed an Act? On what principle could the initial jurisdiction of the Parliament disappear in 1968? Since this aspect has a bearing, it was the subject matter of some discussion during the arguments of the learned advocates. Mr. Sibal was emphatic in claiming that clause (5) was enabling in nature, and clause (4) could not be inter preted as dependent on clause (5). He relied on Mr. Setal vad 's evidence before the Joint Committee of Bill No. 5 of 1964. The stand of Mr. Shanti Bhushan, instructed by Mr. Prashant Bhushan, the Advocate on record on behalf of the petitioner in the leading case Writ Petition (C) No. 491 of 1991, has been that clause (5) was merely enabling, but not in the sense as stated by Mr. Setalvad in his evidence. In the view of the latter, it is open to the Parliament either to follow the procedure laid down by an Act made under clause (5) or to ignore the same in any case and adopt any other procedure. In other words, even after the passing of the 1968 Act, the Parliament can choose either to proceed according to the said Act or to act independently ignoring the same. Mr. Shanti Bhushan said that this is not permissi ble. Once the 1968 Act was enacted, the Parliament is bound to follow it, but earlier 87 it was free to proceed as it liked. He, however, was quite clear in his submission that the exercise of power under clause (4) could not be said to be conditional on the enact ment of a law under clause (5), and that to interpret the provisions otherwise would lead to the extraordinary result that the Parliament was in a helpless condition for about 18 years till 1968, if a Judge was rendered unfit to continue. I agree with the learned counsel. The other learned advocates appearing for the peti tioners did not advert to this aspect pointedly. The stand of Mr. Garg is that whether or not the third respondent is removed, or whether the inquiry proceeds before the Commit tee or not, he must cease to function as a Judge, as his image being under a cloud, must be cleared so that the people may have trust in the judiciary. Mr. Ram Jethmalani, the other learned counsel who appeared on behalf of the petitioner in Writ petition (C).No. 491 of 1991, was ini tially of the view as Mr. Shanti Bhushan on the co relation of clause (4) and (5), but after some discussion, he recon sidered the position and took a positive stand that the exercise of power under clause (4) was dependent on a law being enacted under clause (5), and that the Parliament was bound to proceed in accordance with the provisions of the Act. Now coming back to the Debates, Mr. Santhanam sug gested an amendment for including more details to which the answer of Sir Alladi was as follows: "We need not be more meticulous and more elaborate than people who have tried a similar case in other jurisdictions. I challenge my friend to say whether there is any detailed provision for the removal of Judges more than that in any other Constitution in the world". He requested the House to accept the general principle, namely, that the President in consultation with the Supreme Legislature of this country shall have that right, and assured that, "That does not mean that the Supreme Legisla ture will abuse that power". He rejected the idea of making further additions to the provision relating to the framing of the law by saying, "To make a detailed provision for all these would be a noble procedure to be adopted in any Con stitution. You will not find it in any Constitution, not even in the German Constitution which is particularly de tailed, not in the Dominion Constitution and not even in the Act of Settlement and the later Acts of British Parliament which refer to the" removal of Judges". Some members strong ly suggested that the Supreme Court of India or a number of sitting Judges of the Court should be 88 involved in the proceeding, to which Sir Alladi had strong objection. He called upon the members, "not to provide a machinery consisting of five or four Judges to sit in judg ment over a Chief Justice of the Supreme Court. Are you really serious about enhancing the dignity of the Chief Justice of India ? You are. I have no doubt about it". The clause was ultimately drafted as mentioned above vesting the power in the "Supreme Parliament" as "there must be some power of removal vested somewhere". He pointed out that the matter was not being left in the discretion of the either House to remove a Judge, but ultimate soverign power will be vested in the two Houses of the Parliament and, "that is the import of my amendment". In this background, the Article was finally included in the Draft. Although as was clear from the statements of Sir Alladi as also the language used, the intention of the Sub commit tee preparing the Draft was not to make clause (4) dependent on clause (5), still presumably with a view to allaying any misapprehension which could have arisen by including the entire provisions in one single clause, they were divided and put in two separate clauses and while so doing, the language was slightly changed to emphasise the limited scope of the law. Clause (4) does not state that the misbehaviour or incapacity of the Judge will have to be proved only in accordance with a law to be passed by the Parliament under clause (5). Clause (4) would continue to serve the purpose as it does now, without any amendment if clause (5) were to be removed from the Constitution today. There is no indica tion of any limitation on the power of the Parliament to decide the manner in which it will obtain a finding on misbehaviour or incapacity for further action to be taken by it. Clause (5) merely enables the Parliament to enact a law for this purpose, if it so chooses. The word 'may ' has been sometimes understood in the imperative sense as 'shall ', but ordinarily it indicates a choice of action and not a com mand. In the present context, there does not appear to be any reason to assume that it has been used in its extraordi nary meaning. It is significant to note that while fixing the tenure of a Judge in clause (2) of Article 124, proviso Co) permits the premature removal in the manner provided in clause (4) without mentioning clause (5) at all. The signif icance of the omission of clause (5) can be appreciated by referring to the language of clause 2(A) of Article 124 directing that the "age of a Judge of the Supreme Court shall be determined by such authority and in such manner as Parliament may by law provide". On an examination of all the relevant materials, I am of the view that the exercise of power under clause (4) was not made conditional on the enactment of a law under clause (5), and the reason for inserting 89 clause (5) in Article 124 was, as indicated by Sir Alladi, merely for elaborating the provisions. The other provisions with reference to which the matter needs further examination are Article 121 of the Constitution and the Act of 1968. The object of Article 121 is to prevent any discussion in Parliament with respect to the conduct of a Judge of the Superior Courts, except when it cannot be avoided. The Article, accordingly, prohibits such a discussion except upon a motion for presenting an 'address ' to the President for removal of a Judge. The point is that if the entire proceeding in regard to the removal of a Judge from the very initial stage is assumed to be in the House, does the bar under Article 121 get lifted at that very stage, thus frustrating the very purpose of the Arti cle. There is a complete unanimity before us, and rightly so, that the object of Article 121 to prevent a public discussion of the conduct of a Judge is in public interest and its importance cannot be diluted. Mr. Shanti Bhushan elaborated this aspect by saying that any such discussion in the House is bound to be reported through the media and will thus reach the general public and which by itself, irrespec tive of the final outcome of the discussion, will damage the reputation of the Judge concerned and thereby the image of the entire judiciary; and must not, therefore, be permitted until a report against the Judge after a proper inquiry is available. Mr. Sibal also agreed on the significance of Article 121 and relied on the views of several eminent international jurists, but we need not detain ourselves on this point, as there is no discordant note expressed by anyone before us. The question, however, is as to whether the object of Article 121 will be defeated, if clause (4) of Article 124 is construed as complete in itself and independ ent of clause (5), and clause (5) be understood as merely giving an option to the Parliament to enact a law, if it so chooses; and further whether the inquiry before the Commit tee is within the control of the House of the Parliament so as to exclude an outside interference by any other authori ty, including the courts. It is true that the provisions of an Act control or determine the constitutional provisions, but where the meaning of an Article is not clear it is permissible to take the aid of other relevant materials. Besides, in the present context, where it is necessary to assess the effect of the construction of the other provisions of the Constitution and of the Act on Article 121, the Act provides useful assist ance; and its importance has been greatly enhanced in view of the points urged in the arguments of the learned counsel for the parties before us. All the learned advocates for the petitioners as also the Attorney General are positive that the Act is a perfectly valid piece of legislation and no part of it is illegal or ultra vires. It is on 90 this premise that the writ petitions of the petitioners have been filed and the reliefs are prayed for. Mr. Sibal repre senting the respondents has halfheartedly challenged the Act, making it clear at the same time that if his interpre tation of the provisions is accepted no fault can be found with the Act. Besides, the foundation of the reliefs, asked for in the writ petitions, is the Act and the inquiry there under and if the Act itself goes, the reference to the Committee of Inquiry itself will have to be held as nonex istent in the eye of Law and the writ petitions will have to be rejected on that ground alone. We must, therefore, assume for the purpose of the present cases, that the Act is good and on that basis if the petitioners be found to be entitled to any relief, it may be granted. I am emphasising this aspect as the Act gives a complete answer to the main ques tion as to whether the Committee is subject to the control of the Lok Sabha, and whether this construction of the provisions defeats the purpose of Article 121. The is a short enactment containing only seven sections. Section 1 gives the title and the date of commencement, Section 2 contains definitions and Section 7 deals with power to make rules. The expression "motion" which has not been defined in the Act is signifi cant in the scheme and naturally, therefore, has been sub ject of considerable discussion during the hearing of these cases. The Lok Sabha Rules flamed under Article 118 of the Constitution deal with "motions" in Chapter XIV. There are separate rules of procedures for conduct of business adopted by the Rajya Sabha. In view of the facts of this case, I propose to refer only to the Lok Sabha Rules. Section 3(1) of the states that if a notice of"motion" is given for presenting an address to the Presi dent for the removal of a Judge, signed, in the case of a notice given in the Lok Sabha, by not less than 100 members, and in the case of a notice given in the Rajya Sabha, by not less than 50 members of the House, the Speaker or the Chair man, as the case may be, after consulting such persons as he deems fit, as also such relevant materials which may be available to him, either admit the "motion" or refuse to admit the same. The manner in which this section refers to "motion" in the Act for the first time without a definition or introduction clearly indicates that it is referring to that "motion" which is ordinarily understood in the context of the two Houses of Parliament attracting their respective rules. Section 3 does not specify as to how and to whom this notice of "motion" is to be addressed or handed over and it is not quite clear how the Speaker suddenly comes in the picture unless the Lok Sabha Rules are taken into account. Rule 185 states that notice of "motion" shall be given in writing addressed to the Secretary General and its ' admissi bility should satisfy the conditions detailed in Rule 186. Rule 187 directs the 91 Speaker to examine and decide the admissibility of a "mo tion" or a part thereof. Rule 189 says that if the Speaker admits notice of a "motion" and no date is fixed for discus sion of such "motion", it shall be notified in the BUlletin with the heading "No,Day Yet Named Motions". It is at this stage that 1968 Act by Section 3(1) takes over the matter and asks the Speaker to take a decision for admitting this "motion" or refusing it after consulting such persons and materials as he deems fit. The conclusion is irresistible that the provisions of the Act have to be read along with some of the Lok Sabha Rules. Rules 185, 186 and 187 should be treated to be supplementary to the Act. Then comes sub section (2) of Section 3 which is of vital importance in the present context. It says that if the "motions" referred to in sub section (1) is admitted, the Speaker "shall keep the motion pending" and constitute a Committee for investigation into the allegations consisting of three members of whom one shall be chosen among Chief Justice and other Judges of the Supreme Court and another from among the Chief Justices of the High Court. The situs where the "motion" is pending is almost conclusive on the issue whether the House is seised of it or not. Unless the "motion" which has to remain pending, as directed by Section 3(2) is outside the House and the Speak er while admitting it acts as a statutory authority and not qua Speaker of the Lok Sabha, as is the case of the peti tioners before us, the petitioners will not have any base to build their case on. If the Speaker has admitted the "mo tion" in the capacity as the Speaker and consequently, therefore, representing the House, and has constituted a Committee, it will be entirely for him and through him the House, to pass any further order if necessary about the future conduct of the Committee, and not for this Court, for, the Committee cannot be subjected to a dual control. So the question to ask is where is the "motion" pending, which is promptly answered by the provisions in the Act, by de claring that it remains pending in the House. Section 6 deals with the matter from the stage when the report of the Committee is ready and sub section (1) says that if the report records a finding in favour of the Judge, "the motion pending in the House" shall not be proceeded with. If the report goes against the Judge, then "the motion referred to in sub section (1) of Section 2 shall, together with a report of the Committee, be taken for consideration by the House or the Houses of Parliament in which it is pending". The Act, therefore, does not leave any room for doubt that the "motion" remains pending in the House and not outside it. This is again corroborated by the language used in Proviso to Section 3 (2) which deals with cases where no tices of"motion" under Section 3(1) are given on the same date in both Houses of Parliament. It says that in such a situation, no Committee shall be constituted unless the "motion" has been "admitted in 92 both Houses" and where such "motion"has been admitted "in both Houses", the Committe shall be constituted jointly by the Speaker and the Chairman. The rule making power dealt with in Section 7 is in the usual terms enumerating some of the subject matters without prejudice to the generality of the power, and permits the Joint Committee of both Houses of Parliament to frame the rules, and accordingly, the Judges (Inquiry) Rules, 1969 were made. Rule 2(e) of these Rules describes "motion" as motion admitted under Section 3(1) of the Act. Supplementing the provisions of Section 6(2), Rule 16(2) provides that "a copy of the motion admitted under sub section (1) of section 3 shall be reproduced as an Annexure to such an address". Sub rule (4) states that "the address prepared under subrule (1) and the motion shall be put to vote together in each House of Parliament". It is clear that it is not an inadvertent reference in the Act of the "motion" being pending in the House; the provisions unmistakably indicate that the Act and the Rules envisage and deal with a "motion" which is admitted in the House and remains pending there to be taken up again when the date is fixed by the Speaker on receipt of the report from the Committee. The language throughout the Act has been consist ently used on this premise and is not capable of being ingored or explained away. Nowhere in the Act or the Rules, there is any provision which can lend any support to the stand of the petitioners before us. The scope of the Act and the Rules is limited to the investigation in pursuance of a "Motion" admitted by the Speaker. At the Conclusion of the investigation the Commit tee has to send the report to the Speaker (or the Chairman as the case may be) along with a copy of the original Mo tion. If the finding goes against the Judge, section 6(2) of the Act directs that the Motion, the same original Motion, shall together with the report be taken up for consideration by the House where the Motion is pending. The relevant part of section 6(2) mentions: "the Motion referred to in sub section (1) of section 3 shall together with the report of the Committee, be taken up for consideration by the House. in which it is pending". Rule 16(4) states that the address and the Motion shall be put to vote together in each House of Parliament. What the Act and the Rules contemplate is the original Motion to be taken up for consideration by the House, and if this Motion is held to have exhausted itself on admission by the Speaker, as has been urged on behalf of the petitioners, nothing remains on which the Act would operate. The concept of the original Motion being pending in the House, to be taken up for debate and vote on the receipt of the report of the Committee, is the life and soul of the Act, and if that Motion disappears nothing remains behind to attract the Act. This 93 idea runs through the entire Act and the Rules, and cannot be allowed to be replaced by a substitute. The existence of a Motion pending in the House is a necessary condition for the application of the Act. Bereft of the same, the Act does not survive. It is, therefore, not permissible to read the Act consistent with the stand of the petitioners that the House is not seised of the Motion and does not have anything to do with the inquiry pending before the Committee, until the report is received. If clauses (4) and (5) of Article 124 are construed as suggested on behalf of the petitioners, the Act will have to be struck down as ultra vires, or in any event inoperative and infructuous and on this ground alone the Writ Petitions are liable to be dismissed. It has been contended that if the Motion is held to be pending in the House on its admission, the object of Article 121 shall be defeated. The apprehension appears to be misconceived. The mandate of the Constitution against discussion on the conduct of a Judge in the House is for everybody to respect, and it is the bounden duty of the Speaker to enforce it. He has to ensure that Article 121 is obeyed in terms and spirit, and as a matter of fact there is no complaint of any misuse during the last more than 41 years. The question, however, is whether it will not be feasible for the Speaker to maintain the discipline, if the Motion on admission becomes pending in the House. Before 1968 Act was passed, the motion, like any other motion, was governed by the Lok Sabha Rules, and Rule 189 enabled the Speaker to notify it as a No Day Yet Named Motion without fixing a date, and to permit the matter to be discussed only at the appropriate stage. After the Act, what was left within the discretion of the Speaker, has been replaced by mandatory statutory provision, directing that the motion shall remain pending in the House, to be taken up only on receipt of a finding of the Committee against the Judge. The pendency of the motion in the House, therefore, cannot be a ground to violate Article 121. Mr Sibal, however, claimed that the members of the House are entitled to express their opinion on the proposed endictment from the very initial stage and as a part of his argument relied upon the statement of Mr. Setalvad before the Joint Committee. Mr. Shanti Bhushan challenged the views of Mr. Setalvad on the ground that they would foul with Article 121. I am afraid, the statements of Mr. Setalvad, referred to above, have not been properly appeciated by either side. The modified Bill, on the basis of which the 1968 Act was passed, had not been drafted by then and Mr. Setalvad was expressing his opinion on the earlier Bill, which substantially vested the power of removal of a Judge in the Executive, and kept the Parliament out of the picture until the receipt of a report on the 94 alleged misbehaviour or incapacity. If that Bill had been passed, the effect would have been that the entire proceed ing beginning with the initiation of the inquiry and con cluding with the report would have remained completely outside the House, an interpretation which is being attempt ed by the present petitioners before us, on the present Act too. The objection to the entrustment of the power to the Executive was mainly on the ground that the intention of the Article 124 to leave the removal of a Judge in the hands of the Parliament would be frustrated. In answer to a query of the Chairman of the Committee, Mr. Setalvad said that as a result of the provisions of the Bill (then under considera tion) the Parliament would be completely kept out until a finding of another body was received by the House and this would militate against the constitutional scheme. In this background when his attention was drawn to the bar of Arti cle 121 he replied that it was possible to prevent a prema ture discussion in the Parliament, by the Speaker exercising his authority with discretion. He referred to the Lok Sabha Rules in this context and furher recommended for the Speaker to be vested with larger powers. He was emphatic that the President should not be entrusted with the matter, even at the initial stage, and that it should be left in the hands of the Speaker to take appropriate steps. The suggested substitution of the Speaker (and the Chairman) in place of the President was in accordance with the view that the matter is within the exclusive domain of the two Houses of the Parliament which could exercise its powers through the respective representatives Speaker and the Chairman. About Mr. Setalvad 's evidence I would like to clarify the position that I am not treating his opinion as an authority, and I have taken into account the same as one step in the history of the present legislation starting from the original Bill of 1964. The report of the JointCommittee (presented on 17th May, 1966) sets out the observations of the Committee with regard to the principal changes proposed in the Bill. Para graph 17 of the Report dealing with clause (2) states that the expression "Special Tribunal" has been substituted by "Committee" and "Speaker" and "Chairman" have been brought in "with a view to ensuring that the Committee may not be subject to writ jurisdiction of the Supreme Court & the High Courts". With respect to clause (3), the following observa tions of the Committee are relevant: "The Committee are of the view that to ensure and maintain the independence of the judici ary, the Executive should be excluded from every stage of the procedure for investigation of the alleged misbehaviour or incapacity of a Judge and that the initiation of any proceed ing against a Judge should be made in Parlia ment by a notice of a motion. The Committee 95 also feel that no motion for presenting an address to the President praying for the removal of a Judge should be admitted unless the notice of such motion is signed in the case of a motion in the Lok Sabha, by not less than one hundred members of that House and in the case of a motion in Rajya Sabha, by not less than fifty members of that House. Fur ther, the Committee are of the opinion that the Speaker or the Chairman or both, as the case may be, may after consulting such persons as they think fit and after considering such materials, as may be available, either admit or reject the motion and that if they admit the motion, then they should keep the motion pending and constitute a Committee consisting of three members, one each to be chosen from amongst the Chief Justice and other Judges of the Supreme Court, Chief Justice of the High Courts and distinguished Jurists, respective ly". Paragraph 20 of the Report deals with clause (6) and the proposed changes, that were more consistent with the motion being pending in the House or Houses. Ultimately, another Bill on the lines suggested by the aforesaid Joint Committee was drafted and adopted. Mr. Setalvad 's opinion is relevant as an important step in this history of legislation and can be referred to as such. The wider proposition put forward by Mr. Sibal that the House was seised of the matter so effectively as to entitle every member to demand a discussion in the House at any stage is, however, not fit to be accepted. This will not only violate Article 121, but also offend the provisions of the 1968 Act. It is not correct to assume that if the right of the individual member to insist on immediate discussion is denied, the consequence will be to deprive the Parliament of the control of the motion. When the Speaker exercises authority either under the Lok Sabha Rules or under the.1968 Act, he acts on behalf of the House. As soon as he ceases to be the Speaker, he is divested of all these powers. When he acts the House acts. It is another matter that he may con sult other persons before admitting the motion, and while so doing, he may consult the members of the House also, but without permitting a discussion in the House. The consulta tion, which the Act permits, is private in nature, not amounting to a public discussion while the object of Article 121 is to prevent a public debate. It may also be open to the Speaker to consult the House on a legal issue which can be answered without reference to the conduct of Judge in question, as for example, the issue (involved in the present case) whether on account of dissolution of the old House the Motion has lapsed and the Committee of Inquiry is defunct. What is prohibited is not every matter 96 relating to the removal of a Judge; the bar is confined to a discussion with respect to the conduct of a Judge in the discharge of his duties. 28: Mr. Shanti Bhushan strenuously contended that such portion of the 1968 Act which direct or declare the initial motion admitted by the Speaker to remain pending in the House, should be interpreted as creating a legal fiction limited for the purpose of ensuring that the bar under Article 121 is not lifted prematurely. I do not see any justification for placing this construction on the Act. This issue could not arise with reference to the original Bill which was ultimately dropped, as under its scheme the matter could not have reached the Parliament before the report the Special Tribunal was laid before the Houses under the Presi dent 's direction. The petitioners are trying to put an interpretation on the present Act that may lead to the same conclusion, that is, that the Parliament does not come in the picture until the receipt of the report from the Commit tee. This is wholly inconsistent with the original Bill not Finding favour with the Parliament. But apart from this consideration, let us assume that the petitioners are right, and the matter does not reach the Parliament at all before it is ready for consideration on the basis of the Inquiry Report. It cannot be suggested that even at that stage a discussion on the conduct of a Judge is banned; and before this stage is reached there is no occasion for relying upon Article 121 to prevent a discussion. The situation, there fore, does not require the aid of any legal fiction. The consequence of accepting the argument of Mr. Shanti Bhushan will be to render the aforesaid provisions of the statute wholly superfluous. Also, had it been a case of a legal fiction as suggested, it would attract the observations of Lord Asquith in East End Dwellings Co. Ltd And Finsbury Borough Council: , (followed in 'this country in numerous cases) to the effect that if you are bidden to treat an imaginary state of affairs as real, you must also imagine as real the consequences and incidents which, if the putative state of affairs had in fact existed, must inevita bly have flowed from or accompanied it; and if the statute says that you must imagine a certain state of affairs, it does not say that having done so, you must cause or permit your imagination to boggle when it comes to the inevitable corollaries of that state of affairs. The alternative sug gestion of Mr. Shanti Bhushan that the motion, on its admis sion, having served its purpose, is completely exhausted, and a new motion is to be moved again by a member on the receipt of the Report from the Committee, has also no merit, for if the motion completely exhausts itself and there. fore does not remain in existence any further, no problem about the lifting of the bar under Article 121 arises for being solved with the help of a legal fiction. An attempt was made by mr. Shanti Bhushan to derive some support 97 from that part of clause (4) of Article 124 which requires the voting in the two Houses to take place in the same session. The provision appears to me to be absolutely irrel evant. The clause does not require that the entire proceed ing with respect to the removal of a Judge commencing with the notice of motion has to be within the same session. It refers only to the voting part. A close reading of the entire Act indicates that the language therein, which com pletely demolishes the petitioners ' case, was consciously chosen to make the House seised of the matter, and conse quently it became necessary to include the provisions di recting the motion to remain pending for the purpose of preventing a premature discussion. The Act has, thus, very successfully respected both Articles 124 and 121 in their true spirit, by neatly harmonising them. Let us consider another argument of the petitioners that by reason of the expression "on the ground of proved misbehaviour or incapacity" occurring in clause (4) of Article 124 it should be held that until an adverse verdict of misbehaviour or incapacity by some other body is received by the House, the matter does not come within its purview. The body in contemplation of clause (4) may be an authority, completely unassociated with either House of the Parliament or the Speaker or the Chairman, and the Parliament may not have any control over the same. Such authority would be purely statutory, not amenable to the discipline of the Parliament, but subject to the Court 's jurisdiction. Merely for the reason that a statute under clause (5) prescribes the procedure in this regard by entrusting the Speaker to take a decision at the initial stage, he could not cease to be a statutory authority. In other words, he acts in his individual capacity under the power vested by the law and not in a representative capacity. 1 do not find this con struction of clauses (4) and (5) acceptable. This would, in substance, deny the Parliament the power to remove a Judge exclusively vested in it by Constitution. Let us ignore the present Act and consider another statute with provisions in express terms on the lines suggested by the petitioners, that is, entitling the statutory authority to act independ ently of the Parliament, the Speaker and the Chairman. If that could be permissible it would lead to the Parliament being reduced to a helpless spectator, dependent on the statutory authority, to act on or to ignore a complaint. This would be in complete violation of the intention of the Constitution to vest the power to remove a Judge exclusively in the Parliament. It must, therefore, be held that the Parliament is in control of the matter from the very begin ning till the end, and it acted correctly in accepting the objections of the Joint Committee to the original Bill, aforementioned, and in passing the Act of 1968, iii the form we find it. By the introduction of the Speaker and the requirement of a large number of members of either House to initiate the matter, the 98 House is brought in control of the proceeding through its representative the Speaker or the Chairman. It has to be noted that "the ground of proved misbehaviour or incapacity" is necessary only for putting the matter to vote in the House under clause (4), and is not a condition precedent for initiating a proceeding and taking further steps in this regard. Mr Sibal projected another extreme point of view by contending that a finding of the Committee in favour of the Judge cannot be held to be binding on the Parliament on account of the limited scope of a statute passed under clause (5). There is no merit in this argument either. Clause (4) authorises the Parliament to act on the ground of proved misbehaviour or incapacity and clause (5) permits it to pass a law to lay down the manner in which it may become possible to do so. It is true that the Parliament can exer cise its power without formally framing a law. The House in question could in the absence of a law, decide on the proce dure to be followed in a given case but it was perfectly open to it to pass an Act laying down a general code to be followed until the Act is repealed or amended. It is a well established practice for a large body to entrust investiga tions to a smaller body for obvious practical reasons, and such an exercise cannot be characterised as indulging in abnegation of authority. It could have asked a Parliamentary Committee to enquire into the allegations or employed any other machinery for the purpose. The ratio in State of Uttar Pradesh vs Batuk Deo Pati Tripathi and Anr., , is attracted here. In that case the Administrative Committee of the High Court, constituted under the Rules of the Court resolved that the District Judge should be retired compulsorily from the service, and the Registrar of the High Court communicated the decision to the State Government and thereafter circulated to all the Judges of the High Court for their information. The State Government passed orders retiring the District Judge, whereupon he filed a writ petition in the High Court. The matter was heard by a Full Bench and the majority of the Judges held that the writ petitioner could not have been compulsorily retired on the opinion recorded by the Administrative Committee, as the Full Court was not consulted. The application was allowed and a writ was accordingly issued. On appeal by the State Government this Court reversed the decision holding that Article 235 of the Constitution authorised the High Court to frame the rules for prescribing the manner in which the power vested in the High Court had to be exercised, and observed that though the control over the subordinate courts is vested constitutionally in the High Court by the Article, it did not follow that the High Court has no power to pre scribe the manner in which that control may, in practice, be exercised; and in fact, the very circumstance that the power of control, which comprehends matters of a wide ranging authority, vests in the entire body of Judges 99 makes it imperative that the rules are flamed so that the exercise of the control becomes feasible, convenient and effective. The parliament is a far larger body than the High Court and the observations apply to it with greater force. So long as the statute enables the House to maintain its control either directly or through the Speaker, the entrust ment of the investigation does not amount to abdication of power. It is a case where the Parliament has taken a deci sion to respect the verdict of the Committee in favour of the Judge, consistently with clause (4) and no fault can be .found. It has been stated on behalf of the respondents that the question whether the Motion against the respondent No. 3 has lapsed as a result of the dissolution of the old House is agitating the minds of the members of the Lok Sabha and the issue is under consideration of the new Speaker. In support, he produced a copy of the proceeding of the House. If the present Speaker holds that the Motion has lapsed, and the Committee does not have any duty to perform, the pro ceeding cannot be proceeded with any further. In reply the learned counsel for the petitioners claimed that after the matter is entrusted to the Committee, neither he nor the Parliament at this stage can undo the admission of the Motion by the earlier Speaker, or withdraw the investiga tion. If the petitioners are right, then what happens if a member of the Committee becomes unavailable by any reason whatsoever or another member renders himself unfit to be on the Committee, say by reason of his apparent and gross bias, against or in favour of the Judge concerned, coming to light after the formation of the Committee ? The answer is that the House which is in control of the proceeding is entitled to take all necessary and relevant steps in the matter, except discussing the conduct of the Judge until the stage is reached and the bar under Article 121 is lifted. If on the other hand it is held that the Committee is an independ ent statutory body not subject to the control of the House directly or through the Speaker, as the petitioners suggest, the Act may be rendered unworkable. Besides, this would impute to the Parliament to have done exactly what the Constituent Assembly refused to do by accepting Sir Alla di 's impassioned appeal, referred to above in para graph 19, not to lower the dignity of the Chief Justice of India by providing a machinery consisting of 5 or 4 Judges to sit in appeal over him. It may be noted here that the Constitution has considered it fit to entrust the inquiry in the alleged misbehaviour of a member of a Public Service Commission, a constitutional functionary but lower in rank than the Supreme Court, to the Supreme Court without associ ating a Chief Justice of the High Court or any other person lower in rank. If the Committee is held to be functioning under the supervision and control of the parliament, with a view to aid it for the purpose of a proceeding pending in the House, it will be the parliament which will be in con trol of the proceeding and not the Committee. 100 32. Mr Jethmalani was fervent in his exhortation to construe the Constitution and the Act in a manner which will protect the independence of the judiciary from the politi cians, and this, according to him, is possible only if this Court comes to an affirmative conclusion on the question of justiciability. There cannot be two opinions on the necessi ty of an independent and fearless judiciary in a democratic country like ours, but it does not lead to the further conclusion that the independence of judiciary will be under a threat, unless the matter of removal of Judges, even at the highest level, is not subjected to the ultimate control of Courts. The available materials unmistakably show that great care was taken by the framers the Constitution to this aspect and the matter was examined from every possible angle, before adopting the scheme as indicated earlier. So far as the district courts and subordinate courts are concerned, the control has been vested in the High Court, but when it came to the High Court and Supreme Court Judges, it was considered adequate for the maintenance of their independence to adopt and enact the Constitution as we find it. I do got see any reason to doubt the wisdom of the Constituent Assembly in entrusting the matter exclusively in the hands of the Parliament and I do not have any ground for suspicion that the Members of Par liament or their representatives, the Speaker and the Chair man, shall not be acting in the rue spirit of the Constitu tional provisions. Similarly, the task of enacting a law under clause (5) was taken up seriously by consid ering every relevant aspect, and the process took several years before the Act was passed. do not propose to deal with this point any further beyond saying that the mandate of the Constitution is binding on all of us, and I would close by quoting the following words from Hamilton: "If mankind were to resolve to agree in no institution of government, until every part of it had been adjusted to the most exact stand ard of perfection, society would soon become a general scene of anarchy, and the world a desert. Where is the standard of perfection to be found ? Who will undertake to unite the discordant opinions of a whole community, in the same judgment of it; and to prevail upon one conceited projector to renounce his infal lible criterion for the fallible criterion of his more conceited neighbour? To answer the purpose of the adversaries of the Constitu tion, they ought to prove, not merely that particular provisions in it are not the best which might have been imagined, but that the plan upon the whole is bad and pernicious". It has not been suggested on behalf of the petition ers or by anybody else that it is open to the Court to examine the legality of a final decision taken by the Par liament under clause (4). Even after a verdict against the Judge is returned by the Committee, the Parlia ment or for that matter any of the two Houses can refuse to vote in favour of the Motion for removal of a Judge, and the Court shall not have any jurisdiction to interfere in the matter. Is it conceivable, in the circumstances, that at the intermediate stage of investigation the Court has got the power to intervene ? The answer is in the negative for more than one reason. If the control of the House continues on the proceeding throughout, which can he exercised through the Speaker, it cannot be presumed that the Court has a parallel jurisdiction, which may result in issuance of contradictory directions. Besides, the Court cannot he expected to pass orders in the nature of step in aid, where the final result is beyond its jurisdiction. Any order passed or direction issued by this Court may result in merely an exercise in futility, and may cause a situation, embarassing both for the highest judicial and legislative authorities of the country. The Constitution cannot he attributed with such an intention. I, therefore, hold that the courts including the Supreme Court do not have any jurisdiction to pass any order in relation to a proceeding for removal of a Judge of the superior courts. Reference was made by the learned counsel for the parties to the Constitutions of several other countries, but I do not consider it necessary to discuss them excepting the Australian Constitution as they do not appear to be helpful at all. As has been mentioned earlier the language of Arti cle 124 (4) is similar to section 72(ii) of the Common wealth of Australia Constitution Act (1900), except with this difference that the Australian Constitution Act.does not specifically provide for any law to he made for regulat ing the procedure and investigation. However, the constitu tional and the legal position in Austraila is not helpful to resolve the present dispute before us, as the Commonwealth of Australia Constitution Act (1900) has adopted rigid Separation of Powers between the Executive, Legislature and Judiciary (as has been observed by this Court on many occa sions including at page 415 in Smt. Indira Gandhi vs Raj Narain, , relented to above in paragraph 9. Reference has been made by P.H. Lane in his commentary on the Australian Constitution to the proceedings which were initiated for removal of Mr. Justice Murphy under section 72 (ii) of the Constitution Act. On account of sharp difference amongst the members of the Select Committee of the Senate appointed to inquire into the matter and a further failure to resolve the situation by establishing a second Committee and in view of certain other facts an adhoc legislation was passed under the name of Parliamentary Commission of Inquiry Act, 1986. Under this Act further steps were being taken when Mr. Justice Murphy moved the High Court of Austraila for an order of injunction challenging the validity of the Act and alleging that one of the members of the Commission constituted under the Act (a 102 retired Judge) was disqualified on account of bias. The application was dismissed on merits without adverting to the question of justiciability. This decision, to my mind, is of no help to the petitioners before us, mainly on account of the difference in the Constitutional scheme of the two countries with respect to the Separation of Powers. The judicial powers there have been exclusively vested in the courts by section 71 of the Constitution Act of 1900. Lane has at page 372 of his book opined that sec tion 72 (ii) may be non justiciable, since it seems to place the exercise under the section in Parliament itself. He, however, further proceeds to say that the Parliament could seek the High Court 's help, for example, in the peripheral matter of the meaning of misbehaviour or incapacity in section 72(ii). He has also referred to certain other provi sions of the Constitution Act, and analysed the roles of Parliament and Court with his comments. I do not consider it necessary to proceed further beyond saying that Mr. Justice Murphy 's case does not provide any aid in deciding the issue in the cases before us. Although our Constitution was made after examining the Constitutions of many other countries, it has adopted a pattern of its own. The learned counsel also placed a large number of decisions; both Indian and foreign and since I have not found them relevant, I have refrained from discussing them. None of the cases in which this Court has either interfered with the decision of the House or has refused to do so, related to a proceeding for removal of a Judge, and are clearly distinguishable in view of my opinion expressed above. I am also not dealing with the other points urged by Mr. Sibal, as I agree with him on the main issue of justiciability. I am avoiding to express any opinion on the controversy whether the Motion lapsed or not on the dissolution of the earlier House, as the issue is for the Lok Sabha to decide. In view of the above findings this Court cannot pass any order whether permanent or temporary on the prayer that the respondent No. 3 should not be allowed to exercise his judicial powers. In the result all the F writ petitions are dismissed. The prayer for transfer of Writ Petition No. 1061 of 1991 in Transfer Petition No. 278 of 1991 is allowed and that Writ Petition is also dismissed. There will be no order as to costs. N.P.V. Petitions dis posed of.

Upon a notice given by 108 members of the 9th Lok Sabha of a Motion for presenting an Address to the President for the removal of a sitting Judge of the Supreme Court for the alleged misconduct committed by him while he was functioning as Chief Justice of a High Court, the Speaker of the Lok Sabha admitted the Motion and constituted a Committee con sisting of a sitting Judge of this Court, Chief Justice of a High Court and a distinguished jurist in terms of Section 3(2) of the . Subsequently, the Lok Sabha was dissolved and its term came to an end. On its understanding that the Motion as well as the decision of the Speaker thereon had lapsed consequent on the dissolution of the Lok Sabha, the Union government did not act in aid of the decision of the Speaker, and notify that the services of the two sitting Judges on the Committee would be treated as "actual service" within the meaning of Para 11(B)(i) of of the II Schedule to the Constitu tion. Thereupon, a body called the Sub Committee on Judicial Accountability, claiming to be a Sub Committee constituted by an All India Convention on Judicial Accountability to carry forward the task of implementing the resolutions of the conventions, and the Supreme Court Bar Association, seeking to prosecute the matter in the larger public inter est and, in particular, in the interests of litigant public, filed two Writ Petitions before this Court. Two prayers common to both the petitions were, first, that the Union of India be directed to take immediate steps to enable the Inquiry Committee to discharge its functions under the and, second, that during the pendency of the proceedings before the Committee the con cerned Judge should be restrained from performing judicial functions and from exercising Judicial powers. It was contended on behalf of the petitioners that pending business lapsed on prorogation, and as a general practice the House was 4 usually prorogued before it was dissolved, but impeachment motions were sui generis in their nature and, therefore, they did not lapse; that the question whether a motion lapsed or not was a matter pertaining to the conduct of the business of the House of which the House was the sole and exclusive master; no aspect of the matter was justiciable before a Court and Houses of Parliament were privileged to be the exclusive arbiters of the legality of their proceed ings, that it would be highly inappropriate that the Speaker should issue notice to a Judge and call upon him to appear before him; that these proceedings could not be equated with disciplinary or penal proceedings and the Speaker would not decide anything against the Judge at that stage and would merely decide whether the matter would bear investigation; that the constitutional machinery for removal of a Judge was merely a political remedy for judicial misbehaviour and did not exclude the judicial remedy available to the litigants to ensure and enforce judicial integrity, that the right to move the Supreme Court to enforce fundamental rights was itself a fundamental right and that took within its sweep, as inhering in it, the right to an impartial judiciary with persons of impeccable integrity and character, without which the fundamental right to move the court itself becomes barren and hollow, that the court itself had the jurisdic tion nay a duty to ensure the integrity and impartiality of the members composing it and restrain any member who was found to lack in those essential qualities and attainments at which public confidence is built. Another Writ Petition was filed by an individual by way of a counter to the second prayer in the Writ Petitions filed by the SubCommittee on Judicial Accountability and the Supreme Court Bar Association. It was contended that till the Inquiry Committee actually found the concerned Judge guilty of charges, there should be no interdiction of his judicial functions and that if such a finding was recorded then thereafter till such time as the Motion for the presen tation of the Address for the removal of the Judge was disposed of by the Houses of Parliament which should not be delayed beyond 180 days the President may ask the Judge concerned to recuse from judicial functions. Another Writ Petition was also filed by a practising Advocate challenging the constitutional validity of the as ultra vires Articles 100, 105, 118, 121 and 124(5) of the Constitution of India and seeking a declaration that the ' Motion presented by 108 Members of Parliament for the removal of the Judges 5 had lapsed with the dissolution of the Lok Sabha. The peti tioner also sought the quashing of the decision of the Speaker admitting the Motion, on the ground of denial of opportunity of being heard to the concerned Judge before the admission of Motion and constitution of the Committee by Speaker. A Transfer Petition was filed seeking the withdrawal by the Supreme Court to itself from the Delhi High Court the Writ Petition filed in the High Court, where reliefs were similar to those prayed for in the Writ Petition filed by the practising Advocate. The Writ Petition was directed to be withdrawn to the Supreme Court and was heard along with other Writ Petitions. 1t was contended on behalf of the petitioners in these Writ Petitions that before taking a decision to admit the motion and constituting a Committee for investigation, it was incumbent upon the Speaker, as a minimum requirement of natural justice, to afford an opportunity to the Judge of being heard since such a decision had momentous consequences both to the Judge and to the judicial system as a whole and that any politically motivated steps to besmear a Judge would not merely affect the Judge himself but also the entire system of administration of justice and therefore it would greatly advance the objects and purposes of if the Judge concerned himself was given such a hearing; that the Speaker had acted contrary to Constitutional practice, that the manner in which he had admitted the motion smacked of malafides and since the Speaker had not entered appearance and denied the allega tions, he must be deemed to have admitted them; that having regard to the nature of the area the decision of the Court and its writ is to operate in, the Court should decline to exercise its jurisdiction, and that any decision rendered or any writ issued might, ultimately become futile and infruc tuous as the constitution of and investigation by the com mittee were not, nor intended to be, an end by themselves culminating in any independent legal consequence, but only a proceeding preliminary to and preceding the deliberations of the House on the motion for the presentation of an address to the President for the removal of a Judge, which was indisputably within the exclusive province of the Houses of Parliament over which courts exercised no control or juris diction. On behalf of the Union of india it was contended that a combined reading of Articles 107, 108 and 109 would lead irresistibly to the conclusion that upon dissolution of the House, all bills would 6 lapse subject only to the exception stipulated in Article 108, that on first principle also it required to be accepted that no motion should survive upon the dissolution of the House unless stipulated otherwise under the Rules of proce dure and conduct of business; the doctrine of lapse was a necessary concomitant of the idea that each newly constitut ed House was a separate entity having a life of its own unless the business of the previous House was carried over by the force of statute or rules of procedure and that the question whether a motion lapsed or not was to be decided on the basis of the provisions of law guiding the matter and the House itself was not its final arbiter and the Court alone had jurisdiction to examine and pronounce on the law of the matter. Disposing of the cases, this Court, HELD: By majority Per Ray. J. (for himself, Venkatacha liah, Verma and Agrawal, J J) 1.1 Where there is a written Constitution which consti tutes the fundamental and in that sense a "higher law" and acts as a limitation upon the Legislature and other organs of the State as grantees under the Constitution, the usual incidents of parliamentary sovereignty do not obtain and the concept is one of 'limited Government '. Judicial review is an incident of and flows from this concept of the fundamen tal and the higher law being the touchstone of the limits of the powers of the various organs of the State which derive power and authority under Constitution and that the judicial wing is the interpreter of the Constitution and, therefore, of the limits of authority of the different organs of the State. In a federal set up, the judiciary becomes the guard ian of the Constitution. The inter pretation of the Consti tution as a legal instrument and its obligation is the function of the Courts. It is emphatically the province and duty of the judicial department to say what the law is. [51 G H, 52A, D] 1.2 In interpreting the constitutional provisions con cerning the judiciary and its independence the Court should adopt a construction which strengthens the foundational features and the basic structure of the Constitution. Rule of law is a basic feature of the Constitutional fabric and is an integral part of the constitutional structure. Inde pendence of the judiciary is an essential attribute of Rule of law. [31 D] 1.3 In construing the Constitutional provisions, the law and 7 procedure for removal of Judges in other countries afford a background and a comparative view. The solution must, of course, be found within our own Constitutional Scheme. But a comparative idea affords a proper perspective for the under standing and interpretation of the Constitutional Scheme. [31 G H] Barringtons Case [1830]; Terrell vs Secretary of State for the Colonies and Another, , referred to. Constituent Assembly Debates Vols. I to VI @ pp 899,900 Vol. VIII @ pp. 243 262, referred to. Halsbury 's Laws of England, 4th Ed. p 1108; She treet 'Judges on Trial ' (1976); pp. 404 405; Rodney Brazier 'Constitutional Texts ' (1990) pp. 606 607; Gall 'The Canadi an Legal System ' (1983); pp. 184 186, 189; Lane 's Commentary on The Australian Constitution (1986) p. 373; Mclelland 'Disciplining Australian Judges ' , at p. 403; Henry J. Abraham. ' The Judicial Process, 3rd Ed. p. 45; Robert J. Janosik: Encyclopeadia of the American Judicial System, Vol II pp. 575 to 578; "The Impeachment of the Federal Judiciary" Wrisley Brown Harvard Law Review 1912 1913 684 at page 698; 'The Judicial Process in Comparative Perspective ' (Clarendon Press Oxford 1989 at page 73); (Erskine May 's "The Law, Privileges, Proceeding and Usage of Parliament" (Twenty first Edition London Butterworths 1989); M.N. Kaul and S.L. Shakdher in Practice and Procedure of Parliament", referred to. 2.1 It is not correct to say that the question whether a motion has lapsed or not was a matter pertaining to the conduct of the business of the House, of which the House was the sole and exclusive master, and that no aspect of the matter was justiciable before a Court. [29 C ,53 G] 2.2 The question whether the motion has lapsed is a matter to be pronounced upon on the basis of the Constitu tion and the relevant rules. [53 E] 2.3 On such interpretation of the Constitutional provi sions as well as the , the Courts retain jurisdiction to declare that a motion for removal of Judge does not lapse on dissolution of the House. [53F G] Bradlaugh vs Gossett, [18841 , distinguished. 8 A.K. Gopalan vs The State of Madras, |; Special Reference Case; , , referred to. Barton vs Taylor, , Rediffuson (Hong Kong) Ltd. vs Attorney General of Hong Kong, ; , referred to. 3.1 The constitutional process for removal of a Judge upto the point of admission of the motion, constitution of the Committee and the recording of findings by the Committee are not, strictly, proceedings in the Houses of Parliament. The Speaker is a statutory authority under the Act. Upto that point the matter cannot be said to remain outside the Court 's jurisdiction. [66 E] 3.2 The scheme of Articles 124(4) and (5) is that the entire process of removal is in two parts the first part, under clause (5) from initiation to investigation and proof of misbehaviour or incapacity is covered by an enacted law, Parliament 's role being only legislative as in all the laws enacted by it, the second part under clause (4) is in Par liament and that process commences only on proof of misbeha viour or incapacity in accordance with the law enacted under clause (5). Thus, the first part is entirely statutory, while the second part alone is the parliamentary process. [61 D] 3.3 The context and setting in which clause (5) appears along with clause (4) in Article 124 indicate its nature and distinguish it from Articles 118, 119 and 121, all of which relate to procedure and conduct of business in Parliament. [61 B C] 3.4 The validity of law enacted by the Parliament under clause (5) of Article 124 and the stage upto conclusion of the inquiry in accordance with that law, being governed entirely by statute, would be open to judicial review as the parliamentary process under Article 124(4) commences only after a finding is recorded that the alleged misbehaviour or incapacity is proved in the inquiry conducted in accordance with the law enacted under clause (5). For this reason, the argument based on exclusivity of Parliament 's jurisdiction over the process and progress of inquiry under the and, consequently, exclusion of this Court 's jurisdiction in the matter at this stage does not arise. [59 G H, 60 A] 4.1 Article 121 suggests that the bar on discussion in Parliament with respect to the conduct of any Judge is lifted 'upon a 9 motion for presenting an address to the President praying for the removal of a Judge as hereinafter provided '. The words 'motion ' and 'as hereinafter provided ' are obvious references to the motion for the purpose of clause (4) of Article 124 which, in turn, imports the concept of "proved" misbehaviour or incapacity. What lifts the bar under Article 121 is the 'proved ' misbehaviour or incapacity. Clause (5) of Article 124 provides for an enactment of law for the purpose of investigation and proof of misconduct or incapac ity preceding the stage of motion for removal on the ground of 'proved ' misbehaviour or incapacity under clause (4). [56 H, 57 A B] 4.2 An allegation of misbehaviour or incapacity of a Judge has to be made, investigated and found proved in accordance with the law enacted by the Parliament under Article 124 (5) without the Parliament being involved upto that stage; on the misbehaviour or incapacity of a Judge being found proved in the manner provided by that law a motion for presenting an address to the President for remov al of the Judge on that ground would be moved in each House under Article 124(4); on the motion being so moved after the proof of misbehaviour or incapacity and it being for pre senting an address to the President praying for removal of the Judge, the bar on discussion contained in Article 121 is lifted and discussion can take place in the Parliament with respect to the conduct of the Judge; and the further conse quences would ensue depending on the outcome of the motion in a House of Parliament. If, however, the finding reached by the machinery provided in the enacted law is that the allegation is not proved, the matter ends and there is no occasion to move the motion in accordance with Article 124(4). [57 G H, 58 A B] 4.3 Thus prior proof of misconduct in accordance with the law made under Article 124(5) is a condition precedent for the lifting of the bar under Article 121 against dis cussing the conduct of a Judge in the Parliament. Article 124(4) really becomes meaningful only with a law made under Article 124(5), without which, the constitutional scheme and process for removal of a Judge remains inchoate. [66 F] 4.4 The bar in Article 121 applies to discussion in Parliament but investigation and proof of misconduct or incapacity cannot exclude such discussion. This indicates that the machinery for investigation and proof must neces sarily be outside Parliament and not within it. In other words, proof which involves a discussion of the conduct of the Judge must be by a body which is outside the limita 10 tion of Article 121. The policy appears to be that the entire stage upto proof of misbehaviour or incapacity, beginning with the initiation of investigation on the alle gation being made, is governed by the law enacted under Article 124(5) and in view of the restriction provided in Article 121, that machinery has to be outside the Parliament and not within it. Parliament neither has any role to play till misconduct or incapacity is found proved nor has it any control over the machinery provided in the law enacted under Article 124(5). Parliament comes in the picture only when a finding is reached by that machinery that the alleged misbe haviour or incapacity has been proved. The enacted under article 124(5) itself indicates that the Parliament so understood the integrated scheme of Arti cles 121, 124(4) and 124(5). The general scheme of the Act conforms to this view. [58 H 59 A D] 4.5 It is not the law enacted under Article 124(5) which abridges or curtails the parliamentary process or exclusivi ty of its jurisdiction, but the Constitutional Scheme itself which by enacting clauses (4) and (5) simultaneously indi cated that the stage of clause (4) is reached and the proc ess thereunder commences only when the alleged misbehaviour or incapacity is proved in accordance with the law enacted under clause (5). It is only then that the need for discuss ing a Judge 's conduct in the Parliament arises and, there fore, the bar under Article 121 is lifted. [60 D E] 5.1 If the motion for presenting an address for removal is envisaged by Articles 121 and 124(4) 'on ground of proved misbehaviour or incapacity ', it presupposes that misbeha viour or incapacity has been proved earlier. This is more so on account of the expression 'investigation and proof ' used in clause (5) with specific reference to clause (4), indi cating that 'investigation and proof ' of misbehaviour or incapacity is not within clause (4) but within clause (5). Use of the expression 'same session ' in clause (4) without any reference to session in clause (5) also indicates that session of House has no significance for clause (5) i.e., 'investigation and proof ' which is to be entirely governed by the enacted law and not the parliamentary practice which may be altered by each Lok Sabha. [61 F H] 5.2 The significance of the word 'proved ' before the expression 'misbehaviour or incapacity ' in clause (4) of Article 124 is also indicated when the provision is compared with Article 317 providing for removal of a member of the Public Service Commission. The expression in clause (1) of Article 317 used for describing the ground 11 of removal is 'the ground of misbehaviour ' while in clause (4) of Article 124, it is, 'the ground of proved misbeha viour or incapacity '. [62 A] 5.3 Use of the word 'may ' in clause (5) indicates that for the 'procedure for presentation of address ' it is an enabling provision and in the absence of the law, the gener al procedure or that resolved by the House may apply but the 'investigation and proof ' is to be governed by the enacted law. The word 'may ' in clause (5) is no impediment to this view. When a provision is intended to effectuate a right here it is to effectuate a constitutional protection to the Judges under Article 124(4) even a provision as in Arti cle 124(5) which may otherwise seem merely enabling becomes mandatory. The exercise of the power is rendered obligatory. The use of the word 'may ' does not necessarily indicate that the whole of clause (5) is an enabling provision leaving it to the Parliament to decide whether to enact a law even for the investigation and proof of the misbehaviour or incapaci ty or not. [62 D, 62 G, 63 E F] State of Uttar Pradesh vs Joginder Singh, ; at 202; Punjab Sikh Regular Motor Service, Moudhapara vs The Regional Transport Authority, Raipur & Anr., ; , referred to. Erederic Guilder ,Julius vs The Right Rev. The Lord Bishop of Oxford, ' the Rev. Thomas Tellusson Carter, at 244, referred to. 5.4 Similarly, use of word 'motion ' to indicate the process of investigation and proof in the , because the allegations have to be presented to the 'Speaker ' does not make it 'motion in the House ' not withstanding use of that expression in Section 6. Otherwise, section 6 would not say that no further step is to be taken in case of a finding of 'not guilty '. It only means that when the allegation is not proved, the Speaker need not commence the process under clause (4) which is started only in case it is proved. The Speaker is, therefore, a statutory authority under the Act chosen because the further process is parliamentary and the authority to make such a complaint is given to Members of Parliament. Moreover, the enactment under Article 124(5) cannot be a safe guide to determine the scope of Article 124(5). [64 A C] 6.1 Article 124(5) does not operate in the same field as Article 118 relating to procedure and conduct of business in Parliament. [61C] 12 6.2 Article 118 is a general provision conferring on each House of Parliament the power to make its rules of procedure. These rules are not binding on the House and can be altered by the House at any time. A breach of the rules amounts to an irregularity and is not subject to judicial review in view of Article 122. [64 G] 6.3 Article 124(5) is in the nature of a special provi sion intended to regulate the procedure for removal of a Judge under Article 124(4), which is not a part of the normal business of the House but is in the nature of special business. It covers the entire field relating to removal of a Judge. Rules made under Article 118 have no application in this field. [64 H, 65 A] 6.4 Article 124(5) has no comparison with Article 119. Articles 118 and 119 operate in the same field viz., normal business of the House. It was, therefore, necessary to specifically prescribe that the law made under Article 119 shall prevail over the rules of procedure made under Article 118. Since Articles 118 and 124(5) operate in different fields; a provision like that contained in Article 119 was not necessary and even in the absence of such a provision, a law made under Article 124(5) will override the rules made under Article 118 and shall be binding on both the Houses of Parliament. A violation of such a law would constitute illegality and could not be immune from judicial scrutiny under Article 122(1). [65 B C] 7.1 Neither the doctrine that dissolution of a House passes a sponge over parliamentary slate nor the specific provisions contained in any rule or rules framed under Article 118 of the Constitution determine the effect of dissolution on the motion for removal of a Judge under Article 124, because Article 124(5) and the law made there under exclude the operation of Article 118 in this area. [49 F] Purushothaman Nambudiri vs The State of Kerala, [1962] Suppl. 1 SCR 753, referred to. 7.2 The law envisaged in Article 124(5) is parliamentary law which is of higher quality and efficacy than rules made by the House for itself under Article 118. Such a law can provide against the doctrine of lapse. [50 H] 7.31n the constitutional area of removal of a Judge, the law made under Article 124(5) must be held to go a little further and to exclude the operation of the Rules under Article 118 and no ques 13 tion of repugnance could arise to the extent the field is covered by the law under Article 124(5). [51 C] State of Punjab vs Sat Pal Dang & Ors, ; , relied on. 8.1 The reflects the consti tutional philosophy of both the judicial and political elements of the process of removal. The ultimate authority remains with the Parliament in the sense that even if the Committee for investigation records a finding that the Judge is guilty of the charges, it is yet open to the Parliament to decide not to present an address to the President for removal. But if the Committee records a finding that the Judge is not guilty then the political element in the proc ess of removal has no further option. The law is, indeed, a civilised piece of legislation reconciling the concept of accountability of Judges and the values of judicial inde pendence. The provisions of the do not foul with the constitutional scheme. [65 B C, 64 C] 8.2 The Speaker, while admitting a motion and constitut ing a Committee to investigate the alleged grounds of misbe haviour or incapacity does not act as part of the House. The House does not come into the picture at this stage. The provisions of the are not uncon stitutional as abridging the powers and privileges of the House. The is constitutional and is intra vires. [66 G H] 9.1 The is law enacted under Article 124(5) which provides against doctrine of lapse. 9.2 The effect of sections 3(1) and (2) and 6(2) of the , is that the motion should be kept pending till the committee submits its report and if the committee finds the Judge guilty, the motion shall be taken up for consideration. Only one motion is envisaged which will remain pending. No words of limitation that the motion shall be kept pending subject to usual effect of dissolution of the House can or should be imported. [50 G] 9.3 Section 3 of the Act applies to both the Houses of Parliament. The words "shall keep the motion pending" cannot have two different meanings in the two different contexts. It can only mean that the consideration of the motion shall be deferred till the report 14 of the Committee implying that till the happening of that event the motion will not lapse. Therefore, such a motion does not lapse with the dissolution of the House of Parlia ment. [51 D] 10. At the stage of the provisions when the Speaker admits the motion under section 3 of the , a Judge is not, as a matter of right, entitled to a notice. The scheme of the statute and the rules made there under by necessary implication, exclude such a right. But that may not prevent the Speaker, if the facts and circum stances placed before him indicate that hearing the Judge himself might not be inappropriate, might do so. But a decision to admit the motion and constitute a Committee for investigation without affording such an opportunity does not, by itself and for that reason alone, vitiate the deci sion. [68 E G] 11.1 It is true that society is entitled to expect the highest and most exacting standards of propriety in judicial conduct, and any conduct which tends to impair public confi dence in the efficiency, integrity and impartiality of the court is indeed forbidden. But, the proposition that, apart from the constitutional machinery for removal of a Judge, the judiciary itself has the jurisdiction and in appropriate cases a duty to enquire into the integrity of one of its members and restrain the Judge from exercising judicial functions is beset with grave risks. The court would then indeed be acting as a tribunal for the removal of a Judge and is productive of more problems than it can hope to solve. [69 C, 70 H] Sampath Kumar & Ors. vs Union of India & Ors, , referred to. Corpus Juris Secundum, (VoI.48A), referred to. 11.2 The relief of a direction to restrain the Judge from discharging judicial functions cannot be granted. The entire Constitutional Scheme, including the provisions relating to the process of removal of a Judge are to be taken into account for the purpose of considering this aspect. Since the Constitutional Scheme is that the Judge 's conduct cannot be discussed even in the Parliament which is given the substantive power of removal, till the alleged misconduct or incapacity is 'proved ' in accordance with the law enacted for this purpose, it is difficult to accept that any such discussion on the conduct of the Judge or any evaluation or inference as to its 15 merit is permissible according to law elsewhere except during investigation before the Inquiry Committee constitut ed under the statute for this purpose. Therefore, it is difficult to accept that there can be any right in anyone running parallel with the Constitutional Scheme for this purpose contained in clauses (4) and (5) of Article 124 read with Article 121. No authority can do what the Constitution by necessary implication forbids. [71 B F] 11.3 The question of propriety is, however, different from that of legality. Whether the Judge should continue to function during the intervening period is to be covered by the sense of propriety of the concerned Judge himself and the judicial tradition symbolised by the views of the Chief Justice of India. It should be expected that the Judge would be guided in such a situation by the advice of the Chief Justice of India, as a matter of convention, unless he himself decided as an act of propriety to abstain from discharging judicial functions during the interregnum. It is reasonable to assume that the framers of Constitution had assumed that a desirable convention would be followed by a Judge in that situation which would not require the exercise of a power of suspension.[It would also be reasonable to assume that the Chief Justice of India is expected to find a desirable solution in such a situation to avoid embarrass ment to the concerned Judge and to the Institution in a manner which is conducive to the independence of judiciary and should the Chief Justice of India be of the view that in the interests of the institution of judiciary it is desira ble for the Judge to abstain from judicial work till the final outcome under Article 124(4), he would advise the Judge accordingly, and the concerned Judge would ordinarily abide by the advice of the Chief Justice of India. All this is, however, in the sphere of propriety and not a matter of legal authority to permit any court to issue any legal directive t? the Chief Justice of India for this purpose. [71 G, 72 A, C E] 12. Even on the allegations made in the petition and plea of malafides which require to be established on strong grounds no such case is made out. A case of malafides cannot be made out merely on the ground of political affiliation of the Speaker either. That may not be a sufficient ground in the present context. At nil events, as the only statutory authority to deal with the matter, doctrine of statutory exceptions or necessity might be invoked. [74 B C] 13. The law as to standing to sue in public interest actions has 16 undergone a vast change over the years and liberal standards for determining locus standi are now recognised. The present matter is of such nature and the constitutional issues of such nature and importance that it cannot be said that members of the Bar, and particularly, the Supreme Court Bar Association have no locus standi in the matter. An elaborate re survey of the principles and precedents over again is unnecessary. Suffice it to say that from any point view, the petitioners satisfy the legal requirements of the standing to sue. [74 E F] S.P. Gupta & Ors. vs Union of India & Ors. etc. , [1982] 2 SCR 365, relied on. Certain submissions advanced on the prayer seeking to re.strain the judge from functioning till the proceedings of the committee were concluded lacked as much in propriety as in dignity and courtesy with which the Judge is entitled. While the members of the bar may claim to act in public interest, they have, at the same time, a duty of courtesy and particular care that in the event of the charges being found baseless or insufficient to establish any moral turpi tude, the Judge does not suffer irreparably in the very process. The approach should not incur the criticism that it was calculated to expose an able and courteous Judge to public indignity even before the allegations were examined by the forum constitutionally competent to do so. The level of the debate both in and outside the Court should have been more decorous and dignified. Propriety required that even before the charges are proved in the only way in which it is permitted to be proved, the Judge should not be embarrassed. The constitutional protection to Judges is not for their personal benefit; but is one of the means of protecting the judiciary and its independence and is, therefore, in the larger public interest. Recourse to constitutional methods must be adhered to if the system were to survive. [74 G, 75 A C] 15.1 The interpretation of the law declared by this Court that a motion under section 3(2) of the Judges (In quiry) Act, 1968, does not lapse upon the dissolution of the House is a binding declaration. If the law is that the motion does not lapse, there can be no occasion for the House to say so at any time and it is erroneous to assume that the Houses of Parliament would act in violation of the law, since the interpretation of the law is within the exclusive power of the courts. [76 E] 17 25.2 If the House is not required to ' consider this question since the parliamentary process can commence only after a finding of guilt being proved, the further question of a futile writ also does not arise. The point that the House can decide even after a finding of guilt that it would not proceed to vote for removal of the Judge is not germane to the issue since that is permissible in the Constitutional Scheme itself under Article 124(4), irrespective of the fact whether Article 124(5) is a mere enabling provision or a constitutional limitation on the exercise of power under Article 124 (4). [60 B C] 15.3 The Union Government has sought to interpret the legal position for purpose of guiding its own response to the situation and to regulate its actions on the Speaker 's decision. That understanding of the law is unsound. [76 G] 15.4 No specific writ of direction need issue to any authority. Having regard to the nature of the subject matter and the purpose it is ultimately intended to serve, all that is necessary is to declare the legal and correct constitu tional position and leave the different organs of the State to consider matters falling within the orbit of their re spective jurisdiction and powers. [76 H, 77 A] 15.5 In the circumstances, the question of Court de clining to exercise its jurisdiction on the ground that the Judgment rendered and Writ issued by it would become infruc tuous does not arise. [31 A C, 77 A] Per Sharma, J. (dissenting); 1.1 On a close examination of the Constitution, it is clear that a special pattern has been adopted with respect to the removal of the members of the three organs of the State. The Executive, the Legislature and the Judiciary at the highest level, and this plan having been consciously included in the Constitution, has to be kept in mind in construing its provisions. The approach should be that when a question of removal of a member of any of the three wings at the highest level i.e. the President; the Members of the Parliament and the State Legislatures; and the Judges of the Supreme Court and the High Courts arises, it is left to an organ other than where the problem has arisen, to be decid ed. Consistent with this pattern, Clause (4) of Article 124 in emphatic terms declares that a Judge of the Supreme Court or the High Court shall not be removed from his office except on a special majority of the Members of each House of Parliament. Both the Executive and the Judiciary 18 are thus excluded in this process. The scheme cannot be construed as lack of trust in the three organs of the State. There are other relevant considerations to be taken into account while framing and adopting a written Constitution, which include the assurance to the people that the possibil ity of a subjective approach clouding the decision on an issue as sensitive as the one under consideration, has been as far eliminated as found practicable in the situation. And where this is not possible at all, it cannot be helped, and has to be reconciled by application of the doctrine of necessity, which is not attracted in the instant case. [81 F H, 82 D E,F G] A11 Party Hill Leaders Conference vs M.A. Sangma, ; at 411, referred to. The Federalist: Hamilton, referred to. 1.2 There cannot be two opinions on the necessity of an independent and fearless judiciary in a democratic country like ours, but it does not lead to the further conclusion that the independence of judiciary will be under a threat, unless the matter of removal of Judges, even at the highest level, is not subjected to the ultimate control of Courts. Great care was taken by the framers of the Constitution to this aspect and the matter was examined from every possible angle, before adopting the scheme as laid down. So far as the district courts and subordinate courts are concerned, the control has been vested in the High Court, but when it came to the High Court and Supreme Court Judges, it was considered adequate for the maintenance of their independ ence to adopt and enact the Constitution as it is found now. There is no reason to doubt the wisdom of the Constituent Assembly in entrusting the matter exclusively in the hands of the Parliament and there is no ground for suspicion that the Members of Parliament or their representatives, the Speaker and the Chairman, shall not be acting in the true spirit of the Constitutional provisions. The mandate of the Constitution is binding on all. [100 B E] 2.1 The exercise of power under clause (4) was not made conditional on the enactment of a law under clause (5), and the reason for inserting clause (5) in Article 124 was merely for elaborating the provisions. Clause (4) does not state that the misbehaviour or the incapacity of the Judge will have to be proved only in accordance with a law to be passed by the Parliament under clause (5) Clause (4) would continue to serve the purpose as it does now, without any 19 amendment if clause (5) were to be removed from the Consti tution today. There is no indication of any limitation on the power of the Parliament to decide the manner in which it will obtain a finding on misbehaviour or incapacity for further action to be taken by it. Clause (5) merely enables the parliament to enact a law for this purpose, if it so chooses. [88 E, 88 A, 89 A] 2.2 The word 'may ' has been sometimes understood in the imperative sense as 'shall ', but ordinarily it indicates a choice of action and not a command. In the present context, there is no reason to assume that it has been used in its extraordinary meaning. [88 F] 3. The object of Article 121 is to prevent any discus sion in Parliament with respect to the conduct of a Judge of the Superior Courts, except when it cannot be avoided. The Article, accordingly, prohibits such a discussion except upon a motion for presenting an address to the President for removal of a Judge. [89 B] 4.1 The expression "motion" has not been defined in the . The Lok Sabha Rules framed under Article 118 of the Constitution deal with "motions". There are separate rules of procedures for conduct of business adopted by the Rajya Sabha. Section 3(1) of the Act states that if a notice of "motion" is given for presenting an address to the President for the removal of a Judge, the Speaker or the Chairman, as the case may be, after consult ing such persons as he deems fit, as also such relevant materials which may be available to him either admit the "motion" or refuse to admit the same. The manner in which this section refers to "motion" in the Act for the first time without a definition or introduction clearly indicates that it is referring to that "motion" which is ordinarily understood in the context of the two Houses of Parliament attracting their respective rules. Section 3 does not speci fy as to how and to whom the notice of "motion" is to be addressed or handed over and it is not quite clear as to how the Speaker suddenly comes in the picture unless the Lok Sabha Rules are taken into account. Therefore, the provi sions of the Act have to be read alongwith some of the Lok Sabha Rules. Rules 185, 186 and 137 which are relevant for the purpose should be treated to be supplementary to the Act. [90 D G, 91 B] 4.2 Sub section (2) of Section 3, which is of vital importance in the present context, says that if the "motion" referred to in subsection (1) is admitted, the Speaker "shall keep the motion pending" 20 and constitute a Committee for investigation into the alle gations. 191 C] 4.3 The situs where the "motion" is pending is almost conclusive on the issue whether the House is seized of it or not. The Act does not leave any room for doubt that the "motion" remains pending in the House and not outside it. This is corroborated by the language used in proviso to Section 3(2) which deals with cases where notices of "mo tion" under Section 3(1) are given on the same date in both Houses of Parliament. It says that in such a situation, no Committee shall be constituted unless the "motion" has been "admitted in both Houses", and where such "motion" has been admitted "in both Houses", the Committee shall be constitut ed jointly by the Speaker and the Chairman. It is not an inadvertent reference in the Act of the "motion" being pending in the House: the Act and the Rules made thereunder envisage and deal with a "motion" which is admitted in the House and remains pending there to be taken up again when the date is fixed by the Speaker on receipt of the report from the Committee. The language throughout the Act has been consistently used on this premise and is not capable of being ignored or explained away. [91 D, G H, 92 A, C D] 4.4 The scope of the Act and the Rules is limited to the investigation in pursuance of a "motion" admitted by the Speaker. At the conclusion of the investigation the Commit tee has to send the report to the Speaker (or the Chairman as the case may be) along with a copy of the original Mo tion. If the finding goes against the Judge, the Motion, the same original Motion, together with the report would be taken up for consideration by the House where the Motion is pending, and the address and the Motion would be put to vote together in each House of Parliament. What the Act and the Rules contemplate is the original Motion to be taken up for consideration by the House, and if this Motion is held to have exhausted itself on admission by the Speaker nothing remains on which the Act would operate. [92 E, G] 4.5 Thus, the concept of the original Motion being pending in the House, to be taken up for debate and vote on the receipt of the report of the Committee, is the life and soul of the Act, and if that Motion disappears nothing remains behind to attract the Act. This idea runs through the entire Act and the Rules, and cannot be allowed to be replaced by a substitute. The existence of a Motion pending in the House is a necessary condition for the application of 21 the Act. Bereft of the same, the Act does not survive. It is, therefore, not permissible to read the Act so as to mean that the House is not seised of the Motion and that it does not have anything to do with the inquiry pending before the Committee, until the report is received. If clauses (4) and (5) of Article 124 are construed otherwise the Act will have to be struck down as ultra vires, or in any event, inopera tive and infructuous and, on this ground alone, the Writ Petitions are liable to be dismissed. [92 H, 93 A B] 5.1 The mandate of the Constitution against discussion on the conduct of a Judge in the House is for everybody to respect, and it is the bounden duty of the Speaker to en force it. He has to ensure that Article 121 is obeyed in terms and spirit. The pendency of the motion in the House cannot be a ground to violate Article 121, and the apprehen sion that if the motion is held to be pending in the House, on its admission, the object of Article 121 would be defeat ed is misconceived. [93 C, F] 5.2 The wider proposition that the House was seized of the matter so effectively as to entitle every member to demand a discussion in the House at any stage will not only violate Article 121, but also offend the provisions of the 1968 Act. It is not correct to assume that if the right of the individual member to insist on immediate discussion is denied, the consequence will be to deprive the Parliament of the control of the motion. The Speaker may consult other persons before admitting the motion, and while so doing he may consult the members of the House also, but without permitting a discussion in the House. The consultation, which the Act permits, is private in nature, not amounting to a public discussion, while the object of Article 121 is to prevent a public debate. It may also be open to the Speaker to consult the House on a legal issue which can be answered without reference to the conduct of Judge in ques tion, as for example, the issue involved in the instant case, whether on account of dissolution of the old House the Motion has lapsed and the Committee of Inquiry is defunct. What is prohibited is not every matter relating to the removal of a Judge; the bar is confined to a discussion with respect to the conduct of a Judge in the discharge of his duties. [95 E H, 96A] 5.3 There is no justification for interpreting such portion of the 1968 Act, which directed or declared the initial motion admitted by the Speaker to remain pending in the House, as creating legal fiction limited for the purpose of ensuring that the bar under Article 121 was not lifted prematurely. [96 B] 22 East End Dwellings Co. Ltd. And Finsbury Borough Coun cil: , referred to. 5.4 A close reading of the entire Act indicates that the language therein was consciously chosen to make the House seized of the matter, and consequently it became necessary to include the provision directing the motion to remain pending for the purpose of preventing a premature discus sion. The Act has, thus, very successfully respected both Articles 124 and 121 in their true spirit, by neatly harmo nising them. [97 B] 5.5 Parliament is in control of the matter from the very beginning till the end. By the introduction of the Speaker and the requirement of a large number of members of either House to initiate the matter, the House is brought in con trol of the proceeding through its representative, the Speaker or the Chairman. The ground of proved misbehaviour or incapacity is necessary only for putting the matter to vote in the House under clause (4), and is not a condition precedent for initiating a proceeding and taking further steps in this regard. ]97 G H, 98 A] 5.6 It is a well established practice for a larger body to entrust investigations to a smaller body for obvious practical reasons, and such an exercise cannot be characte rised as indulging in abnegation of authority. It could have asked a Parliamentary Committee to enquire into the allega tions or employed any other machinery for the purpose. [98 D] 5.7 So long as the statute enables the House to maintain its control either directly or through the Speaker, the entrustment of the investigation does not amount to abdica tion of power. It is a case where the Parliament has taken a decision to respect the verdict of the Committee in favour of the Judge, consistently with clause (4) and no fault can be found. 199 B] State of Uttar Pradesh vs Batuk Deo Pati Tripathi and Anr., , referred to. 5.8 The House, which is in control of the proceeding is entitled to take all necessary and relevant steps in the matter, except discussing the conduct of the Judge until the stage is reached and the bar under Article 121 is lifted. If it is held that the Committee is an independent statutory body not subject to the control of the House 23 directly or through the Speaker, then the Act may be ren dered unworkable. Besides, this would lower the dignity of the Chief Justice of India by providing a machinery consist ing of 5 or 4 Judges to sit in ,appeal over him. If the Committee is held to be functioning under the supervision and control of the Parliament, with a view to aid it for the purpose of a proceeding pending in the House, it will be the Parliament which will be in control of the proceeding and not the Committee. [99 E F, H] 6.1 When even after a verdict against the Judge is returned by the Committee, the Parliament, or for that matter any of the two Houses can refuse to vote in favour of the Motion for removal of a Judge, and the Court would not have any jurisdiction to interfere in the matter, it is not conceivable, that at the intermediate stage of investigation the Court has got the power to intervene. This is because, if the control of the House continues on the proceeding throughout, which can be exercised through the Speaker, it cannot be presumed that the Court has a parallel jurisdic tion, which may result in issuance of contradictory direc tions. Besides, the Court cannot be expected to pass orders in the nature of step in aid, where the final result is beyond its jurisdiction. Any order passed or direction issued by this Court may result in merely an exercise in futility, and may cause a situation, embarrassing both for the highest judicial and legislative authorities of the country. The Constitution cannot be attributed with such an intention. [101 A C] 6.2 In the circumstances the courts, including this Court, do not have any jurisdiction to pass any order in relation to a proceeding for removal of a Judge of the superior courts. [101 C] 7. No opinion is expressed on the controversy whether the Motion lapsed or not on the dissolution of the earlier House, as the issue is for the Lok Sabha to decide. [102 E] 8. This Court cannot pass any order whether permanent or temporary on the prayer that the respondent No. 3, the concerned Judge, should not be allowed to exercise his judicial powers. [102 F] 9.1 Although the powers of State have been distributed by the Constitution amongst the three limbs, i.e. the Legis lature, the Executive and the Judiciary, the doctrine of Separation of Powers has not been strictly adhered to and there is some overlapping of powers in the gray areas. [80F G] 24 Smt. Indira Gandhi vs Raj Narain, at p. 415, referred to. 9.2 Generally, questions involving adjudication of disputes are amenable to the jurisdiction of the courts, but there are exceptions, not only those covered by specific provisions of the Constitution in express terms, but others enjoying the immunity by necessary implication arising from established jurisprudential principles involved in the Constitutional scheme. [81 C] 10. It is permissible to take into consideration the entire historical background of the provisions of the Con stitution and the Act as aid to interpretation. [84 C] Bengal Immunity Company vs The State of Bihar, at 632 & 633; B. Prabhakar Rao vs State of Andhra Pradesh, [1985] Suppl 2 SCR 573, referred to. Heydon 's case: 76 E.R. 637; Eastman Photographic Materi al Company vs Comptroller General of Patents, LR. , referred to.

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riminal Appeal No. 65N of 1968. Appeal by special leave from the judgment and order, dated October 5, 1967 of the Allahabad High Court, Lucknow Bench in Criminal Revision No. 152 of 1966. A.S.R. Chari, R.K. Garg, R.A. Gupta and S.C. Agarwal, for the appellant. H.R. Khanna and O.P. Rana, for the respondent. 188 The Judgment of the Court was delivered by Mitter, J. In this appeal by special leave the appellant challenges his conviction under section 3 of the Railway Stores (Unlawful Possession) Act, 1955. The Act is a measure providing for punishment of persons in unlawful possession of railway stores who cannot satisfactorily account how they came by the same. By section 2 "railway stores" are defined to mean any article (a) which is the property of any railway administration, and (b) which is used or intended to be used in the construction, operation or maintenance of a railway. Section 3 defines the offence as also the measure of punishment therefore. It reads: "If any person is found, or is proved to have been in possession of any article of railway stores reasonably suspected of being stolen or unlawfully obtained, and cannot account satisfactorily how he came by the same, he shall be punishable with imprisonment for a term which may extend to five years, or with fine, or with both. " Before anyone can be charged with the offence under section 3 it must be shown that he was in possession of railway stores which by the definition of section does not include all articles which are ' the property of a railway administration but only those which are used or intended to be used in the construction, operation or maintenance of a railway. Mere unlawful possession of the property of any railway administration is not an offence. The prosecution must also prove that the articles were being actually used or were intended to be used for by the railway. Thus any article which is the property of a railway administration but which has been discarded or rejected for further use would be outside the definition of railway stores. Railway stores may be new or old and an offence may be committed in respect of stores of either kind. If the railway administration has no further use of them be they new or old as in the case where they have become unserviceable or outmoded no person can be charged with an offence under section 3 in respect thereof. It is only when the articles satisfy the definition of railway stores that the prosecution can be successfully launched against a person in unlawful possession thereof. Even in such a case. the prosecution must first adduce evidence to show that there was cause for reasonable suspicion of the stores being stolen or obtained unlawfully. It is only when the burden in respect of this is discharged by the prosecution that the onus shifts to the accused to account satisfactorily of his possession of the same. He may, for instance, show that he had purchased the property in open market where goods of this 189 kind are usually sold or that he had bought them from someone bona fide in the belief that the vendor had lawfully obtained the The facts in this case are as follows. On the strength of some information received on 28th July, 1964 that some stolen railway property was being sent out of Lucknow through a motor transport agency, a Sub Inspector attached to the Railway Protection Force along with another Sub Inspector of Police searched the premises of the motor transport company at Lucknow the same night. The search which took place in the presence of the appellant and the manager of the transport company revealed that a large number of parts of railway machinery (railway engines) bearing railway marks were contained in 23 bags of metal scrap booked the same day by the appellant for consignment to Jullunder. The usual formality of preparing a recovery memo and the sealing of goods in bags in the presence of witnesses was gone through. One Jaswant Singh, described as an expert of railway machinery parts and Foreman and Chief Inspector of N.E. Kotwali Chowk, Lucknow, examined the goods said to be railway stores and kept in 11 bags and made a report to the effect that they were all railway stores being parts of a railway engine. It was the case for the prosecution that the appellant failed to offer any satisfactory explanation of his possession of the goods. On the strength of the evidence adduced and principally on the report of Jaswant Singh along with his oral testimony the Magistrate found him guilty and sentenced him to imprisonment for two years. The conviction was maintained by the Sessions Judge and the High Court. The report made by Jaswant Singh shows that he had examined the material which he classified under 38 heads and described the same as unauctionable property. Against each item he put a remark either "O" or "N", 'O ' signifying old goods and 'N ' meaning new ones. The report seems to suggest that the goods being unauctionable a third party could not lawfully obtain possession of the same. Curiously in his testimony before the court although he said that he had prepared ' the report and signed the same he made no statement to the effect that the contents of the report were correct. His definite averment was: "Railway engine is auctioned in the market. I cannot say if these articles were auctioned in the market. I cannot say if these articles were auctioned Or not." In his cross examination he repeated the same averment in 'different words but only added that he had examined the articles 1Sup. C.I./70 14 and they were parts of an engine and that railway articles were mixed with other goods in the bags. From his deposition it is not possible to spell out any averment to the effect that the items mentioned in his report were used or intended to be used in the construction, operation or maintenance of a railway. In our view there was no evidence before the courts to prove that the articles seized were railway stores within the meaning of section 2 of the Act. Our attention was drawn to the case of Moyalal Rostagir vs The State(1) wherein it was held that in order to prove that the articles were railway stores it was necessary to establish that the articles in question were not only the property belonging to a railway administration but they were used or intended to be used for the construction or operation of a railway. Counsel for the respondent however cited a decision of the Orissa High Court in Udaya Dalai vs The State(2). The material seized in that case were tie bars and iron sleepers which were brand new. According to the learned Judge of the Orissa High Court: " . section 2 of the Act does not require the prosecution to prove that the incriminating articles belonging to a particular railway. From the evidence of P.W. 5 it can be reasonably inferred that as the seized articles were found to conform to the specifications of the Indian Railway Standards they held that they belonged to any of the railways in India. His further evidence that they were 'brand new ' is also sufficient to show that they were intended to be used in the construction, operation or maintenance of the railway. " In our view although the prosecution is not called upon to prove that the goods belong to any particular railway administration it has to establish that the articles were the property of a railway administration. Evidence to the effect that the goods conformed to the Railway Standards fails short of such proof. In most cases the burden of proof in this respect may be discharged by leading evidence about the identifying marks on the goods or some, peculiarity of the goods not to be found in cases of non railway goods. Again the mere description of the goods as new would not fulfil the requirements of section 2(b). Some evidence will have to be led to the effect that the goods of the kind were being actually used by a railway administration and that the goods were in a serviceable condition. In the case of goods which had not been put to use evidence would have to be led to establish that they had been manufactured for such us,. (1) (2) 30 Cuttack Law Tims, 275. 191 The evidence 'in the case before us did not establish that goods were railway stores within the meaning of section 2 of the Act and as such the question of punishment under section 3 did not arise. The appeal will there be allowed and the bail bond of the appellant directed to be cancelled. V.P.S. Appeal allowed.

A large number of parts of machinery bearing railway marks, contained in bags of metal scrap booked for transport by lorry by the appellant, was seized by the Railway police and the appellant was charged with an offence under section 3 of the Railway Stores (Unlawful Possession) Act, 1955. The expert on railway machinery parts certified that the goods were unactionable, suggesting that they could not have been auctioned and lawfully purchased by any third party, but in court, he gave evidence and made a categorical statement that he could not say if the articles were auctioned in the market or not. The appellant was convicted and the conviction was confirmed by the High Court. In appeal to this Court, HELD: Before anyone can be charged with the offence under section 3, the prosecution must show that the articles in his possession are 'railway stores ' as defined in section 2, that is: (i) that the articles are the property of a railway administration (though it is not necessary to prove that they belong to any particular railway administration); and (ii) that they are used or intended to be used in the construction, operation or maintenance of a railway. The prosecution must also show that there was cause for reasonable suspicion of the stores having been stolen or unlawfully obtained. Evidence that the goods conformed to the railway standards, or that they were new, fails short of the requisite proof, because, an article, though it is the property of a railway administration would not be "railway stores ' if the article has been discarded or rejected as useless. Since the evidence in this case did not establish that the goods were used or intended to be used in the construction, operation or maintenance of a railway the charge must fail. [188 D F, E H; 189 F H] Moyalal Rostagir vs State, , approved. Observations contra in Udaya Dalai vs State, 30 Cuttack L.T. 275, disapproved.

2702.txt

ns Nos. 154 and 203 of 1966. Petition under article 32 of the Constitution of India for the enforcement of fundamentals rights. section K. Mehta, and K. L. Mehta, for the petitioners (in both the petitions). N. section Bindra, A. Sreedharan Nambiar , R. H. Dhebar for R. N. Sachthey, for respondent No. 1 (in W. P. 154 of 1966). 1. M. Lall and E., C. Agrawala, for respondent No. 2 (in W.P.No. 154 of 1966). R. H. Dhebar for R. N. Sachthey, for respondents Nos. I and_ (in W.P. No. 203 of 1966). H. R Gokhale and E. C. Agarwala, for respondent No. 6 (in W.P. No. 203 of 1966). Respondent No. 10 appeared in person (in W.P. No. 203 of 1966). Ramaswami, J. In this case the petitioner, Roshan La1 Tandon has obtained a rule from this Court calling upon the respondents to show cause why a writ in the nature of mandamus under article 32 of the Constitution of India should not be issued commanding the respondents not to carry out the directives contained in the notification of the Railway Board No. E(NG)65 PMI 26 dated the 27 the October, 1965, Annexure 'D ' to the Writ Petition, in so far as it grants protection to the existing Apprentice Train Examiners and lays down the procedure to fill upgraded vacancies. Cause has been shown by, the respondents to whom notice of the rule was ordered to be given. There were originally two scales for Train Examiners Rs. 100 185 ( 'D ' Grade) and Rs. 150 225 ( 'C ' Grade). These scales were later revised as a result of the recommendations of the Second Pay Commission and the scale of 'D ' Grade was increased to Rs. 180 240 and that of 'C ' Grade to Rs. 205 280. On February 18, 1961 the Railway Board issued a letter No. PC 60/PS5/ TP 8, Annexure 'A ' to the Writ Petition to the General Managers 187 of all Indian Railways conveying its decision that vacancies in the Entry Grade of Train Examiners (in the scale Rs. 180 240) with effect from February 18, 1961 should be filled as follows: (i) 50% of the vacancies should be filled from Apprentice Train Examiners who successfully have completed the prescribed (4 years) apprenticeship, the remaining 50% of the vacancies being filled by promotion of skilled artisans. (ii) 20 /1/O of the annual requirements of Apprentice Train Examiners should be drawn from skilled artisans who are not more than 35 years old on 1st July of the year in which the apprenticeship is likely to commence. " Promotion to Grade 'C ' of Train Examiners used to take place on the basis of seniority cum suitability without any distinction whether the employee entered Grade 'D ' of the Train Examiners directly or was selected out of the category of skilled artisans. This rule was laid down by the Railway Board in its letter No. E(S) 1 57 TRS/41, dated January 25, 1958 which states: "Ref : Para 2 of Board 's letter No. E(R) 49 JAC / 13 dated 23 2 50 laying down that 20% of the posts in the TXR grade Rs. 150 225 should be reserved and the TXR in the grade of Rs. 80 160 (since revised Rs. 100 185) promoted from skilled and semi skilled ranks. The Board have reviewed the position and have decided that promotion to the TXR grade of Rs. 150 225 should hereafter be made solely on the basis of seniority cum suitability and the reservation of only 20% as mentioned above will no longer be operative." (Annexure 'B ' to the Writ Petition). On the basis of this rule the Divisional Personnel Officer, New Delhi, prepared a seniority list for the Train Examiners of Grade 'D ' of Delhi Division as on December 31, 1964 (Annexure 'C ' to the Writ Petition). 'On October 27, 1965 the Railway Board issued the impugned notification (Annexure 'D ' to the Writ Petition). The notification states in the first place that on and from April 1, 1966 vacancies in the Entry Grade of Train Examiners scale Rs. 120 240 should not be filled from Apprentice Train Examiners upto 50% as hitherto, but should exclusively be filled by promotion from amongst artisan staff With regard to the next higher grade i.e., Grade 'C ', it was provided that 80% vacancies should be filled by Apprentice Train Examiners who had successfully completed the prescribed training of 5 years (three years in case of Diploma Holders and three years in case of Artisan recruited as Apprentice Train Examiner). Twenty per cent of the vacancies were to be filled by the Train Examiners from Grade 'D '. It was 188 further provided that the Train Examiners Grade 'D ' who began as Apprentice Train Examiners and who were to be absorbed in the 'C ' Grade against 80% vacancies reserved for them should not be required to undergo selection before being absorbed in that grade. As regards 20% vacancies reserved for the other class of Train Examiners the promotion was to be on selection basis. The materials portion of the notification of the Railway Board dated October 27, 1965 is reproduced below: "RECRUITMENT: (i) Vacancies in the entry grade of Train Examiners in the authorised scale Rs. 180 240 should not be filled from apprentice TX Rs. upto 50% as hitherto, but should exclusively be filled by promotion from amongst artisan staff. (ii) (a) Vacancies in the next higher grade Rs. 205 280 (AS) should be filled from amongst X X the TXRs in grade Rs. 180 240 (AS) to the extent of 2O%. (b) The remaining 80% vacancies should be filled by Apprentice TX Rs. who have successfuly completed prescribed apprenticepship mentioned in para 2 below. (c) 25% of the annual requirements of apprentice TXRS. should be drawn from skilled artisans who are not more than 35 years old on 1st July of the year in which apprenticeship is likely to commence. The instructions contained in Board 's letter No. 2(NG) 61MI/101 dated 6 6 62 should be kept in view. Training 2. The Appentice TXRs recruited on and from 1/4/66 shall be given a training for a period of five years (three years in the case of diploma holders). From the same date artisans in lower grades (recruited as apprentice TXRS.) shall be given 'in service ' training for period of three years. Instructions regarding a revised syllabus for the training of the Apprentice TXRS. will follow: DISTRIBUTION OF POSTS IN DIFFERENT GRADE Fifty per cent of existing posts of TXRs in grade Rs. 180 240 which were required to be earmarked for(Apprentice TXRS. in terms of Board 's letter No. PC 60/ PS 6/TP 8 dated 18 2 1961 should be upgraded to scaleRs. 205 280. 189 REVISED DESIGNATIONS AND CLASSIFICATION OF POSTS OF TXRS. Designation Scale of Pay Classification T. X. Its. Grade D ' 180 240Non selection T. X. Rs. Grade 'C ' 205 280Selection for promotees from grade ID ' T. X. Rs. Grade 'B ' 250 380Selection T. X. Its. Grade 'A ' 335 425Non selection Head T. X. Rs. 370 475 Selection Chief T. X. Rs. 450 575 Selection Carriage Foreman Protection to the existing apprentice TXRS. procedure fill upgraded vacancies. It has also been decided that with effect from 1 4 66 all the Apprentice TXRS. (Diploma holders as well as others) on successful completion of their training should be straightaway brought on to the scale Rs. 205 280 (AS) instead of being first absorbed in scale Rs. 180 6 240 as at present. Consequenty they should be allowed stipend in scale Rs. 180 6 210 during the period of their training. As regards the apprentice TXRS. who are undergoing training at present, and will not be brought on to the work working posts before 1 4 66, it has been decided that from the date of this letter, they should be allowed stipend in scale Rs. 180 6 210 during the remaining period of their training. Their period of training should also be increased to 5 years, on completion of which they should be put on to the working posts in scale Rs. 205 280 (AS). The Apprentice TXRS. who have already been or will be absorbed in scale Rs. 180 240 upto 31 3 66 should first be accommodated in scale Rs. 205 280 against the quota of 80% vacancies reserved for them. Such staff should not be required to undergo a 'Selection ' before being absorbed in that grade. The upgraded vacancies in scale Rs. 205 280 left over after earmarking those for the apprentices under training on 2 4 66 should be filled by promotion of TXRS. in scale Rs. 180 240 on a selection basis. While computing the number of posts available for promotion of TXRS. in scale Rs. 180 240 the vacancies likely to occur during the period 190 of apprenticeship of the apprentices under training as on 1 4 66 should also be taken into account. In other words, it would be necessary to keep in reserve only the number of posts equal to the number of apprentices under training as on 1 4 66, who cannot be absorbed in the anticipated vacancies which will arise by the time they qualify. " The petitioner, Roshan Lal Tandon entered railway service on March 6, 1954 as skilled fitter on the Northern Railway. He was selected for the training for the post of Train Examiner Grade 'D ' on June 5, 1958 and was confirmed in that grade on October 25, 1959. The case of the petitioner is that he alongwith the direct recruits formed one class in Entry grade 'D ' and their condition of service was that seniority was to be reckoned from the date of appointment as Train Examiner in Grade 'D ' and promotion to Grade 'C ' was on the basis of seniority cum suitability test irrespective of the source of recruitment. It was alleged that there was no difference between the apprentices and those selected out of the skilled artisans when they entered Grade 'D ' and that portion of the impugned notification which gave a favourable treatment to the direct recruits in Grade 'D ' with regard to promotion to Grade 'C ' was arbitrary and discriminatory and violated the guarantee under articles 14 and 16 of the Constitution. It was contended that the petitioner having been brought to grade 'D ' by undergoing the necessary selection and training and having been integrated with the others who had been brought in through direct recruitment in grade 'D ' could not be differentiated for the purpose of promotion to the senior Grade 'C '. The petitioner has therefore moved this Court for the grant of a writ under article 32 of the Constitution to quash the notification of the Railway Board dated October 27, 1965. In the counter affidavit respondent No. 1 has denied that there was any violation of the guarantee under articles 14 and 16 of the Constitution. It was conceded that prior to April 1, 1966 promotion to the post of Grade 'C ' Train Examiner was on the basis of seniority cum suitability but the impugned notification was issued by the first respondent because it Was decided that the posts of senior Train Examiners in Grade 'C ' should be filled by men possessin adequate technical knowledge and so the period of training of senior Train Examiners was increased and it was decided that in future 80 per cent of the vacancies in 'C ' grade should be filled directly by Apprentice Train Examiners and the remaining 20 per cent was to be made available for recruitment from the category of Train Examiners to which the petitioner belonged. This recruitment of 20 per cent vacancies was to be made on the basis of merit. It was said that the reorganisation of the Service was made with a view to obtain a better and more technically trained class of Train Examiners. The reason was that 191 there were more complicated designs. of Carriages and Wagons, acquisition of modern type of Rolling Stock and greater speed of trains under dieselisation and electrification programmes. It was. considered that there should be a better calibre of technically trained and technically qualified personnel for proper maintenance and safety of the Rolling Stock. In view of the decision to recruit Apprentice Train Examiners directly in 'C ' Grade with effect from April 1, 1966 those who were Apprentice Train Examiners in Grade 'D ' before that date had to be upgraded in the scale of Rs. 205 280. It was therefore thought that these posts should be upgraded "so that there should be parity of treatment with the Apprentice Train Examiners who were to join after April 1, 1966". The first respondent has also controverted the allegation of the petitioner that the procedure outlined in the impugned notification dated October 27, 1965 in regard to the upgraded vacancies was discriminatory. The main question to be considered in this case is whether the notification by the first respondent dated October 27, 1965 is violative of articles 14 and 16 of the Constitution in so far as it makes a discrimination against the petitioner for promotion to Grade 'C '. According to the impugned notification the existing Apprentice Train Examiners who had already been absorbed in grade 'D ' by March 31. 1966 should first be accommodated in grade 'C ' in 80% of the vacancies reserved for them without undergoing any selection. With regard to 20% of the vacancies there is a reservation in favour of the departmental Train Examiners, but the promotion is by selection and not by the test of seniority cum suitability which prevailed before the date of the impugned notification. It was not disputed by Mr. Mehta on behalf of the petitioner that the Railway Board was competent to say that with effect from April 1, 1966 vacancies in the Entry grade posts of Train Examiners should not be filled from Apprentice Train Examiners upto 50% but should be exclusively filled by promotion from amongst artisan staff. As regards the recruitment to grade 'C ', the impugned notification states that with effect from April 1, 1966 all the Apprentice. Train Examiners on successful completion of their training should be straightaway brought on to the scale Rs. 205 280 instead of being first absorbed in scale Rs. 180 6 240 as at present. The period of training was also increased to 5 years on completion of which they should be put on to the working posts in scale Rs. 205 280. So far as this portion of the notification is concerned, Counsel for the petitioner did not raise any constitutional objection. But the contention of the petitioner is that the following portion of the notification was. constitutionally invalid: "The Apprentice TXRS. who have already been or will be absorbed in scale Rs. 180 240 upto 31 3 66 should first be accommodated in scale Rs. 205 280 192 against the quota 80% vacancies reserved for them. Such staff should not be required to undergo a 'Selection ' before being absorbed in that grade. The upgraded vacancies in scale Rs. 205 280 left over after earmarking those for the apprentices under training on 2 4 66 should be filled by promotion of TXRs in scale Rs. 180 240 on a selection basis. " In our opinion, the constitutional objection taken by the petitioner to this part of the notification is well founded and must be accepted as correct. At the time when the petitioner and the direct recruits were appointed to Grade 'D ', there was one class in Grade 'D ' formed of direct recruits and the promotees from the grade of artisans. The recruits from both the sources to Grade 'D ' were integrated into one class and no discrimination could thereafter be made in favour of recruits from one source as against the recruits from the other source in the matter of promotion to Grade 'C '. To put it differently, once the direct recruits and promotees are absorbed in one cadre, they form one class and they cannot be discriminated for the purpose of further promotion to the higher grade 'C '. In the present case, it is not disputed on behalf of the first respondent that before the impugned notification was issued there was only one rule of promotion for both the departmental promotees and the direct recruits and that rule was seniority cum suitability, and there was no rule of promotion separately made for application to the direct recruits. As a consequence of the impugned notification a discriminatory treatment is made in favour of the existing Apprentice Train Examiners who have already been absorbed in Grade 'D ' by March 31, 1966, because the notification provides that this group of Apprentice Train Examiners should first be accommodated en bloc in grade 'C ' upto 80 per cent of vacancies reserved for them without undergoing any selec tion. As regards the 20 per cent of the vacancies made available for the category of Train Examiners to which the petitioner belongs the basis of recruitment was selection on merit and the previous test of seniority cum suitability was abandoned. In our opinion, the present case falls within the principle of the recent decision of this Court in Mervyn vs Collector(1). In that case, the petitioners who were Appraisers in the Customs Department filed a writ petition under article 32, challenging the validity of the "rotational" system as applied in fixing the seniority of Appraisers and Principal Appraisers. The system, as laid down in the relevant departmental circulars was that vacancies occurring in the cadre of Appraisers were to go alternatively to 'promotees ' and 'direct recruits '. According to the petitioners of that case this resulted in inequality, especially in view of the fact that the number of direct recruits over the years was very low. Promotion to the (1) ; 193 grade of Principal Appraisers was from the cadre of Appraisers; only those who had served as Appraisers for five years were entitled to be promoted to the higher grade. Since the direct recruits had to wait for five years before they could become Principal Appraiser the promotees below them who had put in five years as Appraisers became Principal Appraisers. In order to restore the seniority of the direct recruits thus lost, the rotational system was applied to the cadre of Principal Appraisers also i.e., one vacancy was to go to a promotee and the other to a direct recruit. The plea of inequality in violation of article 16(1) of the Constitution was raised by the petitioners in respect of this also. It was held by this Court, in the first place, that there was no inherent vice in the principle of fixing seniority by rotation in a case when a service is composed in fixed proportion of direct recruits and promotees. It was held in the second place that the same could not be said when the rotational system was applied to the recruitment of Principal Appraisers. The source of recruitment for these was one only, namely, the grade of Appraisers. There was no question of any quota being reserved from two sources in their case. In so far therefore as the Government was doing what it called res toration of seniority of direct recruits in Appraisers grade on their promotion to the higher grade it was clearly denying equality of opportunity under article 16 of the Constitution. At page 606 of the Report Wanchoo, J., as he then was, speaking for the Court observed as follows: "This brings us to the question of Principles Appraisers. We are of opinion that the petitioners have a legitimate grievance in this respect. The source of recruitment of Principal Appraisers is one, namely, from the grade of Appraisers. There is therefore no question of any quota being reserved from two sources in their cases. The rotational system cannot therefore apply when there is only one source of recruitment and not two sources of recruitment. In a case therefore where there is only one source of recruitment, the normal rule will apply, namely, that a person promoted to a higher grade gets his seniority in that grade according to the date of promotion subject always to his being found fit and being confirmed in the higher grade after the period of probation is over. In such a case it is continuous appointment in the higher grade which determines seniority for the source of recruitment is one. There is no question in such a case of reflecting in the higher grade the seniority of the grade from which promotion is made to the higher grade. In so far therefore as the respondent is doing what it calls restoration of seniority of direct recruits in Appraisers ' grade when they are promoted to the Principal Appraisers ' grade, it is clearly denying equality of opportunity LP(N)ISCI 14 194 to Apprasiers which is the only source of recruitment to the Principal Appraisers ' grade. There is only one source from which the Principal Appraisers are drawn, namely, Appraisers, the promotion being by selection and five, years ' experience as Appraiser is the minimum qualification. Subject to the above all Appraisers selected for the post of Principal Appraisers must be treated equally. That means they will rank in seniority from the date of their continuous acting in the Principal Appraisers ' grade subject of course to the right of government to revert any of them who have not been found fit during the period of probation. But if they are found fit after the period of probation they rank in seniority from the date they have acted continuously as Principal Appraisers whether they are promotees or direct recruits. The present method by which the respondent puts a direct recruit from the grade of Appraiser, though he is promoted later, above a promotee who is promoted to the grade of Principal Appraiser on an earlier date clearly denies equality of opportunity where the grade of Principal Appraiser has only one source of recruitment, namely from the grade of Appraisers. In such a case the seniority in the grade of Principal Appraisers must be determined according to the date of continuous appointment in that grade irrespective of whether the person promoted to that grade from the Appraisers ' grade is a direct recruit or a promotee. This will as we have already said be subject to the government 's right to revert any one promoted as a Princivil Appraiser if he is not found fit for the post during the period of probation. The petition therefore will have to be allowed with respect to the method by which seniority is fixed, in the grade of Principal Appraisers. That method denies equality of opportunity of employment to the Appraisers who are the only source of recruitment to the grade of Principal Appraisers. What the impugned method seeks to do is to introduce a kind of reservation in respect of the two categories of Appraisers from which the promotions are made, and that cannot be done when the source of promotion is one. " We pass on to consider the next contention of the petitioner that there was a contractual right as regards the condition of service applicable to the petitioner at the time he entered Grage 'D and the condition of service could not be altered to his disadvantage afterwards by the notification issued by the Railway Board. It was said that the order of the Railway Board dated January 25, 1958, Annexure 'B ', laid down that promotion to Grade 'C ' from Grade 'D ' was to be based on seniority cum suitability and this condition of service was contractual and could not be altered thereafter to the prejudice of the petitioner. In our opinion, there,, 195 is no warrant for this argument. It is 'true that the origin of Government service is contractual. There is an offer and acceptance in every case. But once appointed to his post or office the Government servant acquires a status and his rights and obligations are no longer determined by consent of both parties, but by statute or statutory rules which may be framed and altered unilaterally by the Government. In other words, the legal position of a Government servant is more one of status than of contract. The hall mark of status is the attachment to a legal relationship of rights and duties imposed by the public 'law and not by mere agreement of the parties. The emolument of the Government servant and his terms of service are governed by statute or statutory rules which may be unilaterally altered by the Government without the consent of the employee. It is true that article 311 imposes constitutional restrictions upon the power of removal granted to the President and the Governor under article 310. But it is obvious that the relationship between the Government and its servant is not like an ordinary contract of service between a master and servant. The legal relationship is something entirely different, something in the nature of status. It is much more than a purely contractual relationship voluntarily entered into between the parties. The duties of status are 'fixed by the law and in the enforcement of these duties society has an interest. In the language of juris prudence status is a condition of membership of a group of which powers and duties are exclusively determined by law and not by agreement between the parties concerned. The matter is clearly stated by Salmond and Williams on Contracts as follows: "So we may find both contractual and status obligations produced by the same transaction. the one transaction may result in the creation not only of obligations defined by the parties and so pertaining to the sphere of contract but also and concurrently of obligations de fined by the law,itself, and so pertaining to the sphere of status. A contract of service between employer and employee, while for the most part pertaining exclusively to the sphere of contract, pertains also to that of status so far as the law itself has seen fit to attach to this relation compulsory incidents, such as liability to pay compensation for accidents. The extent to Which the law is content to leave matters within the domain of contract to be determined by the exercise of the autonomous authority of the parties themselves, or thinks fit to bring the matter within the sphere of status by mining for itself the contents of the relationship, is a matter depending on considerations of public policy. In such contracts as those of service the tendency in modem times is to withdraw the matter more and more from the domain of contract into that of status." .lm0 (Salmond and Williams on Contracts, 2nd edition p. 12). 196 We are therefore of the opinion that the petitioner has no vested contractual right in regard to the terms of his service and that Counsel for the petitioner has been unable to make good his submission on this aspect of the case. But for the reasons already expressed we hold that the impugned part of the notification violates the guarantee under articles 14 and 16 of the Constitution and a writ in the nature of mandamus should be issued commanding the first respondent not to give effect to the impugned part of the notification, viz.,: "The Apprentice T.X.Rs. who have already been or will be absorbed in scale Rs. 180 240 upto 31 3 66 should first be accommodated in scale Rs. 205 280 against the quota of 80% vacancies reserved for them. Such staff should not be required to undergo a 'Selection ' before being absorbed in that grade. The upgraded vacancies in scale Rs. 205 280 left over after earmarking those for the apprentices under training on 2 4 66 should be filled by promotion of T.X.Rs. in scale Rs. 180 240 on a selection basis. While computing the number of posts available for promotion of T.X.Rs. in scale Rs. 180 240 the vacancies likely to occur during the period of apprenticeship of the apprentices under training as on 1 4 66 should also be taken into account. In other words, it would be necessary to keep in reserve only the number of posts equal to the number of apprentices under training as on 1 4 66, who cannot be absorbed in the anti cipated vacancies which will arise by the time they qualify. " The application is accordingly allowed, but there will be no ,order with regard to costs in this case. Writ Petition No. 203 of 1966 The material facts of this case are parallel to those in Writ Petition No. 154 of 1966 and for the reasons already given we hold that the petitioner is entitled to the grant of a writ in the nature of mandamus commanding the respondents not to give effect to the impugned part of the notification dated October 27, 1965, Annexure 'D ' to the Writ Petition. The application is accordingly allowed, but there will be no order as to costs in this case. Petitions allowed.

Vacancies in grade 'D ' of Train Examinations were filled by (a) direct recruits i.e., apprentice train examiners who had completed the prescribed period of training, and (b) promotees from skilled artisans. Promotion from Grade 'D ' to 'C ' was on the basis of seniority cum suitability. In October 1965 the Railway Board issued a notification by which it was provided that eighty per cent of the vacancies in Grade 'C ' were to be filled up from apprentice train examiners recruited on and after April 1, 1966 and the remaining twenty per cent by train examiners from Grade 'D '. The notification further provided that apprentice train examiners who had already been absorbed in Grade D before April 1966 should en bloc be accommodated in Grade 'C ' in the eighty per cent of the vacancies without undergoing any selection and with regard to twenty per cent of the vacancies, reserved for the other class promotion was to be on selection basis and not on the basis of seniority cum suitability. The petitioner who entered Railway service in 1954 as a skilled artisan and was selected and confirmed in Grade 'D ' filed a Writ Petition in this Court challenging that part of the notification which gave favourable treatment to apprentice train examiners who had already been absorbed in Grade 14 'D ' as arbitrary and discriminatory and violative of Articles t4 and 16 of the Constitution. It was also contended that the earlier order laying down that promotion to grade 'C ' was to be based on seniority cum suitability had become a contractual condition of service and could not be altered to the prejudice of the petitioner. HELD: (i) The impugned part of the notification violated the guarantee under Articles 14 and 16 of the Constitution. Once the direct recruits and promotees were absorbed in one cadre, they formed one class and they could not be discriminated against for the purpose of further promotion to the higher grade 'C '. Before the impugned notification was issued there was only one rule of promotion applicable to both direct recruits and promotees. By the impugned notification a discriminatory treatment was made in favour of the existing apprentice Train Examiners who had already been absorbed in grade 'D ' because, the notification provided that this group of apprentice train examiners should first be accommodated en bloc in grade 'C ' up to eighty per cent of the vacancies reserved for them without undergoing any selection; whereas in the twenty per cent of the vacancies available to the category of Train Examiners to which the petitioner belonged the basis of recruitment was selection on merit and the previous test of seniority cum suitability was abandoned. [192 D G]. 186 Mervyn vs Collector, ; relied on. (ii) The petitioner had no vested contractual right in regard to the terms of his service. The legal position of a Government servant is more one of status than of contract. Once appointed to his post or office a Government servant acquires a status and his rights and obligations are no longer determined by consent of parties, but by statute or statutory rules which may be framed and altered unilaterally by the Government. [195 B C].

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r Petition (Civil) No. 344 of 1983. Under article 139A of the Constitution of India for transfer of Writ Petition No. 475 of 1983 pending before the Rajasthan High Court. D. Bhandari for the Petitioner (Not Present) B. D. Sharma for the Respondent. The Order of the court was delivered by 200 CHINNAPPA REDDY, J. This petition is totally bereft of any statement of facts. It has been drafted and filed in a most casual and careless manner. All that is stated in the petition is that the Writ Petition pending in the Rajasthan High Court raises exactly the same questions as those raised in SLP (Civil) No. 7561/83 pending in this Court and the writ petition may, therefore, be transferred to this Court. Nothing else is mentioned. No facts relating to either case are mentioned. Even the alleged common questions are not stated. We can only say that it is most discourteous and disrespectful to the highest court in the country to file such indifferent petitions. The advocate is not discharging his duty either to the court or to the client. Transfer petition is dismissed. H.S.K. Petition dismissed.

A petition for withdrawing a writ petition pending in the High Court to the Supreme Court under Article 139A (1) of the Constitution mentioned nothing else except that the writ petition pending in the High Court raised exactly the same questions as those raised in a special leave petition pending in the Supreme Court. What the questions were and what the facts of the cases were was not disclosed. Dismissing the petition, ^ HELD: It is most discourteous and disrespectful to the highest court in the country to file such indifferent petitions. The advocate; is not discharging his duty either to the court or to the client. [200 C]

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Civil Appeals Nos. 56 to 62 of 1957. Appeals by special leave from the judgment and order dated April 28. 1954 of the Labour Appellate Tribunal of India (Special Bench Banks), Bombay,in Appeals Nos. 122, 129, 130, 142, 144, 145, 152, 153, 154, 155, 162, 169, 217 & 218 of 1953. N. A. Palkhiwala, J. B. Dadachanji and section N. Andley, for the appellants in C. As, Nos. 56 & 60 of 1957. M. C. Setalvad, Attorney General for India, J. B. Dadachanji and section N. Andley, for the appellants in C. As. 57, 58, 59 & 61 of 1957, 6 202 M. C. Setalvad Attorney General for India and Naunit Lal, for the appellant (Punjab National Bank) in C. A. No. 62 of 1957. N. V. Phadke, T. section Venkataraman, K. R. Sharma and K. R. Choudhury, for respondent No. 1 in C. A. No. ' 56 of 1957. N. C. Chatterjee, Sadhan Chandra Gupta, Janardan Sharma, M. K. Ramamurthi and M. R. K. Pillai, for respondents in C. As. Nos. 57 to 61 of 1957 (Represented by All India Bank Employees Association) B. P. Maheshwari, for respondent No. 3 (Association of the Punjab National Bank Employees) in C. A. No. 62 of 1957. B.P. Maheshwari, for Surat Bank Employees Union. B. C. Ghose, and I. section Sawhney, for All India Central Bank Employees ' Association. May 12. The Judgment of the Court was delivered by section K. DAS J. These are seven appeals on behalf of different Banks working in this country, some incorporated in India and some outside India. It is necessary that we should very briefly state the background of the industrial dispute which has given rise to these appeals. It is now well known that there was a sharp rise in the prices of commodities during and after World War No. 11. This rise in prices very seriously affected salaried employees belonging to the middle class including such employees in the banking industry. In or about the year 1946 trade unions of bank em ployees presented demands for higher salaries and allowances and better conditions of service. In some cases notices of threatened strike were also served on the employers. The unrest became particularly acute in the provinces of Bombay, the United Provinces, and Bengal as they were then known. The local Governments of those provinces referred these industrial disputes for adjudication: this resulted in some regional awards which came to be known in Bombay as the Divatia Award, in the United I Provinces as the B B. Singh 203 Award and in Bengal as the Gupta, Chakravarty and Sen Awards. Notwithstanding these awards, the general unrest amongst Bank employees continued and there was a clamor for control of the banking industry by the Central Government. On April 30, 1949, was passed the Industrial Disputes (Banking and Insurance Companies) Ordinance (Ordinance VI of 1949) under the provisions of which all banking companies having branches or other establishments in more than one province came under the jurisdiction of the Central Government for the purposes of the (XIV of 1947). By a notification dated June 13, 1949, the Central Government constituted an ad hoc Tribunal consisting of Shri K. C. Sen, a retired Judge of the Bombay High Court, as Chairman, with two other persons as members to adjudicate upon an industrial dispute between several banking companies and their workmen. On the same day, the industrial dispute was referred to the Tribunal by a separate order. The dispute covered several items, and some more were added from time to time. For the sake of convenience, we shall hereafter refer to this Tribunal as the Sen Tribunal and its award as the Sen Award. After a very exhaustive enquiry, the Sen Tribunal made its award which was published on August 12, 1950. Some of the leading Banks being dissatisfied with the award applied to Supreme Court and obtained special leave to appeal against the said award, as it had been specially exempted from the jurisdiction of the Labour Appellate Tribunal constituted under the Industrial Disputes (Appellate Tribunal) Act, 1950 (XLVIII of 1950). This Court ultimately held that the award of the Sen Tribunal was void in to for want of jurisdiction, but did not go into the merits of the award With regard to any of the matters dealt with therein. The consequence of this decision was that the dispute in the banking industry remained unresolved. Soon after there were some strikes consequent on certain action taken by some of the Banks. The result was that the Central Government had to take steps afresh to settle this long standing dispute. Attempts were at first made through the machinery of 204 conciliation to settle the dispute, but these attempts failed. On June 26, 1951, was enacted the (XL of 1951) which had the effect of temporarily freezing some of the gains of labour under the Sen Award. In July 1951 the Central Government made a fresh reference to an Industrial Tribunal consisting of Shri H. V. Divatia, a retired Judge as. Chairman and two other members, but the Chairman and the members resigned within a short time. On January 5, 1952, two notifications were made. By one notification a new Tribunal was constituted to be called the All India Industrial Tribunal (Bank Disputes). The Chairman of this Tribunal was Shri Panchapagesa Sastry, another retired Judge. The other two members were Shri M. L. Tannan and Shri V. L. D 'Souza. Hereafter we shall refer to this Tribunal as the Sastry Tribunal. By another notification of the same date the Central Government referred the matters specified in such. II of the notification, which '. were the matters in dispute between the employers and workmen of the banking companies specified in sch. 1, to the Tribunal for adjudication. We need not set out here the matters specified in sch. 11, but shall presently refer to those items only with which we are concerned in these appeals. The Sastry Tribunal made its award which was published on April 20, 1953. This award came up for consideration of a Special Bench of the Labour Appellate Tribunal on appeals preferred by the employees of banks all over India and of the Banks themselves. The decision of the Labour Appellate Tribunal was given on April 28, 1954. Some of the Banks moved this Court for special leave to appeal from the decision dated April 28, 1954, of the Labour Appellate Tribunal and such leave was granted on October 4,1954. The same order which granted special leave also directed that the appeals be consolidated. These seven appeals on behalf of different Banks against their workmen have been filed in pursuance of the aforesaid leave granted by this Court. In Civil Appeal No. 56 of 1957 in which the Imperial Bank (now substituted as the State Bank of India) is 205 the appellant, a preliminary objection has been taken on behalf of the respondent workmen of the Bank to the effect that the appeal is incompetent. We shall presently consider this preliminary objection, but before we do so, it will be convenient to indicate the principal questions which arise for consideration in these seven appeals. These questions have been formulated under four heads : (1) what is the scope of item 5 of schedule II of the notification dated January 5, 1952, the item being expressed in the following words " Bonus, including the qualifications for eligibility and method of payment "; (2) does section 10 of the Banking Companies Act, 1949 (prior to its amendment by Act 95 of 1956) prohibit the grant of bonus to Bank employees; (3) whether an industrial tribunal is entitled in law to compel Banks to disclose " secret reserves " and " other necessary provisions" made by them, for the purpose of adjudication; (4) whether the Full Bench formula laid down by the Labour Appellate Tribunal in Mill Owners ' Association, Bombay vs Rashtriya Mill Mazdoor Sangh, Bombay (1) for the payment of bonus to employees in the textile industry is applicable to Banks. Of the aforesaid four questions, the first two directly fall for decision in the appeals before us. For reasons which we shall presently give, we consider that questions (3) and (4) do not call for any decision at the present stage. We shall now state how the Sastry Tribunal and the Labour Appellate Tribunal dealt with the first two questions. We have stated that item 5 of sch. II of the notification dated January 5, 1952, referred to the claim of bonus by Bank employees. We have also quoted earlier the words in which item 5 was expressed. The Banks contended before the Sastry Tribunal that the dispute referred to in item 5 did not contemplate the determination of the quantum of bonus payable by (1) 206 any of the Banks for any particular year, but the item merely referred to the question of bonus in general with special reference to qualifications for eligibility and method of payment. This contention of the Banks was upheld by the Sastry Tribunal which said: " The primary duty is on the Government to be satisfied subjectively whether a reference should be made or not. In the circumstances aforesaid, we hesitate to hold that we are concerned with the question of quantum of benefits for particular banks and for particular years in the past in the light of profits of such banks durina those periods. We ruled out a request that evidence should be taken for determination of the question. It may yet be open to the concerned parties where there is a real grievance to approach the Government to get a suitable reference for the future as well as for the account years 1949, 1950 and 1951. " What the Sastry Tribunal did was to consider the question whether there could be a bonus scheme for future years and whether it should be made to apply retrospectively to all Banks and for all years; and as to the guiding principles for the ascertainment of bonus, the Sastry Tribunal suggested certain lines of approach and recommended them for the earnest consideration of both the parties. The Labour Appellate Tribunal, however, came to, a different conclusion with regard to the scope of item 5 and held that it embraced the claims to bonus for the relevant years. Accordingly, it said : " It follows, therefore, that the claims to bonus made for the relevent years have not yet been adjudicated upon and that the terms of the reference have not been exhausted. The ad hoe Tribunal to which this reference was made is no longer in existence and some other Tribunal will have to decide what bonus, if any, is payable by the Banks to its employees for the relevant years. " The correctness of this part of the judgment of the Labour Appellate Tribunal has been seriously contested before us on behalf of the appellants and this is the first question which we have to decide. 207 On the second question, namely as to the interpretation of section 10 of the Banking Companies Act, 1949 (prior to its amendment in 1950) there was again a difference between the Sastry Tribunal and the Labour Appellate Tribunal. The Chairman of the Sastry Tribunal was of the view that section 10 of the Banking Companies Act, 1949, did not stand in the way of a grant of bonus to Bank employees, but the other members of the Sastry Tribunal apparently felt that the matter was not free from doubt and the Tribunal as a whole recommended to Government that the alleged legal difficulty by reason of section 10 of the Banking Companies Act, 1949, should be removed by suitable legislation. Perhaps, it was as a result of this recommendation that section 10 of the Banking Companies Act, 1949, was amended in 1956. The Labour Appellate Tribunal, however, by a majority of 2 to I came to the conclusion that section 10 was no bar to a claim for bonus by Bank employees. One member of the Appellate Tribunal, Shri D.E. Reuben, recorded a note of dissent in which he held that by reason of section 10 of the Banking Companies Act, 1949, as it stood at the relevant time, the Industrial Courts could not grant bonus to the workmen of a Bank. On behalf of the appellants it has been contended that the view of the majority of the Labour Appellate Tribunal with regard to section 10 of the Banking Companies Act, 1949, is not correct. This is the second question for our decision. As we are not deciding the other two questions, no useful purpose will be served by setting out the findings of the Tribunals below with regard to them. We now proceed to consider the preliminary objection taken on behalf of the respondent workmen in Civil Appeal No. 56 of 1957. Some more facts must be stated with reference to this preliminary objection. After the decision of the Labour Appellate Tribunal and before it could be implemented, several Banks appealed to Government to set aside the decision of the Labour Appellate Tribunal as they felt that the total burden imposed by it was entirely beyond their capacity to bear. Therefore, the Reserve Bank of India, under directions of the Central Government 208 carried out a rapid survey of the possible effect of the decision of the Labour Appellate Tribunal on the working of a few typical banks which were parties to the dispute. On a study of the evidence so collected, the Central Government concluded that it; was inexpedient on public grounds to give effect to parts of the decision. Consequently, the Labour Appellate Tribunal 's decision was modified by them by an order dated August 24, 1954. This decision was debated in Parliament and ultimately Government announced their decision to appoint a Commission (known as Bank Award Commission) to help them assess more fully the effect of the award. The Commission submitted its report on July 25, 1955, and with regard to the claim for bonus it said: " In regard to the claim for bonus, no general principles can be invoked and the case of each individual bank would have to be considered on its merits. Since this dispute has not been resolved so far, it is likely that it may have to be dealt with in the near future. The claim for bonus is not within the terms of my reference and I do not wish to trespass in the area of this dispute. I am, however, referring incidentally to this aspect of the matter because the fixation of a wage structure is likely to have an effect on employees ' claim for bonus." (see paragraph 51 at page 34 of the Commission 's report). Thereafter, the (XLI of 1955) was passed to provide for the modification of the decision of the Labour Appellate Tribunal in accordance with the recommendations of the Commission. This Act in so far as it is relevant for our purpose said in section 3 thereof that the decision of the Labour Appellate Tribunal shall have effect as if the modifications recommended in Ch. XI of the report of the Commission dated July 25, 1955, had actually been made therein and the appel late decision as so modified shall be the decision of the Appellate Tribunal within the meaning of the Industrial Disputes (Appellate Tribunal) Act, 1950 and the award shall have effect accordingly. It is clear that the Commission did not make any recommendation in 209 respect of the bonus claim and the , does not affect the present appeals; that Act merely gave effect to the modifications recommended by the Commission, but did not give the decision of the Labour Appellate Tribunal any higher sanctity as a statutory enactment. Now, the preliminary objection taken on behalf of the respondent workmen is that the decision of the Labour Appellate Tribunal merely says that the claims to bonus for the relevant years have not been adjudicated and therefore the terms of the reference have not been fully worked out; it is contended that this means that some other Tribunal " ill have to decide what bonus, if any, is payable by the Banks to their employees, and no sucr Tribunal having been so long appointed, there is at the present stage no enforceable award within the meaning of the , and the appeal accordingly is premature and incompetent. We are unable to accept this contention as correct. On behalf of the appellant Banks it has been submitted that the Labour Appellate Tribunal misconceived the scope of item 5 of sch. 11 of the relevant notification and on that misconception it came to the conclusion that the terms of reference had not been exhausted, a conclusion the correctness of which the appellants are entitled to challenge by way of appeal or else they will be bound by the decision that the reference is still pending and can be worked out by another Tribunal. This submission we think is correct. In the , an 'award ' means an interim or final determination by an Industrial Tribunal of any industrial dispute or of any question relating thereto. The dispute between the parties in the present case related to bonus: on behalf of the banks it was contended (a) that item 5 of sch. 11 did not include claims of bonus for particular years in respect of particular banks but related to a general scheme of bonus including qualifications for eligibility and method of payment, and (b) that even a general scheme cf bonus could not be made by reason of the provisions of section 10 of the Banking 27 210 Companies Act, 1949; on behalf of the Bank employees it was contended that (a) item 5 included claims for bonus for particular years in respect of particular banks and (b) section 10 of the Banking Companies Act, 1949, did not stand in the way of such claims. These rival contentions led to an industrial dispute which the Labour Appellate Tribunal determined by its decision dated April 28, 1954. We do not see why that decision is not an 'award ' within the meaning of the . In our opinion, in no sense can the appeals be said to be premature or incompetent. It is worthy of note that these appeals have been filed in pursuance of special leave granted by this Court tinder article 136 of the Constitution. That Article enables this Court to grant, in its discretion, special leave to appeal from any judgment, decree, determination, sentence or order in any cause or matter passed or made by any court or tribunal in the territory of India. The powers of this Court under the said Article are wide and are subject to such considerations only as this Court has laid down for itself for the exercise of its discretion. The argument before us is not that these appeals do not come, within those considerations and special leave should not have been granted; but the argument is that they are incompetent for other reasons. Even those reasons, we think, are not sound. Learned counsel for the respondent workmen has cited before us some decisions, one Australian 'In re the Judiciary Acts, etc. (1)); and another American (David Muskrat vs United States (2)) in support of his contention. We consider, however, that the point is so clear and beyond doubt that it is unnecessary to embark on an examination of decisions which relate to entirely different facts. There is, in our opinion, no substance in the preliminary objection which must be overruled. Now, we proceed to consider the true scope of item 5 of sch. 11 of the notification dated January 5, 1952. Schedule 11 of the notification dated June 13, 1949, by which a reference was made to the Sen Tribunal contained an identical item which was item 6. That (1) ; (2) ; ; 211 item was expressed exactly in the samewords as item 5 of sch. 11 of the notification underour consideration. The Sen Tribunal dealt with thescope of that item and said that a large number ofdemands had been made by the unions for bonus for particular years in respect of particular banks. The Sen Tribunal then said: " We have been unable to deal with such individual demands, except such matters as were pending in the different States at the time of our appointment and have been specifically referred to us under the provisions of section 5 of Ordinance VI of 1949 or Act LIV of 1949. Apart from the great deal of time that we should have to spend on such questions, had we to hear and dispose of every application for a particular year in respect of a particular bank, we believe that the kind of disputes regarding bonus that have been referred to us are disputes of a general nature, e.g., questions regarding 'qualifications for eligibility and method of payment '. " Thus it is clear that the Sen Tribunal also understood the item as a reference, of a dispute of a general nature which did not include demands for bonus for particular years in respect of particular banks. The Central Government which made the reference to the Sastry Tribunal by the notification dated January 5, 1952, had before it the interpretation which the Sen Tribunal had made in respect of the self same item. Having that interpretation before it, the Central Government used identical language to express the dispute which it referred to the Sastry Tribunal in item 5 of sch. This, in our opinion clearly shows that item 5 of sch. 11 of the notification relating to the Sastry Tribunal has the same meaning as item 6 of sch. 11 of the notification relating to the Sen Tribunal as interpreted by that Tribunal. The various items in sch. 11 of the relevant notification are not items in legislative lists, but are items in an administrative order and it would not be right to apply the same canon of interpretation to the items in an administrative order as is applied to items in a legislative list. It is worthy of note that some of the items in 212 the Sen reference were modified when the subsequent reference was made to Sastry Tribunal. Item 38 of the Sen reference read as follows: In what manner and to what extent do the decisions of the Tribunal require modification in the case of employees of banks in liquidation or moratorium ?" This item was dealt with by the Sen Tribunal at pp. 157 to 160 of its award and it pointed out certain defects in the wording of the item. When a similar item was referred to the Sastry Tribunal, necessary changes were made in the wording of the item to remove the defects pointed out by the Sen Tribunal (see item 11 of sch. 11 of the notification relating to the Sastry Tribunal. Another example of a similar character is item 5 of sch. 11 of the Sen reference, an item which related to " other allowances " payable to bank employees including conveyance allowance for clerks for journeys to and from the clearing house. A point taken before the Sen Tribunal was that by conveyance allowance was meant an allowance for journeys to and from the place of work. The Sen Tribunal confined conveyance allowance to expenditure incurred for going out on the Bank 's work while the Bank employee was on duty. The scope of the reference was made clearer by changing the phraseology of the item when the subsequent reference to the Sastry Tribunal was made; see in this connection the phraseology of item 28 of sch. 11 of the notification relating to the Sastry Tribunal. It would thus appear that we have two kinds of examples: (1) in some cases the phraseology of the items is changed when the subsequent reference is made taking into consideration the criticisms made by the Seti Tribunal and (2) there are other cases where no change in phraseology is made even though the Sen Tribunal has understood a particular item in a particular sense. Judged in the light of these examples, it seen is to us that the true scope of item 5 of ,ch. 11 is what the Sastry Tribunal understood it to be, namely., whether bonus was payable to Bank employees and, if so, what were the qualifications for eligibility and method of 213 payment. The reference in item 5 of schedule 11 did not include within itself claims of bonus for particular years in respect of particular banks. The Sastry Tribunal further pointed out that there were specific references with regard to the claims for bonus in respect of some Banks. Those reference did not, however, come within item 5 of sch. If they did, it was completely unnecessary to make separate and specific references with regard to such claims. Item 5 was not the only item which raised a general question. There were many other items of a similar nature, such as items 3, 6, 9 etc. The Labour Appellate Tribunul itself realised the difficulty of deciding under item 5 of sch. 11 the particular claims for bonus for particular years. The Sastry Tribunal pointed out that there were 129 banks before it and no evidence was given to substantiate the claims for bonus for particular years in respect of particular banks. The Sastry Tribunal said: "We cannot assume that, for all these 129 banks before us and for all these years there were live disputes about this matter which the Government had considered fit and proper to be referred to us after applying their minds to the problem whether such a reference should be made to an industrial tribunal. There is also this additional circumstance that there had been two special and specific references by the Govern cut in relation to the payment of bonus by the central bank of India, the Allahabad Bank and the, Unitted commercial Bank for the years 1951 and 1951. Moreover, even apart from the general character of the various heads of of disputes in the reference to us individual cases pertaining) only to Some banks Wherever the Government wanted to make such a reference have been particularised and set out, e.g, absorption of Bharat Bank employees itein 31 in schedule It of the, notification. It may be mentioned that the claim before us in connection with the bonus payable I)v the Imperial Bank of India for the years 1948, lb49, 1950 and 1951 would involve a payment of very nearly a crore of rupees over and above the 214 payments already made for these years. It is not possible for us to affirm what the attitude of the Government would have been on the question of referring a dispute of this character to us under section 10 of the . " Faced with the difficulty referred to by the Sastry Tribunal, the Labour Appellate Tribunal also said that it could not deal with individual claims for bonus in the present proceedings. The Labour Appellate Tribunal said that it would be acting in vacuo if it attempted to decide individual claims for bonus without having before it specific cases of bonus, particularly when there were no materials on the record on which the Tribunal could make a decision as to the quantum of bonus payable by a particular bank for a particular year. This difficulty instead of leading the, Labour Appellate Tribunal to give a proper interpretation to the true scope of item 5 of sch. 11 led it to the conclusion that item 5 of sch. 11 embraced within itself individual claims for bonus for particular years and those claims must be dealt with by another tribunal on the footing that the reference had not been completely worked out. We consider this to be a complete non sequitur. Item 5 of sch. IL must be interpreted as an item in an order of reference in the context in which the item has been used, the words in which it has been expressed and against the background in which the dispute has arisen. The practical difficulty which may arise in deciding individual claims for bonus in respect of particular banks is merely a circumstance to be taken into consideration. It cannot be decisive on the question of determinination the true scope and effect of item 5 of sch. On a consideration of all relevant circumstances and having regard to the context and the words in which item 5 of sch. 11 has been expressed, we are of the view that the Labour Appellate Tribunal was wrong in its conclusion that the reference had not been worked out and that individual claims for bonus in respect of particular banks must be determined by another tribunal on the basis of the reference made in 1952. 215 We now proceed to a consideration of the more important question, as to the effect of section 10 of the Banking Companies Act, 1949. We have stated earlier that section 10 of the Banking Companies Act, 1949, hereinafter called the Banking Act, was amended in 1956. We shall first read the unamended section, the provisions whereof were in force at the time relevant to these appeals. We shall later read also the amended section in connection with an arguement presented on behalf of the Bank employees that the (XCV of 1956) was not remedial in nature but was declaratory of the law as it always was. Section 10 of the Banking Act prior to its amendment in 1956, was in these terms " section 10. (1) No banking Company(a) shall employ or be managed by a managing agent or, (b) shall employ any person (i)who is or at any time has been adjudicated insolvent, or has suspended payment or has compounded with his creditors, or who is or has been convicted by a criminal court of an offence involving moral turpitude; or (ii)whose remuneration or part of whose remuneration takes the form of commission or of a share in the profits of the company; or (iii)whose remuneration is, according to the normal standards prevailing in banking business, on a scale disproportionate to the resources of the Company; or (c) shall be managed by any person: (1)who is a director of any other company, not being a subsidiary company of the banking company; or (ii)who is engaged in any other business or vocation ; or (iii)who has a contract with the company for its management for a period exceeding five years at any one time: 216, Provided that the said period of five years shall in relation to contracts subsisting on the 1st day of July, 1944, be computed from that date Provided further that any contract with the company for its management may be renewed or extended for a further period not exceeding five years at a time if and so often as the directors so decide. (2)If any question arises in any particular case whether the remuneration is, according to the normal standards prevailing in banking business, on a sctle disproportionate to the resources of the company for the purpose of sub clause (iii) of clause (b) of subsection (1), the decision of the Reserve Bank thereon shall be final for all purposes. " Before we proceed to a consideration of the construction of the section, a little history may not be out of place. The Companies (Amendment) Act, 1936 introduced a new Ptrt XA in the Indian Companies Act, 1913 (VIl of 1913). Part XA contained certain special provisions applicable to banking companies only. The section with which we are concerned was section 277HH, and that section was introduced by an amending Act of 1944. It was the precursor of section 10 of the Banking Act and it may, perhaps, be advisable to read section 277HH in so far as it is relevant for our purpose: " 277HH. No banking company. shall, after the expiry of two years from the commencement of the Indian Companies (Amendment) Act, 1944, employ or be, managed by a managing agent, or any person whose remuneration or part of whose remuneration takes the form of commission or a share in the profits of the company, or any person having a contract with the company for its management for a period exceeding five years at any one time ; Provided that the period of five years shall, for the purposes of this section, be computed from the date on which this section comes into force; 217 Provided further that any such contract may be be renewed or extended for a further period not exceeding five years at a time if and so often as the directors think fit. " Obviously, the most undesirable feature in the structure and management of banking companies which the section tried to remedy was the appointment of managing directors or managers on long term contracts on payment of remuneration by commission or a share in the profits. However, the section was not confined to a managing agent or manager only, though by a reference to the statement of objects and reasons in relation to the amendment of 1944 it was suggested on behalf of the respondents that the section was so confined. The statement of objects and reasons is not admissible, however, for construing the section; far less can it control the actual words used. The section in express terms said that 'no banking company . shall employ any person whose remuneration or part of whose remuneration takes the form of . a share in the profits of the company '. Then, in 1949 came the Banking Act. As its long title and preamble indicate, it is an Act to consolidate and amend the law relating to banking companies. It repealed the whole of Part XA of the Indian Companies Act, 1913 including section 277HH referred to above, but section 2 said: " section 2. The provisions of this Act shall be in addition to, and riot, save as hereinafter expressly provided, in derogation of the Indian Companies Act, 1913, and any other law for the time being in force. " The Indian Companies Act, 1913 itself stood repealed by the Indian (I of 1956). We now come back to section 10, the proper interpretation of which is the immediate problem before us. Shorn of all such details as are unnecessary for our purpose, the section says that no banking company shall employ any person, whose remuneration or part of whose remuneration takes the form of a share in the profits of the company. The section opens with a negative, 218 and says that no banking company shall employ any person; the expression 'any person ' is followed by the adjectival clause descriptive of the person who shall not be employed. The adjectival clause says that the person, who shall not be employed, is one whose remuneration or part of whose remuneration takes ' the form of a share in the profits of the company. Two questions at once confront us: (1) is I bonus remuneration; and (2) is it a share in the profits of the company. The argument on behalf of the appellant Banks is that I bonus ' as awarded by Industrial Courts is remuneration within the meaning of section 10 and it is also a share in profits; therefore. the express provisions of section 10 read with section 2 of the Banking Act override the provisions of the so far as banking companies are concerned, and prohibit the award of bonus to employees of Banks. On behalf of the Bank employees the argument is that bonus as awarded by Industrial Courts is not 'remuneration ' within the meaning of section 10 of the Banking Act, nor is it a share in profits in its true nature. The argument on both sides hinges on the two key expressions: I remuneration ' and ' share in profits '. The meaning of these expressions we shall consider in some detail. But it is convenient at this stage to get rid of some minor points. Section 10 in its operative part says that 'no banking company shall employ any person etc. ' The amendment of 1956 says that I no banking company shall employ or continue the employment of any person '. The question has been mooted before us if the expression 'shall employ ' means and includes, prior to the amendment of 1956, 'shall continue the employment of '. We think it does; otherwise the very purpose of the section is defeated. Take, for example, the case of an insolvent. The section says that no banking com pany shall employ any person who is or at any time has been adjudicated insolvent. Suppose that at the time the bank employs a person, he has not incurred any of the disqualifications mentioned in section 10; but subsequently, there is an order of adjudication against him and he is adjudicated an insolvent, The section 219 obviously means that such a person can no longer be employed by the bank. If subsequent disqualification is not within the mischief of the section, then the very purpose of the section which must be the safety and well being of the bank will be rendered nugatory. We must, therefore, hold that the expression 'shall employ a person ' in section 10 means and includes 'shall have in employment ' and in this respect the amendment of 1956 merely makes clear what was already meant by the section. We may also dispose of here an argument based on section 2. When an industrial dispute as to bonus between an employer and his workmen is referred to a tribunal for adjudication, the tribunal has the power to resolve the dispute by an award. Such an award may grant bonus to workmen, if certain conditions are fulfilled. The argument before us is that the provisions of the Banking Act are not to be interpreted in derogation of the provisions of the , but in addition thereto. This argument, however, ignores an essential qualification embodied in section 2 namely, the qualification in the clause 'save as hereinafter ex pressly provided '. If section 10 expressly provides that no banking company shall employ a person whose remuneration or part of whose remuneration takes the form of a share in profits, and I bonus ' is both remuneration and a share in profits, then section 2 can be of no assistance to the respondents. The express provisions of section 10 must then override any other law for the time being in force, so far as banking companies are concerned. This brings us back to the two key expressions remuneration ' and 'share in profits '. We take the expression 'remuneration ' first. The dictionary meaning of the word is reward, recompense, pay for service rendered (see the Concise Oxford Dictionary) ; and that is the ordinary meaning of the word. The word was judicially noticed in a very early decision (R. vs Postmaster General (1); and on appeal (2); Blackburn, J., said: " I think the word ' remuneration. . means,, a quid pro quo. If a man gives his services. whatever consideration lie gets for giving his services seems to (1) (2) 220 me a remuneration for them. Consequently, I think if a person was in receipt of a payment, or in receipt of a percentage, or any kind of payment which would not be an actual money payment, the amount he would receive annually in respect of this would be remuneration. " The word was again noticed in several English decisions in connection with section 13 of the Workmen 's Compensation Act, 1906, which enacted that a workman did not include a person employed otherwise than by way of manual labour whose " remuneration " exceeded pound, 50 ; and in Skiles vs Blue, Anchon Line, Ltd.( ') it was observed that remuneration was not the same thing as salary or cash payment by the employer but involved the same considerations as earnings. This was a case in which the purser of a ship received, in addition to his regular wages, at the end of each voyage, at a fixed rate per month, a bonus or extra wages; he also made a profit by the sale on board ship of whisky in nips. The majority of Judges held that both the bonus and the profit on the whisky ought to be taken into account in estimating the purser 's remuneration. In an earlier decision, Penn vs Spiers and Pond Limited (2), the gratuities and tips which the deceased workmen, employed as a waiter on a restaurant car, received from passengers using the restaurant car were held to be I earnings in the employment of the same employer '. The decision in Penn vs Spiers and Pond, Limited (supra) (2) was approved by the House of Lords in Great Western Railway vs Helps (a). In his speech Lord Dunedin repelled the argument addressed for the appellants of that case that the meaning of the expression " earnings " should be limited to what the workman gets from direct contract from his employer by saying that the simple answer to the argument was that the statute did not say so; it used the general term I earnings ' (in our case the general term `remuneration) instead of the term " wages" or the expression " what he gets from his employer ". It is, we think, unnecessary to multiply decisions. In a recent Australian decision, Conally vs Victorian Railways (1) [1911] 1 K.B 36o. (2) (3)[1918] A.C. 141. 221 Commissioner,s (1) the matter has been tersely put as follows: " It (the word remuneration) should be given its natural meaning unless there is reason to do otherwise. " This is a salutary rule of construction and should, we think, be adopted in the present case. Is there anything in the Banking Act to give the word 'remuneration ' a restricted meaning? Three meanings have been canvassed before us. The widest meaning for which the learned Attorney General appearing for some of the banks has contended is the natural meaning of the word 'remuneration ' in the sense of any recompense for services rendered, whether the payment is voluntary or under a legal obligation. The second meaning, which is intermediate between the widest and the narrowest, is that it means what is payable under any legal obligation, whether under a contract, statute, or an award. The narrowest meaning for which Shri N.C. Chatterjee, learned counsel for the respondent workmen, has canvassed is that remuneration in section 10 of the Banking Act means contractual wages, viz., what is payable under the terms of the contract of employment only. He has put his argument in the following way: section 10, when it says that I no banking company shall employ a person etc. ', refers to the contractual relationship of employer and employee created by an act of parties, and its purpose is to put a, ban on one kind of employment of a person who is to be paid a particular remuneration under the terms of his employment. It is stated that the prohibition is against any remuneration in the nature of profit sharing being fixed under a contract of service between the bank and its employees and it is contended that the legislature made the prohibition dependent on the terms of employment. It is submitted that the adjudication of an industrial tribunal in awarding bonus does not create any obligation by act of parties, and even if it imports some kind of implied term, it is de hors the contract of employment and is the result of a judicial verdict under the industrial law. The argument is attractive but does not in our opinion stand the test of close scrutiny. Lot us look a (1) ; (also 1957 Australian Law Reports 1097). 222 little more closely to section 10 of the Banking Act. It says inter alia that no banking company shall employ or be managed by a managing agent or shall employ a person who is or has been convicted by a criminal court of an offence involving moral turpitude etc; see el. (b)(1). It is obvious that when the section says 'shall employ ', it means 'shall have in the employment of. It is not suggested that the disqualifications mentioned in cl. (b) (1) refer only to the contract of employment. If that were so, the section would hardly serve the purpose for which it must have been meant. We may take another example which brings out the meaning of the section even more clearly. Let us suppose that the Bank employs a manager on a contract of service which makes no mention of bonus or commission. On the argument of learned counsel for the respondents, section 10 does not stand in the way of the bank to pay voluntarily and ex gratia any amount to the manager by way of commission or bonus, as long as the contract of service does not contain any term as to such payment. This, in our opinion, makes nonsense of the section. Learned counsel for the respondents had himself suggested in the course of his arguments that having regard to the legislative history of the enactment, the section was intended to prevent banks from having managers, by whatever name they might be called, who were paid by commission or a share in the profits; and yet the Bank can make such payment if it adopts the subterfuge of not saying anything about such payment in the contract of service. There are, in our view, clear indications in the section itself that the word 'remuneration ' has been used in the widest sense. Firstly, cl. (b) (iii) also uses the word remuneration. It says " whose remuneration is, according to normal standards prevailing in banking business, on a scale disproportionate to the resources of the company ". Sub section (2) unamended states inter alia that if any question arises in any particular case whether the remuneration is according to the normal standards prevailing in banking business on a scale disproportionate to the resources of the company etc., the decision of the Reserve Bank 223 shall be final. It is clear that in cl. (b) (iii) of sub section (1) and also in sub section (2), the word,remuneration has been used in the widest sense. We may invite attention in this connection to r. 5 of the Banking Companies Rules, 1949 (which are statutory rules) which requires a banking company to send periodically to the principal office of the Reserve Bank a statement in Form I showing the remuneration paid during the previous calendar year to officers of the company etc. Form I has a footnote which says: " Remuneration includes salary, house allowance, dearness allowance, . bonus . . fees and allowances to directors etc." We do not say that a statutory rule can enlarge the meaning of section 10; if a rule goes beyond what the section contemplates, the rule must yield to the statute. We have, however, pointed out earlier that section 10 itself uses the word 'remuneration ' in the widest sense, and r. 5 and Form I are to that extent in consonance with the section. Shri Phadke appearing for some of the respondents has urged a somewhat different contention. He has argued that assuming that the word 'remuneration ' has been used in the widest sense in section 10 and therefore includes bonus, r. 5 and Form 1, show that payment of bonus is permissible: this is intelligible only on the footing that the provisions of section 10 are restricted in their application to such employees of a banking company as are employed in a managerial or admini strative capacity; they do not apply to 'workmen ' as defined in the . We find it difficult to accept this argument. The section says that 'no banking company shall employ any person ', and we do not see how the expression 'any person ' can be restricted to those on the managerial or administrative staff only. We cannot arbitrarily cut down the amplitude of an expression used by the legislature. It is necessary to refer here to the decision in Wrottesley vs Regent Street Florida Restaurant (1) on which learned counsel for the respondent workmen has placed great reliance. It is necessary to refer to the (1) 224 facts of the case, which are stated in the headnote. The waiters employed at an unlicensed restaurant, by an oral agreement amongst themselves and between them and their employers, paid into a pool all the tips received by them during the course of their employment. The tips were placed in a locked box, and the contents were distributed weekly in shares calculated in accordance with the agreement. The total weekly sum received by each waiter including the share of the tips exceeded, but the weekly wage paid by the employers was itself less than, the minimum wage prescribed by the Wages Regulations (Unlicensed Place of Refreshment) Order, 1949. The proprietors of the restaurant were prosecuted for failing to pay the minimum wage. It was held that the sums paid from the pool were riot remuneration, and the earlier decisions relating to the calculation of the earnings of a waiter in connection with the Workmen 's Compensation Acts were distinguished. Lord Goddard, C.J., thus explained the distinction: " The amount of a man 's earnings in an employment and the amount of remuneration which his employer pays to him are not necessarily the same thing. The section creating the offence, and under which the proceedings are taken, is section 9, sub section 2, of the Catering Wages Act, 1943. That section provides that, if an employer fails to pay to a worker to whom a wages regulation order applies remuneration not less than the statutory minimum remuneration clear of all deductions, he shall be guilty of an offence. Section 10 contains somewhat elaborate provisions for the computation of remuneration. Not only the short title but the structure of the Act setting up a wages commission, permitting the establishment of wages boards, and providing for wage regulation orders clearly indicates that it is with wages that the Act is intended to deal. The use of the word " remuneration " in both section 9 and section 10 and, indeed, in other sections, is probably because there are certain deductions from wages which are authorized by section 10, so that remuneration is an apt word to indicate the net payment, 225 What we have to decide is whether, when a waiter, receives a payment from the tronc in the manner found in the case, that sum can be regarded as remuneration paid to him by, or as remuneration obtained by him in cash from, his employer. In our opinion, when a customer gives a tip to a waiter the money becomes the property of the latter. " We think that the decision itself shows that the word remuneration ' must be given its meaning with reference to the context in which the word occurs in the statute. In the context of the Catering Wages Act, 1943, it meant the net payment after certain deductions from wages paid by the employer; and in the Workmen 's Compensation Acts, it meant the amount of a man 's earnings in an employment. We have pointed out that in the Banking Act with which we are con cerned, the word I remuneration ' has been used in the widest sense. In that. sense, it undoubtedly includes bonus. We proceed now to a consideration of the second key expression for our purpose, viz., 'takes the form of a share in the profits of the company '. The conception of industrial bonus (that is, profit bonus claimed by employees and granted amicably, through conciliation or as a result of an industrial award) has had a chequered development. In some of the earlier Bombay decisions of Industrial Adjudicators, it was held that the grant of bonus was entirely a matter of grace and not of right; some decisions characterized bonus as a gift, a sort of bakshis or pourboire (see D. G. Damle 's Labour Adjudications in India. p. 408). By 1948, however, the conception had crystallised, and it was judicially recognised that the claim of profit bonus could not any longer be regarded as an ex gratia payment. In Millowner 's Association, Bombay vs Rashtriya Mill Mazdoor Sangh Bombay (1) the Full Bench of the Labour Appellate Tribunal evolved the formula for determining the quantum of bonus, and the general principles governing the claim of bonus were also laid down. These are,: (1) as both capital (1) 29 226 and labour contribute to the earnings of the industrial concern, it is fair that labour should derive some benefit, if there is a surplus after meeting prior or necessary charges; (2) the claim of bonus would only arise if there should be a residue after making provision for (a) prior charges and (b) a fair return on paid up capital and on reserves employed as working capital .and (3) bonus is a temporary satisfaction, wholly or in part, of the needs of the employee where the capacity of the industry varies or is expected to vary from year to year, so that the industry cannot afford to pay 'living wages '. The Labour Appellate Tribunal recognised that where the goal of living wages had been attained, bonus like profit sharing in the technical, narrow sense would represent more the cash incentive to greater efficiency and production. The conception of the living wage itself is a growing conception, and the goal has been reached in very few industries, if any, in this country. The general principles laid down by the aforesaid Full Bench decision of the Labour Appellate Tribunal were generally approved by this Court in Muir Mills Co. Ltd. vs Suti Mills Mazdoor Union, Kanpur (1), and have been fully considered again and approved in Civil Appeals Nos. 459 and 460 of 1957 (Associated Cements) in which judgment was delivered on May 5, 1959. We have to consider the expression I takes the form of a share in the profits of the company ' in the context of the meaning of the word bonus ' as explained above. It is necessary to state that we are not considering here the question of production bonus or Puja bonus, which may not necessarily come out of profits and these stand on a different footing. There can be now no doubt, however, that profit bonus, in the industrial sense in which we now understand it, is a share in the profits of the company; it is labour 's share of the contribution which it has made in the earning of the profits. The two grounds on which it has been contended that bonus is not a share in the profits are (1) that it is not a fixed or certain percentage of the available surplus of profits and (2) it partakes of the (1) ; 227 nature of a contingent, supplementary wage. These two grounds weighed considerably with the majority of members of the Labour Appellate Tribunal who expressed the view that section 10 of the Banking Act did not stand in the way of granting bonus to bank employees, because bonus according to them was not a share in the profits of the company. We do not think that either of these two grounds is valid. The first ground arises out of a confusion between the expression 'takes the form of a share in profits ' and the expression 'profit sharing ' used in a narrow, technical sense. It is undoubtedly true that the bonus formula does not lay down any fixed percentage which should go to labour out of the available surplus. The share of labour will depend on a number of circumstances; but once the amount which should go to labour has been determined, it is easy enough to calculate what proportion it bears to the whole amount of available surplus of profits. There is thus no difficulty in identifying bonus as a share in the profits of the company. It is true that the International Congress on Profit sharing held in Paris in 1889 adopted the definition of 'profit sharing ' in the technical, narrow sense. That definition said that profit sharing was an agreement (formal or informal) freely entered into, by which the employees receive a share, fixed in advance, of the profits " (see Encyclopaedia of the Social Sciences, Seligman and Johnson, Vol. XII, p.487). But that is not the sense in which bonus has been understood in our industrial law, and it is worthy of note that section 10 of the Banking Act does not use the technical expression 'profit sharing ' but the more general expression I takes the form of a share in the profits etc. '. We are unable to hold that this general expression has a technical meaning in the sense that the share in profits must be fixed in advance, as in technical profit sharing; such a meaning would, without sufficient reason, exclude from its purview schemes under which the workers are granted regularly a share in the net profits of industry, but in which the share to be distributed among the workers is not fixed in advance but is decided from time to time on ad hoc, 228 basis by an independent authority such as an industrial court or tribunal. The second ground also appears to us to be equally untenable. Bonus in the ' industrial sense as understood in our country does come out of the available surplus of profits, and when paid, it fills the gap, wholly or in part, between the living wage and the actual wage. It is an addition to the wage in that sense, whether it be called Contingent and supplementary. None the less, it is labour 's share ' in the profits, and as it is a remuneration which takes the form of a share in profits, it come 's within the mischief of section 10 of the Banking Act. It may be asked why should the legislature seek to deprive bank employees, who are not on the managerial or administrative staff, of their industrial claim to bonus when they contribute to the prosperity of the banks? This really is a question of policy on which we are not permitted to speculate. On the one side there is the necessity for safeguarding the integrity and stability of the banking industry, and on the other side there is the claim of employees for a share in the profits. Which claim has a greater urgency at a particular time is really a matter for the legislature to say. We may refer here by way of contrast to section 31A of the . That section ' is in terms similar to section 10 of the Banking Act, but has some marked differences. Firstly, it specifically mentions bonus, along with a share in profits, in cls. (b) and (c) of sub section (1); secondly, it has a proviso which says inter alia that nothing in subS. (1) shall prohibit the payment of bonus in any year on a uniform basis to all salaried employees I etc., or such bonus which in the opinion of the Central Government is reasonable having regard to the circumstances of the case. This merely shows that it is for the legislature to decide how to adjust the claim of employees with the safety and security of the business in which the employees are in employment. The learned Attorney General has relied on a number of decisions in support of his contention that bonus comes within the expression 'takes the form of a share in profits '. In re Young, Ex Parte Jones (1) it was held (1) [1896]2Q.B.484. 229 that a contract that a person shall receive a fixed sum " out of the profits" of a business was equivalent to a contract that he shall receive "a share of the profits" within the meaning of sub section 3(d) of section 2 of the Partnership Act, 1890. A similar question arose in Admiral Fishing Company vs Robinson (1) in connection with section 7, sub section 2, of the Workmen 's Compensation Act, 1906 which said: " This Act shall not apply to such members of the crew as are remunerated by shares in the profits or gross earnings of the working of such vessel. " The claimant who was the engineer of a fishing smack was entitled to one share of the net profits of the working of the vessel on the particular voyage. The question was was he remunerated by shares in the profits ? The answer given was that he clearly was so remunerated. In Costello vs Owners of Ship Pigeon (2) the claimant was employed as a boatswain on a steam fishing trawler and was remunerated by wages, maintenance, and poundage dependent on the profits of the fishing expedition. The House of Lords decided by a majority that the claimant was remunerated by a share in profits within the meaning of section 7, sub section 2, of the Workmen 's Compensation Act, 1906. Shri N. C. Chatterjee has invited our attention to Newstead vs Owners of Steam Trawler Labrador (3). That was a case of a claim for compensation by the widow of a member of the crew of a fishing vessel, which was lost with all hands. The claim was resisted by the owners on the ground that the deceased was remunerated by a share in the profits or gross earnings of the vessel within section 7, sub section 2 of the Workmen 's Compensation Act, 1.906, and therefore that the Act did not apply to him. He was employed as chief engineer on board a steam trawler at a fixed weekly wage of pound 2. It was the custom of the owners when the gross earnings of the boat exceeded pound 100 for any one trip (each trip being usually of about a week 's duration) to allow a sum of pound 2 by way of bonus, of which pound, I went to the captain and 2s. to each of the remaining eight members of the crew. If the gross earnings of the (1) (2) (3) 230 boat exceeded pound 125 the bonus was proportionately increased and so on, but it was not further increased if the gross earnings realised more than pound, 175. The decision proceeded on the footing that the bonus in that case was not a share in profits but an additional sum for wages determined by the amount of the gross earnings. Lord Cozens Hardy, M. R., expounded the ratio of the decision in the following words : " The question is whether, having regard to the circumstances, that can be said in the present case. It seems that by the custom of this firm and by the understanding and arrangement between the parties, if the vessel made pound, 100 the skipper was entitled to pound 1, and in that particular case each member of the crew was entitled to half a crown. If the vessel made more the skipper and crew were entitled to larger sums. Now what was the effect .of that? The bonus was not, as it seems to me any part of the profits, nor was it a share in the gross earnings of the vessel. There was an obligation on the part of the owners of the trawler to pay the half a crown (to take that as one instance) in a certain event, which event was to be determined by the gross earnings of the vessel. I see no ground for holding that it was in any sense of the word a share of the gross earnings of the working of the vessel any more than the actual wages which were payable to the seamen could be treated as being a share of the gross earnings of the vessel, although the bonus as well as the wages would figure in the ship 's accounts as against the receipts on the other side. " It seems clear to us that the ratio of the decision does not apply here. The bonus we are dealing with here is not additional wage determined by the amount of profits; it is really part of the availiable surplus of profits distributed to labour for its contribution to the earnings. It does not arise out of any contract to pay, though the claim is recognised as one based on social justice. Shri Phadke has relied on the decision In re The Spanish Prospecting Company Limited That (1) 231 decision proceeded on the meaning of the word 'profits ', of which a classic definition was given by Fletcher MOUITON, L. J. In view of the decisions of this Court referred to earlier, it is now beyond dispute that bonus in the industrial Sense comes out of profits. If it does, we do not see how it can be held that it is not a share in profits. Shri Phadke suggested that the concept of a share in profits pre supposes the idea of either a definite amount or a definite proportion determined in advance. This submission we have dealt with at an earlier stage and no useful purpose will be served by repeating what we have said already. We must now notice two other arguments advanced on behalf of the respondent workmen. These arguments are based on the amendments made in 1956. Section 10 as amended by the (XCV of 1956) reads, in so far as it is relevent for our purpose section 10. No Banking Company (a)shall employ or be managed by a managing agent ; or (b) shall employ or continue the employment of any person (i) who is, or at any time has been, adjudicated insolvent or has suspended payment or has compounded with his creditors, or who is, or has been, convicted by a criminal Court of an offence Involving (ii)whose remuneration or part of whose remuneration takes the form of commission or of a share in the profits of the company: Provided that nothing contained in this clause shall apply to the payment of any bonus by any banking company in pursuance of a settlement or award arrived at or made under any law relating to industrial disputes or in accordance with any scheme framed by such banking company or in accordance with the usual practice prevailing in banking business ; or (iii)whose remuneration is, in the opinion of the Reserve Bank, excessive; or ( c) . . . . . . . . . . 232 Explanation. For the purpose of sub clause (iii) of clause (b), the, expression "remuneration", in relation to a person employed or continued in employment, shall include salary, fees and perquisites but shall not include any allowances or other amounts paid to him for the purpose of reimbursing him in respect of the expenses actually incurred by him in the performance of his duties. (2). . . . . . (3)If any question arises in any particular case wither the remuneration is excessive within the meaning of sub clause (iii) of clause (b) of subsection (1), the decision of the Reserve Bank thereon shall be final for all purposes. " It will be noticed that the amended section has a proviso which makes it clear that nothing in the relevent clause in subs section (1) shall apply to the payment of any bonus by any banking company in pursuance of a settlement or award arrived at or made under any law relating to industrial disputes or in accordance with any scheme framed by such banking company or in accordance with the usual practice prevailing in banking business. It is clear that the amended section does not stand in the way of the grant of industrial bonus. It was, however, not in force at the time relevent in these appeals, and there is nothing in the , which would make it retrospective in operation. Shri N. C. Chatterjee has, however, contended that the amending Act is declaratory of the law as it always was, and Shri Phadke has contended that the amending Act is parliamentary exposition of the true meaning of section 10 of the Banking Act. We are unable to accept any of these two contentions. The amending Act states in its long title that it is an Act to amend the Banking Companies Act, 1949. Section 2 states: "For section 10 of the Banking Companies Act, 1949, the following section shall be substituted. " There is nothing in the amending Act to indicate that it was enacted to remove any doubt, explain any former statute, or correct any omission or error, What is a declaratory Act The 233 following observations in Craies on Statute Law, Fifth. edition, pp. 56 57 are apposite: " For modern purposes a declaratory Act may be defined as an Act to remove doubts existing as to the common law, or the meaning or effect of any statute. Such Acts are usually held to be retrospective. The usual reason for passing a declaratory Act is to set aside what Parliament deems to have been a judicial error, whether in the statement of the common law or in the interpretation of statutes. Usually, if not invariably, such an Act contains a preamble, and also the word "declared" as well as the word 'enacted '. A remedial Act, on the contrary, is not necessarily retrospective; it may be either enlarging or restraining and it takes effect prospectively, unless it has retrospective affect by express terms or necessary intendment. We are of the view that the amending Act of 1956 is not a declaratory Act, and except in the small matter of the expression 'shall continue to employ ' in sub section (1), it does not purport to explain any former law or declare what the law has always been. It is an ordinary remedial piece of legislation which came into effect from January 14, 1957. For the period relating to the appeals before us, the amended section was not in force. This brings us to ail end of the two questions, (1) and (2), which directly fall for decision in these seven appeals. Contrary to the findings of the Labour Appellate Tribunal, we have come to the conclusion that (1) the scope of item 5 of sch. II of the relevant notification is not what the Labour Appellate Tribunal thought it to be and the reference of 1952 is not pending for determining the quantum of bonus for the relevant years in respect of particular banks and (2) in any event, section 10 of the Banking Act, prior to the amendment of 1956, prohibited the grant of industrial bonus to bank employees inasmuch as such bonus is remuneration which takes the form of a share in the profits of the banking company. We do not think that the other two questions, (3) and (4), require any decision at this stage. It is to be remembered that we are exercising our appellate 234 jurisdiction in these seven appeals and not our advisory jurisdiction. These seven appeals stand completely disposed of on the findings which we have given on the two questions already discussed. On our findings the dispute as to bonus referred to the Industrial Tribunal in 1952 has come to an end. The reference is no longer pending and in the view which we have expressed as respects the interpretation of unamended section 10 of the Banking Act no claim for bonus can be adjudicated on for the past relevant years. It is, therefore, not necessary for us to decide hypothetical questions which may arise in any future reference that may be made under the amended section. In the exercise of its appellate powers this Court does not give speculative opinions on hypothetical questions. It would be, contrary to principle, inconvenient and inexpedient that opinion should be given on such questions. If and when, they arise, they must arise in concrete cases and to use the words of the Earl of Halsbury, L. C., in Attorney General of Ontario vs Hamilton Street Railway (1): " It would be extremely unwise for any judicial Tribunal to attempt beforehand to exhaust all possible cases and facts which might occur to qualify, cut down, and override the operation of the particular words when the concrete case is not before it. " It is also to be remembered that no evidence was allowed to be given either by the banks or the bank employees as to the claims for bonus for particular years in respect of particular banks. The dispute was treated, rightly in our opinion, as a dispute relating to the general question of bonus. That general question is now disposed of on the findings which we have already given. We are aware that if and when a future reference as to an industrial dispute relating to bonus is made by the appropriate Government and the amended section falls for consideration, questions (3) and (4) may fall for decision. It would be time enough to decide those questions when they actually arise in concrete cases and we consider that it is not only unwise but inexpedient that we should forestall questions which may arise in future cases and decide (1) [1903] A.C.524, 529. 235 them more or less in vacuo and in the absence of necessary materials for the decision of those questions. These are our reasons for holding that questions (3) and (4) should not now be decided. It is necessary to state, however, that any observations which the Tribunals below may have made with regard to questions (3) and (4) would be in the nature of obiter dicta and it would be open to both parties to canvass those questions if and when they arise in any concrete case in future. Therefore, we have not considered it necessary to state in detail the contentions raised before us on behalf of the parties concerned with regard to questions (3) and (4). A few words regarding Civil Appeal No. 62 of 1957 before we conclude. Besides the question of bonus two other questions were raised in this appeal: (1) whether the Labour Appellate Tribunal had jurisdiction to order cancellation and refund of cash deposits and (2) whether the Tribunals below were wrong in holding that the taking of cash deposits etc., should be restricted to workmen of three categories only. When it was pointed out that the cash deposits had already been refunded in accordance with the decision of the Labour Appellate Tribunal the learned Attorney General who appeared for the appellant in Civil Appeal No. 62 of 1957 (The Punjab National Bank, Limited) did not press those points. Therefore, in Civil Appeal No. 62 of 1957 also the only surviving question is the question of bonus on which we have already given our decision. Shri Sadhan Chandra Gupta appeared on behalf of the respondents in Civil Appeal No. 62 of 1957 and made his submissions on the question of bonus. He has taken a stand on section 2 of the Banking Act and has contended that even if bonus is remuneration which takes the form of a share in profits, section 2 saves the power of industrial tribunals to award such bonus under the , and such award, if made, will impose an obligation on banks to pay the bonus awarded and would not make them liable to penalty under section 46 of the Banking Act. We have dealt with this argument at an earlier stage and have pointed out that section 2 is a saving provision with regard 236 to any other law for the time being in force, provided there is no express provision to the contrary in the Banking Act. If, as we hold, unamended section 10. of the Banking Act expressly prohibits the employment of any person by a bank whose remuneration takes the form of a share in the profits of the company, then section 2 of the Banking Act is of no help and cannot permit something which is expressly prohibited by section 10. For the reasons given above, we allow these seven appeals to the extent already indicated, namely, (1) the reference of 1952 is not now pending for determining the question of bonus for the relevant years in respect of particular banks and (2) section 10 of the Banking Act prior to the amendment of 1956 prohibits the grant of industrial bonus to bank employees when such bonus is remuneration which takes the form of a share in the profits of the banking company. In the circumstances of these cases and in view of the long drawn out nature of the dispute, we make no direction as to costs. Appeals allowed in part.

Section 10(1)(b)(11) of the Banking Companies Act, 1949 provided:" No banking company shall employ any person whose remuneration or part of whose remuneration takes the form . of a share in the profits of the company. " The dispute between the appellant Banks and their employees related, inter alia, to the question whether the provisions of the Banking Companies Act, 1949, prohibit the grant Of bonus to bank employees. The Labour Appellate Tribunal took the view that section 10 of the Act did not stand in the way of granting bonus to bank employees, because bonus according to it was not a share in the profits of the company. On appeal, it was contended for the appellant Banks that bonus as awarded by the Industrial Courts is remuneration within the meaning of section 10 201 read with section 2 of the Banking Companies Act, 1949, and that it was also a share in profits, and therefore, the express provisions of section 10 read with section 2 override the provisions of the , so far as banking companies are concerned, and prohibit the award of bonus to employees of Banks. Held : (1) that the expression " shall employ any person in section 10 of the Banking Companies Act, 1949, means and includes " shall have in employment any person " and that in this respect the amendment of 1956, merely makes clear what was already meant by the section ; (2) that the word " remuneration " in section 10 of the Act has been used in the widest sense and includes bonus ; (3) that bonus in the industrial sense comes out of the available surplus of profits, and when paid, it fills the gap, wholly or in part, between the living wage and the actual wage. It is labour 's share in the profits, and as it is a remuneration which takes the form of a share in profits, it comes within the mischief of section 10 of the Act; (4) The , is not a declaratory Act, and except in the small matter of the expression " shall continue to employ " in sub section (1), it does not purport to explain any former law or declare what the law has always been. Consequently, though section 10 as amended by the Act Of I956 does not stand in the way of the grant of industrial bonus, for the period relating to the present appeals, the amended section had no retrospective effect. Accordingly, section 10 of the Banking Act, prior to the amend ment of 1956, prohibited the grant of industrial bonus to bank employees inasmuch as such bonus is remuneration which takes the form of a share in the profits of the banking company.

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iation allowance is only entitled to the actual or probable depreciation of the machinery etc. for the period due to wear and tear. The depreciation cannot be computed on an actuarial basis or on the profit and loss account furnished by the company. In the instant cases, the accounting was far the purpose of minimising the profits to deprive are 511 workers their due. Such depreciation cannot be allowed. If the inflated figures are left out of account the industry has the capacity to bear the additional burden. [524A B, E] (e) Even though the wages were fixed on industry cum region basis it is open to industry to plead that it has not the financial capacity to hear the increased burden. When such a plea is specifically raised, it is the duty of the industrial court to determine whether the increased burden could be borne by the particular industry. [525 F G] & CIVIL APPELLATE JURISDICTION: Civil Appeal No. 146/78. Appeal by Special Leave from the Award dated 22 2 77 of the Industrial Court, Gujarat in Ref. I.C. No. 53/75. AND CIVIL APPEAL NOS. 322 324 OF 1979. Appeals by special leave from the Order dated 18 10 1978 of the Gujarat High Court in SCA No. 1036/77. AND SPECIAL LEAVE PETITION (CIVIL) NO. 2939/79. From the Judgment and Order dated 30 1 1979 of the Gujarat High Court in SCA No. 311/78. Dr. Anand Prakash, Laxmi Anand Prakash, Arun B. Desai and H. K. Puri for the Appellant in CA 146/78 and 323/79. F. section Nariman, H. K. Puri, Arun B. Desai and Mrs. Laxmi Anand for the Appellants in CA 322/79. A. K. Sen, Arun B. Desai, V. K. Behl, H. K. Puri and Mrs. Laxmi Anand for the Appellant in CA 324/79. M. K. Ramamurthy and Promod Swarup for the Respondents in C.A. 146/78 and C.A. 322/79. section section Khanduja and Miss Kusum Chowdhry for the Respondent in C.A. 146/78 and 323 324/79. J. G. Shah (CA 322) M. K. Ramamurthi (SLP. 2939 and CA 322) and A. K. Srivastava and Vineet Kumar for the Respondents in C.A. 322 and for the Petitioner in SLP. 2939/79. The Judgment of the Court was delivered by KAILASAM, J. All these appeals and special leave petition are by the management of five cooperative sugar factories in Gujarat State. The demand of the workmen of the factories in Gujarat was for pay 512 ment of the U.P. Government revised scales for sugar factories in U.P. regarding pay, dearness allowance and other benefits. The second Wage Board for the sugar industry gave its report in 1970. The Wage Board 's report was due to expire on 31st October, 1974. The Government of U.P. on 31st October, 1974, issued the U.P. Pattern Scales of Wages and Dearness Allowance for workmen employed in all sugar factories working by vacuum Pan Manufacturing Process. The Labour Minister gave the award and as a result of that award, an order was passed under section 3 sub clause (b) of the U.P. This order relating to U.P. Pattern of Pay, Graduated Dearness Allowance, Variable Dearness Allowance came into force from 31st October, 1974 and effect was to be given to these pay scales and dearness allowance from 1st October, 1974. As the sugar factories were seasonal factories a retention allowance for unskilled seasonal workmen for off season at the rate of 10% of the basic wage and dearness allowance payable during the crushing year 1974 75 was also provided for. The demand put forward by the workmen in all these appeals is for payment according to the U.P. Pattern. The Industrial Court, Gujarat, increased the graduated dearness allowance of the unskilled employees from Rs. 21 to Rs. 40. But this increase was not given at one stage but was spread over in three stages, the first stage being from 1st July, 1976 to 30th June, 1977, the second stage being from 1st July, 1977 to 30th June, 1978 and the third stage being from 1st July, 1978 to 30th June, 1979 and onwards. The increased graduated dearness allowance for the first period would be Rs. 32 per month; for the second period Rs. 36 per month and for the third period Rs. 40 per month. The existing basic wage for the unskilled employee is Rs. 110. The variable dearness allowance of Rs. 151 per month is being paid and the Court found that there was no dispute as raised in demand No. 2(c). Regarding variable dearness allowance demand Nos. 3, 4 and 5 the Court revised the rates from 83 paise per point on the rise over 301 points of All India Average Consumer Price Index Number for Industrial Workers (Base 1960 100) at Re. 1.00 per point for skilled B operatives and for clerks drawing upto Rs. 150 per month as asked for in demand 5(i) (b) and from Re. 0.95 to Re. 1.12 for All India Average Consumer Price Index for other employees as per demand No. 5(i)(d). This increase was also spread over for a period of three years i.e. 7 paise for the first period from 1st July, 1976 to 30th June, 1977; 5 paise for the second period from 1st July, 1977 to 30th June, 1978; and 5 paise for the third period from 1st July, 1978 to 30th June, 1979 and 513 onwards. Regarding demand No. 7 relating to retaining allowance to be paid to the unskilled seasonal employees at the rate of 10 per cent of the basic wage and dearness allowance payable during the crushing season 1974 75 and for subsequent years, the Court found that the demand was justified. The Court gave a retention allowance of 10%, as demanded, of the basic wage and dearness allowance payable during the crushing season 1974 75 and also for the three subsequent years. On appeal the High Court passed an order on 18th October, 1978 as follows stating that reasons will be given later. "(1) The impugned award is hereby quashed and set aside. (2) There is no justification for the phasing awarded by the Industrial Court and hence, the phasing is quashed and set aside. (3) x x x x (4) x x x x (5) The respective cooperative sugar societies will pay the costs of the other side. Costs quantified at Rs. 300/ in each matter. Rule is made absolute accordingly in Special Civil Applications Nos. 1136 of 1977, 1148 of 1977, 602 of 1978 and 311 of 1978, Special Civil Applications Nos. 1036 of 1977 and 1505 of 1977 are dismissed. " By this order the Court quashed the award and set it aside. It also found that there was no justification for phasing as awarded by the Industrial Court and therefore quashed it and set it aside. It confirmed with retrospective effect the award as given by the Industrial Court. The High Court also directed that U.P. Pattern will be given full effect with retrospective effect from the date mentioned in the award. The reasons were given by the High Court by its judgment dated 30th January, 1979. The judgment of the High Court is assailed on the following grounds: 1. The grant of neutralisation of variable dearness allowance at 125% is far in excess of what is permissible under the industrial law. The High Court erred in not taking into account depreciation of the sugar factories in arriving at the 514 financial capacity of the industry for the purpose of fixing the wage structure. In any event, it was submitted that as the administration of the sugar factories is governed by the Gujarat Cooperative Societies Act, 1961, those provisions will have to be followed in arriving at the net profits and for determining the financial capacity of the factories to pay. It was submitted that the Industrial Court and the High Court erred in following the U.P. Pattern on the ground that it has been accepted by the other States in the South zone without taking into account the relevant circumstances relating to individual factories. Lastly it was contended that the High Court after quashing the impugned award and setting it aside erred in passing a new award. We ignore the last ground as we feel it is purely technical. Though the High Court may not be right in stating that it quashed and set aside the award, the intention is clear from the subsequent clauses of the award. We will now proceed to deal with the other three objections. It is strongly urged on behalf of the appellants that the High Court and the Tribunal were in error in allowing neutralisation of variable dearness allowance of 125% which is beyond the permissible limits of the industrial law. It is common ground that 100% neutralisation would be achieved by granting an increase of 83 paise for rise in one point in the cost of living index. By granting an increase of one rupee for increase of one point the neutralisation is by 125%. Dearness Allowance was primarily intended as a protection of persons whose salaries are at the subsistence level to protect them against the adverse effects of the rise in prices. The Commission on Dearness Allowance in May, 1967 stated that historically dearness allowance was regarded as applicable to those employees whose salaries are at the subsistence level or at a little above in order to enable them to face the increase in dearness of essential commodities. The National Commission on Labour, 1969, observed that unless money wages rise as fast as consumer prices it will result in an erosion of real wages. But the extent of its impact will depend on the margin of erosion available at different levels of income. The Commission recommended that 95% neutralisation 515 should be granted against rise in cost of living to those drawing minimum wage in non scheduled employments. In a series of decisions, this Court has expressed the same view. It has been held that cent per cent neutralisation cannot be allowed as it would lead to a vicious circle and add to the inflationary spiral. It was observed that there was no reason why the industrial worker should not make sacrifices like all other citizens. In Clerks of Calcutta Tramways vs Calcutta Tramways Co. Ltd(1) this Court said "We can now take it as settled that in matters of the grant of dearness allowance except to the very lowest class of manual labourers whose income is just sufficient to keep body and soul together, it is impolitic and unwise to neutralise the entire rise in the cost of living by dearness allowance. More so in the case of the middle classes". The same view was expressed in the Hindustan Motors '(2) case and was reaffirmed in Hindustan Times Ltd. New Delhi vs Their Workmen,(3) where it was observed that the whole purpose of dearness allowance being to neutralise a portion of the increase in the cost of living it should ordinarily be on a sliding scale and provide for an increase on rise in the cost of living and a decrease on a fall in the cost of living. In Kamani Metals and Alloys Ltd. vs Their Workmen,(4) it was held that 100% neutralisation is not advisable as it will lead to inflation and therefore dearness allowance is often a little less than one hundred per cent neutralisation. In Silk & Art Silk Mills Association Ltd. vs Mill Mazdoor Sabha(6) it was laid down that in considering a claim for dearness allowance or revision of dearness allowance amongst other factors it should be borne in mind (1) Full neutralisation is not normally given, except to the very lowest class of employees; (2) The purpose of dearness allowance being to neutralise a portion of the increase in the cost of living,* should ordinarily be on a sliding scale and provide for an increase on the rise in the cost of living and a decrease on a fall in the cost of living. In Silk & Art Silk Mills Association Ltd. vs Mill Mazdoor Sabha(6) a grant by the Industrial Tribunal of 99% neutralisation of increase in the cost of living was confirmed as the workmen cannot be denied their subsistence wage at its real level because some other comparable concern is paying at a lower rate. In Killick Nixon Ltd. vs Killick & 516 Allied Companies Employees Union(1) this Court after approving the propositions laid down in Bengal Chemical case (supra) proceeded to state at p. 467: "There is, however, one thing which we must point out lest there should be some misconception about it and that is that so far as the lowest paid employees at or just above the subsistence level are concerned, they are entitled to 100% or at any rate not less than 95% neutralisation of the rise in the cost of living and hence there should be no ceiling on dearness allowance payable to employees within the slab of first Rs. 100, unless it can be shown by the management that the rate of neutralisation in their case is more than 100 per cent. The decision is authority for the proposition that the rate of neutralisation cannot be more than 100% even in the case of lowest paid employees. The proposition laid down in the decision cited above were reiterated and followed in Shivraj Fine Art Litho Works vs State Industrial Court, Nagpur & Ors.(2) The law is thus clear that dearness allowance is intended to neutralise a portion of the increase in the cost of living. Though 100% neutralisation is not advisable as it will lead to inflation, full neutralisation may be permissible only in the case of the lowest class of employees. The management is entitled to complain if the neutralisation is more than 100%. The purpose of grant of dearness allowance is to neutralise the increase in the cost of living due to rise in prices. Neutralisation may be such as to neutralise fully the increase in cost of living or may be restricted to neutralise only a portion of the increase. Full or cent per cent neutralisation can be achieved if the increase in the cost of living is fully compensated so that the pay of the worker is not adversely affected. But an award of more than 100% of an increase in the cost of living would be more than neutralisation and would in effect gives the worker an increased wage. The result would be the worker would be getting an increased wage packet whenever there is a price rise a result which would not have been envisaged in making provision for grant of dearness allowance. Mr. M. K. Ramamurthi learned counsel for the respondents submitted that the permissible limit of 100% neutralisation is not applicable to cases where persons are seasonally employed. The learned counsel pointed out that the sugar industry does not function for the whole year and for months it is closed and the workers are left without employment during the off season. In order to give some relief to such sea 517 sonal workers he submitted, that the award of equalisation of more than 100% is justified. This plea cannot be accepted for the award of equalisation of more than 100% in these cases is not based on seasonal employment. To mitigate the hardship of unemployment during the off season a retention allowance has been provided for the seasonal workers. The plea that the neutralisation of more than 100% is based on seasonal employment was not taken in the pleadings or raised before the courts below. Demand No. 7 relates to claim for payment of retaining allowance for the unskilled seasonal employees in the off season at the rate of 10% of their basic wage and dearness allowance payable during the crushing season 1974 75. The Industrial Court as regards demand No.7 directed that the unskilled seasonal employees be paid retaining allowance for the season 1975 at the rate of 10% of the basic wage and dearness allowance payable during the crushing season 1974 75. The claim regarding the variable dearness allowance is demand No. 2(c) and 5(1) (a) (b). There is no reference in the proceedings before the Industrial Court or the High Court that the variable dearness allowance of more than 100% equalisation was awarded due to the seasonal employment of the workers. In the result we accept the contention of the appellants that variable dearness allowance cannot be more than 100% neutralisation. The second contention raised on behalf of the appellants is that in fixing fair wages and dearness allowance financial capacity of the cooperative societies should be arrived after taking into account the depreciation. Mr. Nariman the learned counsel submitted that in order to keep an industry running it is necessary to make provision for depreciation as otherwise when the machinery gets worn out the industry would grind to a halt. The learned counsel submitted that though there are certain observations by this Court in Unichem Laboratories Ltd. vs The Workmen(1), and Indian Link Chain Manufacturers Ltd. vs Workmen,(2) that depreciation could not be taken into account in fixing the gross profits, they do not rule out taking into account the depreciation in all cases in determining the financial capacity of the Industry to bear the increased burden. Before considering the decisions which bear on the question we will refer to the plea of the appellants that financial capacity of sugar industry functioning under the Cooperative Societies Act should only be decided according to the provisions of section 66 of the Gujarat Co 518 operative Societies Act, 1961, Act X of 1962. Section 66(1) runs as follows: "A society earning profit, shall calculate its annual net profits by deducting from the gross profits for the year, all accrued interest which is overdue for more than six months, establishment charges, contributions, if any, towards the provident fund and gratuity fund of its employees, interest payable on loan and deposits, audit fees, working expenses including repairs, rents, taxes and depreciation, and after providing for or writing off bad debts and losses not adjusted against any fund created out of profits. A society may, however, add to the net profits for the year, interest accrued in the preceding years, but actually recovered during the year. The net profits thus arrived at, together with the amount of profits brought forward from the previous year shall be available for appropriation. " Relying on the provisions of the section which requires that taxes and depreciation should be deducted from gross profits for arriving at net profits, it was submitted that in determining the financial capacity of the industry the net profits as prescribed in the section would have to be determined. We do not read the section as meaning that wages and dearness allowance could only be determined after the net profits are arrived at. The sub section itself provides that contributions towards provident fund and gratuity fund of its employees should all be deducted from the gross profits for arriving at the net profits. The provision for deducting depreciation occurs after providing for contribution towards provident fund and gratuity. The determination of the net profits under the section is for a different purpose, namely for appropriation of the net profits as provided for in the Act and does not in any way support the contention of the appellants. In deciding the financial capacity of an industry this Court has laid down in Ahmedabad Mills Owners ' Association etc. vs The Textile Labour Association,(1) that "Industrial adjudication must take into account the problem of additional burden which such wage structure would impose upon the employer and consider whether the employer can reasonably be called upon to bear such burden. It is a long range plan and in dealing with the problem, which is difficult and delicate the financial position of the employer and the future prospects of the industry and the additional burden which may be imposed on the consumer must be carefully examined." This Court after referring to the Reserve Bank Bulletin about the financial position of the industry 519 and about cotton textile industry and other authorities on determining the financial capacity of an industry observed that "industrial adjudication cannot lean too heavily on such single purpose statements or adopt any one of the tests evolved from such statements, whilst it is attempting the task of deciding the financial capacity of the employer in context of the wage problem." The financial capacity of the industry will have to be decided in the context of the wage problems and the methods adopted in determining financial capacity of the industry for other purposes need not be followed. While examining the financial capacity in detail we must ultimately base our decision on a broad view which emerges from a consideration of all relevant factors, such as financial position of the employer, the interests of the consumer etc. The wages due to a worker are in the nature of expenses just like payment for raw materials. In this sense the wages are expenses which have to be met whether the company works, makes a profit or not. So far as the minimum wages due to a worker are concerned, the law requires that they should be paid first and if the industry cannot pay them it may as well close. The payment of dearness allowance as prescribed under the Minimum Wages Act should also be provided for in any event. It is settled law that in fixing fair wages or dearness allowance or for making contribution to provident fund or providing for gratuity the financial capacity of the industry to bear the additional burden will have to be taken into account. On principle of social justice with the development of industrial law it has now been accepted that when the industry can bear the burden provision should be made for provident fund and gratuity scheme. In determining the financial capacity of an industry all relevant facts will have to be taken into account. The principles followed in arriving at the profit and loss account for income tax and other purposes may not be conclusive. The claim of the employer to a reasonable profit, that of the shareholders for a fair dividend and the interest of consumer and other relevant factors and circumstances will have to be taken into account. It is necessary to take into account all the facts and circumstances relating to the industry for determining the financial capacity of the industry to pay. We will now proceed to refer in detail to the three decisions of this Court which are relied on as authority for the proposition that depreciation should not be taken into account in fixing the wage structure. In Gramophone Company Ltd. vs Its Workmen(1) this Court had to 520 examine the financial capacity of the employer for determining whether the industry could bear the burden of a gratuity scheme. The court found on examination of the financial position of the company that the profits that were made by the company were Rs. 7.6 lakhs in 1956 57, Rs. 7.2 lakhs in 1957 58, Rs. 1.6 lakhs in 1958 59, Rs. 1.49 lakhs in 1959 60 and Rs. 6.04 lakhs in 1960 61. On behalf of the company it was submitted that the introduction of the gratuity scheme would throw a great burden on the industry involving an initial fund of Rs. 33 or 34 lakhs and that if provision is made for income tax payable and development rebate it will be seen that the company is running at a loss. The Court found that the financial position of the industry showed that the burden of payment of gratuity and provident fund can be made without undue strain on the financial position of the employer. The court observed that the introduction of a gratuity scheme will not require an initial fund of Rs. 33 or 34 lakhs but only involve an additional burden of Rs. 1.5 lakhs at the most. Though the introduction of the gratuity scheme may involve an expenditure of Rs. 1.50 lakhs a year the actual burden will be Rs. 60,000 as there will be a reduction of the income tax payable by about 63%. Regarding the plea of the company that if the amounts due to income tax and development rebate are taken out, it would show that the company has suffered a loss, the Court observed that the provisions for income tax and reserves must take a second place as compared to provisions for a wage structure. In declining to accept the contention that provision for taxation and reserves should have precedence, the Court proceeded to base its decision on the finding that the financial capacity of the industry was such that it could bear the burden. This Court held that if the industry is in a stable condition and the burden of provident fund and gratuity does not result in loss to the employer that burden will have to be borne by the employer like the burden of wage structure in the interest of social justice. The statement that provision for income tax and development rebate taking only a second place may not be understood as holding that they should on no account be taken into consideration or that a wage increase would be permissible if it would result in reduction of income tax. The decision is based on the finding that the company is in a position to bear the burden and the observations were incidental and made on the facts of the case. It may be noted that there is no reference about taking into account of depreciation allowance. The judgment should be understood as negativing the plea that the income tax and development rebate should be taken into account to the extent of showing that the industry is running at a loss. 521 The second decision is Indian Link Chain Manufacturers Ltd. vs Their Workmen.(1) The question arose whether in the matter of determining surplus the Tribunal was justified in taking the figures of depreciation allowance and development rebate from the balance sheet and not from the income tax assessment orders in which the figures were higher and whether for determining the return on reserves the figures at the end of the year or the beginning of the year had to be taken. It was held by this Court that there was no justification for the rejection of the company 's claim for depreciation and development rebate and the same be allowed as per income tax assessment. The Court allowed depreciation allowance and development rebate. In determining the financial position of the company the court observed that it would not be appropriate to approach its capacity to bear the burden from an investors point of view. The over all picture of the soundness of the undertaking and its future prospects must be taken into account. * The Court adopted the principles laid down in the Bharatkhand Textile Mfg. Co. Ltd. & Ors. vs The Textile Labour Association, Ahmedabad(2) which are as follows: "It is not disputed that the benefit of gratuity is in the nature of retiral benefit and there can be no doubt that before framing a scheme for gratuity industrial adjudication has to take into account several relevant facts; the financial condition of the employer, his profit making capacity, the profits earned by him in the past, the extent of his reserves and the chances of his replenishing them as well as the claim for capital invested by him, these and other material considerations may have to be borne in mind in determining the terms of the gratuity scheme." (Emphasis supplied). Thus the facts that have to be taken into account in determining an overall picture of the financial capacity are the financial condition of the employer his profit making capacity the profits earned by him in the past, the extent of his reserves and the chances of his replenishing them as well as the claim for capital invested by him. After referring to the decision in the Hindustan Antibiotics Ltd. vs The Workmen & Ors., (3) at p. 809 the Court made the following observations: "It is pertinent to notice that gratuity and wages in industrial adjudication are placed on the same footing and have priority over Income tax and other reserves, as such in consi 522 dering the financial soudness of an undertaking for the purposes of introduction of a gratuity scheme the profits that must be taken into account are those computed prior to the deduction of depreciation and other reserves. " As already pointed out in Gramophone Company 's case there is no reference to deduction of depreciation. In the case under consideration i.e. Indian Link Chain Ltd., the Court at p. 807 allowed the claim of the company for a deduction on account of depreciation and development rebate at Rs. 1,61,054 and Rs. 5,822 instead of Rs. 80,190 and Rs. 3,970. On the facts of the case it is found that the industry was in a position to bear the burden. In Unichem Laboratories Ltd. vs The Workmen(1) it was found that the average gross profits of the company exceeded Rs. 40 lakhs and the additional financial burden by the revision of the wage structure was Rs. 5.55 lakhs. On the facts the court held that the Tribunal was justified in computing gross profits without deducting tax, depreciation and development rebate. The court accepted the plea on behalf of the company that the decision in Gramophone Company Ltd. had no occasion to consider whether depreciation reserve can be deducted or not. Scrutinising the figures given at p. 581 of the Reports the Court found that the average net profit worked out to Rs. 13,84,691.00. The depreciation that was claimed was Rs. 5,44,918 for 1965 66, Rs. 5,55,035 for 1966 67, Rs. 7,84,824 for 1967 68, Rs. 11,11,775 for 1968 69 and Rs. 9,16,719 for 1969 70. On the facts the Court found that the company had the financial capacity. The inclusion or exclusion of the depreciation allowance would not have made any difference to the capacity of the industry to bear the additional burden. The decision may not be understood as laying down a principle of law that in no case the depreciation could be taken into account. It may be remembered that in Bharatkhand Textile Mfg. Co. Ltd. (supra) the guidelines that were indicated were that in determining the capacity to pay by the industry the financial condition of the employer, his profit making capacity, the profits earned by him in the past, the extent of his reserves and the chances of his replenishing them as well as the claim for capital invested by him*. these and other material considerations may have to be borne in mind. Thus the extent of the reserves the chances of replenishing them as well as the claim for capital 523 invested by him and as observed in Ahmedabad Millowners ' Association vs Textile Workers,(1) will have to be taken into account. The position of the industry should be examined in detail and the decision should be based on a broad view which emerges from a consideration of all relevant factors such as whether the employer can reasonably be called upon to bear the burden and whether the additional burden imposed on the consumer is justified would also have to be carefully examined. As pointed out in the Ahmedabad Millowners Association case (supra) "It is a long range plan and in dealing with the problem, which is difficult and delicate the financial position of the employer and the future prospects of the industry and the additional burden which may be imposed on the consumer must be carefully examined. " It may be that for prudent management of an industry it will be desirable to take into account to some extent the depreciation of the machinery for otherwise after lapse of years the machinery may get worn out and without provision for replacement the industry itself will come to a stop. Whether provision for such depreciation should be made and if so to what extent will depend upon the facts of the case. Depreciation allowance to the extent of making out a loss need not be accepted but reasonable provision should be made. The three decisions of this Court referred to were given on the particular facts of the case and may not be understood as laying down that under no circumstances deduction for depreciation, reserves etc. could be made. It is of utmost importance that the industry must be kept going as long as it could pay the minimum wages. It may sometimes be necessary for the workers to make some sacrifice to keep the industry going. It is not wise to kill the goose that lays the golden eggs. The capacity of the industry to bear the burden will have to be taken into account in determining whether provision could be made for fixing a wage structure including provision for contribution to provident fund, gratuity etc. In determining the capacity of the industry to bear the burden all relevant facts will have to be taken into account and actual state of affairs determined. The procedure adopted by the industry to determine the financial capacity for other purposes may not be relevant. It cannot be taken as a hard and fast rule that provision for depreciation, provision for development rebate, tax liabilities should never be allowed. While the preservation of the industry is paramount the attempts of the management to show that the company is running at a loss by boosting the depreciation allowance etc. should not be permitted. In short the real capacity of the industry to bear the extra burden will have to be determined. 524 An employer claiming depreciation allowance is only entitled to the actual or probable depreciation of the machinery, tools etc. for the period due to wear and tear. The depreciation cannot be computed on any notional basis or on the profit and loss account furnished by the company. In the cases before use the management has claimed by way of depreciation the cost of purchase of machinery for expansion of the manufacturing plant. In the matter relating to Chalthan Sugar Mills in the profit and loss account for the year ending June 30, 1975 Rs. 1,07,56,523 is claimed by way of depreciation at the end of the year. The balance brought forward on this account from the previous year is Rs. 79,11,066. During the year, an amount of Rs. 28,45,457 is added. In the profit and loss account for the year ending June 30, 1977 the depreciation fund increased from Rs. 1,07,56,523 to Rs. 1,30,24,742. In the profit and loss account for the year ending June 30, 1977 an amount of Rs. 22,97,553 is added to the depreciation fund. The figures furnished by the other sugar factories follow the same pattern. During the course of arguments the appellants admitted that the amount shown as depreciation actually represented the cost of purchase of new machinery and balance for expansion of the manufacturing units. These amounts relate to expansion of the industry and should be shown in the capital account and cannot be claimed as deduction due to depreciation. The accounting of the sugar factories concerned is for the purpose of minimising the profits and showing loss for the purpose of depriving the workers their due. Such depreciation cannot be allowed. But as pointed out by us the actual depreciation which should be deducted in the interest of the industry can be taken into account. In the cases before us if the inflated figures should be left out of account we feel that the industry has the capacity to bear the additional burden. The High Court after referring to the decisions of this Court in Gramophone Co. and Indian Link Chain Manufacturers and the Shivraj Litho Works (supra) came to the conclusion that gross profits before allowance is made for depreciation has to be taken into account for the purpose of considering the paying capacity of the industry. The High Court added the amount of depreciation to the net profits as shown in the balance sheet and found that large profits were available as gross profits. The High Court was of the view that the position of the three factories in South Gujarat, namely Gandevi, Bardoli and Madhi is not at all gloomy so far as their financial prospects are concerned. The High Court found that though the price of sugarcane was fixed for delivery at the factory, it has paid the price to the growers ex sugarcane field, thus bearing the charges for cutting sugarcane and for carrying it to the factory premises from the field. This payment was unjustified 525 and was intended for the benefit of the members of the cooperative society and resulted in showing of a 'Paper Loss '. We are unable to agree with the conclusion of the High Court that this payment is unjustified and is for the purpose of benefiting its own members. It is submitted on behalf of the factories that the sugar factories pay an extra amount to the growers to induce them to cultivate sugarcane for a profit and thereby preventing them from cultivating other crops and reducing the area under sugarcane cultivation. The finding of the High Court that this extra payment is to benefit the members of the society itself is also not borne out as there are members who are not growers of sugarcane. The benefits by way of giving fertilizers at a discount etc. will not profit members who are not growers. The High Court has not estimated the likely increase in profits due to increase in the price of sugar levy along with the increase in expenditure due to the revision of the wage structure which it has estimated at about Rs. 5 lakhs. Further as pointed out by us earlier the High Court erred in adding back the depreciation and other reserves without determining as to what extent such allowances are permissible on the facts of the case. For the reasons stated we feel that the financial capacity of the industry has not been determined in the manner in which it ought to have been done. The wages are normally fixed on the basis of industry cum region. The U.P. Pattern was fixed by the Uttar Pradesh Government on an agreement between the parties under section 3(b) of the U.P. Industrial Disputes Act, 1947(U.P. Act No. 18 of 1947). The order under sec. 3 (b) is provisional in character. Section 3 (d) provides for fixing the wages after proper adjudication. No such adjudication took place in U.P. after the passing of the order under sec. 3(b). Even though normally the wages are fixed on the industry cum region basis it is open to the industry to plead that it has not the financial capacity to bear the increased burden. When such a plea is specifically raised it is the duty of the Industrial Court to determine whether the increased burden could be borne by the particular industry. The reason given by the Industrial Court and the High Court for following the U.P. Pattern is that it has been accepted by various sugar factories in the southern region and a neighbouring factory Kodinar Sugar Factory and hence there is no reason for not applying the same rates to the appellant factories. On behalf of the appellant it was pleaded that it is not admitted that all the sugar factories in the southern region have accepted the U.P. Pattern. It was submitted that the case of the Kodinar is different because it was established long time ago and is a flourishing concern. 526 In view of the order we propose to make we do not feel called upon to examine in detail the financial capacity of the various factories or to remit it to the Industrial Court for that purpose. We have found that the order of the Industrial Court and the High Court relating to the provision for variable dearness allowance of more than 100% neutralisation is not sustainable in law and will have to be set aside. Regarding the award relating to the retention allowance of the unskilled workers at 10% of the basic wage and the dearness allowance payable during the crushing season, it was not challenged before the High Court. The only question therefore which is in dispute is the increase of graded dearness allowance from Rs. 21 to Rs. 40 with effect from the date of the award. We do not think that the increase in burden under this head would be beyond the financial capacity of the factories especially as we are satisfied that the claim for depreciation is highly exaggerated. Taking all the circumstances relating to the financial capacity of the factories we are satisfied that the increase in the burden due to the increase in the graduated dearness allowance will be within the capacity of the industry. We therefore find no reason for remitting the matter back to the Industrial Court. We set aside the award relating to the grant of graduated dearness allowance at more than 100% but direct that it will be confined to 83 paise for increase of one point i.e. limited to cent per cent neutralisation. So far as the increment of the graduated dearness allowance from Rs. 21 to Rs. 40 from the date of the award and the retention allowance at 10% of the basic wage and dearness allowance payable during the crushing season to the unskilled workers is concerned, it is confirmed. The appeals are disposed of accordingly. The Appellant will pay costs of the respondents one set of Rs. 2000/ which will be divided amongst the respondents. N.K.A Appeals allowed partly.

The respondent workmen who were employees of Sugar mills in the State of Gujarat demanded grant of dearness allowance, among certain other benefits, on the basis of revised scales for sugar factories in Uttar Pradesh. The Industrial Court, Gujarat increased the dearness allowance on a graded scale spread over three years. On appeal the High Court set aside the award by the Industrial Court in respect of phasing but confirmed the award in regard to dearness allowance and directed that the U.P. pattern should be given full effect with retrospective effect from The date mentioned in the award. The employers questioned the correctness of the High Court 's judgment on the ground that (I) grant of neutralization of variable dearness allowance at 125% is far in excess of what is permissible under the industrial law and (2) the High Court failed to take into account depreciation in arriving at the financial capacity of the industries while fixing the wage structure. ^ HELD: 1. (a) Variable dearness allowance cannot be more than 100% neutralization. [517D] (b) The purpose of dearness allowance is to neutralise a portion of the increase in the cost of living due to rise in prices. Neutralization may be such as to neutralize fully the increase in the cost of living or may be restricted to only a portion of the increase. Cent percent neutralization can be achieved if the increase in the cost of living is fully compensated so that the pay of the workers is not adversely affected. But an award of more than 100% of increase in the cost of living would be more than neutralization and would in effect give the worker an increased wage. The result would be that the worker would be getting an increased wage packet whenever there is a price rise, a result which would not have been envisaged in making provision for grant of dearness allowance. [516D G] Clerks of Calcutta Tramways vs Calcutta Tramways Co. Ltd.; , , Kamani Metals and Alloys Ltd. vs Their Workmen ; , Bengal Chemical and Pharmaceutical Works Ltd. vs Its Workmen, A.I.R. 1969 S.C. 360, Silk & Art Silk Mills Association Ltd. vs Mill Mazdoor Sabha, ; and Killick Nixon Ltd. vs Killick followed. 510 (c) It is not correct to say that neutralization of more than 100% dearness allowance is based on the seasonal nature of employment in the industry. The retention allowance provided to seasonal workers in sugar industry is to mitigate the hardship of unemployment during the off season. [517A B] 2. (a) Section 66(1) of the Gujarat Cooperative Societies Act 1961 requires that taxes and depreciation should be deducted from gross profits for arriving at net profit. That does not mean that wages and dearness allowance could only be determined after the net profits are arrived at. The sub section itself provides that contributions towards provident fund and gratuity even of its employees should all be deducted from the gross profits for arriving at the net profits. The provision for deducting depreciation occurs after providing for contribution towards provident fund and gratuity. The determination of the net profits under the section is for different purpose, namely, for appropriation of the net profit as provided for in tie Act and does not in any way support the contention of the appellant. [518E F] (b) It is settle law that in fixing far wages or dearness allowance or making contribution to provident fund or providing for gratuity the financial capacity of the industry to bear the additional burden will have to be taken into account. On principle of social justice with the development of industrial law it has now been accepted that when the industry can bear the burden, pro vision should be made for provident fund and gratuity schemes. In determining the financial capacity of an industry all relevant facts will have to be taken into account. The principles followed in arriving at the profit and loss account for income tax and other purposes may not be conclusive. The claim of he employer to a reasonable profit, that of the shareholders for a fair dividend the interest of consumer and other relevant factors and circumstances will have to be taken into account. It is necessary to take into account all the facts and circumstances relating to the industry for determining the financial capacity of the industry to pay. [519 G] Ahmedabad Mills owners ' Association etc. vs The Textile Labour association; , , Gramophone Company Ltd. vs Its Workmen, , Indian Link Chain Manufacturers Ltd. vs Their Workmen, ; and Bharatkhand Textile Mfg. Co. Ltd. and ors. vs The Textile Labour Association, Ahmedabad; , ; followed. (c) The facts that have to be taken into account in determining an overall picture of the financial capacity are the financial condition of the employer his profit making capacity, the profits earned by him in the past, extent of the reserves and the chances of his replenishing them as well as the claim for capital invested by him. [521F G] Hindustan Antibiotics Ltd. vs The Workmen and ors. ; , referred to.

4067.txt

iminal Appeal No. 67 of 1969. Appeal by special leave from the judgment and order dated August 12, 1969 of the Delhi High Court in Criminal Appeal No. 68 of 1967 and Murder Reference No. 1 of 1967. H. R. Khanna and R. N. Sachthey, for the appellant. Har Pershad and O. N. Mohindroo, for the respondent. The Judgment of the Court was delivered by P. Jaganmohan Reddy, J. This Appeal is by Special leave against the Judgment of the Himachal Bench of The High Court of Delhi acquitting the accused who had been sentenced to death for an offence of murder under Section 302 of the Indian Penal Code. The accused Respondent was a Manager at the Kotkhai Branch of the Himachal Pradesh State Cooperative Bank of which Sunder Lal Chaturvedi the deceased was the General Manager. It appears that during the period the accused was working in that Bank there was a fire in the Kotkhai Branch in which the records of the Bank were burnt and a sum of Rs. 10,000/,A was found missing. The deceased had suspended the accused from the service and subsequently he was dismissed. In or about 1964, the deceased retired from the Bank and in 1965 started a Private Limited Company under the name of Himprasth Financiers with the Head Office at Nagina Singh Building which was situated in the Mall at Shimla of which he was the Managing Director. He used to also live in the same building in one of the rooms of the office and have his meals in the Mansarovar Hotel. The other Directors of this Company were Gurucharan Singh, Puran Chand Sood and Kailasli Devi wife of I. C. Gupta, P.W. 2, who was at one time also Manager in the Himachal Pradesh State Cooperative Bank. After the accused was dismissed from the Bank he had applied to the deceased for a job and was appointed as an Accountant in the Finance Company but later when his request for increase in his pay was not sanctioned, he sent in his resignation by a letter dated 31 12 66 Exh. P. 8 and it was accepted on 3 1 67 by a resolution of the Board of Directors Exh. P. 43. On the night of 30th January 1967 the deceased had his dinner at the Hotel and when lie came out after taking his food it was alleged that he was met by the accused. This was witnessed by Romesh Chand P.W. 7 the Proprietor of the Hotel who saw them both going towards the Mall. Thereafter at the betel shop which is near Nagina Singh Building, Lal Chand P.W. 9 who was purchasing cigarettes at that shop saw them together and going towards the Nagina Singh Building. It 768 was the last time he was seen alive. On the 31st January 67 at about 9.30 a.m. I. C. Gupta P.W. 2, came to visit the deceased and .found that the main door was bolted from inside. He then peeped through the glass of the window panes through the adjoining room and saw that the deceased was lying in a pool of blood. He immediately telephoned to the Police. In response to this call the Station House Officer of the Saddar Police Station, Inder Raj Malik, P.W. 28 came to the building, broke open the room through the kitchen door and saw that the back door of the bath room was open. At that time there were present P.W. 2. Amar chand P.W. 8, Raidev Krishan P.W. 13 and others. The deceased had on him four incised wounds one on the neck and 3 on the hands. On inspection of the room he found on the nearby table a key exhibit 4 stained with blood and under the table there was a biscuit colour Coat button exhibit 1. Inside the shelf of an Almirah there was a water flask which appeared to have on its neck 3 finger impressions. On the glass pane of the door leading to the kitchen were also found two finger marks. The curtain near the kitchen door showed that someone had wiped his blood stained hands on it. The key and the button were seized and a panchnama was made. There were also found two bunches of the keys underneath the pillow of the deceased. Des Raj, P.W. 6, the Police Photograph took photographs not only of the various objects in the room but also of the finer marks on the flask and the window panes after the same were dusted with some prey powder. Thereafter the Investigating, Officer P.W. 28 requested P.W. 2, P.W. 8 and P.W. 13 to ascertain if any of the things belonging to the deceased were missing. These three persons informed him after inspection list two loan registers, one general ledger, one cash book and vouchers from April '66 to December '66 were missing. They further informed him that one blanket of the deceased, one tea poy cove, ' and one canvas bag was missing. An inquest on the dead body was held and the blood found was also seized. Thereafter p. W. 28 went to Mansarover Hotel and recorded the statement of P.W. 7. On 1 2 6 / at about 11.30 a.m. P.W. 28 accompanied by the Assistant Sub Inspector and Constables met P.W. 2, P.W. 8 and boarded the jeep of P.W. 2 driven by Roshan Lal and went towards the house of Om Prakash. On the way PW. 2 saw Kala Ram, P.W. 5, who was waiting for a bus and asked him to get into the jeep. Thereafter they went to the house of the accused situated at Anandale and there P.W. 28 went inside the house and saw the accused in one of his rooms and brought him outside. After interrogating him he arrested him and pursuant to a statement made by him seized from him one sweater, one coat, one blanket which was hidden inside the nivar of his cot lying inside his room. The sweater and the coat were stated by the accused to be his. The accused also gave them the pair of boots and socks which he was wearing and informed them that he had concealed one blood 769 stained dagger under a stone slab below the Maidan of Burnt Market and over the bakeries which was by the side of a pipe and offered to have it recovered. He further stated that he had kept the five registers in a canvas bag which lie had hidden below a stone at Krishna Nagar on the bank of Ganda Nala and that he had thrown 8 or 9 bundles of the vouchers tied in a tea poy cloth and his blood stained pants in the Ganda Nala and would get them recovered. The, Investigating Officer reduced the statements to writing in the presence of the Panchas and took their signatures. This Panchnama is exhibit P. 6. The coat and sweater and the blanket inside he nivar of his cot were handed over by the accused to the police. These were found to contain blood and were seized through a Panchnama. The accused then took them to the market and on the way were met by Bhag Singh P.W. 12 and in the presence of all these persons he. removed a piece of stone which was near a pipe and brought out a blood stained dagger from under it and gave it to P.W. 28. He then took them to the Tekri of one Ganga Singh P. W. II, in the Lower Bazar who sells daggers and there P.W. 28 recorded his statement that on the day of the incident the accused had purchased the dagger recovered from under the stone which was identified by P.W. 11, as the one sold to him. On the next day namely 2 2 67 P.W. 28, got a plan of the rooms and the office where the deceased was working and living prepared and from there accompanied by P.W. 2, P.W. 13 went to Krishna Nagar taking with them on the way Manohar Lal P.W. 14, from Krishna Nagar to Ganda Nala which was flowing in the khud. From near there the accused pointed out a stone slab from where a canvas bag which contained five registers said to be missing from the residence of the deceased were recovered and then the accused went into the Ganda Nala brought out a tea poy cloth which contained vouchers and also recovered a blood stained pant which was lying under the water. The button and the coat were sent to the forensic laboratory at Chandigarh for examination. The flash and, the glass panes were sent to the Finger Print Examiner at Phillor and the button to the Forensic Laboratory which gavel a report that it was similar to the button on the coat from which it was missing. The Chemical Examiner and Serologist found human blood on the key. the dagger, blanket, coat, sweater and pant, the shoes and socks. The blood grouping could only be found on the pajama and shirt of the deceased which is of 'O ' group while no blood grouping was possible in respect of the other articles referred to. Vide exhibit P. 60 and exhibit P. 48. The finger print expert found on the flask and the glass pane reported as per exhibit P. 59 that they are the same as those of the accused and have more than 12 points of similarity i.e. matching ridge characteristic details. The High Court grouped the circumstances relied against the accused Under 4 broad heads namely 770 (i) that there was a motive for committing the murder; (ii) that the deceased Chaturvedi was seen last in the Company of the accused; (iii) that in pursuance of the statement said to have been made by the accused as per exhibit P. 6 a recovery of blood stained sweater, coat, blanket. shoes and socks and blood stained dagger were made ,as per exhibit P. 6/A on 1 2 67 (the date given in the Judgment as 2 2 67 is not correct), and that on 2 2 67 five registers contained in a bag and 12 bundles of vouchers were recovered; and (iv) that the finger marks of the accused were found on the flask as well as on the glass panes at the place where the murder took place. If the circumstantial evidence as relied upon by the prosecution is credible and acceptable the offence with which the accused is charged can be held to be established beyond reasonable doubt. The High Court however did not accept these circumstances as having been established by any independent and reliable evidence. In so far as motive suggested byu the prosecution is concerned it was of the view that while no doubt the accused was suspended by an order of the deceased on 21 6 63 that suspension must have been as a consequence of the action taken by the authorities of the Bank with the approval of the Board of Directors and this does not indicater that he could have any grievance against him; that the accused had no grievance against the deceased is also shown by the fact that the deceas ed had given him employment in the Finance Company. The second circumstance against the accused, that lie was last seen in the Company of the deceased on 30 1 67 at 9.30 p.m. was also held not to incriminate him for the reason that even if Lal Chand P.W. 9 's statement was true, it only goes to show that the accused was seen going with the deceased towards the Nagina Singh Building but that does not mean that they had gone into that Building together, but on the other hand there was a possibility of the accused taking leave of the deceased and going away to his house without entering into the Nagina Singh Building. With respect to the third circumstance relating to the seizure and recovery of articles and their admissibility under Sec. 27 of the Evidence Act, it was observed that the evidence adduced by the prosecution for establishing these circumstances reveals a number of irregularities and is suspicious firstly because the prosecuting officer took with him all the witnesses who were neither independent nor impartial and even the witness P.W. 5 Kala Ram cannot be considered to be independent or impartial as he was not a stranger but was known to the Enquiry Officer. A reading of Kala Ram 's ,evidence gives the impression that he is a person willing to be an ;agent of the police. It also appeared to the High Court that the 771 action of P.W. 28 in bringing the accused out of the room when he and the other witnesses went to his house gives rise to the suspicion that it might have been done deliberately to clear the way for planting the articles in the cot which was in the room and fourthly the statement exhibit 6 said to have been made by the accused amounted to a confession by the accused and it as the enquiry officer P.W. 28 claimed that the statement was voluntary instead of recording it himself he could have produced the accused before a Magistrate for recording the same. In view of this the High Court was not satisfied that the statements were freely and voluntarily made by the accused and accordingly neither the portions of those statements which related to the discovery of incriminating facts nor the admissibility under Sec. 27 of these Memos exhibit P6 & P. 6A and P. 7 which were signed by P.W. 2, P.W. 5, P.W. 8 and P.W. 28 both on 1 2 67 as well as on 2 2 67 could be relied upon. Even the handing over of the shoes and socks it was observed cannot be treated as having been discovered because the accused was wearing them at the time when he handed them over to the police, and also that it was difficult to believe that the accused will have the coat, sweater and blanket which are said to have blood stains on them recovered because he could have discarded them in the same way as he is said to have done with his pants. Moreover the coat and the sweater were not shown to belong to the accused by independent and reliable evidence. For these reasons the alleged discoveries or the recoveries of the coat, the sweater, the blanket, shoes and socks were rejected. Even with respect to the discovery of the dagger the High Court thought that Amar Chand P.W. 8 was not an independent witness, that Bhag Singh P.W. 12 who was just a worker at the bakery claimed to be present casually did not inspire confidence, nor in the absence of independent witnesses who could have been easily procured could the other evidence be relied upon. The identification of the dagger by Ganga Singh P.W. 11 before the Magistrate was also not accepted because there was nothing to show that the dagger was the one which was purchased by the accused nor is it possible to distinguish the dagger in question from the other 3 daggers with which it was mixed up. Similarly the evidence relating to the recovery of the account books and vouchers was disbelieved. The thumb impressions on the flask and the glass panes was rejected on the ground that no particulars were set out by the Director of the Finger Prints Bureau except the stereotyped statement that there was a similarity of more than 12 points. On this aspect the High Court observed as follows "If the accused also had handled the flask, as suggested by the prosecution, his finger impressions also would be on the flask, and there would be quite a good number of finger impressions on the flask. But curiously only three finger impressions, and that too of the accused, are 772 said to be present on the flask. This in our Opinion, is a very suspicious feature. Further, the existence of the finger marks is said to have been noticed even at the earliest stage of the inquest, and that too not by any expert but by the any vestigating Officer, I.C. Gupta, Amar Chand and Baldev Krishan as though they anticipated the presence of the finger marks. There is thus no clear proof that the finger marks alleged to have been found on the flask and the glass pane were those of the accused, and we hold accordingly". In possession of articles which bear incriminating blood stains and Court has undoubted power to interfere with the findings of fact, no distinction being made between judgments of acquittal and conviction, though in the case of acquittals it will not ordinarily interfere with the appreciation cf evidence or on findings of fact unless the High Court "acts perversely or otherwise improperly" (See State of Madras vs Vaidyanatha lyer) (1). The case against the accused as already stated depends entirely on circumstantial evidence the credibility of which is very much in issue. It is well established that circumstantial evidence consists in various links in a chain, which if complete, leads to the undoubted conclusion that the accused and accused alone could have committed the offence with which he is charged. It is said that this evidence is much more dependable than direct evidence provided that no link in the chain is missing. While it is possible that each of these links may not by itself incriminate the accused or be conclusive against him the linking of all of them may forge the chain in arriving at that conclusion The evidence that accused had ill will against the deceased furnishing a motive, that he was last seen in the company of the deceased, that he was present in the room of the deceased at or about the time he was murdered, that he was subsequently found in possession of articles which bear incriminating 'blood stains and that he had hidden the dagger with blood stains thereon and certain other articles which were discovered on the information furnished by him, all of which if believed leads to the conclusion that he was the murderer. In appreciating the evidence against the ac cused the prime duty of a court is firstly to ensure that the evidence is legally admissible, that the witnesses who speak to it are credible and have no interest in implicating him or have ulterior motive. At the very outset an attempt was made on behalf of the de fence to suggest that it was P.W. 2 who was the murderer and not the accused. This suggestion was made to him in the committal court as also in Sessions Court but it was denied. It was submitted that P.W. 2 had a motive to do away with the deceased because he (1) ; , 587. 773 wanted to appropriate to himself the money and property of the deceased. To this end he was cross examined with the object of establishing that he and the deceased had purchased jointly a land near Chhail and that the deceased was in possession of large sums of money and that P.W. 2 used to receive all the amounts from the loans. advanced by the Finance Company and to avoid any liability for these amounts the murder was committed with the object of taking away the accounts and destroying the evidence relating there to. It was further suggested that because of this motive he and P W, 8 who admitted that he considered P.W. 2 as his superior and P.W. 13 Bhag Singh who is the brother in law of P.W. 2 being the wife 's brother, were interested in shifting the offence to the accused by taking a prominent part during the investigation and became the main witnesses for proving the several incriminating circumstances against him. While it is not the function cf this Court to determine who other than the person who has been charged with the murder had committed it, the line which the defence adopted was to establish that the witnesses referred to above had an interest in implicating the accused or at any rote to create uncertainty and doubt sufficient to give the benefit to the accused. It is not beyond the ken of experienced able and astute lawyers to raise doubts and uncertainties in respect of the prosecution evidence either during trial by cross examination or by the marshalling of that evidence in the manner in which the emphasis is placed thereon. 'But what has to be borne in mind is that the penumbra of uncertainty in the evidence before a Court is generally due to the nature and quality of that evidence. It may be the witnesses are lying or where they are honest And truthful, they are not certain. It is therefore difficult to expect a scientific or mathematical exactitude while dealing with such evidence or arriving at a true conclusion. Because of these difficulties corroboration is sought wherever possible and the maxim that the accused should be given the benefit of doubt becomes pivoital in the prosecution of offendsers which in other words means that the prosecution must prove its case against an accused beyond reasonable doubt by a sufficiency of credible evidence. The benefit of doubt to which the accused is entitled is reasonable doubt the doubt which rational thinking men will reasonably, honesty and conscientiously entertain and not the doubt of a timid mind which fightshy though unwittingly it may be or is afraid of the logical consequence if that benefit was not given. Or as one great Judge said it is "not the doubt of a vacillating mind that has not the moral courage to decide but shelters itself in a vain and idle scepticism". It does not mean that the evidence must be so strong as to exclude even a remote possibility that the accused could not have committed the offence. If that were so the law 774 would fail to protect society as in no case can such a possibility be excluded. It will give room for fanciful conjectures or untenable doubts and will result in deflecting the course of justice if pot thwarting it altogether. It is for this reason the phrase has been criticised. Lord Goddard C.J. in Rex vs Kritz(1) said that when in explaining to the juries what the prosecution has to ,establish "a Judge begins to use the words " 'reasonable doubt" and to try to explain what is a reasonable doubt and what is not, be is much more likely to confuse the jury than if he tells them in plain language "It is the duty of the prosecution to satisfy you ,of the prisoner 's guilt" ". What in effect this approach amounts to is that the greatest possible care should be taken by the Court in convicting an accused who is presumed to be innocent til the contrary is clearly established which burden is always in the accusatory system, on the prosecution. The mere fact that there is only a remote possibility in favour of the accused is itself sufficient to establish the case beyond 'reasonable doubt. This then is approach. The High Court thought, there was force in the suggestion of the learned Advocate for, the accused that P.W. 2 had a clear motive to take away the registers and vouchers of the Company to make such use of them as would suit him and also to murder the deceased. On the contrary the I evidence of P.W.; 2 shows that he was a friend of the deceased. , He had been a Manager in the Himachal: Pradesh State Cooperative Bank when the de , was the General Manager. There is nothing to show that during that period the deceased and, he were. ,on inimical terms or there was any disagreement between them of Such a nature as .would imply that he bore ill will towards the deceased. On the ,other hand both of them had jointly purchased a land, and when the deceased started the Himprasth Finance Company P.W. 2 's wife was made a Director in that Company blecause P.W. 2 being an employee in a State Cooperative Bank could not take interest therein. At the time of the incidept it ' appear. , that P.W. 2 was living in Simla and according to him he had ,regard for the deceased and as he was his General Manager he ,used to go to him almost daily in the morning and in the evening. He further says he must have visited him hundred times inside the house, and on the evening of the 30th January, 67, the deceased and he went for an evening stroll as usual and at 9.30 p.m. that day he left him near the Nagina Singh Building, after which the deceased went away to take his food towards the Lower Bazar side and he went away to his house. P.W. 2 knew of the financial position of the deceased which was according to the loan ledger entries of the Himprasth Finance Company 775 Rs. 1157.71 np. as on 31 12 66, that there was a credit amount of Rs. 14,000 as on 29 11 66 Which was not withdrawn till then; that certain amounts were also borrowed for the marriage of his daughter from Rawal Chand of Sanjouli whom he knew welt and that from the accounts it appeared that there was only Rs. 6.10 np. as cash in hand of the Company which may be in the hands of P.W. 13. He further states that he used to. be present in every meeting of the Himprasth Financiers and he used to write: the Minutes Book. There is no suggestion that these Account Books were manipulated or that the entries therein were, not made con temporaneously with the transactions which they evidenced. There is therefore no justification for holding that either P.W. 2, or P.W. 8 or P.W. 13 notwithstanding their close connection with the deceased and the Himprasth ;Finance Company were inimically disposed towards the deceased or towards the accused. No adverse inference can be drawn as contended by the learned Advocate for the accused, against P.W. 2 that the circumstance point out to him as being concerned with the murder or against the other two witnesses that they were supporting P.W. 2 with the object of exculpating him from any charge that may be levelled again st him. The ' suggestion that P.W. 2 Wanted to appropriate the property of the deceased or do away with the cash from the loans which were, being paid to him directly had no rationale. to support it, because firstly the deceased had one married daughter another unmarried, and secondly that he had nephews who,in the absence, of the daughters would have inherited his property. A suspicion was sought to be aroused because P.W. 2 did.not scene for the daughters jut sent for the nephews which was with the object of dividing the properties of the deceased in league with them. P.W. 2 said that he did not know the address of the daughters of deceased and therefore he sent for the nephews, as such no sinister motive can be attributed to him. P;W. 28 the Investigating Officer had known that P.W. 2, P.W. 8 and P.W. 13 were the only persons closely connected he found some finger prints on the flask and the window panes, he out of abundant caution took their finger prints also on that very day long before the accused was suspected as being involved in the murder. It was only after the investigating Officer examined P.W. 7 the Proprietor of Mansarover Hotel at about 8.30 p.m. on the day the murder was discovered that he came to know that the accused had met the deceased outside the Hotel after he had taken his meals that night. The various Panchnamas of seizures that the Investigating Officer prepared in the presence of P.W. 2, P.W. 8 and P.W. 13 cannot be assailed merely on the ground that they were connected with the deceased or with Himprasth Finance Company. The fact that a key and a button 776 was recovered or that the flask or the window panes had finger prints were found in the room where the deceased was murdered are, unassailable nor has any doubt been raised to discredit these recoveries. All that is said by the learned Advocate is that P.W. 28, being an experienced Investigator had created evidence and the Account Books, vouchers, tea poy cloth, a canvas bag, blanket of the deceased were shown as missing in order to plant them subs equently on the accused. But at the time when these seizures were made the part played by the accused if any was not known, and if at all P.W. 2, P.W. 8 and P.W. 13 who were Witness to the panchnama had not been cleared from suspicion. We are not unaware that Section 27 of the Evidence Act which makes the information given by the accused while in custody leading, to the discovery of a fact and the fact admissible, is liable to be abused and for that reason great caution has to be exercised in resisting any attempt to circumvent, by manipulation or ingenuity of the Investigating Officer, the protection afforded by Sec. 25 and Sec. 26 of the Evidence Act. While considering the evidence relating to the recovery we shall have to exercise that caution and care which is necessary to lend assurance that the information furnished and, the fact discovered is credible. As already stated, on 1st February 1967 the coat, sweater, shoes and socks of the accused and a blanket of the deceased ware recovered in the presence of P.W. 2, P.W. 5, P,W. 8 and P.W. 28. After this they proceeded to: the place indicated by the accused and recovered the blood stained dagger from under a stone, which was witnessed by them. P.W. 2 did not accompany the party as according to him he had to Jo to make arrangements for the funeral of: the deceased On 'the way to the place from where the dagger was to be recovered, the party met one Bhag Singh P.W. 12 who also accompanied then to the place of recovery and in the presence of Roshan Lal who I was 'not examined) Amar Chand, P.W. 8, Bhag Singh, P.W. 12, and P.W. 28, the dagger was recovered and a Memo exhibit P. 28 was prepared and. attested by the 'aforesaid witnesses,. The High Court rejected the evidence of 'these recoveries under exhibit P. 6/A and P. 28 because P.W. 2, P.W. 8, P.W. 13 and Roshan Lal the driver of P.W. 2, were all connected with the deceased and are not therefore independent or impartial witnesses, It thought that the Investigating Officer should have called independent and impartial witnesses preferably, and if possible, from the locality, as it could not be said that they were not available or if,,: available would not be willing to be witnessed and that in any base calling of, the same persons to witness several searches or recoveries, is objectionable, and would render the search or the recovery doubtful and suspect, if not invalid. 777 Further having held this it nonetheless said that there was no injunction against the same get of witnesses being present at the successive enquiries if nothing could be urged against them. In our view the evidence relating to recoveries is not similar to that contemplated under Sec. 103 of the Criminal Procedure Code where searches are required to be made in the presence of two or more inhabitants of the locality in which the place to be searched is situate. In an investigation under Sec. 157 the recoveries could be proved even by the solitary evidence of the Investigating Officer if his evidence could otherwise be believed. We cannot as a matter of law or practice lay down that where recoveries have to be effected from different places on the information furnished by the accused different sets of persons should be called in to witness them. In this case P.W. 2 and P.W. 8 who worked With the deceased were the proper persons to witness the recoveries as they could identify some of the things that were missing and also they could both speak to the information and the recovery made in consequence thereof as a continuous process. At any rate P.W. 2 who is alleged to be the most interested was not present at the time of the recovery of the dagger. P.W. 5,s evidence was not considered to be independent, be cause the High Court thought that he was known to P.W. 28 from before. This by itself in our view will not justify the rejection of his evidence. That apart there is nothing in his evidence to show that P.W. 28 knew him before he came to Simla while he was living in Kaithal. The witness stated that the S.H.O. was never posted at Kaithal but knew the Daroga (SHO) from 2/3 months before that date. He had not met P.W. 28 before be arrived at Simla. It was suggested to him that Daroga had come and sat in his shop at the Mandi but that was denied. He however stated that the Daroga used to ask his 'hal chal ' sometime and used to wish him and that was all. Witness also denied having seen P.W. 2 and P.W. 8 before that day and came to know their names only when he went to Anandale. The brothers of P.W. 5 were at Kaithal doing business ' but here again there was nothing to connect the brothers with P.W. 28 and though P.W. 28 admits that his own brothers Roshan Lal and Malik Harbans Lal reside in Kaithal and one of them has some lands there, he was not. on good terms with them and denies that they bad any connection with P.W. 5. From this evidence it is clear that apart from the fact that P.W. 28 had known P.W. 5 after he had come to. Simla which is not unusual for a Police Officer, there is nothing to indicated that P.W. 5 could be subservient to P.W. 2,8. It is not unknown that in some instances where persons are made to witness Panchnamas they have resiled from them while giving evidence in Court, probably either due to 778 the pressure exerted by the police at that time or they have been won over by the defence. Nothing of that nature is appar ent in this case and the comment of the High Court that a reading of the evidence of P.W. 5 gives the impression that he is a person willing to be pliable agent of the police and cannot be regarded as an independent or impartial witness has in our view no justification. It is said that P.W. 12 Bhag Singh was just a worker at the bakery and while he pretends to be present there casually at the spot from where the dagger was taken out, the Investigating Officer said he had summoned him on the suggestion of the Head Constable; as such his evidence 'does not inspire confidence . 'We do not think that this is a sufficient reason for discarding the evidence of P.W. 5 because when P.W. 28 says he summoned Bhag Singh through the constable it does not negative the statement of Bhag Singh that he was casually present and could have been called 'by him through the Head Constable. In our view there is no reason to hold that the evidence of these persons P.W. 2, P.W. 5, P.W. 8 and P.W. 12 can be said to suffer from any infirmity or that they had not witnessed the information given by the accused as per Exhibits P. or P. 28 or the recoveries made by him as a consequence of that information. Thereafter on the information furnished by the accused that he had purchased the weapon from Ganga Singh P.W. 11 and that be would take them to him, they went to the, thari of P.W. 11 where the accused pointed him out to them. It is contended that the information given by the accused that he purchased the dagger from P.W. 11 followed by his leading the police to his thari and pointing him out is inadmissible under Sec. 27 of the Evidence Act. In our view there is force in this contention. A fact discovered within the meaning of Sec. 27 must refer to a material fact to which the information directly relates. In order to render the information admissible the fact discovered must be relevant and must have been such that it constitutes the information through which the discovery was made. What is the fact discovered in this case? Not the dagger but the dagger hid under the stone which is not known to the police. (See Pulukuri Kotayya & Ors. vs King Emperor) (1). But thereafter can it be said that the information furnished by the accused that he purchased the dagger from P.W. 11 led to a fact discovered when the accused took the police to the thari of P.W. 11 and pointed him out ? A single Bench of the Madras High Court in Public (1) 74 India Appeals p. 65. 779 Prosecutor vs India China Lingiah & Ors. (1), and in re Vellingiri (2), seems to have taken the view that the information by an accused leading to the disco very of a witness to whom he had given stolen articles is a discovery of a fact within the meaning of Sec. 27. In Emperor vs Ramanuja Ayyangar(3), a Full Bench of three Judges by a majority held that the statement of the accused "I purchased the mattress from this shop and it was this woman (another witness) that carried the mattress" as proved by the witness who visited him with the police was admissible because the word 'fact ' is not restricted to something which can be exhibited as a material object. This judgment was before Pulukuri Kotayya 's case (4) when as far as the Presidency of Madras was concerned the law laid down by the Full Bench of that Court, in Re Athappa Goundan prevailed. It held that where the accused 's statement connects the fact discovered with the offence and makes it relevant, even though the statement amounts to a confession of the offence, it must be admitted because it is that has led directly to the discovery. This view was over ruled by the Privy Council in Pulukuri Kotayya 's case(5) and this Court had approved the Privy Council case in Ramkishan Mithanlal Sharma vs The State of Bombay(6). In the Full Bench judgment of seven Judges in Sukhan vs The Crown (7 ) , which was approved by the Privy Council in Pulukuri Kotayya 's case(8), Shadi Lal, C.J., as he then was speaking for the majority pointed out that the expression 'fact ' as defined by Sec. 3 of the Evidence Act includes not only the physical fact which can be perceived by the senses but also the psychological fact or mental condition of which any person is conscious and that it is in the former sense that the word used by the Legislature refers to a material and not to a mental fact. It is clear therefore that what should be discovered is the material fact and the information that is admissible is that which has caused that discovery so as to connect the information and the fact with each other as the 'cause and effect '. That information which does not distinctly connect with the fact discovered or that portion of the information which merely explains the material thing discovered is not admissible under Sec. 27 and cannot be proved. As explained by this Court as well as by the Privy Council, normally Sec. 27 is brought into operation where a person in police custody produces from some place of concealment some object said to be connected with the, crime of which the informant is the accused. The concealment of the fact which is not known to the police is what is discovered by the information and lends assurance that (1) AIR 1954 Mad. 333. (2) AIR 1950 Mad 613. (3)AIR (4) 74 1. A. 64. (5) ILR (6) ; , (7) ILR Vol. X Lahore 283. 780 the information was true. No witness with whom some material fact, such as the weapon of murder, stolen ' 'property or other in eliminating article is not hidden sold or kept and which is unknown to the Police can be said to be discovered as a consequence of the information furnished by the accused. These examples however are only by way of illustration and are not exhaustive. What 'Makes the information leading to the discovery of the witness admissible is the discovery from him of the thing sold to him or hidden or kept with him which the police did not know until the. information was furnished to them by the accused. A wittiness cannot be said to be discovered if nothing is to be found or recovered from him as a consequence of the information furnished by the accused and the information which disclosed the identity of the witness will not be admissible. But even apart from the admissibility of the information under Sec. 27, the evidence of the Investigating Officer and the panchas that the accused had taken them to P.W. 11 and pointed him out and as corroborated by P.W. 11 himself would be admissible under Sec. 8 '.of the Evidence Act as conduct of the accused. We then come to the recovery on the second February, of Pant, the Account Books and the vouchers. These however, cannot in our view be relied upon because P.W. 28 had information relating to them which had been furnished by the accused more than 24 hours before and the description given by him was that they could have been discovered. At any rate the long delay does not lend assurance to the discovery. It appears from the application made on the 2nd February to the Magistrate that the accused was arrested on 1 2 67 and at his instance and from his possession one sweater. one coat and one blanket blood stained, have been recovered and in addition one blood stained warm pant, one duster, one bag containing 5 registers are still t0 be 'recovered on the pointing out of the accused but the remand of the, accused is due to expire at 1 p.m. and accordingly it was requested that a further remand for 7 days be given and the a caused made over to the police and orders be passed. The accused is alleged to have given the information that he had hid them under the stone slab near Krishna Nagar Ganda Nala Which he had thrown away in the sewage and which he said will point out and get them recovered. The recovery itself is under E P.7, to which P.W. 2, P.W. 13 and Manohar Lal P.W. 14 who was picked up on the 'rasta when he was summoned by the constables are witnesses. According to P.W. 14 the Thandar was going ahead and went down to the Nala, when the constable summoned him and he went there. He further says that the Thanedar sent a constable down. The accused bad a talk with Thanedar. The constable took out from below a stone slab five registers in a bag, the accused was standing on a stone. At ibis 781 stage the prosecutor sought permission to cross examine the witness and it 'Was given. In the cross examination he denied in signed the Memo at the spot and said that he had signed ' it at the Thana. He also said it was incorrect to suggest that the Memo was read over to him and he signed it. Whether the articles recovered were planted at the place from where, they were alleged to be recovered or not as suggested by the learned Advocate for the accused, the evidence referred to certainly goes against the prosecution version that the Account Books, vouchers and the pant were recovered at the instance of the accused. The Police appears to have known the place from where these articles were alleged to have been recovered and therefore it cannot be said 'that they were discovered as a consequence of the information furnished by the accused. After excluding the recoveries made tinder exhibit 7 namely the Account Books etc. the evidence against the accused which remains to be considered is, the motive, the recovery of the button, the finger prints on the flask and the window panes, blood stained coat, sweater, shoes and socks alleged to be of the accused, blanket, the dagger and the deceased being last seen alive in his Company. As we have already noticed the High Court had rejected the evidence of motive but in our view it failed to consider one aspect which is important namely that the accused wanted to be reemployed with the Himprasth Finance Company and though the other Directors were willing, the deceased was not. It is true that the initial illwill which he may have had against the deceased when he suspended him in 1964 may have been forgotten because the deceased subsequently extended his sympathy and employed him in his Finance Company. The accused was not satisfied with the conditions of his service and wanted an increase in the pay which the Company was not prepared to give causing him to resign. This itself may have given him cause to nurse a grievance against the deceased because he was the person who was as incharge of the affairs of that Company in which he had a dominant voice but when he wanted to be reappointed the deceased definitely put his foot down and refused to entertain him which would certainly create ill will in him against the be occasion but if he does not continue to do so or positively obstructs or is against his being given any benefit even on one such occasion it may give rise to a sense of grievance against him. The springs of human action and conduct are unfathomable because what motivates them is difficult to postulate. At any rate where personal interest is involved, it is too much to expect objectivity in a person s relationship with others who are unobliging or considered to be hostile to him. There 'are many with 782 greater cause who may not venture to do away with those that give occasion for it but experience has shown that even with lesser motive persons have committed more dastardly crimes; that is why in view of these imponderable, motive by itself is not sufficient to determine culpability. It has to be judged with positive evidence relating to incriminating facts and circumstances proved in a case against an accused. It is contended strenuously that there is no evidence to establish that the accused was with the deceased at the time when he was murdered. This contention seems to have found favour with the High Court which has held that though the deceased was last seen alive in the Company of the accused it is not sufficient to indicate that he had gone with the deceased into the Nagina Singh Building and was with him at the time when the murder was committed. The evidence of P.W. '7 is positive that he had seen the accused in the company of the deceased after the deceased had his meals at about 9.30 or so. This witness was the first to give information to P.W. 28 which was at about 8.300 p.m. on 31st January. The High Court does not disbelieve this evidence. In so far as P.W. 9 is concerned it is said that he is a mere casual or chance witness. Even if the reasons given by the High Court for disbelieving his evidence is accepted it cannot negative the fact of the accused being seen in the company of the deceased at about 9.30 or 9.45 p.m. on 30th January when he was the last one to have seen him alive. That the accused was in the room with. the deceased is established by the fact that his finger prints were en the flask and the window panes and that a coat button of his Was found in the room. It was however contended on behalf of the accused that these finger prints were not blood stained nor do they indicate that the accused was present at the time when the offence was committed because the evidence shows that be was seeking to get reemployment and the possibility of his. having, visited the deceased earlier in the day or a few days before the offence when the finger prints could have been found on the flask and the window panes cannot be ruled out. Secondly it was urged that the report of the finger print expert as the High Court has held does not furnish the reasons for the opinion that they belonged to the accused. On the first of these contentions it may be observed that there is no evidence that he bad been to see the deceased earlier that day or had seen him before that day as would probably these finger prints being still present on the 31st January. The evidence merely points out to the fact that the accused was seeking reemployment in the Company and the deceased was unwilling to give him employment. It is a long way from this circumstance to infer that he had been in the room earlier. The second contention is in our view equally untenable. The report regarding the Finger Print is that of the 783 Director of the Finger Print Bureau which under Sec. 510 Criminal Procedure Code can be used as evidence in any enquiry or trial without examining the person who gave the report just in the same way as the report of the Chemical Examiners or of the Chief Inspector of Explosives is evidence. Under sub. (2), however the Court may, if it t hinks fit, and shall, on the application of the prosecution or the accused, summon and examine any such person as to the subject matter of his report. The addition of the report of the Director of Finger Prints Bureau and of the Chief Inspector of Explosives in Sec. 510 was made by Sec. 99 of Act 26 of 1955 and unless the Court or the Public Prosecutor or the accused require the summoning and examining of any person as to the subject matter of his report that report can be. acted upon. It is however submitted that while the report may be admissible the opinion will have to be justified. Neither the decision of a Single Judge of Andhra Pradesh High Court in re. Godaverthy Bheshyakaravcharvulu(1). , nor that of the Madras High Court case in re. Marudai, support this contention. The reason why the reports of the Director of the Finger Print Bureau is treated as evidence 'Without examining the persons giving the report is that the comparison and identification of Finger Prints has now developed into a science and the results derived therefrom have reached a stage of exactitude. As long as the report shows that the opinion was based on observations which lead to a conclusion that opinion can be accepted, but should there be any doubt it can always be decided by the calling of the person making the report; when once the report is proved; neither the prosecution nor the accused nor yet the Court thought it necessary to require the person making the report to be examined. In this case, however, the photographs of the finger prints were taken on the very day when the flask and the glass pane were seized. After these material objects were sent to the Finger Print Bureau they were again photographed and compared with the finger prints taken of P.W. 2, P.W. 13 and P.W. 8 and the accused. In so far as. the Finger Prints of the accused are concerned though some what smudged they were said to be readably clear and in each of the finger impressions found on the flask and the window pane there Were more than 12 points of similarity i.e. matching ridge characteristic details in their identical sequence, without any discordances in their comparable portion and the corresponding portion of the left thumb impression, middle finger impression, left index finger, right middle finger of Om Prakash the accused. It was also stated that so many points of similarity cannot be found to occur in the impressions of different thumbs and fingers and they are therefore of one and the same person. In respect (1) AIR 1960 A.P. 164. (2) AIR 1960 Madras 370. 784 of a thumb impression compared with the right thumb impression of Om Prakash the expert had found not less than 10 points of similarity and even with respect to this his opinion was that SO many points of similarity cannot be found to occur in the impressions of different thumbs and fingers and are therefore identical or are, of one and the same person. There appears to be no difficulty in coming to the conclusion from the report that 'the points of similarity are those which can be accepted as a positive finding. The absence of these Finger Prints being blood stained is not indicative of the accused not being there before the murder We have it in evidence that the curtain near the door showed that blood stained hands severe wiped thereon. That apart the button which was recovered gives a direct clue to the presence of the accused at the time when the offence was committed. 'it. is seen from exhibit P. 6/A that the upper button of the 3 small buttons on the cuff of the coat recovered from the accused was missing and the button recovered from the room where the deceased was murdered matches the button and supplies the missing one. The report of the Forensic expert is that on a comparison of that button with the button of the accused 's coat esta blishes that it is the similar one. For this reason the accused had denied that the coat and the sweater belonged to him and the learned Advocate on his behalf has urged in support of that plea that these were not recovered from the accused and the recovery memos were all fake and were written subsequently. Accused in the statement under Sec. 342 in answer to question 19, that he had signed the recovery Memos dealing with the sweater, coat and blanket said that it was incorrect. He further said that he was made to sign three blank papers in the Thana and that he Was filing a copy of the application in this connection made by while he was in the judicial lock up. Again in answer to question 35 whether he has anything else to say he stated categorically that on the 1st February '67 he was taken to the Thana at 5 p. M. on the 2nd February he was produced before the Court where a remand was taken and that on 7 2 67 the S.H.O. 'obtained his signatures on three blank papers in respect of Which 'he had sent an application after he was taken to the judicial lock up. This statement goes counter to the facts stated ill the application of remand made to the Magistrate on 2 2 67 which was earlier extracted. A perusal of that remand application would show that these recoveries had already been made on the 1st and so there could be no question of his signatures been taken on the blank papers on the 7th for purposes of cooking up the recovery Memos which according to the accused Were not recovered on the 1st. The coat. and the sweater were recovered from his room while the shoes and socks from his person as the was wearing them, There can be no doubt of the ownership being that of the accused. 785 respect to which similar contentions were raised. Where a person who is not a hardened criminal is burdened with the guilt of a gruesome crime, is confronted with as ' tell tale finding the possibility of his making a clean breast of what is weighing heavily on him cannot be ruled out. It is difficult to generalise as to what a man may or may not do after committing a ghastly murder nor can there be an infallible test to determine the course of human reaction, conduct or behaviour in a given situation which might manifest itself in various ways. In case when the accused was confronted with the button of his coat he gave information leading to the incriminating discoveries. Whether the knife could have been properly identified by P. W. 11 in the identification held before the Magistrate there can be little doubt, if we believe his evidence, the accused hid purchased a knife that day, which is similar in nature to the one he was selling. There is no reason why P.W. II should not be, believed on this aspect. He says that it was purchased by the accused at the noon time on the day when Mahatma Gandhi had died on the 30th for Re. 1/ and that the police had; brought the accused to his shop on the 3rd day after the dagger was purchased. He further says that the accused used to go to him previously for the mending of his knife and scissors though the witness admits that he had not purchased any dagger from him previously. In cross examination he admitted frankly that he was having his thari without permission of the municipality and that he was challenged and fined almost every month though from the last 8 months the police have not challaned but the Municipal Committee have challaned him. He also admitted that once about 23/24 years ago he was convicted in a theft case and was sentenced to rigorous imprisonment and his history sheet was closed 21 or 22 years ago. At the time of giving evidence he is about 35 years and even making an approximation of the age he must have been 13 or 14 years when the offence for which he was convicted was committed. This admission seemed to have weighed with the High Court that his antecedents were such as to justify their not relying upon his evidence. They also found it difficult to believe that when he had not put any special mark on the dagger he could identify it from amongst three similar ones. In this connection it may be remembered that P.W. It was making the knives which be was selling and it is not unknown that persons who make knives or other implements can recognise them with some amount of certainty even though special identification marks may not be present. Be that as it may, even if the identification is discarded there is nothing to doubt his statement that he knew the accused before the 30th January 1967 786 and that about noon on that day he had purchased a dagger from him. It is not unreasonable to infer that the dagger which he purchased is the dagger which was recovered on the information furnished by the accused himself on the second day after his purchase and that dagger 'Contained human blood. One other important circumstance against the accused is the blanket that was found in his house which had. human blood stains thereon. The murder of the deceased was in January in the coldest months in Simla and the possibility of the accused having taken a blanket to cover himself also 'fits in with the other evidence adduced by the prosecution. There is in our view no justification for the High Court in jettisoning this cogent evidence of a conclusive nature on mere conjectures and. on the omnibus ground that the witnesses were not independent or impartial which as we have shown is without justification. In our view the evidence in this case is. sufficient to justify the conviction of the accused for an offence of murder. We, accordingly set aside the judgment of acquittal of the High Court, convict the accused under Sec. 302 and sentence him to life imprisonment. V.P.S. Appeal allowed.

The accused was charged with murder by stabbing, and the evidence against him was circumstantial. It consisted of : (a) evidence of ill will against the deceased furnishing a motive (b) evidence that he was last seen in the company of the deceased, (c) evidence furnished by finger prints, that he was present in the room of the deceased at or about the time of the murder, (d) evidence that he was subsequently found in Possession of articles which had incriminating blood strains, and (e) evidence that he had bidden a dagger with bloodstains thereon, and certain other articles. which were discovered on information furnished by him. The trial court convicted him but the High Court set aside the conviction on the ground that the witnesses were not independent or impartial. Allowing the appeal to this Court, HELD : (1) In an appeal against acquittal by special leave under article 136, this Court has power to interfere with the findings of fact, no distinction being made between judgments of acquittal and conviction though in the case of acquittals, it will not ordinarily interfere with the appreciation of evidence or findings of fact unless the High Court acted perversely or otherwise improperly. [772 B D] State of Madras vs Vaidyanatha Iyer, ; , 587, referred to. (2) In the case of circumstantial evidence if the links in the chain are complete leading to the undoubted conclusion that the accused alone could have committed the offence then it can be accepted. In appreciating such evidence the prime duty of a court is to ensure that the evidence is legally admissible, that the witnesses are credible and that they have no interest or motive in implicating the accused, Since it is difficult to expect a scientific or mathematical exactitude while dealing with such evidence corroboration is sought wherever possible. If there is any reasonable doubt the accused is given the benefit of such doubt. The doubt should be reasonable and not a remote possibility in favour of the accused. That is, the greatest possible care should be taken by the court in convicting an accused,, who is presumed to be innocent till the contrary is clearly established, and the burden of so establishing is always on the prosecution. [772 C E, G; 773 E H; 774 C] (3)(a) While considering the evidence relating to the recovery under section 27 of the Evidence Act the court will have to exercise that caution and care which is necessary to lend assurance that the information furnished by the accused lead in to the discovery of a fact is credible. [776 D] 766 In the present case, the various panchnamas of seizure prepared by the Investigating Officer could not be assailed on the ground that the witnesses who witnessed the recoveries were connected with the deceased or with his business, and that therefore, they were not independent or impartial witnesses. [775 H; 776 G] (b) The evidence relating to recoveries is not similar to that contemplated under section 103, Cr. It cannot be laid down as a matter of law or practice that where recoveries had to be effected from different places on the information furnished by an accused different sets of persons should be called to witness them. [777 B C] On the contrary, in the present case, the witnesses who worked with the deceased were proper persons to witness the recoveries as they could identify the things which were missing. [777 C D] (4) The report of the Director of the Finger Print Bureau regarding the finger prints can be used as evidence under section 510 Cr. P.C., without examining the person making the report, because identification of finger prints has developed into an exact science. As long as the report shows that the opinion was based on relevant observations that opinion can be accepted. [783 A E] In the present case, the report set out many points of similarity between the finger prints found in the room of the deceased and those of the accused. [783 H] (5) The information given by the accused that he purchased a dagger from one of the prosecution witnesses followed his leading the police to that witness and pointing him out is inadmissible under section 27 of the Evidence Act. The concealment of a fact which is not known to the police is what is discovered by the information given by an accused and lends assurance that the information was true. What makes the information leading to the discovery of a witness admissible is the discovery from him of the thing sold to him or hidden or kept with him which the police did not know until information was furnished by the accused. But a witness cannot be said to have been discovered if nothing was found with or recovered from him. as a consequence of the information furnished by the accused. [778 F 779 H; 780 A C] Emperor vs Ramanuya Ayangar, A.I.R. 1935 Mad. 528, over ruled. Pulukiuri Kotayya & Ors. vs King Emperor, 74 I.A. 65, Ramkrishan Mithaplal Sharma vs State of Bombay, [1955] I S.C.R. 9 '03, Sukhan vs Crown, I.L.R. X Lah. 283, Public Protector vs India China Lingiah & Ors., A.I.R. 1954 Mad. 435 and Re : Vellingiri, A.I.R. 1950 Mad. referred to. (6) But that the accused had taken some of the prosecution witnesses to the witness from whom he bought the dagger and pointed him out, would be admissible under section 8 of the Evidence Act as conduct of the accused. [780 C D] (7) Even after excluding some recoveries on the ground that the evidence regarding them was not satisfactory, the evidence against the accused consisted of evidence of motive, recovery of a button in the room of the deceased which matched with the button on the cuff of the coat recovered from the accused, the finger prints in the room, recovery of a blood stained coat and other articles of dress, a blanket, and the dagger, and the 767 fact that the accused and deceased were last seen together. The evidences cogent and conclusive and should not have been rejected by the High Court. [781 C E; 786 C D]

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Appeal No. 128 of 1976. (From the Judgment and Order dated 10 12 1975 of the Allahabad High Court in Election Petition No. 35/74). G.N. Dikshit, M.V. Goswami, S.V. Goswami and Ambrish Kumar, for the Appellant. L.M. Shinghvi, Pratnod Swarup and S.K. Verma, for Re spondent No. 1. The Judgment of the Court was delivered by GUPTA, J. The appellant was one of the eight contest ants from Mat Constituency No. 365 in District Mathura in the Uttar Pradesh Legislative Assembly elections held in 1974. February 24 and 26, 1974 were the dates when poll was taken and the result was declared on February 28, 1974. The first respondent who was sponsored by Bhartiya Kranti Dal, it will be referred to as B.D. hereinafter, was elected securing 33565 votes. The appellant who came next was a nominee of the Congress party; he polled 20731 votes, 12,834 votes less than the successful candidate. On April 14, 1974 the appellant presented an election petition in the Allaha bad High Court calling in question the election of the first respondent alleging that he was guilty of adopting corrupt practice within the meaning of sub sections (2), (3) and (3A) of section 123 of the Representation of the People Act, 1951. The first respondent in his written statement denied all the allegations. The High Court held that the election petitioner had failed to prove the charge of corrupt prac tice alleged against the successful candidate and dismissed the election petition. The election petitioner challenges the correctness of the decision in this appeal under section 116A of the Representation of the People Act, 1951. Certain principles governing election disputes are now well settled. One such principle is that proceedings arising out of election petitions are quasi criminal in character and the allegations made in the petition must be proved beyond reasonable doubt. 'Another is that in an appeal under section 116A of the Representation of the People Act, 1951 this Court will not interfere with the findings of fact recorded by the trial court except for very strong and cogent reasons. A third is that it is unsafe in an election case to accept oral evidence at its face value without looking for assurance from some surer circumstances or unimpeachable documents. [see Rahim Khan vs Khurshid Ahmed ; (656)]. Of the issues framed upon the pleading of the parties, issues 1, 2, 3 and 4 only are relevant for the purposes of the present appeal. These issues are as follows: (1) Whether the respondent No. 1, his agents, workers and supporters, with his consent, promoted feeling of hatred between different classes of the citizens of India, particularly between fats and Thakurs of the Constituency on the one side and other Castes and 414 communities on the other, for furtherance of the prospects of his election and thereby committed corrupt practice as defined in section 123 (3 A) of the Act ? (2) Whether the respondent No. 1, his agents workers and supporters, with his consent, promoted caste feeling and appealed to the voters to vote or refrain from voting on the basis of caste and community for furtherance of the prospects of his election and thereby committed corrupt practice as defined in section 123(3) of the Act? (3) Whether the respondent No. 1, his agents and workers, with his consent, directly or indirectly interfered with free exercise of electoral rights of the voters and committed corrupt practice of undue influence as defined in section 123(2) of the Act? (4) Whether the respondent No. 1, his agents and workers, with his consent, committed corrupt practice of bribery for inducing Muslim voters to vote for the respondent No. 1, by paying several thousands of rupees for construction of a school building and a mosque, as alleged in para 13(i), (ii) and (IV) of the petition ? The first two issues are interconnected The allegations relating to these issues are based on three pamphlets, Exhibits P. and P. 22, and oral evidence of meet ings where speeches were delivered appealing to voters on the ground of caste and attempting to promote hatred between different castes. There is no reference, however, to these pamphlets in the election petition. Of the pamphlets, exhibits P. 20 and P. 22 contain an appeal to all the resi dents of the constituency to vote for the first respondent, and the High Court rightly held that these two pamphlets cannot be called objectionable. Exhibits P. 21 appeals to the voters not to vote for outsiders such as, the appellant but to one who belonged to the constituency like the first respondent. It is difficult to say that this is an appeal on the ground of caste or community. But it is not neces sary to pursue this matter further because there is no evidence to connect the first respondent with this pamphlet and, as the High Court has found it is not "proved as to at whose instance this pamphlet was printed or distributed". The oral evidence on these two issues seeks to prove that meetings were held at three villages, Bajna, Neemgaon and Surir Kalan where speeches were made asking the votes to vote on the basis of caste and community and attempting to promote feelings of enmity between different castes and communities in the constituency. At Bajna two meetings are said to have been held on February 5, 1974, one at 12.30 P.M. at the canal inspection house and the other at 8 P.M. at the local B.K.D. office. P.W. 6 Ganga Sahai, P.W. 8 Gandalal, and P.W. 22 Jaipal Singh are the witnesses who were examined by the 415 election petitioner to prove this allegation. From the evidence of P.W. 8 it does not appear that any appeal was made to the voters on the ground of caste or community in either of the two meetings. P.W. 6 and P.W. 22 wanted the court to believe that though they had heard offending speeches being delivered at the meetings, they did not report the matter to anyone earlier but disclosed what they heard for the first time in court. If the High Court found their. testimony unbelievable, we do not think any exception can be taken to it. The High Court also. found that neither P.W. 8 nor P.W. 22 was a disinterested witness, P.W. 8 being an active member of the Congress and P.W. 22 was a polling agent of the appellant. At Neemgaon a meeting is alleged to have been held on February 19, 1974 at 12 noon in the primary school premises. Of the two witnesses who speak about this meeting, P.W. 16 Lotan appears to have admitted on cross examination that he had not attended the meeting and P.W. 15 Raghubir says, like P.Ws. 6 and 22, that what he heard in the meeting he was disclosing for the first time in court. The High Court further finds that P.W. 15 was a man in the confidence of the appellant and P.W. 16 was admittedly a "man of Congress". If in these circumstances the High Court refused to rely on the evidence of these two witnesses, no interfer ence is called for. The meeting at Surir Kalan is said to have been held at 2 P.M. on the Ramlila platform in the village. P.W. 4 Harpal Singh and P.W. 5 Badan Singh are the two witnesses for the petitioner as to what happened at this meeting. From the testimony of P.W. 4 Harpal Singh it seems extremely unlikely that he was present at the meeting. P.W. 4 is the Head Master of a junior high school. The school was open on that day. The schools hours were from 10 A.M. to 4 P.M. The witness says that he was able to attend the meeting as it was held during the "interval period". He admits that there are eight periods of forty minutes duration each and the interval is after the fourth period for about forty five minutes. It is dear therefore that he could not possibly attend the meeting at 2 P.M. The witness however attempts to prove his presence at the meeting by saying that the meeting started at about 1 P.M., thus contradicting his earlier statement. The attempt to shift the time makes. his evidence more suspect. He also states that he does not know who ultimately won the election. This apparent unconcern suggesting that he was an impartial witness which is hardly believable marks him out as thoroughly unreliable. The other witness P.W. 5 Badan Singh says that the meeting was held at 2 P.M. According to him a pamphlet (Exhibit A) was distrib uted at the meeting. This pamphlet which contains the description "Decision of Kashatriya Mahasabha" contains an appeal to all the members of the Kashatriya caste to attend the meeting to be held on February 8, at 2 P.M. at Surir Kalan. The pamphlet does not disclose the .name of the place where it was printed. There is no evidence to connect it with the first respondent. There is also no mention of this pamphlet in the election petition. P.W. 5 does not make any secret that he was opposed to Chandan Singh being elect ed a member of the assembly. Further, he admits that he did not complain of what happened at the meeting to the authori ties or to the petitioner. If the High 416 Court did not find it possible to rely on P.W. 4 and P.W. 5, we do not think any legitimate grievance can be made. We therefore find no reason to interfere with the findings recorded by the High Court on issues 1 and 2 that no corrupt practice within the meaning of section 123(3A) or section 123(3) has been proved against the first respondent. Issue No. 3 relates to the alleged undue influence exercised by the successful candidate or with his consent by his agents and workers within the meaning of section 123(2) of the Act. The allegations relating to this issue are contained in paragraph 12 of the election petition and the particulars are in schedule III and IX thereto. The evi dence adduced on this issue falls into three categories; (1) evidence of witnesses who speak about the threats at the meetings held in support of the first respondent, (2) wit nesses who speak about the actual interference and (3 ) circumstantial evidence of a corroborative nature. As re gards the first category, these witnesses have been found unreliable by the High Court while dealing with issues Nos. 1 and 2. No further reference therefore need be made to their evidence. As regards the second category of witnesses who speak of actual interference by the agents and workers of the first respondent, the High Court after a detailed examination of the evidence adduced found that many of these witnesses were interested witnesses and that their testimony did not inspire confidence. No presiding officer of the polling stations where such undue influence is alleged to have been used has been examined. One of the witnesses examined by the election petitioner, P.W. 37 Rajendra Kumar Pathak, who was Sector Magistrate in Neemgaon which includes five polling stations says that he was making a continuous round of the polling stations staying for about 15 minutes at each and that whenever any complaint was made to him about any difficulty felt by the voters in the matter of the free exercise of their right to vote, he saw that the cause for complaint was removed. His evidence is that he did not receive any complaint about anyone being prevented from casting his vote. He adds that instructions were given to the Sector Magistrates by the Government that voters should be allowed to cast their votes freely; no Sector Magistrate was examined by the election petitioner to prove that this was not done. The High Court therefore did not place any reliance, and in our view rightly, on these witnesses. The circumstantial evidence which is claimed as corroborative of the oral evidence on this issue consists of certain let ters, namely Exhibits P.7, P.8, P.9, P. 10, and P.14 Exhib its P.7 and P.8 are two letters sent to the appellant by P.W. 14 Habura and P.W. 29 Brij Mohan Bhardwaj respectively complaining about the various irregularities at the polling stations. On a scrutiny of their testimony the High Court found both of them unreliable witnesses and was of the view that these two letters were brought into existence for the purpose of this case after the result of the election had been declared. Exhibit P.9 is a copy of a letter dated February 23, 1974 addressed to the Superintendent of Police, Mathura. by the District Magistrate, Mathura. The copy was proved by P.W. 30 Was ud din Quareshi who was a Stenographer to the District Magistrate at the relevant time. The High Court doubted the authenticity of this copy as the date, February 23 appearing on the letter was admittedly not in the hand 417 writing of the District Magistrate nor of the witness. Exhibit 14 is another letter dated February 23, 1974 ad dressed to the District Magistrate, Mathura, by the appel lant. In this letter the petitioner expressed his general apprehension about the irregularities likely to be committed at some polling stations on the day of poll and requested the District Magistrate to. make necessary arrangements to prevent the same. Exhibit P. 10 dated February 25, 1974 was also addressed to the District Magistrate Mathura by the petitioner. This letter of course contains reference to a number of specific cases of irregularities in certain poll ing stations. The oral evidence adduced to prove these irregularities, we have found already, is not creditworthy. That the election petitioner did not examine any of the Sector Magistrates within whose jurisdiction such irregular ities had taken place has already been mentioned. The only Sector Magistrate examined on behalf of the election peti tioner, P.W. 37 Rajendra Kumar Pathak, does not support the petitioner 's case. Having considered the two letters Exhibits P. 14 and P. 10 the High Court observed: "If the two letters are read and consid ered together an inference may well be drawn that the former was sent as a precautionary measure advance to give support to the latter one with a view to create some sort of an evidence in case an election petition was necessitated to be filed." These letters put in evidence to corroborate the oral testi mony on the issue of undue influence have themselves no intrinsic merit and are far from reliable and therefore do not advance the petitioner 's case any further than what the oral testimony does. We therefore affirm the finding of the High Court on issue No. 3 that the petitioner has failed to prove the allegation of undue influence. This leaves only issue No. 4 concerning the allegation of bribery. This is the issue which was pressed before us as the main ground in support of the appeal. The allegations relating to the corrupt practice of bribery are contained in paragraph 13(ii) and (iv) of the election petition and the particulars are set out in schedule X thereto. Paragraphs 13(ii) and (iv) state: "13. That the material facts relating to corrupt practice of bribery committed by respondent No. 1, his workers and agents with his consent are given hereinafter. (i) * * * (ii) That Sri Chandan Singh in order to get the support of the Muslim voters of village Naujhil offered a bribe Rs.1200/ ostensibly for the erection of the building for Islamia school to Sri Aijaz Hussain, Ida and Idris The order was made to induce the Muslim voters to vote for respondent No. 1. (iii) * * * (iv) That village Bishambara is also a Muslim dominated village in which there are about 2000 Muslim voters belonging to Meo community. Respondent No. 1 paid a sum of Rs. 3000/ to the Pradhan of the said village Sri Niamat 418 Khan, for inducing the voters of Meo community to vote in his favour. The said amount was paid for constructing a mosque for use of this community of this village. Full particulars of this corrupt practices are given in Sched ule X to this petition. " The allegations are denied in paragraph 13 of the written statement. Before turning to the evidence on this issue it is necessary to dispose of a contention raised in the High Court and also before us that the allegations must be taken to have been admitted by the first respondent in view of the vague evasive denial given by him in his written statement. This is how the allegations have been denied in the written statement. That the averments made in para graph 13 of the petition . are vague, absurd, wrong and baseless. No person can be stopped in donating certain amount in public institution or the charitable one. Donation to an institution does not amount to bribery. The construction of the part 6 indicate igno rance of the petitioner who is not aware in spite the legal advice. The alleged allega tion of bribery is denied in toto and is liable to be dismissed. 13(ii) That the averments made in para l3(ii) are wrong, baseless, hence denied. The same being repetition of foregoing sub clause (i), no need of saying much whatever is said in the previous paragraph (i). 13(iii) * * * 13(ii) That the averments made in para 13(ii) are wrong, false and baseless as if the same is denied. The schedule enclosed marked Annexure X is general in nature and wrong, hence denied and the petition is liable to be dismissed. " In paragraph 13(iii) of the written statement the first respondent refers to the contents in schedule X of the election petition as "too vague and incorrect, false and baseless". Counsel for the appellant contended that the denial amounted to this only that donation to a public or charitable institution could not constitute bribery. We think that a correct and complete reading of paragraph 13 of the written statement the construction put on it on behalf of the appellant would not be justified. It cannot be overlooked that the allegation of bribery is also denied ' 'in toto" and as false and baseless. The additional con tention that donation to public or charitable institutions could not amount to bribery appears to be a legal plea asserting that even on the statements made in paragraph 13 of the election petition the allegation of bribery was not sustainable. The case of bribery rests on two incidents, one relating to payment of Rs. 1200/ to the Muslim voters in village Naujhil for the reconstruction of a Muslim school in that village and the other relating to the payment of Rs. 3000/ to the Pradhan of village Bishambara, which is a Muslim dominated village, for the construction of a mosque in the 419 village. The allegation regarding the payment of Rs. 1200/ for Islamia school in Naujhil is sought to be proved by P.W.1 Alia Noor, who has a motor cycle repairing shop, P.W. 2 Chandra Pal Sharma, P.W. 3 Ashraf Ali, P.W. 7 Fiaz Khan, P.W. 17 Kadhera and some correspondence that passed between some of these witnesses. What is alleged to have happened is like this. Near about midnight between the 23rd and the 24th February, 1974, the first respondent Chandan Singh along with Chatur Singh and several others drove in a jeep to Naujhil at a place where about 200 Muslims were sitting around a fire. Some from the crowd went upto the jeep, had a talk with Chandan Singh and told him that whoever would donate money for Islamia school, the Muslim votes would be cast in his favour, Chandan Singh Offered to pay and gave twelve currency notes of Rs. 100/ each to Chatur Singh who made them over to one Ida who is said to be the president of the school. P.W. 1 Alla Noor, P.W. 3 Ashraf Ali and P.W. 7 Fiaz Khan are witnesses to this inci dent. About half an hour later, two persons named Nanhey and Habib informed P.W. 2 Chandra Pal Sharma, who was the pradhan of village Naujhil, of the incident. On being sum moned the appellant arrived there within a few minutes and Nanhey and Habib repeated the story in his presence. At the instance of the appellant the Station Officer, Naujhil, was also summoned there, but he declined to take any step. The appellant then came to the place visited by the first re spondent earlier and remonstrated with the Muslims crowd still present there for having accepted the money from the first respondent. Certain letters were produced on behalf of the appellant to strengthen the oral evidence relating to the incident. Exhibit P.2 appears to be a notice given by Fiaz Khan, who is a member of the school committee, to Ida accusing him of not utilising for the school the money taken by him from the first respondent, asking him to take early steps in the matter, and warning him that in default action would be taken against him. Exhibit P.I is a letter written by P.W.3 Ashraf Ali, who was a teacher of the school, to P.W. 1 All Noor saying that he had taken the sum of Rs. 1200/from Ida in the presence of witnesses and pur chased some building material for the school. This letter bears no date. Exhibit P.5 is another letter sent by P.W. 1 Alla Noor to P.W. 7 Fiaz Khan assuring him that the sum of Rs. 1200/ taken from the first respondent would be utilised for the benefit of the school. The High Court has disbe lieved the entire story finding that neither the witnesses were believable nor the letters reliable. The story of the midnight visit of the first respondent doling out money to a crowd of Muslim voters who happened to be present would strike anyone as ridiculous and we agree with the High Court that it cannot be true. Besides, neither Ida who is made to appear as a central figure in the dispute over the money, nor Nanhey or Habib who conveyed the information to P.W. Chandra Pal Sharma, has been examined. About the letters the High Court 's finding is that from their tenor it was clear that these were brought into existence for the purpose of the election petition. We find nothing to justify a different view. The other allegation with regard to the issue of bribery is that a sum of Rs. 3000/ was paid to Niamat Khan, Pradhan of village Bishambara, for constructing a mosque to induce the Muslim voters of that 420 village to vote in favour of the first respondent. The only witness examined to prove this allegation is P.W. 24, Usman. According to him on the evening previous to the date of poll, grand father of the first respondent came to Niamat Khan and paid Rs. 3000/ to him ;n return for his promise that he would see that all the Muslim votes were cast in favour of the first respondent. On cross examination the witness admits that he does not know what happened to that money and that he was disclosing this fact for the first time in court. He is not named either in the election petition or on the schedule thereto. He came to depose without receiving any summons. Niamat Khan has been exam ined by the respondent as his witness and he denies the allegation as totally false. The High Court therefore did not rightly put any reliance on the evidence of this wit ness. The appellant had no personal knowledge of the facts alleged in support of the case of bribery. Exhibit P. 10, the letter he addressed to the District Magistrate on Febru ary 25, 1974 of course contains a vague reference to these allegations, but this, as the High Court has said, seems to have been written "with a view to create some sort of an evidence in case. election petition was necessitated to be filed". We find no merit in this appeal which we dismiss with costs. P.B.R. Appeal dismissed.

In the election to the State Assembly the first respond ent was declared elected. The appellant, who was one of the defeated candidates, impugned the election on the ground that the first respondent was guilty of adopting corrupt practices within the meaning of section 123(2), (3) and (3A) of the Representation of the People Act, 1951. It was alleged that (i) to get support of the Muslim voters of a village, the first respondent offered a bribe for the construction of a school building for Muslim boys in the village and (ii) in another village with predominant Muslim voters, he paid a big sum of money for the construction of a mosque. The first respondent in his written statement denied the allega tions as absurd and baseless and denied in toto the allega tion of bribery. The High Court dismissed the petition. On appeal to this Court it was contended that the alle gations against the respondent must be taken to have been admitted in view of his vague and evasive denial. Dismissing the appeal, HELD: The well settled principles governing election dis putes are: (1) proceedings arising out of election petitions are quasi criminal in character and the allegations made in the petition must be proved beyond reasonable doubt; (2) in an appeal under section 116A of the Act the Supreme Court will not interfere with the findings of fact recorded by the trial court except for very strong and cogent reasons; and (3) it is unsafe in an election case to accept oral evidence at its face value without looking for assurances from some surer circumstances or unimpeachable documents. [413F] Rahim Khan vs Khurshid Ahmed, ; , 656, followed. (i) In the instant case the contention that donation to public or charitable institutions could not amount to bribery is a legal plea asserting that even on the state ments made in the election petition the allegation of brib ery was not sustainable. The allegation of bribery was denied by the first respondent in toto and as false and baseless. [418G] (ii) The story that the first respondent visited the village at midnight and doled out money to a crowd of Muslim voters could not be true. The central figures in the dis pute over the money had not been examined by the appellant and the letters produced by him to strengthen oral evidence relating to the incidents were clearly brought into exist ence for the purpose of election petition. [419G] (iii) As regards the amount alleged to have been paid for the construction of a mosque one of the witnesses exam ined deposed without receiving any summons from the court. The appellant had no personal knowledge of the facts alleged in support of the case of bribery. The High Court rightly held that the letter which the appellant addressed to the District Magistrate containing vague references to the allegations had been written "with a view to create some sort of evidence in case the election petition was necessi tated to be filed ' '. [420C] 413

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vil Appeal Nos. 11;55 to 1188 (NT) of 1990. From the Judgments and Orders dated 7.11.1985, 12.8.85, 6.2.85 and 24.7.86 of Madras High Court in T.C.P. Nos, 739/85, 3 13/85, 260/84 and 42/86. T.A. Ramachandran and Mrs. Janaki Ramachandran for the Appellants. S.C. Manchanda, B.B. Ahuja and Ms. A. Subhashini for the Respondent. The Judgment of the Court was delivered by VENKATACHALIAH, J. These four petitions for grant of 270 special leave arise out of the orders of the High Court of Judicature at Madras in the corresponding four Tax Case Petitions rejecting the assessee 's applications under Sec tion 256(2) of the Income tax Act, 1961 and the reference of a question of law whether the disallowance under Section 40(b) of the Income Tax Act, 1961 (Act) of the interest paid by the firm to its partner should be the gross amount of such interest or should be confined to the net amount after setting off the interest, in turn, paid_by the partner to the firm on his borrowings from the firm. In each of these cases the Income Tax Appellate Tribunal had, in substance, held that what was disallowable was the entirety of the interest paid by the firm to the partner without reference to any interest that may, in turn, have been paid by the partner to the firm. The Tribunal in the appeals preferred by the Revenue before it, allowed the appeals and reversed the view to the contrary taken in favour of the assessees by the first appellate authority. The Tribunal also declined to state a case and refer a question of law under Section 256(1) of the Act to the High Court; whereupon the assessees moved the aforesaid Tax Case Petitions before the High Court under Section 256(2). The High Court rejected these applications on the view that there was no referable question of law arising out of the appellate orders or ' the Tribunal, having regard to the earlier pronouncement of the High Court in C.I.T. vs O.M.S.S. Sankaralinga Nadar & Co., ITR 332 on which the Tribunal had relied. The correctness of the decision of the High Court in the said Sankaralinga Nadar 's case has come to be examined by this Court in Keshavji Ravji & Co. vs C.I.T., ; this Court has taken a view in the light of which Sankaralinga Nadar & Co. 's case cannot be held to have laid down the law correctly in all respects. The pronouncement of this Court in the said Keshavji Ravji & Co 's case (supra) covers the point raised in these Special Leave Petitions. However, as the present special leave petitions arise out of the orders of the High Court rejecting the Tax Case Petitions under Section 256(2) of the Act, we should, in the normal course, grant special leave, register the correspond ing civil appeals and after setting aside the orders of the High Court remit the corresponding Tax Case Petitions to the High Court with a direction to allow petitions and 20 direct the Income Tax Appellate Tribunal to state a case and refer a question of law for the opinion of the High Court and thereafter, to 270 dispose of the references in the light of the pronouncement of this Court in the said Keshavji Ravji & Co. 's case. This procedure would, indeed, be an idle, time consuming and wholly avoidable formality in the circumstances of the present cases. As the position is now settled, we are of the opinion that interests of justice would be served by treat ing the present Special Leave Petitions as directed against and arising from the main Appellate Orders of the Income Tax Appellate Tribunal, Madras, and after granting Special Leave, set aside that part of the appellate orders as per tain to the extent of disallowance of the interest under Section 40(b) of the Act and direct the Tribunal to dispose of the appeals on the point afresh in the light of the aforesaid pronouncement of this Court. These petitions are, therefore, treated as directed against the main Appellate Judgments dated 9.3.1984 in ITA 1521/Mds/1982; 29.2.84 in ITA No. 898/Mds/1982; 30.8.1983 in ITA 1520/Mds/82 and 22.2. 1984 in ITA 1848/Mds/83 'of the Income Tax Appellate Tribunal, Madras and Special Leave granted. The orders of the Tribunal made under Section 256(1) of the Act in each of these cases as well as the orders of the High Court in Tax Case Petition 739 of 1985, 3 13 of 1985, 260 of 1984 and 42 of 1986 are set aside. Further, the appellate orders of the Income tax Appel late Tribunal, in so far as they pertain to the extent of disallowance of interest under Section 40(b) of the Act, are set aside and the said appeals remitted to the Tribunal for a fresh disposal of the appeals on the point in the light of the pronouncement in Keshavji Ravji & Co. 's case. There will, however, be no order as to costs. N.P.V. Appeals al lowed.

The Income Tax Appellate TribUnal in appeals preferred before it the revenue held that the entirety of interest paid by a firm to its partner was disallowable under Section 40(b) of the Income Tax Act without reference to tile inter est that might, in turn, have been paid by the partner to the firm on his borrowings. On appellants assessees ' appli cation under Section 256(1) of the Act, the Tribunal de clined to state a case and refer a question of law for the opinion of the High Court. The appellants assessees then moved Tax case petitions under Section 256(2) of the Act before the High Court. The High Court rejected the applica tions on the view that there was no referable question of law arising out of the appellate order of the Tribunal having regard to its earlier decision in C.I.T. vs O.M.S.S. Sankaralinga Nadar & Co., , on which the Tribunal had relied. The appellants assessees filed special leave petitions in this Court. Treating the special leave petitions as directed against the main appellate order of the Tribunal, and allowing the appeals, this Court, HELD: It is now settled by the pronouncement of this Court in Keshavji Ravji & Co. vs C.I.T., ; that where two or 269 more transactions on which interest is paid to or received from the partner by the firm are shown to have the element of mutuality and are referable to the funds of the partner ship as such, Section 40(b) should not be so construed as to exclude in quantifying the interest, if any, paid to a partner by the firm in excess of what was received from the partner. [270F] Keshavji Ravji & Co., ; , followed. C.I.T. vs O.M.S.S. Sankaralinga Nadar & Co., , over ruled. In the instant case, the appeals were directed against the High Court 's orders rejecting the assessee 's applica tions under Section 256(2) of the Act. However, remitting the cases to the High Court In the normal course for neces sary action would be an idle, time consuming and avoidable formality. Further, as the position is settled on the point raised, interests of justice would be served by treating the appeals as directed against the main appellate orders of the Tribunal and remitting the cases to the Tribunal for dispos al. [270B; 271A B] Accordingly, the orders of the Tribunal and of the High Court are set aside, and the appeals remitted to the Tribu nal for disposal afresh on the extent of disallowance of interest under Section 40(b) of the Act in the light of pronouncement of this Court in Keshavji Ravji & Co. vs C.I.T., [1990] 1 S.C.R.243. [271E F]

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the Court to interpret words of ambiguous meaning in a, broad and liberal sense, 107 826 & CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No. 61 of 1952. Appeal by special leave granted by the Supreme Court on the 10th September, 1951, from the Judgment and Order dated the 5th March, 1951, of the High Court of Judicature at Bombay (Chagla C.J. and Bhagwati J.) in Criminal Appeal No. 394 of 1950 arising out of the Judgment and Order dated the 29th May, 1950, of the Court of the Presidency Magistrate, Second Court, Mazagaon, Bombay, in Cases Nos. 630 /P and 635/P of 1949. M.P. Amin (R. J. Kolah, with him) for appellants Nos. 1, 2 and 4. As K. Muthuswami for appellant No. 3. C. K. Daphtary, Solicitor General for India (Porus A. Mehta, with him) for the respondent. 1953. March 30. The Judgment of the Court was delivered by BOSE, J. The appellants have been convicted under sections 7 and 9 of the Essential Supplies Act (No. XXIV of 1946) on two counts. The first appellant is a registered joint stock company, the Seksaria Mills Ltd. It was fined Rs. 10,000 on each of the two counts, that is to say, a total fine of Rs. 20,000, and this was upheld in appeal. The second appellant is the Director of the Mills. He was sentenced to two months ' rigorous imprisonment and to a fine of Rs. 2,00,000 on each count. In appeal the sentence of imprisonment was set aside and the fine reduced to Rs. 10,000 on each count. The third appellant is the General Manager of the Mills. He was sentenced to a fine of Rs. 2,000 on each count. This has been upheld. The fourth appellant is the Sales Manager of the Mills. He was sentenced to four months ' rigorous imprisonment and a fine of Rs. 1,00,000 on. each count. In appeal the sentence of imprisonment was upheld but the fine was reduced to Rs. 10,000 on each count. The substantive sentences are to run concurrently. 827 A Government of India Notification dated 2nd February, 1946, required every manufacturer to submit " true and accurate information relating to his undertakings " to the Textile Commissioner C.S.T. Section at Bombay. In compliance with this Order the first appellant submitted a return, signed by the third appellant, on 10th March, 1947. This return is Exhibit A 1. It showed that 13 bales of cloth (20 half bales and 3 full bales) were delivered to Messrs. Dwarkadas Khetan & Company of Bombay during the month of February, 1947, on behalf of the quotaholder Shree Kishan & Company. Another return of the same date (Exhibit A 2), also relating to the month of February, 1947, showed that 6 bales were delivered to the same Dwarkadas Khetan & Company on behalf of another quota holder Beharilal Bajirathi. A note on the back of each printed form states. By 'delivered 'or delivery ' is meant physical delivery of cloth in bales or in pieces but not cloth which though paid for is still in the I physical possession of the seller. " The offence charged is that this information is not true and accurate. The case for the prosecution is that the bales remained in the physical possession of the first appellant at all material times and were not physically delivered to Messrs. Dwarkadas Khetan & Company. Before us the learned Solicitor General added that even if there was physical delivery to Dwarkadas Khetan that did not comply with the requirements of the form because the form requires information regarding physical delivery to the quota holder or his agent and as Dwarkadas Khetan was not the agent of the quota holder, the statement is inaccurate and misleading. The learned Presidency Magistrate who tried the case, and also the High Court on appeal, hold that the prosecution have established their case and so have convicted and upheld the convictions respectively. 828 The business procedure of the first appellant is explained by Dwarkadas Khetan. His firm, Dwarkadas Khetan & Company, are the first appellant 's sole selling agents. ' They are del credere agents and guarantee payment to the first appellant of all sales made and, on the other side, guarantee delivery to the purchasers with whom they deal direct. It is necessary at this stage to understand that because of various orders and rules made under the Essential Supplies Act the first appellant could only sell to specified quota holders and only up to the limits of their quotas. The two quota holders which concern us are Shree Kishan & Company and Beharilal Bairathi. The first appellant 's selling procedure is this. When goods are ready for sale, it sends Dwarkadas Khetan & Company in duplicate a " ready sale note ". These notes contain particulars about the bales and the persons to whom they are to be delivered. Upon receipt of this Dwarkadas & Company contact the quota holders or their agents. The next step is for the quota holder to pay Dwarkadas & Company the price of the goods specified in the " ready sale note". Upon receipt of the money, one of the two notes is handed over to the quota holder or his agent and he is given a receipt for the money paid. At the same time Dwarkadas & Company send the first appellant an " advice slip " telling it that the money has been received and asking it to prepare a delivery order. The first appellant then debits Dwarkadas & Company with the price and not the purchaser. For payment it looks to Dwarkadas & Company. Upon receipt of this advice slip the first appellant 's office prepares the delivery order and delivers the goods to the party concerned. The person receiving the goods then signs the delivery order in token of receipt and the signed order is sent to Dwarkadas & Company who, after making the necessary entries in their books, return the order to the Mills office. It will be seen that the first appellant has no direct dealing, with the purchaser. It acts through Dwarkadas & Company in every case. 829 It will now be necessary to trace the history of the two consignments relating to the 13 bales and the 6 bales separately. We will deal with the 13 bales first. The quota holder in respect of the 13 bales was Shree Kishan & Company. This firm was an up country firm and so it was necessary for it to appoint a local agent in Bombay for making payments and receiving delivery. There was some confusion about the agent so appointed; at first one Dharsi Moolji was appointed and then P. C. Vora. The letter informing the first appellant that Dharsi Moolji bad been appointed is not on record but we were told at the Bar that it is not disputed that I the letter is dated 7th February, 1947. In any case, Dharsi Moolji wrote to the first appellant on 20th February, 1947, saying that he had been authorised to take delivery of the January quota on behalf of Messrs. Shree Kishan & Company and on 21 st February, 1947, he paid Dwarkadas Khetan & Company a sum of Rs. 14,000 for this quota. A receipt and an entry in Dwarkadas ' books evidence the payment. The same day Dwarkadas Khetan wrote to the first appellant telling it that his firm had received payment in advance from Shree Kishan & Company and that the 13 bales should be sent to "our godown ", Whether the " our " refers to Dwarkadas ' godown or to a godown jointly shared between Dwarkadas and the first appellant is not clear. The learned High Court Judges hold that the godown belonged to the first appellant, but that, in our opinion, is not very material for reasons we shall give later. On receipt of this " advice slip " the first appellant prepared what it has called a " ready sale note " on the same. day, 21st February, 1947, authorising the purchaser to take delivery within a week. Dharsi Moolji was named as the Commission Agent. (The man now entered is Prataprai Chunilal, that is, P. C. Vora, but the original name was Dharsi Moolji. The change was made for reasons which will presently appear). 830 In pursuance of all this, the first appellant dispatched the 13 bales on 28th February, 1947, and sent them to Dharsi Moolji. But in the meanwhile other events had taken place. One P. C. Vora wrote to the first appellant on 17th February, 1947, and said that he had been authorised to take possession of these 13 bales. What had happened in the meanwhile was that the, quota holder Shree Kishan & Company had changed its local agent. Accordingly, when the goods reached Dharsi Moolji he refused to take delivery. The selling agent Dwarkadas thereupon telephoned the first appellant. He explained that he had actually, received the money for the bales from Dharsi Moolji and had not received anything from P. C. Vora and so could not deliver the goods to the latter and equally could not accept money from P. C. Vora until the matter had been straightened out with Dharsi Moolji. The first appellant thereupon told Dwarkadas to keep the goods in the Dady Seth godown. On the same day, apparently before all this occurred, the first appellant credited Dwarkadas Khetan with the money he had received from Dharsi Moolji on account of the 13 bales, less Dwarkadas ' commission. In other words, this adjustment in the accounts was the equivalent of payment for the 13 bales by Dwarkadas Khetan to the first appellant on account of the purchaser Shree Kisban & Company. It will be remembered that Dwarkadas Khetan & Company were the sole selling agents and they alone were responsible to the Mills for orders ' which. were placed through them. The muddle between Dharsi Moolji and P. C. Vora was cleared up between 3rd March, 1947, and 14th March, 1947. On 3rd March, 1947, Dwarkadas Khetan returned the Rs. 14,000 which Dharsi Moolji had paid and on 14th March, 1947, accepted the money from P. C. Vora. The alteration in the "ready sale note" of 21st February, 1947, was presumably made because of these facts. Four days later, Dwarkadas Khetan delivered the goods to P. C. Vora. (There was no need to make any alterations in the first 831 appellant 's account books because Dwarkadas was responsible for the price whatever happened between him and Dharsi and also because in any event the. goods were sold to Shree Kishan: the only query at that time was who was his agent to accept delivery for him). The return with which we are concerned was made on 10th March, 1947. It will be seen from the above that the position at that date was as follows: (1) the selling, agent bad informed the first appellant that he had effected a sale, (2) the selling agent had paid the first appellant for the goods, (3) specific bales had been set aside and appropriated to the sale and consequently the property in the goods had passed, (4) the goods had actually left the Mills ' premises, and (5) they were in the Dady Seth godown under the control of Dwarkadas Khetan. We say the goods were under the control of Dwarkadas Khetan for three reasons: (1) as shown above, the property in the goods had passed and so the, first appellant no longer had title to them, (2) Dwarkadas says that until be received the money for them from P. C. Vora he would have refused to deliver them, (3). being a del credere agent he would have been within his rights (a) to refuse delivery to anybody till he was paid and (b) to deliver them despite anything the first appellant might say once he received his money; also because Dwarkadas ' Mehtaji says "If the goods are not, accepted by the merchants or their agents, the same are sent to us and we keep them in the godown. " Bearing these facts in mind, we will now examine the offending document. It is a printed form. The heading is " Manufacturer 's Returns showing detail% of delivery to quota holders or other8 of civil cloth. " Then there is a note as follows : " IMPORTANT: This form should be completed in accordance with the instructions printed overleaf. giving full details relating to the previous month, 832 Under that is the following "All stocks pledged/hypothecated by manufacturers with banks or others shall be included in this statement. " The only column in the printed form which could be related to this is column 3 headed " Full name and address of person to whom delivered. " On the back there are the following instructions: "II. The word I others ' in the heading of the form includes artificers who are privileged to purchase cloth under General Permission No. TCS 42 / 1, dated 10th August, 1944, and any person to whom deliveries are made under any other General or Special Permission or Order of the Textile Commissioner. The name of artificers or any other persons shall be 'mentioned in column 3 and against their names, number and date of General or Special Permission shall be mentioned in column 2. By 'delivered ' or 'delivery 'ismeantphysical delivery of cloth in bales or in pieces but not cloth which, though paid for, is still in the physical possession of the seller. " The form was filled in as follows : In the column headed 11 Full name and address of quota holder " the name of ShreeKishan & Company is entered. In the column headed Full name and address of person to whom delivered the name of Dwarkadas Khetan & Company is entered. The question we,have to decide is whether these two entries are inaccurate. Dealing first with the learned Solicitor 'General 's argument regarding the construction of the words used in the form, we are of opinion that it cannot be accepted. The second clause of the portion marked "Important" towards the head of the form states that all stocks pledged or hypothecated with banks or others must also be included, and Instruction No. II on the back directs that the names of "any other person" must be entered in column 3 and that the number and date of the General or Special Permission must be set out in column 2, Whether this means that goods 833 cannot be pledged without permission or that only goods allotted to quota holders can be pledged we do not know, but whatever it means, it is clear that the entry in column 3 is not intended to be confined to quota holders or their agents but means what it says, namely the person to whom physical delivery of the goods has been made whoever he may be. The only question therefore is whether there was physical delivery to Dwarkadas Khetan. In one sense, there can be no doubt about that. The goods left the Mills ' premises, the property in them had passed and when Dharsi Moolji refused to receive them they were handed over to Dwarkadas Khetan and not taken back to the Mills. Dwarkadas Khetan asked the Mills what he should do with them, and in the end he placed them in the Dady Seth godown. In any ordinary understanding of the term it would be clear that the goods had been physically delivered to Dwarkadas Khetan. But the learned High Court Judges do not appear to have concerned themselves with the question of actual physical possession because they say: "It would not be true to say, and the record amply bears it out, that this godown belonged to Dwarkadas Khetan. Even if Dwarkadas Khetan had control over the godown, the control was exercised on behalf of and as the agent of the Mills. " Therefore, the test of the sort of possession which they had in mind was not the control over the goods. But that has always been regarded as one of the tests of physical or de facto possession. Lancelot Hall distinguishing between possession in law and possession in fact says that "possession in the popular sense denotes a state of fact of exclusive physical control". See his treatise on Possessory Liens in English Law, page 2. See also Pollock and Wright in their Essay on Possession in the Common Law, page 119. Drawing the same distinction they say that "physical possession" may be generally described by stating that 108 834 "when a person is in such a relation to a thing that, so far as regards the thing, he can assume, exercise or resume manual control of it at pleasure, and so far as regards other persons, the thing is under the protection of his personal presence, or in or on a house or land occupied by him, or in some receptacle belonging to him and under his control. " This would seem exactly to meet the case of Dwarkadas Khetan. Possession is an ambiguous term. The law books divide its concept into two broad categories, (1) physical possession or possession in fact and (2) legal possession which need not coincide with possession in fact. The offending form with which we are concerned draws the same broad line. But even on the factual side of the border niceties creep in and so the possession of a servant is called custody rather than possession. But what of an agent ? If a man lives abroad over a period of years and leaves his house and furniture in charge of an agent who has the keys of the house and immedi ate access to and physical control over the furniture, it would be difficult to say that the agent was not in physical possession. It is true the legal possession would continue to reside in the owner but the actual physical possession would surely be that of the agent. And so with a del credere agent, because such a person is the agent of the seller only up to a point. Beyond that he is either a principal or an agent of the buyer. This distinction was discussed by one of us in the Nagpur High Court in Kalyanji Kuwarji vs Tirkaram Sheolal(1) and was accepted by the Madras High Court in Kandula Radhakrishna Rao vs The Province of Madras(2). But we need not go into all this. Here is an Order which is to affect the business of hundreds of persons, many of whom are small petty merchants and traders, the sort of meni who would not have lawyers constantly at their elbow; and even if they did, the more learned their advisers were in the law the more puzzled (1) A.I.R. 1938 Nag. (2) 835 they would be as to what advice to give,for it is not till one is learned in the law that subtleties of thought and bewilderment arise at the meaning of plain English words which any ordinary man of average intelligence, not versed in the law, would have no difficulty in understanding. In a penal statute of this kind it is our duty to interpret words of ambiguous meaning in a broad and liberal sense so that they will not become traps for honest, unlearned (in the law) and unwary men. If there is honest and substantial compliance with an array of puzzling directions, that should be enough even if on some hypercritical view of the law other ingenious meanings can be devised. In our opinion, Dwarkadas Khetan could, in the circumstances given above, be described, without any straining of language, as the person to whom the goods were actually delivered. It follows the conviction on this count cannot stand. We would like to add that in any event, even if ultra technical notions regarding the concept of possession were to be incorporated into the case, it would be wrong to say that there had been anything beyond a technical and unintentional breach of the law. The facts are truly and accurately given according to the popular and natural meaning of the words used; nothing was hidden. The goods did reach the quotaholder in the end, or rather his proper agent, and we cannot see what anyone could stand to gain in an unauthorised way over the very natural mistake which occurred owing to what seems to have been a time lag in the consequences of a change of agency. So, even if there was a technical breach of the law, it was not one which called for the severe strictures which are to be found in the trial court 's judgment and certainly not for the savage sentences which the learned Magistrate imposed. In the High Court also we feel a nominal fine would have met the ends of justice even on the view the learned Judges took of the law. The charge on the second count relating to the 6 bales is a similar one and the facts follow the same pattern. They have been detailed in the High Court 's 836 judgment, so it is not necessary to do more than outline them here. The quota holder here is Beharilal Bairathi. In this case also, Dharsi Moolji paid Dwarkadas Khetan for the goods and the Mills sent the bales to Dharsi Moolji for delivery in the same truck as the 13 bales. Dharsi Moolji refused to accept these bales also, so they were deposited in the Dady Seth godown along with the other thirteen. Dwarkadas Khetan & Company has been entered as the person to whom delivery was made. For the reasons given above, we hold that this was a true and accurate return. The appeal is allowed. The conviction and sentence in each of the four cases is set aside. The fines, if paid, will be refunded. Appeal allowed. Agent for appellants Nos. 1, 2 & 4: Rajinder Narain. Agent for appellant No. 3: Ganpat Rai.

A Government Notification issued under the Essential Sup plies Act, 1946, required every manufacturer to submit "true and accurate information relating to his undertakings" and a note of the printed form stated that "by 'delivered ' or 'delivery ' is mean physical delivery of cloth in bales and pieces but not cloth which though paid for, is still in the physical possession of the seller. The appellant Mills were manufacturers of cloth and D.K. & Co. were their sole del credere, selling agents who guaranteed payment to the appellant of the price of all sales made and, on the other side, guaranteed delivery to the purchasers with whom they dealt direct. One D.M. informed the Mills as the agent of an up country quota holder that he bad been authorised by the latter to take delivery of 13 bales and on this account paid Rs. 14,000 to D.K. & Co. D.K. & Co. wrote to the Mills that they bad received payment. The Mills dispatched the goods to D.M. but meanwhile the quota. holder had changed his agent and D.M. refused to take delivery. The Mills credited the money which had been received from D.M. to D.K. godown till the question of delivery was settled. In a return submitted under the Essential Supplies Act 1946, these 13 bales were shown &a "delivered" to D. K. & Co. The appellants were prosecuted and convicted on the ground that physical delivery was not given to D.K. & Co. and the return, was not therefore true and accurate: Held, that, as the goods had left the Mill premises, the price had been paid and the property in them had passed and as they were in a godown under the control of D. K. & Co., D. K. & Co. were in the circumstances, the persons to whom the goods were actually delivered, and the conviction was illegal. A del credere agent is an agent of the seller only up to a point. Beyond that he is either a principal or an agent of the buyer.

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Appeals Nos. 1003 and 1004 of 1964. Appeals by special leave from the judgment and order dated January 7, 1963 of the Bombay High Court, Nagpur Bench in Civil Revision Applications Nos. 294 and 295 of 1962. section T. Desai, G. L. Sanghi and O. C. Mathur, for the appel lant (in both the appeals). C. B. Agarwala, section K. Gambhir and Ganpat Rai, for respondent No. 1 (in both the appeals). R. N. Sachthey, section P. Nayar for R. H. Dhebar, for the res pondent No. 3 (in both the appeals). The Judgment of the Court was delivered by Sikri, J. These two appeals, by special leave, are directed against the judgment of High Court of Judicature at Bombay (Nagpur Bench), dated January 7, 1963, allowing two Civil Revision applications Nos. 294 of 1962 and 295 of 1962, filed by Paramsukhdas, a respondent before us. The High Court, by this judgment, quashed orders dated April 9, 1962, in the Land Acquisition Cases No. 189 of 1961. and No. 190 of 1961 (as amended subsequently on July 6, 1962) and remitted the matter to the Court of the Civil Judge, Akola, for a fresh decision on merits with advertence to the remarks in the judgment. The High Court further directed that Paramsukhdas be allowed to be impleaded as a non applicant in the two proceedings and all parties will be allowed to amend their pleadings or make fresh pleadings with respect to the alleged compromise as filed before the High Court in Special Civil Application No. 232 of 1960. Mr. section T. Desai, the learned counsel for the appellant, con tends: (1)That the High Court has no jurisdiction under section 115. to interfere with the orders of the Civil Judge, dated April 9, 1962; 364 (2) That Paramsukhdas, respondent No. 1, is not a person interested in the compensation and is not entitled to be impleaded as a party to the references under section 18 of the Land Acquisition Act, 1894, (I of 1894) hereinafter referred to as the Act , (3) That, if at all, no revision but appeal lay to the High Court. Before dealing with the above contentions it is necessary to state the relevant facts. Sunderlal, appellant, owned some land (field No. 22) in Monza Umari, Taluq and District Akola. This field had been leased to Khushal Singh under a registered lease for 5 years commencing from April 1, 1954. The field was acquired by the Government. The Land Acquisition Officer made his award on January 30, 1960, and assessed the total compensation at Rs. 26,105.58, and apportioned the amount equally between Sunderlal and Khushal Singh. On February 17, 1960, the Land Acquisition Officer noted the following regarding Khushal Singh: "2. Khushalsing s/o Tolaram (a) According to letter No. 154 / 60 of 15th February 1960 from the Court of Civil Judge (Sr. Dn.) Khamgaon, and the attachment order issued by that Court, in C.S. No. 4 B/1958, the amount to be paid to Khushalsing Tolaram be kept in Revenue Deposit. (b) One Sunderlal minor guardian father Madanlal Harjimal, of Akola, has presented an objection petition against this payment. " Sunderlal filed an application for reference under section 18 of the Act, claiming more compensation and also complaining in regard to the apportionment of the amount of compensation between him and Khushal Singh. According to him, Khushal Singh was not a protected tenant and his period of lease having expired, he was not at all entitled to any portion of the amount of compensation. A reference under section 18 was made on June 27, 1961, and this reference was numbered Land Acquisition Case No. 189 of 1961. Khushal Singh also applied for a reference and he claimed enhancement of compensation and challenged the basis of apportionment adopted by the Land Asquisition Officer. The Collector made the reference and it was numbered Land Acquisition No. 190 of 1961. Before we deal with what happened before the Civil Judge, it is necessary to give some facts about the litigation between Sunderlal and Khushal Singh. 'On July 21, 1956, Sunderlal filed a suit (Civil Suit No. 133 B of 1956) against Khushal Singh for rent due on January 1, 1955, and January 1, 1956, in the, Court of Civil Judge, Akola. On July 22, 1957, the Civil Court referred the matter to the Revenue Court under section 16 A of the Berar Regulation of Agricultural Leases Act, 1951. On July 25, 1958, the Sub Divisional Officer, Akola, answered the reference 365 Revenue Case No. 79 of 1957 58) holding that Khushal Singh was not a protected lessee. On appeal, the Deputy Collector. Akola, held, on October 8, 1959, that Khushal Singh was a protected lessee. The Bombay Revenue Tribunal confirmed the order of the Deputy Collector on March 22, 1960. Sunderlal filed a petition before the High Court under article 226 of the Constitution. It was numbered Special Civil Application No. 232 of 1960. On February 8, 1961, a compromise petition (Civil Application No. 163 of 1961) was filed in the High Court, in Special Civil Application No. 232 of 1960. It was stated in. the compromise petition that Khushal Singh did not wish to dispute Sunderlal 's contention that the land was leased for horticulture purposes and that he had not acquired the status of a protected lessee, as defined in the Berar Regulation of Agricultural Leases Act, 1951. Khushal Singh further stated that he had no objection to the quashing of the orders of the Bombay Revenue Tribunal dated March 22, 1960, and of the Deputy Collector dated October 8, 1959. On March 11, 1961, Paramsukhdas filed an application (Civil Application No. 246 of 1961) in the High Court in Special Civil Application No. 232 of 1960, claiming to be heard. He alleged that he had obtained a decree against Khushal Singh and started execution proceedings for Rs. 20,013/ and the amount of Rs. 13,644.27 ordered to be paid to Khushal Singh as compensation had been attached by him for the satisfaction of his decree. He alleged that Khushal Singh and Sunderlal had mala fide entered into an agreement and had filed a compromise application asking for quashing of the orders of the Revenue Courts with the sole object of setting at naught the attachment and execution of his decree. He prayed, therefore, for leave to appear in the case as a party vitally interested. He further prayed that the compromise application should not be entertained and, should be dismissed in the interest of justice. It appears that on March 20, 1961, this application came up for hearing before the High Court. Paramsukhdas, however, took three weeks ' more time from the High Court, which was granted to him. It further appears that Paramsukhdas withdrew the said amount of Rs. 13,644 27 towards satisfaction of his decree. On April 18, 1961, he filed another application (Civil Application No. 365/61) wherein he stated that he had withdrawn the amount and alleged that he was now an interested party, and, therefore, he should be joined as a party. On the same date, his Advocate, Mr. Sohoni gave an undertaking in the following terms: "Mr. Sohoni undertakes to hold the moneys withdrawn 'by his client subject to the orders of this Court 'on this application." On August 3, 1961, the High Court disposed of Civil Applica tion No. 163 of 1961, Civil Application No. 246 of 1961 and Civil Application No. 365 of 1961. The High Court held that in L/S5SCI 10 366 the circumstances "we do not consider it advisable to proceed in this matter ourselves. The parties will be at liberty to file the compromise petition in the Civil Court where proceedings are pending on reference under section 18 of the Land Acquisition Act." The High Court, in order to safeguard the interests of the parties, kept these proceedings pending till the decision on the, compromise petition by the Civil Court. The compromise petition was directed to be returned to Sunderlal. On September 18, 1961, Sunderlal and Khushal Singh filed applications for compromise in both the Land Acquisition references. Paramsukhdas filed applications under 0. XXII r. 10, read with section 151, C.P.C., praying that his name be substituted or added as an applicant. He alleged that the compromise was fraudulent and that Khushal Singh was abandoning the case, and as an attaching creditor, he was entitled to be added a party to the case. Both Khushal Singh and Sunderlal objected, and by two orders dated April 9, 1962, the Civil Judge rejected the applications of Paramsukhdas. He framed the issue: "Whether Paramsukhdas can be permitted to be substituted or added as a party to these two references." He held that admittedly Paramsukhdas had not approached the Land Acquisition Officer in the proceedings in which the award was passed on January 30, 1960. He had not appeared before the Land Acquisition Officer as a person interested in the land or the compensation that would be determined by the authorities. He further held that under the circumstances Paramsukhdas was not one of the persons interested in the acquired land before the Collector, and he also could not be one, of the persons interested in the objections under section 20.(b) of the Act. After referring to Manjoor Ahmad vs Rajlaxmi Dasi (1) and Abu Bakar vs Peary Mohan Mukherjee (2), he hold that the scope of the reference under section 18 was limited and new questions not covered by the reference could not be entertained. He reviewed his orders on July 6, 1962, but nothing turns on that in the present appeals. Paramsukhdas filed two revisions, Nos. 294 and 295 of 1962, before the High Court on June 30, 1962. On August 22, 1962, Sunderlal filed an application for withdrawal of Special Civil Application No. 232 of 1960. The High Court, on September 24, 1962, ordered: "Allowed, main petition dismissed as withdrawn. No costs.". Before the High Court a preliminary objection was raised in Civil Revisions Nos. 294 and 295 of 1962, that revisions were not competent because appeals lay against the orders of the Civil (1) A.I.R, 1956 Cal, 263. (2) I.L.R. 367 Judge. The High Court overruled this objection. Regarding the ,claim of Paramsukhdas to be added as a party, the High Court ;held that his application showed that he was not claiming any interest in the lands themselves but was only claiming an interest in the compensation for the land which had been deposited in the Court for payment to the persons concerned, and as such was a person interested, as defined in section 3 (b) of the Act, and he. would, therefore, be entitled to claim that he should be allowed to join as a party. Mr. Desai contends that an attaching creditor is not interested in the amount of compensation as compensation. His interest, he urges, is only to get moneys belonging to the judgment debtor in enforcement of his rights, and accordingly he is not entitled to be made a party to the reference under section 18 of the Act. He further contends that the Court in hearing a reference under section 18 of the Act can only deal with an objection, which has been referred and cannot go into any matter beyond the reference. He con cludes: if this is so, even if Paramsukhdas is ordered to be added a party he would not be able to challenge the compromise between Sunderlal and Khushal Singh. The learned counsel for the respondent, Mr. C. B. Agarwala, controverts these submissions. ,He says that Paramsukhdas is a person interested in the objection within section 20, and is a person affected by the objection within section 21 of the Act. He also relies on 0. XXII r. 10(2), C.P.C., which is made applicable by section 53 of the Act. Before examining the authorities cited at the Bar, it is necessary to examine the scheme and the provisions of the Act insofar as they are relevant to the question of determination of compensation, the question of apportionment of the compensation, and the question as to the persons who are entitled to be heard. Section 3(b) defines the expression "person interested" as follows: "the expression person interested includes all persons claiming an interest in compensation to be made on account of the acquisition of land under this Act, and a person shall be deemed to be interested in land if be is interested in an easement affecting the land. " It will be noticed that it is an inclusive definition. It is not necessary that in order to fall within the definition a person should claim an interest in land, which has been acquired. A person becomes a person interested if he claims an interest in compensation to be awarded. It seems to us that Paramsukhdas is a "person interested" within section 3(b) of the Act because he claims an interest in compensation. But before he can be made a party in a reference it has to be seen whether he comes within s, 20(b) and s.21 of the Act. L/S5SCI 10(a) 368 The scheme of the Act seems to be to first deal with persons who are interested in land. These persons are heard under section 5A of the Act. The ordinary meaning of "the person interested in land" is expanded by section 5A(3), for the purposes of this section, to include a person who would be entitled to claim an interest in compensation. It would be strange to come to the conclusion that the Legislature is keen that a person claiming an interest in compensation should be heard before the land is acquired but is not interested in him after the land is acquired. On the contrary, it follows from section 5A(3) that a person claiming an interest in compensation would be one of the persons whose interests are meant to be safeguarded. It appears from sections 6 to 10 that a person claiming an interest in compensation is not expressly mentioned. But in section 11 he is expressly mentioned, and it is directed that the Collector shall inquire into respective interests of the persons claiming the compensation and shall make an award. Section 12 makes the award final and conclusive as between persons interested, i.e., including persons claiming an interest in compensation. Under section 14 the Collector has power, inter alia, to summon the parties interested. Under section 18 any person interested can claim a reference. A person claiming an interest in compensation would also be entitled to claim a reference. After a reference is made the Court is enjoined under section 20 to determine the objections, and serve, among others, all persons interested in the objection. A person claiming an interest in compensation would, it seems to us, be a person interested in the objection if the objection is to the amount of compensation or the apportionment of compensation, and if his claim is likely to be affected by the decision on the objection. Section 21 restricts the scope of enquiry to a consideration of the interests of the persons affected by the objection. But it does not follow from section 21 that there is any restriction on the grounds which can be raised by a person affected by the objection to protect his interests. The restriction that is laid is not to consider the interests of a person who is not affected by the objection. Section 29 deals with apportionment of compensation, if there is agreement, and section 30 enables the Collector to refer disputes as to apportionment to the Court. From the above discussion it follows that a person claiming an interest in compensation is entitled to be heard under sections 20 and 21 of the Act. The provisions of the Act, including sections 20 and 21, do not prescribe that his claim to an interest in compensation should be "as compensation", as urged by Mr. Desai. This is really a contradictory statement. For, a fortiori, he has no interest in land, and compensation is given for interests in land. He can never claim compensation qua compensation for what he claims is an interest in the compensation to be awarded. This is not to say that a person claiming an interest in compensation may not claim that the compensation awarded for the acquired land is low, if it affects his interests, 369 In the view we have taken we are supported by some autho rities. Shah, J., speaking for the majority in Grant vs State of Bihar,(1) observed: "The right of the State of Bihar arose on May 22, 1952 when the title to the land vested in it by virtue of the notification issued under the Bihar Land Reforms Act. There is nothing in the Land Acquisition Act which prohibits the Collector from making a reference under section 30 for determination of the title of the person who has since the date of the award acquired a right to the compensation. If after a reference is made to the Court the person interested dies and his title devolves upon another person, because of inheritance, succession, insolvency, forfeiture, compulsory winding up or other form of statutory transfer, it would be open to the, party upon whom the title has devolved to prosecute the claim which the person from whom the title has devolved could have prosecuted. In Promotha Nath Mitra vs Rakshal Das Addy(2) it was held that a reference made by the Collector under section 30 of the Land Acquisition Act at the in stance of a proprietor of land may be prosecuted by the purchaser of his rights after the award at a revenue auction. If the right to prosecute a reference by a person on whom the title of the person interested has devolved be granted, there is no reason why the right to claim a reference of a dispute about the person entitled to compensation may not be exercised by the person on whom the title has devolved since the date of the award. The scheme of the Land Acquisition Act is that all disputes about the quantum of compensation must be decided by resort to the procedure prescribed by the Act; it is also intended that disputes about the rights of owners to compensation being ancillary to the principal dispute should be decided by the Court to which power is entrusted. Jurisdiction of the Court in this behalf is not restricted to cases of apportionment, but extends to adjudication of disputes as to the person who are entitled to receive compensation, and there is nothing in section 30 which excludes a reference to the Court of a dispute raised by a person on whom the title of the owner of land has, since the award, devolved. " In Golap Khan vs Bholanath Marick(3) an attaching creditor was directed to be made a party to the reference under the Land (1) ; (2) (3) 370 Acquisition Act, before the Civil Court. Mookerjee, J., observed: "The petitioner was entitled to be added as a party, not under Rule 10, but on the ground that he was a person interested in the subject matter of the litigation and that no order ought to have been made for its disposal without any opportunity afforded to him to establish his claim." In Siva Pratapa Bhattadu vs A.E.L. Mission(1) an attaching creditor was held to be a person interested within section 3(b) of the Act. Mr. Desai relies on Manjur Ahmed vs Rajlakshmi(2) but in that case the point decided by the Court was different. It was held there that if a party to a land acquisition proceeding before the Collector had not obtained a reference under section 18 of the Act, its representative could not do indirectly what they did not do directly, i.e. they could not be added a party in a reference pending at the instance of other parties in order that the nil award against the party might be reversed and in order that they might be awarded a share of the compensation money. Here no such point has been raised. It has not been urged before us that Paramsukhdas was a party before the Collector and that having not applied for a reference under section 18 he is now debarred from being added as a party. The case of Gobinda Kumar Roy Chowdhury vs Debendra Kumar Roy Chowdhury(3) was also decided on the same lines. Similar view was reiterated in Mahammad Safi vs Haran Chandra(4). Both these cases had followed Abu Bakar vs Peary Mahan Mukerjee(5). Maclean, C. J., observed as follows in Abu Bakar vs Peary Mohan Mukerjee(5). "If we read that section in connection with section 20 and section 18, I think it is impossible to avoid the conclusion that the Legislature intended that all that the Court could deal with was the objection which had been referred to it; and this seems to be a view consistent with commonsense and with the ordinary method of procedure in civil cases. The zemindar here could, if he liked, have raised the objection as to the whole com pensation for the trees being given to the tenants, but he did not do so. He must, therefore, be taken to have accepted the award in that respect; and it would be little less than dangerous if we were to hold that the Judge to (1) A.I.R. 1926 Mad. 307. (2) A.I.R. 1956 Cal. 263. (3) C.W.N. 98. (4) (5) 371 whom only one objection was referred could go into all sorts of questions and objections which had not been referred to him. " These three cases are distinguishable inasmuch as they are dealing with the cases of persons who having a right to seek a reference failed to claim that reference but ought to raise the point in a, reference made at the instance of another party. The case of Karuna Sindhu Dhar vs Panna Lal Paramanik(1) also does not assist the appellant. The High Court held in that case that as Rajmohan never claimed the entire compensation money before the Collector, the Land Acquisition Judge was not entitled to vary the awards by a declaration that Rajmohan alone was entitled to get the compensation. It seems to us that Paramsukhdas was clearly a person in terested in the objections which were pending before the Court in the references made to it and that he was also a person whose interest would be affected by the objections, within section 21. He was accordingly entitled to be made a party. In the result we uphold the order made by the High Court in this respect. Mr. Desai says that at any rate direction should be given that Paramsukhdas should not be entitled to challenge the compromise entered into between Sunderlal and Khushal Singh. We are unable to accept this submission. Paramsukhdas is entitled to raise all points to protect his interests which were affected by the objections. It is also in the interest of justice that there should not be multifarious proceedings and all points arising which are not expressly barred under section 21 should be gone into by the Court. This leaves only the two points regarding the jurisdiction of the High Court. In our view, the High Court is quite right in holding that the orders of the Civil Judge, dated April 9, 1962, were not awards within section 54 of the Act. The awards had still to be made. If no appeal lay, then the revisions were competent and the High Court was right in entertaining the revisions because the Civil Judge had either refused to exercise jurisdiction vesting in him or had acted with material irregularity in the exercise of his jurisdiction. In the result the appeals fail and are dismissed with costs in favour of Respondent No. 1; one hearing fee. Y.P. Appeal dismissed.

The land of the appellant was acquired under the Land Acquisition Act, 1894 and the compensation was apportioned between the appellant and his lessee. The appellant claimed that be was entitled to the whole of the compensation while his, lessee claimed a larger share. At their instance, references were made to the Civil Court under section 18 of the Land Acquisition Act, But, before the references were made, the respondent, who was a decree holder against the lessee, attached the lessee 's share of the compensation amount in execution of his decree. Subsequently the respondent withdrew the lessee 's share of the compensation amount in execution of his decree. The appellant and his lessee, filed a compromise petition before the Civil Judge and the respondent also applied to be impleaded as party to the References. The Civil Judge dismissed the respondent 's applications. The respondent thereupon, filed revision petitions in the High Court. The High Court, held: (1) that the respondent was a person interested in the compensation within the meaning of section 3 (b) of the Land Acquisition Act and was therefore entitled to claim that he should be allowed to join as a party; and (ii) that the revision petitions were competent. In appeal, this Court, Held: (i) The respondent was a 'person interested ' within section 3(b) of the Act, because, he was claiming an interest in the compensation. He was also interested in the objections which were pending before the Court in the references made to it and was a person whose interest would be affected by the objections. within section 21 of the Act. Accordingly, he was entitled to be made a party. [367H; 371C D] The definition of 'Person interested ' in section 3 (b) is an inclusive definition and in order to fall within it it is not necessary that a person should claim an interest in the acquired land. It is sufficient if he claims an interest in the compensation to be awarded. A person claiming art interest in the compensation would be a person interested in the objections to be determined under section 20 of the Act, if the objection is to the amount of compensation or the appor tionment of compensation, and if his claim is likely to be affected by the decision on the objection. Under section 21 the interest , of a person who is not affected by the objection are not to be considered but if he is affected, there is no restriction on the grounds which can be raised by him to protect his interest. Therefore, a person claiming an interest in the compensation is entitled to be heard under Ss. 20 and 21. The sections do not prescribe that his claim to an interest in compensation should be as 'compensation '. A person who has no interest in land can never claim compensation qua compensation, for what he claims is an interest in the compensation, to be. 363 awarded. That is not to say that a person claiming an interest in the compensation may not claim that the compensation awarded for the acquired land is low, if it affects his interests. [367G H; 368D H] Grant vs State of Bihar ; , followed. Golap Khan vs Bholanath Marick, , Siva Prasad Bhattadu vs A.E.L. Mission, A.I.R. 1926 Mad. 307 approved. Manjoor Ahmed vs Rajlaxmi Dasi, A.I.R. 1956 Cal. 263 Abu Bakar vs Peary Mohan Mukherjee, I.L.R. , Gobinda Kumar Roy vs Debendra Kumar Roy Mahammad Safi vs Haran Chandra and Karuna Sindhu Dhar vs Panna Lai Paramanik , distinguished. (ii) The High Court was right in holding that the orders of the Civil Judge were not awards within the meaning of section 54 of the Land Acquisition Act; and as they were not awards and no appeals lay, the revisions were competent and the High Court was justified in interfering as the Civil Judge refused to exercise a jurisdiction vested in him. [371F]

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ivil Appeal No. 161 Of 1986. From the Judgment and Order dated 17.9.85 of the Customs Excise and Gold (Control) Appellate Tribunal, New Delhi in Appeal No. ED(SB) (T) 463/84 D. Soli J. Sorabjee, Ravinder Narain, Harish Salve, section Ganesh and P.K. Ram for the Appellant. B. Datta, Additional Solicitor General, Mrs. Indra Sawhney and Ms. section Relan for the Respondent. The Judgment of the Court was delivered by RANGANATH MISRA, J. The fate of this appeal under sec tion 35(L) of the , de pends upon the meaning and scope of the Explanation appear ing in section 11A of the Act. The High Court of Karnataka by its order dated 4.6.1976 in Writ Petition No. 2632 of 1976 gave the following direc tion: 311 "Pending disposal of the aforesaid writ Peti tion, it is ordered by this Court that collec tion of excise duty as a fabric be and the same is hereby stayed. It is further ordered that the petitioner shall however continue to pay exercise duty as yarn and shall further maintain an account in square metres for future clearance." The said Writ Petition was ultimately dismissed by the High Court on 16.2. The operative part of the Court 's final order ran thus: "For the reasons aforesaid, we make the fol lowing order: (i) Rule discharged; (ii) We decline to interfere at this stage leaving open to the petitioner to urge all the contentions in reply to the show cause notices. " On 20th May, 1982, a notice to show cause was issued to the appellant by the Assistant Collector, being Notice No. 913, and with this the Collector sought to raise a demand for the period from 20th June, 1976 to 28th February, 1981 apart from for the period between 1.4. 1975 to 18.8.1975 in respect of which an earlier show cause notice dated 29.1. 1976 had already been issued. It is not disputed by the Revenue that the appropriate period of limitation to apply to the facts of the case is six months as provided in section 11A of the Act and that the Notice issued on 20th of May, 1982 was beyond that period. Reliance was placed on the Explanation for obtaining extension of that period. The Explanation reads thus: "Where the service of the notice is stayed by an order of a Court, the period of such stay shall be excluded in computing the aforesaid period of six months or five years, as the case may be." The provision in the Explanation incorporates a well known principle of law. Section 15 of the Limitation Act of 1908 (also of Section 15 of the Limitation Act of 1963) incorpo rates the same principle. This Court in Sirajul Haq Khan & others vs The Sunni Central Board of Waqf, U.P. & others, dealt with the effect of an order of injuc tion in the matter of computation of limitation. At page 1302 of the Reports, Gajendragadkar, J. as he then was, spoke for the Court thus. 312 "It is plain that, for excluding the time under this section, it must be shown that the institution of the suit in question had been stayed by an injunction or order; in other words, the section requires an order or an injunction which stays the institution of the suit. And so in cases falling under Section 15, the party instituting the suit would by such institution be in contempt of court. But in our opinion, there would be no justifi cation for extending the application of section 15 on the ground that the institution of the subsequent suit would be inconsistent with the spirit or substance of the order passed in the previous litigation . . " In the instant case, the order of stay passed by the Karna taka High Court had only stayed the collection of the excise duty, which is a stage following levy under the scheme of the Act. Obviously there was no interim direction of the High Court in the matter of issue of notice for the purpose of levy of duty. The relevant portion of Section 11A provid ed. "(1) When any duty of excise has not been levied or paid or has been short levied or short paid or erroneously refunded, a Central Excise Officer may, within six months from the relevant date, serve notice on the person chargeable with the duty which has not been levied or paid or which has been short levied or short paid or to whom the refund has erro neously been made, requiring him to show cause why he should not pay the amount specified in the notice: (2) The Assistant Collector of Central Excise shall, after considering the representation, if any, made by the person on whom notice is served under sub section (1), determine the amount of duty of.excise due from such person (not being in excess of the amount specified in the notice) and thereupon such person shall pay the amount so determined. ' ' Reference to Section 3 of the Act which contains the charg ing provision clearly shows that levy and collection are two distinct and separate 313 steps. This Court in N.B. Sanjana, Assistant Collector of Central Excise, Bombay & Ors. vs Elphinstone Spinning & Weaving Mills Co. Ltd., ; , at page 514 stat ed: " . The charging provision section 3(i) specifically says "there shall be levied and collected in such a manner as may be pre scribed the duty of excise . . "It is to be noted that sub section (i) uses both the expressions "levied and collected" and that clearly shows that the expression "levy" has not been used in the Act or the Rules as meaning actual collection." The High Court having directed stay of collection had, therefore, not given any interim direction in the matter of issue of notice or levy of the duty. The Explanation in clear terms refers to stay of service of notice. The order of the High Court did not at all refer to service of notice. Therefore, there is force in the submission of the appellant that the benefit of the Explanation is not available in the facts of the case. No notice seems to have been issued in this case in regard to the period in question. Instead thereof an out right demand had been served. The provisions of Section 11A (1) and (2) make it clear that the statutory scheme is that in the situations covered by the sub section (1), a notice of show cause has to be issued and sub section (2) requires that the cause shown by way of representation has to be considered by the prescribed authority and then only the mount has to be determined. The scheme is in consonance with the rules of natural justice. An opportunity to be heard is intended to be afforded to the person who is likely to be prejudiced when the order is made, before making the order thereof. Notice is thus a condition precedent to demand under sub section (2). In the instant case, compliance with this statutory requirement has not been made, and, there fore, the demand is in contravention of the statutory provi sion. Certain other authorities have been cited at the hearing by counsel for both sides. Reference to them, we consider, is not necessary. The appeal has to be allowed and the demand raised for the period 19.8.1975 to 23.2.1981 has to be set aside. There shall be no order for costs. The tax paid, if any, shall be refunded to the appellant. S.R. Appeal al lowed.

A show cause notice dated 29.1.1976 issued by the re spondent to the appellant calling upon him to explain as to why excise duty treating his product as "fabric" and not as "yarn" may not be levied, was challenged in the High Court of Karnataka in Writ Petition No. 2632/ 1976. Pending final disposal of the writ petition, an interim order staying the collection of excise duty as a "fabric" for the period 1.4.1975 to 18.8.75 alone was passed with a specific direc tion that the appellant should continue to pay excise duty as "yarn". Finally the writ petition was dismissed on 16.2.1981. On 20th May, 1982, another notice No. 913 to show cause was issued to the appellant simultaneously seeking to raise a demand for the period from 20.6.1976 to 28.2.1981 apart from for the period between 1.4.1975 to 18.8.1975 challenged in the earlier writ petition. The Karnataka High Court having rejected the plea of bar of limitation under section 11A of the raised in the writ petition challenging the said second show cause notice and demand, the appellant has come in appeal by way of special leave. Allowing the appeal, the Court, HELD: 1.1 Section 3 of the Act which contains the charg ing provision clearly shows that levy and collection are two distinct and separate steps. [312H] 1.2 The provision of section 11A(1) and (2) of the make it clear that the statutory scheme is that in the situations covered by the sub section(1), a notice of show cause has to be issued and sub section(2) requires that the cause shown by way of representation has to be considered by the prescribed au thority and then 310 only the amount has to be determined. The scheme is in consonance with the rules of natural justice. An opportunity to be heard is intended to be afforded to the person who is likely to be prejudiced when the order is made, before making the order thereof. Notice is thus a condition prece dent to a demand under sub section(2). In the instant case, compliance with this statutory requirement has not been made, and, therefore, the demand is In contravention of the statutory provision. [313E G] 2. Explanation to section 11A of the , which incorporates a well known principle of law, in clear terms refers to 'stay of service of notice '. The High Court order did not at all refer to service of notice. The High Court having directed stay of collection of duty as 'fabric ' has not issued any interim direction in the matter of issue of notice of levy of the duty. Therefore, the benefit of Explanation to section 11A of the Act is not available to the Respondent. [313C D] Sirajul Haq Khan & Ors. vs The Sunni Central Board of Waqf, U.P. & Ors. , ; and N.B. San jane As sistant Collector of Central Excise, Bombay & Ors. vs El phinstone Spinning & Weaving Mills Co. Ltd., ; , 514 referred to.

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tition (CRL) No. 1171 of 1982. Under article 32 of the Constitution of India. Petitioner in person. Social Welfare. Miss Kamini Jaiswal for Indian Council of Social Welfare. J.B. Dadachanji & Co. for Indian Council of Child Welfare and Swedish Embassy. Dr. N.M. Ghatate for all God 's Children Inc. Arizone, U.S.A. P.H. Parekh for Maharashtra State Women 's Council of Child Welfare, Bombay and for Enfants de L 'espoir. 804 P.K. Chakeravorty for Legal Aid Service, West Bengal. Mrs. Manik Karanjawala for Indian Associations for Promotion of Adoption. Mrs Urmila Kapur for SOS Children 's Village of India. Kailash Vasdev for Missionary of Charity, Calcutta. Baldev Raj Respondent in person. G.M. Coelho Bar at Law for Enfant 's du Mande (France) Miss Rani Jethamalani for Kuanyin Charitable Trust. B.M. Bageria for Terre Des Hommes (India) Society. Sukumar Ghose for Mission of Hope (India) Society, Calcutta. S.K. Mehta for Netherlands Inter Country Child Welfare Oraganisation. Parijot Sinha for society for International Child Welfare. Kailash Vasdev for Bhavishys. The Judgment of the Court was delivered by BHAGWATI, J. This writ petition has been initiated on the basis of a letter addressed by one Laxmi Kant Pandey, an advocate practising in this Court, complaining of malpractices indulged in by social organisations and voluntary agencies engaged in the work of offering Indian children in adoption to foreign parents. The letter referred to a press report based on "empirical investigation carried out by the staff of a reputed foreign magazine" called "The Mail" and alleged that not only Indian children of tender age are under the guise of adoption "exposed to the long horrendous journey to distant foreign countries at great risk to their lives but in cases where they survive and where these children are not placed in the Shelter and Relief Homes, they in course of time become beggars or prostitutes for want of proper care from their alleged foreign foster parents. " The petitioner accordingly sought relief restraining Indian based private agencies "from carrying out further activity of routing children for adoption abroad" and directing the Govern 805 ment of India, the Indian Council of Child Welfare and the Indian Council of Social Welfare to carry out their obligations in the matter of adoption of Indian children by foreign parents. This letter was treated as a writ petition and by an Order dated 1st September, 1982 the Court issued notice to the Union of India the Indian Council of Child Welfare and the Indian Council of Social Welfare to appear in answer to the writ petition and assist the Court in laying down principles and norms which should be followed in determining whether a child should be allowed to be adopted by foreign parents and if so, the procedure to be followed for that purpose, with the object of ensuring the welfare of the child. The Indian Council of Social Welfare was the first to file its written submissions in response to the notice issued by the Court and its written submission filed on 30th September, 1982 not only carried considerable useful material bearing on the question of adoption of Indian children by foreign parents but also contained various suggestions and recommendations for consideration by the Court in formulating principles and norms for permitting such adoptions and laying down the procedure for that purpose. We shall have occasion to refer to this large material placed before us as also to discuss the various suggestions and recommendations made in the written submission by the Indian Council of Social Welfare when we take up for consideration the various issues arising in the writ petition. Suffice it to state for the present that the written submission of the Indian Council of Social Welfare is a well thought out document dealing comprehensively with various aspects of the problem in its manifold dimensions. When the writ petition reached hearing before the Court on 12th October, 1982 the only written submission filed was that the Indian Council of Social Welfare and neither the Union of India nor the Indian Council of Child Welfare had made any response to the notice issued by the Court. But there was a telegram received from a Swedish Organisation called `Barnen Framfoer Allt Adoptioner" intimating to the Court that this Organisation desired to participate in the hearing of the writ petition and to present proper material before the Court. S.O.S, Children 's Villages of India also appeared through their counsel Mrs. Urmila Kapoor and applied for being allowed to intervene at the hearing of the writ petition so that they could made their submissions on the question of adoption of Indian Children by foreign parents. Since S.O.S, Children 's Villages of India is admittedly an organisation concerned with welfare of children, the Court, by an Order dated 12th October, 1982, allowed them to intervene and to make 806 their submissions before the Court. The Court also by the same Order directed that the Registry may address a communication to Barnen Framfoer Allt Adoptioner informing them about the adjourned date of hearing of the writ petition and stating that if they wished to present any material and make their submissions, they could do so by filing an affidavit before the adjourned date of hearing. The Court also directed the Union of India to furnish before the next hearing of the writ petition the names of "any Indian Institutions or Organisations other than the Indian Council of Social Welfare and the Indian Council of Child Welfare, which are engaged or involved in offering Indian children for adoption by foreign parents" and observed that if the Union of India does not have this information, they should gather the requisite information so far as it is possible for them to do so and to make it available to the Court. The Court also issued a similar direction to the Indian Council of Child Welfare, Indian Council of Social Welfare and S.O.S. Children 's Villages of India. There was also a further direction given in the same Order to the Union of India, the Indian Council of Child Welfare, the Indian Council of Social Welfare and the S.O.S. Children 's Villages of India "to supply to the Court information in regard to the names and particulars of any foreign agencies which are engaged in the work of finding Indian children for adoption for foreign parents". The writ petition was adjourned to 9th November, 1982 for enabling the parties to carry out these directions. It appears that the Indian Council of Social Welfare thereafter in compliance with the directions given by the Court, filed copies of the Adoption of Children Bill, 1972 and the adoption of Children Bill, 1980. The adoption of Children Bill, 1972 was introduced in the Rajya Sabha sometime in 1972 but it was subsequently dropped, presumably because of the opposition of the Muslims stemming from the fact that it was intended to provide for a uniform law of adoption applicable to all communities including the Muslims. It is a little difficult to appreciate why the Muslims should have opposed this Bill which merely empowered a Muslim to adopt if he so wished; it had no compulsive force requiring a Muslim to act contrary to his religious tenets: it was merely an enabling legislation and if a Muslim felt that it was contrary to his religion to adopt, he was free not to adopt. But in view of the rather strong sentiments expressed by the members of the Muslim Community and with a view not to offend their religious susceptibilities, the Adoption of Children Bill, 1980 which was introduced in the Lok 807 Sabha eight years later on 16th December, 1980, contained an express provision that it shall not be applicable to Muslims. Apart from this change in its coverage the Adoption of Children Bill, 1980 was substantially in the same terms as the Adoption of Children Bill, 1972. The Adoption of Children Bill 1980 has unfortunately not yet been enacted into law but it would be useful to notice some of the relevant provisions of this Bill in so far as they indicate what principles and norms the Central Government regarded as necessary to be observed for securing the welfare of children sought to be given in adoption to foreign parents and what procedural safeguards the Central Government thought, were essential for securing this end. Clauses 23 and 24 of the Adoption of Children Bill, 1980 dealt with the problem of adoption of Indian children by parents domiciled abroad and, in so far as material, they provided as follows: "23 (1) Except under the authority of an order under section 24, it shall not be lawful for any person to take or send out of India a child who is a citizen of India to any place outside India with a view to the adoption of the child by any person. (2) Any person who takes or sends a child out of India to any place outside India in contravention of sub section (1) or makes or takes part in any arrangements for transferring the care and custody of a child to any person for that purpose shall be punishable with imprisonment for a term which may extend to six months or with fine, or with both. (24) (1) If upon an application made by a person who is not domiciled in India, the district court is satisfied that the applicant intends to adopt a child under the law of or within the country in which he is domiciled, and for that purpose desires to remove the child from India either immediately or after an interval, the court may make an order (in this section referred to as a provisional adoption order) authorising the applicant to remove the child for the purpose aforesaid and giving to the applicant the care and custody of the child pending his adoption as aforesaid: Provided that no application shall be entertained 808 unless it is accompanied by a certificate by the Central Government to the effect that (i) the applicant is in its opinion a fit person to adopt the child; (ii) the welfare and interests of the child shall be safeguarded under the law of the country of domicile of the applicant; (iii) the applicant has made proper provision by way of deposit or bond or otherwise in accordance with the rules made under this Act to enable the child to be repatriated to India, should it become necessary for any reason. (2) The provisions of this Act relating to an adoption order shall, as far as may be apply in relation to a provisional adoption order made under this section. The other clauses of the Adoption of Children Bill, 1980 were sought to be made applicable in relation to a provisional adoption order by reason of sub clause (3) of clause 24. The net effect of this provision, if the Bill were enacted into law, would be that in view of clause 17 no institution or organisation can make any arrangement for the adoption of an Indian child by foreign parents unless such institution or organisation is licensed as a social welfare institution and under Clause 21, it would be unlawful to make or to give to any person any payment or reward for or in consideration of the grant by that person of any consent required in connection with the adoption of a child or the transfer by that person of the care and custody of such child with a view to its adoption or the making by that person of any arrangements for such adoption. Moreover, in view of Clause 8, no provisional adoption order can be made in respect of an Indian child except with the consent of the parent or guardian of such child and if such child is in the care of an institution, except with the consent of the institution given on its behalf by all the persons entrusted with or in charge of its management, but the District Court can dispense with such consent if it is satisfied that the person whose consent is to be dispensed with has abandoned, neglected or persistently ill treated the child or has persistently failed without reasonable cause to discharge his obligation as parent or guardian or can not be found or is incapable of giving consent or is withholding consent unreasonably. When a 809 provisional adoption order is made by the District Court on the application of a person domiciled abroad, such person would be entitled to obtain the care and custody of the child in respect of which the order is made and to remove such child for the purpose of adopting it under the law or within the country in which he is domiciled. These provisions in the Adoption of Children Bill, 1980 will have to be borne in mind when we formulate the guidelines which must be observed in permitting an Indian child to be given in adoption to foreign parents. Besides filing copies of the Adoption of Children Bill, 1972 and the Adoption of Children Bill, 1980 the Indian Council of Social Welfare also filed two lists, one list giving names and particulars of recognised agencies in foreign countries engaged in facilitating procurement of children from other countries for adoption in their own respective countries and the other list containing names and particulars of institutions and organisations in India engaged in the work of offering and placing Indian children for adoption by foreign parents. The Writ Petition thereafter came up for hearing on 9th November, 1982 when several applications were made by various institutions and organisations for intervention at the hearing of the writ petition. Since the questions arising in the writ petition were of national importance, the Court thought that it would be desirable to have assistance from whatever legitimate source it might come and accordingly, by an order dated 9th November, 1982, the Court granted permission to eight specified institutions or organisations to file affidavits or statements placing relevant material before the Court in regard to the question of adoption of Indian children by foreign parents and directed that such affidavits or statements should be filed on or before 27th November, 1982. The Court also issued notice of the writ petition to the State of West Bengal directing it to file its affidavit or statement on or before the same date. The Court also directed the Superintendent of Tees Hazari courts to produce at the next hearing of the writ petition quarterly reports in regard to the orders made under the Guardian and Wards Act, 1890 entrusting care and custody of Indian children to foreign parents during the period of five years immediately prior to 1st October, 1982. Since the Union of India had not yet filed its affidavit or statement setting out what was the attitude adopted by it in regard to this question, the Court directed the Union of India to file its affidavit or statement within the same time as the others. The Court then adjourned the hearing of the writ petition to 1st December 1982 in order that the record may be completed by that time. 810 Pursuant to these directions given by the Court, various affidavits and statements were filed on behalf of the Indian Council of Social Welfare, Enfants Du Monde, Missionaries of Charity, Enfants De L 's Espoir, Indian Association for promotion of Adoption Kuan yin Charitable Trust, Terre Des Homes (India) Society, Maharashtra State Women 's Council, Legal Aid Services West Bengal, SOS Children 's Villages of India, Bhavishya International Union for Child Welfare and the Union of India. These affidavits and statements placed before the Court a wealth of material bearing upon the question of adoption of Indian children by foreign parents and made valuable suggestions and recommendations for the consideration of the Court. These affidavits and statements were supplemented by elaborate oral arguments which explored every facet of the question, involving not only legal but also sociological considerations. We are indeed grateful to the various participants in this inquiry and to their counsel for the very able assistance rendered by them in helping us to formulate principles and norms which should be observed in giving Indian children in adoption to foreign parents and the procedure that should be followed for the purpose of ensuring that such inter country adoptions do not lead to abuse maltreatment or exploitation of children and secure to them a healthy, decent family life. It is obvious that in a civilized society the importance of child welfare cannot be over emphasized, because the welfare of the entire community, its growth and development, depend on the health and well being of its children. Children are a "supremely important national asset" and the future well being of the nation depends on how its children grow and develop. The great poet Milton put it admirably when he said: "Child shows the man as morning shows the day" and the Study Team on Social Welfare said much to the same effect when it observed that "the physical and mental health of the nation is determined largely by the manner in which it is shaped in the early stages". The child is a soul with a being, a nature and capacities of its own, who must be helped to find them, to grow into their maturity, into fulness of physical and vital energy and the utmost breadth, depth and height of its emotional, intellectual and spiritual being; otherwise there cannot be a healthy growth of the nation. Now obviously children need special protection because of their tender age and physique mental immaturity and incapacity to look after themselves. That is why there is a growing realisation in every part of the globe that children must be brought up in an atmosphere of love and affection 811 and under the tender care and attention of parents so that they may be able to attain full emotional, intellectual and spiritual stability and maturity and acquire self confidence and self respect and a balanced view of life with full appreciation and realisation of the role which they have to play in the nation building process without which the nation cannot develop and attain real prosperity because a large segment of the society would then be left out of the developmental process. In India this consciousness is reflected in the provisions enacted in the Constitution. Clause (3) of Article 15 enables the State to make special provisions inter alia for children and Article 24 provides that no child below the age of fourteen years shall be employed to work in any factory or mine or engaged in any other hazardous employment. Clauses (e) and (f) of Article 39 provide that the State shall direct its policy towards securing inter alia that the tender age of children is not abused, that citizens are not forced by economic necessity to enter avocations unsuited to their age and strength and that children are given facility to develop in a healthy manner and in conditions of freedom and dignity and that childhood and youth are protected against exploitation and against moral and material abandonment. These constitutional provisions reflect the great anxiety of the constitution makers to protect and safeguard the interest and welfare of children in the country. The Government of India has also in pursuance of these constitutional provisions evolved a National Policy for the Welfare of Children. This Policy starts with a goal oriented perambulatory introduction: "The nation 's children are a supremely important asset. Their nurture and solicitude are our responsibility. Children 's programme should find a prominent part in our national plans for the development of human resources, so that our children grow up to become robust citizens, physically fit, mentally alert and morally healthy, endowed with the skills and motivations needed by society. Equal opportunities for development to all children during the period of growth should be our aim, for this would serve our larger purpose of reducing inequality and ensuring social justice. " The National Policy sets out the measures which the Government of India proposes to adopt towards attainment of the objectives set out in the perambulatory introduction and they include measures designed to protect children against neglect, cruelty and exploitation 812 and to strengthen family ties "so that full potentialities of growth of children are realised within the normal family neighbourhood and community environment. " The National Policy also lays down priority in programme formation and it gives fairly high priority to maintenance, education and training of orphan and destitute children. There is also provision made in the National Policy for constitution of a National Children 's Board and pursuant to this provision, the Government of India has Constituted the National Children 's Board with the Prime Minister as the chair person. It is the function of the National Children 's Board to provide a focus for planning and review and proper coordination of the multiplicity of services striving to meet the needs of children and to ensure at different levels continuous planning, review and coordination of all the essential services. The National Policy also stresses the vital role which the voluntary organisations have to play in the field of education, health recreation and social welfare services for children and declares that it shall be the endeavour of State to encourage and strengthen such voluntary organisations. There has been equally great concern for the welfare of children at the international level culminating in the Declaration of the Rights of the Child adopted by the General Assembly of the United Nations on 20th November, 1959. The Declaration in its Preamble points out that "the child, by reason of his physical and mental immaturity, needs special safeguards and care, including appropriate legal protection, before as well as after birth", and that "mankind owes to the child the best it has to give" and proceeds to formulate several Principles of which the following are material for our present purpose: "PRINCIPLE 2: The child shall enjoy special protection and shall be given opportunities and facilities by law and by other means, to enable him to develop physically mentally morally, spiritually and socially in a healthy and normal manner and in conditions of freedom and dignity. In the enactment of laws for this purpose the best interests of the child shall be the paramount consideration. " PRINCIPLE 3: The child shall be entitled from his birth to a name and a nationality. PRINCIPLE 6: The Child, for the full and harmonious development of his personality, needs love and under 813 standing. He shall, wherever possible, grow up in the care and under the responsibility of his parents, and in any case in an atmosphere of affection and of moral and material security; a child of tender years shall not, save in exceptional circumstances, be separated from his mother. Society and the public authorities shall have the duty to extend particular care to children without a family and to those without adequate means of support. Payment of State and other assistance towards the maintenance of children of large families is desirable. PRINCIPLE 9: The child shall be protected against all forms of neglect, cruelty and exploitation. He shall not be the subject of traffic, in any form. PRINCIPLE 10: The child shall be protected from practices which may foster racial, religious and any other form of discrimination. He shall be brought up in a spirit of understanding, tolerance friendship among peoples, peace and universal brotherhood and in full consciousness that his energy and talents should be devoted to the service of his fellow men. " Every child has a right to love and be loved and to grow up in an atmosphere of love and affection and of moral and material security and this is possible only if the child is brought up in a family. The most congenial environment would, of course, be that of the family of his biological parents. But if for any reason it is not possible for the biological parents or other near relative to look after the child or the child is abandoned and it is either not possible to trace the parents or the parents are not willing to take care of the child, the next best alternative would be to find adoptive parents for the child so that the child can grow up under the loving care and attention of the adoptive parents. The adoptive parents would be the next best substitute for the biological parents. The practice of adoption has been prevalent in Hindu Society for centuries and it is recognised by Hindu Law, but in a large number of other countries it is of comparatively recent origin while in the muslim countries it is totally unknown. Amongst Hindus, it is not merely ancient Hindu Law which recognises the practice of adoption but it has also been legislatively recognised in the Hindu Adoption and Maintenance Act, 1956. The Adoption of Children Bill 1972 sought to provide for a uniform law of adoption applicable to all communities includ 814 ing the muslims but, as pointed out above, it was dropped owing to the strong opposition of the muslim community. The Adoption of Children Bill, 1980 is now pending in Parliament and if enacted, it will provide a uniform law of adoption applicable to all communities in India excluding the muslim community. Now when the parents of a child want to give it away in adoption or the child is abandoned and it is considered necessary in the interest of the child to give it in adoption, every effort must be made first to find adoptive parents for it within the country, because such adoption would steer clear of any problems of assimilation of the child in the family of the adoptive parents which might arise on account of cultural, racial or linguistic differences in case of adoption of the child by foreign parents. If it is not possible to find suitable adoptive parents for the child within the country, it may become necessary to give the child in adoption to foreign parents rather than allow the child to grow up in an orphanage or an institution where it will have no family life and no love and affection of parents and quite often, in the socioeconomic conditions prevailing in the country, it might have to lead the life of a destitute, half clad, half hungry and suffering from malnutrition and illness. Paul Harrison a free lance journalist working for several U.N. Agencies including the International Year of the Child Secretariat points out that most third world children suffer "because of their country 's lack of resources for development as well as pronounced inequalities in the way available resources are distributed" and they face a situation of absolute material deprivation. He proceeds to say that for quite a large number of children in the rural areas, "poverty and lack of education of their parents, combined with little or no access to essential services of health, sanitation and education, prevent the realisation of their full human potential making them more likely to grow up uneducated, unskilled and unproductive" and their life is blighted by malnutrition, lack of health care and disease and illness caused by starvation, impure water and poor sanitation. What Paul Harrison has said about children of the third world applies to children in India and if it is not possible to provide to them in India decent family life where they can grow up under the loving care and attention of parents and enjoy the basic necessities of life such as nutritive food, health care and education and lead a life of basic human dignity with stability and security, moral as well as material, there is no reason why such children should not be allowed to be given in adoption to foreign parents. Such adoption would be quite consistent with our National Policy on Children because it would 815 provide an opportunity to children, otherwise destitute, neglected or abandoned, to lead a healthy decent life, without privation and suffering arising from poverty, ignorance, malnutrition and lack of sanitation and free from neglect and exploitation, where they would be able to realise "full potential of growth". But of course as we said above, every effort must be made first to see if the child can be rehabilitated by adoption within the country and if that is not possible, then only adoption by foreign parents, or as it is some time called 'inter country adoption ' should be acceptable. This principle stems from the fact that inter country adoption may involve trans racial, trans cultural and trans national aspects which would not arise in case of adoption ' within the country and the first alternative should therefore always be to find adoptive parents for the child within the country. In fact, the Draft Guidelines of Procedures Concerning Inter Country Adoption formulated at the International Council of Social Welfare Regional Conference of Asia and Western Pacific held in Bombay in 1981 and approved at the Workshop on Inter Country Adoption held in Brighten, U.K. on 4th September, 1982, recognise the validity of this principle in clause 3.1 which provides: "Before any plans are considered for a child to be adopted by a foreigner, the appropriate authority or agency shall consider all alternatives for permanent family care within the child 's own country". Where, however, it is not possible to find placement for the child in an adoptive family within the country, we do not see anything wrong if: a home is provided to the child with an adoptive family in a foreign country. The Government of India also in the affidavit filed on its behalf by Miss B. Sennapati Programme Officer in the Ministry of Social Welfare seems to approve of inter country adoption for Indian children and the proceedings of the Workshop on Inter Country Adoption held in Brighten, U.K. on 4th September, 1982 clearly show that the Joint Secretary, Ministry of Social Welfare who represented the Government of India at the Workshop "affirmed support of the Indian Government to the efforts of the international organisations in promoting measures to protect welfare and interests of children who are adopted aboard. " But while supporting inter country adoption, it is necessary to bear in mind that the primary object of giving the child in adoption being the welfare of the child, great care has to be exercised in permitting the child to be given in adoption to foreign parents, lest the child may be neglected or abandoned by the adoptive parents in 816 the foreign country or the adoptive parents may not be able to provide to the child a life of moral or material security or the child may be subjected to moral or sexual abuse or forced labour or experimentation for medical or other research and may be placed in a worse situation than that in his own country. The Economic and Social Council as also the Commission for Social Development have therefore tried to evolve social and legal principles for the protection and welfare of children given in inter country adoption. The Economic and Social Council by its Resolution 1925 LVIII requested the Secretary General of the United Nations to convene a group of Experts with relevant experts with relevant experience of family and child welfare with the following mandate: "(a) To prepare a draft declaration of social and legal principles relating to adoption and foster placement of children nationally and internationally, and to review and appraise the recommendations and guidelines incorporated in the report of the Secretary General and the relevant material submitted by Governments already available to the Secretary General and the regional commissions. (b) To draft guidelines for the use of Governments in the implementation of the above principles, as well as suggestions for improving procedures within the context of their social development including family and child welfare programmes. " Pursuant to this mandate an expert Group meeting was convened in Geneva in December, 1978 and this Expert Group adopted a "Draft declaration on social and legal principles relating to the protection and welfare of children with special reference of foster placement and adoption, nationally and internationally". The Commission for Social Development considered the draft Declaration at its 26th Session and expressed agreement with its contents and the Economic and Social Council approved the draft Declaration and requested the General Assembly to consider it in a suitable manner. None of the parties appearing could give us information whether any action has been taken by the General Assembly. But the draft Declaration is a very important document in as much it lays down certain social and legal principles which must be observed in case of inter country adoption. Some of the relevant principles set out 817 in the draft Declaration may be referred to with advantage: "article 2. It is recognised that the best child welfare is good family welfare. When biological family care is unavailable or in appropriate, substitute family care should be considered. Every child has a right to a family. Children who cannot remain in their biological family should be placed in foster family or adoption in preference to institutions, unless the child 's particular needs can best be met in a specialized facility. Children for whom institutional care was formerly regarded as the only option should be placed with families, both foster and adoptive. The primary purpose of adoption is to provide a permanent family for a child who cannot be cared for by his/her biological family. In considering possible adoption placements, those responsible for the child should select the most appropriate environment for the particular child concerned. Sufficient time and adequate counselling should be given to the biological parents to enable them to reach a decision on their child 's future, recognizing that it is in the child 's best interest to reach this decision as early as possible. Legislation and services should ensure that the child becomes an integral part of the adoptive family. The need of adult adoptees to know about their background should be recognized. Governments should determine the adequacy of their national services for children, and recognize those children whose needs are not being met by existing services. For some of these children, inter country adoption may be considered as a suitable means of providing them with a oily. In each country, placements should be made 818 through authorized agencies competent to deal with inter country adoption services and providing the same safeguards and standards as are applied in national adoptions. Proxy adoptions are not acceptable, in consideration of the child 's legal and social safety. No adoption plan should be considered before it has been established that the child is legally free for adoption and the pertinent documents necessary to complete the adoption are available. All necessary consents must be in a form which is legally valid in both countries. It must be definitely established that the child will be able to immigrate into the country of the prospective adopters and can subsequently obtain their nationality. In inter country adoptions, legal validation of the adoption should be assured in the countries involved. The child should at all times have a name, nationality and legal guardian. " Thereafter at the Regional Conference of Asia and Western Pacific held by the International Council on Social Welfare in Bombay in 1981, draft guidelines of procedure concerning inter country adoption were formulated and, as pointed out above, they were approved at the Workshop held in Brighton, U.K. on 4th September, 1982. These guidelines were based on the Draft Declaration and they are extremely relevant as they reflect the almost unanimous thinking of participants from various countries who took part in the Regional Conference in Bombay and in the Workshop in Brighton, U.K. There are quite a few of these guidelines which are important and which deserve serious consideration by us: "1.4. In all inter country adoption arrangements, the welfare of the child shall be prime consideration. Biological Parents: 2.2. When the biological parents are known they shall be offered social work services by professionally qualified workers (or experienced personnel who are supervised by such qualified workers) before and after the birth of the child. 819 2.3. These services shall assist the parents to consider all the alternatives for the child 's future. Parents shall not be subject to any duress in making a decision about adoption. No commitment to an adoption plan shall be permitted before the birth of the child. After allowing parents a reasonable time to reconsider any decision to relinquish a child for adoption, the decision should become irrevocable. If the parents decide to relinquish the child for adoption, they shall be helped to understand all the implications, including the possibility of adoption by foreigners and of no further contact with the child. Parents should be encouraged, where possible, to provide information about the child 's background and development, and their own health. It is the responsibility of the appropriate authority or agency to ensure that when the parents relinquish a child for adoption all of the legal requirements are met. If the parents state a preference for the religious up bringing of the child, these wishes shall be respected as far as possible, but the best interest of the child will be the paramount consideration. If the parents are not known, the appropriate authority or agency, in whose care the child has been placed, shall endeavour to trace the parents and ensure that the above services are provided, before taking any action in relation to adoption of the child. The Child: 3.1. Before any plans are considered for a child to be adopted by foreigners, the appropriate authority or agency shall consider all alternatives for permanent family care within the child 's own country. A child study report shall be prepared by professional workers (or experienced personnel who are supervised by such qualified workers) of an appropriate authority or agency, to provide information which will form a basis for the selection of prospective adopters for the child, 820 assist with the child 's need to know about his original family at the appropriate time, and help the adoptive parents understand the child and have relevant information about him/her. 3.3 As far as possible, the child study report shall include the following: 3.3.1. Identifying information, supported where possible by documents. 3.3.2. Information about original parents, including their health and details of the mother 's pregnancy and the birth. 3.3.3. Physical, intellectual and emotional development. 3.3.4. Health report. 3.3.5. Recent photograph. 3.3.6. Present environment category of care (Own home, foster home, institution, etc.) relationships, routines and habits. 3.3.7. Social Worker 's assessment and reasons for suggesting inter country adoption. Brothers and sisters and other children who have been cared for as siblings should not be separated by adoption placement except for special reasons. When a decision about an adoption placement is finalised, adequate time and effort shall be given to preparation of the child in a manner appropriate to his/her age and level of development. Information about the child 's new country and new home, and counselling shall be provided by a skilled worker. (a) Before any adoption placement is finalized the child concerned shall be consulted in a manner appropriate to his/her age and level of development. When older children are placed for adoption, the adoptive parents should be encouraged to come to the child 's country of origin, to meet him/her there, learn 821 personally about his/her first environment and escort the child to its new home. Adoptive Parents: 4.3. In addition to the usual capacity for adoptive, parenthood applicants need to have the capacity to handle the trans racial, trans cultural and trans national aspects of inter country adoptions. A family study report shall be prepared by professional worker (or experienced personnel who are supervised by such qualified workers) to indicate the basis on which the applicants were accepted as prospective adopters. It should include an assessment of the parents ' capacity to parent a particular type of child and provide relevant in formation for other authorities such as Courts. The report on the family study which must be made in the community where the applicants are residing, shall include details of the following: 4.5.1. Identifying information about parents and other members of the family, including any necessary documentation. 4.5.2. Emotional and intellectual capacities of prospective adopters, and their motivation to adoption. 4.5.3. Relationship (material, family, relatives, friends, community) 4.5.4. Health. 4.5.5. Accommodation and financial position. 4.5.6. Employment and other interests. 4.5.7. Religious affiliations and/or attitude. 4.5.8. Capacity for adoptive parenthood, and details of child preferred (age, sex, degree of disability). 4.5.9. Support available from relatives, friends, community. 4.5.10. Social worker 's assessment and details of adoption authority 's approval. 822 4,5.11. Recent photograph of family. Adoption Authorities and Agencies: 5.1. Inter country adoption arrangements should be made only through Government adoption authorities (or agencies recognised by them) in both sending and receiving countries. They shall use experienced staff with professional social work education or experienced personnel supervised by such qualified workers. The appropriate authority or agency in the child 's country should be informed of all proposed inter country adoptions and have the opportunity to satisfy itself that all alternatives in the country have been considered, and that inter country adoption is the optimal choice of care for the child. Before any inter country adoption plan is considered, the appropriate authority or agency in the child 's country should be responsible for establishing that the child is legally free for adoption, and that the necessary documentation is legally valid in both countries. Approval of inter country adoption applicants is a responsibility of the appropriate authorities or agencies in both sending and receiving countries. An application to adopt a child shall not be considered by a sending country unless it is forwarded through the appropriate authority or agency in the receiving country. The appropriate authority or agency in both countries shall monitor the reimbursement of costs involved in inter country adoption to prevent profiteering and traffic king in children. XX XX XX XX 5.7. When a child goes to another country to be adopted, the appropriate authority or agency of the receiving country shall accept responsibility for supervision of the placement, and for the provision of progress reports for the adoption authority or agency in the sending country for the period agreed upon. 823 5.8. In cases where the adoption is not to be finalised in the sending country, the adoption authority in the receiving country shall ensure that an adoption order is sought as soon as possible but not later than 2 years after placement. It is the responsibility of the appropriate authority or agency in the receiving country to inform the appropriate authority or agency in the sending country of the details of the adoption order when it is granted. 5.8.1. In cases where the adoption is to be finalised in the sending country after placement, it is the responsibility of the appropriate authority or agency in both the sending and receiving country to ensure that the adoption is finalised as soon as possible. If the placement is disrupted before the adoption is finalised, the adoption authority in the receiving country shall be responsible for ensuring, with the agreement of the adoption authority in the sending country that a satisfactory alternative placement is made with prospective adoptive parents who are approved by the adoption authorities of both countries. Adoption Services and Communities: 6.1. Appropriate authorities or agencies in receiving countries shall ensure that there is adequate feedback to the appropriate authorities or agencies in sending countries, both in relation to inter country adoption generally and to individual children where required. XX XX XX XX 6.3. The appropriate authorities and agencies in both sending and receiving countries have a responsibility for public education in relation to inter country adoption, to ensure that when such adoption is appropriate for children, public attitudes support this. Where public attitude is known to be discriminatory or likely to be hostile on grounds of race or colour, the appropriate authority or agency in the sending country should not consider placement of the child. 824 Status of the Child: 7.1. Family: It is essential that in inter country adoption child is given the same legal status and rights of inheritance, as if she/he had been born to the adoptive parents in marriage. Name: When the legal adoption process is concluded the child shall have the equivalent of a birth registration certificate. Nationality: When the legal adoption is concluded, the child shall be granted appropriate citizenship. XX XX XX XX 7.5. Immigration: Before an inter country adoption placement with particular prospective adopters is proposed, the appropriate authority or agency in the child 's country shall ensure that there is no hindrance, to the child entering the prospective adopters ' country, and that travel documents can be obtained at the appropriate time. We shall examine these provisions of the Draft Declaration and the draft guidelines of procedure when we proceed to consider and lay down the principles and norms which should be followed in intercountry adoption. Now it would be convenient at this stage to set out the procedure which is at present being followed for giving a child in adoption to foreign parents. Since there is no statutory enactment in our country providing for adoption of a child by foreign parents or laying down the procedure which must be followed in such a case, resort is had to the provisions of the Guardians & Wards Act 1890 for the purpose of facilitating such adoption. This Act is an old statute enacted for the purpose of providing for appointment of guardian of the person or property of a minor. Section 4 sub section (5) clause (a) defines the "court" to mean the district court 825 having jurisdiction to entertain an application under the Act for an order appointing or declaring a person to be a guardian and the expression "district court" is defined in sub section (4) of section 4 to have the same meaning as assigned to it in the Code of Civil Procedure and includes a High Court in the exercise of its ordinary original civil jurisdiction. Section 7 sub section (1) provides that where the court is satisfied that it is for the welfare of a minor that an order should be made appointing a guardian of his person or property or both or declaring a person to be such a guardian, the court may make an order accordingly and, according to section 8, such an order shall not be made except on the application of one of four categories of persons specified in clauses (a) to (d), one of them being "the person desirous of being the guardian of the minor" and the other being "any relative or friend of the minor". Sub section (1) of section 9 declares that if the 'application ' is with respect to the guardianship of the person of the minor and that is the kind of application which is availed of for the purpose of intercountry adoption it shall be made to the district court having jurisdiction in the place where the minor ordinarily resides. Then follows section 11, sub section (1) which prescribes that if the court is satisfied that there is ground for proceeding on the application, it shall fix a date for the hearing thereof and cause notice of the application and of the date fixed for the hearing to be served on the parents of the minor if they are residing in any State to which the Act extends, the person if any named in the petition as having the custody or possession of the person of the minor, the person proposed in the application to be appointed guardian and any other person to whom, in the opinion of the court, special notice of the application should be given. Section 17 provides that in appointing guardian of a minor, the court shall be guided by what, consistently with the law to which the minor is subject, appears in the circumstances to be for the welfare of the minor and in considering what will be for the welfare of the minor, the court shall have regard to the age sex, and religion of the minor, the character and capacity of the proposed guardian and his nearness of kin to the minor, the wishes, if any, of a deceased parent and any existing or previous relations of the proposed guardian with the minor or his property. The last material section is section 26 which provides that a guardian of the person of a minor appointed by the court shall not, without the leave of the court by which he was appointed, remove the ward from the limits of its jurisdiction, except for such purposes as may be prescribed and the leave to be granted by the 826 court may be special or general. These are the relevant provisions of the which have a bearing on the procedure which is at present being followed for the purpose of carrying through inter country adoption. The foreign parent makes an application to the court for being appointed guardian of the person of the child whom he wishes to take in adoption and for leave of the court to take the child with him to his country on being appointed such guardian. The procedure to be followed by the court in disposing of such application is laid down by three High Courts in the country with a view to protecting the interest and safeguarding the welfare of the child, but so far as the rest of the High Courts are concerned, they do not seem to have taken any steps so far in that direction. Since most of the applications by foreign parents wishing to take a child in adoption in the State of Maharashtra are made on the original side of the High Court of Bombay that High Court has issued a notification dated 10th May 1972 incorporating Rule 361 B in Chapter XX of the Rules of the High Court of Bombay (Original Side) 1957 an this newly added Rule provides inter alia as follows: When a foreigner makes an application for being appointed as the guardian of the person or property of a minor, the Prothonotary and Senior Master shall address a letter to the Secretary of the Indian Council of Social Welfare, informing him of the presentation of the application and the date fixed for the hearing thereof he shall also inform him that any representation which the Indian Council of Social Welfare may make in the matter would be considered by the Court before passing the order on the application. A copy of the application shall be forwarded to the Secretary of the Indian Council of Social Welfare along with the letter of Prothonotary and Senior Master. " The High Court of Delhi has also issued instructions on the same lines to the Courts subordinate to it and these instructions read as follows: (i) A foreigner desirous of being appointed guardian or the person of a minor and praying for leave to remove the minor to a foreign country, shall make an application for the purpose in the prescribed form under the , attaching with it three copies of passport size 827 photographs of the minor, duly attested by the person having custody of the minor at the time; (ii) If the court is satisfied that there is no ground for proceedings on the application, it shall fix a day for the hearing there of and cause notice of the application and of the date fixed for the hearing on the person and in the manner mentioned in Section 11, as also to the general public and the Secretary of the Indian Council of child Welfare and consider their representation; (iii) Every person appointed guardian of the person of a minor shall execute a bond with or without a surety or sureties as the court may think fit to direct and in such sum as the court may fix, having regard to the welfare of the minor and to ensure his production in the court if and when so required by the court; (iv) On the court making an order for the appointment of a foreigner guardian of the person of an Indian minor, a copy of the minor 's photograph shall be counter signed by the Court and issued to the guardian or joint guardian, as the case may be, appointed by the court alongwith the certificate or guardianship. " The High Court of Gujarat has not framed any specific rule for this purpose like the High Courts of Bombay and Delhi but in a judgment delivered in 1982 in the case of Rasiklal Chaganlal Mehta,(1) the High Court of Gujarat has made the following observations: "In order that the Courts can satisfactorily decide an intercountry adoption case against the aforesaid background and in the light of the above referred guidelines, we consider it necessary to give certain directions. In all such cases, the Court should issue notice to the Indian Council of Social Welfare (175, Dadabhai Naroji Road, Bombay 828 400001) and seek its assistance. If the Indian Council of Social Welfare so desires it should be made a party to the proceedings. If the Indian Council of Social Welfare does not appear, or if it is unable, for some reason, to render assistance, the Court should issue notice to an independent, reputed and publicly/officially recognised social welfare agency working in the field and in that area and request it to render assistance in the matter. " The object of giving notice to the Indian Council of Social Welfare or the Indian Council for Child Welfare or any other independent, reputed and publicly or officially recognised social welfare agency is obviously to ensure that the application of foreign parents for guardianship of the child with a view to its eventual adoption is properly and carefully scrutinised and evaluated by an expert body having experience in the area of child welfare with a view to assisting the Court in coming to the conclusion whether it will be in the interest of the child, promotive of its welfare, to be adopted by the foreign parents making the application or in other words, whether such adoption will provide moral and material security to the child with an opportunity to grow into the full stature of its personality in an atmosphere of love and affection and warmth of a family hearth and home. This procedure which has been evolved by the High Courts of Bombay, Delhi and Gujarat is, in our opinion, eminently desirable and it can help considerably to reduce, if not eliminate, the possibility of the child being adopted by unsuitable or undesirable parents or being placed in a family where it may be neglected, maltreated or exploited by the adoptive parents. We would strongly commend this procedure for acceptance by every court in the country which has to deal with an application by a foreign parent for appointment of himself as guardian of a child with a view to its eventual adoption We shall discuss this matter a little more in detail when we proceed to consider what principles and norms should be laid down for inter country adoption, but, in the meanwhile, proceeding further with the narration of the procedure followed by the courts in Bombay, Delhi and Gujarat, we may point out that when notice is issued by the court, the Indian Council of Social Welfare or the Indian Council for Child Welfare or any other recognised social welfare agency to which notice is issued, prepares what may conveniently be described as a child study report and submits it to the Court for its consideration. What are the different aspects relating to the child in respect of which the child study report should give information is a matter which we shall presently discuss, but suffice it to state for the time 829 being that the child study report should contain legal and social data in regard to the child as also an assessment of its behavioural pattern and its intellectual, emotional and physical development. The Indian Council of Social Welfare has evolved a standardised form of the child study report and it has been annexed as exhibit 'C ' to the reply filed in answer to the notice issued by the Court. Ordinarily an adoption proposal from a foreign parent is sponsored by a social or child welfare agency recognised or licensed by the Government of the country in which the foreign parents resides and the application of the foreign parent for appointment as guardian of the child is accompanied by a home study report prepared by such social or child welfare agency. The home study report contains an assessment of the fitness and suitability of the foreign parent for taking the child in adoption based on his antecedents, family background, financial condition, psychological and emotional adaptability and the capacity to look after the child after adoption despite racial, national and cultural differences. The Indian Council of Social Welfare has set out in annexure 'B ' to the reply filed by it, guidelines for the preparation of the home study report in regard to the foreign parent wishing to take a child in adoption, and it is obvious from these guidlines which we shall discuss a little later, that the home study report is intended to provide social and legal facts in regard to the foreign parent with a view to assisting the court in arriving at a proper determination of the question whether it will be in the interest of the child to be given in adoption to such foreign parent. The court thus has in most cases where an application is made by a foreign parent for being appointed guardian of a child in the courts in Bombay, Delhi and Gujarat, the child study report as well as the home study report together with other relevant material in order to enable it to decide whether it will be for the welfare of the child to be allowed to be adopted by the foreign parents and if on a consideration of these reports and material, the court comes to the conclusion that it will be for the welfare of the child, the court makes an order appointing the foreign parent as guardian of the child with liberty to him to take the child to his own country with a view to its eventual adoption. Since adoption in a foreign country is bound to take some time and till then the child would continue to be under the guardianship of the foreign parent by virtue of the order made by the court, the foreign parent as guardian would continue to be accountable to the court for the welfare of the child and the court therefore takes a bond from him with or without surety or sureties in such sum as may be thought for ensuring its production if and when required by the court. 830 The foreign parent then takes the child to his own country either personally or through an escort and the child is then adopted by the foreign parent according to the law of his country and on such adoption, the child acquires the same status as a natural born child with the same rights of inheritance and succession as also the same nationality as the foreign parent adopting it. This is broadly the procedure which is followed in the courts in Bombay, Delhi and Gujarat and there can be no doubt that, by and large, this procedure tends to ensure the welfare of the child, but even so, there are several aspects of procedure and detail which need to be considered in order to make sure that the child is placed in the right family where it will be able to grow into full maturity of its personality with moral and material security and in an atmosphere of love and warmth and it would not be subjected to neglect, maltreatment or exploitation. Now one thing is certain that in the absence of a law providing for adoption of an Indian child by a foreign parent, the only way in which such adoption can be effectuated is by making it in accordance with the law of the country in which the foreign parent resides. But in order to enable such adoption to be made in the country of the foreign parent, it would be necessary for the foreign parent to take the child to his own country where the procedure for making the adoption in accordance with the law of that country can be followed. However, the child which is an Indian national cannot be allowed to be removed out of India by the foreign parent unless the foreign parent is appointed guardian of the person of the child by the Court and is permitted by the Court to take the child to his own country under the provisions of the . Today, therefore, as the law stands, the only way in which a foreign parents can take an Indian child in adoption is by making an application to the Court in which the child ordinarily resides for being appointed guardian of the person of the child with leave to remove the child out of India and take it to his own country for the purpose of adopting it in accordance with the law of his country. We are definitely of the view that such inter country adoption should be permitted after exhausting the possibility of adoption within the country by Indian parents. It has been the experience of a large number of social welfare agencies working in the area of adoption that, by and large, Indian parents are not enthusiastic about taking a stranger child in adoption and even if they decide to take such child in adoption, they prefer to adopt a boy rather than a girl and they are wholly averse to adopting a handicapped child, with the result that the majority of abandoned, destitute or orphan girls and 831 handicapped children have very little possibility of finding adoptive parents within the country and their future lies only in adoption by foreign parents. But at the same time it is necessary to bear in mind that by reason of the unavailability of children in the developed countries for adoption, there is a great demand for adoption of children from India and consequently there is increasing danger of ill equipped and sometimes even undesirable organisations or individuals activising themselves in the field of inter country adoption with a view to trafficking in children and sometimes it may also happen that the immediate prospect of transporting the child from neglect and abandonment to material comfort and security by placing it with a foreigner may lead to other relevant factors such as the intangible needs of the child, its emotional and psychological requirements and possible difficulty of its assimilation and integration in a foreign family with a different racial and cultural background, being under emphasized, if not ignored. It is therefore necessary to evolve normative and procedural safeguards for ensuring that the child goes into the right family which would provide it warmth and affection of family life and help it to grow and develop physically, emotionally, intellectually and spiritually. These safeguards we now proceed to examine. We may make it clear at the outset that we are not concerned here with cases of adoption of children living with their biological parents, for in such class of cases, the biological parents would be the best persons to decide whether to give their child in adoption to foreign parents. It is only in those cases where the children sought to be taken in adoption are destitute or abandoned and are living in social or child welfare centres that it is necessary to consider what normative and procedural safeguards should be forged for protecting their interest and promoting their welfare. Let us first consider what are the requirements which should be insisted upon so far ar a foreigner whishing to take a child in adoption is concerned In the first place, every application from a foreigner desiring to adopt a child must be sponsored by a social or child welfare agency recognised or licensed by the government of the country in which the foreigner is resident. No application by a foreigner for taking a child in adoption should be entertained directly by any social or welfare agency in India working in the area of inter country adoption or by any institution or centre or home to which children are committed by the juvenile court. This is essential primarily for three reasons. 832 Firstly, it will help to reduce, if not eliminate altogether the possibility of profiteering and trafficking in children, because if a foreigner were allowed to contact directly agencies or individuals in India for the purpose of obtaining a child in adoption, he might in his anxiety to secure a child for adoption, be induced or persuaded to pay any unconscionable or unreasonable amount which might be demanded by the agency or individual procuring the child. Secondly it would be almost impossible for the court to satisfy itself that the foreigner who wishes to take the child in adoption would be suitable as a parent for the child and whether he would be able to provide a stable and secure family life to the child and would be able to handle trans racial, trans cultural and trans national problems likely to arise from such adoption, because, where the application for adopting a child has not been sponsored by a social or child welfare agency in the country of the foreigner, there would be no proper and satisfactory home study report on which the court can rely. Thirdly, in such a case, where the application of a foreigner for taking a child in adoption is made directly without the intervention of a social or child welfare agency, there would be no authority or agency in the country of the foreigner who could be made responsible for supervising the progress of the child and ensuring that the child is adopted at the earliest in accordance with law and grows up in an atmosphere of warmth and affection with moral and material security assured to it. The record shows that in every foreign country where children from India are taken in adoption, there are social and child welfare agencies licensed or recognised by the government and it would not therefore cause any difficulty hardship or inconvenience if it is insisted that every application from a foreigner for taking a child in adoption must be sponsored by a social or child welfare agency licensed or recognised or recognised by the government of the country in which the foreigner resides. It is not necessary that there should be only one social or child welfare agency in the foreign country through which an application for adoption of a child may be routed; there may be more than one such social or child welfare agencies, but every such social or child welfare agency must be licensed or recognised by the government of the foreign country and the court should not make an order for appointment of a foreigner as guardian unless it is satisfied that the application of the foreigner for adopting a child has been sponsored by such social or child welfare agency. The social or child welfare agency which sponsors the application for taking a child in adoption must get a home study report prepared by a professional 833 worker indicating the basis on which the application of the foreigner for adopting a child has been sponsored by it. The home study report should broadly include information in regard to the various matters set out in Annexure 'A ' to this judgment though it need not strictly adhere to the requirements of that Annexure and it should also contain an assessment by the social or child welfare agency as to whether the foreigner wishing to take a child in adoption is fit and suitable and has the capacity to parent a child coming from a different racial and cultural milieu and whether the child will be able to fit into the environment of the adoptive family and the community in which it lives. Every application of a foreigner for taking a child in adoption must be accompanied by a home study report and the social or child welfare agency sponsoring such application should also send along with it a recent photograph of the family, a marriage certificate of the foreigner and his or her spouse as also a declaration concerning their health together with a certificate regarding their medical fitness duly certificate by a medical doctor, a declaration regarding their financial status alongwith supporting documents including employer 's certificate where applicable, income tax assessment orders, bank references and particulars concerning the properties owned by them, and also a declaration stating that they are willing to be appointed guardian of the child and undertaking that they would adopt the child according to the law of their country within a period of not more than two years from the time of arrival of the child in their country and give intimation of such adoption to the court appointing them as guardian as also to the social or child welfare agency in India processing their case, they would maintain the child and provide it necessary education and up bringing according to their status and they would also send to the court as also to the social or child welfare agency in India reports relating to the progress of the child alongwith its recent photograph, the frequency of such progress reports being quarterly during the first two years and half yearly for the next three years. The application of the foreigner must also be accompanied by a Power of Attorney in favour of an Officer of the social or child welfare agency in India which is requested to process the case and such Power of Attorney should authorise the Attorney to handle the case on behalf of the foreigner in case the foreigner is not in a position to come to India. The social or child welfare agency sponsoring the application of the foreigner must also certify that the foreigner seeking to adopt a child is permitted to do so according to the law of his country. These certificates, declarations and documents which must accompany the application of the foreig 834 ner for taking a child in adoption, should be duly notarised by a Notary Public whose signature should be duly attested either by an Officer of the Ministry of External Affairs or Justice or Social Welfare of the country of the foreigner or by an Officer of the Indian Embassy or High Commission or Consulate in that country. The social or child welfare agency sponsoring the application of the foreigner must also undertake while forwarding the application to the social or child welfare agency in India, that it will ensure adoption of the child by the foreigner according to the law of his country within a period not exceeding two years and as soon as the adoption is effected, it will send two certified copies of the adoption order to the social or child welfare agency in India through which the application for guardianship is processed, so that one copy can be filed in court and the other can remain with the social or child welfare agency in India. The social or child welfare agency sponsoring the application must also agree to send to the concerned social or child welfare agency in India progress reports in regard to the child, quarterly during the first year and half yearly for the subsequent year or years until the adoption is effected, and it must also undertake that in case of disruption of the family of the foreigner before adoption can be effected, it will take care of the child and find a suitable alternative placement for it with the approval of the concerned social or child welfare agency in India and report such alternative placement to the court handling the guardianship proceedings and such information shall be passed on both by the court as also by the concerned social or child welfare agency in India to the Secretary, Ministry of Social Welfare, Government of India. The Government of India shall prepare a list of social or child welfare agencies licensed or recognised for inter country adoption by the government of each foreign country where children from India are taken in adoption and this list shall be prepared after getting the necessary information from the government of each such foreign country and the Indian Diplomatic Mission in that foreign country. We may point out that the Swedish Embassy has in Annexure II to the affidavit filed on its behalf by Ulf Waltre, given names of seven Swedish organisations or agencies which are authorised by the National Board for Inter Country Adoption functioning under the Swedish Ministry of Social Affairs to "mediate" applications for adoption by Swedish nationals and the Indian Council of Social Welfare has also in the reply filed by it in answer to the writ petition given a list of government recognised organisations or agencies dealing in inter country adoption in foreign countries. It should not therefore be difficult for the Government of India to prepare a list 835 of social or child welfare agencies licensed or recognised for intercountry adoption by the Government in various foreign countries. We direct the Government of India to prepare such list within six months from today and copies of such list shall be supplied by the Government of India to the various High Courts in India as also to the social or child welfare agencies operating in India in the area of inter country adoption under licence or recognition from the Government of India. We may of course make it clear that application of foreigners for appointment of themselves as guardians of children in India with a view to their eventual adoption shall not be held up until such list is prepared by the Government of India but they shall be processed and disposed of in the light of the principles and norms laid down in this judgment. We then proceed to consider the position in regard to biological parents of the child proposed to be taken in adoption. What are the safeguards which are required to be provided in so far as biological parents are concerned ? We may make it clear at the outset that when we talk about biological parents, we mean both parents if they are together of the mother or the father if either is alone. Now it should be regarded as an elementary requirement that if the biological parents are known, they should be properly assisted in making a decision about relinquishing the child for adoption, by the Institution or centre or Home for Child Care or social or child welfare agency to which the child is being surrendered. Before a decision is taken by the biological parents to surrender the child for adoption, they should be helped to understand all the implications of adoptions including the possibility of adoption by a foreigner and they should be told specifically that in case the child is adopted, it would not be possible for them to have any further contact with the child. The biological parents should not be subjected to any duress in making a decision about relinquishment and even after they have taken a decision to relinquish the child for giving in adoption, a further period of about three months should be allowed to them to reconsider their decision. But once the decision is taken and not reconsidered within such further time as may be allowed to them, it must be regarded as irrevocable and the procedure for giving the child in adoption to a foreigner can then be initiated without any further reference to the biological parents by filing an application for appointment of the foreigner as guardian of the child. Thereafter there can be no question of once again consulting the biological parents whether they wish to give the child in adoption or they want to take it back. It would be most unfair if after a 836 child is approved by a foreigner and expenses are incurred by him for the purpose of maintenance of the child and some times on medical assistance and even hospitalisation for the child, the biological parents were once again to be consulted for giving them a locus penitential to reconsider their decision. But in order to eliminate any possibility of mischief and to make sure that the child has in fact been surrendered by its biological parents, it is necessary that the Institution or Centre or Home for Child Care or social or child welfare agency to which the child is surrendered by the biological parents, should take from the biological parents a document of surrender duly signed by the biological parents and attested by at least two responsible persons and such document of surrender should not only contain the names of the biological parents and their address but also information in regard to the birth of the child and its background, health and development. If the biological parents state a preference for the religious upbringing of the child, their wish should as far as possible be respected, but ultimately the interest of the child alone should be the sole guiding factor and the biological parents should be informed that the child may be given in adoption even to a foreigner who professes a religion different from that of the biological parents. This procedure can and must be followed where the biological parents are known and they relinquish the child for adoption to an Institution or Centre or Home for Child Care or hospital or social or child welfare agency. But where the child is an orphan, destitute or abandoned child and its parents are not known, the Institution or Centre or Home for Child Care or hospital or social or child welfare agency in whose care the child has come, must try to trace the biological parents of the child and if the biological parents can be traced and it is found that they do not want to take back the child, then the same procedure as outlined above should as far as possible be followed. But if for any reason the biological parents cannot be traced, then there can be no question of taking their consent or consulting them. It may also be pointed out that the biological parents should not be induced or encouraged or even be permitted to take a decision in regard to giving of a child in adoption before the birth of the child of within a period of three months from the date of birth. This precaution is necessary because the biological parents must have reasonable time after the birth of the child to take a decision whether to rear up the child themselves or to relinquish it for adoption and moreover it may be necessary to allow some time to the child to overcome any health problems experienced after birth. 837 We may now turn to consider the safeguards which should be observed in so far as the child proposed to be taken in adoption is concerned. It was generally agreed by all parties appearing before the Court, whether as interveners or otherwise, that it should not be open to any and every agency or individual to process an application from a foreigner for taking a child in adoption and such application should be processed only through a social or child welfare agency licensed or recognised by the Government of India or the Government of the State in which it is operating, or to put it differently in the language used by the Indian Council of Social Welfare in the reply filed by it in answer to the writ petition, "all private adoptions conducted by unauthorised individuals or agencies should be stopped". The Indian Council of Social Welfare and the Indian Council for Child Welfare are clearly two social or child welfare agencies operating at the national level and recognised by the Government of India, as appears clearly from the letter dated 23rd August, 1980 addressed by the Deputy Secretary to the Government of India to the Secretary, Government of Kerela, Law Department, Annexure 'F ' to the submissions filed by the Indian Council for Child Welfare in response to the writ petition. But apart from these two recognised social or child welfare agencies functioning at the national level, there are other social or child welfare agencies engaged in child care and welfare and if they have good standing and reputation and are doing commendable work in the area of child care and welfare, there is no reason why they should not be recognised by the Government of India or the Government of a State for the purpose of inter country adoptions. We would direct the Government of India to consider and decide within a period of three months from today whether any of the institutions or agencies which have appeared as interveners in the present writ petition are engaged in child care and welfare and if so, whether they deserve to be recognised for inter country adoptions. Of course it would be open to the Government of India or the Government of a State suo motu or on an application made to it to recognise any other social or child welfare agency for the purpose of inter country adoptions, provided such social or child welfare agency enjoys good reputation and is known for its work in the field of child care and welfare. We would suggest that before taking a decision to recognise any particular social or child welfare agency for the purpose of intercountry adoptions, the Government of India or the Government of a State would do well to examine whether the social or child welfare agency has proper staff with professional social work experience, because otherwise it may not be possible for the social or child wel 838 fare agency to carry out satisfactorily the highly responsible task of ensuring proper placement of a child with a foreign adoptive family. It would also be desirable not to recognise an organisation or agency which has been set up only for the purpose of placing children in adoption: it is only an organisation or agency which is engaged in the work of child care and welfare which should be regarded as eligible for recognition, since inter country adoption must be looked upon not as an independent activity by itself, but as part of child welfare programme so that it may not tend to degenerate into trading. The Government of India or the Government of a State recognising any social or child welfare agency for inter country adoptions must insist as a condition of recognition that the social or child welfare agency shall maintain proper accounts which shall be audited by a chartered accountant at the end of every year and it shall not charge to the foreigner wishing to adopt a child any amount in excess of that actually incurred by way of legal or other expenses in connection with the application for appointment of guardian including such reasonable remuneration or honorarium for the work done and trouble taken in processing, filing and pursuing the application as may be fixed by the Court. Situations may frequently arise where a child may be in the care of a child welfare institution or centre or social or child welfare agency which has not been recognised by the Government. Since an application for appointment as guardian can, according to the principles and norms laid down by us, be processed only by a recognised social or child welfare agency and none else, any unrecognised institution, centre or agency which has a child under its care would have to approach a recognised social or child welfare agency if it desires such child to be given in inter country adoption, and in that event it must send without any undue delay the name and particulars of such child to the recognised social or child welfare agency through which such child is proposed to be given in inter country adoption. Every recognised social or child welfare agency must maintain a register in which the names and particulars of all children proposed to be given in inter country adoption through it must be entered and in regard to each such child, the recognised social or child welfare agency must prepare a child study report through a professional social worker giving all relevant information in regard to the child so as to help the foreigner to come to a decision whether or not to adopt the child and to understand the child, if he decides to adopt it as also to assist the court in coming to a decision whether it will be for the welfare of the child to be given in adoption to the 839 foreigner wishing to adopt it. The child study report should contain as far as possible information in regard to the following matters: "(1) Identifying information, supported where possible by documents. (2) Information about original parents, including their health and details of the mother 's pregnancy and birth. (3) Physical, intellectual and emotional development. (4) Health report prepared by a registered medical practitioner preferably by a paediatrician. (5) Recent photograph. (6) Present environment category of care (Own home, foster home, institution etc.) relationships, routines and habits. (7) Social worker 's assessment and reasons for suggesting inter country adoption. " The government of India should, with the assistance of the Government of the States, prepare a list of recognised social or child welfare agencies with their names, addresses and other particulars and send such list to the appropriate department of the Government of each foreign country where Indian children are ordinarily taken in adoption so that the social or child welfare agencies licensed or recognised by the Government of such foreign country for intercountry adoptions, would know which social or child welfare agency in India they should approach for processing an application of its national for taking an Indian child in adoption. Such list shall also be sent by the Government of India to each High Court with a request to forward it to the district courts within its jurisdiction so that the High Courts and the district courts in the country would know which are the recognised social or child welfare agencies entitled to process an application for appointment of a foreigner as guardian. Of course, it would be desirable if a Central Adoption Resource Agency is set up by the Government of India with regional branches at a few centres which are active in inter country 840 adoptions. Such Central Adoption Resource Agency can act as a clearing house of information in regard to children available for inter country adoption and all applications by foreigners for taking Indian children in adoption can then be forwarded by the social or child welfare agency in the foreign country to such Central Adoption Resource Agency and the latter can in its turn forward them to one or the other of the recognised social or child welfare agencies in the country. Every social or child welfare agency taking children under its care can then be required to send to such Central Adoption Resource Agency the names and particulars of children under its care who are available for adoption and the names and particulars of such children can be entered in a register to be maintained by such Central Adoption Resource Agency. But until such Central Adoption Resource Agency is set up, an application of a foreigner for taking an Indian child in adoption must be routed through a recognised social or child welfare agency. Now before any such application from a foreigner is considered, every effort must be made by the recognised social or child welfare agency to find placement for the child by adoption in an Indian family. Whenever any Indian family approaches a recognised social or child welfare agency for taking a child in adoption, all facilities must be provided by such social or child welfare agency to the Indian family to have a look at the children available with it for adopt on and if the Indian family wants to see the child study report in respect of any particular child, child study report must also be made available to the Indian family in order to enable the Indian family to decide whether they would take the child in adoption. It is only if no Indian family comes forward to take a child in adoption within a maximum period of two months that the child may be regarded as available for inter country adoption, subject only to one exception, namely, that if the child is handicapped or is in bad state of health needing urgent medical attention, which is not possible for the social or child welfare agency looking after the child to provide, the recognised social or child welfare agency need not wait for a period of two months and it can and must take immediate steps for the purpose of giving such child in inter country adoption. The recognised social or child welfare agency should, on receiving an application of a foreigner for adoption through a licensed or recognised social or child welfare agency in a foreign country, consider which child would be suitable for being given in adoption to the foreigner and would fit into the environment of his family and community and send the photograph and child study report of such child to the foreigner for the purpose of obtaining his 841 approval to the adoption of such child. The practice of accepting a general approval of the foreigner to adopt any child should not be allowed, because it is possible that if the foreigner has not seen the photograph of the child and has not studied the child study report and a child is selected for him by the recognised social or child welfare agency in India on the basis of his general approval, he may on the arrival of the child in his country find that he does not like the child or that the child is not suitable in which event the interest of the child would be seriously prejudiced. The recognised social or child welfare agency must therefore insist upon approval of a specific known child and once that approval is obtained, the recognised social or child welfare agency should immediately without any undue delay proceed to make an application for appointment of the foreigner as guardian of the child. Such application would have to be made in the court within whose jurisdiction the child ordinarily resides and it must be accompanied by copies of the home study report, the child study report and other certificates and documents forwarded by the social or child welfare agency sponsoring the application of the foreigner for taking the child in adoption. Before we proceed to consider what procedure should be followed by the court in dealing with an application for appointment of a foreigner as guardian of a child, we may deal with a point of doubt which was raised before us, namely, whether the social or child welfare agency which is looking after the child should be entitled to receive from the foreigner wishing to take the child in adoption any amount in respect of maintenance of the child or its medical expenses. We were told that there are instances where large amounts are demanded by so called social or child welfare agencies or individuals in consideration of giving a child in adoption and often this is done under the label of maintenance charges and medical expenses supposed to have been incurred for the child. This is a pernicious practice which is really nothing short of trafficking in children and it is absolutely necessary to put an end to it by introducing adequate safeguards. There can be no doubt that if an application of a foreigner for taking a child in adoption is required to be routed through a recognised social or child welfare agency and the necessary steps for the purpose of securing appointment of the foreigner as guardian of the child have also to be taken only through a recognised social or child welfare agency, the possibility of any so called social or child welfare agency or individual trafficking in children by demanding exorbitant amounts from prospective adoptive parents under the guise of maintenance charges and medical expenses or 842 otherwise, would be almost eliminated. But, at the same time, it would not be fair to suggest that the social or child welfare agency which is looking after the child should not be entitled to receive any amount from the prospective adoptive parent, when maintenance and medical expenses in connection with the child are actually incurred by such social or child welfare agency. Many of the social or child welfare agencies running homes for children have little financial resources of their own and have to depend largely on voluntary donations and therefore if any maintenance or medical expenses are incurred by them on a child, there is no reason why they should not be entitled to receive reimbursement of such maintenance and medical expenses from the foreigner taking the child in adoption. We would therefore direct that the social or child welfare agency which is looking after the child selected by a prospective adoptive parent, may legitimately receive from such prospective adoptive parent maintenance expenses at a rate not exceeding Rs. 60 per day (this outer limit being subject to revision by the Ministry of Social Welfare, Government of India from time to time) from the date of selection of the child by him until the date the child leaves for going to its new home as also medical expenses including hospitalisation charges, if any, actually incurred by such social or child welfare agency for the child. But the claim for payment of such maintenance charges and medical expenses shall be submitted to the prospective adoptive parent through the recognised social or child welfare agency which has processed the application for guardianship and payment in respect of such claim shall not be received directly by the social or child welfare agency making the claim but shall be paid only through the recognised social or child welfare agency. This procedure will to a large extent eliminate trafficking in children for money or benefits in kind and we would therefore direct that this procedure shall be followed in the future. But while giving this direction, we may make it clear that what we have said should not be interpreted as in any way preventing a foreigner from making voluntary donation to any social or child welfare agency but no such donation from a prospective adoptive parent shall be received until after the child has reached the country of its prospective adoptive parent. It is also necessary to point out that the recognised social or child welfare agency through which an application of a foreigner for taking a child in adoption is routed must, before offering a child in adoption, make sure that the child is free to be adopted. Where the parents have relinquished the child for adoption and there is a docu 843 ment of surrender, the child must obviously be taken to be free for adoption. So also where a child is an orphan or destitute or abandoned child and it has not been possible by the concerned social or child welfare agency to trace its parents or where the child is committed by a juvenile court to an institution, centre or home for committed children and is declared to be a destitute by the juvenile court, it must be regarded as free for adoption. The recognised social or child welfare agency must place sufficient material before the court to satisfy it that the child is legally available for the adoption. It is also necessary that the recognised welfare agency must satisfy itself, firstly, that there is no impediment in the way of the child entering the country of the prospective adoptive parent; secondly, that the travel documents for the child can be obtained at the appropriate time and lastly, that the law of the country of the prospective adoptive parent permits legal adoption of the child and that no such legal adoption being concluded, the child would acquire the same legal status and rights of inheritance as a natural born child and would be granted citizenship in the country of adoption and it should file along with the application for guardianship, a certificate reciting such satisfaction. We may also at this stage refer to one other question that was raised before us, namely, whether a child under the care of a social or child welfare agency or hospital or orphanage in one State can be brought to another State by a social or child welfare agency for the purpose of being given in adoption and an application for appointment of a guardian of such child can be made in the court of the latter State. This question was debated before us in view of the judgment given by Justice Lentin of the Bombay High Court of 22nd July, 1982 in Miscellaneous Petition No. 178 of 1982 and other allied petitions. We agree with Justice Lentin that the practice of social or child welfare agencies or individuals going to different States for the purpose of collecting children for being given in inter country adoption is likely to lead to considerable abuse, because it is possible that such social or child welfare agencies or individuals may, by offering monetary inducement, persuade indigent parents to part with their children and then give the children to foreigners in adoption by demanding a higher price, which the foreigners in their anxiety to secure a child for adoption may be willing to pay. But we do not think that if a child is relinquished by its biological parents or is an orphan or destitute or abandoned child in its parent State, there should be any objection to a social or child welfare agency taking the child to another State, even if 844 the object be to give it in adoption, provided there are sufficient safeguards to ensure that such social or child welfare agency does not indulge in any malpractice. Since we are directing that every application of a foreigner for taking a child in adoption shall be routed only through a recognised social or child welfare agency and an application for appointment of the foreigner as guardian of the child shall be made to the court only through such recognised social or child welfare agency, there would hardly be any scope for a social or child welfare agency or individual who brings a child from another State for the purpose of being given in adoption to indulge in trafficking and such a possibility would be reduced to almost nil. Moreover before proposing a child for adoption, the recognised social or child welfare agency must satisfy itself that the child has either been voluntarily relinquished by its biological parents without monetary inducement or is an orphan or destitute or abandoned child and for this purpose, the recognised social or child welfare agency may require the agency or individual who has the care and custody of the child to state on oath as to how he came by the child and may also, if it thinks fit, verify such statement, by directly enquiring from the biological parents or from the child care centre or hospital or orphanage from which the child is taken. This will considerably reduce the possibility of abuse while at the same time facilitating placement of children deprived of family love and care in smaller towns and rural areas. We do not see any reason why in cases of this kind where a child relinquished by its biological parents or an orphan or destitute or abandoned child is brought by an agency or individual from one State to another, it should not be possible to apply for guardianship of the child in the court of the latter State, because the child not having any permanent place of residence, would then be ordinarily resident in the place where it is in the care and custody of such agency or individual. But quite apart from such cases, we are of the view that in all cases where a child is proposed to be given in adoption, enquiries regarding biological parents, whether they are traceable or not and if traceable, whether they have voluntarily relinquished the child and if not, whether they wish to take the child back, should be completed before the child is offered for adoption and thereafter no attempt should be made to trace or contact the biological parents. This would obviate the possibility of an ugly and unpleasant situation of biological parents coming forward to claim the child after it has been given to a foreigner in adoption. It is also necessary while considering placement of a child in adoption to bear in mind that brothers and sisters or children who have 845 been brought up as siblings should not be separated except for special reasons and as soon as a decision to give a child in adoption to a foreigner is finalised, the recognised social or child welfare agency must if the child has reached the age of understanding, take steps to ensure that the child is given proper orientation and is prepared for going to its new home in a new country so that the assimilation of the child to the new environment is facilitated. We must emphasize strongly that the entire procedure which we have indicated above including preparation of child study report, making of necessary enquiries and taking of requisite steps leading upto the filing of an application for guardianship of the child proposed to be given in adoption, must be completed expeditiously so that the child does not have to remain in the care and custody of a social or child welfare agency without the warmth and affection of family life, longer than is absolutely necessary. We may also point out that if a child is to be given in intercountry adoption, it would be desirable that it is given in such adoption as far as possible before it completes the age of 3 years. The reason is that if a child is adopted before it attains the age of understanding, it is always easier for it to get assimilated and integrated in the new environment in which it may find itself on being adopted by a foreign parent. Comparatively it may be some what difficult for a grown up child to get acclimatized to new surroundings in a different land and some times a problem may also arise whether foreign adoptive parents would be able to win the love and affection of such grown up child. But we make it clear that we say this, we do not wish to suggest for a moment that children above the age of three years should not be given in inter country adoption. There can be no hard and fast rule in this connection. Even children between the ages of 3 and 7 years may be able to assimilate themselves in the new surroundings without any difficulty and there is no reason why they should be denied the benefit of family warmth and affection in the home of foreign parents, merely because they are past the age of 3 years. We would suggest that even children above the age of 7 years may be given in inter country adoption but we would recommend that in such cases, their wishes may be ascertained if they are in a position to indicate any preference. The statistics placed before us show that even children past the age of 7 years have been happily integrated in the family of their foreign adoptive parents. 846 Lastly, we come to the procedure to be followed by the court when an application for guardianship of a child is made to it. Section 11 of the provides for notice of the application to be issued to various persons including the parents of the child if they are residing in any State to which the Act extends. But, we are definitely of the view that no notice under this section should be issued to the biological parents of the child, since it would create considerable amount of embarrassment and hard ship if the biological parents were then to come forward and oppose the application of the prospective adoptive parent for guardianship of the child. Moreover, the biological parents would then come to know who is the person taking the child in adoption and with this knowledge they would at any time be able to trace the whereabouts of the child and they may try to contact the child resulting in emotional and psychological disturbance for the child which might affect his future happiness. The possibility also cannot be ruled out that if the biological parents know who are the adoptive parents they may try to extort money from the adoptive parents. It is therefore absolutely essential that the biological parents should not have any opportunity of knowing who are the adoptive parents taking the child in adoption and therefore notice of the application for guardianship should not be given to the biological parents. We would direct that for the same reasons notice of the application for guardianship should also not be published in any newspaper. Section 11 of the Act empowers the court to serve notice of the application for guardianship on any other person to whom, in the opinion of the court, special notice of the application should be given and in exercise of this power the court should, before entertaining an application for guardianship, give notice to the Indian Council of Child Welfare or the Indian Council for Social Welfare or any of its branches for scrutiny of the application with a view to ensuring that it will be for the welfare of the child to be given in adoption to the foreigner making the application for guardianship. The Indian Council of Social Welfare of the Indian Council of Child Welfare to which notice is issued by the court would have to scrutinise the application for guardianship made on behalf of the foreigner wishing to take the child in adoption and after examining the home study report, the child study report as also documents and certificates forwarded by the sponsoring social or child welfare agency and making necessary enquiries, it must make its representation to the court so that the court may be able to satisfy itself whether the principles and norms as also the procedure laid down by us in this judgment have been observed and followed, whether the foreigner 847 will be a suitable adoptive parent for the child and the child will be able to integrate and assimilate itself in the family and community of the foreigner and will be able to get warmth and affection of family life as also moral and material stability and security and whether it will be in the interest of the child to be taken in adoption by the foreigner. If the court is satisfied, then and then only it will make an order appointing the foreigner as guardian of the child and permitting him to remove the child to his own country with a view to eventual adoption. The court will also introduce a condition in the order that the foreigner who is appointed guardian shall make proper provision by way of deposit or bond or otherwise to enable the child to be repatriated to India should it become necessary for and reason. We may point out that such a provision is to be found in clause 24 of the Adoption of Children Bill No. 208 of 1980 and in fact the practice of taking a bond from the foreigner who is appointed guardian of the child is being followed by the courts in Delhi as a result of practice instructions issued by the High Court of Delhi. The order will also include a condition that the foreigner who is appointed guardian shall submit to the Court as also to the Social or Child Welfare Agency processing the application for guardianship, progress reports of the child along with a recent photograph quarterly during the first two years and half yearly for the next three years. The court may also while making the order permit the social or child welfare agency which has taken care of the child pending its selection for adoption to receive such amount as the Court thinks fit from the foreigner who is appointed guardian of such child. The order appointing guardian shall carry, attached to it, a photograph of the child duly counter signed by an officer of the court. This entire procedure shall be completed by the court expediticusly and as far as possible within a period of two months from the date of filing of the application for guardianship of the child. The proceedings on the application for guardianship should be held by the Court in camera and they should be regarded as confidential and as soon as an order is made on the application for guardianship the entire proceedings including the papers and documents should be sealed. When an order appointing guardian of a child is made by the court, immediate intimation of the same shall be given to the Ministry of Social Welfare, Government of India as also to the Ministry of Social Welfare of the Government of the State in which the court is situate and copies of such order shall also be forwarded to the two respective ministries of Social Welfare. The Ministry of Social Welfare, Government of India shall maintain a register containing names and other particulars of the children in 848 respect of whom orders for appointment of guardian have been made as also names, addresses and other particulars of the prospective adoptive parents who have been appointed such guardians and who have been permitted to take away the children for the purpose of adoption. The Government of India will also send to the Indian Embassy or High Commission in the country of the prospective adoptive parents from time to time the names, addresses and other particulars of such prospective adoptive parents together with particulars of the children taken by them and requesting the Embassy or High Commission to maintain an unobtrusive watch over the welfare and progress of such children in order to safeguard against any possible maltreatment, exploitation or use for ulterior purposes and to immediately report any instance of maltreatment, negligence or exploitation to the Government of India for suitable action. We may add even at the cost of repetition that the biological parents of a child taken in adoption should not under any circumstances be able to know who are the adoptive parents of the child nor should they have any access to the home study report or the child study report or the other papers and proceedings in the application for guardianship of the child. The foreign parents who have taken a child in adoption would normally have the child study report with them before they select the child for adoption and in case they do not have the child study report, the same should be supplied to them by the recognised social or child welfare agency processing the application for guardianship and from the child study report, they would be able to gather information as to who are the biological parents of the child, if the biological parents are known. There can be no objection in furnishing to the foreign adoptive parents particulars in regard to the biological parents of the child taken in adoption, but it should be made clear that it would be entirely at the discretion of the foreign adoptive parents whether and if so when, to inform the child about its biological parents. Once a child is taken in adoption by a foreigner and the child grows up in the surroundings of the country of adoption and becomes a part of the society of that country, it may not be desirable to give information to the child about its biological parents whilst it is young, as that might have the effect of exciting his curiosity to meet its biological parents resulting in unsettling effect on its mind. But if after attaining the age of maturity, the child wants to know about its biological parents, there may not be any serious objection to the giving of such information to the child because after the child attains maturity, it is not likely to be easily affected by such information and in such a 849 case, the foreign adoptive parents may, in exercise of their discretion, furnish such information to the child if they so think fit. These are the principles and norms which must be observed and the procedure which must be followed in giving a child in adoption to foreign parents. If these principles and norms are observed and this procedure is followed, we have no doubt that the abuses to which inter country adoptions, if allowed without any safeguards, may lend themselves would be considerably reduced, if not eliminated and the welfare of the child would be protected and it would be able to find a new home where it can grow in an atmosphere of warmth and affection of family life with full opportunities for physical intellectual and spiritual development. We may point out that the adoption of children by foreign parents need not wait until social or child welfare agencies are recognised by the Government as directed in this order, but pending recognition of social or child welfare agencies for the purpose of inter country adoptions, which interregnum, we hope, will not last for a period of more than two months, any social or child welfare agency having the care and custody of a child may be permitted to process an application of a foreigner, but barring this departure the rest of the procedure laid down by us shall be followed wholly and the principles and norms enunciated by us in this Judgment shall be observed in giving a child in inter country adoption. The writ petition shall stand disposed of in these terms. Copies of this order shall be sent immediately to the Ministry of Social Welfare of the Government of India and the Ministry of Social Welfare of each of the State Governments as also to all the High Courts in the country and to the Indian Council of Social Welfare and the Indian Council of Child Welfare. We would direct that copies of this Order shall also be supplied to the Embassies and Diplomatic Missions of Norway, Sweden, France, Federal Republic of Germany and the United States of America and the High Commissions of Canada and Australia for their informations since the statistics show that these are the countries where Indian children are taken in adoption. S.R. 850 ANNEXURE 'A ' 1. Source of Referral. Number of single and joint interviews. Personality of husband and wife. Health details such as clinical tests, heart condition, past illnesses etc. (medical certificates required, sterility certificate required, if applicable), 5. Social status and family background. Nature and Adjustment with occupation. Relationship with community. Description of home. Accommodation for the child. Schooling facilities. Amenities in the home. Standard of living as it appears in the home. Type of neighbourhood. Current relationship between husband and wife. (a) Current relationship between parents and children (if any children). (b) Development of already adopted children (if any) and their acceptance of the child to be adopted. Current relationship between the couple and the members of each other 's families. 851 17. If the wife is working, will she be able to give up the job ? 18. If she cannot leave the job, what arrangements will she make to look after the child ? 19. Is adoption considered because of sterility of one of the maritial partners ? 20. If not, can they eventually have children of their own ? 21. If a child is born to them, how will they treat the adopted child ? 22. If the couple already has children how will these children react to an adopted child ? 23. Important social and psychological experiences which have had a bearing on their desire to adopt a child. Reasons for wanting to adopt an Indian child. Attitude of grand parents and relatives towards the adoption. Attitude of relatives, friends, community and neighbourhood towards adoption of an Indian child. Anticipated plans for the adopted child. Can the child be adopted according to the adoption law in the adoptive parents country ? Have they obtained the necessary permission to adopt ? (Statement of permission required.) 29. Do the adoptive parents know any one who adopted a child from their own country or another country ? Who are they ? From where did they fail to get a child from that source ? 30. Did the couple apply for a child from any other source ? If yes, which source ? 31. What type of child is the couple interested in ? (sex, age, and for what reasons.) 852 32. Worker 's recommendation concerning the family and the type of child which would best fit into this home. Name and address of the agency conducting the home study. Name of social worker, qualification of social worker. Name of agency responsible for post placement, supervision and follow up.

The petitioner, an advocate of the Supreme Court addressed a letter in public interest to the Court, complaining of malpractices indulged in by social organisation and voluntary agencies engaged in the work of offering Indian Children in adoption to foreign parents, the petitioner alleged that not only Indian Children of tender age are under the guise of adoption "exposed to the long horrendous journey to distant foreign countries at great risk to their lives but in cases where they survive and where these children are not placed in the shelter and Relief Houses, they in course of time become beggars or prostitutes for want of proper care from their alleged foster parents. " The petitioner, accordingly, sought relief restraining Indian based private agencies "from carrying out further activity of routing children for adoption abroad" and directing the Government of India, the Indian Council of Child Welfare and the Indian Council of Social Welfare to carry out their obligations in the matter of adoption of Indian Children by Foreign parents. Being a public interest litigation, the letter was treated as a writ petition. Disposing of the Writ Petition, after indicating the principles and norms to be observed in giving a Child in adoption to foreign parents, the Court ^ HELD: 1: 1. Every child has a right to love and be loved and to grow up in an atmosphere of love and affection and of moral and material security and this is possible only if the child is brought up in a family. The most congenial environment would, of course, be that of the family of his biological parents. But if for any reason it is not possible for the biological parents or other near relative to look after the child or the child is abandoned and it is either not possible to trace the parents or the parents are not willing to take care of the child, the next best alternative would be to find adoptive parents for the child so that the child can grow up under the loving care and attention of the adoptive parents. The adoptive parents would be the next best substitute for the biological parents. [813E F] 1: 2. When the parents of a child want to give it away in adoption or the child is abandoned and it is considered necessary in the interest of the child 796 to give it in adoption, every effort must be made first to find adoptive parents for it within the country, because such adoption would steer clear of any problems of assimilation of the child in the family of the adoptive parents which might arise on account of cultural, racial or linguistic differences in case of adoption of the child by foreign parents. If it is not possible to find suitable adoptive parents for the child within the country, it may become necessary to give the child in adoption to foreign parents rather than allow the child to grow up in an orphanage or an institution where it will have no family life and no love and affection of parents and quite often, in the socioeconomic conditions prevailing in the country, it might have to lead the life of a destitute, half clad, half hungry and suffering from malnutrition and illness. [8 4B D] 2: 1. The primary object of giving the child in adoption should be the welfare of the child. Great care has to be exercised in permitting the child to be given in adoption to foreign parents, lest the child may be neglected or abandoned by the adoptive parents in the foreign country or the adoptive parents may not be able to provide to the child a life or moral or material security or the child may be subjected to moral or sexual abuse or forced labour or experimentation for medial or other research and may be placed in a worse situation than that in his own country. [815G H; 816A] 2: 2. Since there is no statutory enactment in our country providing for adoption of a child by foreign parents or laying down the procedure which must be followed in such a case, resort is had to the provisions of the for the purpose of facilitating such adoption. [ 824G] 2: 3. The High Courts of Bombay, Delhi and Gujarat have laid down by Rules and Instructions certain procedure when a foreigner makes an application for adoption under the Guardian and Wards Act including issuing of a notice to the Indian Council of Social Welfare and other officially recognised social welfare agencies with a view to assist the court in properly and carefully scrutinising the applications of the foreign parents for determining whether it will be in the interest of the child and promotive of its welfare, to be adopted by the foreign parents making the application or in other words, whether such adoption will provide moral and material security to the child with an opportunity to grow into the full stature of its personality in an atmosphere of love and affection and warmth of a family health and home. This Procedure is eminently desirable and it can help considerably to reduce, if notice imitate, the possibility of the child being adopted by unsuitable or undesirable parents or being placed in a family where it may be neglected, maltreated or exploited by the adoptive parents. [828B E] Rasiklal Chaganlal Mehta 's case A.I.R. 1982 Gujarat 193, approved. The requirements which should be insisted upon so far as a foreigner wishing to take a child in adoption and the procedure that should be followed for the purpose of ensuring that such inter country adoptions do not lead to abuse maltreatment or exploitation of children and secure to them a healthy, decent family life are as under: (1) Every application from a foreigner desiring to adopt a child must be 797 sponsored by a social or child welfare agency recognised or licensed by the government of the country in which the foreigner is resident. No application by a foreigner for taking a child in adoption should be entertained directly by any social or welfare agency of India working in the area of inter country adoption or by any institution or centre or home to which children are committed by the juvenile court. This is essential primarily for three reasons. [831G H] Firstly, it will help to reduce, if not eliminate altogether, the possibility of profiteering and trafficking in children, because if a foreigner were allowed to contact directly agencies or individuals in India for the purpose of obtaining a child in adoption, he might, in his anxiety to secure a child for adoption, be induced or persuaded to pay any unconscionable or unreasonable amount which might be demanded by the agency to individual procuring the child. Secondly it would be almost impossible for the court to satisfy itself that the foreigner who wishes to take the child in adoption would be suitable as a parent for the child and whether he would be able to provide a stable and secure family life to the child and would be able to handler trans racial, trans cultural and trans national problems likely to arise from such adoption, because where the application for adopting a child has not been sponsored by a social or child welfare agency in the country of the foreigner, there would be no proper and satisfactory home study report on which the court can rely. Thirdly, in such a case, where the application of a foreigner for taking a child in adoption is made directly without the intervention of a social or child welfare agency, there would be no authority or agency in the country of the foreigner who could be made responsible for supervising the progress of the child and ensuring that the child is adopted at the earliest in accordance with law and grows up in an atmosphere of warmth and affection with moral and material security assured to it. [832A E] Every application of a foreigner for taking a child in adoption must be accompanied by a home study report and the social or child welfare agency sponsor in such application should also send along with it a recent photograph of the family, a marriage certificate of the foreigner and his or her spouse as also a declaration concerning their health together with a certificate regarding their medical fitness duly certified by a medical doctor, a declaration regarding their financial status alongwith supporting documents including employer 's certificate where applicable, income tax assessment orders, bank references and particulars concerning the properties owned by them, and also a declaration stating that they are willing to be appointed guardian of the child and an undertaking that they would adopt the child according to the law of their country within a period of not more than two years from time of arrival of the child in their country and give intimation of such adoption to the court appointing them as guardian as also to the social or child welfare agency in India process. sing their case, and that they would maintain the child and provide it necessary education and up bringing according to their status and they would also send to the court as also to the social or child welfare agency in India reports relating to the progress of the child alongwith its recent photograph, the frequency of such progress reports being quarterly during the first two years and half yearly for the next three years. The application of the foreigner must also be accompanied by a Power of Attorney in favour of an officer of the social or child welfare agency in India which is requested to process the case and such 798 Power of Attorney should authorize the Attorney to handle the case on behalf of the foreigner in case the foreigner is not in a position to come to India. The social or child welfare agency sponsoring the application of the foreigner must also certify that the foreigner seeking to adopt a child is permitted to do so according to the law of his country. These certificates, declarations and documents must accompany the application of the foreigner for taking child in adoption, should be duly notarised by a Notary Public whose signature should be duly attested either by an officer of the Ministry of External Affairs or Justice or Social Welfare of the country of the foreigner or by an officer of the Indian Embassy or High Commission or Consulate in that country. The social or child welfare agency sponsoring the application of the forefingers must also undertake while forwarding the application to the social or child welfare agency in India, that it will ensure adoption of the child by the foreigner according to the law of his country within a period not exceeding two years and as soon as the adoption is affected, it will send two certified copies of the adoption order to the social or child welfare agency in India through which the application for guardianship is processed, so that one copy can be filed in court and the other can remain with the social or child welfare agency in India. The social or child welfare agency sponsoring the application must also agree to send to the concerned social or child welfare agency in India progress reports in regard to the child, quarterly during the first year and half yearly for the subsequent year or years until the adoption is effected, and it must also undertake that in case of disruption of the family of the foreigner before adoption can be effected, it will take care of the child and find a suitable alternative placement for it with the approval of the concerned social or child welfare agency in India and report such alternative placement to the court handling the guardianship proceedings and such information shall be passed on both by the court as also by the concerned social or child welfare agency in India to the Secretary, Ministry of Social Welfare, Government of India. [833C H; 834A E] 3: 2. The Government of India shall prepare a list of social or child welfare agencies licensed or recognised for inter country adoption by the Government of each foreign country where children from India are taken in adoption and this list shall be prepared after getting the necessary information from the government of each such foreign country and the Indian Diplomatic Mission in that foreign country. Such lists shall be supplied by the Government of India to the various High Courts in India as also to the social or child welfare agencies operation in India in the area of inter country adoption under licence or recognition from the Government of India. [834E F; [835 B] 3: 3. If the biological parents are known, they should be helped to understand all the implications of adoption including the possibility of adoption by a foreigner and they should be told specifically that in case the child is adopted, it would not be possible for them to have any further contact with the child The biological parents should not be subjected to any duress in making a decision about relinquishment and even after they have taken a decision to relinquish the child for giving in adoption, a further period of about three months should be allowed to them to reconsider their decision. But once the decision is taken and not reconsidered within such further time as may be allowed to them, it must be regarded as irrevocable and the procedure for 799 giving the child in adoption to a foreigner can then be initiated without any further reference to the biological parents by filling an application for appointment of the foreigner as guardian of the child. Thereafter there can be no question of once again consulting the biological parents whether they wish to give the child in adoption or they want to take it back. But in order to eliminate any possibility of mischief and to make sure that the child has in fact surrendered by its biological parents, it is necessary that the Institution or Centre or home for Child Care or social or Child Welfare Agency to which the child is surrendered by the biological parents, should take from the biological parents a document of surrender duly signed by the biological parents and attested by at least two responsible persons and such document of surrender should not only contain the names of the biological parents and their address but also information in regard to the birth of the child and its background, health and development. If the biological parents state a preference for the religious upbringing of the child, their wish should as far as possible be respected, but ultimately the interest of the child alone should be the sole guiding factor and the biological parents should be informed that the child may be given in adoption even to a foreigner who professes a religion different from that of the biological parents. The biological parents should not be induced or encouraged or even be permitted to take a decision in regard to giving of a child in adoption before the birth of a child or within a period of three months from the date of birth. This precaution is necessary because the biological parents must have reasonable time after the birth of the child to take a decision whether to rear up the child themselves or to relinquish it for adoption and moreover it may be necessary to allow some time to the child to overcome any health problems experienced after birth. [835 H; 836A D; 836G H] 3: 4. It should not be open to any and every agency or individual to process an application from a foreigner for taking a child in adoption and such application should be processed only through a social or child welfare agency licensed or recognised by the Government of India or the Government of the State in which it is operating. Since an application for appointment as guardian can be processed only by a recognised social or child welfare agency and none else, any unrecognised institution, centre or agency which has a child under its care would have to approach a recognised social or child welfare agency if it desires such child to be given in inter country adoption, and in that event it must send without any undue delay the name and must send without any undue delay the name and particulars of such child to the recognised social or child welfare agency through which such child is proposed to be given in inter country adoption. The Indian Council of Social Welfare and the Indian Council for Child Welfare are clearly two social or child welfare agencies operating at the national level and recognised by the Government of India. But apart from these two recognised social or child welfare agencies functioning at the national level, there are other social or child welfare agencies engaged in child care and welfare and if they have good standing and reputation and are doing commendable work in the are of child care and welfare they should also be recognised by the Government of India or the Government of the State for the purpose of inter country adoptions. But before taking a decision to recognise any particular social or child welfare agency for the purpose of inter country adoptions the Government of India or the Government of a State would do well to examine whether the social or child welfare agency 800 has proper staff with professional social work experience, because otherwise it may not be possible for the social or child welfare agency to carry out satisfactorily the highly responsible task of ensuring proper placement of a child with a foreign adoptive family. The Government of India or the Government of a State recognising any social or child welfare agency for inter country adoptions must insist as a condition of recognition that the social or child welfare agency shall maintain proper accounts which shall be audited by a chartered accountant at the end of every year and it shall not charge to the foreigner wishing to adopt a child any amount in excess of that actually in cured by way of legal or other expenses in connection with the application for appointment of guardian including such reasonable remuneration or honorarium for the work done and trouble taken in processing, filing and pursuing the application as may be fixed by the Court. [837B H; 838A D] 3:5. Every recognised social or child welfare agency must maintain a register in which the names and particulars of all children proposed to be given in inter country adoption through it must be entered and in regard to each such child, the recognised social or child welfare agency must prepare a child study report through a professional social worker giving all relevant information in regard to the child so as to help the foreigner to come to a decision whether or not to adopt the child and to understand the child, if he decides to adopt it as also to assist the court in coming to a decision whether it will be for the welfare of the child to be given in adoption to the foreigner wishing to adopt it. The child study report should contain as far as possible information in regard to the following matters: (1) Identifying information, supported where possible by documents. (2) Information about original parents, including their health and details of the mother 's pregnancy and birth. (3) Physical, intellectual and emotional development. (4) Health report prepared by a registered medical practitioner preferably by a paediatrician. (5) Recent photograph. (6) Present environment category of care (Own home, foster home, institution etc.) relationships routines and habits. (7) Social worker 's assessment and reasons for suggesting inter country adoption. [838G H; 839A E] 3:6. The recognised social or child welfare agency must insist upon approval of a specific known child and once that approval is obtained the recognised social or child welfare agency should immediately without any undue delay proceed to make an application for appointment of the foreigner as guardian of the child. Such application would have to be made in the court within whose jurisdiction the child ordinarily resides and it must be accompanied by copies of the home study report, the child study report and other certificates and documents forwarded by the social or child welfare agency 801 sponsoring the application of the foreigner for taking the child in adoption. It is also necessary that the recognised social or child welfare agency through which an application of a foreigner for taking a child in adoption is routed must before offering a child in adoption, make sure that the child is free to be adopted. The recognised social or child welfare agency must place sufficient material before the court to satisfy it that the child is legally available for adoption. It is also necessary that the recognised social or child welfare agency must satisfy itself, firstly, that there is no impediment in the way of the child entering the country of the prospective adoptive parent; secondly, that the travel documents for the child can be obtained at the appropriate time and lastly, that the law of the country of the prospective adoptive parent permits legal adoption of the child and that on such legal adoption being concluded, the child would acquire the same legal status and rights of inheritance as a natural born child and would be granted citizenship in the country of adoption and it should file alongwith the application for guardianship, a certificate reciting such satisfaction. [841C D; 842H; 843A D] 3: 7. In cases where a child relinquished by its biological parents or an orphan or destitute or abandoned child is brought by an agency or individual from one State to another, there should be no objection to a social or child welfare agency taking the child to another State, even if the object be to give it in adoption, provided there are sufficient safeguards to ensure that such social or child welfare agency does not indulge in any malpractice. There should also be no difficulty to apply for guardianship of the child in the court of the latter State. because the child not having any permanent place of residence would then be ordinarily resident in the place where it is in the care and custody of such agency or individual. [843H; 844A F] Section 11 of the provides for notice of the application to be issued to various persons including the parents of the child if they are residing in any State to which the Act extends. But, no notice under this section should be issued to the biological parents of the child, since it would create considerable amount of embarrassment and hardship if the biological parents were then to come forward and oppose the application of the prospective adoptive parent for guardianship of the child. Moreover, the biological parents would then come to know who is the person taking the child in adoption and with this knowledge they would at any time be able to trace the whereabouts of the child and they may try to contact the child resulting in emotional and psychological disturbance for the child which might affect his future happiness. For the same reasons, notice of the application for guardianship should also not be published in any newspaper. If the court is satisfied, after giving notice of the application to the Indian Council of Child Welfare or the Indian Council for Social Welfare or any of its branches for scrutiny of the application, that it will be for the welfare of the child to be give in adoption to the foreigner making the application for guardianship, it will only then make an order appointing the foreigner as guardian of the child and permitting him to remove the child to his own country with a view to eventual adoption. The Court will introduce the following conditions in the order, namely: [846A H; 848A B] (i) That the foreigner who is appointed guardian shall make proper 802 provision by way of deposit or bond or otherwise to enable the child to be repatriated to India should it become necessary for any reason. [847C] (ii) That the foreigner who is appointed guardian shall submit to the court as also to the Social or Child Welfare Agency processing the application for guardianship, progress reports of the child alone with a recent photograph quarterly during the first two years and half yearly for the next three years. [847D] (iii) The order appointing guardian shall carry, attached to it, a photograph of the child duly counter signed by an officer of the court. [817F] Where an order appointing guardian of a child is made by the court, immediate intimation of the same shall be given to the Ministry of Social Welfare, Government of India as also to the Ministry of Social Welfare of the Government of the State in which the court is situate and copies of such order shall also be forwarded to the two respective Ministries of Social Welfare. The Ministry of Social Welfare, Government of India shall maintain a register containing names and other particulars of the children in respect of whom orders for appointment of guardian have been made as also names, addresses and other particulars of the prospective adoptive parents who have been appointed such guardians and who have been permitted to take away the children for the purpose of adoption. The Govt. of India will also sent to the Indian Embassy or High Commission in the country of the prospective adoptive parents from time to time the names, addresses and other particulars of such prospective adoptive parents together with particulars of the children taken by them and requesting the Embassy or High Commission to maintain and unobtrusive watch over the welfare and progress of such children in order to safeguard against any possible maltreatment exploitation or use for ulterior purposes and to immediately report and instance of maltreatment, negligence or exploitation to the Government of India for suitable action. [847G H; 848A C] 3:8. The social or child welfare agency which is looking after the child selected by a prospective adoptive parent, may legitimately receive from such prospective adoptive parent maintenance expenses at a rate of not exceeding Rs. 60 per day (this outer limit being subjective to revision by the Ministry of Social Welfare, Government of India from time to time) from the date of selection of the child by him until the date the child leaves for going to is new home as also medical expenses including hospitalization charges, any, actually incurred by such social or child welfare agency for the child. But the claim for payment of such maintenance charges and medical expenses shall be submitted to the prospective adoptive parent. [842C D] 3:9. If a child is to be given in inter country adoption, it would be desirable that it is given in such adoption as far as possible before it completes the age of 3 years. The reason is that if a child is adopted before it attains the age of understanding, it is always easier for it to get assimilated and integrated in the new environment in which it may find itself on being adopted by a foreign parent. Children above the age of 3 years may also be given in inter country adoption. There can be no hard and fast rule in this connection. Even children between the ages of 3 to 7 years may be able to assimilate themselves in the new surroundings without any difficulty. Even children 803 above the age of seven years may be given in inter country adoption but their wishes may be ascertained if they are in a position to indicate any preference. [845D G] 3:10. The proceedings on the Application for guardianship should be held by the Court in camera and they should be regarded as confidential and as soon as an order is made on the application for guardianship the entire proceedings including the papers and documents should be sealed. [841C D] 3:11. The social or child welfare agency which is looking after the child selected by a prospective adoptive parent, may legitimately receive from such prospective adoptive parent maintenance expenses at a rate of not exceeding Rs. 60 per day (this outer limit being subject to revision by the Ministry of Social Welfare, Government of India from time to time) from the date of selection of the child by him until the date the child leaves for going to its new home as also medical expenses including hospitalisation charges, if any, actually incurred by such social or child welfare agency for the child. But the claim for payment of such maintenance charges and medical expenses shall be submitted to the prospective adoptive parent through the recognised social or child welfare agency which has processed the application for guardianship and payment in respect of such claim shall not be received directly by the social or child welfare agency making the claim but shall be paid only through the recognised social or child welfare agency. However, a foreigner may make voluntary donation to any social or child welfare agency but no such donation from a prospective adoptive parents shall be received until after the child has reached the country of its prospective adoptive parent. [842C G]

4760.txt

Civil Appeal No. 3015 of 1987. From the Judgment and order dated December 11, 1985 of the Delhi High Court in Civil Revision (R) No. 47 of 1984. Rajinder Sachhar, P.C. Mudgal and S.P. Gupta for the Appellant. Anil Nauria and Mrs. Rekha Pandey for the Respondent. The Judgment of the Court was delivered by 1061 RANGANATHAN, J. The appellant is an advocate. He is the owner of premises No. H 2/6 Model Town, Delhi. He let out a part of this premises comprising a set of rooms above the garage (which may be briefly referred to as 'servants ' quarters ') and a hall on the ground floor of the building to the respondent. The letting was oral and on a monthly rent of Rs.600 (exclusive of electricity and water charges) from July 1976. In January 1980, the landlord filed an eviction petition under proviso (e) to section 14(1) of the Delhi Rent Control Act. He claimed that he needed the premises bona fide for the personal residential requirements of himself and the members of his family. His case was that he was having his office at Chandni Chowk on a first floor but, as he had been advised by the doctor not to climb upstairs, he desired to move the office and library to the ground floor hall of the premises in question. He also claimed that the servants ' quarters were required for the use of his servants and their families. The petition was resisted by the respondent on a number of grounds. We are, however, concerned here only with two of the grounds put forward by the tenant. His first submission was that though the premises had initially been taken only for the residential use of himself, subsequently two separate tenancies had been created in respect of premises in dispute. He claimed that he was the tenant only of the servants ' quarters and that the hall or the ground floor had been let out to Bal Kunj (a society registered under the ) of which he was the Secretary. It was pointed out that from November 1986 onwards, the petitioner was being paid two sums, a sum of Rs.250 by the respondent and another sum of Rs.350 per month by the respondent on behalf of Bal Kunj. It was, therefore, contended that the petition as filed was not maintainable. The second plea taken by the respondent was that the intended use of the ground floor hall as the office of the petitioner lawyer constituted a non residential use and was, therefore, outside the purview of proviso (e) to section 14(1). The Rent Controller rejected the contentions of the tenant. He held that there had been a single tenancy. The premises had been let out by the landlord only to the respondent, Prabhu Chaudhury, on a rent of Rs.600 per month. On the second aspect, the claim of the landlord that he required the entire premises for use by himself and his servants and that the ground floor was needed for setting up his office and library was held by the Rent Controller to fall within the scope of 1062 the relevant statutory provision. The Rent Controller, therefore, directed eviction as prayed for by the petitioner. The above order had been passed under the provisions of section 25B of the Delhi Rent Control Act. The landlord having succeeded in his eviction petition, the tenant filed a revision petition before the Delhi High Court under sub section (8) of that section. The learned Judge who heard the petition reversed the findings of the Rent Controller. He held that the landlord would be entitled to be put in possession only of the servants ' quarters and that the petitioner could not claim the use of the hall on the ground floor. In the result, therefore, the learned Judge modified the order passed by the Rent Controller. He restricted the eviction order granted by the Rent Controller to the servants ' quarters. We may mention here that, in compliance with the order of the learned Judge, the respondent has since vacated and delivered vacant possession of the servants ' quarters to the landlord. The controversy before us is restricted to the hall on the ground floor. The first question that arises for our consideration is whether the High Court was right in holding that there were two separate tenancies, one in respect of the servants ' quarters and the other in respect of the hall on the ground floor. The position is this. There was oral evidence let in by the petitioner to show that the premises had been let out to the respondent in July 1976 at Rs.600 p.m. It appears the respondent started paying two separate amounts of Rs.250 and Rs.350 since November 1976. It also appears that the former amount was paid by the respondent and the letter by means of cheques in the name of the trust. It also seems to be common ground that the respondent was occupying the servants ' quarters and the Bal Kunj was occupying the hall on the ground floor though it is not clear at what point of time this happened. Counsel for the respondent relies on these circumstances. He wants to use the fact that the petitioner who was also occupying a hall on the ground floor adjacent to the hall occupied by the trust clearly must have been aware of the use of the hall to submit that the trust had been accepted as a tenant in respect of the hall at Rs.350 p.m. He also relies on a fact which he says the Rent Controller completely missed that in 1978, when a number of cheques given to the landlord had been returned dishonoured, the landlord wrote a letter dated 26.11.1978 to the tenant in which he specifically referred to the fact that five of the cheques "belong to Balkunj. " It is submitted that these facts clearly put the matter beyond all doubt that, though initially the premises had been taken only by the 1063 respondent, it had subsequently been converted into two tenancies. Learned counsel for the landlord on the other hand submitted that the question whether there was a single tenancy or two tenancies is essentially a question of fact. The Rent Controller, after appreciating all the circumstances, had come to the conclusion that there was a single tenancy. There was clear evidence to show that initially, in July 1976, the landlord had let out the premises only to the respondent for a monthly rent of Rs.600. It is true that subsequently, after a few months, the tenant paid the rent by way of two cheques one drawn by himself and the other drawn on behalf of Balkunj. But, learned counsel submits, relying on the decision in Sheodhari Rai vs Suraj Prasad Singh, AIR 1954 S.C. 758, this alone cannot lead to the conclusion that a separate tenancy had been created in respect of the hall between Balkunj and the petitioner. Learned counsel also pointed out that the Rent Controller had referred to two important documents, AW 8/18 and AW 8/20. These were two letters dated 5.8.1977 and 15.1.1978. In these two letters the landlord had specifically and categorically denied the tenancy on behalf of Balkunj. What had happened was that the respondent on behalf of Balkunj had written to the landlord making certain claims for repairs etc. in respect of the hall occupied by Balkunj. Immediately the landlord wrote back saying that he had nothing to do with Balkunj, that the tenancy was only in favour of the respondent, and that he did not recognise Balkunj as his tenant. These two letters remained unanswered. Learned counsel for the landlord, therefore, submitted that there was ample material and clinching evidence before the Rent Controller to come to the conclusion that there was a single tenancy and that was between Prabhu Chowdhary and the landlord and that, therefore, there was no question of there being two tenancies as held by the High Court. We are inclined to agree with this submission of the landlord. The initial tenancy was only an oral tenancy. Nevertheless there were two witnesses who deposed that the original tenancy agreement was only between the petitioner and the respondent. At that time, admittedly, there was no question of Balkunj being the tenant in respect of any portion of the premises. All that the respondent says is that subsequently cheques were being issued in the name of Balkunj also and that this must be taken to lead to an inference that the petitioner had accepted Balkunj as its tenant. It is very difficult to accept this argument. It is no doubt true that the rent has been paid by two cheques since November 1976 but the mere payment of rent by two cheques, in the circumstances of this case, cannot mean that there were two tenancies. The landlord was entitled to a rent of Rs.600 p.m. and so 1064 long as he got this amount, it was immaterial for him whether the amount was paid in a lump sum or by one cheque or more than one cheque and who the makers of the cheques were. It is not unusual to come across cases where a tenant pays the rent not by a cheque drawn by himself but by a cheque drawn by some other concern in which he has an interest such as a partnership concern a limited company or other entity in which he is interested. So, the mere fact that for some reason the respondent chose not to issue a single cheque for the rent of Rs.600 but that he gave two separate cheques, one for Rs.250 drawn by himself and one for Rs.350 drawn in the name of Balkunj cannot lead to an irresistible conclusion that the tenancy was created in favour of Balkunj with the concurrence of the landlord. The letter dated 26.11.78, far from "clinching" the respondent 's claim, as held by the High Court, does not in our view improve the tenant 's case at all. It only evidences the fact that the landlord was receiving the cheques issued in the name of the trust in discharge of the respondent 's obligation to pay the rent of Rs.600 p.m. It is also true that, since the landlord was also occupying a part of the ground floor premises, he might have been aware that certain activities of Balkunj were being carried on in the hall. But this can only mean that the landlord permitted the tenant to use a portion of the premises let out for running the activities of the trust. Even assuming that, standing by themselves these two facts might have been sufficient to draw any such inference as is suggested, the two letters of 5.8.77 and 15.1.78 place the matter beyond all doubt. The landlord categorically asserted in these letters that he does not recognize Balkunj as his tenant and that the respondent alone was his tenant. There was no reply to these letters from the respondent. In these circumstances there can be no doubt at all that the premises had been let out only to the respondent by the petitioner and that Balkunj cannot be considered to be a tenant of the premises or any portion thereof. The finding of the Rent Controller that there was only a single tenancy was essentially a finding of fact based on the material and circumstances to which we have adverted and we are also inclined to accept the conclusion of the Rent Controller as the correct one. We also agree with the landlord that this is a finding with which the High Court should not have interfered. Though under Section 25(B)(8) of the Delhi Rent Control Act the powers of the High Court are somewhat wider than similar powers of revision under section 115 of the Civil Procedure Code, it is well established by a series of decisions of this Court that the power of revision under the Rent Control Acts does not entitle the High Court to enter into the merits of the factual con 1065 troversies between the parties and to reverse findings of fact in this regard. It is sufficient, in this context, to refer to the decision of this Court in Helper Girdharbhai vs Saiyed Mohmad; , which was reviewed earlier decisions. The decision in Sushila Devi vs Avinash Chandra Jain, to which counsel for the respondent referred, lays down no different principle. So far as the second point is concerned, learned counsel for the respondent relied upon two decisions of this Court in Mohanlal vs Kondi, ; and in Subramania Mudaliar vs Kolapur Traders, In the former, it was held that the profession of a lawyer is "business" within the meaning of section 10(3)(a)(iii) of the Andhra Pradesh Building (Lease, Rent & Eviction) Control Act, 1960. The latter is a decision to a like effect. These decisions are not of much help in the context of the present case and of the provisions of clause (e) of the proviso to section 14(1) of the Delhi Rent Control Act. Here the landlord is seeking to recover possession of a residential premises. There is, as we have already held, a single tenancy in favour of the respondent for a residential purpose. Though learned counsel for the respondent invited us to say that, so far as the hall was concerned, the premises were being used by a trust and, hence for a non residential purpose, we cannot permit him to raise this plea. Such a plea was not taken before the High Court. Against the order of the High Court, the respondent had also filed a special leave petition to this Court which has been dismissed. It is therefore not open to the respondent to urge this point before us. The only point taken before the High Court was that the petitioner could not get relief because the use of the hall by a lawyer as his office and library could not amount to a residential requirement. We shall, therefore, confine ourselves to this question. In our opinion, the contention of the respondent cannot be accepted in the extreme form in which it is urged here. It may be that in a case where a lawyer seeks to evict a tenant on the ground that the entire premises sought to be got vacated are solely needed by him for use as his office and library, his requirement may not satisfy the requirements of clause (e) of the proviso to section 14(1). But this is quite different from saying that where the premises are sought to be got vacated for use as a residence and, the landlord being a lawyer desires to use a part of such residence as a study, office or library, such use would be a non residential use. Any professional man of standing would necessarily have to set apart a portion of his residence for such purposes and the premises do not cease to be his residence because 1066 of that. in the present case, the petitioner seeks eviction of the suit premises for his bona fide residential requirement and the use of the hall as an office is only incidental to such a requirement. In ascertaining the bona fide need of residence, in the case of a lawyer, the fact that a room has to be used as an office cannot be a consideration extraneous to the scope and content of clause (e) of the proviso to section 14(1). To test our conclusion, we may see what the position would be in the converse case. If, in the present case, the petitioner had stated that he required the hall because he had no living room in the premises which he was occupying as the only room there was being, or had to be, used by him as an office, the petitioner 's claim could not have been rejected, for he would then have needed the hall clearly as part of his residential requirement. The decision in Khanna vs Batra, illustrates this. There, an advocate, had asked for eviction of a tenant from the first floor as the ground floor premises occupied by him were not sufficient for his needs for purposes of residence and office. The Rent Control Tribunal held that since the appellant intended to convert the existing residential accommodation in his possession into an office and library for the use of his clerk and clients, such a user was not permissible in law. Reversing this conclusion, Grover, J observed: "It seems to me that the Rent Control Tribunal was clearly in error in thinking that merely because the appellant wanted to use the accommodation in his possession for professional purposes, he could not claim benefit of the provision contained in clause (e) of the proviso to section 14(1) of the Act. It was this error which led to the conclusion at which the Rent Control Tribunal arrived upholding the decision of the Controller on the second point, namely the requirement of the appellant on personal grounds. I cannot therefore, accede to the submission of the learned counsel for the respondent that the finding of the Rent Controller Tribunal with regard to the personal need or requirement was one of fact and thus immune from challenge in the second appeal. Should the position is different in this case? Merely because the petitioner has come forward with an honest plea that he intends to use a part of his residence as an office, should a different result follow, particularly in a case like this where ill health compels him to have his 1067 office at home? Should the result depend on the jugglery of pleadings or the substance of the matter? We think the substance should prevail. In our opinion, where a landlord applies for the possession of his residential premises, his bona fide requirement of the premises for his residential purposes will not stand vitiated merely because he intends to use a portion of the premises for purposes of his office, library or study. We are, therefore, of opinion that the High Court should not have interfered with the findings of the Rent Controller on this point as well. This is no doubt a mixed question of fact and law but, for the reasons given earlier, we are inclined to agree with the conclusion of the Rent Controller. In the result, we hold that the High Court was in error in granting relief to the petitioner only in respect of the servants ' quarters and in declining to grant the petitioner relief in respect of the hall. We allow the appeal, set aside the judgment of the High Court and restore the order of the Rent Controller that the petitioner is entitled to the possession of the entire premises in question. There will, however, be no order as to costs. R.S.S. Appeal allowed.

% The appellant is an advocate. Pursuant to an oral agreement, he let out to the respondent a part of his residential premises comprising of two rooms above the garage, referred to as "servants 'quarters" and a hall on the ground floor, in July 1976 at Rs.600 p.m. Since November 1976 the respondent started paying two separate amounts of Rs.250 and Rs.350 the latter amount by means of cheques in the name of Balkunj, a registered trust, of which he was the Secretary. In January 1980 the landlord filed an eviction petition under proviso (e) to section 14(1) of the Delhi Rent Control Act, 1958 on the ground that he required the servants ' quarters for his servants and the hall for his office and library. The respondent resisted the petition on a number of grounds. The two grounds with which this Court is concerned are that (1) two separate tenancies came to be created in respect of the premises in dispute and hence the petition as filed was not maintainable and (2) the intended use of the hall as office constituted a non residential use, and therefore outside the purview of proviso (e) to section 14(1). The Rent Controller held that there was a single tenancy, that the landlord bona fide required the premises for his use, and that setting up his office and library fell within the scope of the relevant statutory provision. The High Court in the revision petition under sub 1059 section (8) of section 25B of the Act, reversed the findings of the Rent Controller and modified the eviction order passed by him restricting it to the servant 's quarters only. In regard to the first ground, the respondent submits that the fact that the landlord was aware of the use of the hall by the trust and his acceptance of the cheques on behalf of the trust prove that the trust had been accepted as the tenant in respect of the hall. In this connection the respondent relies on the appellant 's letter dated 26.11.1978 to the respondent, in which the landlord specifically refers to the fact that five of the dishonoured cheques being returned by him "belong to the trust". The appellant, on the other hand, submits that acceptance of two cheques alone cannot lead to the conclusion that a separate tenancy had been created in respect of the hall between Balkunj and the petitioner. The appellant further relies on the two letters dated 5.8.1977 and 15.1.1978 written by him to the respondent categorically denying the tenancy on behalf of Balkunj. He further submits that the finding of the Rent Controller that there was only a single tenancy was essentially a finding of fact, based on material and circumstances, with which the High Court should not have interfered. In regard to the second ground the respondent urges that the intended use of the hall by the appellant as office and library could not amount to a residential requirement. Allowing the appeal this Court, ^ HELD: (1) It is no doubt true that the rent has been paid by two cheques since November 1976 but the mere payment of rent by two cheques, in the circumstances of this case, cannot mean that there were two tenancies. The landlord was entitled to a rent of Rs.600p.m. and so long as he got this amount it was immaterial for him whether the amount was paid in a lump sum or by one cheque or more than one cheque and who the makers of the cheques were. It is not unusual to come across cases where a tenant pays the rent not by a cheque drawn by himself but by a cheque drawn by some other concern in which he has an interest such as a partnership concern, a limited company etc. It is also true that the landlord might have been aware that certain activities of Balkunj were being carried on in the hall. But this can only mean that the landlord permitted the tenant to use a portion of the premises for running the activities of the trust. Even assuming that these two facts might have been sufficient to draw any such inference as is suggested, the two letters of the landlord, dated 5.8.77 and 15.1.78 1060 place the matter beyond all doubt. The landlord had categorically asserted in these letters that he did not recognize Balkunj as his tenant. [1063G H; 1064A E] (2) The finding of the Rent Controller that there was only a single tenancy was essentially a finding of fact with which the High Court should not have interfered. Though under Section 25(B)(8) of the Delhi Rent Control Act the powers of the High Court are somewhat wider than similar powers of revision under section 115 of the Civil Procedure Code, it is well established by a series of decisions of this Court that the power of revision under the Rent Control Act does not entitle the High Court to enter into the merits of the factual controversies between the parties and to reverse findings of fact in this regard. [1064F H; 1065A] (3) Any professional man of standing would necessarily have to set apart a portion of his residence as a study, office or library and the premises do not cease to be his residence because of that. In ascertaining the bona fide need of residence, in the case of a lawyer, the fact that a room has to be used as an office cannot be a consideration extraneous to the scope and content of clause(e) of the proviso to section 14(1). It may be that in a case where a lawyer seeks to evict a tenant on the ground that the entire premises sought to be got vacated are solely needed by him for use as his office and library, his requirement may not satisfy the requirements of clause(e) of the proviso to section 14(1). [1066A B; 1065F G] (1) Sheodhari Rai vs Suraj Prasad Singh, AIR 1954 S.C. 758; (2) Helper Girdharbhai vs Saiyed Mohmad, ; ; (3) Sushila Devi vs Avinash Chandra Jain, ; (4) Mohanlal vs Kondi, ; ; (5) Subramania Mudaliar vs Kolapur Traders, and (6) Khanna vs Batra, , referred to.

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Appeal Nos. 351 359/72. Appeals from the Judgment and Order dated 7 5 1971 of the Orissa High Court in O.J.C. Nos. 1185 to 1190, 1223 and 1224 of 1970 and 41/71 and CiviI AppeaI Nos. 1855 1863, 2091/72 and 1802/74. Appeals by Certificate/Appeals by Special Leave from the Judgments and Orders dated 7 5 1971, 3 2 1971 and 28 3 1974 of the 814 Orissa High Court in O.J.C. Nos. 1185 1190, 1223, 1224 and 1226/ 70, 850/70, 589/72 and Civil Appeals Nos. 1892 1893 of 1971, 1302, 2071 and 12351236 of 1972. Appeals from the Judgment and Orders dated 15 5 1970, 16 41971, and 6 9 1971 of the Orissa High Court in O.J.C. Nos. 329 and 357/70, 786/.70, 242/67, 859 and 863/70. Vinoo Bhagat for the Appellants in CAs. 351 359/72 and RR. in CAs. 1859 1862/72. Gobind Das and G.S. Chatterjee for the Appellants in rest of the Appeals, except 1802/74 and RR. in CAs. 351 359/72. R.K. Garg and S.C. Agarwal for Appellants in CA 1802/74 and B.P. Maheshwari and Suresh Sethi for Respondents in CAs. 12351236/72. B. Parthasarthy for RR in CA. 1802/74. The Judgment of the Court was delivered by J. These appeals by certificate or special leave are directed against judgments of the Orissa High Court dated May 15, 1970, February 3, 1971, April 16, 1971, May 7, 1971, September 6, 1971 and March 28, 1974. They arise out of several writ petitions. The facts which gave rise to the petitions changed from time to time largely because of amendments in the law, and that was the reason for the filing of separate writ petitions resulting in the impugned judgments of the High Court, but we have heard them together at the instance of the learned counsel for the parties and will dispose them of by a common judgment. The nature of the controversy in these cases is such that it will be enough to state the basic facts for the purpose of appreciating the arguments of counsel for the parties. The Collector of Mayurbhanj issued a notice on February 3, 1970 by which he invited tenders for the grant of li cences for establishing 70 outstill shops for 1970 71. Ajodhya Prasad Shah gave the highest bid for a group of seven shops, in one lot, for Rs. 34,000/ per month. His bid was accepted and his name was entered in the prescribed register, and the entry was signed by the successful bidder and the Collector. Ajodhya Prasad accordingly deposited Rs. 68,000/ on account of two months ' "fees", in ad vance, as required by rule 103 of the Board 's Excise Rules, 1965. Raghunandan Saha, who was the unsuccessful bidder, felt aggrieved and filed an appeal, but it was dismissed by the Excise Commissioner on March 16, 1970. The Board of Revenue also refused to interfere. Ajodhya Prasad claimed that in the mean time he made arrangements for establishing his shops and incurred an expenditure of about Rs. 1,50,000/ . He therefore approached the authorities concerned for the issue of the licenses for running the shops from April 1, 1970. He approached , the Superintend ent of Excise for depositing Rs. 34,000/ for the month of April, but the Superintendent did not pass the deposit challan. Ajodhya Prasad thereupon filed a writ petition (O.I.C. No. 329 of 1970) in the High Court with the allega tion that the Collector 815 was not acting according to the law as the State Government had issued instructions to him not to. issue the licenses. Ajodhya Prasad prayed in his petition for the issue of directions for ' the issue of licenses and quashing the State Government 's instructions to the contrary. Raghunandan Saha also filed a petition (O.J.C. No. 357 of 1970) on April 13, 1970. The Collector issued a notice for reauction on May 1, 1970 and Ajodhya Prasad amended his petition for quashing the notice also. The State Government and the other respondents traversed the claim in Ajodhya Prasad 's writ petition and pleaded, inter alia, that the bids at the auction were not satisfac tory and, in the interest of the State revenue, the State Government had passed the orders for not accepting Ajodhya Prasad 's bids. The High Court examined the questions whether Ajodhya Prasad was entitled to the issue of the licenses for the seven shops and whether the State Govern ment had the authority to direct the withholding and reauc tioning of the licenses, and held, inter alia, that the State Government had no power to interfere with the auction held by the Collector after it had "become final in appeal and revision", and could not direct a reauction. The High Court examined the nature of the realisation at the auction and held that it was a tax which was not contemplated by section 38 of the Bihar and Orissa Excise Act, 1915, herein after referred to as the Act, and that rule 103(1) of the Board 's Excise Rules in regard to the fees for the licenses was not authorised by the Act and was in excess of the rule making power of the Board. The High Court also held that the "auction price for a license is not excise duty within the meaning of Entry 51 of List II of the Seventh Schedule to the Constitution" and it was not open to. the Collector "to follow the process of auctioning for deter mining the license fee" which was really a tax in the garb of a fee. It held that the aforesaid rule 103 was incompe tent and ultra vires the Act. On the question of grant of the "exclusive privilege" under section 22 of the Act, the High Court held that what was purported to be given under the sale notice was not the grant of .an exclusive privi lege. In taking that view the High Court stated that notice had not been issued under section 22 (1) of the Act and the Collector had no authority to issue such a notice In that view of the matter, the High Court did not express any final opinion as to whether the licence was to be granted for an exclusive privilege to manufacture and sell 'liquor. The High Court accordingly quashed the direction of the State Government dated April 15, 1970 for reauctioning the license and declared that rule 103(1) of the Board 's Excise Rules was ultra vires the Act. Appeals Nos. 1892 and 1893 of 1971 are directed against that judgment of the High Court dated May 15, 1970, on certificates. The State Government issued the Bihar and Orissa Excise (Orissa Amendment) Ordinance of 1970 and the State Govern ment issued a fresh order dated August 19, 1970 under the provisions of the amended section 29(2) of the Act for fresh settlement of the shops, and wrote to the Collector of Mayurbhanj to call for tenders in accordance with that order. The Collector called for tenders within a week. 816 Ajodhya Prasad thereupon filed another writ petition (O.J.C. 'No. 850 of 1970) for quashing the Collector 's tender notices and for a direction to the authorities con cerned to grant a license to him on the basis of the earlier auction. The Bihar and Orissa Excise (Orissa Amendment) Act, 1970 was passed on October 5, 1970 and the ordinance was re pealed. That was followed by the Orissa Excise (Exclusive Privilege) Rules, 1970, which were made under section 89 of the Act. The respondents in Ajodhya Prasad 's writ petition No. 850 of 1970 pleaded that the amendments to the Act were valid and that the State Government had the right to grant an exclusive privilege for the purposes mentioned in section 22 of the Act. The money so realised was consideration for the exclusive privilege under section 22 and was neither an excise duty nor a tax nor a fee. It was also pleaded that the tender was in accordance with the rules as the authority to accept the tender was the State Government. The High Court examined Ajodhya Prasad 's writ petition (No. 850 of 1970 in its Judgment dated February 3, 1971. It held that the order of the State Government dated August 19, 1970 for inviting tenders was invalid as the authorities for fixing the procedure under the amended section 29(2)(b) had not been specified, the Government had "appropriated for itself absolute and naked and arbitrary power ' to accept any tender or reject any tender for any reason whatsoever or without any rhyme or reason" and the order left it to the uncontrolled discretion of the authority concerned to determine the adequacy of the amount offered in the tender. As regards the claim for the issue of a license under sec tion 6, the High Court held that as the petitioner was the highest bidder on February 20, 1970 and his name was entered in the bid register and the entry was signed, the petition er was entitled to the grant of the exclusive privilege under section 22 by virtue of section 6(a) of the Amending Ordinance irrespective of the validity of rule 103 (1) of the Board 's Excise Rules. The High Court accordingly held that section 6(a) of the Amending Ordinance was valid and the grant of seven ' shops to the petitioner, for the manu facture and retail sale of country liquor was therefore validated "as the grant of an exclusive privilege under section 22 of the Act" and he was entitled to license under sub section (2) of that section. The Order of the State Government dated August 19, 1970 and the Collector 's tender notice were quashed and the Collector was directed to issue the license for the seven shops to him. Siba Prasad Saha who filed the writ petition (No. 786 of 1970) in August 1970, after the first judgment of the High Court dated May 15, 1970 for refund of the license fee and for non payment of any fee in the future, as he was a licen see for several liquor shops, amended it in the light of the subsequent developments. The High Court took the view in its judgment dated April 16, 1971 that sections 2 to 5 of the Amending Ordinance, or the Amending Act (17 of 1970) were not made retrospective. It took note of this Court 's 817 decision in Krishna Kumar Narula etc. vs The State of Jammu and Kashmir and others(1) that a citizen had the fundamental right to carry on business in liquor and all that the State could do. was to impose reasonable restric tion thereon. It also held that in so far as section 29(2) of the Act provided that the sum payable under sub section (1) thereof shall be determined "otherwise" than by calling tenders or by auction, it was unconstitutional That portion ,of sub section (2)(a) was therefore struck off. The High Court held further that what was realised by the State was not a fee or tax, as the primary purpose of the Act was to. restrict the manufacture and sale of country liquor. It accordingly held as follows, "We are, therefore, satisfied that the provi sion in Section 22 of the Act for grant to any person of the exclusive privilege of manufac ture and sale of country liquor for a sum, the method of determination of which is provided in Section 29, are provisions which are calcu lated to restrict and control trade in liquor although incidentally revenue is earned for the State thereby and that Entry in List II of the Seventh Schedule confers power on the State Legislature to enact such a regulatory measure and consequently the State Legislature has legislative competence to enact Sections 22 and 29. " The High Court accordingly held that section 22 and section 29 without the expression "or otherwise" in clause (a) of sub section 2 were valid and constitutional. The High Court then examined the effect of section 6 of the Amend ing Act of 1970, and held that as retrospec tive effect was not given to sections 2 to 5 of that Act, the validity of the money rea lised by the State had to be judged with reference to the unamended provisions, and held as follows, "It, therefore, follows that by reason of the fact that Sections 2 to 5 of the Amending Act were not made retrospective in operation, the effect of Section 6 is that thereby the Legis lature had directed the State to disregard the decision given by this Court in Ajodhya Pra sad 's case (I.L.R. 1971 Curt. 51 ) that the amount realised by the auction is illegal. This virtually amounts to judicial exercise of power by the legislature a power which the Legislature does not possess. We, therefore hold that Sections 2 to 5 of the Amending Act having not been made retrospective, Section 6 is ultra vires the powers of the Legislature. " The High Court however held that although the ' license fee collected by the State was illegal, the petitioner had already enjoyed the benefit under the license and had volun tarily participated in the auction, and was not entitled to an order for its refund. A similar view was taken in the judgment dated April 16,1971 in O.J.C. No. 242 of 1967 and the judgment dated May 7, 1971 in (1) ; 818 O.J.C. NOS. 1185 1190, 1223, 1224 and 1226 of 1970. Those judgments have given rise to civil appeals Nos. 2071, 1855 1863 and 351 359 Of 1972 (cross appeals). O.J. Cs. Nos. 859 and 863 of 1970 were diposed of by separate judgments dated September 6, 1971 which followed the earlier judgment dated April 16, 1971 in Siba Prasad Saha 's case and that has given rise to appeals Nos. 1235 and 1236 of 1972. The Bihar and Orissa Excise (Orissa Second Amendment) Act, 1971 (10 of 1971) was passed to set right the defects in the law. Stated briefly that Act made the amendments to sections 2, 7, 29, 37 ' and 90 retrospective and validated the earlier acts. A writ petition (O. J.C. No. 589 of 1972) was filed to challenge the vires of section 22 and 29 of the Act. The main judgment in the matter was delivered in O.J.C. No. 1036 of 1971, on January 3, 1974. In that judgment the High Court examined the challenge to the vires of sections 22 and 29 of the Act and the claim for refund of the money already paid with reference to the amendments to the Act. It fol lowed the earlier decision in Siba Prasad Saha 's case of April 16, 1971 (I. L.R.1971 Cuttack 777) and dismissed the writ petitions and that/ms led to the filing of civil ap peals Nos. 1235 and 1236 of 1972. The last judgment was delivered on March 28, 1974 in O.J.C. No. 589 of 1972, in Siba Prasad saha 's case. The petitioner there was the grantee of the exclusive privilege for sale of country liquor: during the year 1972 73 for some shops in Mayurbhanj district. The ' petitioner challenged the vires of sections 22 and 29(2) as amended, and prayed for the consequential reliefs. The High Court held that the case was completely covered by its decision dated January 3, 1974 in O.J.C. No. 1036 of 1971 and dismissed the peti tion. It will tires appear that these appeals are inter con nected and that is why we have thought it desirable to examine them in a common, judgment. As has been stated, Civil Appeals Nos. 1892 and 1893 of 1971 arise out of ' O.J. Cs. 392 and 357 of 1970 which have been decided by the judgment of the High Court dated May 15, 1970. It has been argued by Mr. Govind Das on behalf of the appellants that the High Court erred in hold ing that the sale notice issued by the Collector was not for the grant of an exclusive .privilege under subsection (1) of section 22 of the Act because the Collector had no authority to issue a notice under that sub section, as the power of the ' State Government in that respect had been delegated to the Board of Revenue. Sub section (1) of section 22 of the Act provides that the State Government may grant to any person, On such condi tions and for such periods as it may think fit, the exclu sive privilege, inter alia, of manufacturing or selling retail any country liquor. The proviso to the sub section requires that public notice shall be given of the intention 819 to grant any exclusive privilege of that nature and that a. decision would be taken after considering the objections made in that respect. Once a decision is taken under ,sub section (1) to grant the exclusive privilege within any specified area, sub section (2) provides that no grantee of such a privilege shall exercise the same "unless or until he has received a license in that behalf from the Collector or the Excise Commissioner. " It has been stated at the Bar by Mr. Govind Das, and has not been controverted that, as. had been averted in ' the memorandum of appeal, the requirement of sub section (1) of section 22 had already been complied with by the State Government, and that the Collector was not concerned and did not in fact issue any public notice for purposes of sub section (1) of section 22. A reading of the Collector 's notice, which admittedly was in Form G.L. 10, shows that it related to the auction of the right to open a shop at the site named in the notice and the payment of the license fee therefor. The High Court therefore went wrong in holding that the issue of the notice in Form G.L. 10 negatived the contention that what was proposed to be given was the exclusive privilege to manufacture and sell country liquor. By virtue of section 7(1), the administra tion of the Excise Department and the collection of excise revenue within the district vested in the Collector, and we are unable to think, that his notice in Form G.L. 10 was sufficient to show that the exclusive privilege for retail sale of country liquor, under the outstill system, was not proposed to be given to the successful bidders at the auc tion. The true nature of the proceeds of the auction held by the Collector in such a case has been examined by this Court in Nashirwar etc. vs The Slate of Madhya Pradesh, C) Har Shankar and others vs The Dy. Excise and Taxation Com missioner and others(2) and Thakur Prasad Sao and others vs The Member, Board of Revenue and others etc. (? '). In Na shirwar 's case (supra) this Court examined the constitution al validity of the provisions in the Central Provinces Excise Act for granting leases in respect of liquor by public auction, and of the Abkari Act of the Kerala State placing restrictions on the manufacture and sale etc. of liquor. After considering all the decided cases includ ing Narula 's case (supra) in which it was held that a citizen had a fundamental right to. do business and deal in liquor, this Court referred to its decision in State of Orissa and others vs Harinarayan Jaiswal and others(4) in which Narula 's case was explained, and held as follows, "For these reasons we hold that the State has the exclusive right or privilege of manufacturing and selling liquor. The State grants such right or privilege in the shape of a licence or a lease. The State has the power to hold a (1) ; (2) ; (3) ; (4) [1972].3 S.C.R. 784. 820 public auction for grant of such right or privilege and accept payment of a sum in consideration of grant of lease. " While taking this view this Court held that the State Legislature was authorised to make a provision for public auction by reason of the power contained in Entry 8 List II of the Seventh Schedule to the Constitution and that there was "no fundamental right of citi zens to carry on trade or to do business in liquor. " The matter again came up for consideration in Har Shankar 's case (supra) with reference to the provisions of sections 27 and 34 of the Punjab Excise Act, 1914, where the appellants gave bids at public auctions. It was held that the amount payable by them, as licensees, was neither a fee in the technical sense nor a tax, but was in ' the nature of "price of a privilege" and that auctions were only a mode or medium for ascertaining the best price obtainable therefor. Thakur Prasad 's (supra)was a case directly under the provisions of the Act. It also related to the outstill system. It was held that "the State has the exclusive right and privilege of manufacturing and selling liquor" and that it has the "power to hold a public auction for the grant of such a right or privilege and to accept payment of a sum therefor. " It was accordingly held that the right granted to the appellants by public auction and the li censes issued to them was "clearly an exclusive privilege within the meaning of section 22(1) of the Act" and that it has expressly been provided in section 29 that it would be permissible for the State Government to accept payment of a sum in "conSideration" of the exclusive privilege under section 22. There can be no doubt therefore that the High Court erred in taking a contrary view. The High Court has tried to support its view by refer ring to the condition stated in Form G.L. 10 for the opening of additional shops during the currency of the license, and has stated that an exclusive privilege under section 22 "cannot comprehend exercise o[ such power once it is granted for a specified period. " This was clearly an erroneous view because it is not disputed before us that no such condition was inserted in the license at all. What the licensee therefore received under the license was an exclu sive privilege of manufacturing and selling liquor under the outstill system within the meaning of section 22 of the Act. The High Court has held that after the acceptance of the bid all that remained was to issue a license and that the Collector committed an illegality in ordering a reauction under the directions of the State Government. Such a view presupposes that a binding, obligation had come into existence in favour of the bidder by accepting a deposit from him even though this was done on the express condition that it was tentative and was not an acceptance of his bid. We do not think that what the High Court held to be an "acceptance of the bid" at the "auction", even after the announcement of an express condition 821 attached to it that the knocking down of the bid would not really be an acceptance of it by the Government, could be an acceptance of the bid at all. In the peculiar facts and circumstances of the auction, the bids were, apparently, nothing more than offers in response to invitation to make tenders, and such auctions were the mode of ascertaining the highest offers. The basic conditions for the emergence of rights through offers or conditions made and accepted, and acted upon, by paying any specified or agreed price as consideration, were thus wanting in this case. In fact the express and advertised terms of the auction made it clear that the money tendered was to be deemed to be deposited tentatively, pending the acceptance of the bid. So what we have before us are neither offers nor acceptance by the Government. There were only offers by the bidders to pur chase the rights, subject expressly to their acceptance or rejection by the State Government. The essentials of any agreement and the mutuality of obligations were thus absent altogether. Moreover it was not an ordinary auction where binding agreement could be deemed to be concluded at the fall of the hammer, creating mutually enforceable obligations. Those were only so called auctions, adopted as means for ascer taining the highest offers for the exclusive privileges which the Government alone could grant for carrying on a trade or business. considered noxious, under the law and which, because of its special character, could be regulated in any way, or even prohibited altogether, by the Govern ment. This special character of the trade or business would appear from the power of the State Government to grant the exclusive privilege to. carry on trade in the manufacture and sale of liquor. It will be recalled that section 22(1) provides that the State Government "may grant to any person, on such conditions and for such periods as it may think fit, the exclusive privilege" in question: Sub section (2) of section 22 enacts that a grantee of such a privilege shah not exercise it "unless or until he has received a license in that behalf from the Collector or the Excise Commission er. " The powers of the Government to reject a bid were thus reserved both under the provisions of law and by the express declarations made before the auction. At any rate we do not find any basis for the creation of a right merely by making a bid. The extent of the powers of the government in such matters has been indicated by this Court in State of Orissa and others vs Harinarayan Jaiswal and others (supra). So long as these powers are not used in an unreasonable or mala fide manner, their exercise cannot be questioned. In the cases before us, it could not be said that either the Gov ernment or any of its officers abused the power by acting either unreasonably or in a mala fide manner, and we find no justification for the argument that it was not permissi ble for the State Government to issue.the directions for reauction even when it found that the bids at the auction were unsatisfactory. The High Court has taken the view that rule 103(1) of the Board 's Excise Rules regarding the manner of fixation and realisation 822 of the consideration for the grant of a license for the exclusive privilege of retail vend of country spirit was "incompetent and ultra vires the act. " The High Court took that view under the mistaken impression that the State was not entitled to collect a tax "under the garb of a fee" and the "auction price for a license is not duty within the meaning of Entry 51 of List 11 of the Seventh Schedule to the Constitution. " But, as has been shown, what was sought to be raised was consideration and not "fee". The use of the expression "fees" in the rule is therefore inaccurate, but that cannot detract from the real nature of the recov ery. Mr. S.C. Agarwal has challenged the validity of rule 103 on another ground, and we shall deal with it when we come to the judgment of the High Court dated April 16, 1971. The next judgment of the High Court is that dated February 3, 1971, in O.J.C. No. 850 of 1970, which has given rise to civil appeal No. 209/of 1972 by the State of Orissa. We have already stated the findings of the High Court in regard to it. It has been argued by Mr. Govind Das that even if the State Government failed to specify the authority which was to determine the mode of determining the sum payable under sub section (1) of section 29, that could not be said to matter because it was the Collector, who was incharge of the administration of the Excise Department and Collection of the excise revenue under section 7 of the Act, who took the action to issue the auction notice for the grant of the license. for the retail sale of country liquor. Moreover, the State Government did not object to his authority to do so. and, on the other hand, directed him to make a reauction merely on the ground of the insufficiency of the bids. The Collector called for fresh. tenders. It was not in dispute before the High Court that the State Government issued a special order under section 29 by which it nominated itself to be the authority to determine the sufficiency of the sum payable under section 29(1) of the Act. There is nothing in sub section (2)(b) to show that that was not permissible. The other question in this respect is whether the fol lowing direction in the State Government 's order dated August 19, 1970 was valid, "It shall be at the discretion of the State Government to accept or reject any tender without assigning any reason therefor to order for calling of fresh tender or other wise as the case may be. " It will be recalled that the High Court has taken the view that the order dated August 19, 1970 and the tender notice issued in pursuance thereof were bad in law and were liable to be quashed. The High Court has taken the view that section 29(2)(a) did not authorise the exercise of "such absolute and naked power in determining the sum of money" as was sought to be done by the order dated August 19, 1970. It appears to us however that the power to accept or reject a tender without assigning any reason cannot be said to be 823 arbitrary as section 29(2) (which has been amended with retrospective effect) itself provides. that (i) it shall be exercised in the interest of the Excise revenue", (ii) by the specified authority, and (iii) under such control as may be specified. As has been stated, the State Govern ment retained the power of accepting or rejecting the tender, or for calling of a fresh tender, to itself, and such an order cannot be said to be an "absolute" or "naked" power of the nature apprehended by the High Court. Refer ence in this connection may be made to the decision in Jaiswal 's case (supra) mentioned above. Moreover it is not disputed before us that the power to accept or not to accept the highest or any bid was expressly reserved under the impugned sale notification. Sub section (2) of section 79 of the Act was also amended by the Bihar and Orissa Excise (Second Orissa Amendment) Act 1971 (Act 10 of 1971) with full retrospective effect. Section 17 of the Act validated both the licenses granted and amounts paid or payable therefor, and its validity has not been challenged before us. It will be remembered that Siba Prasad Saha had filed O.J.C. No. 786 of 1970 after the first judgment of the High Court dated May 15,1970, for refund of the license fee and for non payment of the fee in future. The State of Orissa feels aggrieved against the decision of the High Court in that case dated April 16,1971 that a citizen has a fundamen tal right to deal in liquor. In taking that view the High Court relied on this Court 's decision in Narula 's case (supra). The decision in Narula 's case was considered and explained by this Court in Nashirwar 's care (supra) and it has been held as follows, "It is not correct to read in the deci sion in Narula 's case that there is a funda mental right to do business in liquor. The decision is that dealing in liquor is busi ness and a citizen has a right to do business in that commodity and the State can impose reasonable restrictions on the right in public interest. If the State can prohibit bussiness in liquor as is held in State of Bombay and Another vs F.N. Balsara (1951 S.C.R.682) this establishes that the State has exclusive right of privilege of manufac ture, possession, sales of intoxicating liquor and therefore the Slate grants such a right of privilege to persons in the shape of license or lease." In reaching this conclusion this Court took note of the decision in Bharucha 's case(1) that there was no inherent right in a citizen to sell intoxicating liquors by retail, and that it is not a privilege of a citizen of the State, and observed that as Bharucha 's case was a Constitution Bench decision like Narula 's case, the latter could not be said to have overruled the former. As has been stated, the matter again came up for consideration in Har Shankar 's case (supra) with specific reference to Narula 's case, and it was reiterated that "there is no fundamental right to do trade or business in intoxicants" and that "in all their mani festations, these rights are vested in the State and indeed without such vesting there can be no effective regulation of 824 various forms of activities in relation to intoxicants. " The contrary view of the High Court in impugned judgment is incorrect and must be set aside. The other grievance of the appellant State is that the High Court struck down the expression "or otherwise" from clause (a) of subsection (2) of 29 of the Act as unconstitu tional. We have given our reasons for the contrary view, and the High Court therefore went wrong in striking down the expression "or otherwise". The High Court has also held that as sections 2 to 5 of the Amending Act of 1970 were not made retrospective in operation, the effect of section 6 amounted to a direction by the Legislature to the State to disregard the decision in Ajodhya Prasad 's case that the amount realised by auction was illegal and that section 6 was therefore ultra vires the powers of the Legislature. It will be sufficient to say in this connection that the Bihar and Orissa Excise (Second Orissa Amendment) Act, 1971 (Act 10 of 1971) has made good the deficiency, if any, by stating that the amending provi sions shall be deemed always to have been so added or inserted or substituted. In this respect also, the impugned judgment of the High Court must be rectified. Mr. S.C. Agarwal has argued that the amount realised by the State for grant of the exclusive privilege under sec tions 22 and 29 was nothing but a tax and no such tax was permissible under Entries 45 to 63 of List II of the Seventh Schedule to the Constitution and that it was not excise duty within the meaning of Entry 51 or a fee under Entry 66. It has also been argued that Entry 8 embodying the Police powers of the State could not be invoked to sustain such an imposition. Mr. Bhagat has also argued that the collection was in the nature of a tax and section 29 was therefore ultra vires the Constitution. Mr. Bhagat has also urged that the State was not the owner of the exclusive privilege to manufacture or sell liquor and that the Act did not empower it to part with that right on payment. We have given our reasons already for taking a contrary view, with refer ence to. the decisions in Nashirwar 's case and Har Shankar 's case. The State has the exclusive right or privilege to manufacture, store and sell liquor and to grant that right to its license holders on payment of consideration, with such conditions and restrictions for its regulation as may be necessary in the public interest. The argument to the contrary is futile and is rejected. It has been argued by Mr. Agarwal that although the Amending Act of 1970 (Act 17 of 1970) was enacted for the purpose of getting over the High Court 's declaration in O.J.C.No. 357 of 1970 that rule 103 of the Board 's Excise Rules, 1965, in so far as it directs that fees for license for the retail vend of excisable articles shall be fixed by auction, was ultra vires the Act, rule 103 continued to remain invalid even after the promulgation of that Act because. such a rule could not be made under section 90(7) of ' the Act. Counsel has argued that as the rule was in valid, it was not permissible to hold the impugned public auction because that was not permissible under any other provision of the Act. This argument is also futile because section 5 of the Bihar and Orissa Excise (Second Orissa Amendment) 10 of 1971) has substituted a new sub section (2) for the old sub section as follows, providing for auction, and it has been stated that it shall be "deemed always to have been substituted". "(2) The sum payable under sub section (1) shall be determined as follows, (a) by auction or by calling tenders or other wise as the State Government may, in the interest of excise revenue by general or special order direct." Then follow other clauses with which we are not concerned. Moreover section 17 of that Act has validated all grants made by way of licenses for manufacture and retail sale of country liquor in respect of any place on or after the 7th day of August, 1965, on which date the Board 's Excise Rules (including rule 103) admittedly came into force. In this view of the matter, it is not necessary for us to examine the other arguments of Mr. Agarwal Which have been adopted by Mr. Bhagat regarding the invalidity of rule 103. It is not necessary to deal separately with the judgment of the High Court dated April 16, 1971 in O.J.C. No. 242 of 1967, which has given rise to civil appeal No. 2071 of 1972, or with its decision dated May 7, 1971 in O.J.Cs. No. 1185 1190, 1223, .1224 and 1226 of 1970 (which has given rise to civil appeals Nos. 1855 1863 of 1972 and cross appeals Nos. 351 359 of 1972) because they are based on the afore said decision dated April 16, 1971 in O.J.C. No. 786 of 1970. So also, it is not necessary to deal separately with the decision dated September 6,1971 in O.J.C.No. 859 of 1970 and 863 of 1970 which have given rise to civil appeals Nos. 1235 and 1236 of 1972, for the same reason. This takes us to the judgment of the High Court dated March 28, 1974 in O.J.C.No.589 of 1972 which has given rise to civil appeal No. 1802 of 1974. That decision is based on the decision dated January 3,1974 in O.J.C.No. 1036 of 1971. The petitioner in that case was a licensee for the retail sale of country liquor in Mayurbhanj district. He chal lenged the vires of sections 22 and 29 of the Act and claimed that the monthly consideration for the license was not due from him and that he was entitled to a refund of the money already paid by him. The High Court followed that decision and dismissed the writ petition. In doing so it relied on its decision dated April 16, 1971 in Siba Prasad Saha vs State of Orissa and other (I.L.R. 1971 Cut tack 777) and the decision of this Court in Jaiswal 's case (supra) and dismissed the petition. We have already dealt with the points which arise for consideration in this case while examining the earlier cases and we see nothing wrong with the impugned judgment of the High Court by which the writ petition has been dismissed. In the result, we order as follows, Civil Appeals Nos. 1892 and 1893 of 1971 are allowed, the impugned judgment of the High Court dated May 15,1970 is set aside and writ petitions Nos. O.J.C. 329 and 357 of 1970 are dismissed. 826 Civil Appeal No. 2091 is allowed, the impugned judgment of the High Court dated February 3, 1971 is set aside and the writ petition No. 850 of 1970 is dismissed. Civil Appeal No. 1302 of 1972 is allowed, the 'impugned judgment of the High Court dated April 16, 1971 is set aside and the writ petition No. 786 of 1970 is dismissed. Civil Appeal No. 2071 of 1972 is allowed, the impugned judgment of the High Court dated April 16, 1971 is set aside and the writ petition No. O.J.C. 242 of 1967 is dismissed. Civil Appeals Nos. 1855 1863 of 1972 are allowed, the impugned judgments of the High Court dated May 7, 1971 are set aside and O.J. Cs. 1185 1190, 1223, 1224 and 1226 of 1970 are dismissed. Cross appeals Nos. 351 359 of 1972 are dismissed. Civil Appeals Nos. 1235 and 1236 of 1972 are allowed, the impugned judgments of the High Court dated September 6, 1971 are set aside and O.J. Cs. Nos. 859 and 863 of 1970 are dismissed. Civil Appeal No. 1802 of 1974 fails and is dismissed. In the circumstances of these cases there will be no order as to he costs.

Section 22(1) of the Bihar & Orissa Excise Act, 1915, provides that the States may grant to any person on such conditions and for such periods as it may think fit, the exclusive privilege of manufacturing or selling in retail count try liquor. The proviso provides that a public notice shall be given of the intention to grant such exclu sive privilege and that a decision would be taken after considering objections. Sub section (2) provides that no grantee of such a privilege shall exercise it unless or until he has received a licence in that behalf from the Collector or the Excise Commissioner. In the present case the Collector issued a notice in form GL 10 relating to the auction of the right to open a liquor shop at the site named in the notice and the payment of the licence fee therefor. The respondent was a success ful bidder at the auction. He deposited the money under r. 103 of the Excise Rules but the Government did not grant him the licences. In a writ petition filed by the respond ent the State Government alleged that the bids at the auc tion were not satisfactory and that in the interest of revenue the State Government did not accept the bids. The High Court held (i) that the State Government had no power to interfere with the auction held by the Collector after it had become final and could not direct reauction and (ii) that the realisation at the auction was not a fee but a tax not contemplated by the Act and that the auction price for a licence was not excise duty within the meaning of Entry 51 of List II and hence r. 103(1) of the Rules providing for fixation of licence fee by auction was in excess of the rule making power of the Board. The High Court also held that what was purported to be given under the sale notice of the Collector was not the grant of exclusive privilege under section 22. By the Bihar & Orissa Excise (Orissa Amendment Ordi nance) 1970 which later became the Act, section 29(2) was amend ed. The State Government issued an order for fresh settle ment of the shops and the Collector accordingly called for tenders. In the respondent 's writ petition the High Court held that the State Government 's order was invalid as the author ities for fixing the procedure. under section 29(2) as amended had not been specified and the order left it to the uncon trolled discretion of the authority concerned to accept or reject any tender and to determine the adequacy of the amount offered in the tender. The State Government 's order and the Collector 's tender notice were quashed and the Collector was directed to issue licence to the respondent. The High Court accordingly held that the respondent was entitled to the grant of the exclusive privilege under section 22 because he was the highest bidder in the auction. The High Court also held in a petition filed by another respondent, that in so far as section 29(2) provided that the sum payable under sub section (1) thereof shall be determined "other wise" than by calling tenders or by auction it was uncon stitutional; that portion of section 29(2). should, therefore, be struck down: that section 6 of the Amending Act, 1970 was ultra vires as there was exercise of judicial power by the legis lature and, therefore, the licence fee collected by the State was illegal; but that as the respondent had already enjoyed the benefit of the licence and voluntarily partici pated in the auction he wag not entitled to its refund. 3 1338S.C.I./76 812 Therefore the Second Amendment Act, 1971 was passed. The vires of the amended sections 21 and 29 was challenged in writ petitions but the High Court dismissed them. In appeals to this Court, HELD: (1) The provisions of the Act and the express declarations make clear that the State Government had the power to reject a bid. In any event no right is created in the bidder by making a bid. The administration of the Excise Department and the collection of revenue within the district vest in the Collector. It is not correct to say that the notice issued by the Collector in form GL 10 was sufficient to show that the exclusive privilege for retail sale of country liquor was not proposed to be given to the successful bidders at the auction. The High Court erred in holding that a condition regarding the opening of additional shops was inserted in the Form. ; 820E] (b) It has been held by this Court that the State has the exclusive right or privilege of manufacturing and sell ing liquor. The State grants such right or privilege in the shape of a licence or a lease. The State has the power to hold, a public auction for grant of such right or privilege and accept payment of a sum in consideration of grant of lease, that the amount payable by the bidders as licensees was neither a fee in the technical sense nor a tax, but was in the. nature of price of a privilege and that auctions were only a mode or medium for ascertaining the best price obtainable thereof. Therefore, the right granted to the bidders by public auction and the licences issued to them was clearly an exclusive privilege within the meaning of section 22(1 ) of the Bihar Act and it was expressly provided in section 29 that it would be permissible for the State not to accept payment of a sum in consideration of the grant of the exclusive privilege. [819 H; 820A D] Nashirwar etc. vs The State of Madhya Pradesh ; ; Hat Shankar & ors. vs The Dy. Excise and Taxa tion Commissioner & ors. ; ; Thakur Prasad Sac & ors. vs The Member, Board of Revenue & ors. ; State of Orissa & ors. vs Harinarayan Jaiswal & ors. ; applied. (c) The view of High Court that after the acceptance of the bid the Collector should have issued the licence and that he committed an illegality in ordering reauction pre supposes that a binding obligation had come into existence in favour of the bidder by accepting a deposit from him even though this was done on the express condition that it was tentative and was not an acceptance of his bid. In the peculiar facts and circumstances of the auction, the bids were nothing more than offers in response to an invitation to make tenders and such auctions were the mode. of ascer taining the highest offers. The basic conditions for the emergence of rights through offers or conditions made and accepted and acted upon by paying any specified or agreed price as consideration were wanting in this case. The express and advertised terms of. the auction made it clear that the money tendered was to be deemed to be deposited tentatively, pending the acceptance of the bid. The bids were neither offers nor acceptance ' by the Government. They were only offers by the bidders.to purchase the rights. The essentials of an agreement and mutuality of obligations were absent altogether. Since auction is only a mode of ascer taining the highest offer, the State Government can deter mine the sum payable by any other method and hence. the High Court was wrong in striking down the expression "other wise" from section 29(2)(a). [820 H; 821 A C] (d) These auctions are not ordinary auctions where a binding agreement could be deemed to be concluded at the fall of the.hammer, creating mutually enforceable obliga tions but. are a means for ascertaining the highest offers for the exclusive privileges which the Government alone could grant for carrying on a trade or business considered noxious under the law, and which, because of its special character, could be regulated m any way or even prohibited altogether by the Government. This special character of the trade or business would appear from the power of the State Government to grant the exclusive privilege to carry on trade m the manufacture and sale of liquor. [821 F G] (e) There is no justification for the argument of the. respondents that it was not permissible for the State Gov ernment to issue directions for reauction even when it found that the bids at the auction were unsatisfactory. So long as the powers of the Government to reject a bid are not used in an unreasonable or mala fide manner, their exercise cannot be questioned [821 G] 2(a) The High Court 's view that r. 103(1) was ultra. vires was taken under the mistaken impression that the State was collecting a tax under the garb of a fee and that the auction price for a licence could not be treated as duty within the meaning of Entry 51, List II of the Seventh Schedule. But what was sought to be raised was considera tion and not fee. The use of the expression " 'fees" in the rule is inaccurate but that:cannot detract from the real nature of the recovery. [822 A B] (b) The argument of the respondent that r. 103 continued to remain invalid even after the promulgation of the Amend ment Act is not correct because section 5 of the Second Amendment Act has substituted a new sub section (2)for the old subsection providing for auction and this sub section stated that it shall be deemed always to have been substituted". Section 17 has validated all grants made by way of licences for manufacture and retail sale of country liquor and the amounts paid or payable therefor. [824 G H; 825 C] (c) The power to accept or reject a tender without assigning any reason cannot be said to be arbitrary as section 29(2) (which has been amended with retrospective effect) itself provides that (i) it shall be exercised in the inter est of the Excise revenue, (ii) by the specified authority and (iii) under such control as may be specified. In the instant case the 'State Government retained the power of accepting or rejecting the tender or for calling of a fresh tender, to itself, and such an order cannot be said to be an absolute or naked power of the nature apprehended by the High Court. Moreover, the power to accept or reject the highest o,r any bid was expressly reserved under the im pugned sale notification. [823 A C] (3) Even though no authority was specified for taking action under section 29(1) it was the Collector who is in charge of the Excise Administration that took action in the present case and his action was approved by the State Gov ernment. Moreover, the State Government issued a modified order under section 29 nominating itself as the authority to determine the sufficiency of the. sum payable. [822 D] (4) It has been held by this Court that there is no fundamental right to do trade or business in intoxicants and that in all their manifestations these rights are vested in the State and without such vesting there can be no effective regulation of various forms of activities in relation to intoxicants. There is no inherent right in a citizen to sell intoxicating liquors by retail. [823 H] Krishan Kumar Narula etc. vs The State of J & K & ors ; ; Nashirwar etc. vs The State of M.P. ; ; Har Shankar & ors. vs The Dy. Excise & Taxation Commissioner & ors. ; ; Coovetlee Bharucha vs The Excise Commissioner ; fol lowed. (5) Since the Bihar & Orissa Excise (Second Orissa Amendment) Act, 1971 has made good the deficiency, if any, by stating that the amending provisions in sections 2 to 5 of the Amending Act, 1970 shall be deemed always to have been so added or inserted or substituted, the High Court was wrong in holding that there was any exercise of judicial power by 'the Legislature. [824 C D]

3763.txt

: Criminal Appeals Nos. 18 and 19 of 1969. Appeal from the judgment and order dated October 16, 1968 ' of the Madras High Court in Criminal Misc. Petition No. 980 of 1968. 642 A.K. Sen, N.C. Raghavachari, W.S. Sitaram and R. Gopalakrishnan, for the appellants. S.T. Desai, B.D. Sharma and section P. Nayar., for the respondent. P.R. Gokulakrishnan, Advocate General, Tamil Nadu and V. Rangam, for the intervener. Bhargava, J. These appeals, by certificate, challenge a .common Order of the High Court of Madras dismissing applications under section 561A of the Code of Criminal Procedure presented by the appellants in the two appeals for quashing proceedings being taken against them in the Court of the Chief Presidency Magistrate, Madras, on the basis of a complaint filed on 17th March; 1968 by the respondent, the Director of Enforcement, New Delhi. The Rayala Corporation Private Ltd., appellant in Criminal Appeal No. 18 of 1969, was accused No. 1 in the complaint, while one M.R. Pratap, Managing Director of .accused No. 1, appellant in Criminal Appeal No. 19/1969 was accused No. 2. The circumstances under which the complaint was filed may be briefly stated. The premises of accused No. 1 were raided by the Enforcement Directorate on the 20th and 21st December, 1966 and certain records were seized from the control of the Manager. Some enquiries were made subsequently and, thereafter, on the 25th August, 1967, a notice was issued by the respondent to the two accused to show cause why adjudication proceedings should not be instituted against them for violation of sections 4 and 9 of the Foreign Exchange Regulation Act VII of 1947 (hereinafter referred to as "the Act") on the allegation that a total sum of 2,44,713.70 Swedish Kronars had been deposited in a Bank account in Sweden in the name of accused No. 2 at the instance of accused No. 1 which had acquired the foreign exchange and had failed to surrender it to. an authorised dealer as required under the provisions of the Act. They were called upon to show cause in writing within 14 days of the receipt of the notice. Thereafter, some correspondence went on between the respondent and the two accused and, later, on 4th November, 1967, another notice was issued by the respondent addressed to accused No. 2 alone stating that accused No. 2 had acquired a sum of Sw. 88,913.09 during the. period 1963 to 1965 in Stockholm, was holding that sum in a bank account, and did not offer or cause it to be offered to the Reserve Bank of India on behalf of the Central Government, so that he had contravened the provisions of section 4(1) and section 9 of the Act, and affording to him. an opportunity under section 23(3) of the Act of showing, within 15 days from the receipt of the notice, that he had permission or special exemp 643 tion from the Reserve Bank of India in his favour for acquiring this amount of foreign exchange ,and for not surrendering the amount in accordance with law. A similar show cause notice was issued to accused No. 1 in respect of the same amount on 20th January, 1968, mentioning the deposit in favour of accused No. 2 and failure of accused No. 1 to surrender the amount, and giving an opportunity to accused No. 1 to produce the permission or special exemption from the Reserve Bank of India. On the 16th March, 1968, another notice was issued addressed to both the accused to show cause in writing. within 14 days of the receipt of the notice why adjudication proceedings as contemplated in section 23 D of the Act should not be held against them in respect of a sum of Sw. 1,55,801.41 which were held in a bank account in Stockholm in the name of accused No. 2 and in respect of which both the accused had contravened the provisions of sections 4( 3 ), 4( 1 ), 5(1)(e) and 9 of the Act. The notice mentioned that it was being issued in supersession of the first show cause notice dated 25th August, 1967, ,and added that it had since been decided to launch a prosecution in respect of Sw. 88,913.09. The latter amount was the amount in respect of which the two notices of 4th November, 1967 and 20th January, 1968 were issued to the two accused, while this notice of 16th March, 1968 for adjudication proceedings related to the balance of the amount arrived at by deducting this sum from the original total sum of Sw. 2,44,71 3.70. The next day, on 17th March, 1968, a complaint was filed against both the accused in the Court of the Chief PresidenCy Magistrate, Madras, for contravention of the provisions of sections 4( 1 ), 5( 1 ) (e) and 9 of the Act punishable under section 23 (1 ) (b) of the Act. In addition, the complaint also charged both the accused with violation of Rule 132 A(2) of the Defence of India. Rules (hereinafter referred to as "the D.I. Rs.") Which was punishable under Rule 132 A(4) of the said Rules. Thereupon, both the accused moved the High Court for quashing the proceedings sought to be taken against them on the basis of this complaint. Those applications having been dismissed, the appellants have come up in these appeals challenging the order of the High Court dismissing their applications and praying for quashing of the proceedings being taken on the basis of that complaint. In these appeals. Mr. A.K. Sen, appearing on behalf of the appellants, has raised three points. In respect of the prosecution for violation of sections 4(1), 5(1)(e) and 9. of the Act punishable under section 23 (1 ) (b) of the Act, the principal ground raised is that section 23(1)(b) of the Act is ultra rites Article 14 of the Constitution inasmuch as it provides for a punishment heavier and severer than the punishment or penalty provided for the same acts under section 23(1)(a) of the Act. In the alternative, the second point taken is that, even if section 23 ( 1 ) (b) is not void, the complaint in 644 respect of the offences punishable under that section has not been filed properly in accordance with the proviso to section 23 D (1 ) of the Act, so that proceedings cannot be competently taken on the basis of that complaint. The third point raised relates to the charge of violation of R. 132 A(2) of the D.I. Rs. punishable under R. 132 A(4) of those Rules and is to the effect that R. 132 A of the D.I. Rs. was omitted by a notification of the Ministry of Home Affairs dated 30th March, 1965 and, consequently, a prosecution in respect of an offence punishable under that Rule could not be instituted on 17th March, 1968 when that Rule had ceased to exist. On these three grounds, the order quashing the proceedings being taken on the complaint in respect of all the offences mentioned in it has been sought in these appeals. To appreciate the first point raised before us and to. deal with it properly, we may reproduce below the provisions of section 23 and section 23 D(1) of the Act : "23. Penalty and procedure. (1) If any person contravenes the provisions of section 4, section 5, section 9, section 10, sub section. (2) of section 12, section 18, section 18A or section 18B or of any rule, direction or order made thereunder, he shall (a) be liable to such penalty not exceeding three .times the value of the foreign exchange in respect of which the contravention has taken place, or five thousand rupees, whichever is more, as may be adjudged by the Director of Enforcement in the manner hereinafter provided, or (b) upon conviction by a Court, be punishable with imprisonment for a term which may extend to two years, or with fine, or with both. (IA) If any person contravenes any of the provisions of this Act, or of any rule, direction or order made thereunder, for the contravention of which no penalty is expressly provided, he shall, upon conviction by a court be punishable with imprisonment for a term which may extend to two years, or with fine, or with both. (lB) Any Court trying a contravention under sub section (1) or sub section (IA) and the authority adjudging any contravention under clause (a) of sub section (1 ) may, if it thinks fit, and in addition to any sentence or penalty which it may impose for such contravention, direct that any currency, security, gold or silver, or goods or any other money or property, In respect of which the contravention has taken place, 645 shall be confiscated to the Central Government and further direct that the foreign exchange holdings, if any, of the person committing the contravention or any part thereof shall be brought back into India or shall be retained outside India in accordance with the directions made in this behalf. Explanation. For the purposes of this sub section, property in respect of which contravention has taken place shall include deposits in a bank, where the said property is converted into such deposits. (2) Notwithstanding anything, contained in section 32 of the Code of Criminal Procedure, 1898 (Act 5 of 1898), it shall be lawful for any magistrate of the first class, specially empowered in this behalf by the State Government, and for. any presidency magistrate to pass a sentence of fine exceeding two thousand rupees on any person convicted of an offence punishable under this section. (3) No Court shall take cognizance (a) of any offence punishable under sub section (1) except upon complaint in writing made by the Director of Enforcement, or (aa) of any offence punishable under sub section (2) of section 191, (i) where the offence is alleged to have been committed by an officer of Enforcement not lower in rank than an Assistant Director of Enforcement, except with the previous sanction of the Central Government; (ii) Where the offence is alleged to have been committed by a Officer of Enforcement lower in rank than an Assistant Director of Enforcement, except with the previous sanction of the Director of Enforcement, or; (b) of any offence punishable under sub section (IA) of this section or section 23F, except upon complaint in writing made by the Director of Enforcement or any officer authorised in this behalf by the Central Government or the Reserve Bank by a general or special order; Provided that where any such offence is the contravention of any of the provisions of this Act or any rule, direction or order made thereunder which prohibits the doing of an act without permission, no such complaint shall be made unless the person accused of the offence has been given an opportunity of showing that he had such permission. 646 (4) Nothing in the first proviso to section 188 of the Code of Criminal Procedure, 1898 (Act 5 of 1898), shall apply to any offence punishable under this section." 23D. Power to adjudicate. (1) For the purpose of adjudging under ' clause (a) of sub section (1) of section 23 whether any person has committed 'a contravention, the Director of Enforcement shall hold an inquiry in the prescribed manner after giving that person a reasonable opportunity of being heard and if, on such inquiry, he is satisfied that the "person has committed the contravention, he may impose such penalty as he thinks fit in accordance with the provisions of the said section 23: Provided that if, at any stage of the inquiry, the Director of Enforcement is of opinion. that having regard to the circumstances of the case, the penalty which he is. empowered to impose would not be adequate, he shall, instead of imposing any penalty himself, make a complaint in writing to the Court. " A plain reading of section 23 (1 ) of the Act shows that under this sub section provision is made for action being taken against any per son who contravenes the provisions. of sections 4, 5, 9, 10, 12(2), 18,18A or 18B or of any rule, direction or order made thereunder;and cls. (a) and (b) indicate the two different proceedings that can be taken for such contravention. Under cl. (a), the person is liable to a penalty only, and that penalty cannot exceed three times the value of the foreign exchange in respect of which the contravention has taken place, or Rs. 5,000/ , whichever is more. This penalty can be imposed by an adjudication made by the Director of Enforcement in the manner provided in section 23D of the Act. The alternative punishment that is provided in cl. (b) is to be imposed upon conviction by a Court when the Court can sentence the person to imprisonment for a term which may extend to two years, or with fine, or with both. Clearly, the punishment provided under section 23 (1)(b) is severer and heavier than the penalty to which the person is made liable if proceedings are taken under section 23(1)(a) instead of prosecuting him in a Court under section 23 (1)(b). The argument of Mr. Sen is that this section lays down no principles at all, for determining when the per son concerned should be proceeded 'against under section 23(1)(a) and when under section 23(1)(b), and it would appear that it is left to the arbitrary discretion of the Director of Enforcement to decide which proceedings should be taken. The liability of a person for more or less severe punishment for the same act at the sole discretion and arbitrary choice of the Director of Enforcement, 647 it is urged, denies equality before law guaranteed under article 14 of the Constitution. The submission made would have carried great force with us but for our view that the effect of section 23D of the Act is that the choice in respect of the proceeding to be taken under section 23(1)(a) or s,. 23(1)(b) has not been left to the unguided and arbitrary discretion of the Director of Enforcement, but is governed by principles indicated by that section,. In this connection, it is pertinent to note that section 23 (1) of the Act 'as origin.ally enacted in 1947 did not provide for alternative punishment for the same contravention and contained only one single provision under which any person contravening any of the provisions of the Act or of any rule, direction or order made thereunder was punishable with imprisonment for a term which could extend to two, years or with fine or with bOth, with the additional clause that any Court trying any such contravention might, if it thought fit and in addition to any sentence which it might impose for such contravention, direct that any currency, security, gold or silver, or goods or other property in respect of which the contravention has taken place shall be confiscated. No question of the applicability of article 14 of the Constitution could, therefore, 'arise while the provision stood as originally enacted. Parliament, by Foreign Exchange Regulation (Amendment) Act XXXIX of 1957, amended section 23(1) and, at the same time, also introduced section 23D in the Act. It was by this amendment that two alternative proceedings for the same contravention were provided in section 23 (1 ). In thus introducing two different proceedings, Parliament put in the forefront proceedings for penalty to be taken by the Director of Enforcement by taking up adjudication, while the punishment to be awarded by the Court upon conviction, was mentioned as the second type of proceeding that could be resorted to. Section 23D(1) is also divisible into two parts. The first part lays down what the Director of Enforcement has to do in order to adjudge penalty under section 23 ( 1 ) (a), and the second part, contained in the proviso, gives the power to the Director of Enforcement to file a complaint instead of imposing a penalty himself. In our opinion, these two sections 23(D and 23D(1) must be read together, so that the procedure laid down in section 23D(1) is to be followed in all cases in which proceedings are intended to be taken under section 23 (1). The effect of this interpretation is that, whenever there is any contravention of any section or rule mentioned in section 23( 1 ), the Director of Enforcement must first proceed trader the principal clause of section 23D(1) and initiate proceedings for adjudication of penalty. He cannot, at that stage, at his discretion, choose to file a complaint in a Court for prosecution of the person concerned for the offence under section 23( 1 )(b). The Director of Enforcement can only file a complaint by acting Ll4Sup./69 12 648 in accordance with the proviso to section 23D(1), which clearly lays down that the complaint is only to be filed in those cases where, at any stage of the inquiry, the Director of Enforcement comes to the opinion that, having regard to the circumstances of the case, the penalty which he is empowered to impose would not be adequate. Until this requirement is satisfied, he cannot make a complaint to the Court for prosecution of the person concerned under section 23 (1) (b). The choice of the proceeding to be taken against the person, who is liable for action for contravention under section 23 (1), is, thus, not left entirely to the discretion of the Director of Enforcement, but the criterion for making the choice is laid down in the proviso to section 23D(1). It cannot possibly be contended, and no attempt was made by Mr. Sen to contend, that, if we accept this interpretation that the right of the Director of Enforcement to make a complaint to the Court for the offence under section 23 (1) (b) can be exercised only in those cases where in accordance with the proviso, he comes to the opinion that the penalty which he is empowered to impose would not be adequate, the validity of section 23 (1) (b) of the Act can still be challenged. In this connection, it was urged before us that the language of the principal clause of section 23D(1) taken together with the language of the proviso does not justify an interpretation that a complaint for an offence under section 23 (1) (b) cannot be made by the Director of Enforcement except in accordance with the proviso, particularly because the principal clause of section 23D(1) merely lays down the procedure that has to be adopted by the Director Of Enforcement when proceeding under section 23 (1) (a), and contains No. words indicating that such a proceeding must invariably be resorted to by him whenever he gets information of a contravention mentioned in section 23(1). The language does not contain any ,words creating a bar to his proceeding to file a complaint straightaway instead of taking proceedings for adjudication under section 23D(1). It is true that neither in section 23(1) itself nor in section 23D(1) has the Legislature used specific words excluding the filing of a complaint before proceedings for adjudication are taken under section 23D(1). If any such words had been used, no such controversy could have been raised as has been put forward before us in these appeals. We have, however, to gather the intention of the Legislature from the enactment as a whole. In this connection, significance attaches to the fact that section 23D(1) was introduced simultaneously with the provision made for alternative proceedings under section 23 (1) in its two cls. (a) and (b). It appears to be obvious that the Legislature adopted this course so as to ensure that all proceedings under section 23(1) are taken in the manner laid down in section 23D(1). Parliament must be credited with the knowledge that, if provision is made for two alternative punishments for the same act one differing from the other without any limitations, such a provision would be void under article 14 of 649 the Constitution; and that is the reason why Parliament simultaneously introduced the procedure to be adopted under section 23D(1) in the course of which the Director of Enforcement is ' to decide whether a complaint is to be made in Court and under what circumstances he can do so. We have also to keep in view the general principle of interpretation that, if a particular interpretation will enure to the validity of a law, that interpretation must be preferred. In these circumstances, we have no hesitation in holding that, whenever there is a contravention by .any person which is made punishable under either cl. (a)or cl. (b) of section 23(1), the Director of Enforcement must first initiate proceedings under the principal clause of section 23D( 1 ) and he is empowered to file a complaint in Court only when he finds that he is required to do so in accordance with the proviso. It is by resorting to the proviso only that he can place that person in greater jeopardy of being liable to a more severe punishment under section 23(1)(b) of the Act. The view we have taken is in line with the decision of this Court in Shanti Prasad Jain vs The Director of Enforcement(1), where this Court considered the validity of section 23(1)(a) and section 23D which were challenged on the ground of two alternative procedures being applicable for awarding punishment for the same act. The Court noticed the position in the following words : "It will be seen that when there is a contravention of section 4 (1 ), action with respect to it is to be taken in the first instance by the Director of Enforcement. He may either adjudge the matter himself in accordance with section 23(1)(a), or he may send it on to a Court if he considers that a more severe penalty than he can impose is called for. Now, the contention of the appellant is that when the case is. transferred to a Court, it will be tried in accordance with the procedure prescribed by the Criminal Procedure Code, but that when the Director himself tries it, he will follow the procedure prescribed therefor under the Rules framed under the Act, and that when the law provides for the same offence being tried under two procedures, which are substantially different, and it is left to the discretion of an executive officer whether the trial should take place under the one or the other of them, there is clear ' discrimination, and article 14 is contravened. Therefore, section 23(1)(a) must, it is argued, be struck down as unconstitutional and the imposition of fine on the appellant under that section set aside as illegal." (1)" ; 650 The Court then distinguished the provisions of the Act with the law considered in the case of State of West Bengal vs Anwar A1i(1) and held . "Section 23D confers authority on the very officer who has power to try and dispose of a case to send it on for trial to a Court, and that too only when he considers that a more severe punishment than what he is authorised to impose should be awarded. " On this view about the effect of section 23D, the Court gave the decision that the power conferred on the Director of Enforcement under section 23D to transfer cases to a Court is not unguided and arbitrary, and does not offend article 14 of the Constitution; and section 23 (1) (a) cannot be assailed as unconstitutional. In that case, the argument was that section 23(1)(a) should be struck down, because the procedure prescribed by it permitted proceedings to be taken by the Director of Enforcement himself which procedure did not confer the same rights on the defence as the procedure prescribed for trial if the Director of Enforcement filed a complaint for the offence under section 23 (1) (b). In the case before us, it is section 23(1)(b) which is challenged and on a slightly different ground that it provides for a higher punishment than that provided by section 23 (1) (a). The answer to both the questions is found in the view taken by us in the present case as well as by this Court in the case of Shanti Prasad Jain(2) that the Director of Enforcement, though he has power to try the case under section 23 (1) (a), can only send the case to the Court if he considers that a severer punishment than what he is authorised to impose should be awarded. The Court in that case also thus accepted the principle that section 23D limits entirely the procedure the Director of Enforcement has to observe when deciding whether the punishment should be under section 23 (1) (a) or under section 23 (1) (b). However, we consider that, in this case, there is considerable force in the second point urged by Mr. Sen on behalf of the appellants that the respondent, in filing the complaint on 17th March, 1968, did not act in accordance with the requirements of the proviso to section 23D(1). We have held above that the proviso to section 23D(1) lays down the only manner in which the Director of Enforcement can make a complaint and this provision has been laid down as a safeguard to ensure that a person, who is being proceeded against for a contravention under section 23(1), is not put in danger of higher and severer punishment at the choice and sweet will of the Director of Enforcement. When such a safeguard is provided by legislature, it is necessary that the authority, which takes the step of instituting against that person proceedings in which a severer punishment can be awarded, complies strictly (1) ; (2) [19631 2 S.C.R. 297. 651 with all the conditions laid down by law to be satisfied by him before instituting that proceeding. in the present case, therefore, we have to see whether the requirements of the proviso to section 23D(1) were satisfied at the stage when the respondent filed the impugned complaint on 17th March, 1968. The proviso 'to section 23D(1) lays down that the complaint may be made at any stage of the enquiry but only if, having regard to the circumstances, of the case, the Director of Enforcement finds that the penalty which he is empowered to impose would not be adequate. It was urged by Mr. Sen that, in this case, the complaint was not filed as a result of the enquiry under the principal clause of section 23D(1) at all and, in any case, there was no material before the respondent on which he could have formed the opinion that the penalty which he was empowered to impose would not be adequate in respect of the stun of Sw. 88,913.09 which, it was alleged, had been acquired by the two accused during the period 1963 to 1965 and kept in deposit against law. Arguments at some length were advanced before us on the question as to what should be the stage of the enquiry at which the Director of Enforcement should form his opinion and will be entitled to file the complaint in Court. It appears to us that it is not necessary in this case to go into that question. It is true that the enquiry in this case under section 23D( 1 ) had been instituted by the issue of the show cause notice dated 25th August, 1967, that being the notice mentioned in Rule 3 (1 ) of the Adjudication Proceedings and Appeal Rules, 1957. On the record, however, does not appear that, even after the issue of that notice, any such material came before the respondent which could be relevant for forming an opinion that the penalty which he was empowered to impose for the contravention in respect of the sum of Sw. 88,913.09 would not be adequate. The respondent, in the case of accused No. 2, appears to have formed 'a prima. facie opinion that a complaint should be made against him in Court when he issued the notice on 4th November, 1967 under the proviso to section 23(3) of the Act, and a similar opinion in respect of accused No. 1 when he issued the notice on 20th January, 1968 under the same proviso. There is, however, no information on the record to indicate that, by the time these notices were issued, any material had appeared before the respondent in the course of the enquiry initiated by him through the notice dated 25th August, 1967 which could lead to the opinion being formed by the respondent that he will not be in a position to impose adequate penalty by continuing the ,adjudication proceedings. Even subsequently, when one of the accused replied to the notice, there does not appear to have been brought before the respondent any such relevant material. Mr. S.T. Desai on behalf of the respondent drew our attention to para. 3(E) of the petition presented by accused No. 1 for 652 certificate under article 132(1) and article 134(1)(c) of the Constitution in this case which contains the following pleading : "In this case, having issued show cause notice dated 25 8 67 in respect of the subject matter of the pending prosecution and having taken various acts, taking statements, taking recorded statements, investigations, the respondent did not hold an enquiry for the purpose of his forming an opinion that the accused is guilty of violations and that the penalty is not adequate and as such, the prosecution filed in C.C. 8756 of 68 is liable to be quashed on this ground. " Relying on this pleading, Mr. Desai urged that it amounts to a admission by accused No. 1 that, during enquiry, various statements were taken and recorded and investigations made, so that we should not hold that there was no material on the basis of which the respondent could ' have formed the opinion that it was a fit case for making a complaint. The pleading does not show that any statements were taken or recorded during the course to the enquiry held under section 23D( 1 ) of the Act in the manner laid down by the Adjudication Proceedings and Appeal Rules, 1953 Under those Rules, after a notice is issued, the Director of Enforcement is required to consider the cause shown by such person in response to the notice and, if he is of the opinion that adjudication proceedings should be held, he has to fix a date for the appearance of that person either personally or through his lawyer or other authorised representative. Subsequently, he has to explain that the person proceeded against or his lawyer or authorised representative the offence alleged to have been committed by such person indicating the provisions of the Act or of the rules, directions or orders made thereunder in respect of which contravention is alleged to have taken place, and then he has to give an opportunity to such person to produce such documents or evidence a he may consider relevant to the inquiry. It is on the conclusion of such an inquiry that the Director can impose a penalty under section 23(1)(a). In the present case, there is no material at all show that any proceedings were taken in the manner indicate by the Rules referred to above. There does not appear to has been any cause shown by either of the two accused, or consideration of such cause by the respondent to decide whether adjudication proceedings should be held. It is true that there is some material to indicate that, after the issue of notice dated 25 8 1967, some investigations were carried on by the respondent; but these investigations would not be part of the inquiry which had to be held in accordance with Adjudication Proceedings and Appeal Rules, 1957. It appears that, at one stage, before the complaint was filed, a writ petition was moved under article 226 of the Constitution in the High Court of Madras praying for the quashing of 653 the notice dated 25th August, 1967. The order made ' by the High Court on one of the interim applications in connection with that notice shows that, while that writ petition was pending, some investigations were permitted by the Court, but further penal proceedings in pursuance of that notice were restrained. This clearly indicates that whatever statements were recorded by the respondent as mentioned in the petition of accused No. 1 referred to above must have been in the course of investigation and not in the course of the inquiry under section 23D ( 1 ) of the Act. The record before us, therefore, does not show that any material at all was available to the respondent in the course of the enquiry under section 23D( 1 ) on the basis of which he could have formed an opinion that it was a fit case for making a complaint on the ground that he would not be able to impose adequate penalty. The complaint has, therefore, to be held to have been filed without satisfying the requirements and conditions of the proviso to. section 23D(1) of the Act and is in violation of the safeguard provided by the Legislature for such contingencies. The complaint, insofar as it related to the contravention by the accused of provisions of sections 4 ( 1 ), 5 ( 1 ) ( e ) and 9 of the Act punishable under section 23(1)(13) is concerned, is invalid and proceedings being taken in pursuance of it must be quashed. There remains for consideration the question whether proceedings could be validly continued on the complaint in respect of the charge under R. 132A(4) of the D.I.Rs. against the two accused. The two relevant clauses of Rule 132A are as follows: "132A. (2) No person other than an authorised dealer shall buy or otherwise acquire or borrow from, of sell or otherwise transfer or lend to, or exchange with, any person not being an authorised dealer, 'any foreign exchange. . . . . (4) If any person contravenes any of the provisions this rule, he shall be punishable with imprisonment for a term which may extend to two years, or with fine, or with both; and any court trying such contravention may direct that the foreign exchange in respect of which the court is satisfied that this rule has been contravened, shall be forfeited to the Central Government. " The charge in the complaint against the two accused was that they had acquired foreign exchange to the extent of Sw. 88,913.09 in violation of the prohibition contained in R. I32A(2) during the period when this Rule was in force, so that they became liable to punishment under R.132A(4). Rule 132 A as a whole ceased to be in existence as a result of the notification issued by the Ministry 654 of Home Affairs on 30th March, 1955, by which the Defence of India (Amendment) Rules, 1965 were promulgated. Clause 2 of these Amendment Rules reads as under : "In the Defence of India Rules, 1962, rule 132A (relating to prohibition of dealings in foreign exchange) shall be omitted except as respects things done or omitted to be done under that rule. " The argument of Mr. Sen was that, even if there was a contravention of R. 132A(2) by the accused when that Rule was in force, the act of contravention cannot be held to be a "thing done or omitted to be done under that rule," so that, after that rule has been omitted, no prosecution in respect of that contravention can be instituted. He conceded the .possibility that, if a prosecution had ,already been started while R. 132A was in force, that prosecution might have been competently continued. Once the Rule was omitted altogether, no new proceeding by way of prosecution could be initiated even though it might be in respect of an offence committed earlier during the period that the rule was in force. We are inclined to agree with the submission of Mr. Sen that the language contained in ' el. 2 of the Defence of India (Amendment) Rules, 1965 can only afford protection to action already taken while the rule was in force, but cannot justify initiation of a new proceeding which will not be a thing done or omitted to be done under the rule but a new act of initiating a proceeding after the rule had ceased to exist. On this interpretation, the complaint made for the offence under R. 132A(4) of the D.I. Rs., after 1st April, 1965 when the rule was omitted, has to be held invalid. This view of ours is in line with the general principle enunciated by. this Court in the case of section Krishnan and Others ' vs The State of Madras(1), relating to .temporary enactments, in, the following words : "The general rule in regard to a temporary statute is that, in the absence of special provision to the contrary, proceedings which are being taken against a person under it will ipso facto terminate as soon as the statute expires." Mention may also be made to a decision of a learned single Judge of the Allahabad High Court in Seth Jugmendar Das and Others vs State(2), where a similar view was taken when considering the effect of the repeal of the Defence of India Act, 1939, and the (1) ; (2) A.I.R. 1951 All. 703. 655 Ordinance No. XII of 1946 which had amended section 1 (4) of that Act. On the other hand, Mr. Desai on behalf of the respondent relied on a decision of the Privy Council in Wicks vs Director of Public Prosecutions(1). In that case, the appellant, whose case came up before the Privy Council, was convicted for contravention of Regulation 2A of the Defence (General) Regulations framed under the Emergency Powers (Defence) Act, 1939 as applied to British subjects abroad by section 3 (1 )(b) of the said Act. It was held that, at the date when the acts, which were the subjectmatter of the charge, were committed, the regulation in question was in force, so that, if the appellant had been prosecuted immediately afterwards, the validity of his conviction could not be open to any challenge at all. But the Act of 1939 was a temporary Act, and after various extensions it expired on February 24, 1945. The trial of the accused took place only in May 1946, and he was Convicted and sentenced to four years ' penal servitude on May 28. In these circumstances, the question raised in the appeal was: "Is a man entitled to be acquitted when he is proved to have broken a Defence Regulation at a time when that regulation was in operation, because his trial and conviction take place after the regulation expired ?" The Privy Council took notice of sub section (3) of section 11 of the Emergency Powers (Defence) Act, 1939 which laid down that "the expiry of this Act shall not affect the operation thereof as respects things previously done or omitted to be done". It was argued before the Privy Council that the phrase "things previously done" does not cover offences previously committed. This argument was rejected by Viscount Simon on behalf of the Privy Council and it was held that the appellant in that cane could be convicted in respect of the offence which he had committed when the regulation was in force. That case, however,is distinguishable from the case before us inasmuch as, in that case, the saving provision laid down that the operation of that Act itself was not to be affected by the expiry as respects things previously done or omitted to be done. The Act could, therefore, be held to be in operation in respect of acts already committed, so that the conviction could be validly made even after the expiry of the Act in respect of an offence committed before the expiry. In the case before us, the operation of R. 132A of the D.I. Rs. has not been continued after its omission. The language used in the notification only affords protection to things already done under the rule, so that it cannot permit further application of that rule by instituting a new prosecution in respect of something already done. The offence alleged against the accused in the present case is in respect of acts done by them which cannot be held to be acts under that rule. The difference in the language thus makes (1) [1947] A.C. 362. 656 it clear that the principle enunciated by the Privy Council in the case cited above cannot apply to the notification with which we are concerned. Reference was next made to a decision of the Madhya Pradesh High Court in State of Madhya Pradesh vs Hiralal Sutwala(1), but, there again, the accused was sought to be prosecuted for 'an offence punishable under an Act on the repeal of which section 6 of the had been made applicable. In the case before us, section 6 of the cannot obviously apply on the omission of R. 132A of the D.I.Rs. for the two obvious reasons that section 6 only applies to repeals and not to omissions, and applies when the repeal is of a Central Act or Regulation and not of a Rule. If section 6 of the had been applied no doubt this complaint 'against the two accused for the offence punishable under R. 132A of the D.I.Rs. could have been instituted even after the repeal of that rule. The last case relied upon is 1. K. Gas Plant Manufacturing Co., (Rampur) Ltd. and Others vs The King Emperor(2). In that case, the Federal Court had to deal with the effect of sub section (4) of section 1 of the Defence of India Act, 1939 and the Ordinance No. XII of 1946 which were also considered by the Allahabad High Court in the case of Seth Jugmendar Das & Ors.(2). After quoting the amended sub section (4) of section 1 of the Defence of India Act, the Court held : "The express insertion of these saving clauses was no doubt due to a belated realisation that the provisions of section 6 of the (X of 1897) apply only to repealed statutes and not to expiring statutes, and that the general rule in regard to the expiration of a temporary statute is that unless it contains some special provision to the contrary, after a temporary Act has expired, no proceedings can be taken upon it and it ceases to have any further effect. Therefore, offences committed against temporary Acts must be prosecuted and punished before the Act expires and as soon as the Act expires any proceedings which are being taken against a person will ipso facto terminate. " The Court cited. with approval the decision in the case of Wicks vs Director of Public Prosecutions(4), and held that, in view section 1 (4) of the Defence of India Act, 1939, as amended by Ordinance No. XII of 1946, the prosecution for a conviction for an offence committed when the Defence of India Act was in force, was valid even after the Defence of India Act had ceased to be in force. That case is, however, distinguishable from the case (1) A.I.R. 1959 M.P. 93. (2) (3) A.I.R. 1951 All. 703. (4) (1947) A.C. 362. 657 before us in two respects. In that case, the prosecution had been started before the Defence of India Act ceased to be in force and, secondly, the language introduced in the amended sub section (4) of section 1 of the Act had the effect of making applicable the principles laid down in section 6 of the , so that a legal proceeding could be instituted even after the repeal of the Act in respect of an offence committed during the time when the Act was in force. As we have indicated earlier, the notification of the Ministry of Home Affairs omitting R. 132A of the D.I.Rs. did not make any such provision similar to, that contained ms. 6 of the . Consequently, it is clear that, after the omission of R. 132A of the D.I.Rs., no prosecution could be instituted even in respect of an act which was an offence when that Rule was in force. ' In this connection, Mr. Desai pointed out to us that, simultaneously with the omission of R. 132A of the D.I.Rs., section 4(2) of the Act was amended so as to bring the prohibition contained in R. 132A(2) under section 4(1) of the Act. He urged that, from this simultaneous action taken, it should be presumed that there was no intention of the Legislature that acts, which were offences punishable under R. 132A of the D.I.Rs., should go unpunished after the omission of that rule. It, however, appears that when section 4(1) of the Act was amended, the Legislature did not make any provision that an offence previously committed under R. 132A of the D.I.Rs. would continue to remain punishable as an offence of contravention of section 4 ( 1 ) of the Act, nor was any provision made ' permitting operation of R. 132A itself so as to permit institution of prosecutions in respect of such offences. The consequence is that the present complaint is incompetent even in respect of the offence under R. 132A(4). This is the reason why we hold that this was an appropriate case where the High Court should have allowed the applications under section 561A of the Code of Criminal Procedure and should have quashed the proceedings on this complaint. Consequently, as already directed by our short order dated 2nd May, 1969, the appeals are allowed, the order of the High Court rejecting the applications under section 561A of the Code of Criminal Procedure is set aside, and the proceedings for the prosecution of the appellants are quashed. V.P.S. Appeals allowed.

The premises of the first appellant were raided by the Enforcement Directorate and certain records were seized. The second appellant was the first appellant 's managing director. Thereafter, on 25th August 1967, notice was issued by the respondent to the two appellants to show cause within fourteen days why adjudication proceedings should not be instituted against them under section 23D(1) of the Foreign Exchange Regulation Act, 1947, for violation of sections 4 and 9 of the Act, on the allegation that 2,44,713.70 Swedish Kronars had been deposited by them in a bank account in Sweden instead of surrendering the foreign exchange to an authorised dealer as required by the Act. After investigation, on 4th November 1967, another notice was issued to the second appellant stating that out of the total sum mentioned, he had acquired, during 1963 to 1965, Sw. 88,913.09, that he held the amount in a bank in Sweden instead of offering it to the Reserve Bank of India and thereby contravened sections 4(1) and 9 of the Act, and asking him to show if he had any special exemption for acquiring the foreign exchange. A similar show cause notice was issued to the first appellant in. respect of the same amount on 20th January 1968. On 16th March 1968, in supersession of the show cause notice dated 25th August 1967, a further notice was addressed to both the appellants to show cause within 14 days why adjudication proceedings under section 23D of the Act should not be held against them in respect of the balance of Sw. 1,55,801.41 and added that it had since been decided to launch a prosecution in respect of the Sw. 88,913.09 and on the 17th March 1968 a complaint was filed against both the 'appellants in the Chief Presidency Magistrate 's Court for contravention of sections 4(1), 5(1)(e) and 9 of the Act, punishable under section 23(1)(b) of Act, and for violation rule 132A(2) of the Defence of India Rules, 1962, punishable under rule 132A(4). Thereupon, the appellants fried 'applications in the High Court under section 561A, Criminal Procedure Code, for quashing the proceedings in the Magistrate 's court, but the applications were dismissed. In appeal to this Court, it was contended that: (1) The punishment under section 23(1)(b) is severer and heavier than the penalty to which a person is made liable if adjudication proceedings are taken under section 23(1)(a), but the section lays down no principles at all for determining when the person concerned should be proceeded against,under section 23(1)(a) and when under section 23(1)(b) and has left it to the arbitrary discretion of the respondent 'and hence violates Aft. 14 of Constitution; (2) Even if section 23(1)(b) is not void the respondent did not act in 'accordance with the 640 requirements of the proviso to section 23D(1)which lays down that a con plaint may be made at any stage of the enquiry, but only if, having regarto the circumstances of the case, the Director of Enforcement finds the the penalty which 'he is empowered to impose under section 23(1)(a) would not be adequate; and (3) Since the Notification issued by the Ministry of Home Affairs dated 30th March 1965 provided that R. 132A shall be omitted except 'as respects things done or omitted to be done under that Rule, a prosecution in respect of an offence punishable under that Rule could not be instituted on 17th March 1968 when that Rule had ceased to exist even though it might be in respect of an offence committed earlier during the period that the rule was in force. HELD: (1) The choice whether the proceeding be taken under section 23(1)(a) or 23(1)(b) against the person who is liable for action for contravention under section 23(1), is not left entirely to the discretion of the Director of Enforcement but the criterion for making the choice is indicated in the proviso to section 23D(1). [648 A B] The Foreign Exchange Regulation (Amendment) Act, 1957, amended section 23(1) and at the same also, introduced section 23D. The intention of the Legislature from such simultaneous amendment was that the two sections are to be read together. While providing for alternative proceedings under section 23(1)(a) and section 23(1)(b), the Legislature ensured that the procedure laid down in section 23D(1) was to be followed in all cases in which proceedings are intended to be taken under section 23 (1 ). Thus, whenever there is any contravention of any section or rule mentioned in section 23 (1) the Director of Enforcement must first proceed under the principal clause of section 23D(1) and initiate proceedings for adjudication of penalty. He cannot at that stage, in his discretion, choose to file a complaint in a court for prosecution of the person concerned for the offence under section 23(1)(b). Though the Legislature has not used in either of the sub sections specific words excluding the filing of a complaint before proceedings for adjudication are taken under section 23D(1), it must be presumed that Parliament knew that if provision was made for two alternative punishments for the same act, one differing from the other, and without any limitations, such a provision would be void under article 14. In view of the principle that an interpretation which would save a section should be preferred sections 23(1) and 23D(1) must be interpreted to mean that the Director of Enforcement must first initiate proceedings under the principal clause of section 23D(1) for adjudication of penalty and that he is empowered to file a complaint in court for the offence under section 23(1)(b) only when at any stage of the adjudication enquiry,, he comes to the opinion that, having regard to the circumstances of the case, the penalty which he is empowered to impose would not be: adequate. [647 D, F H; 648 E H; 649 A C] Shanti Prasad Jain vs The Director of Enforcement,. ; ;. followed. (2) When such a safeguard is provided by the Legislature it is necessary that the authority, which takes the steps of instituting against that person proceedings, in which, a severer punishment can be awarded, complies strictly with all the conditions laid down by law, that is, the Director could file a complaint for prosecution in court only if, having regard to the circumstances of the case, he finds that the. penalty that he is empowered to impose in the adjudication proceedings would not be adequate. [650 G H] . In the present case, the enquiry had been instituted by the issue of the show cause notice dated 25th August 1967. But it does not appear on 641 the record that even after the issue of that notice, any such material came .before the respondent which could be relevant for forming an opinion that the penalty which he. was empowered to impose for the contravention in respect Sw. 88,913.09 would not be adequate. No doubt some investigation was made, but the investigation would not be part of the enquiry which had to be held in accordance with the Act and the Adjudication Proceedings and Appeal Rules, 1957. Neither of the appellants had shown cause in pursuance of the notice and there was no consideration, of such cause to decide whether adjudication proceedings should be held or not. Nor were any statements taken or recorded during an enquiry under section 23D(1). Whatever statements were recorded were in the course. of investigation and not in the course of an enquiry under section 23D(1). Therefore, the complaint must be held to have been filed without satisfying the requirements and conditions of the proviso to section 23D(1) of the Act, and in .so far as it related to the contravention of the provisions of sections 4(1), 5(1)(e) and 9 of the Act, punishable under section 23(1)(b), it must be held invalid. [651 D E; 652 C D, F G; 653 B D] (3) The language used in the Notification of 30th March 1965 only affords protection to action already taken while the rule was in force, but cannot justify initiation of a new proceeding which will not be a thing done or omitted to be done under the rule but, a new act of initiating, a proceeding after the rule had ceased to exist. The offence alleged against the appellants is in respect of acts done by them which cannot be held to be acts under that rule. Unlike case of Wicks vs Director of Public Prosecutions, [1947] A.C. 362, where an express provision was made. that the operation of the Emergency Powers (Defence) Act, 1939 (a temporary Act) was not to be affected by its expiry as respects things, previously done or omitted to, be done, in. the present case, the operation of r. 132A of the Defence of India Rules has not been continued after its omission. Section 6 of the , also could not be invoked,. because, the section does not apply to temporary statutes, or rules and omissions. It only applies to repeals to. Central Acts. Further, the Notification of the Ministry of Home Affairs omitting R. 132A, did not make any such provision similar to that contained in section 6 of the . Moreover, though section 4(1) of the Foreign Exchange Regulation Act was amended simultaneously with the omission of the r. 132A, the Legislature did not make any provision that an offence previously committed, under r. 132A would continue to remain punishable as an offence of contravention of section 4(1) of the Act nor was any provision made permitting operation of r. 132A itself to permit institution of prosecutions in respect of such offences. Consequently, after the omission of r. 132A the complaint is, incompetent even in respect of the offence under Rule 132A(4). [654 A D; 655 F H; 656 B C, E F; 657 A F] section Krishnan & Ors. vs The State of Madras, [1951] S.C.R. 621, applied. State of M.P.v. Hiralal Sutwala, A.I.R. 1959 M.P. 93, 1. K. Gas: Plant Manufacturing Co. Ramput vs The King Emperor, , distinguished. Seth Jugmendar Das vs State, A.I.R. 1951 All. 703, referred to.

2640.txt

Appeal No. 1898 of 1967. Appeal by Special Leave from the Judgment and Order dated the 4th November, 1965 of the Allahabad High Court in Civil Miscellaneous Petition No. 2491 of 1965. Bishan Narain and D. N. Mishra, for the appellant. section N. Prasad and section P. Nayar, for respondents Nos. 1 & 2. The Judgment of the Court were delivered by SARKARIA J. This appeal by special leave is directed against the order dated November 4, 1965, of the High Court of Judicature at Allahabad dismissing the appellant 's writ petition under Article 226 and 227 of the Constitution in limine. The appellant was a Guard 'C ' Grade in Northern Railway. He was confirmed in that post in 1952. On April 3, 1955, an incident took place at Railway Station, Kalka, as a result of which, he was prosecuted for an offence under section 509, Penal Code. The Additional 180 District Magistrate, Ambala convicted and sentenced him on December 29, 1955 to three months simple imprisonment. His appeal was dismissed by the Court of Session. In Revision, the High Court of Punjab, on March 5, 1956, maintained his conviction but reduced the sentence. On April 2, 1956, the appellant received a communication from the Divisional Personnel Officer, Northern Railway that he had been dismissed by the Divisional Superintendent from service w.e.f. March 31, 1956. In Appeal by special leave, this Court, set aside the conviction ,of the appellant and acquitted him by its judgment dated March 7, 1957. Thereafter, the appellant filed a writ petition in the High Court of Punjab under Article 226 of the Constitution impugning the order The High Court by its judgment, dated of his dismissal. September 2, 1958, issued the, writ directing the respondents to treat the dismissal of the appellant wholly void and ineffective. Pursuant to that direction, on December 26, 1958 the appellant received a letter from the Divisional Personnel Officer that he had been reinstated to the post of Guard 'C ' Grade and that the matter of his back wages for the period between the date of his. dismissal and the date of reinstatement would be decided later on. By another letter of February 13, 1959, the same officer informed the appellant that the period from the date, of his dismissal to the date of his reinstatement would be treated as leave due. The appellant, on March 11, 1959, was paid Rs. 81.51 as his entire wages for the period ending March 7, 1959. On August 13, 1959, the appellant made an application under section 15(2) of the (Act 4 of 1936) (here inafter referred to a$ the Act) before the prescribed authority claim in , a sum of Rs. 9015.60 plus 10 times of, the said amount as compensation from the respondents. In addition, Traveling Allowance was claimed. Later, an attempt was made to amend the application and replace 'Traveling Allowance ' by 'Running Allowance '. The Authority did not permit the appellant to do so as he had failed to amend in time despite the order of the Court. The respondents resisted the appellant 's claim on various grounds including that of limitation. By an order dated August 7, 1963, the Authority directed respondent No. 1 (Union of India), in its capacity as employer, to refund the sum of Rs. 4863.20, (plus Rs. 100/ as costs) to the appellant holding that the same had been illegally deducted from his wages. The Authority disallowed the remaining claim including that of the Running Allowance. Against the order of the Authority, two appeals were carried to the Appellate Authority (Additional District Judge) One by the appellant and the other by the respondents. The Appellate Authority held that the appellant 's claim was barred by time as limitation had commenced from the date of dismissal from service and not from the date of reinstatement or the date on which it was decided to treat the period of dismissal as leave due. It upheld the dismissal of the appellant 's claim to the Running Allowance, inter alia for the reason that he had, despite the order of the 181 Authority, failed to amend the petition within the period indicated in 0.6, R.18 of the Code of Civil Procedure. The Appellate Authority further found that the Railway Administration was competent to treat the period of appellant 's inactive service from April 1, 1956 to February 17, 1959, as leave due and to deduct his wages for that period in accordance with rule 2044 of the Railway Establishment Code; and in view of section 7 (2) (h) of the Act, no refund of the deducted wages could be allowed. It further held that in the case of Railway Administration, the Divisional Superintendent named as Pay Master was res ponsible for the payment of wages of the Railway employees, and consequently, the direction of the Authority requiring the Union of India to make payment to the claimant was illegal. In the result, the Appellate Authority allowed the respondent 's appeal and dismissed the appellant 's claim. The appellant 's writ petition impugning this order of the Appellate Authority was, as already stated, dismissed by the High Court. Hence this appeal. The first question that falls to be considered is, whether the claim application filed by the appellant under section 15(2) of the Act was time barred? Mr. Bishan Narain, learned Counsel for the appellant contends that the case falls under the first part of the proviso (1) to section 15(2) which relates to deduction of wages and limitation would start from March 11, 1959 when the wages for the period of the appellant 's inactive service were actually deducted and he was paid Rs. 81.51 only for the entire period ending March 7, 1959. , Even on a stricter view, according to the learned Counsel, limitation would not start earlier than the date, February 13, 1959, when constructive deduction took place and it was decided to treat the period of his inactive service as leave due (which meant leave without pay). Since the appellant 's claim application had been presented within six months of either of these dates, it was well within time. Learned Counsel for the respondents does not dispute that this is a case of deduction of wages. His argument, however, is that irrespective of whether the case was one of deduction or of non payment of wages, the starting point of limitation would be the same viz., the date on which the wages fell due or accrued. The argument is that the concepts of 'deducted wages ' and . 'delayed wages ' are so integrated with each other that the events relatable to them always synchronise furnishing the same cause of action and the same start of limitation. It is pointed out that the wages of a Railway employee fall due every month; wages of one month being payable by the 10th of the succeeding month. Since the dismissal of the Appellant was declared void and non est by the Punjab High Court it is urged his right to claim wages continued to accrue every month even during the period of Ills dismissal. In the view propounded by the learned Counsel, limitation for making the application under section 1 5 (2) started from January 3, 1956, the date of the dismissal and the application made by the appellant 182 more than three years thereafter, was clearly time barred. Reference has been made to this Court 's decision in Jai Chand Sawhney vs Union of India(1). We shall presently see that while the contentions of the learned Counsel for the respondents cannot, those canvassed by the learned Counsel for the appellant must prevail. The material part of section 15 of the Act reads "15(1) 15(2) Where contrary to the provisions of this Act any deduction has been made from the wages of an employed person or any payment of wages has been delayed, such person himself, or any legal practitioner or any official of a registered trade union authorised in writing to act on his behalf, or any Inspector under this Act, or any other person acting with the permission of the authority appointed under sub section (1) may apply to such authority for a direction under sub section (3) Provided that every such application shall be presented within (twelve months) from the date on which the deduction from the wages was made or from the date on which the payment of the wages was due to be made, as the case may be: Provided further that any application may be admitted after the said period of twelve months when die applicant satisfies the authority that he had sufficient cause for not making the application within such period. 15(3) When any application under sub section (2) is entertained, the authority shall hear the applicant and the employer or other person responsible for the payment of wages under section 3, or give them an opportunity of being heard, and, after such further inquiry ' (if any) as may be necessary, may, without prejudice to any other penalty to which such employer or other person is liable under this Act, direct the refund to the employed person of the amount deducted, or the payment of the delayed wages, together with the payment of such compensation as the authority may think fit, not exceeding ten times the amount deducted in the former case and not exceeding twenty five rupees in the latter, and even if the amount deducted or the delayed wages are paid before the disposal of the application direct the payment of such compensation, as the authority, may think fit, not exceeding twenty five rupees :. The question of limitation turns on an interpretation of the first proviso to sub section (2) of section 15. This proviso ex facie indicates two 1. 183 alternative termini a quo for limitation, namely : (i) the date on which deduction from wages was made, or, (ii) the date, on which the payment of the wages was due to be made. From a reading of section 15, it is clear that the legislature has deliberately used, first, in sub section (2), and then in sub section (3) the expressions "deduction of wages" and "delay in payment of wages" as two distinct concepts. Terminus a quo (i) in the proviso expressly relates to the deduction of wages, while (ii) is referable to the delayed wages. if both these terminii were always relatable to the same point of time, then there would be no point in mentioning terminus a quo (i), and the, Legislature could have simply said that limitation for a claim under section 15(2) would always start from the date on which the wages "fall due" or "accrue" as has been done under article 102 of the Limitation Act which applies only to suits for recovery of wages. The very fact that two distinct starting points of limitation referable to two distinct concepts, have been stated in the proviso, shows that the Legislature had visualised that the date of deduction of wages and the due date of delayed wages, may not always coincide. Conjunction "or", which in the context means "either", and the phrase "as the case may be" at the end of the Proviso are clinching indicia of this interpretation. They are not mere suplusages and must be given their full effect. The Legislature is not supposed to indulge in tautology; and when it uses analogous words or phrases in the alternative, each maybe presumed to convey a separate and distinct meaning, the choice of either of which may involve the rejection of the other. To hold that the two expressions "wages deducted", and "wages delayed", though used in the alternative, carry the same meaning, and in the Proviso are always referable to one and the same ' point of time, would be contrary to this primary canon of interpretation "Deduction from wages" has not been defined in the Act. Some illustrations of such deductions are, however, to be found in sections 7 and 13. One of them in section 7 (2) (b) is "deductions for absence from duty" which indicates that such deduction can be a total deduction, also. That is to say "deduction from wages" may be 'the same thing as "deduction of wages". The deduction in the instant case is akin to this category covering the entire deficiency for the period of absence, the only difference being that here, the appellant absence from duty was involuntary. Such absence in official parlance is euphemistically called "in active service ', if the employee is later on reinstated. The point to be considered further is when did such deduction ofwages take place ? Ordinarily in a case like the present where the employee was dismissed on one date and reinstated on a later date, the deduction of wages may synchronise with the act of reinstatement. But on the peculiar and admitted facts of this case, the deduction did not take place on the date of reinstatement (26 12 1958) because the order of reinstatement expressly stated that "decision with regard to his wages to be paid for that period will be taken later on". In the case in hand, therefore, the "deduction ' will coincide with the decision impliedly or expressly deducting the wages. Such a decision was taken 184 and put in the course of a communication to the appellant on February 18, 1959 whereby he was informed that the period from 3 1 1956 to 17 3 1959, would be treated as 'leave due ' Which, it is conceded, meant leave without pay. Thus, deduction from his wages for the entire period of his 'inactive service ' took place on February 18, 1959. and limitation under the first part of the Proviso commenced from that date. The application was made on August 13, 1959, within six months of that date and was thus within time. in Jai Chand Sawhney 's case (supra), the, interpretation of the first Proviso to section 15(2) never came up for consideration. Therein, the Court was concerned only with the construction of the expression "accrue/due" in article 102 of the Limitation Act, 1908 which does not govern applications under section 15(2) of the Act. That case, therefore, is of no assistance in determining the precise issue before us. It may be observed in passing that the, rule in Sheo Prasad vs Additional District Judge,(1) relied on by the Additional District Judge, was not followed by the same High Court in Ram Kishore Sharma vs Additional District Judge Saharanpur(2), as is had ceased to be good law in view _of the decision of this Court in Divisional Superintendent, Northern Railway vs Pushkar Dutt Sharma(3). In Pushkar Dutt 's case (supra), the application under section 15 (2) of the Act was filed within six months of the date on which the dismissal of the employee was set aside by the court in second appeal. The employee 's application would have been within time irrespective of whether his case was treated as one of "wages deducted" or "wages delayed". Therefore, the necessity of examining the comparative mean ing and distinction between "deduction from wages" or "delay in payment of wages due" and the two alternative starting points of limitation relatable to these expressions, did not arise in that case. In the light of the above discussion, we reverse the finding of the Additional District Judge and hold that the application filed by the appellant under section 15(2) of the Act having been made within six months of the date of deduction from his wages, was within time. The second ground on which the order of the, Additional District Judge proceeds, is that since the deduction of the wages for the period of his inactive service from April 1, 1956 to February 17, 1959, had been made under the order of a co mpetent authority passed in accordance with rule 2044 of the Railway Establishment Code, in view of section 7 (2) (h) of the Act no order could be made for the refund of the deducted amount. Both the learned Counsel before us are agreed that in view of the pronouncement of this Court in Devendra Pratap Narain 'Rai; Sharma vs State of U.P.(4), this ground is not sustainable. In Sharma 's case (supra), this Court was construing rule 54 of the U.P. Government Fundamental Rules, the language of which is substantially the same as that of rule 2044 of the Railway Establishment Code. It (1) A.I.R. 1962 All. 144. (2) [1959] All Law Journal p. 225. (3) (4) [1962] Supp. S.C.R. 315. 185 was held therein, that r. 54 enables the State Government to fix the pay of a public servant when his dismissal is set aside in departmental appeal. But that rule has no application to cases in which dismissal is declared invalid by a decree of civil court and he is, in consequence, reinstated. Mr. Bishan Narain next contends that the prescribed Authority had wrongly disallowed the claim of the appellant to "Running Allowance ' which he had mis described as "Traveling Allowance" in his claim application. The point pressed into argument is, that once the Authority had allowed the appellant to amend his application for converting the claim of "Traveling Allowance" into "Running Allowance", it had no discretion left thereafter to prevent him from carrying out the amendment, on the technical ground that the period indicated by Order 6, Rule 18, Code of Civil Procedure, for this purpose, has expired. The Code of Civil Procedure, it is urged, does not govern amendment of applications under section 15(2) of the Act. The contention is untenable. While it is true that Rule s 17 and 18 of Order 6 of the Code do not, in terms, apply to amendment of an application under section 15(2), the Authority is competent to devise, consistently with the provisions of the Act and the Rules made thereunder, its own procedure based on general principles of justice, equity and good conscience. One of such principles is that delay defeats equity. The Authority found that the applicant was guilty of gross negligence. He took no steps whatever to carry out the amendment for several months after the order permitting the amendment, and thereafter, when the case was at the final stage, he suddenly woke up, as it were, from slumber, and sought to amend his application. In the circumstances, the Authority rightly refused to put a premium on this delay and laxity on the part of the appellant. In the view we take on the claim to running allowance we need not pronounce finally on whether an amendment to the relief once granted requires to be formally carried out in the petition, as in a pleading in court, less rigidity being permissible in quasi judicial proceedings. Mr. Bishan Narain further contends that Running Allowance was a part of the pay or substantive wages. In support of this argument he has invited our attention to rule 2003 of the Railway Establishment Code, clause 2 of which defines 'average pay '. According to the second proviso to this clause in the case, of staff entitled to running allowance, average pay for the purpose of leave salary shall include the average running allowance earned during the 12 months immediately preceding the month in which a Railway servant proceeds on leave subject to a maximum of 75 per cent of average pay for the said period, the average running allowance once determined remaining In operation during the remaining part of the financial year 1 cases of leave not exceeding one month. The crucial words, which have been underlined. show that such Running Allowance is counted towards 'average pay ' in those cases only where the leave, does not exceed one month. It cannot, therefore, be said that Running Allowance was due to the appellant as part of his wages for the entire period of his inactive ser 186 vice. Traveling allowance or running allowance is eligible if the officer has traveled or run, not otherwise. We therefore negative this contention. For the foregoing reasons, we allow this appeal, set aside the order of the Appellate Authority and restore that of the Prescribed Authority. The appellant shall have his costs throughout. KRISHNA IYER, J. The judgment just delivered has my full concurrence but I feel impelled to make a few observations not on the merits but on governmental disposition to litigation, the present case being symptomatic of a serious deficiency. In this country the State is the largest litigant to day and the huge expenditure involved makes a big draft on the public exchequer. In the context of expanding dimensions of State activity and responsibility, is it unfair to expect finer sense and sensibility in its litigation policy, the absence of which, in the present case, he led the Railway callously and cantankerously to resist an action by its own employee, a small man, by urging a mere technical plea which has been pursued right up to the summit court here and has been negatived in the judgment just pronounced ? Instances of this type are legion as is evidenced by the fact that then Law Commission of India in a recent report(1) on amendments to the Civil Procedure Code has suggested the deletion of section 80, finding that wholesome provision hardly ever utilised by Government, and has gone further to provide a special procedure for government litigation to highlight the need for an activist policy of just settlement of claims where the State is a party. It is not right for a welfare ' State like ours to be Janus faced, and while formulating the humanist project of legal aid to the poor, contest the claims of poor employees under it pleading limitation and the like. That the tendency is chronic flows from certain observations I had made in the Kerala High Court decision(2) which I may usefully excerpt here "The State, under our Constitution, undertakes economic activities in a vast and widening public sector and inevitably gets involved in disputes with private individuals. But it must be remembered that the State is no ordinary party trying to win a case against one of its own citizens by hook or by crook; for, the State 's interest is to meet honest claims, vindicate a substantial defence and never to score a technical point or overreach a weaker party to avoid a just liability or secure an unfair advantage, simply because legal devices provide such an opportunity. The State is. a virtuous litigant and looks with unconcern on immoral forensic successes so that if on the merits the case is weak, government shows a willingness to settle the dispute regardless of prestige and other lesser motivations which move, private parties to fight (1) Law Commission of India, .54th Report Civil Procedure Code. (2) P.P. Abu backer vs The Union of India : A.I.R. 1972 Ker. 103 : 107 para 5. 187 in court. The lay out on litigation costs and executive time by the State and its agencies is so staggering these days because of the large amount of litigation in which it is involved that a positive and wholesome policy of cutting back on the volume of law suits by the twin methods of not being tempted into forensic show downs where a reasonable adjustment is feasible and ever offering to extinguish a pending proceeding on just terms, giving the legal mentors of government some initiative and authority in this behalf. I am not indulging in any judicial homily but only echoing the dynamic national policy on State litigation evolved at a Conference of Law Ministers of India way back in 1957. This second appeal strikes me as an instance of disregard of that policy. " All these words from the Bench, hopefully addressed to a responsive Government, may, if seasonable reactions follow, go a long way to avoidance of governmental litigiousness and affirmance of the image of the State as deeply concerned only in Justic Social Justice. The phyrric victory of the poor appellant in this case is a sad justification, for the above observations.

The appellant, a Railway Guard, was convicted and sentenced for an offence under section 509, I.P.C. The High Court uphold his conviction. On appeal this Court set aside.the conviction and acquitted him. In the meanwhile the appel lant, was dismissed from service with effect from 31st March, 1956. The appellant impugned the order of dismissal in the High Court which held that his dismissal was wholly void and ineffective. Thereupon the appellant was reinstated and was informed that the matter of his back wages for the period between the date of his dismissal and the date of reinstatement would be decided later. By another letter he was informed that this period was treated as leave due. He was paid Rs. 81.51 as his wages for the entire period ending on March 7, 1959. The appellant made an application under section 15(2) of the claiming Rs. 9,016.60 plus ten times the said amount as compensation. In addition, he first claimed 'traveling allowance ' but later sought to amend the application by replacing 'traveling allowance by 'running allowance This was rejected by the Prescribed Authority. The Authority allowed a part of the claim but the appellant preferred an appeal to the Appellate Authority under the Act. The Appellate Authority held that the claim was barred by time as limitation had commenced from the date of dismissal from service and not from the date of reinstatement Or the date on which it was decided to treat the period of dismissal as leave due. On the question (i) whether the. claim application filed by the appellant tinder s 15(2) was time barred and (ii) whether he was entitled to running allowance. Allowing the appeal, HELD : (i) the first proviso to sub sections (2) of section 15 indicates two alternative starting points for limitation, namely, (i) the date on which deduction from wages was made or (ii) the date on which the payment of the wages was due to be made. [183 A] From a reading of section 15 it is clear that the legislature has deliberately used, first. in sub section (2) and then in sub section the expressions "deduction of wages" c and "delay in payment of wages ' as two distinct concepts. Terminus a quo (i) in the proviso expressly relates to the deduction of wages, while (ii) is referable to the delayed wages. If both these terminii were always relatable to the same Point of time, then there would be nor point in mentioning terminus a quo (i) and the legislature could have simply said that limitation for a claim under section 15(2) would always start from the date on which the wages "fall due" or "accrue" as has been done under Article 102 of the Limitation Act which applies only to suits for recovery of wages. The very fact that two distinct starting points of limitation referable to two distinct concepts have been stated in the proviso. shows that the legislature had visualised that the date of deduction of wages and the due date of delayed wages. may not always coincide. Conjunction "or" which in the context means "either" and the phrase "as the 179 case may be" at the end of the proviso are clinching indicate of this interpretation. They are not mere surpluses and must be given their full effect. The legislature is not supposed to indulge in tautology; and when it uses analogous words or phrases in the alternative, each may be presumed to convey a separate and distinct meaning. the choice of either of which may involve the rejection of the other. To hold that the two expressions "wages deducted" and "wages delayed" though used in the alternative. carry the same meaning, and in the proviso are always referable to one and the same point of time, would be contrary to this primary canon of interpretation. (183B E] Ordinarily where an employee was dismissed on one date and reinstated on another, the deduction of wages may synchronize with the act of reinstatement. In the instant case the deduction did not take place on the date of reinstatement because the order of reinstatement expressly stated that decision with regard to his wages for the period would be taken later. Therefore the deduction would coincide with the decision deducting the wages. Such a decision was taken on February, 18, 1959 and limitation under the first part of the proviso commenced from that date. [183G H] Jai Chand Sawhney vs Union of India ; ; Divisional Superintendent. Northern Railway vs Pushkar Dutt Sharma (1967] ; held inapplicable. (ii) Running allowance was counted towards average pay in those cases only where the leave did not exceed one month. Travelling allowance or running allowance was eligible if the officer had travelled or run, not otherwise. it could not be said that running allowance was due to the appellant as part of his wages for the entire period of his inactive service. [185H; 186A] Per Krishra Iyer J. (Concurring) In this country the State is the largest litigant today and the huge expenditure involved makes a big draft on the public exchequer, In the context of expanding dimensions of State activity and responsibility, it is not unfair to expect finer sense and sensibility in its litigation policy, the absence of which in the present case had led the Railways callously and cantankerously to resist an action by its own employee. a small man, by urging a mere technical plea which had been pursued right up to the highest court and had been negatived, It was not right for a welfare State like ours to be Janus faced and while formulating the humanist project of legal aid to the poor contest the claims of poor employees under it pleading limitation and the like, [186 E]

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Appeal No. 1191 of 1967. Appeal by special leave from the judgment and order dated May 23, 1962 of the Allahabad High Court in Special Appeal No. 592 of 1961. C. B. Agarwala and 0. P. Rana, for the appellants. The respondent did not appear. The Judgment of the Court as delivered by Sikri, J. This appeal by special leave is directed against the judgment of the Allahabad High Court whereby it allowed the 267 writ petition file by the respondent, Kumari Chittra Srivastava, hereinafter referred to as the petitioner, and quashed the impugned order but left it open to the Board of High School and Intermediate Education, hereinafter referred to as the Board, to reconsider the case after giving the petitioner a chance to offer her explanation. The facts are not in dispute and the only question which arises is whether in the circumstances the petitioner was entitled to an opportunity to represent her case before the Board prior to the passing of the impugned order. The relevant facts in brief are these. The petitioner was in 1959 60 session a student of Basant Girls Intermediate College, Varanasi. She appeared at the Intermediate examination in 1960 but failed. She then joined the Government Inter College for Girls at Jaunpur. Her name was sent up for Intermediate examination to be held in 1961 by the Principal. She appeared in the examination but her result was not declared by the Board. On May 24, 1961, the Board addressed a letter to the Principal making enquiries regarding the attendance of the petitioner. According to the regulations framed by the Board no candidate can be presented for the Intermediate examination unless he/she has attended during two academical years 75% of lectures given in each subject in which the candidate is to be examined. In the case of a failed candidate, like the petitioner, the percentage shall be calculated for one academical year, but Regulation 5(xiii) enables the head of a recognised institution to condone the deficiency in certain cases. This regulation reads "(xiii) The rule regarding minimum attendance shall be strictly enforced. The head of the recognised institution may condone a deficiency in attendance of not more than (a) ten days in the case of a candidate for the High School Examination; and (b) ten lectures (including periods of practical work, if any) given in each subject in the case of a candidate for the Intermediate Examination. All cases in which this privilege is exercised shall be reported to the Director of Education as the Chairman of the Board. In the cases of failed or detained candidates whose attendance of one year will be taken into account, the shortage to be condoned shall be reduced to half." 268 The Principal received the letter when on vacation outside Jaunpur. The Principal replied on June 14, 1961, saying that a proper reply to paragraphs 1 and 2 of the letter will be sent after July 8, 1961. She, however, stated "When Km. Chitra Srivastava absented herself for a pretty long period on account of her illness, the position :was explained to her, besides informing her guardian also who was even called to the office and acquainted with the circumstances. At that time, it was possible for her to make good this shortage by her regular attendance. The teacher in Home Science took leave in February, 1961. Chitra was short in attendance in other subjects also, but she made good the shortage by her regular attendance. When, during the days the classes were held, lectures in other subjects were held and the girl attended there, it was, not considered proper to detain her from appearing at the examination on account of her absence from lectures in a subject in which the required lectures were not held. I got the student admitted to the examination as I was confident that the officers of the Board will agree with my view. " The substance of the letter was that the shortage in lectures was due to the lecturer taking leave. The Board was, however, impatient. It is not clear whether this letter was received by the Board because no reference to it is made in the letter dated July 6, 1961. The Board wrote: "In continuation of this office letter No. E.I./617, dated 24th May, 1961 and telegram dated 24th May, 1961 1 have the honour to inform that you have not furnished the desired information about the student Km. Chitra Srivastava, roll No. 50452. From your previous letter No. 143/E dated 6th May, 1961, ' it is learnt that the admission of the student by you to the examination. by condoning her absence from seven lectures on the subject of Home Science was contrary to rules. Hence the student 's Inter Examination of 1961 is cancelled. Kindly communicate this to the student under intimation to this office." 269 The Principal replied on July 11, 1961, giving details of the lectures attended and requested that the order be cancelled and the severe punishment be not awarded to the petitioner. On October 6, 1961, the petitioner filed a petition under article 226 of the Constitution challenging the impugned order dated July 6, 1961. Mathur, J., dismissed it summarily. On appeal, Srivastava and Katju, JJ., allowed the petition, as mentioned earlier. They were of the view that the Board, while cancelling the examination, acted in a quasi judicial capacity. The Board was "by cancelling the examination inflicting a penalty" and if opportunity had been given to the petitioner to present her case she might have persuaded the Board not to cancel the examination. The learned counsel for the appellant, Mr. C. B. Aggarwal. contends that the facts are not in dispute and it is further clear that no useful purpose would have been served if the Board had served a show cause notice on the petitioner. He says that in view of these circumstances it was not necessary for the Board to have issued a show cause notice . We are unable to accept this contention. Whether a duty arises in a particular case to issue a show cause notice before inflicting a penalty does not depend on the authority 's satisfaction that the person to be penalised has no defence but on the nature of the order proposed to be passed. We agree with the High Court that the impugned order imposed a penalty. The petitioner has appeared in the examination and answered all the question papers. According to her she had passed. To deny her the fruits of her labour cannot but to be called a penalty. We are unable to appreciate the contention that the Board, in "cancelling her examination" was not exercising quasijudicial functions. The learned counsel urges that this would be, casting a heavy burden on the Board. Principles of natural justice are to some minds burdensome but this price a small price indeed has to be paid if we desire a society governed by the rule of law. We should not be taken to have decided that this rule will also apply when a candidate is refused admission to an examination. We are not concerned with this question and say nothing about it. The learned counsel invites us to hold that the decision of the Board was on the facts correct and that the Board had no power to condone the shortage of 2 lectures. But we decline to into these questions. We are not sitting as a court of appeal and it is for the Board to decide after giving an opportunity to the petitioner and pass such orders as it thinks fit. Whether it has the power to condone the shortage of lectures is for it, at least in the first instance, to decide. 270 The learned counsel further invites us to say that the possible courses which the petitioner 's counsel had outlined before the High Court will not be legal or justified. The petitioner 's counsel had pointed out that the Board could have been persuaded to adopt some of the following courses "(1) To accept the explanation of the principal as valid. (2) To condone the shortage of two lectures which the Principal could not condone. The question whether the Board had power to condone shortage was raised in the Board of High School and Intermediate Education Uttar Pradesh Allahabad and others versus G. Vishwanath Nayar but was not decided and was left open. It is urged on behalf of the appellant that the power to admit a candidate to an examination vests in the Board. The Regulations only provide the extent to which shortage in attendance can be condoned by the heads of institutions. There is nothing in the Regulations to limit the power of the Board itself to admit a candidate to an examination after condoning shortage which could not be condoned by the head of the institution. (3) After noting that a technical breach of rules had been committed the Board or the Chairman may have decided not to take any action. (4) The Board may have framed a new regulation with retrospective effect either permitting the head of the institution to condone a shortage in a case like that of the appellant or permitting the Board itself to make the necessary condonation in such cases. (5) The Board could have given an authoritative interpretation of the words 'lectures given ' in clause (iii) of regulation 5 of chapter XII and decided whether the words covered such cases where the students were present to attend the lecture but it could not be arranged because of some unavoidable reason. " But, like the High Court, we are not called upon to pronounce on their legality or appropriateness at this stage. In the result the appeal fails and is dismissed. As the petitioner (now respondent) is not represented there will be no order as to costs. V.P.S. Appeal dismissed.

The respondent appeared in the Intermediate examination and passed, but the appellant, instead of declaring her result, addressed a letter on May 24, 1961, to the Principal of the college in which the Respondent was studying, making enquiries regarding the respondent 's attendance. According to the regulations, a candidate must attend 75% of the lectures given in each subject. The Principal, by her letter dated June 14, 1961, replied that the respondent was at one time short of attendance, that she made good the 'shortage in all subjects except one, but the shortage in that subject was due to the fact that lectures Were not given in that subject the lecturer having been on leave. By its letter dated July 6, 1961, the appellant cancelled the respondent 's result and no reference was made to the Principal 's letter in the appellant 's letter. The respondent thereupon filed a writ petition challenging the appellant 's order cancelling the result, and the High Court allowed the petition. In appeal to this Court, HELD : The appellant should have given an opportunity to the respondent to present her case and pursuade the appellant not to cancel her result. [269 C] Whether a duty arises in a particular case to issue a show cause notice before inflicting a penalty does not depend on the authority 's satisfaction that the person to be penalised has no defence but On the nature of the order proposed to be passed. In the present case, the impugned order imposed a penalty on the respondent as she was denied the fruits of her labour, and when passing it, the appellant was exercising quasi judicial functions. [269 D F]

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Civil Appeal No. 1153 of 1975. Appeal by Special Leave from the Judgment and order dated the 29th November 1974 of the Mysore High Court at Bangalore Writ Petition No. 117 of 1973. section V. Gupte, K. R. Nagaraja for the Appellant. Shyamla Pappu (Mrs.) for Respondent No. 3. The Judgment of the Court was delivered by Gupta, J. on the application of the appellant the Regional Transport Authority, Mandya, granted him. a contract carriage permit on February 8, 1972, valid for the entire State of Karnataka. The grant was cancelled by the Karnataka State Transport Appellate Tribunal by its order dated August 19, 1972 on appeal preferred by the third respondent, Karnataka State Road Transport Corporation. The appellant filed a writ petition in the High Court of Karnataka at Ban galore challenging the order of the Appellate Tribunal. The High Court dismissed the petition by its order dated November 29, 1 974 agreeing with the Appellate Tribunal that the Regional Transport Authority, Mandya, had no jurisdiction to grant permits valid throughout the State of Karnataka in view of the first proviso to sub section (1) of section 45 of the (hereinafter referred to as the Act). The correctness of that decision is questioned by the appellant in this appeal by special leave. Section 45(1) with its first proviso which is the only part of the section relevant for the present purpose is in these terms: General provision as to applications for permits. 30 "45 (1) Every application for a permit shall be made to the Regional Transport Authority of the region in which it is proposed to use the vehicle or vehicles: Provided that if it is proposed to use the vehicle or vehicles in two or more regions lying within the same State, the application shall be made to the Regional Transport Authority of the region in which the major portion of the proposed route or area lies, and in case the portion of the proposed route or area in each of the regions is approximately equal, to the Regional Transport Authority of the region in which it is proposed to keep the vehicle or vehicles :" As its marginal note indicates, section contains a general provision regulating applications for permits. The proviso, quoted above, lays down that where the applicant for a permit proposes to use his vehicle in two or more regions in the same State, the application must be made to the Regional Transport Authority within whose jurisdiction the major portion of the proposed route or area lies. The appellant had asked for a contract carriage permit that would be valid throughout the State of Karnataka which meant that he proposed to use his vehicle in all the different regions lying in the State. The second proviso to section 44(1) of the Act lays down that the area specified as the region of a Regional Transport Authority shall not be less than an entire district, or the whole area of a Presidency town. In the State of Karnataka there are 19 Regional Transport Authorities, one for each district in the State. In terms of the first proviso to section 45 (1), an application for an inter regional permit that the appellant was asking for had to be made to the Regional Transport Authority of the region that included the major portion of the proposed area. The question debated before the appellate tribunal and the High Court was whether the area lying within the jurisdiction of the Regional Transport Authority, Mandya, was larger than the area within the region of any other Regional Transport Authority in the State, and in that context the meaning of the term 'area ' in the first proviso to section 45 (1) arose for consideration. According to the applicant for the permit, 'area ' in section 45 meant the extent of motorable tract in the region, and the Regional Transport Authority, Mandya, agreeing with this interpretation of the word 'area ' found that the 'Mandya Region has more motorable roads than any other district in the State". The appellate tribunal and the High Court both refused to accept this meaning of 'area ' which they held to mean plain geographical area and as the Regional Transport Authority, Mandya, was admittedly not the largest district in that State, the High Court dismissed the writ petition and affirmed the decision of the appellate tribunal that the grant of permit was without jurisdiction. Before proceeding to consider the merits of the rival contentions as to the meaning of the word 'area ' in the first proviso to section 45(1), it would be helpful to refer to certain other provisions of the Act which seem to be relevant in this context. The appellant had asked for a contract carriage permit. Section 2(3) defies a contract carriage as a motor vehicle which carries passengers for hire or reward under a contract for the use of the vehicles as a whole either on a time basis or 31 from one point to another, and in both cases without stopping to pick up or set down along the line of route passengers not included in the contract. A motor vehicle is defined in section 2(18) as a mechanically propelled vehicle 'adapted for use upon roads '. Section 49 lays down the particulars that an application for a contract carriage permit shall contain, and the 'area ' for which the permit is required is one of the matters that the application must state. The word route which has been used in association with 'area ' in section 45(1) is defined by section 2(28A) as "a line of travel which specifies the highway which may be traversed by a motor vehicle between one terminus and another." Section 2(1) defines 'area ' as follows: " "area", in relation to any provision of this Act, means such area as the State Government may, having regard to the requirements of that provision, specify by notification in the official Gazette;" The terms and expressions defined in section 2 will apply only if there is nothing repugnant in the subject or context as the opening words of the section indicate. The first proviso to section 45 (1) speaks of the route or area proposed in an application for a permit and, as such, there can be no question here of the State Government specifying the area. Clearly, the definition of area in section 2(1) has no relevance in this context. The question therefore remains to be answered, whether 'area` in section 45(1) has been used in the wider sense of geographical area, or it means only the area of motorable roads ? The section uses both the words, 'route ' and 'area ', whichever is applicable in a given case. A route as defined is a line of travel between two termini on a highway, but the idea of a route as a notional line that the definition suggests has not been consistently maintained in the Act. In Dosa Satyanarayanamurty etc. vs The Andhra Pradesh State Road Transport Corpn. (1) this Court observed: "There is no inherent in consistency between an "area" and a "route". The proposed route is also an area limited to the route proposed. " A similar observation was made in C.P.C. Motor Service, Mysore vs The State of Mysore(2) that in the scheme of the Act, by the word "route" is meant "not only the notional line but also the actual road over which the omnibuses run". Of course, it would not be correct to say that the Act recognizes no distinction between 'route ' and 'area '. A route may mean not only the notional line of travel between one terminus and another, but also the area of the road over which the motor vehicles ply, yet the two terms are not interchangeable; as pointed out in C.P. Sikh Regular Motor Service etc. vs The State of Maharashtra,(3) "a route is an area plus something more". This "something" is the notional line of travel between two termini which distinguishes a route ` from an area simpliciter. The first proviso to section 45(1) speaks of "route or area" apparently making a distinction between them to cover applications relatable to either. A contract carriage does not ply along a fixed route or routes but over an area, which is why an application for a contract carriage permit has to contain a statement as to the proposed area. (1) (644). (2) [1962 Supp. (1) S.C.R. 717 (725). (3) ; 32 All the decisions to which we have referred above have taken the view that by area is meant the road, the physical tract, over which the motor vehicles ply without reference to any notional line of travel. Of course, this meaning was given to the word 'area ' in the context of the provisions of the Act considered in these cases, in none of which section 45 came up for consideration. We do not however find any reason to think that 'area ' in section 45 ( 1 ) has a different connotation. Except that the territorial jurisdiction of the regional transport authorities is fixed in terms of geographical area districtwise in the State of Karnataka 'area ' in that wider sense is irrelevant to the purposes of the Act. Counsel for the respondent, Mysore State Road Transport Corporation, Bangalore, built an argument on the provisions of section 12 of the Act that the meaning of 'area ' is not restricted only to the area of motorable roads in a region. Section 42 prohibits the use of a transport vehicle in any public place except in accordance with the conditions of a valid permit. A transport vehicle includes a motor vehicle used for the carriage of passengers [section 2(33) and section 2(25). Public place has been defined by section 2(24) of the Act as "road, street, way or other place, whether a thoroughfare or not, to which the public have a right of access, and includes any place or stand at which passengers are picked up or set down by a stage carriage". lt was argued that a contract carriage which does not ply on a fixed route could be used in any public place which need not necessarily be a road; this, according to counsel, indicated that the word area occurring in section 45(1) meant geographical area and not motorable roads only. We do not find it possible to accept this contention. Assuming that a contract carriage could be used in places which are not really roads, the fact remains that a contract carriage being a motor vehicle is intended for use upon roads, and any casual use of it in places other than roads is not decisive on the interpretation of the word area. The prohibition against the use of transport vehicles in public places which are not roads serves to repel a possible claim that for using a motor vehicle in places which cannot be called roads no permit was necessary. We hold therefore that the word area in the first proviso to section 45(1) of the Act means the area of motorable roads within the territorial jurisdiction of a regional transport authority. The Regional Transport Authority, Mandya, held that it had within its jurisdiction the largest area of motorable roads in the State of Karnataka, and this finding has not been disturbed by the appellate tribunal. The appellate tribunal thought that the expression "motorable roads" was vague as the area comprising of motorable roads would be changing from time to time", but the jurisdiction of a regional transport authority to grant an inter regional permit depends on the existing area of motorable roads when an application for a permit is made. In the course of arguments before us doubts were expressed on the reasonableness of a provision which requires an application for an inter regional permit to be made to the regional transport authority of the region in which the major portion of the proposed route or area lies when section 63 of the Act provides elaborate checks and lays 33 down conditions for the validation of permits for use outside the region in which it has been granted. It was submitted that in view of the provisions of section 63 there was no point in insisting on the application being made to the Regional Transport Authority of any particular region. We see the logic of this submission, but this is a matter of policy on which the court has no say. However, the policy itself does not appear to have been stated very clearly. On the provisions as they are it is difficult to say that the construction put forward on behalf of the third respondent is altogether implausible. It is also true that there can be practical difficulties, whichever interpretation was adopted. This being the position we should have thought that instead of leaving the law in such a slippery state, the State should clarify it by appropriate legislation so that the law may be clear and easily ascertainable by the concerned section of the public. The appeal is allowed and the impugned order including the order of the Mysore State Transport Appellate Tribunal is set aside. We make it clear that all we have decided in this case is that the Regional Transport Authority, Mandya, had jurisdiction to issue the permit to the appellant, whether the permit satisfies the other conditions of a valid inter regional permit did not arise for consideration in this appeal In the circumstances of the case we make no order as to costs. S.R. Appeal allowed.

Section 45(1) of the , a general provision regulating applications for inter regional route permits within a State requires an application to be made to the appropriate Regional Transport Authority mentioned in the proviso thereto namely, either to the Regional Transport Authority of tho region in which the major portion of the proposed route or area lies or to the Regional Transport Authority of the region in which it is proposed to keep the vehicle or vehicles in case the portion of the proposed route or area in each of the regions are approximately equal. The appellant applied for a contract carriage permit that would be valid throughout the State of Karnataka, which meant that he proposed to use his vehicle in all the nineteen regions, to the Regional Transport Authority, Mandya, who granted him on 8 2 1972 a contract carriage permit valid for the entire State of Karnataka. The permit was granted as Mandya region has more motorable roads than any other district in the State. On appeal preferred by the State Road Transport Corporation, taking the view that geographically Mandya region was smaller in area and, as such, the jurisdiction of the Regional Transport Authority, Mandya was ousted, the permit granted to the appellant was cancelled by the State Transport Appellate Tribunal by its Order dated 19 8 1972, resulting in a writ Proceedings before the Karnataka High Court which was dismissed. On appeal by Special Leave, the Court, ^ HELD: (1) The word "route" which has been used in association with "area specifically notified by the State Government". However, the terms and "a line of travel which specifies the highway which may be traversed by a motor vehicle between one terminus and another". Section 2(1) defines "area" as "area specifically notified by the State Government". However, the terms and expressions defined in section 2 will apply only if there is nothing repugnant in the subject or context. Tho first proviso to section 45(1) speaks of the route or area proposed in an application for a permit and, as such, there can be no question of the State Government specifying the area. The definition of "area" in section 2(1) has therefore no relevance in this context. [31B D] (2) section 45 uses both the words "route" and "area" whichever is applicable in a given case. A route as defined is a line of travel between two termini on a highway, but the idea of a route as a notional line that the definition suggests has not been consistently maintained in the Act. [31D E] (3) A route may mean not only the notional line of travel between one terminus and another, but also the area of the route over which the motor vehicles ply, yet the two terms are not interchangeable. "A route is an area plus some thing more." This "something" is the notional line of travel between the two termini which distinguishes a route from an area simpliciter. The first proviso to section 45(1) speaks of "route or area" apparently making a distinction between 29 them to cover applications relatable to either. A contract carriage does not ply along a fixed "route or routes" but over an "area" which is why an application for a contract carriage permit has to contain a statement as to the pro posed area. [31G H] Dosa Satyanarayanamurty etc. vs The Andhra Pradesh State Road Transport Corpn., (644). C. P. C. Motor Service, Mysore vs The State of Mysore, [1962]Supp. (1) S.C.R. 717 (725). C. P. Sikh Regular Motor Service etc. vs The State of Maharashtra, [1975] (2) S.C.R. 10, followed. (4)The word "area" in the first proviso to section 45(1) of the Act means the area of motorable roads within the territorial jurisdiction of a regional transport authority. Except that the territorial jurisdiction of the regional transport authority is fixed in terms of "geographical area "district wise in the State of Karnataka "area" in that wider sense is irrelevant to the purpose of the Act. [32 B, F] (5) The jurisdiction of a regional transport authority to grant an inter regional permit depends on the existing areas of motorable roads when an application for a permit is made. [32 G] [On the question of the reasonableness of a provision which requires an application for an inter regional permit to be made to the Regional Transport Authority of the region where the major portion of the proposed route or area lies, the Court observed that this was a matter of policy but added that the policy has not been stated very clearly, and that instead of leaving the law in such a "slippery state," the State should clarify it by appropriate legislation so that the law may be clear and easily ascertainable by the concerned section of the public.]

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Appeals Nos. 123 and 124 of 1966. Appeals by special leave from the judgments and orders dated April 28, 1965 of the Gujarat High Court in Civil Revision Applications Nos. 88 and 93 of 1961. P. B. Patwari, K. L. Hathi, section K. Bagga and Sureshta Bagga, for the appellants. P. M. Rawal and P. C. Bhartari, for the respondents. The Judgment of the Court was delivered by Mitter, J. These are two appeals by special leave from judg ments of the Gujarat High Court dated April 28, 1965 in Civil Revision Applications No. 88 and 93 of 1961. As the questions involved in both the applications were the same, the High Court delivered the main judgment in Civil Revision Application No. 88/1961 and referred to the same in its judgment in Civil Revision Application No. 93 of 1961. The two applications in the High Court arose out of certain proceedings under the Saurashtra Agricultural Debtors Relief Act. The applicants before the High Court and the appellants before this Court were mortgagees in possession of certain lands belonging to the debtors who are now represented by the respondents. The main question before the High Court was and before us is, whether the debtors had lost all their interest in the lands mortgaged by reason of the operation of the Saurashtra Land Reforms Act, XXV of 1951 and as such were not competent to make an application under the Saurashtra Agricultural Debtors Relief Act, 1954. Hereinafter the two Acts will be referred to as the Land Reforms Act and the Debtors Relief Act. It is not necessary to deal separately with the facts in the two appeals as the course of proceedings in both cases were similar giving rise to common questions of law. We therefore propose to take note of the facts in Civil Revision Application No. 88 of 1961. The creditors, appellants before us, were in possession of the properties the subject matter of litigation, under two mortgage deeds of Samvat years 1997 and 1999. The first mortgage was for Rs. 991 and the second for Rs, 1,011 The mortgagees were with possession and the mortgagee have been appropriating the income of the usufruct thereof for the last 50 years. There is nothing to show whether they were under a liability under the documents of mortgage to pay the revenue and other dues to the State but there is no dispute that they have 692 been doing so for many years past. The lands were situate in Bajana State with its own peculiar land tenure system known as the Girasdari system. The Land Reforms Act which came into force on July 23, 1951 purported to effect important and far reaching changes in the said system. The preamble to the Act shows that its object was "the improvement of land revenue administration and for ultimately putting an end to the Girasdari system" and the regulation of the relationship between the Girasdars and their tenants, to enable the latter to become occupants of the land held by them and to provide for the payment of compensation to the Girasdars for the extinguishment of their rights. It will be noted at once that the Act aimed at regulating the relationship of persons in the position of landholders and their tenants and to enable the tenants to become the real owners of the soil under direct tenancy from the State. It was not meant to extinguish or affect the rights of the landholders as mortgagors unless the persons in occupation had become tenants either by contract or by operation of law. The Act came into force in the whole of Saurashtra area of the State of Gujarat. Under section 2(15) 'Girasdar ' meant any talukdar, bhagdar, bhayat, cadet or mul girasia, etc. Under section 2(13) 'estate ' meant all land of whatever description held by a Girasdar including uncultivable waste whether used for the purpose of agriculture or not and 'Gharkhed ' meant any land reserved by or allotted to a Girasdar before the 20th May 1950 or for being cultivated personally and in his personal cultivation. A tenant under section 2(30) meant an agriculturist who held land on lease from a Girasdar or a person claiming through ' him and included a person who was deemed to be a tenant under the provisions of the Act. Under section 3 the provisions of the Act were to have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force. Section 4 Provided that "all land of whatever description held by Girasdar is and shall continue to be liable to the payment of land revenue to the State of Gujarat. " Section 5 classified Girasdars according to the measure of their holding and under cl. (c) thereof a Girasdar was to belong to class C if the total area of agricultural land comprised in his estate did not exceed Act. 120 00 Section 6(1) of the Act laid down that any person who was lawfully cultivating any land belonging to a Girasdar was to be deemed for the purposes of the Act to be the tenant if he was not a member of the Girasdars family or a servant on wages payable in cash or in kind etc. or a mortgagee in, possession. The Explanation to the sub section however shows that a person who was otherwise, deemed to be a tenant was not to cease to be such only on the 693 ground that he was a mortgagee in possession. Under section 19 it was open to any Girasdar to apply to the Mamlatdar for the allotment to him of land for personal cultivation within a certain fixed time. Such application had to be made in a specified form giving the prescribed particulars. The applicant had to show inter alia, the area and location of the land in respect of which the allotment was prayed for, the right under which he claimed the land and full particulars of his estate as also the area of khalsa land, if any, in his possession. Under section 20 of the Act it was for the Mamlatdar to issue notice to the tenant or tenants concerned on receipt of an application under section 19 and make an enquiry in the prescribed manner after giving the parties an opportunity of being heard. After such inquiry the Mamlatdar was required to pass an order making an allotment to the Girasdar of such land as may be specified in the order and this was to be followed by the issue of an occupancy certificate to a Girasdar in respect of his Gharkhed and the land, if any, allotted to him under the section. Under sub section (4) no Girasdar was to obtain possession of any land held by a tenant except in accordance with the order under the section. Section 24 laid down the total area of the holding which a C class Girasdar could be allotted for personal cultivation. Sub section (2) of the section provided that a C class Girasdar could not be allotted any khalsa land if it was held by a tenant. Chapter V containing sections 31 to 41 provided for acquisition of occupancy rights by tenants and section 31 laid down the consequences which were to issue in the wake of grant of occupancy certificates. A tenant who was granted such a certificate was to be free of all relations and obligations as tenant to the Girasdar. The Girasdar in his turn was to be entitled to receive and be paid compensation as provided in the Act. Under section 36 the right. tide and interest of the Girasdar in respect of an occupancy holding were to be deemed to have been extinguished on the payment by the Government of the last instalment of compensation. The functions of a Mamlatdar are laid down in section 46 of the Act. It was for him to decide inter alia what land should be allotted to a Girasdar for personal cultivation and to make such allotment, to decide whether a person was or was not tenant, to determine whether a tenancy shall be termi nated under section 12 and many other matters. Under s.51. an appeal lay to the Collector against any order of the Mamlatdar. The above analysis of the relevant provisions of the Land Reforms Act amply demonstrates the manner in which a change was to be brought about in the relationship between the Girasdar and his tenants and the rights which they were respectively to acquire under the orders of the Special Mamlatdar. The said Officer had no jurisdiction to terminate any rights under mortgage, 694 The full text of the order of the Mamlatdar on the application of the Girasdars (the respondents to the appeal) is not before us. The copy of the order on the respondents ' application marked exhibit 8/1 bearing date 16th January 1954 was handed over to us. It appears therefrom that the Girasdar was allowed to keep as Gharkhed certain lands by paying six times the assessment in the treasury but with regard to section Nos. 684 arid 685 (the lands given to the mortgagees) the same were held by the Mamlatdar to be khalsa and full assessment thereof was ordered to be taken. The Mamlatdar further noted that there was no need to grant any occupancy rights. On May 2, 1955 the respondents applied for adjustment of their debt to the Civil Judge exercising jurisdiction under the Debtors Relief Act. The creditors relied on the order of the Special Mamlatdar declaring the lands as Khalsa as fortified by the decision of the Bhayati court of Bajana State. It was contended that the lands having been declared khalsa the debtors had lost their rights therein. Reliance was also placed on Forms 7 and 8 by counsel for the appellants to show that his clients had acquired proprietary rights in the said khalsa lands. According to the Civil Judge the judgment of the Bhayati court had merely decided that the Bajana State had 'no title or interest in the land in question and that the Jats Mul Girasdars were independent proprietors thereof. The Judge however remarked that it was not for the Special Mamlatdar to decide any question as to title and he had merely ordered recovery of full assessment from the persons in actual possession and this in no way vested any title in the creditors. In the result the Civil Judge directed the restoration of the lands to the debtors subject to certain limitations and conditions. The creditors went up in appeal to the Assistant Judge, Surendranagar. There it was contended on their behalf that the mortgages had been extinguished by the title of the paramount power and on the date of the application under the Debtors Relief Act there was no subsisting mortgage between them and the respondents. Reliance was placed on the decision of the Special Mamlatdar declaring the land to be khalsa land as extinguishing the mortgages by forfeiture of the land to the State. The Assistant Judge dealt with the question at some length and came to the conclusion that the mortgages bad not been extinguished and not being tenants within the meaning of section 6 the creditors could not have got an occupancy certificate in respect of the lands in their possession. He further stressed on the decision of the Special Mamlatdar to show that only the liability for the full assessment of the lands was indicated without any disturbance to the rights inter se. between the mortgagor and the mortgagees. Dealing, with the question of the advances made and the amounts 695 still due to the creditors, it was ordered that the debtors should pay Rs. 1,698/ in twelve yearly instalments and the award was directed to be modified accordingly. The matter was then taken up by way of Civil Revision to the High Court of Gujarat. The High Court arrived at the following conclusions : (a) The decision of the Bhayati court merely declared that the State was entitled to recover taxes of various kinds from the lands in possession of tenants or mortgagees. There was no decision that the lands in possession of the mortgagees were confiscated to the State. (b) The Special Mamlatdar rejected the application of the debtors and directed the lands in possession of the different creditors to be treated as Government lands as according to him the decision of the Bhayati court amounted to a forfeiture of the lands by the Bajana State. (c) It was not necessary to test the correctness of the decision of the Special Mamlatdar as in view of the provisions in the Debtors Relief Act which was an Act subsequent to the Land Reforms Act the provisions of the latter Act were to prevail. In the result the High Court affirmed the order of the Assistant Judge in appeal directing possession to be handed over to the debtors. Before us great stress was laid on the decision of the Special Mamlatdar and it was argued that subject to any appeal from his order his decision was binding on the parties and not having gone up in appeal from the order of the Special Mamlatdar the debtors could not be allowed to agitate their rights to the land ignoring the said order. We have not before us the full text of the order of the Special Mamlatdar relied on by the appellants nor are we satisfied from copies of form 7 prescribed under Rule 81 of the Rules promulgated under the Land Reforms Act that there was any adjudication of the rights of the debtors and the creditors inter se. In our view all that the Special Mamlatdar decided and had jurisdiction to decide under the Act was, whether the debtors could be given occupancy certificates or allotted any land Gharkhed and the Special Mamlatdar merely ordered that the lands being khalsa full assesment had to 'be, taken in respect of them and there was no need to grant occupancy rights. In order to get such occupancy rights the creditors had to show that they had 696 become tenants which Obviously they could not be under the provisions of section 6 of the Land Reforms Act. The fact that they had all along paid the revenue and other dues to the State, if any, would not clothe them with the right of the tenants. Under section 76(c) of the Transfer of Property Act a mortgagee in possession must, in the absence of a contract to the contrary out of the income of the property, pay the Government revenue, all other charges of a public nature and all rent accruing due in respect thereof during such possession. We do not know whether there was a contract to the contrary and whether the mortgagors had covenanted to pay the rent and the revenue. But even if they could not meet the revenue and other State dues out of the income and paid the same out of their own pockets in order to save the security, the mortgagees were only entitled under section 72(b) of the Transfer of Property Act to add the amount to the mortgage money. They could not by paying such rent or revenue acquire a title in derogation of the rights of the mortgagors and the payments, if any, are to be taken into account when the mortgagors seek to redeem the property. That apart, it has not been shown to us that the debtors were awarded any compensation in respect of the khalsa lands given in mortgage to the appellants. The occupancy certificates, if any, given by the Special Mamlatdar to the appellants cannot under the provisions of the Land Reforms Act extinguish the title of the mortgagors. Whether the: mortgagors as C class Girasdars can be allowed to retain land in excess of the limits specified in the Act and whether as a result of the restoration of the lands to them by the award such limit will be exceeded in this case, are not questions for us to consider. The right of the mortgagors not being extinguished under any provision of law to which our attention was drawn, no, fault can be found, with the award is finally modified by the judgment of the Assistant Judge and effect must be given thereto. In our view, it is not necessary to consider the point canvassed at length before the High Court and dealt with in the judgment of the said court as to whether the Provisions of the Debtors Relief Act over ride those in the Land Reforms Act. The object of the two Acts are different. The object of the Land Reforms Act. as already noted, is the improvement of the land revenue administration and outline an end to the Girasdari system and granting of occupancy rights to the, Girasdars and /or their, tenants, whereas the Debtors Relief Act governs the rights of the debtors and creditors inter se inter alia by scaling down the debits and providing for restoration of their Pr to debtors. In our view, the right of the debtors in this case were not extinguished under the Land Reforms Act and it was open to the court exercising jurisdiction under the Debtors Relief Act to scale down tile debt and provide for resto 697 ration of the land in possession of the mortgagees to the mortgagors on taking fresh accounts between the parties and directing payments by one party to the other as has been done in this case. The appeals therefore fail and are dismissed with costs. Y.P. Appeal dismissed.

The Respondent Girasdars in the State of Saurashtra mortgaged their lands with possession with the appellants, who paid the land revenue and other dues. By the Saurashtra Land Reforms Act (25 of 1951), the, rights of the Girasdars were extinguished, and the tenants of Girasdars became occupants of land held by them. The Land Reforms Act provided for the Mamlatdar to allot land to a Girasdar for personal cultivation. The special Mamlatdar declared the lands in dispute to be Khalsa and full assessment had to; be taken, and that there was no need to grant 'any occupancy rights. The Saurashtra Agricultural Debtors Relief Act, 1954 was enacted scaling down the debts and for providing for rest oration of their property, to the debtors. Thereupon the respondents applied.for adjustment of their debt to the Court having jurisdiction under the Debtors Relief article The ' appellants relied on the order of the Special Mamlatdar declaring the lands as Khalsa and contended that the lands having been declared as Kholsa, the respondents had lost their rights therein. HELD : The rights of the respondents Girasdars in this case were not extinguished under the Land Reforms Act and it was open to the court exercising jurisdiction under the Debtors Relief Act to scale down the debt and provide the restoration of the land in possession of the mortgagees to, the mortgagors on taking fresh account between the parties and directing. payments by one party to the other. The Saurashtra Land Reforms Act aimed at regulating the relationship of persons in position of Landholders and their tenants, and to enable the tenants to become the real owners of the soil under direct tenancy from the State. It was not meant to extinguish or affect the rights of Landholders as mortgagors unless the persons in occupation had become tenants either by contract or by operation of law. No adjudication of the rights of the debtors and creditors inter se was done. All that the Special Mamlatdar decided and had jurisdiction to decide under the Land Reforms Act was whether the respondents could be given occupancy certificates or allotted any land Gharkhed and the Special Mamlatdar merely ordered that the lands being Khalsa full assessment had to be taken in respect of them and there was no need to grant occupancy rights. In order to get such occupancy rights the appellants had to show that they had become tenants which they could not be under the provisions of section 6 of the Land Reforms Act. The fact that they had all along paid the revenue and other dues to the State, if any, would not clothe them with tenancy rights. That apart, it has not been shown that the respondents were awarded any compensation in respect of the 691 Khalsa lands given in mortgage to the appellants. The occupancy certificates, if any, given by the Special Mamlatdar to the appellants could not under the provisions of the Land Reforms Act extinguish the title of the respondents. [695 H; 696 H]

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Civil Appeal No. 2009 of 1978. Appeal by Special Leave from the Judgment and Order dated 8/12th May, 1978 of the Calcutta High Court in Appeal from Original Order No. 884/76. Devi Pal. P. K. Pal, J. B. Dadachanji and K. J. John for the Appellant. The appellant is a banking company incorporated in the United Kingdom with its registered office at London. It carries on banking business in India, and is assessed under the Income tax Act, 1961. The appellant filed a return of its income for the assessment year 1972 73. During the assessment proceeding, the Income tax Officer issued a notice under section 142(1) of the Income tax Act requiring the appellant to produce certain account books and documents. The appellant applied against the notice to the High Court at Calcutta under Articles 226 of the Constitution. A learned Single Judge of the High Court did not accept the wide construction which the appellant sought to put upon the impugned notice, and construing it in specific limited terms he directed the appellant to comply with it. The appellant preferred an appeal in the High Court. Meanwhile, pursuant to the direction by the learned Single Judge, the Income tax Officer made an assessment order on March 31, 1977. Thereafter, the appeal was allowed by a Division Bench of the High Court by its judgment dated May 8 and 12, 1978, and the impugned notice under section 142(1) and the 768 consequent assessment order were quashed. But while doing so, the Division Bench also directed the Income tax Officer to make a fresh assessment. Aggrieved by that direction, the appellant applied for, and obtained, special leave to appeal, to this Court. The sole question before us is whether the High Court erred in directing a fresh assessment. The appellant contends that the High Court was in error in making the direction because the assessment had already become barred by limitation and thereby a valuable right not to be assessed had accrued to the appellant, and the High Court was not competent to deprive the appellant of that accrued right. It is necessary first to examine whether the bar of limitation had come into play at any time before the High Court passed the impugned order. The assessment year under consideration is the year 1972 73. By virtue of section 153(1) (a) (iii) of the Income tax Act, no assessment order in respect of that assessment year could be made after two years from the end of that assessment year. The end of the assessment year is March 31, 1975. However, the appellant filed the writ petition on March 17, 1975, fourteen days before the end of the period for making the assessment order. On the same date, March 17, 1975, the learned Single Judge granted an interim injunction restraining the Income tax Officer from proceeding with the assessment, and on March 25, 1975 the injunction was made operative for the pendency of the writ petition. The writ petition was disposed of by the learned single judge by his judgment dated August 31, 1976. It is apparent that the assessment proceedings remained stayed throughout the period from March 17, 1975 to August 31, 1976 by virtue of the orders of the court. As has been mentioned, the learned Single Judge disposed of the writ petition on August 31, 1976. In his judgment, besides directing the appellant to comply with the notice under section 142(1) as construed by him, he also included a direction to the Income tax Officer to complete the assessment by March 31, 1977. On September 22, 1976, he amended his judgment inasmuch as it now required that "the assessment for the relevant year must be completed on the 31st of March, 1977 but must not be completed before 31st March 1977. " In other words, while the Income tax Officer could continue with the assessment proceedings he was restrained by the Court from making the assessment order before, and in fact could make it only on, March 31, 1977. Now it is important to note that when the amendment was made by the learned Single Judge in his judgment, it was an amendment made by him to a judgment disposing of the writ petition and having regard especially to the nature and the terms of the amend 769 ment, it must be deemed to have taken effect as from August 31, 1976, the date of the original judgment. In the appeal filed thereafter by the appellant, no interim order was made suspending the operation of the direction that the assessment order be made on March 31, 1977 only. A stay order was made against the enforcement of the notice of demand alone. Adhering to the directions of the learned Single Judge, the Income tax Officer made an assessment order on March 31, 1977. In the result, the assessment proceeding remained pending during the entire period from March 17, 1975 to March 31, 1977 by successive orders of the Court. If regard be had to clause (ii) of Explanation 1 to section 153, which provides that in computing the period of limitation for the purposes of section 153, the period during which the assessment is stayed by an order or injunction of any court shall be excluded, it is abundantly clear that the assessment order dated March 31, 1977 is not barred by limitation. In computing the period for making the assessment, the Income tax Officer would be entitled to exclude the entire period from March 17, 1975, on which date there were fourteen days still left within the normal operation of the rule of limitation. The assessment order was made on the very first day after the period of stay expired; it could not be faulted on the ground of limitation. There is, therefore, no force in the submission of the appellant that the limitation for making the assessment had expired and a valuable right not to be assessed had thereby accrued to it, and that consequently the High Court was not competent to make the order directing a fresh assessment. The next point is whether the High court possessed any power to make the order directing a fresh assessment. The principal relief sought in the writ petition was the quashing of the notice under section 142(1) of the Income tax Act, and inasmuch as the assessment order dated March 31, 1977 was made during the pendency of the proceeding consequent upon a purported non compliance with that notice, it became necessary to obtain the quashing of the assessment order also. The character of an assessment proceeding, of which the impugned notice and the assessment order formed part, being quasi judicial, the "certiorari" jurisdiction of the High court under Article 226 was attracted. Ordinarily, where the High court exercises such jurisdiction it merely quashes the offending order and the consequential legal effect is that but for the offending order the remaining part of the proceeding stands automatically revived before the inferior court or tribunal with the need for fresh consideration and disposal by a fresh order. Ordinarily, the High Court does not substitute its own order for the order quashed by it. It is, of course, a different case where the adjudication by the High Court establishes a complete want of jurisdic 770 tion in the inferior court or tribunal to entertain or to take the proceeding at all. In that event on the quashing of the proceeding by the High Court there is no revival at all. But although in the former kind of case the High court, after quashing the offending order, does not substitute its own order it has power nonetheless to pass such further orders as the justice of the case requires. When passing such orders the High court draws on its inherent power to make all such orders as are necessary for doing complete justice between the parties. The interests of justice require that any undeserved or unfair advantage gained by a party invoking the jurisdiction of the court, by the mere circumstance that it has initiated a proceeding in the court, must be neutralised. The simple fact of the institution of litigation by itself should not be permitted to confer an advantage on the party responsible for it. The present case goes further. The appellant would not have enjoyed the advantage of the bar of limitation if, notwithstanding his immediate grievance against the notice under section 142(1) of the Income tax Act, he had permitted the assessment proceeding to go on after registering his protest before the Income tax Officer, and allowed an assessment order to be made in the normal course. In an application under section 146 against the assessment order, it would have been open to him to urge that the notice was unreasonable and invalid and he was prevented by sufficient cause from complying with it and therefore the assessment order should be cancelled. In that event, the fresh assessment made under section 146 would not be fettered by the bar of limitation. Section 153(3)(i) removes the bar. But the appellant preferred the constitutional jurisdiction of the High Court under Article 226. If no order was made by the High Court directing a fresh assessment, he could contend as is the contention now before us, that a fresh assessment proceeding is barred by limitation. That is an advantage which the appellant seeks to derive by the mere circumstance of his filing a writ petition. It will be noted that the defect complained of by the appellant in the notice was a procedural lapse at best and one that could be readily corrected by serving an appropriate notice. It was not a defect effecting the fundamental jurisdiction of the Income tax Officer to make the assessment. In our opinion, the High Court was plainly right in making the direction which it did. The observations of this court in Director of Inspection of Income tax (Investigation), New Delhi and Another vs Pooran Mall & Sons and another(1) are relevant. It said: "The court in exercising its powers under article 226 has to mould the remedy to suit the facts of a case. If in a particular case a court takes the view that the Income tax 771 Officer, while passing an order under section 132(5), did not give an adequate opportunity to the party concerned it should not be left with the only option of quashing it and putting the party at an advantage even though it may be satisfied that on the material before him the conclusion arrived at by the Income tax Officer was correct or dismissing the petition because otherwise the party would get an unfair advantage. The power to quash an order under Article 226 can be exercised not merely when the order sought to be quashed is one made without jurisdiction in which case there can be no room for the same authority to be directed to deal with it. But, in the circumstances of a case, the court might take the view that another authority has the jurisdiction to deal with the matter and may direct that authority to deal with it or where the order of the authority which has the jurisdiction is vitiated by circumstances like failure to observe the principles of natural justice, the court may quash the order and direct the authority to dispose of the matter afresh after giving the aggrieved party a reasonable opportunity of putting forward its case. Otherwise, it would mean that where a court quashes an order because the principles of natural justice have not been complied with, it should not while passing that order permit the tribunal or the authority to deal with it again irrespective of the merits of the case. " The point was considered by the Calcutta High court in Cachar plywood Ltd. vs Income Tax Officer, "A" Ward, Karimganj, Dist., Cachar & Another(1) and the High court, after considering the provisions of section 153 of the Income Tax Act, considered it appropriate, while disposing of the writ petition, to issue a direction to the Income tax Officer to complete the assessment which, but for the direction of the High court, would have been barred by limitation. Our attention has been drawn to a recent decision of this Court in Rajinder Nath etc. vs The Commissioner of Income tax, Delhi(2) (by a Bench of this Court of which one of us was a member). In that case, the Court considered the provisions of section 153(3) (ii) of the Income tax Act and laid down that the word "direction" in that subsection refers to a direction necessary for the disposal of the case and which the court has power to make while deciding the case. In the view taken by us that the order made by the High Court directing a fresh assessment is necessary for properly and completely disposing of 772 the writ petition, the appellant can obtain no assistance from Rajinder Nath (supra). Mr. A. P. Mohanti, who appeared for the intervener, supported the contention that the High Court was not entitled to make an order directing a fresh assessment, and has referred us to three cases, Pickles vs Falsham,(1), Anisminic Ltd. vs The Foreign Compensation Commission and Another(2), and Bath and West Countries Property Trust Ltd. vs Thomas (Inspector of Taxes)(3). We are of the opinion that the cases are distinguishable. In Pickles (supra), Cave L.C. declined to remand the case to the Special Commissioners because the time for making the requisite assessment had expired. In Anisminic Ltd. (supra) the decision of the Commissioner considered by the House of Lords was a nullity. The present case is one of a mere procedural lapse, an imperfect notice which is replaceable by a proper notice. The third case, Bath and West Countries Property Trust Ltd. (supra) was again a case where it was too late for the Inspector to make a fresh assessment. In the case before us a direction by the High court is sufficient to raise the bar of limitation, a power absent in the aforesaid cases. In our Judgment, the order made by the High Court directing the Income tax Officer to make a fresh assessment was necessary in order to do complete justice between the parties. The High Court had jurisdiction to make the order, and it acted in the sound exercise of its judicial discretion in making it. The appeal is dismissed with costs. V.D.K. Appeal dismissed.

The appellant, a banking company incorporated in the United Kingdom, carries on banking business in India and is assessed under the Income Tax Act, 1961. The appellant filed a return of its income for the assessment year 1972 73. During the assessment proceedings the Income Tax Officer issued a notice under section 142(1) of the Income Tax Act requiring the appellant to produce certain account books and documents. The appellant applied against the notice to the High Court of Calcutta under Article 226 of the Constitution. The High Court construing the notice in specifically limited terms directed the appellant to comply with it. The appellant preferred an appeal in the High Court. Meanwhile, pursuant to the direction by the learned single judge, the Income Tax Officer made an assessment order on March 31, 1977. Thereafter the appeal was allowed by a Division Bench of the High Court by its judgment dated May 8 and 12, 1978, and the impugned notice under section 142(1) and the consequent assessment order were quashed. But while doing so, the Division Bench also directed the Income Tax Officer to make a fresh assessment. Aggrieved by that direction, the appellant applied for, and obtained special leave to appeal to this Court. Dismissing the appeal, the Court ^ HELD: 1. The High Court was competent to make the order directing a fresh assessment since the limitation for making the assessment had not expired and no valuable right to be assessed had thereby accrued to the appellant. [769 D E] The facts of the case make it clear that the assessment proceedings remained pending during the entire period from March 17, 1975 to March 31, 1977 by virtue of successive stay orders of the Court. If regard be had to clause (ii) of Explanation 1 to section 153 which provides that in computing the period of limitation for the purposes of section 153 the period during which the assessment is stayed by an order or injunction of any court shall be excluded, it is abundantly clear that the assessment order dated March 31, 1977 is not barred by limitation. In computing the period for making the assessment, the Income Tax Officer would be entitled to exclude the entire period from March 17, 1975, on which date there were fourteen days still left within the normal 766 operation of the rule of limitation. The assessment order was made on the very first day after the period of stay expired; it could not be faulted on the ground of limitation. [769 B D] 2. The character of an assessment proceeding of which the impugned notice and the assessment order formed part, being quasi judicial, the "certiorari" jurisdiction of the High Court under Article 226 was attracted. Ordinarily, where the High Court exercises such jurisdiction it merely quashes the offending order, and the consequential legal effect is that but for the offending order the remaining part of the proceeding stands automatically reviewed before the inferior court or tribunal with the need for fresh consideration and disposal by a fresh order. Ordinarily the High Court does not substitute its own order for the order quashed by it. It is, of course, a different case where the adjudication by the High Court establishes a complete want of jurisdiction in the inferior court or tribunal to entertain or to take the proceeding at all. In that event on the quashing of the proceeding by the High Court there is no revival at all. But although in the former kind of case the High Court, after quashing the offending order, does not substitute its own order it has power nonetheless to pass such further orders as the justice of the case requires. [769 F H, 770 A] 3. When passing such orders the High Court draws on its inherent power to make all such orders as are necessary for doing complete justice between the parties. The interests of justice require that any undeserved or unfair advantage gained by a party invoking the jurisdiction of the court, by the mere circumstance that it has initiated a proceeding in the court, must be neutralised. The simple fact of the institution of litigation by itself should not be permitted to confer an advantage on the party responsible for it. [770 A C] In the present case, the appellant would not have enjoyed the advantage of the bar of limitation if, notwithstanding his immediate grievance against the notice under section 142(1) of the Income Tax Act, he had permitted the assessment proceeding to go on after registering his protest before the Income Tax Officer, and allowed an assessment order to be made in the normal course. In an application under section 146 against the assessment order, it would have been open to him to urge that the notice was unreasonable and invalid and he was prevented by sufficient cause from complying with it and therefore the assessment order should be cancelled. In that event, the fresh assessment made under section 146 would not be fettered by the bar of limitation. Section 153(3)(i) removes the bar. But the appellant preferred the constitutional jurisdiction of the High Court under Article 226. If no order was made by the High Court directing a fresh assessment, he could contend that a fresh assessment proceeding is barred by limitation. That is an advantage which the appellant seeks to derive by the mere circumstance of his filing a writ petition. It will be noted that the defect complained of by the appellant in the notice was a procedural lapse at best and one that could be readily corrected by serving an appropriate notice. It was not a defect affecting the fundamental jurisdiction of the Income Tax Officer to make the assessment. The High Court was plainly right in making the direction which it did. [770 C G] Director of Inspection of Income Tax (Investigation) New Delhi and Anr. vs Pooran Mall and Sons and Anr. @ 395; followed. 767 Cachar Plywood Ltd. vs Income Tax Officer, 'A ' Ward, Karimganj Dist. Cachar and Anr., (1978) 114 ITR (Cal.); approved. Rajinder Nath etc. vs The Commissioner of Income Tax, Delhi, ; distinguished. Pickles vs Falsham, 9 Tax Cases, 261, 288; Anisminic Ltd. vs The Foreign Compensation Commission & Anr. [1969] 1 All E.L.R. 208; Bath and West Countries Property Trust Ltd. vs Thomas (Inspector of Taxes) ; distinguished.

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ION: Criminal Appeal No. 49 of 1954. Appeal by special leave from the judgment and order dated the 7th October, 1953 of the Orissa High Court at Cuttack in Criminal Appeal No. 108 of 1952 arising out of the judgment and order dated the 14th November 1952 of the Court of Assistant Sessions Judge at Sambalpur Sundergarh in Sessions Trial No. 7/4 (5) of 1922. section C. Isaacs, R. Patnaik and R. C. Prasad, for the appellant. Porus A. Mehta and P. G. Gokhale, for the respondent. March 13. The Judgment of the Court was delivered by SINHA J. The main question canvassed in this appeal by special leave is whether the ruling of this Court in the case of Topan Das vs The State of Bombay(1) governs this case also, in view of the fact that the appellant is the only person out of the accused persons placed on trial, who has been convicted for the offence of conspiracy under section 120 B, Indian Penal Code. The point arises in the following way: The appellant and four others were placed on their trial before the Assistant Sessions Judge of Sambalpur for offences under sections 120 B, 409,477 A and 109, Indian Penal Code with having committed the offences of criminal conspiracy, criminal breach of trust in respect of Government property, and falsification of accounts with a view to defraud the Government. The appellant was the District Food Production Officer in Sambalpur and the other four accused persons were agricultural sub overseers in charge of their respective areas under the appellant. Another such agricultural sub overseer was Pitabas Sahu at Bargarh centre. He was examined at the trial as P.W. 25 and (1) 209 shall hereinafter be referred to as the approver. The prosecution case is that in furtherance of the Grow More Food Scheme initiated by Government it was decided to subsidize the supply of oil cake to agriculturists with a view to augmenting the production of food crops. Cultivators were to be supplied this variety of manure at Rs. 4 4 0 per maund, though the Government had to spend Rs. 7 12 0 per maund. The appellant entered into a conspiracy with his subordinate staff including the agricultural sub overseers aforesaid to misappropriate the funds thus placed at their disposal for the procurement and supply of oil cake to cultivators. To bolster up the quantity of oil cakes to be procured, they showed false transactions of purchase and distribution thereof and falsified accounts, vouchers, etc. Thus they were alleged to have misappropriated the sum of Rs. 4,943 4 0 of Government money. A large volume of oral and documentary evidence was adduced on behalf of the prosecution. The three assessors who assisted at the trial were of the opinion that none of the accused was guilty. The learned Assistant Sessions Judge in agreement with the assessors acquitted the four agricultural sub overseers aforesaid of all charges, giving them the benefit of the doubt. But in disagreement with the assessors he convicted the appellant under all the charges and sentenced him to rigorous imprisonment for four and a half years and a fine of Rs. 2,000 under section 409, Indian Penal Code, and to rigorous imprisonment for two years each under sections 120 B and 477 A of the Code, the sentences of imprisonment to run concurrently. The learned trial Judge observed in the course of his judgment as follows: "Hence on a consideration of all the evidence as discussed above, I find that the prosecution have fully proved their case that the accused Bimbadhar Pradhan, the D.F.P.O. has conspired to embezzle the Government money. They have also proved that he has got an active hand and in assistance of Pitabas 210 Sahu has embezzled Government money amounting to Rs. 4,943 4 0 and in that act he has also actively helped Pitabas Sahu in falsifying the Government records by making false entries. Hence all these three charges have been conclusively proved against him. So far as regards the other accused persons, I have already stated that they are considerably inexperienced and the doubtful nature of evidence against these accused persons and considering the position between the first accused and the other accused persons, I give these four accused persons the benefit of doubt though I do not approve their conduct in this affair. As per my findings given above, I may state here that this is a case in which we find a person in charge of the entire administration of agricultural and G.M.F. development of a district has not only soiled his own hands by embezzling Government money by corrupt means but has also introduced corruption into the entire administration of that department by spoiling the career of young men who are entrusted with this work and employed under him". The appellant went up in appeal to the High Court of Orissa. A Division Bench of that Court allowed his appeal and set aside his convictions and sentences under sections 409 and 477 A, Indian Penal Code, but upheld his conviction and sentence in respect of the charge of conspiracy under section 120 B of the Code. We need not enter into the correctness of the findings of the trial court in respect of the acquittal of the other four accused, or of the High Court with regard to the acquittal of the appellant in respect of the charges under sections 409 and 477 A, Indian Penal Code. The High Court held that though the appellant had withdrawn the sum of Rs. 27,000 from the Government treasury with a view to subsidizing the procurement of oil cake, it had not been proved that there was an entrustment to the appellant. Hence the charge against him under section 409 failed. As regards the charge under section 477 A, the High 211 Court acquitted him on the ground that the documents said to have been falsified, which were large in number, had not been mentioned in the charge and a vague statement that "accounts, cash books, stock books, petty cash sale register, cash memos, applications from cultivators, receipts, bills, vouchers, papers, documents, letters, correspondence, etc. had been falsified" was made. As regards the charge of conspiracy under section 120 B, the High Court observed that the most important witness to prove the charge was the approver aforesaid (P.W. 25) who had given a full description of the conspiracy on the 23rd or 25th September 1947 between the appellant and other sub overseers including himself for the purpose of showing bogus purchases and bogus distribution of large quantities of oil cake. It also observed that "Most of the witnesses examined by the prosecution to corroborate the evidence of Pitabas are themselves accomplices in the conspiracy". The High Court found that in respect of that conspiracy the evidence given by the approver got adequate corroboration from other independent witnesses. After setting out the evidence the High Court recorded the following finding: "This would be strongest corroboration of the evidence of the approver about the appellant being the prime mover and the brain behind the entire fraud. It was he who wanted to misuse his official position and persuade his subordinates to join with him in showing false procurement and distribution figures of oilcakes". And finally the High Court came to the following conclusion: "I am therefore of the opinion that the approver 's version about the leading part in the conspiracy played by the appellant in persuading all his subordinates to join with him for the purpose of committing criminal breach of trust of the sums withdrawn from the treasury by showing false procurement and distribution of oilcake is true. There is independent corro 212 boration of his evidence which is inconsistent with the appellant being a mere negligent superior officer who was deceived and defrauded by his dishonest subordinates. It was then urged that in the charge under section 120 B of the Indian Penal Code, the date of the commission of the offence was stated to be the month of October 1947, whereas according to the evidence of P.W. 5, the conspiracy took place at Bargarh between the 23rd and 25th September 1947. This discrepancy in the date is immaterial and has not prejudiced the appellant in any way". From the concurrent orders of conviction and sentence of the appellant under section 120 B, Indian Penal Code, he was granted special leave to appeal to this Court. The learned counsel for the appellant has raised the following points in support of the appeal: 1. That all the persons charged with the offence of conspiracy except the appellant having been acquitted, his conviction and sentence in respect of that charge could not in law be maintained; 2. That the appellant himself having been acquitted of the substantive charges under sections 409 and 477 A of the Code, he could not be convicted for conspiracy to commit those very offences; 3. That the evidence of the prosecution witnesses having been disbelieved as against the other accused, the same evidence should not have been relied upon for convicting the appellant of the charge of conspiracy; 4. That the provisions of section 342, Code of Criminal Procedure, had not been fully complied with in so far as important circumstances in the prosecution evidence had not been put to the appellant in his examination by the court under that section. In our opinion, there is no substance in any one of these contentions and we proceed to give our reasons for our conclusions. In support of the first contention raised on behalf of the appellant strong reliance was placed on the 213 recent decision of this Court in Topan Das vs State of Bombay(1) and the rulings relied upon in that case. The cases, The Queen vs Manning(2), The Queen vs Thompson(3) and The King vs Plummer(4) were cited in support of the contention that where all the accused persons except one are acquitted on a charge of conspiracy, the conviction of one only on that charge cannot be sustained. In this connection the recent decision of the Judicial Committee of the Privy Council in the case of Kannangara Aratchige Dharmasena vs The King(5) may also be referred to, though it was not cited at the Bar. In that case the Judicial Committee held that where only two persons are involved in a charge of conspiracy, if a new trial has to be directed in respect of one it should be ordered in respect of both, because the only possible conclusion in such a case was either that both were guilty or that neither was guilty of the offence. The recent decision of this Court so strongly relied upon by the appellant lays down a similar rule, but is clearly distinguishable from the case in hand inasmuch as in that case the only persons alleged to have been guilty of the offence of conspiracy were the persons placed on trial. There was no allegation nor any evidence forthcoming that any other persons were, though not placed on trial, concerned with the crime. In those circumstances this Court laid it down that it was essential to bring the charge of conspiracy home to the accused person or persons to prove that there was an agreement to commit an offence between two or more persons. On the findings in that case only one person, after the acquittal of the rest of the accused was concerned with the crime and stood convicted of the charge of conspiracy. As a person cannot be convicted of conspiring with himself to commit an offence, this Court gave effect to the contention that on the findings and on the evidence, (1)[1955] 2 S.C.R. 881. (2) (3) ; (4) (5) 28 214 as also on the charge in that case the conviction could not be sustained. But in the instant case, as already indicated, on the findings of the courts below, apart from the persons placed on trial, there was the approver who implicated himself equally with the other accused persons and a number of other prosecution witnesses as having been privy to the conspiracy. The evidence of the approver has been found by the courts below to have been materially corroborated both as to the unlawful agreement and as to the persons concerned with the conspiracy. In the first information report lodged on the 28th June 1948 the approver Pitabas Sabu, one of the agricultural sub overseers, was named along with the other five accused as the persons concerned with the conspiracy. Subsequently Pitabas Sahu aforesaid was granted pardon on condition of his making a full and true statement of the facts of the case and was examined as an approver, on whose evidence mainly rested the case against the accused. His evidence, as indicated above, was supported by the dealers in oilcake who supplied the commodity which was the subject matter of the conspiracy. It cannot therefore be said that this case is on all fours with the recent decision of this Court referred to above. But it was argued on behalf of the appellant that be was charged only with a conspiracy with the other accused persons and not with any conspiracy with the approver along with those others. The charge under section 120 B is in these terms: "First, that you, on or about the month of October, 1947 in the district of Sambalpur agreed with Hemchandra Acharya and other accused persons to do or caused to be done an illegal act by illegal means and that you did some acts in pursuance of the said agreement to wit, the offence of criminal breach of trust under section 409, I.P.C. and falsification of accounts under section 477 A punishable with R. I. for more than two years and thereby committed an offence punish 215 able under section 120 B, I.P.C. , and within the cognizance of court of Sessions". It will thus appear from the words of the charge that the approver was not specifically named as having been one of the conspirators, unless he could be brought within the category of "other accused persons". Something will have to be said as to what those words denote, whether the approver was also included within that description. Counsel for the appellant contended that they did not. Counsel for the State Government contended to the contrary. In England an indictment consists of three parts: (1) the commencement, (2) the statement of the offence, and (3) the particulars of the offence. The English law of indictment from very early times has been based on very technical rules. Those rules have now been codified by the Indictments Act, 1915 (5 & 6 George 5, Chapter 90). In Rule 2 (Schedule 1) of the Act as amended by the Administration of Justice (Miscellaneous Provisions) Act of 1933, the form of "the commencement of the indictment" has been prescribed. The form of "Statement of the offence" has been prescribed by Rule 4 of the Act and below that has to follow "Particulars of offence" as re quired by Rule 5. Those rules more or less correspond to the rules laid down in Chapter XIX of the Code of Criminal Procedure. Section 221, Code of Criminal Procedure, requires that the charge shall state the offence with which the accused is charged, giving the specific name of the offence, if such a name has been given by the law which creates the offence, which in this case means the offence of criminal conspiracy, defined by section 120 A, Indian Penal Code. The naming of the section is, under sub section (5) of section 221 , Code of Criminal Procedure, equivalent to a statement that every legal condition required by law to constitute the offence of criminal conspiracy charged against the appellant was fulfilled. Section 222 of the Code requires that the particulars as to the time and place of the alleged offence, and 216 the person (if any) against whom, or the thing (if any) in respect of which, the offence was committed, shall be stated. It is noteworthy that section which requires the particulars of the offence to be stated does not in terms further require that in an offence,like conspiracy the names of the co conspirators should also be mentioned. Hence in England it is enough if the indictment states that the accused along with other persons unknown had committed the offence of criminal conspiracy. Though the statute law in India does not make it obligatory that the persons concerned in the crime of criminal conspiracy should be specifically named along with the person or persons charged in a particular trial, it is always advisable to give those particulars also in order to give a reasonable notice to the accused that he has been charged with having conspired with so and so (persons named), as also persons unnamed, to commit a certain offence. In this case the charge against the five accused persons with reference to section 120 B, Indian Penal Code, named only those five persons as the conspirators and omitted to name the approver also as having been privy to the conspiracy. This is clearly brought out with reference to the charge framed against the other four accused (who have been acquitted by the trial court as aforesaid). It states: "That you, on or about the month of October 1947 in the district of Sambalpur, agreed with Bimbadhar Pradhan to do or caused to be done an illegal act by illegal means. . . . . We find with reference to the records of the trial court that the trial has not been characterised by thoroughness or circumspection. The date of the offence as given in the charge is different from the date as disclosed in the evidence, as pointed out by the High Court, which found that mistake bad not caused any prejudice to the accused. Similarly, the charge under section 477 A had not, as held by the High Court, been framed with sufficient parti 217 cularity as a result of which the appellant had to be acquitted of that charge on appeal. If the charge under section 120 B had added the words "and other persons, known or unknown", there would have been no ground for a grievance on the part of the appellant. But even so, in our opinion, the provisions of section 225, Code of Criminal Procedure, are clearly applicable to the facts and circumstances of the present case. It has not been shown to us how the omission to mention the name of the approver in the charge under section 120 B, Indian Penal Code, has misled the appellant or has occasioned a failure of justice. The prosecution case throughout has been, as is clear with reference to the petition of complaint, that the appellant with his subordinates in the Food Department had conspired to misappropriate the funds allocated to the procurement of oil cake with a view to helping agriculturists with manure to raise more food crops. The approver has been very much in the picture all the time and, as a matter of fact, as found by the courts below, his evidence is the main plank in the prosecution case. Of course, there is the other corroborative evidence, as pointed out in the judgments of the courts below. The provisions of section 537 are equally attracted to this case. With reference to the provisions of that section it is pertinent to note that though the other accused had been acquitted by the trial court and though he was the only appellant in the High Court, he did not raise the points with reference to the alleged illegality or irregularity in the charge, before that court. Hence applying the Explanation to that section to this case, it cannot be urged that the omission in the charge has occasioned a failure of justice. But the learned counsel for the appellant has invited our pointed attention to the observations of Mr. Justice Mathew at p. 243 of Queen vs Manning(1) that it is "an imperative rule of law" that "in a (1) 218 charge for conspiracy in a case like this where there are two defendants, the issue raised is whether or not both the men are guilty, and if the jury are not satisfied as to the guilt of either, then both must be acquitted". But Lord Coleridge, C. J., whose direction to the jury in that case was the subject matter of the judgment does not put it as high as Mr. Justice Mathew, but understood it "to be the established rule of practice". Reliance was placed by the learned counsel for the appellant on the case of The King vs Plummer(1), in which it has been observed that with the acquittal of the only alleged conspirators no verdict of guilty against the appellant could be passed because the verdict would be regarded as repugnant, in so far as it would amount to saying that there was a criminal agreement between the appellant and the others and none between them and him. Hence it was contended that in a situation such as the present case presents, the conviction of the appellant would amount to a similar repugnancy. This aspect of the matter has been well discussed in a judgment of the Calcutta High Court delivered by Mr. Justice Mukerji in the case of I. G. Singleton vs The King Emperor(2). The learned Judge has there pointed out the difference between the position as it obtains in India and that in England. The rule of English law as to the acquittal of an alleged conspirator following from the acquittal of the other when the conspiracy was said to be only between the two and in a joint trial of both is based upon a rule of practice and procedure, namely, that repugnancy or contradiction on the face of the record is a ground for annulling a conviction. But such a repugnancy is not by itself a sufficient ground for quashing a conviction in India where the matter is governed by statutory law both as to the offence and the procedure for bringing the offender to justice. In India there is no provision in the statutory law justifying an interference with a conviction on the (1) (2) 219 ground of repugnancy in the record. That is not to say that the court is to shut its eyes to the inconsistency in convicting one person of the offence of conspiracy on the same evidence on which the other alleged conspirator had been acquitted. If the matter is as simple as that, ordinarily the courts will have no difficulty in setting aside the conviction, when there was absolutely nothing on the record to distinguish the case against the one from that against the other. Such was the case which was decided by this Court in Topan Das vs State of Bombay(1). Learned counsel for the appellant pressed upon us the consideration that notwithstanding the state of affairs as disclosed in the evidence, the appellant was entitled to an acquittal because in the charge as framed against him there was no reference to the approver. He contended that the rule upon which the accused was entitled to an acquittal was not a matter of practice but of principle. In the instant case we are not sure that the acquittal of the co accused by the trial court was well founded in law or justified by the evidence in the case. The trial court has not disbelieved the evidence led on behalf of the prosecution. It has only given the benefit of the doubt to the accused whom it acquitted on grounds which may not bear scrutiny. But as the case against those acquitted persons is not before us, we need not go any further into the matter. It has further been contended by the learned counsel for the appellant that the High Court having acquitted him in respect of the two substantive charges of criminal breach of trust and of falsification of documents he should not have been convicted of the offence of criminal conspiracy because the conspiracy was alleged to have been for those very pur poses. It is a sufficient answer to this contention to say that the offence of criminal conspiracy consists in the very agreement between two or more persons to commit a criminal offence irrespective of the (1) 220 further consideration whether or not those offences have actually been committed. The very fact of the conspiracy constitutes the offence and it is immaterial whether anything has been done in pursuance of the unlawful agreement. But in this case the finding is not that Government money had not been misappropriated or that the accounts had not been falsified. The charge under section 477 A relating to the falsification of the documents has failed because the High Court found that particular charge was wanting in sufficient particulars, thus causing prejudice to the accused. The charge under section 409, Indian Penal Code, was set aside by the High Court on the ground that there was "practically no evidence of entrustment with the appellant of the price of 1500 maunds of oil cakes, a substantial portion of which he was said to have misappropriated". How far this observation of the High Court is well founded in law with reference to the official position of the appellant who had the spending of the Government money in his hands is not a matter on which we need pronounce. It is enough to point out that it has not been found by the courts below that the object of the criminal conspiracy had not been achieved. On the other hand, there is enough indication in those judgments that the object of the conspiracy had been to a large extent fulfilled. Hence it must be held that there is no substance in this contention also. Another contention raised on behalf of the appellant was that the other accused having been acquitted by the trial court the appellant should not have been convicted because the evidence against all of them was the same. There would have been a great deal of force in this argument, not as a question of principle but as a matter of prudence, if we were satisfied that the acquittal of the other four accused persons was entirely correct. In this connection the observations of this Court in the case of Dalip Singh vs State of Punjab(1), and of the Federal Court in (1) ; , 156. 221 Kapildeo Singh vs The King(1) are relevant. It is not essential that more than one person should be convicted of the offence of criminal conspiracy. It is enough if the court is in a position to find that two or more persons were actually concerned in the criminal conspiracy. If the courts below had come to the distinct finding that the evidence led on behalf of the prosecution was unreliable, then certainly no conviction could have been based on such evidence and all the accused would have been equally entitled to acquittal. But that is not the position in this case as we read the judgments of the courts below. Lastly, it was contended that the examination of the appellant by the learned trial Judge was not in full compliance with the requirements of section 342, Code of Criminal Procedure. Two points have been sought to be made in this connection. Firstly, it has been contended that though the other accused who have been acquitted by the trial court were questioned with reference to the conspiracy with the approver Pitabas Sahu, no such question was put to the appellant. It is true that the court questioned him about his "conspiracy with the other accused persons". Counsel for the parties before us did not agree as to the significance of the words "in conspiracy with the other accused persons". The contention on behalf of the appellant was that they referred only to the persons actually standing trial before the court, whereas counsel for the State con tended that they had reference to all the accused persons named in the petition of complaint including the approver. A number of rulings of the different High Courts as to what is the position of an approver, whether he continues to be an accused person even after the grant of pardon or whether he is only in the position of a witness on behalf of the prosecution, were cited before us. But we do not think it necessary in this case to pronounce upon that because we have, as already indicated, come to our conclusions (1) , 837, 838. 29 222 on the assumption that there is an omission in the charge in so far as the approver has not been specifically named in the charge under section 120 B, Indian Penal Code. Secondly, it was contended that the evidence of P.W. 27 who had been chiefly relied upon in the courts below as corroborating the approver had not been specifically put to the appellant though the evidence of the approver Pitabas Sahu was pointedly put to him. In our opinion, it is not ordinarily necessary to put the evidence of each individual witness to the accused in his examination under section 342, Code of Criminal Procedure. The appellant was put the question "Have you got anything to say on the evidence of the witnesses?" That, in our opinion, is sufficient in the circumstances of this case to show that the attention of the accused was called to the prosecution evidence. As to what is or is not a full compliance with the provisions of that section of the Code must depend upon the facts and circum stances of each case. In our opinion, it cannot be said that the accused has been in any way prejudiced by the way he has been questioned under that section. As all the contentions raised on behalf of the appellant fail, the appeal must stand dismissed.

The appellant and four others were placed on their trial before the Assistant Sessions Judge of Sambalpur for offences under sections 120 B, 409, 477 A and 109, I.P.C. with having committed the offences of criminal conspiracy, criminal breach of trust in respect of Government property and falsification of accounts with a view to defraud the Government. The appellant was the District Food Production Officer and the other four accused persons were agricultural sub overseers under the appellant and another agricultural sub overseer namely P. was examined at the trial as an approver. The Assistant Sessions Judge convicted the appellant under all the three charges but acquitted the four sub overseers giving them the benefit of doubt. The High Court in appeal allowed the appeal of the appellant in respect of charges under sections 409 and 477 A, I.P.C. but upheld his conviction and sentence in respect of the charge of conspiracy under section 120 B, I.P.C. observing that in respect of that charge the evidence given by the approver got corroboration from other independent evidence. On appeal by special leave to the Supreme Court the main question for consideration was whether the ruling of the Supreme Court in the case of Topan Das vs The State of Bombay ([1955] 2 S.C.R. 881), governed the present case in view of the fact that the appellant was the only person out of the accused persons on trial who had been convicted of the offence of conspiracy under section 120 B, I.P.C. Held (i) that the case of Topan Das vs State of Bombay was, clearly distinguishable from the present case as in that case the only persons alleged to have been guilty of the offence of conspiracy 'Were the persons placed on trial. There was no allegation nor any 207 evidence forthcoming that any other persons though not placed on trial, were concerned with the crime. On the findings in that case, only one person, after the acquittal of the rest of the accused, was concerned with the crime and stood convicted of the charge of conspiracy. As a person cannot be convicted of conspiring with himself to commit an offence, the Supreme Court gave effect to the. contention that on the findings and on the evidence, as also on the charge in that case, the conviction could not be sustained. But in the instant case on the findings of the courts below, apart from the persons placed on the trial, there was the approver who implicated himself equally with the other accused persons and a number of other prosecution witnesses as having been privy to the conspiracy. And therefore the present case was not on all fours with the case of Topan Das vs State of Bombay. (ii) The provisions of section 225, Cr. P.C. were clearly applicable to the facts and circumstances of the present case. It had not been shown how the omission to mention the name of the approver in the charge under section 120 B, I.P.C. had misled the appellant or had occasioned a failure of justice. (iii) The provisions of section 537 of the Code of Criminal Procedure were equally applicable to the facts of the case. As the appellant did not raise the point with reference to the alleged illegality or irregularity in the charge before the High Court it must be held, applying the Explanation to that section, that the omission in the charge bad not occasioned a failure of justice. The contention that with the acquittal of the alleged conspirators no verdict of guilty against the appellant could be given, because the verdict would be regarded as repugnant in so far as it would amount to saying that there was a criminal agreement between the appellant and the others and none between them and him, the conviction of the appellant would amount to a similar repugnancy was without substance because the rule of English law as to the acquittal of an alleged conspirator when the conspiracy was said to be only between the two is based upon a rule of practice and procedure, namely that repugnancy or contradiction on the face of the record is a ground for annulling a conviction. But such a repugnancy is not by itself a sufficient ground for quashing a conviction in India where the matter is governed by statutory law both as to the offence and the procedure for bringing the offender to justice. In India there is no provision in the statutory law justifying an interference with a conviction on the ground of repugnancy in the record. Topan Das vs State of Bombay ([1955] 2 S.C.R. 881), The Queen vs Manning ([1883] , The Queen vs Thompson ([1851] 16 Q.B. 832), The King vs Plummer ([1902] 2 K.B. 339), Kannangara Aratchige Dharmasena vs The King ([1951] A.C. 1), I. G. Singleton vs The King Emperor ([1924] , Dalip Singh vs State of Punjab ([1954] S.C.R. 145) and Kapildeo Singh v, The King ([1949 50] F.C.R. 834), referred to. 208

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ivil Appeal Nos. 14 32, 902, 879, 1130 32, 1121, 1172, 1215, 1201, 1127, 1128, 1222, 1224, 1223, 1275, 1129, 1523, 1539, 1280, 863, 1361, 1323, 1375, 1621, 1374, 1410, 1628, 2117, 1961, 1917, 1918, 1919, 1920 & 2290 of 1978 3447 3450/79. Appeals by Special Leave from the Judgments and order dated 13.10.1977 etc. Of the Andhra Pradesh High Court in Writ Petition No. 1872/77 etc. AND WRIT PETITION Nos: 3973, 3998, 3836, 4198, 4199, 4200, 4210, 4263, 4317, 4318, 4414, 4256, 4537 and 4500 of 1978. F. section Nariman, K. Krishna Rao and K. Rajendra Choudhary far the Appellants in CA Nos. 14 to 23, 25 29, 1223 1224 1628/78, 3447 and 3449/79. A. Subba Rao for the Appellants in CA No. 1126 & WP Nos. 3973, 4198, 4199, 4200, 4317, 4318 4210/78. A. V. V. Nair for the Appellants in CA Nos. 1215, 1361, 2117, 1286 and W.P. No. 1374/78. G. section Rama Rao for the Appellants in CA No. 1121 & Petitioners in WP Nos. 4256 and 3836/78. Vepa Sarathi and B. Ranta Rao for the Appellants/Petitioners in CA Nos. 24, 30, 32, 1172, 1127, 1128, 1129, 1261, 1323 1275/ 78 and WP Nos. 4263, 4500 4537/78. section Venkata Reddy and G. Narsimulu for the Appellants in CA Nos. 31, 902, 879, 1130 32, 1410, 1621, 1917 20, 1961/78 & 1373/78. A. K. Ganguli for the Appellants in CAs 1222 and 863/78. R A. V. Rangam for the Petitioners in WP No. 3998/78. section Balakrishan for the Petitioners in WP 4414/78. V.S. Desai and A. Subba Rao for the Applicant/Intervener. 1147 K. K. Venugopal Addl. , Ram Chandra Reddy Adv. A Genl. A. P. and B. Parthasarthy for the appearing respondents. BHAGWATI, J. These appeals by special leave and the writ petitions represent a last but desperate attempt by the; class of land holders in Andhra Pradesh to defeat an agrarian reform legislation enacted by the State or the benefit of the weaker sections of community. It is indeed a matter of regret that a statute intended to strike at concentration of land in the hands of a few and to act as a great equaliser by reducing inequality in holding of land between the haves and the have nots should have practically remained unimplemented for a period of over seven years. Unfortunately, this is the common fate of much of our social welfare legislation. We can boast of some of the finest legislative measures calculated to ameliorate the socio economic conditions of the poor and the deprived and to reach social and economic justice to them, but regret ably, a large part of such legislation has remained merely on paper, and the benefits of such legislation have not reached the common man to any appreciable extent. The Andhra Pradesh Land Reforms (Ceiling on Agricultural Holdings) Act 1 of 1973 (hereinafter referred to as the Andhra Pradesh Act) which is challenged in the present appeals was enacted by the Andhra Pradesh Legislature on 1st January 1973. Soon after its enactment, the constitutional validity of the Andhra Pradesh Act was challenged before the Andhra Pradesh High Court on various grounds, but a full Bench of the High Court negatived the challenge and held the Andhra Pradesh Act to be constitutionally valid. Though this judgment was delivered by the High Court as early as 11th April, 1973, no effective steps for implementation of the Andhra Pradesh Act could be taken, since the Andhra Pradesh Act merely remained on the statute book and for some inexplicable reason, it was. not brought into force until 1st January 1975. Even after the Andhra Pradesh Act was brought into force, not much enthusiasm was shown be the Government in implementing its provisions and in the mean while, it was found necessary to amend the legislation and hence the Andhra Pradesh Land Reforms (Ceiling on Agricultural Holdings) Amendment Act 1977 was enacted with retrospective effect from 1st January 1975 and by this amending Act certain amendments were made which included inter alia the introduction of section 41A. We shall presently refer to the relevant provisions of the amended Andhra Pradesh Act, but before we do so, it is necessary to point out that as soon as the amending Act was passed, another round 1148 of litigation was started by the landholders by filing writ petitions in the High Court challenging once again the constitutional validity of the Andhra Pradesh Act. There were several grounds on which the constitutional validity was challenged but the main ground was that by reason of the enactment of the Urban Land (Ceiling Regulation) Act 1976 (hereinafter referred to as the Central Act), the Andhra Pradesh Act had become void and inoperative. Certain other questions involving the interpretation of the provisions of the Andhra Pradesh Act were also raised in some of the writ petitions, but they too need not be mentioned here, because in the course of the hearing we made it clear to the parties that we would examine only the constitutional validity of the Andhra Pradesh Act and other questions could be agitated by the landholders in the appeals filed by them against the orders determining surplus land. It was pointed out to us that some of the landholders had not filed appeals within the prescribed time and grave injustice would therefore result to them if these question, were not decided by us. But the learned Additional Solicitor General appearing on behalf of the State family stated before us that if appeals have been filed beyond time or are filed within a month of disposal of these appeals, the delay in filing the appeals would be condoned. Turning to the constitutional challenge which in those days was required to be decided by a full Bench of 5 Judges of the High Court, it was held that the enactment of the Central Act did not have the effect of invalidating the whole of the Andhra Pradesh Act, but since the provisions of the Andhra Pradesh Act were repugnant to the provisions of the Central Act so far as concerned land satisfying both the definition of "land" in the Andhra Pradesh Act and the definition of "vacant land" in the Central Act, the Andhra Pradesh Act was held not applicable to "vacant land" falling within the ambit of the Central Act. The High Court accordingly granted a declaration to this effect to the landholders, but save for this limited relief, dismissed the writ petitions in all other respects, since in the opinion of the High Court there was no substance in any of the other contentions raised on behalf of the landholders. The landholders thereupon preferred the present appeals after obtaining special leave from this Court. The principal contention urged on behalf of the landholders in support of the appeals was that the Andhra Pradesh Act was ultra vires and void as being outside the legislative competence of the Andhra Pradesh Legislature. This contention was based on two resolutions, one dated 7th April 1972 passed by the Andhra Pradesh Legislative Council and the other dated 8th April 1972 passed by the Andhra Pradesh Legislative Assembly under clause (1) of Article 1149 252 of the Constitution. This Article carves out an exception derogating from the normal distribution of legislative powers between the Union and the States under Article 246 and is in the following terms: article 252(1) : If it appears to the legislatures of two or more States to be desirable that any of the matters with respect to which Parliament has no power to make laws for the States except as provided in Articles 249 and 250 should be regulated in such States by Parliament by law, and if resolutions to that effect are passed by all the Houses of the Legislatures of those States, it shall be lawful for Parliament to pass an Act for regulating that matter accordingly, and any Act so passed shall apply to such States and to any other State be which it is adopted afterwards by resolution passed in that behalf by the House or, where there are two Houses, by each of the Houses of the Legislature of that State. (2) An Act so passed by Parliament may be amend ed or repealed by an Act of Parliament passed or adopted in like manner but shall not, as respects any State to which it applies, be amended or repealed by an Act of the Legislature of that State. " The effect of passing of resolutions be the Houses of Legislature of two or more States under this constitutional provision is that Parliament which has otherwise power to legislate with respect to a matter, except as provided in Articles 249 and 250, becomes entitled to legislate with respect to such matter and the State Legislatures passing the resolutions cease to have power to make law relating to. that matter. The resolutions operate as abdication or surrender of the powers of the State Legislatures with respect to the matter which is the subject of the resolutions and such matter is placed entirely in the hands of Parliament and Parliament alone can then legislate with respect to it. It is as if such matter is lifted out of List II and placed in List I of the Seventh Schedule to the Constitution. This would seem to be quite clear on a plain natural construction of the language of clauses (1) and (2) of Article 252 and no authority. is necessary in support of it, but if any was wanted, it may be found in the decision of a Full Bench of five Judges of this Court in Union of India vs V. V. Chaudhary in fact the same Bench as the present one where an identical view has been taken. It was in pursuance of clause (l) of this Article that a Resolution 1150 was passed by the Andhra Pradesh Legislative Council on 7th April 1972 to the effect that "the imposition of a ceiling on urban immovable property and acquisition of such property in excess of the ceiling and all matters connected therewith or ancillary and incidental thereto should be regulated in the State of Madhya Pradesh by Parliament by law and an identical resolution in the same terms was passed on the next day by the Andhra Pradesh Legislature Assembly. Similar resolutions were also passed by the Houses of Legislature of some other States, though there is no material to show as to when they were passed. It was however common ground that at best some of these resolutions were passed prior to the enactment of the Andhra Pradesh Act. The result was that at the date when the Andhra Pradesh Act was enacted, Parliament alone was competent to legislate with respect to ceiling on urban immovable property and acquisition of such property in excess of the ceiling and all connected, ancillary or incidental matters, and the Andhra Pradesh Legislature stood denuded of its power to legislate on that subject. Now the Andhra Pradesh Act, as its long title shows, was enacted to consolidate and damned the law relating to the fixation of ceiling on agricultural holdings and taking over of surplus land and matter connected therewith. On its plain terms, it applies to land situate in any part of Andhra Pradesh. Section 3(f) creates an artificial unit called 'family unit ' by defining it as follows: "Sec. 3(f) "family unit" means (i) in the case of an individual who has a spouse or spouses, such individual, the spouse or spouses and their minor sons and their unmarried minor daughters; if any; (ii) in the case of an individual who has no spouse such individual and his or her minor sons and unmarried minor daughters; (iii) in the case of an individual who is a divorced husband and who has not remarried, such individual and his minor sons and unmarried minor daughters, whether in his custody or not; and (iv) where an individual and his or her spouse are both dead, their minor sons and unmarried minor daughters. Explanation Where a minor son is married, his wife and their offspring, if any, shall also be deemed to be members of the family unit of which the minor son is a member: 1151 The term "land" is defined in section 3(j) to mean "land which A is used or is capable of being used for purposes of agriculture, or for purposes ancillary thereto, including horticulture, forest land, pasture land, waste land, plantation and tope; and includes land deemed to be agricultural land under this Act". Explanation I to this definition enacts a rebuttable presumption that land held under Ryotwari settlement shall, unless the contrary is proved, be deemed to be 'land ' under the Andhra Pradesh Act. Section 3(o) defines 'person ' as including inter alia an individual and a family unit. Section 10 is the key section which imposes ceiling on the holding of land by providing that if the extent of the holding of a person is in excess of the ceiling area, the person shall be liable to surrender the land held in excess. If therefore an individual or a family unit holds land in excess of the ceiling area, the excess would have to be surrendered to the State Government. But the question then arises, what is the ceiling area above which a person cannot hold land. The answer is provided by section 4 which reads as follows: "Sec. 4(1) The ceiling area in the case of a family unit consisting of not more than five members shall be an & extent of land equal to one standard holding. (2) The ceiling area in the case of a family unit consisting of more than five members shall be an extent of land equal to one standard holding plus an additional extent of one fifth of one standard holding for every such member in excess of five, so however that the ceiling area shall not exceed two standard holdings. (3) The ceiling area in the case of every individual who is not a member of a family unit, and in the case of any other person shall be an extent of land equal to one standard holding. Explanation: In the case of a family unit, the ceiling area shall be applied to the aggregate of the lands held by all the members of the family unit". It will thus be seen that the ceiling area in the case of an individual who is not a member of a family unit is equivalent to one standard holding and so also in the case of a family unit with not more than five members, the ceiling area is the same, but if the family unit consists of more than five members, the ceiling area would stand increased by one fifth of one standard holding for every additional member of the family unit, subject however to the maximum limit of 2 standard holdings. When the ceiling area is applied to the holding of a 1152 family unit, the Explanation requires that the lands held by all the members of the family unit shall be aggregated for the purpose of computing, the holding of the family unit. Where, therefore, there in a family unit consisting of father, mother and three minor sons or daughters, the lands held by all these persons would have to be clubbed together and then the ceiling area applied to the aggregate holding. There is no distinction made in the definition of 'family unit ' between a divided minor son and an undivided minor son. Both stand on the same footing and a divided minor son is as much a member of the family unit as an undivided minor son, and consequently the lands held by a divided minor son would have to be included in the holding of the family unit for the purpose of application of the ceiling area. Section 7 invalidates certain transfers of land and provides for inclusion of such lands in the holding of an individual or a family unit. Then there is a provision in section 8 for furnishing a declaration in respect of his holding by every person whose land exceeds the ceiling area and the Tribunal is required by section 9 to hold an enquiry. and pass an order determining the land held in excess of the ceiling area. Such land has to be surrendered by the person holding the land and on such surrender, the Revenue Divisional officer is empowered under section 11 to take possession of the land which thereupon vests in the State Government free from all encumbrances. Section 14 provides inter alia that the land vested in the State Government shall be allotted for use as house sites for agricultural labourers. village artisans or other poor persons owning no houses or house sites or transferred to the weaker sections of the people dependent on agriculture for purposes of agriculture/or for purposes ancillary thereto in such manner as may be prescribed by the Rules, subject to a proviso that as far as practicable not less than one half of the total extent of land so allotted or transferred shall be allotted or transferred to the members of the Scheduled Castes and the Scheduled Tribes. Section 15 enacts a provision for payment of compensation for land vested in the State Government at the rates specified in the Second Schedule. These are the only relevant provisions of the Andhra Pradesh Act which need to be referred to for the purpose of the present appeals. We may now turn to examine the relevant provisions of the Central Act. This Act was enacted by Parliament pursuant to the authority conferred upon it by the resolutions passed by the Houses of legislature of several States including the State of Andhra Pradesh under clause (1) of Article 252. It received the assent of the President on 17th February 1 976 and as its long title and recital shows it was enacted to provide for the imposition of a ceiling on vacant 1153 land is urban agglomerations for the acquisition of such land in excess of the ceiling limit, to regulate the construction of buildings on such land and for matters connected therewith, with a view to preventing the concentration of urban land in the hands of a few persons and speculation and profiteering therein and with a view to bringing about an equitable distribution of land in urban agglomerations to sub serve the common good. We shall refer to a few material provisions of this Act. Section 2(a) (i) defines "appointed day" to mean in relation to any State to which this Act applies in the first instance which includes the State of Andhra Pradesh the date of introduction of the Urban Land (Ceiling and Regulation) Bill, 1976 in Parliament. This was the Bill which culminated in the Act and it was introduced in Parliament on 28th January 1976. Consequently, this date would be the 'appointed day ' for the purpose of applicability of the Act to the State of Andhra Pradesh. The definition of "family" in section 2 (f) is materially in the same terms as the definition of "family unit" in the Andhra Pradesh Act. Then follow two important definitions which needed to be set out in extenso. The word "person" is defined in section 2(i) as including inter alia an 'individual ' and the 'family '. Section 2(n) defines "urban agglomeration" in the following terms: "Sec.2(n) (A) in relation to any State of Union territory specified in column (1) of Schedule 1, means (i) the urban agglomeration specified in the corresponding entry in column (2) thereof and includes the peripheral area specified in the corresponding entry in column (3) thereof; and (ii) any other area which the State Government may, with the previous approval of the Central Government, having regard to its location, population (population being more than one lakh) and such other relevant factors as the circumstance of the case may require, by notification in the official Gazette, declare to be an urban agglomeration and any agglomeration so declared shall be deemed to belong to category D in that Schedule and the peripheral area there for shall be one kilometre; (B) xx xx xx xx xx" The term 'urban land ' is defined in section 2(o) to mean: Sec. 2(o)(i): any land situated within the limits of an urban agglomeration and referred to as such in the master plan; or 1154 (ii) in a case where there is no master plan, or where the master plan does not refer to any land as urban land, any land within the limits of an urban agglomeration and situated in any area included within the local limits of a municipality (by whatever name called), a notified area committee, a town area committee, a city and town committee, a small town Committee, a cantonment board or a panchayat, but does not include any such land which is mainly used for the purpose of agriculture. Explanation: For the purpose of this clause and clause (q), (A) "agriculture" includes horticulture, but does not include (i) raising of grass, (ii) dairy farming, (iii) poultry farming, (iv) breeding of live stock, and (v) such cultivation, or the growing of such plant, as may be prescribed. (B) land shall not be deemed to be used mainly for the purpose of agriculture, if such land is not entered in the revenue or land records before the appointed day as for the purpose of agriculture; (C) notwithstanding anything contained in clause (B) of this Explanation, land shall not be deemed to be mainly used for the purpose of agriculture if the land has been specified in the master plan for a purpose other than agriculture; " Section 2(q) gives a definition of "vacant land" by providing that "vacant land" means, subject to certain exceptions which are not material, land not being land mainly used for the purpose of agriculture, in an urban agglomeration. Section 3 is the rebuttal section which imposes ceiling on holding of 'vacant land ' by providing that: "Sec. 3. Except as otherwise provided in this Act, on and from the commencement of this Act, no person shall be n entitled to hold any vacant land in excess of the ceiling limit in the territories to which this Act applies under sub section (2) of section 1." 1155 Section 4 divides urban agglomeration into categories A, B, C and D lays down different ceiling limits for these different categories. Then there is a provision in section 5 invalidating in certain circumstances the transfer of vacant land made at any time during the period commencing on the appointed day and ending with the commencement of the Act. The procedure for determining "vacant land" held in excess of the ceiling limit is laid down in sections 6 to 9 and section 10 enacts a provision for acquisition of such land held in excess of such limit. Section 23 provides for disposal of vacant land acquired under the Act and it empowers the State Government to allot such vacant land to "any person for any purpose relating to or in connection with any industry or for providing residential accommodation of such type as may be approved by the State Government to the employees of any industry. It will thus be seen that the Central Act imposes a ceiling on holding of land in urban agglomeration other than land which is mainly used for the purpose of agriculture and agriculture in this connection includes horticulture, but does not include raising of grass, dairy farming, poultry farming, breeding live stock and cultivation or the growing of such plants as may be prescribed by the Rules, and, moreover, in order to fall within the exclusion, the land must be entered in the revenue or land record before the appointed day as for the purpose of agriculture and must also not have been specified in the master plan for a purpose other than agriculture. Now, as we have already pointed out above, the Andhra Pradesh Legislature had, at the time when the Andhra Pradesh Act was enacted, no power to legislate with respect to ceiling on urban immovable property. That power stood transferred to parliament and as a first step towards the eventual imposition of ceiling on immovable property of every other description, the Parliament enacted the Central Act with a view to imposing ceiling on vacant land, other than land mainly used for the purpose of agriculture, in an urban agglomeration. The argument of the landholders was that the Andhra Pradesh Act sought to impose ceiling on land in the whole of Andhra Pradesh including land situate in urban agglomeration and since the concept of agglomeration defined in section ' 2(n) of the Central Act was an expensive concept and any area with an existing or future population of more than one lakh could be notified to be an urban agglomeration, the whole of the Andhra Pradesh Act was ultra vires and void as being outside the legislative competence of the Andhra Pradesh Legislature. This argument plausible though it may seem, in our opinion, is unsustainable. It is no doubt true that if the Andhra Pradesh Act seeks to impose ceiling on land falling within an urban agglomeration, it would be outside the area of its legislative competence, because it 1156 cannot provide for imposition of ceiling on urban immovable property. But the only urban agglomerations in the State of Andhra Pradesh recognised in the Central Act were those referred to in section 2(n) (A) (ii) and there can be no doubt that so far as these urban agglomerations are concerned, it was not within the legislative competence of the Andhra Pradesh Legislature to provide for imposition of ceiling on land situate within these urban agglomerations. It is, however, difficult to see how the Andhra Pradesh Act could be said to be outside the legislative competence of the Andhra Pradesh Legislature in so far as land situate in the other areas of the State of Andhra Pradesh is concerned. We accept that any other area in the State of Andhra Pradesh with a population of more than one lakh could be notified as an urban agglomeration under section 2(n)(A)(ii) of the Central Act but until it is so notified it would not be an urban agglomeration and the Andhra Pradesh Legislature would have legislative competence to provide for imposition of ceiling on land situate within such area. No sooner such area is notified to be an urban agglomeration, the Central Act would apply in relation to land situate within such area, but until that happens the Andhra Pradesh Act would continue to be applicable to determine the ceiling on holding of land. It may be noticed that the Andhra Pradesh Act came into force on 1st January 1975 and it was with reference to this date the surplus holding of land in excess of the ceiling area was required to be determined and if there was any surplus it was to be surrendered to the State Government It must therefore follow that in an area other than that comprised in the urban agglomerations referred to in section 2(n) (A) (i), land held by a person in excess of the ceiling area would be liable to be determined as on 1st January 1975 under the Andhra Pradesh Act and only land within the ceiling area will be allowed to remain with him. It is only in respect of land remaining with a person whether an individual or a family after the operation of the Andhra Pradesh Act, that the Central Act would apply if and when the area in question is notified to be an urban agglomeration under section 2(n)(A)(ii) of the Central Act. We fail to see how it can at all be contended that merely because an area may possibly in the future be notified as an urban agglomeration under section 2(n)(A)(ii) of the Central Act, the Andhra Pradesh Legislature would cease to have competence to legislate with respect to ceiling on land situate in such area even though it is not an urban agglomeration at the date of the enactment of the Andhra Pradesh Act. Undoubtedly, when an area is notified as an urban agglomeration under section 2(n)(A)(ii), the Central Act would apply to land situate in such area and the Andhra Pradesh Act would cease to have application but by that time the Andhra Pradesh 1157 Act would have already operated to determine the ceiling on holding of land falling within the definition in section 3(j) of that Act and situate within such area. It is therefore not possible to uphold the contention of the landholders that the whole of the Andhra Pradesh Act is ultra vires and void as being outside the area of legislative competence of the Andhra Pradesh Legislature. It is only in respect of land situate within the urban agglomerations referred to in section 2(n) (A) (i) of the Central Act that the Andhra Pradesh Act would not apply but it would be fully applicable in respect of land situate in all the other areas of the State of Andhra Pradesh. The next contention urged on behalf of the landholders was that on a proper construction of the relevant provisions of the Andhra Pradesh Act, a divided minor son was not liable to be included in "family unit" as defined in section 3(f) of that Act. The argument was that sub section (2) of section 7 did not invalidate all partitions of joint family property but struck only against partitions effected on or before 2nd May 1972 and thus by necessary implication recognised the validity of partitions affected prior to that date. If therefore a partition was effected prior to 2nd May 1972 and under that partition a minor son become divided from his father and mother, the divided minor son could not be included in the family unit and his property could not be clubbed with that of his father and mother, because otherwise it would amount to invalidation of the partition though section 7, sub section (2) clearly recognised such partition as valid. This argument is clearly fallacious in that it fails to give due effect to the definition of family unit in section 3(f) and the provisions of section 4. It is undoubtedly true that a partition effected prior to 2nd May 1972 is not invalidated by the Andhra Pradesh Act and therefore any property which comes to the share of a divided minor son would in law belong to him and would not be liable to be required as part of joint family property. But under the definition of family unit in section 3(f) the divided minor son would clearly be included in the family unit and by reason of section 4 his land whether self acquired or obtained on partition would be liable to be clubbed with the land held by the other members of the family unit. The land obtained by the divided minor son on partition would be liable to be aggregated with the lands of other members of the family unit not because the partition is invalid but because the land held by him howsoever acquired is liable to be clubbed together with the lands of others for the purpose of applying the ceiling area to the family unit. We do not therefore see how a divided minor son can be excluded from the family unit. That would be flying in the face of sections 3(f) and 4 of the Andhra Pradesh Act. 1158 Then a contention was advanced on behalf of the landholders that the definition of "family unit" was violative of Article 14, of the Constitution in that it made unjust discrimination between a minor son and the major son by including minor son in the "family unit" while excluding a major son from it. This contention has already been dealt with by learned brother Tulzapurkar, J. in the judgment delivered by him today in the Haryana Land Ceiling matters and we need not repeat what he had already stated there while repelling this contention. Moreover, this contention isl no longer open to the landholders since the Andhra Pradesh Act is admittedly an agrarian reform legislation and it is protected against challenge on the ground of infraction of Articles 14, 19 and 31 by the protective umbrella of Article 31A. We do not therefore see any substance in the contentions urged on behalf of the landholders and we accordingly dismiss the appeals and the writ petitions with costs. S.R. Appeals & Petitions dismissed.

The Andhra Pradesh Land Reforms (Ceiling on Agricultural Holdings) Act I of 1973 was enacted on 1st of January 1973. Though a Full Bench of the High Court of Andhra Pradesh when challenged by some of the land holders held by its judgment dated 11th April, 1973, the Act to be constitutionally valid; yet the said Act was not brought into force till 1st January 1975. In ]977, the Act was amended with retrospective effect from 1st January 1975 by the Andhra Pradesh Land Reforms (Ceiling on Agricultural Holdings) Amendment Act 1977. As soon ns the Amending Act was passed, the land holders once again filed writ petitions in the High Court, challenging the constitutional validity of the Andhra Pradesh Act. The main ground, inter alia, was that by reason of the enactment of the Urban Land (Ceiling & Regulation) Central Act, 1976, the Andhra Prdesh Act had become void and inoperative. A Full Bench of five judges of the High Court held that the enactment of the Central Act did not have the effect of invalidating the whole of the Andhra Pradesh Act, but since the provisions of the Andhra Pradesh Act were repugnant to the provisions of the Central Act so far as concerned land satisfying both the definition of "land" in the Andhra Pradesh Act and the definition of "vacant land", in the Central Act, the Andhra Pradesh Act was held not applicable to "vacant lands" falling within the ambit of the Central Act. ave for this limited relief, the High Court dismissed the writ petitions in all other respects. Hence the appeals by the land holders after obtaining special leave from this Court. Writ Petitions were also filed directly in this Court by some of the land holders. Dismissing the appeals, and writ petitions, the Court ^ HELD :1. Article 246 of the Constitution of India carves out an exception derogating from the normal distribution of legislative powers between the Union and the States. The effect of passing of resolutions by the Houses of Legislature of two or more States under this constitutional provision is that Parliament which has otherwise no power to legislate with respect to a matter, 1144 except as provided in Articles 249 and 250, becomes entitled to legislate with regard to such matter and the State Legislature passing the resolutions cease to have power to make law relating to that matter. The resolutions operate as abdication or surrender of the powers of the State Legislatures with respect to the matter which is the subject of the resolutions and such matter is placed entirely in the hands of Parliament and Parliament alone can then legislate with respect to each. It is as if such matter is lifted out of list II and placed in List I of the Seventh Schedule to the Constitution. A plain natural construction of the language of Clauses (1) and (2) of Article 252 makes this position clear. It was in pursuance of clause (1) of Article 352 that a resolution was passed by the Andhra Pradesh Legislative Council on 7th April, 1972 to the effect that "the imposition of ceiling of urban immovable property and acquisition of such property in excess of the ceiling and all matters concerned therewith or ancillary and incidental thereto should be regulated in the State or Andhra Pradesh by Parliament by law" and on identical resolution in the same terms was passed on the next day by the Andhra Pradesh Legislative Assembly. The result was that at the date when the Andhra Pradesh Act was enacted, Parliament alone was competent to legislate with respect to ceiling on urban immovable property and acquisition of such property in excess of the ceiling and all connected, ancillary or incidental matters, and the Andhra Pradesh Legislature stood denuded of its power to legislate on that subject. [1149 A, E H, 1150 A C] Union of India vs V. B. Choudhary, 19791 3 SCR 802; followed. Under the powers thus transferred Parliament enacted the Central Act with a view to imposing ceiling on vacant land, other land mainly used for the purpose of agriculture, in an urban. agglomeration. The Central Act imposes a ceiling on holding of land in urban agglomeration other than land which is mainly used for the purpose of agriculture and agriculture in this connection includes horticulture, but does not include raising of grass, daily farming, poultry farming, breeding live stock and such cultivation or the growing of such plants as may be prescribed by the Rules, and, moreover, in order to fall within the exclusion, the land must be entered in the revenue cr land record before the appointed day as for the purpose of agriculture and must also not have been specified in the master plan for a purpose other than agriculture. [119 C F] 3. It is no doubt true that if the Andhra Pradesh Act seeks to impose ceiling on land falling within an urban agglomeration, it would be outside rh art of its legislative competence, because it cannot provide for imposition of ceiling on urban immovable property. But the only urban agglomerations in the State of Andhra Pradesh recognised in the Central Act were those referred to in Section 2(n) (A) (i) and there can be no doubt that so far as these urban agglomerations are concerned, it was not within the legislative competence of the Andhra Pradesh Legislature to provide for imposition of ceiling on land situate within these urban agglomerations. But, the Andhra Pradesh Act is not out side the legislative competence of the Andhra Pradesh Legislative in so far as lands situate in the other areas of the State of Andhra Pradesh are concerned. Any other area in the State of Andhra Pradesh with a population of more than one lakh could be notified as an urban agglomeration under section 2(n) (A) (ii) of the Central Act but until it is so notified would not be an urban agglomeration and the Andhra Pradesh Legislature would have legislative competence to provide for imposition of ceiling on 1145 land situate within such area. No sooner such area is notified to be an urban agglomeration, the Central Act would apply in relation to land situate within such area, but until that happens the Andhra Pradesh Act would continue to be applicable to determine the ceiling on holding of land. The Andhra Pradesh Act came into force on 1st January 1975 and it was with reference to this date that the surplus holding of land in excess of the ceiling area was required to be determined and if there was any surplus it was to be surrendered to the State Government. Therefore, in an area other than that comprised in the urban agglomerations referred to in section 2(n)(A) (i), land held by a person in excess of the ceiling area would be liable to be determined as on 1st January 1975 under the Andhra Pradesh Act and only land within the ceiling area will be allowed to remain with him. It is only in respect of land remaining with a person whether an individual or a family after the operation of the Andhra Pradesh Act, that the Central Act would apply if and when the area in question is notified to be an urban agglomeration under section 2(n)(A)(ii) of the Central Act. [1155 G H, 1156 A G] Merely because an area may possibly in the future be notified as an urban agglomeration under section 2(n) (A) (ii) of the Central Act, the Andhra Pradesh Legislature would not cease to have competence to legislate with respect to ceiling on land situate in such area even though it is not an urban agglomeration at the date of the enactment of the Andhra Pradesh Act. Undoubtedly, when an area is notified as an urban agglomeration under section 2(n) (A) (ii), the Central Act would apply to land situate in such area and the Andhra Pradesh Act would cease to have application but by that time the Andhra Pradesh Act would have already operated to determine the ceiling on holding of land falling within the definition in section 3(j) of that Act and situate within such area. Therefore, the whole of the Andhra Pradesh Act is neither ultravires nor void as being outside the area of legislative competence of the Andhra Pradesh Legislature. It is only in respect of land situate within the urban agglomerations referred to in section 2(n) (A)(i) of the Central Act that the Andhra Pradesh Act would not apply but it would be fully applicable in respect of land situate in all the other areas of the State of Andhra Pradesh. [1156 G X 1157 A B] 4. A divided minor cannot be excluded from the 'family unit ' as defined in section 3(f) of the Andhra Pradesh Act. That would be flying in the face of sections 3(f) and 4 of the Andhra Pradesh Act. It is true that a partition affected prior to 2nd May 1972 is not invalidated by the Andhra Pradesh Act and therefore any property which comes to the share of a divided minor son would in law belong to him and would not be liable to be regarded as part of joint family property. But under the definition of family unit in section 2(f) the divided minor son would clearly be included in the family unit and by reason of section 4 his land whether self acquired or obtained on partition would be liable to be clubbed with the land held by the other members of the family unit. The land obtained by the divided minor son on partition would be liable to be aggregated with the lands of other members of the family unit not because the partition is invalid but because the land held by him howsoever acquired is liable to be clubbed together with the lands of others for the purpose of applying the ceiling area to the family unit. [1157 C, F HI 14 610 SCI/80 1146 5. The Andhra Pradesh Act is admittedly an agrarian reform legislation and it is protected against challenge on the ground of infraction of Article 14, 19 and 31 by the protective umbrella of Article 31A. [1158 B C] 6. The definition of 'family unit ' is nor violative of Article 14 of the Constitution by including ' a minor son in the family unit while excluding a major son from it. [1158 A] Seth Nand Lal vs State of Haryana. [1980] 3 SCR p. 1181 followed.

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Criminal Appeal No. 524 of 1989. From the Judgment and Order dated 25.5.1989 of the Punjab and Haryana High Court in Criminal Appeal No. 175 of 1986. M.C. Bhandare, (N.P.) and Gopal K. Bansal for the Appellants. Mahabir Singh for the Respondent. The Judgment of the Court was delivered by K. JAGANNATHA SHETTY, J. We grant special leave and proceed to dispose of this appeal. On June 28, 1980 the appellants formed a partnership firm for the purpose of running a rice mill in the name and style of M/s Panna Lal Prem Nath Rice Mills at Shahput. They have been convicted by the Presiding Officer of the Special Court, Karnal by judgment dated March 10, 1986 for contra vention of the provisions of the Haryana 888 Rice Procurement (Levy) Order, 1979, read with section 7 of the . They were sentenced to six months ' rigorous imprisonment and a fine of Rs.2,000 each. The High Court of Punjab and Haryana has confirmed that conviction and sentence. They now appeal against conviction. The facts which gave rise to the charge, in so far as material, were these: In 1984, the firm purchased 5373 quintals 69 kgs. and 400 gms of common paddy from the mar ket. By the rate of conversion of paddy into rice an average 3582.49 quintals of rice should have been obtained from that much of quantity of paddy. As per levy rules the firm ought to have supplied 3224.21 quintals of rice to the Government but the firm failed to supply it. Instead it supplied only 15 10 quintals of rice. There was thus a short supply of 1714.17 quintals of levy rice to the Government. On another occasion the firm purchased 2353.79 quintals of superfine paddy out of which 1566.62 quintals of rice could be ob tained. From that, the firm gave the Government 933.89 quintals of rice as against 1174.96 quintals. Here again there was a short supply of 241.07 quintals of superfine levy rice. The short supply of levy rice is a contravention of the Haryana Rice Procurement (Levy) Order 1979 and punishable under section 7 of the . All the partners of the firm were charge sheeted and put to trial for the said offence. They were also convicted and sentenced as earlier stated. Counsel for the appellants urged that there is no evi dence adduced by the prosecution that the appellants were in charge of the business of the firm when the offence was committed and in the absence of any such evidence the con viction could not be sustained. Counsel rested his submis sion on the text of section 10 of the . This section provides: "10. Offences by companies (1) If the person contravening an order made under section 3 is a company, every person who, at the time of contravention was committed, was in charge of, and was responsible to, the company for the conduct of the business of the company as well as the company, shall be deemed to be guilty of the contravention and shall be liable to be proceeded against and punished accordingly: 889 Provided that nothing contained in this sub section render any such person liable to any punishment if he proves that the con travention took place without his knowledge or that he exercised all due diligence to prevent such contravention. (2) Notwithstanding anything con tained .in sub section where an offence under this Act has been committed by a company and it is proved that the offence has been commit ted with the consent or connivance of, or is attributable to any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manag er, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly. " Explanation For the purposes of this section, (a) "Company" means any body corporate, and includes a firm or other association of indi viduals, and (b) "director" in relation to a firm means a partner in the firm. From explanation to section 10 it will be seen that the company includes a firm and other association of persons. Section 10 provides that the person shall be deemed to be guilty of contravention of an order made under section 3 if he was incharge of and was responsible to the firm for the conduct of the business of the firm. What is of importance to note is, that the person who was entrusted with the business of the firm and was responsible to the firm for the conduct of the business, could alone be prosecuted for the offence complained of. Counsel for the State, however, relied upon the legal liability of partners and he argued that it would be for the accused partners to prove that the offence was committed without their knowledge or in spite of exercising due dili gence on their part. He relied upon the proviso to sub section (1) of sec. 10. It is true that under the , a 'firm ' or 'partnership ' is not a legal entity but is merely an association of persons agreed to carry on business. It is only a collective name for individuals, carrying on business in partnership. The essen tial characteristic of a firm is that each partner is a representative of other partners. Each of the partners is an agent as 890 well as a principal. He is an agent in so far as he can bind the other partners by his acts within the scope of the partnership agreement. He is a principal to the extent that he is bound by acts of other partners. In fact every partner is liable for an act of the firm. Section 2(a) of the Part nership Act defines an "act of a firm" to mean any act or omission by all the partners, or by any partner or agent of the firm which gives rise to a right enforceable by or against the firm. But we are concerned with a criminal liability under penal provision and not a civil liability. The penal provi sion must be strictly construed in the first place. Second ly, there is no vicarious liability in criminal law unless the statute takes that also within its fold. Section 10 does not provide for such liability. It does not make all the partners liable for the offence whether they do business or not. It is, therefore, necessary to add an emphatic note of caution in this regard. More often it is common that some of the partners of a firm may not even be knowing of what is going on day to day in the firm. There may be partners, better known as sleeping partners who are not required to take part in the business of the firm. There may be ladies and minors who were admitted for the benefits of partner ship. They may not know anything about the business of the firm. It would be a travesty of justice to prosecute all partners and ask them to prove under the proviso to sub section (1) that the offence was committed without their knowledge. It is significant to note that the obligation for the accused to prove under the proviso that the offence took place without his knowledge or that he exercised all due diligence to prevent such offence arises only when the prosecution establishes that the requisite condition men tioned in sub section (1) is established. The requisite condition is that the partner was responsible for carrying on the business and was during the relevant time in charge of the business. In the absence of any such proof, no part ner could be convicted. We, therefore, reject the contention urged by counsel for the State. We have perused the evidence of the prosecution. Santlal Inspector, Food and Civil Supplies (PW 1) has deposed that the accused were partners of the firm. He has stated that the statement exhibit P. 8 regarding purchase of paddy and supply of levy rice was signed by Lajpat Rai as partner on behalf of the firm. The rest of his statement relates to the short supply of levy rice, and it does not indicate that other partners were also conducting the business during the relevant time. The statement of PW 3 who investigated the case does not indicate anything further. He has seized the relevant docu 891 ments like stock register and recovery memo and arrested all the four accused. These documents do not indicate even remotely that all the partners were doing the business of the firm. There is no other evidence on record on this aspect. With these tit bits, it is impossible to hold that when the offence was committed all the partners were con ducting the business of the firm. However, Lajpat Rai ac cused No. 3 cannot escape the liability. The material on record indicates that he was conducting the business of the firm and in fact, he has signed the statement exhibit P. 8 on behalf of the firm. His conviction cannot therefore be disturbed. But the conviction of other partners is absolute ly uncalled for. In the result we allow the appeal, set aside the convic tion and sentence of appellant Nos. 1, 2 and 4 and acquit them from all the charges. The conviction and sentence of appellant No. 3, however, are maintained. P.S.S. Appeal allowed.

The short supply of levy rice to the State Government by licensed millers is a contravention of the Haryana Rice Procurement (Levy) Order, 1979 made under section 3 of the Essen tial Commodities Act, 1955. The said contravention is pun ishable under section 7 of the Act. Under section 10(1) of the Act a person is deemed to be guilty of contravention of such an order, if he was in charge of and was responsible to the company for the conduct of its business. Under the proviso thereto, a person is, however, not liable to any punishment if he proves that the contravention took place without his knowledge or that he exercised all due diligence to prevent such contravention. Under explanation (a) to the section the term "company" includes a firm or other association of individuals. The appellants, partners of a firm running a rice mill, were convicted for contravention of the provisions of the procurement order read with section 7 of the Act, and sentenced to rigorous imprisonment and fine. The High Court confirmed the conviction and sentence. In this appeal by special leave, it was contended for the appellants that there was no evidence adduced by the prosecution that they were in charge of the business of the firm when the offence was committed and in the absence of any such evidence the conviction could not be sustained. Partly allowing the appeal, 887 HELD: 1. There is no vicarious liability in criminal law unless the statute takes that also within its fold. Section 10 of the does not provide for such liability. It does not make all the partners liable for the offence whether they do business or not. [890C] 2.1 The obligation for the accused to prove under the proviso to section 10(1) that the offence took place without his knowledge or that he exercised all due diligence to prevent such offence, arises only when the prosecution establishes that the requisite condition mentioned in sub section 1 that the partner was responsible for carrying on the business and was during the relevant time in charge of the business, is satisfied. [890E] 2.2 In the instant case PW 1 had deposed that the state ment regarding purchase of paddy and supply of levy rice was signed by appellant No. 3 as partner on behalf of the firm. There is no other evidence on record to indicate that other partners were also conducting the business of the firm when the offence was committed. [890G 891A] The conviction and sentence of appellant No. 3 are, therefore, maintained. The conviction and sentence of appel lant Nos. 1, 2 and 4 are set aside. They are acquitted from all the charges. [891C]

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Civil Appeal No. 1086 of 1973. Appeal by Special Leave from the Judgment and Order dated 8 12 1971 of the Kerala High Court in T.I.T. Reference No. 91/69. section C. Manchanda and Miss A. Subhashini for the Appellants. K. T. Harindranath and T. T. Kunhikannan for the Respondent. The Judgment of the Court was delivered by BHAGWATI J. This appeal arises out of proceedings initiated by the Revenue authorities for levying penalty on the assessee. The assessee is a lady and during the assessment year 1964 65 for which the relevant accounting year was the calender year ended 31st December, 1963, the assessee was a partner in two partnership firms, M/s. Malabar Tile Works and M/s. Malabar Plywood Works and alongwith her there were other partners including her husband and minor daughter. The assessee filed a return of income for the assessment year 1964 65 showing Rs. 4754 as income from property and Rs. 4748 as income from other sources. The assessee stated in the return under the column "Profits and Gains of Business and Profession" against item (b) which required share in the profits of a registered firm to be shown "Please ascertain from the firms ' files the Malabar Tile Works and Malabar Plywood Works. " The assessee, however, did not show in the return the amounts representing the shares of her husband and minor daughter in the firms of M/s. Malabar Tile Works and M/s. Malabar Plywood Works though they were clearly includible in computing the total income of the assessee under section 64 sub section (1) clauses (i) and (iii) of the Income Tax Act, 1961. The Income Tax Officer while making the assessment included the amounts representing the shares of the assessee 's husband and minor daughter in the profits of these two firms in the assessment of the assessee and taxed the assessee on a total income of Rs. 59,506 after including these amounts. Since the assessee had not shown these amounts as forming part of her total income in the return submitted by her, though they were clearly includible in her total income under section 64, sub section (1) clauses (i) and (iii), the Income Tax Officer was of the view that the assessee had con 784 cealed the particulars of her income and rendered herself liable to penalty under section 271 sub section (1) clause (c), and since the minimum penalty leviable on the assessee was Rs. 1000, he referred the case to the Assistant Appellate Commissioner who issued notice under section 274 and after hearing the assessee, imposed a penalty of Rs. 1000. The assessee appealed to the Tribunal against the order imposing penalty and one of the arguments urged on behalf of the assessee in support of the appeal was that there was no obligation of the assessee to show in her return the amounts representing the shares of her husband and minor daughter in the two firms and there was accordingly no concealment by her of the particulars of her income so as to attract the penalty under section 271 sub section (1) clause (c). The Tribunal accepted this argument of the assessee and held that section 271 sub section (1) clause (c) could be invoked only if there was concealment of the "particulars of his income by the assessee" and the words "his income" referred only to be the income of the assessee himself and not to the income of any other person which might be liable to be included in the income of the assessee by reason of section 64 sub section (1) clauses (i) and (iii). The Tribunal accordingly held that the omission or failure of the assessee to disclose in her return the amounts representing the shares of her husband and minor daughter in the two firms as forming part of her income could not be visited with penalty under section 271 sub section (1) clause (c) and in this view, the Tribunal allowed the appeal and set aside the order imposing penalty. This led to the filing of an application for a reference by the Revenue and on the application, the Tribunal referred the following question of law for the opinion of the High Court: "Whether on the facts and in the circumstances of the case, the Tribunal is correct in law in cancelling the penalty levied under section 271(1)(c)?" The High Court took the view that the words used in section 271 sub section (1) clause (c) were "his income" and the amounts representing the shares of the assessee 's husband and minor daughter in the two firms could not be said to be the income of the assessee, though in computing her total income these amounts were liable to be included by reason of section 64 sub section (1) clauses (i) and (iii) and therefore, the assessee could not be said to have concealed her income when she did not disclose these amounts as forming part of her income in the return submitted by her. The High Court accordingly answered the question referred to it in favour of the assessee and against the Revenue. The Revenue thereupon preferred the present appeal with special leave obtained from this Court. 785 There is a decision of this court which is directly in point and it concludes the determination of the question arising in this appeal against the Revenue but before we refer to that decision, we might first examine the question on principle as a matter of pure interpretative exercise. Section 271 sub section (1) clause (c) provides for imposition of penalty on an assessee if it is found inter alia that the assessee has concealed the particulars of "his income. " The question is what is the scope and content of the words "his income" occurring in this penal provision. Do they refer only to the income of the assessee himself or do they also take in the income of others which is liable to be included in the computation of the total income of the assessee by reason of the relevant provisions of the Act, such as section 64 sub section (1) clauses (i) and (iii)? The answer to this question obviously depends upon as to what is "his income" which the assessee is liable to disclose for the purpose of assessment for concealment can only be of that which one is bound to disclose and yet fails to do so. Section 139 provides for filing of a return of income by an assessee and sub section (1) of this section lays down that every person whose total income during the previous year exceeds the maximum amount which is not chargeable to income tax, shall furnish a return of his income in the prescribed form and verified in the prescribed manner, and setting forth such other particulars as may be prescribed. The return of income is required to be filed in order to enable the Revenue Authorities to make a proper assessment of tax on the assessee. It must therefore follow a fortiorari that the assessee must disclose in the return every item of income which is liable to be taxed in his hands as part of his total income. The charge of income tax is levied by section 4 on the total income of the assessee, and 'total income ' is defined in section 2 sub section (45) to mean "the total amount of income referred to in section 5 computed in the manner laid down" in the Act. It is no doubt true that the definition of 'total income ' in Section 2 sub section (45) refers to section 5 and this latter provision lays down that all the income profits and gains accrued or arisen to the assessee or received by or on behalf of the assessee shall be liable to be included in his total income but this provision is subject to the other provisions of the Act and therefore if the income of any other person is declared by any provision of the Act to be includible in computing the total income of the assessee, such income would form part of the total income exigible to tax under section 4 of the Act. Now, section 64 subsection (1) is one such provision which provides for inclusion of the income of certain other persons in computing the total income of an assessee. Clauses (i) and (iii) of this sub section provide that in computing the total income of an assessee there shall be included all 786 such income as arises directly or indirectly to the spouse of such assessee from the partnership of the spouse in a firm carrying on a business in which such individual is a partner as also to a minor child of such assessee from the admission of the minor to the benefits of the partnership firm. It is clear from this provision that though the share of the spouse or minor child in the profits of a partnership firm in which the assessee is a partner is not the income of the assessee but is the income of such spouse or minor child it is liable to be included in computing the total income of the assessee and it would be assessable to tax in the hands of the assessee. The total income of the assessee chargeable to tax would include the amounts representing the shares of the spouse and minor child in the profits of the partnership firm. If this be the correct legal position, there can be no doubt that the assessee must disclose in the return submitted by him, all amounts representing the shares of the spouse and minor child in the profits of the partnership firm in which he is a partner, since they form part of his total income chargeable to tax. The words "his income" in section 139 sub section (1) must include every item of income which goes to make up his total income assessable under the Act. The amounts representing the shares of the spouse and minor child in the profits of the partnership firm would be part of "his income" for the purpose of assessment to tax and would have to be shown in the return of income filed by him. The assessee then contended that the return of income which was required to be filed by her under section 139 sub section (1) was a return in the prescribed form and the form of the return prescribed by rule 12 of the Income Tax Rules, 1962 did not contain any column for showing the income of the spouse and minor child which was liable to be included in the total income of the assessee under section 64 sub section (1) clauses (i) and (iii) and there was therefore no obligation on the assessee to disclose this income in the return filed by her. This contention is also, in our opinion, fallacious and deserves to be rejected. It is true that the form of the return prescribed by rule 12 which was in force during the relevant assessment year did not contain any separate column for showing the income of the spouse and minor child liable to be included in the total income of the assessee, but it did contain a Note stating that if the income of any other person is includible in the total income of the assessee under the provisions inter alia of section 64, such income should also bestow in the return under the appropriate head. This Note clearly required the assessee to show in the return under the appropriate head of income, namely, "Profits and Gains of Business of Profession" the amounts representing the shares of the husband and minor 787 daughter of the assessee in the profits of the two partnership firms. But even so, the assessee failed to disclose these amounts in the return submitted by her and there was therefore plainly and manifestly a breach of the obligation imposed by section 139 sub section (1) requiring the assessee to furnish a return of her income in the prescribed form. It is difficult to see how the Note in the prescribed form of the return could be ignored by the assessee and she could contend that despite the Note, she was not liable to show in her return the amounts representing the shares of her husband and minor daughter in the two partnership firms. The contention of the assessee, if accepted, would render the Note meaningless and futile and turn it into dead letter and that would be contrary to all recognised canons of construction. There can be no doubt that the assessee was bound to show in her return the amounts representing the shares of her husband and minor daughter in the two partnership firms and in failing to do so, she was guilty of concealment of this item of income which plainly attracted the applicability of section 271 sub section (1) clause (c). It is obvious that on this view the order imposing penalty on the assessee would have to be sustained but there is a decision of this Court in V.D.M.RM.M.RM. Muthiah Chettiar vs Commissioner of Income Tax Madras which is binding upon us and where we find that a different view has been taken by a Bench of three Judges of this Court. It was held in this case that even if there were any printed instructions in the form of the return requiring the assessee to disclose the income received by his wife and minor child from a firm of which the assessee was a partner, there was, in the absence in the return of any head under which the income of the wife or minor child could be shown, no obligation on the assessee to disclose this item of income, the assessee could not be deemed to have failed or omitted to disclose fully and truly all material facts necessary for his assessment within the meaning of section 34(1) (a) of the Indian Income Tax Act, 1922. With the greatest respect to the learned Judges who decided this case, we do not think, for reasons already discussed, that this decision lays down the correct law on the subject, and had it not been for the fact that since 1st April 1972 the form of the return prescribed by rule 12 has been amended and since then, there is a separate column providing the "income arising to spouse/minor child or any other person as referred to in Chapter V of the Act" should be shown separately under that column and consequently there is no longer any scope for arguing that the assessee is not bound 788 to disclose such income in the return to be furnished by him, we would have referred the present case to a larger bench. But we do not propose to do so since the question has now become academic in view of the amendment in the form of the return carried out with effect from 1st April 1972. We would therefore follow this decision in Muthiah Chettiar 's case, which being a decision of a bench of three Judges of this Court is binding upon us, and following that decision, we hold that the assessee could not be said to have concealed her income by not disclosing in the return filed by her the amounts representing the shares of her husband and minor daughter in the two partnership firms. We accordingly dismiss the appeal, but in the peculiar circumstances of the present case, we think that the fair order of costs would be that each party should bear and pay its own costs throughout. S.R. Appeal dismissed.

The respondent assessee was a partner in the partnership firms of M/s. Malabar Tile Works and M/s. Malabar Plywood Works and alongwith her there were other partners including her husband and minor daughter. In her returns for the assessment year 1964 65 for which the relevant accounting year was the calendar year ending 31st December, 1963, the assessee filed a return of income omitting the amounts representing the shares of her husband and minor daughter in the partnership firms from her income. The Income Tax Officer, however, brought the amounts, namely, Rs. 59,506 to tax and referred the case for taking action under section 271(1)(c) of the Act to the Assistant Appellate Commissioner who imposed a penalty of namely, Rs. 7,000 on the assessee for having concealed her income. In appeal the Tribunal set aside the order and the High Court on reference affirmed the Tribunal 's order. Hence the appeal by Revenue to this Court after obtaining special leave. Dismissing the appeal, the Court ^ HELD: (1) The assessee, in view of the fact that the prescribed form for filing of returns under section 139 of the Act, prior to 31st March, 1972, did not contain separate column to show "income arising to spouse/minor child or any other person referred to in Chapter V of the Act", and in view of the decision of three Judges Bench reported in SC could not be said to have concealed her income by not disclosing in the return filed by her the amounts representing the shares of her husband and minor daughter in the two partnership firms. [788B] (2) The term "his income" for the purpose of section 271(1)(c) of the Act, is "his income" which the assessee is liable to disclose for the purposes of assessment and yet fails to do so. The return of income under section 139(1) of the Act is required to be filed in order to enable the Revenue Authorities to make a proper assessment of tax on the assessee. A fortiorari, it follows that the assessee must disclose in the return every item of income which is liable to be taxed in his hands under sections 4 & 5 of the Act. [785B; F H] 782 (3) The definition of "total income" in section 2(45), no doubt refers to section 5 which lays down that all the income profits and gains accrued or arisen to the assessee or received by or on behalf of the assessee shall be liable to be included in his total income but this provision is subject to the other provisions of the Act and therefore if the income of any other person is declared by any provision of the Act to be includible in computing the total income of the assessee, such income would form part of the total income exigible to tax under section 4 of the Act. section 64(1) is one such provision which provides for inclusion of the income of certain other persons in computing the total income of the assessee. [785F H] Section 64(1) makes it clear that though the share of the spouse or minor child in the profits of a partnership firm in which the assessee is a partner is not the income of the assessee but is the income of such spouse or minor child it is liable to be included in computing the total income of the assessee and it would be assessable to tax in the hands of the assessee. The total income of the assessee chargeable to tax would include the amounts representing the shares of the spouse and minor child in the profits of the partnership firm. Obviously the words "his income" in section 139 sub section (1) must include every item of income which goes to make up his total income assessable under the Act. The amounts representing the shares of the spouse and minor child in the profits of the partnership firm would be part of "his income" for the purpose of assessment to tax and would have to be shown in the return of income filed by him. [786B D] (4) It is true that the form of the return prescribed by Rule 12 of the Income Tax Rules, 1962 which was in force during the relevant assessment year did not contain any separate column for showing the income of the spouse and minor child liable to be included in the total income of the assessee, but it did contain a Note stating that if the income of any other person is includible in the total income of the assessee under the provisions, inter alia, of section 64, such income should also be shown in the return under the appropriate head. This Note clearly required the assessee to show in the return under the appropriate head of income, namely, "profits and gains of business or profession" the amounts representing the shares of the husband and minor daughter of the assessee in the profits of the two partnership firms. The assessee however failed to disclose these amounts in the return submitted by her and there was plainly and manifestly a breach of the obligation imposed by section 139 sub section (1) requiring the assessee to furnish a return of her income in the prescribed form. To accept the contention that despite the Note the assessee was still not liable to show in the return the amounts representing the shares of her husband and minor daughter in the two partnership firms would render the Note meaningless and futile and turn it into a dead letter 783 and that would be contrary to all recognised canons of construction. The assessee was guilty of concealment of this item of income which plainly attracted the applicability of section 271 sub section (1) clause (c). [786G 787D] V.D.M.RM.M.RM. Muthiah Chettiar vs Commissioner of Income Tax, , doubted

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Civil Appeal No. 535 of 1964. Appeal by special leave from the judgment and order dated July 25, 1961 of the Allahabad High Court in Sales Tax Reference No. 460 of 1954. A. V. Viswanatha Sastri and K. K. Jain for appellant. C. B. Agarwala and 0. P. Rana, for respondent. The Judgment of the Court was delivered by Sikri, J. This appeal by special leave is directed against the judgment of the High Court of Judicature at Allahabad passed 608 in a reference made to it under section II of the U.P. Sales Tax Act, 1948 (U.P. Act XV of 1948) hereinafter referred to as the Act. In this reference the following question was referred by the Judge (Revision), Sales Tax at the instance of the appellant,Modi Sugar Mills Ltd., hereinafter called the assessee: "Whether a dealer who has been assessed to tax on the turnover of the previous year according to his election can change his option and elect the assessment year by filing quarterly returns without the previous sanction of Sales Tax Commissioner The High Court answered the question in the negative. The answer to this question depends upon the interpretation of section 7(1) of the Act, and rr. 39, 40 and 41 of the U.P. Sales Tax Rules, and form IV prescribed under these rules. These provisions are as under: "section 7 (1). Subject to the provisions of section 18, every dealer whose turnover in the previous year is Rs. 12,000 or more in a year shall submit such return or returns of his turnover of the previous year within sixty days of the commencement of the assessment year in such form and verified in such manner as may be prescribed : Provided that the Provincial Government may prescribe that any dealer or class of dealers may submit, in lieu of the return or returns specified in this section, a return or returns of his turnover of the assessment year at such intervals, in such form and verified in such manner as may be prescribed, and thereupon all the provisions of this Act shall apply as if such return or returns had been duly submitted under this Section. Provided further that the assessing authority may in his discretion extend the date of the submission of the return by any person or class of persons. Rule 39 : Election of Assesment year. (1) Any dealer may elect to submit returns of his turnover of the assessment year in lieu of the returns of the turnover of the previous year, and shall signify such election in the return filed by him in Form IV. 609 Provided that a dealer who did not carry on business during the whole of the previous year shall elect to submit his returns of the assessment year. (2) A dealer who has once signified his election under sub rule (1) shall not again exercise his option so as to vary the basis of assessment Provided that the Sales Tax Commissioner may, for reasons to be recorded in writing and on such conditions as he deems fit permit a dealer to exercise a fresh option. Rule 40. Submission of returns Every dealer who elects to submit return of his previous year shall, within sixty days of the commencement of the assessment year, submit to the Sales Tax Officer a return in Form IV showing his turnover for the previous year Provided that no dealer whose turnover in the previous year was less than Rs. 15,000 shall be required to furnish such returns. Rule 41. Returns of assessment year. (1) Every dealer whose estimated turnover during the assessment year is not less than Rs. 15,000 and who elects to submit returns of such year shall before the last day of July, October, January and April submit to the Sales Tax Officer, a return of his gross turnover for the quarters ending June 30, September 30, December 31 and March 31, respectively, in Form IV Provided that every dealer or firm, to whom the pro visions of sub section (3) of Section 18 are applicable shall submit such returns within seven days of the expiry of each month during the year in which the business is commenced. " Before we deal with the interpretation of the section and the rules it is necessary to give a few relevant facts. It appears that for the assessment year 1948 49, 1949 50 and 1950 51, the assessee was assessed on the basis of returns filled for the turnover of the previous year relev ant to each of these assessment years. For the assessment year 1951 52, however, the assessee purporting to make an election under r. 39 of the rules filed returns of his turnover of the assessment year instead of the returns of the turn 610 over of the previous year. The Judge (Revision) held that without sanction of the Sales Tax Commissioner the assessee was not entitled to do so. Mr. Sastri, the learned counsel for the assessee, submits that the above rules should be interpreted as follows : Under sub rule (1) of r. 39 the election is to Me returns of the turnover of the assessment year instead of returns of the turnover of the previous year and not vice versa. Sub rule (2) also deals with the same election, i.e., the election to file returns of the turnover of the assessment year instead of the turnover of the previous year. Rule 40 does not displace the above reading of r. 39 because it covers the case of every dealer who wishes to submit a return of the turnover of the previous year. There is no other rule which deals with such a dealer, and he says that the word 'elects ' may perhaps have reference to the election mentioned in form IV which we will presently consider. At any rate, he says that sub r. (2) of r. 39 has nothing to do with the election mentioned in r. 40. He then submits that r. 41 is concerned with the dealer who has elected under r. 39(1) to submit returns of the turnover of the assessment year and this rule provides various matters in this connection. The learned counsel for the State, Mr. C. B. aggarwala, on the other hand, contends that section 7 of the Act, read with the rules, gives a dealer an option to file returns in respect of the turnover of the previous year or returns of the turnover of the assessment year, and he says that this option is and can only be exercised in the first year when a dealer becomes taxable under the Act, and it is this option or election that is covered by sub rule (2) of r. 39. He relies strongly on form IV in which the following lines occur "I have elected to submit return of my turnover of the previous year ending/month or months of the assessment year". In the alternative he contends that even if r. 3 9 (2) does not cover the filing of the returns of the previous year, according to general principles the assessee having exercised an option to be assessed in respect of the turnover of the previous year cannot now change the basis of assessment. In our opinion the Judge (Revision) was in error in holding that the assessee was not entitled to make an election under r. 39 (1) without the sanction of the Sales Tax Commissioner, and the answer to the question referred to the High Court should be in favour of the assessee. Rule 39(2) specifically mentions an elec 611 tion under sub r. (1) and there is only one kind of election under r. 39(1) and that is for a dealer to elect to submit returns of his, turnover for the assessment year in lieu of the returns of the turnover of the previous year. In other words, under r. 39(1) the, dealer makes a choice that he will be assessed in respect of the turnover not of the previous year, which is normally the rule under section 7, but in respect of the return of the turnover of the assessment year. It seems to us that r. 39(2) covers only the case where: election has been made by a dealer to be assessed in respect of the turnover of the assessment year. It is true that r. 40 also uses the word 'elects ' but this may have reference to the lines in form IV which we have already reproduced above. But assuming that when a dealer submits a return in respect of the previous year under r. 40 and he is treated to have elected within r. 40, yet there is no provision like r. 39(2) which debars him from exercising the option under r. 39(1). In our opinion an express provision like r. 39(2) was necessary to prevent a dealer from exercising the option given to him under r. 39(1). We do not express any opinion whether such a rule could validly be made under section 7 (1). We are not impressed by the argument of Mr. Aggarwal that general principles debar the assessee from exercising the option under r. 39 (1). It is a statutory right given to the assessee and the general principles, if applicable, cannot displace the statutory right. We may mention that the reasoning in the judgment under appeal has been doubted in an unreported judgment of the Allahabad High Court in M/s Mahesh Company Kahoo Kothi Kanpur vs The Commissioner of Sales Tax, Uttar Pradesh(1). In the result we accept the appeal, and answer the question.referred to the High Court in the affirmative. The appellant will have his costs here and in the High Court.

For the assessment years 1948 49, 1949 50 and 1950 51, the appellant was assessed on the basis of returns filed for the turnover of each relevant previous year. For the assessment year 1951 52, the appellant, purporting to make an election under r. 39(1) of the U.P. Sales Tax Rules, filed returns of his turnover of the assessment year instead of the previous year. The Judge (Revision) Sales Tax held that without the sanction of the Sales Tax Commissioner under r. 39(2), the appellant was not entitled to do so, and the High Court also, on a reference, held against the appellant. In appeal to this Court, HELD : The answer of the High Court should have been in favour of the appellant. [610 HI Under r. 39(1), the dealer makes a choice that he will be assessed in respect of the turnover not of the previous year, which is the normal position under section 7, but in respect of the turnover of the assessment year. Rule 39(2), requiring the sanction of the Sales Tax Commissioner covers only the, case where such election has been made under r. 39(1), that is, where the election has been made by a dealer to be assessed in respect of the turnover of the assessment year, and the dealer wishes to exercise a fresh option. Even assuming that, when a dealer submits a return in respect of the previous year under r. 40 be is treated to have elected within that rule, yet, there is no provision like r. 39 (2) which debars him from exercising the option under r. 39(1). In the absence of an express provision like r. 39(2), general principles cannot debar an assessee from exercising a statutory right given to him. [611 A E]

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s Nos. 49, 60, 61 and 80 of 1967. Writ Petitions under article 32 of the Constitution of India for the enforcement of fundamental rights. K. Narayanaswamy and Lily Thomas, for the petitioner (in W.P. No. 49 of 1967). Sadhu Singh, for the petitioner (in W.P. No. 60 of 1967). S.K. Dholakia and Sadhu Singh, for the petitioner (in W.P. No. 61 of 1967). S.T. Desai and Sadhu Singh, for the petitioner (in W.P. No. 80 of 1967). C.K. Daphtary, Attorney General, B.L. lyengar, R.H. Dhebar for R.N. Sachthey, for the respondents (in W.P. No 49 of 1967). R.H. Dhebar for R.N. Sachthey, for the respondents (in W.Ps. Nos. 60, 61 and 80 of 1967). The Judgment of the Court was delivered by Bachawat, J. In all these writ petitions, the petitioners challenge the vires of the Taxation Laws (Extension to Union Territories) Regulation No. 3 of 1963. The contention is that the President had no power to promulgate the Regulation under article 240 of the Constitution. On August 16, 1962, Pondicherry became a Union Territory. On December 5, 1962, Parliament enacted the Pondicherry Administration Act, 1962 (Act No. 49 of 1962). Section 4 (1 ) of this Act provided that all laws in force immediately before August 19, 1962 would continue to be in force in 105 Pondicherry until amended or repealed by a competent legislature or other competent authority. Section 4(2) empowered the Central Government to make necessary adaptations and modifications for the purpose of facilitating the application of any such law in relation to the administration of Pondicherry and bringing the provisions of any such law into accord with the provisions of the Constitution. Section 7 provided that all taxes, duties, cesses and fees which immediately before August 19, 1962 were being lawfully levied would continue to be levied in Pondicherry and to be applied for the same purposes, until other provision was made by a competent legislature or other competent authority. After the passing of this Act, the petitioners continued to be sub.jeer to the existing French laws relating to income tax. On March 30, 1963, the President in the exercise of the powers conferred on him by article 240 of the Constitution promulgated the impugned Regulation No. 3 of 1963. The Regulation extended certain Indian Acts relating to taxation to the Union territories mentioned therein. Section 3 (2) of the Regulation extended the Income tax Act, 1961, subject to the modifications mentioned in Part II of the Schedule, to Pondicherry as from April 1, 1963. Section 4(1) provided that any law in force in Pondicherry corresponding to the Income tax Act, 1961 would stand repealed on April 1, 1963. The petitioners carry on business at Pondicherry and are being assessed to income tax under the Income tax Act. They have filed the present writ petitions asking for a declaration that the Income tax Act, 1961 was not legally extended to Pondicherry and a direction prohibiting the respondents from implementing that Act in relation to Pondicherry. In the Constitution of India as originally enacted, India was declared to be a Union of States, [article 1 (1)]. The States and their territories were specified in Parts A, B and C of the First schedule [article 1(2)]. The territory of India consisted of the territories of the States, the territories specified in Part D of the First Schedule (Andaman and Nicobar Islands) and such other territories as may be acquired, [article 1 (3)]. As original enacted. part VI of the Constitution dealt with Part A States, Part VII dealt with Part B States, Part VIII dealt with Part C States and Part IX dealt with the territories specified in Part D of the First Schedule. The Constitution (Seventh Amendment) Act passed on October 19, 1956 altered the scheme of division of India in to A B and C States and the territories mentioned in Part D of the first Schedule. Article 1 and the First Schedule were amended so that the territory of India would comprise the territories of the states, the Union territories specified in the First Schedule and such other territories as may be acquired. By cl. 30 added to article 66. "Union territory" was defined to mean any Union territory specified in the First Schedule and to include any other territory supp. C.I./68 8 106 comprised within 'the territory of India but not specified in that Schedule. Consequential amendments were made in Part VI and other Parts of the Constitution. Parts VII and IX were repealed. Part VIII was drastically amended. The title of Part VIII was altered to that of "Union Territories". The amended article 239 provided for the administration of Union territories by the President acting through an administrator to be appointed by him. The amended article 240 was in these terms: "240. Power of President to make regulations for certain Union territories. ( 1 ) The President may make regulations for the peace, progress and good government of the Union territory of (a) the Andaman and Nicobar Islands; (b) the Laccadive, Minicoy and Amindivi Islands. (2) Any regulation so made may repeal or amend any Act made by Parliament or any existing law which is for the time being applicable to the Union territory and, when promulgated by the President, shall have the same force and effect as an Act of Parliament which applies to that territory. " The amended article 241 dealt with High Courts for Union territories. Article 242 relating to Coorg was repealed. Article 240 (1) and the First Schedule were amended from time to time. The Constitution (Fourteenth Amendment) Act passed on December 28, 1962 amended the First Schedule and article 240 and added article 239A. Article 239A and the amended article 240 are in these terms: "239A. (1 ) Parliament may by law create for any of the Union territories of Himachal Pradesh, Manipur, Tripura, Goa, Daman and Diu, and Pondicherry (a) a body, whether elected or partly nominated and partly elected, to function as a Legislature for the Union territory, or (b) a Council of Ministers,or both with such constitution, powers and functions, in each case, as may be specified in the law. (2) Any such law as is referred to in clause (1) shall not be deemed to be an amendment of this Constitution for the purposes of article 368 notwithstanding that it contains any provision which amends or has the effect of amending this Constitution. 107 240. (1) The President may make regulations for the peace, progress and good government of the Union territory of (a) the Andaman and Nicobar Islands; (b) the Laccudive, Minicoy and Amindivi Islands; (c) Dadra and Nagar Haveli; (d) Gao, Daman and Diu; (e) Pondicherry: Provided that when any body is created under article 239A to function as a Legislature for the Union teriyaki of Goa, Daman and Diu or Pondicherry, the President shall not make any regulation for the peace, progress and good government of that Union territory with effect from the date appointed for the first meeting of the Legislature. (2) Any regulation so made may repeal or amend any Act made by Parliament or any existing law which is for the time being applicable to the Union territory and, when promulgated by the President, shall have the same force and effect as an Act of Parliament which applies to that territory." Regulation No. 3 of 1963 was made by the President in the exercise of the power conferred on him to make regulations for the peace, progress and good government of the Union territories. The contention that under article 240 the President can make regulations limited to the subject of law and order only cannot be accepted. The grant of legislative power to make laws, regulations or ordinances for British dependencies has long been expressed in the common form of that of making laws, regulations or ordinances for "peace and good government" of the territory or similar objects such as "peace, order and good government", "peace, welfare and good government" and "peace, progress and good government" of the territory. Instances of this common form of grant of legislative power to legislatures and authorities in India are section 42 of the Indian Councils Act, 1861, sections 71, 72, 80A of the Government of India Act, 1915, section 72 of the ninth Schedule and section 92(2) of the Government of India Act,1935. Such a power was held to authorise the utmost discretion of enactment for the attainment of peace, order and good government of the territory and a Court will not enquire whether any particular enactment made in the exercise of this power, in fact, promotes those objects, Riel vs Queen), Chenard and Co. vs Joachim Arissol(2). The words "peace, order and good government" and (1) , 678 679. (2) , 132. 108 similar expressions are words of very wide import giving wide discretion to the authority empowered to pass laws for such purposes, Attorney General for Saskatchewan vs Canadian Pacific Ry. CO.(1) King Emperor vs Benoari Lal Sarma(2). In Jogendra Narayan Deb vs Debendra Narayan Roy(3) Sir George Rankin said that the words have reference to the scope and not to the merits of the legislation. Girindra Nath Banerjee vs Birendra Nath Pal(4), he said that "these words are used because they are words of the widest significance and it is not open to a Court of law to consider with regard to any particular piece of legislation whether in fact it is meritorious in the sense that it will conduce to peace or to good government. It is sufficient that they are words which are intended to give, subject to the restrictions of the Act, a legislating power to the body which it invests with that authority. " Article 240 of the Constitution confers on the President a general power of making regulations for the peace, progress and good government of the specified Union territories. In exercise of this power, the President may make a regulation repealing or amending any Act made by Parliament or any existing law which is for the time being applicable to the Union territory. The regulation when promulgated by the President has the stone force and effect as an Act of Parliament which applies to that territory. The President can thus make regulations on all subjects on which Parliament can make laws for the territory. Parliament has plenary power to legislate for the Union territories with regard to any subject. With regard to Union territories there is no distribution of legislative power. Article 246(4) enacts that "Parliament has power to make laws with respect to any matter for any part of the territory of India not included in a State notwithstanding that such matter is a matter enumerated in the State List. " In R.K. Sen vs Union(3) it was pointed out that having regard to article 367, the definition of "State" in section 3(58) of the applies for the interpretation of the Constitution unless there is anything repugnant in. the subject or context. Under that definition, the expression "State" as respects any period after the commencement of the Constitution (Seventh Amendment) Act, 1956 "shall mean a State specified in the First Schedule to the Constitution and shall include a Union territory. ' But this inclusive definition is repugnant to the subject and con text of article 246. There, the expression "State" means the State specified in the First Schedule. There is a distribution of legislative power between Parliament and the legislatures of the States Exclusive power to legislate with respect to the matters enumerated in the State List is assigned to the legislatures of the States esta (1) , 613 614. ' (2) [1914] L.R. 72 I.A. 57, 72. (3) [1942] L.R. 69 I.A. 76, 90. (4) Cal. 727, 738, (5) ; , 433. 109 blished by Part V1. There is no distribution of legislative power with respect to Union territories. That is why Parliament is given power by article 246(4) to legislate even with respect to matters enumerated in the State List. If the inclusive definition of "State" in section 3(58) of the were to. apply to article 246(4), Parliament would have no power to legislate for the Union territories with respect to matters enumerated in the State List and until a legislature empowered to legislate on those matters is created under article 239A for the Union territories, there would be no legislature competent to legislate on those matterS; moreover, for certain territories such as the Andaman and Nicobar Islands no legislature can be created under article 239A, and for such territories there can be no authority competent to legislate with respect to matters,enumerated in the State List. Such a construction is repugnant to the subject and context of article 246. It follows that m view of article 246(4), Parliament has plenary powers to make laws for Union territories on all matters. Parliament can by law extend the Income tax Act, 1961 to a Union territory with such modifications as it thinks fit. The President in the exercise of his powers under article 240 can make regulations which have the same force and effect as an Act of Parliament which applies to that territory. The President can therefore by regulation made under article 240 extend the Income tax Act, 1961 to that territory with such modifications as he thinks lit. The President can thus make regulations under article 240 with respect to a Union territory occupying the same field on which Parliament can also make laws. We are not impressed by the argument that such overlapping of powers would lead to. a clash between the President and Parliament. The Union. territories. are centrally administered through the President acting through an administrator. In the cabinet system of Government the President acts on the advice of the Ministers who are responsible Parliament. The proviso to article 240(1) lays down the condition for the cesser of power of the President to make regulations under article 240(1). The power of the President to make regulations for the Union territory of Goa, Daman and Diu or Pondicherry ceases when a legislature for the territory is created with effect from the date appointed for the first meeting of the legislature. But until such a legislature is created, the President retains his full power to make regulations for those territories. The proviso does not act as a fetter on the general power of the President to make regulations for the Union territory while no legislature for that territory is brought into. existence. The proviso does not enact, as is suggested by the petitioners, that the power of the President is confined 110 to making laws with respect to the matters enumerated in the State List and the Concurrent List. The argument is that a legislature created under article 239A can be authorised to pass laws with respect to those matters only and having regard to. the proviso to article 240(1) the President 's power to make regulations under article 240 is similarly circumscribed. As a matter of fact, the created local legislatures for the Union territories of Himachal Pradesh, Manipur. Tripura, Goa, Daman and Diu and Pondicherry and section 18 of the Act conferred on those legislatures power to make laws for those territories with respect to the matters enumerated in the State List or the Concurrent List. Assuming that the local legislature created under article 239A can be authorised to make laws with respect only to the matters enumerated in the State List or the Concurrent List, it does not follow that the power of the President to make regulations under article 240 is so limited. By the express words of article 240, the President can make regulations for the peace, progress and good government of the specified Union territories. Any regulation so made may repeal or amend any Act made by Parliament and applicable to that territory. When promulgated by the President the regulation has the same force and effect as an Act of Parliament applicable to that territory. This general power of the President to make regulations extends. to all matters on which Parliament can legislate. It may be recalled that article 239A and the proviso to article 240(1) were inserted by the Constitution (Fourteenth Amendment) Act. Under article 240 as it stood after the Constitution (Seventh Amendment) Act and before the enactment of the Constitution (Fourteenth Amendment) Act, it could not be contended that the general power of the President to make regulations under article 240(1) was limited to matters enumerated in the State List and the Concurrent List. The position was not changed by the insertion of article 239A and the proviso to article 240(1) by the Constitution (Fourteenth Amendment) Act. Moreover, article 239A does not authorise Parliament to create legislatures for the Union territories of the Andaman and Nicobar Islands, Laccadive, Minicoy and Amindivi Islands and Dadra and Nagar Haveli. It is clear, therefore, that the power of the President to make regulations with respect to those territories is not limited by the proviso to article 240( 1 ). We are satisfied. that the proviso to article 240(1) on its true construction does not fetter the power of the President to make regulations for any of the Union territories specified in article 240(1) including Pondicherry as long as no Legislature is created for the territory. It was suggested that there is no provision for the distribution of the income tax attributable to Union territories and therefore the President could not extend the Income tax Act, 1961 to the Union territories. If this argument were sound, even Parliament 111 could not extend the Income tax Act to the Union territories. Moreover, the argument overlooks article 270 which shows that the income tax attributable to Union territories forms part of the Consolidated Fund of India. It is not necessary to make any distribution of income tax with respect to Union territories as those territories are centrally administered through the President. There is no force in the contention that the President cannot make a law with respect to income tax in the absence of an express grant of such a power. There is distribution of legislative power between the Centre and the States and consequently distinct grants of taxing power are made in the legislative lists. With respect to Union territories, there is no distribution of legislative power. For the Union territories, Parliament has plenary powers to make laws and the President has general powers to make regulations. In the exercise of his powers under article 240, the President could make Regulation No. 3 of 1963 extending the Income tax Act, 1961 and other laws to the Union territories. The petitions are dismissed with costs, one hearing fee. Petitions dismissed.

Parliament enacted the Pondicherry Administration Act. which provided that all laws in force immediately before August 19. 1962, when Pondicherry became a Union territory, were to continue to be in force until amended or repealed by a competent legislature or other competent authority. The President, in exercise of the powers conferred on him by article 240 of the Constitution to make regulations of "peace, progress and good government" of the Union territories promulgated the Tax Laws (Extension to Union Territories) Regulation. By this Regulation the laws in force in relation to income tax in Union territory of Pond:cherry were repeated and the Indian Income tax Act, 1961 was made applicable. The petitioners challenged the rites of the Regulation. HELD: The Regulation is valid. The power of the President to make regulations under article 240 is not limited to the subject of law and order. Authority to make regulations for "peace. progress and good government" is a common form of grant of legislative power and the expression "peace, progress and good government" is of very wide import giving wide discretion to the authority empowered to pass laws for such purposes. The President can make regulations with respect to a Union territory occupying the same field on which Parliament can also make laws. Such a regulation may repeal or amend any Act made by Parliament or any existing law which is for the time being applicable to the Union territory and when promulgated has the same force and effect as an Act of Parliament which applies to that territory. [107E 108D] Riel vs queen. Chenard and Co. vs Joachim Arissol, , Attorney General for Saskatchewan vs Canadian Pacific Ry. Co., , King Emperor vs Benoari Lal Sarma, [1914] L.R. 72 I.A. 57. Jogendra Narayan Deb vs Debendra Narayan Roy, [1942] L.R. 69 I.A. 76 and Girindra Nath Banerjee vs Birendra Nath Pal. Cal. 727, referred to. Parliament has, by virtue of article 246(4), power to make laws with respect to any matter including matters enumerated in the State List, for any part of the territory of India not included in a State. With regard to Union territories there is no distribution of legislative power 104 and Parliament has plenary power to make laws for those territories on any subject. Though the definition of "State" in section 3(58) of the , taking within it Union territories, applies to the interpretation of the Constitution, this inclusive definition is repugnant to the subject and context of article 246. There, the expression "State" means the State specified in the FirSt Schedule. Parliament can by law extend the Income tax Act, 1961, to a Union territory with such modifications as it thinks fit. The President can, therefore, by regulation do the same. [108E; 109A D] R.K. Sen vs Union, ; , referred to. The power of the President to make regulations for any of the Union territories specified in article 240(1) so long as no legislature is created for the territory is not fettered by the. proviso to article 24 0(2 ) or limited to matters enumerated in the State List and the. Concurrent list. [110G] It is not necessary to make any distribution of income tax with respect to Union territories, as those territories are centrally administered through the President. [111A B]

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Appeal No. 1753 of 1968 Appeal by Special Leave from the Judgment and Order/Decree dated the 6th September, 1967 of the Calcutta High Court in Appeal from Appellate Decree No. 689 of 1964) S.C. Majumdar and G.S. Chatterjee for the Appellant. Sukumar Ghose for Respondents 1 3. The Judgment of the Court was delivered by KRISHNA IYER, J. This appeal, by special leave, from the judgment of a Single Judge. of the Calcutta High Court, raises a single legal issue with human overtones. The State of West Bengal is the appellant at this the fourth and final deck of the judicial pyramid, having won the case as the 5th defendant at the earlier stages of the litigation but lost in the High Court. The question, shortly put, is whether the vesting of estates in the State under ss.3, 4 and 5 of the West Bengal Estates Acquisition Act, 1953 (West Bengal Act I of 1954) (abbreviated for reference hereinafter as the Act) extinguishes the right of cattle grazing enjoyed by villagers in the grasslands of such estates on the. ground that such right amounts to 'incumbrance ' within s.2(h) of the Act. The facts An estate in village Vadurerpati Madhabpur in the dis trict of Hooghly was among those vested in the State on a notification under s.4 of the Act, free from all encum brances as provided in ss.4 and 5. The Plaintiffs respond ents are some of the denizens of the said village and, in this representative action, claim that the agrarian communi ty there have always enjoyed the right of pasturage over the suit estate and pray for the relief of injunction restrain ing the 5th defendant appellant from interfering with the exercise of the right to graze, as enjoyed before. The State, however, denies the survival of such a right even if it did exist on the score that the fatal impact of s.5 has terminated all incumbrances on the estate and the right to graze cattle belonging to the villagers is but an "incum brance ' as defined in s.2(h) of the Act. Thus the bone of contention between the parties is whether the collective claim of the villagers to graze their cattle on an estate vested in the State under the Act falls within the defini tion of 'incumbrance '. If it does, the suit deserves to be dismissed but, if it does not, the High Court 's view is correct and the case has to be sent back for consideration on the merits. We may mention, for completeness ' sake, that defendants 1 to. 4 are persons in whom the estate has been allegedly settled by the State, although this position is not clear or perhaps is denied by the State itself. 73 The issue, in a nut shell, is as to what is an 'incum brance '. But this question, in the light of the definition which we will presently reproduce, resolves itself into two issues which will be self evident as we read the provision: "2(h) In this Act unless there is anything repugnant in the subject or context. x x x (h) 'incumbrance ' in relation to estates and rights of intermediaries therein does not include the rights of a raiyat or of an under raiyat or of a non agricultural tenant, but shall, except in the case of land allowed to be retained by an intermediary under the pro.visions of section 6, include all rights or interests of what ever nature, belonging to intermediaries or other persons, which relate to lands comprised in estates or to the produce thereof. " And so the two gut questions are: (i) whether a right to graze cattle in the estate of another falls within the sweep of the comprehensive expression 'all rights or interests of whatever nature '; and (ii) whether the members of a village as a collective, though fluctuating body, are covered by the words 'intermediaries or other persons '. While the two courts at the ground and first floor level decided the two points above mentioned in favour of the State, the High, Court, after a long and discursive discus sion, the labyrinthine course of which need not be traversed by us, reached the conclusion that the right in question was a public right belonging to an unspecified and varying group not a specific private interest vesting in specified persons and therefore left untouched by sections 3 to 5 and uncovered by s.2(h). Is that view sustainable on a correct construction of the provision? Putting a literal and teleological construction on the definition of 'incumbrance ' we have hardly any doubt that the legislature has used language of the widest amplitude ' to cast the net wide and to catch all rights and interests whatever be their nature. Indubitably, the right to graze cattle in .an estate is a restrictive interest clearly falling within the scope of the provision. Indeed, so designedly limitless an area of rights and interests of whatever nature is included in the special definition of 'incumbrance ' for the purposes of the Act, that to deny the 'familiar rurally enjoyed right of pasturage as covered by it is to defeat, by judicial construction, the legislative intendment. Likewise, there is no substance in the conten tion that the collective, though uncertain, body of villag ers cannot be brought within the expression 'or other persons '. The connotation of those words in the context is 'intermediaries or persons other than intermediaries '. This embraces all persons other than intermediaries and the villagers 74 who seek to exercised the right of grazing over the inter mediaries ' lands are plainly 'other persons '. There is no warrant for the limited signification imputed to those words by counsel for the respondent when he argues that they refer to particular, definite and known individuals. An unwarranted narrowing of meaning cannot be attributed where there is no contextual compulsion or fulfilment of statutory purpose thereby gained. On the other hand, the great socio economic objective of the Act argues itself. If it is to be successful as a land reform measure, the pre condition is that the estates must vest the intermediaries ' entire rights fully not moth eaten by carving out many little interests out of the plenary ownership of the State. This intendment is further manifest from sections 4 and 5 which we set out below along with section 3: "s.3. The provisions of this Act shall have effect notwithstanding anything to the contrary contained in any other law or in any contract express or implied or in any instrument and notwithstanding any usage or custom to the contrary: x x x x "s.4.(1) The State Government may from time to time by notification declare that with effect from the date mentioned in the notification, all estates and the rights of every intermediary in each such estate situated in any district or part of a district specified, in the notification, shall vest the State free from all incumbrances. X X X "s.5(1) Upon the due publication of a notification under section 4, on and from the date of vesting (a) the estate and the rights of intermediaries in the estates, to which the declaration applies, shall vest in the State free from all incumbrances; in particular and without prejudice to the generality of the provisions of this clause, every one of the following rights which may be owned by an intermediary shall vest in the State, namely: x x x x According to ss.4 and 5, the vesting shall be 'free from all incumbrances '. In short, from the perspective of land reform objectives, a specious meaning is derived by the definition in s.2(h). Ordinarily, the Court cannot cut down the definitional amplitude given in the statute and we see no valid reason for departing from this golden rule. The end product of this discussion is that the appeal must be allowed and, the suit dismissed. Even so, we have been taken on a conducted tour by counsel on both sides more or less covering and controverting the points which have appealed to the High Court. Shri Ghose, for the respondent, pressed before us a contention based on rural economics which has considerable force in a general 75 way, but has none from the legal angle. India lives in her villages not in her cities. This truth has been highlight ed by the Father of the Nation, but insufficiently remem bered by our law makers. The agrarian community, with a cattle economy, rates high in the agrestic scheme the right of pasturage and so it is a human problem for the villagers and their very life if the State snatches the valuable right of pasturage which makes the village economy viable, in the name of. estate 'abolition, without providing alternative village commons. While we are moved by this submission and feel that this is an unintended consequence of comprehen sive vesting of estates in the State, we have only to ob served that the State, in our expectation, should, mindful of its welfare obligation, consider this facet of the prob lem and try to provide grazing grounds in villages where the impact of the Act has deprived the community of the right of pasturage. Even if the consequence of abolition of intermediary rights leads to a baneful by product from the economic point of view, we,as Judges, are functionally committed to construction of the statute in the terms the legislature has cast it. In this context our non legal reaction to the loss of grazing rights by the villagers is reinforced by the obser vations of Sarada Charan Mitra in his Tagore Law Lectures, 1895, on the Land Law of Bengal. He observed at p.495 (II Edition): "Pasturage is, in the large majority of cases in this country, public, in the sense that they belong to or are capable of being used by a community or classes of individuals in a village. Such rights are necessary for the preservation of society. " x x x x "To an agricultural population, pasture land is of the utmost importance and there is seldom a village in Bengal 'which has not a large piece of land attached to it for the grazing of cattle belonging to its inhabitants. " The High Court judgment comments: "He (Justice Sarada Charan Mitra) then refers to Verse 237, Chapter VIII in Manu and also refers to Yajnavalkya. Hence such customary right has been recognised in India from very early times. " Our conclusion cannot therefore be deflected by the unfortunate deprivation, especially because we part with this judgment hopefully, counsel for the appellant having assured the Court that these observation will be communicat ed to his client. This simplistic disposal of the disputed points may not be fair to the High Court, especially because the learned Judge has, in an avoidably erudite survey of Indian and English authorities considered two vital issues. He has discussed at some length the plurality of legal issues: What is the nature, in terms of welt known interests or rights in or over property, of the right of pasturage ? Is it an easement under the Indian Easements Act or the Indian Limitation Act ? Is it profit a prendre and, if so, does it become a right or in 76 terest within section 2(h) of the Act ? Can an easement or right of common pasturage be claimed by a fluctuating body of persons the villagers ? Is such a customary right recog nised in Indian Law ? The learned Judge has followed up the discussion on these points with a further eloborate examination of one other principal issue and two subsidiary points which, may be expressed in his own words: "The question is whether customary right 'enjoyed ' by the villagers is a right belonging to other persons relating to the land compensed in the estate or to the produce thereof. This leads to the consideration of two matters: (a) whether the villagers are other persons within the meaning of section 2(h) of the Estates Acquisition Act; and (b) whether such customary right 'belongs ' to the villagers or to any individual in the village. " We have been taken on a lengthy tour (as we have already mentioned) of these areas of law by counsel on both sides but we do not think it necessary to cover them in this judgment at any length. The conclusion of the learned Judge is that a grazing right or right of pasturage subject to the local requirements of a valid custom, is local law in India. English and Indian decisions and other text book citations have been referred to by the High Court and read before us, but whether such a customary right iS law or not it cannot affect the question before us for the simple reason that s.3 of the Act expressly says that the provisions of the Act 'shah have effect notwithstanding anything to the contrary contained in any other law . and notwithstanding any usage or custom to the contrary. ' Undoubtedly, the plenary vesting of the entire rights of the intermediary under sections 4 and 5 is cut down by a customary right which reduces the ambit of the intermediary right and therefore is con trary to the provisions of ' s.5. Moreover, when ss.4 and 5 declare unmincingly that the vesting shall be free from all incumbrances, a customary right of grazing which clearly is an incumbrance runs counter to this clause. Certainly the definition of 'incumbrance ' cannot take in a right or inter est unless it is in favour of intermediaries, or other persons. The learned Judge has considered whether villag ers constitute a corporation or person, whether fishermen in a body living in a village can be said to be persons. He has also reasoned that since no compensation is paid by the State under the Act for the taking of the customary rights 'such provision for vesting would be void under the Constitution '. Section 161, 183 of the Bengal Tenancy Act and ss.2(p), 5(aa)and 6(h) have all been considered in a learned chain of reasoning. Reliance has also been placed on rulings and text books. As earlier ' stated, we are disinclined to delve into the details of this discussion. The villagers are clearly 'other persons ' and none of the ruling cited before us or referred to by the learned Judge has considered this point. especially in the context of the extremely wide language used in section 2(h) of the Act. It is inconsequential to say that the customary right is law. Equally unhelpful is the finding that the right to graze vested in villagers is a public or quasi public right. Even if it is, once it falls within the definition of 'incumbrance ' paring down the totally of intermediaries ' rights. section 3 hits it down. 77 The conclusion is irresistible that the State 's defence is impregnable. The appeal therefore deseves to be allowed and the suit dismissed which we do, directing the parties to bear their costs through out. Once again we hark back to the human factor of taking away an invaluable right of humble villagers viz., the right of pasturage and feel confident that a Welfare State, deeply concerned with preservation of. village economy, will not hesitate to provide fresh pastures. for the preservation of agrestic life and agricultural prosperity.

Certain estate in a village was acquired under the West Bengal Estates Acquisition Act, 1953. Section 3 of the said Act provides that the provisions of that Act shall have effect notwithstanding anything to the contrary contained in any other law or contract expressed or implied or any in strument or any usage or custom. Section 4 authorities the State Government by a notification to declare that all estates and the rights of every intermediary in each such estate shall vest in the State free from all encumbrances. Section 5 provides that on publication of such a notifica tion the estates to which the declaration applies shall vest in the State free from all encumbrances. Section 2(h) defines an encumbrance as under: " 'incumbrance ' in relation to estates and rights of intermediaries therein does not include the rights of a raiyat or of an under raiyat or of a nonagricultural tenant, but shall, except in the case of land allowed to be retained by an intermediary under the provisions of section 5, include all rights or interests of whatever nature, belonging to intermediaries or other persons, which relate to lands comprised in estates or to the produce thereof. " The respondents, some of the villagers, filed a suit against the appellant in a representative action claiming that the agrarian community in the village has always been enjoying the right of pasturage over the suit estate and that the said right survived in spite of the notification under the Act. The appellants contended that no such right survived after the publication of the notice and in any event, even if such a right amounted to an incumbrance it came to an end by virtue of section 5 of the Act. According to the respondents the said right was not an incumbrance within the meaning of the said Act and according to the appellant it was an incumbrance. The suit and the appeal filed by the respondents were dismissed. The High, Court, however, allowed the Second Appeal filed by the respondents. Allowing the appeal by Special Leave, HELD: (1) The great socio economic objective of the Act if it is to be successful as a land reform measure requires that all the rights must vest fully in the State. [74A C] (2) From the perspective of land reform objective, a specious meaning is derived by the definition of incum brance. Ordinarily the court cannot cut down the defini tional amplitude given in the statute and there is no reason for departing from the said golden rule. The Legislature used the expression incumbrance in its widest amplitude to cast the net wide so as to catch all rights and interest whatever be their nature. [74C G] (3) There is no substance in the contention of the respondent that the collective, though uncertain body of villagers cannot be brought within the expression "or other persons". The expression "intermediaries or persons other than intermediaries" embraces all persons, and the villagers who seek to exercise the right of grazing over the interme diaries ' lands are plainly "other persons". [73 G H] (4) The conclusion of the High Court that the grazing right is a customary right does not carry the case of the respondents any further because the provisions of section 3 operate notwithstanding any usage or custom to the contrary. [76 D F] 72 The Court observed that the present appeal raises a human problem and as 'grazing ' right is an important aspect of agrestic life the State should try to provide alternative grazing grounds to villagers when such rights are taken away [76A C]

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view Petition Nos. 571 586 & 586A of 1985. In Transfer Cases Nos. 52 to 68 of 1982. By Circulation. The Order of the Court was delivered by ORDER We have considered the grounds urged in the Review Petition and since we find no substance in them. the Review Petition are dismissed. PER THAKKAR, J. While it is not agreeable to disagree with the. majority. my conscience commands. and my sense of duty demands. that I should disagree. Disagree with the proposed order dismissing the Review Petitions in limine with the remark that "we find no substance in them", without affording to the Petitioners any opportunity of hearing in the Court to substantiate the grounds urged by them. One of the grounds urged. ground No. 8 in the Petitions, is: "8. That during the course of arguments the parties had proceeded on the assumption that the Hon 'ble Court would 901 decide only the 7 questions framed by the then Hon 'ble Chief Justice and the individual petitions on merits would be dealt with either by the Division Benches of this Hon 'ble Court or by the respective High Courts. It was on this assumption that the parties addressed their arguments and submissions only on those general questions. It is for this reason that written submissions were made only in T.C. No. 55 of 1982 amongst all the Railway matters. None of the Petitioners had been given any opportunity to argue their cases on merits. The judgment under review dismissed all the Transferred Cases and thus all these petitions stand decided on merits also. It is, therefore, necessary that in the interest of justice, the petitioner should be given another opportunity to argue their petitions on merits. This has caused serious prejudice to their cases is apparent from the facts of a few cases reference whereto is made herein after. " It is not possible to say that there is no substance in this ground because no notices have been issued on the Review Petitions and the averments have not been controverted by the other side. So also it is not stated in the majority judgment that the averment is factually untrue. Reference may be made to ground number 9 in Review Petitions Nos. 57 1 to 586A of 1985 which reads as under: ' '9. That it may be submitted 'that the petitioner Shri Narpat Singh had been served with the Office Order identical to the one reproduced in para 3 above and was charged with stoppage of work from 3.2. 1981 and missing from his place of duty and for intimidating and pressurising the loyal employees for not joining duty. The fact is that the petitioner, Narpat Singh is a patient of Asthama and was under the treatment of the Rail way Medical Authorities between December 1980 to 1.2.1981 as outdoor patient. On 2.2. 1981 while on duty as Shed man is DSL/Shed BGKt in shift 6 hours to 14 hours, he developed breathing difficulties and was unable to perform his duties. He obtained sick memo G/92 on 2.2.1981 from GFO/DSL BGKt and while leaving duty proper charge was handed over by the petitioner. He was advised complete rest and sick certifi cate No. 62 of 2.2.1981 for 27 days was submitted. 902 In these circumstances the petitioner could not be treated as on un authorised absence from work from 3.2.1981 when he had obtained G 92 on 2.2.1981 and had sent in his sick certificate and had observed all clue formalities of reporting sick as required under the rules. Had the cases been argued on merits, the petitioner, Narpat Singh would have shown to the Hon 'ble Court as to how he could not be treated on un authorised absence and that the dismissal order has been malafidely issued in a mechanical manner and cannot be substained. " That the matter of Narpat Singh was not argued on its individual merits is correct. Unless the factual averments made in para 9 are shown to be untrue, these may be consid ered adequate to vitiate the impugned order on the ground that it manifests non application of mind and is built on 'no evidence '. This is a good ground to entertain the Review Petition and issue notice to the other side for heating in the Court. In the majority judgment ; (451) paragraph 59 the proposition of law has been enunciat ed that the pleasure under Article 310(1) can be exercised even by an authority specified in the Act or rules made under Article 309 (proviso) in the passage quoted below: "Thus, though trader Article 310(1) the tenure of a govern ment servant is at the pleasure of the President or the Governor, the exercise of such pleasure can be either by the President or the Governor acting with the aid and on the advice of the Council of Ministers or by the authority specified in the Acts made under Article 309 or in rules made under such Acts or made under the proviso to Article 309 and in the case of clause (c) of the second proviso to Article 311 (2), the inquiry is to be dispensed with not on the personal satisfaction of the President or the Governor but on his satisfaction arrived at with the aid and on the advice of the Council of Ministers . " (Emphasis supplied) Serious Constitutional questions, such as the following, arise in this context: When the Constitution advisedly invests powers in regard to the exercise of pleasure on the incumbents of highest executive office can these powers be exercised by any other official, say Divl. Mechani 903 cal Engineer (DME)? By a process of interpretation (and not amendment) can it be so construed that what the President by virtue of Article 310 (1) can do, the DME of the Railway can do by virtue of the same Article? It would virtually amount to amending Article 310 (1) by adding the words "or by any other authority . ". That is to say to rewrite an article in the Constitution. Is this permissible? What is more, the power under Article 310 (1) is exercisable even by the President or the Governor, not on his personal satisfaction, but with the aid and on the advice of the Council of Ministers. Can the same power be exercised by a D.M.E. or any other lower functionary acting on his own, there being no question of his acting with the aid or advice of the council of Ministers? Can the DME who does not even act in the name of the President, surrogate for the President? It is certainly an important Constitutional issue which requires to be examined, but has not been examined, from this perspective though the point was debated. This is another ground to entertain the Review Petition and to issue a notice to the other side for heating in the Court. Another ground for entertaining the Review Petition is this: Will it not be tantamount to speaking in two voices to hold that principles of Natural Justice need not be complied with even in regard to the quantum of punishment to be inflicted on a workman, even though the law declared so far demands that even a black marketeer cannot be black listed without observing the principles of Natural Justice? Is a workman who 'sweats ' for the Nation not entitled to the same treatment as a black marketeer who 'bleeds ' the Nation? 5. An extremely serious and important ground for review also arises in the context of the doctrine enunciated in the following passages ; (522,523), paragraphs 170, 173: "It may be that the railway servants went on these strikes with the object of forcing the Government to meet their demands. Their demands were for their private gain and in their private interest. In seeking to have these demands conceded they caused untold hardship to the public and prejudicially affected public good and public interest and the good and interest of the nation. . . . In the context of an all India strike where a very large, number of railway servants had struck work, the railway services paralysed, loyal workers and superior officers assaulted and intimidated, the country 904 held to ransom, the economy of the country and public inter est and public good prejudicially affected, prompt and immediate action was called for to bring the situation to normal. In these circumstances, it cannot be said that an enquiry was reasonably practicable." The workers certainly have a right to struggle and strive for economic justice in a country the Constitution of which, in the preamble, proclaims it to be a "Sovereign SOCIALIST Secular Democratic Republic". Going on strike in the course of such a struggle cannot be characterized as holding the country to ransom and be frowned upon. Nor can they be condemned as seekers of private gain for endeavouring to remove their economic distress and plight to bring about a just society. And it cannot be said on that account that it is not "reasonably practicable" to hold the inquiry in the case of any workman if there is a country wide general strike by workers. Article 311 (2)(b) was surely not de signed by the Founding Fathers in order to ' enable 'braking ' a strike called in support of workers ' demands for socio economic justice. The issue therefore deserves to be exam ined in the light of this perspective and the Review Peti tions deserve to be admitted. On these grounds and in the light of the other grounds urged in the Review Petitions, the Review Petitions deserve to be heard in the Court. It is therefore directed that the Review Petitions be admitted, notices be issued to the Respondents, and the matters may be placed in the Court for further hearing.

The petitioners, who were Railway employees, were either dismissed or removed from service without holding any en quiry for striking work, paralysing railway services, as sualting and intimidating loyal workers and superior offi cers, etc. The writ petitions flied in the High Courts challenging the orders of dismissal or removal stood trans ferred to this Court, heard along with other writ petitions and civil appeals and by judgment dated 11th July, 1985 dismissed. The, petitioners sought review of the said judgment alleging that during the course of arguments, parties had proceeded on the assumption that the Court would decide only the seven questions framed by the then Hon 'ble the Chief Justice, and the individual petitions on merits would he dealt with either by the Division Benches of this Court or by the respective High Courts, that the parties addressed their arguments and submissions only on those general ques tions, that written submissions were made only in transfer case No. 55 of 1982 amongst all the railway matters, that none of the petitioners had been given any opportunity to argue their cases on merits, that the judgment under review dismissed all the transferred cases and thus all these petitions stand decided on merits also, that this has caused serious prejudice to their cases and, therefore, in the interest of justice, another opportunity should he given to argue the petitions on merits. Dismissing the Review Petitions, HELD: Per P.N. Bhagwati, C.J., V.D. Tulzapurkar, R.S. Pathak and D.P. Madon, JJ. 899 The Review Petitions are dismissed as there is no sub stance in the grounds urged. Per M.P. Thakkar, J. dissenting. There is good ground to entertain the Review Peti tions and issue notice to the other side for hearing. [904E] 2. There is substance in the grounds because no notices have been issued on the Review Petitions and the averments have not been controverted by the other side. In the majori ty judgment also it has not been stated that the averments are factually untrue. [901D E] 3. That the matter of Narpat Singh was not argued on its individual merits is correct. Unless the factual averments made in Para 9 of the Review Petition are shown to be un true, these may be considered adequate to vitiate the im pugned order on the ground that it manifests non application of mind and is built on 'no evidence '. [902C] 4. In the majority judgment the proposition. of law has been enunciated that the pleasure under Article 310(1) can be exercised even by an authority specified in the Act or rules made under the proviso to Article 309. [902D E] 5. The power under Article 310(1) is exercisable even by the President or Governor, not on his personal satisfaction, but with the aid and on the advice of the Council of Minis ters. Can the same power be exercised by a Divisional Me chanical Engineer or any other lower functionary acting on his own, there being no question of his acting with the aid or advice of the Council of Ministers? Can the D.M.E. who does not even act in the name of the President, surrogate for the President? It is certainly an important Constitu tional issue which requires to be examined, but has not been examined from this perspective though the point was debated. [903B D] 6. Will it not tantamount to speaking in two voices to hold that principles of Natural Justice need not be complied with even in regard to the quantum of punishment to be inflicted on a workman, even though the law declared so far demands that even a black marketeer cannot be black listed without observing the principles of Natural Justice? Is a workman who 'sweats ' for the Nation not entitled to the same treatment as a black marketeer, who 'bleeds ' the Nation? [903D E] 900 7. The workers certainly have a right to struggle and strive for economic justice in a country the Constitution of which in the Preamble, proclaims it to be a "Sovereign SOCIALIST Secular Democratic Republic". Going on strike in the course of such a struggle cannot be characterized as holding the country to ransom and be frowned upon. Nor can they be condemned as seekers of private gain for endeavour ing to remove their economic distress and plight to bring about a just society. And it cannot be said on that account that it is not "reasonably practicable" to hold the enquiry in the case of any workman if there is a country wide gener al strike by workers. [904B 904D] 8. Article 311(2)(b) was surely not designed by the Founding Fathers in order to enable 'breaking ' of a strike called in support of workers ' demands for socio economic justice. The issue therefore deserves to be examined in the light of this perspective. [904D]

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Civil Appeal NOS. 64 65 of 1969. (From the Judgment and Decree dated 1 12 61 of the Madhya Pradesh High Court in Misc. First Appeal No. 43 of 1959). section K. Gambhir for the appellant in CA 64 and Respondent in CA 65/69. L. Sanghi, K. John and J. Sinha for the respondent in CA 64 and appellant in CA 65/69. The Judgment of Jaswant Singh and R. section Pathak, JJ. was delivered by Jaswant Singh, J. A. P. Sen, J. gave a dissenting opinion. JASWANT SINGH, J. These two cross appeals by certificates of fitness granted by the High Court of Madhya Pradesh at Jabalpur are directed against the judgment and decree dated December l, 1961 of the said High Court dismissing the Misc. (First) Appeal No. 42 of 1959 preferred by the appellant from the Award dated December 20, 1958 of the II Additional District Judge, Raigarh in Miscellaneous Judicial Case No. 59 of 1958 being a reference under section 18 of the Land Acquisition Act, made at the instance of the appellant in 13 817SCI/78 186 respect of the Award dated August 23, 1957 of the Land Acquisition officer, Raigarh. The facts giving rise to these appeals are: on an undertaking given by him to pay full compensation with interest from the date of possession to the date of payment of compensation as provided in the Land Acquisition Act, 1894 (hereinafter referred to as 'the Act ') the District Engineer, South Eastern Railway, Raigarh, took advance possession on January 17, 1957 of five plots of agricultural land admeasuring 3.38 acres and another plot of agricultural land admeasuring 0.14 acres adjoining the railway track situate in village Darogamuda, Tehsil and District Raigarh, a suburb of Raigarh belonging to respondents I and 2 respectively for doubling the railway line between Rourkela and Durg in the South Eastern Railway. Subsequently Notification dated February 8, 1957 under section 4(1) of the Act for acquisition of the aforesaid plots of land was issued and published in the Government Gazette dated February 15, 1957. This was followed on March 21, 1957 by a notification under section 6 of the, Act. Although in the r statements filed by them under section 9(2) of the Act the respondents claimed compensation at the rate of Rs. 32,670/ per acre i.e. at the rate of /12/ per square foot on the ground that the plots of land in question had a great potential value as a building site and Rs. 500/ for improvements and Rs. 100/ as the value of one tree, the Special Land Acuisition officer, Raigarh by his award dated August 23, 1957 awarded compensation at the rate of Rs. 3,327/14/ per acre which roughly worked out at /1/6 per square foot on the basis of the statement of sales furnished by A.S.L.R. (L.A.) prepared by Jujhar Singh N.A.W.I. Not satisfied with the quantum of compensation, the respondents made an application to the Special Land Acquisition officer requesting him to refer the matter to the court under section 18 of the ;1 Act. According to the request of the respondents, the Special Land . Acquisition officer made the aforesaid references to the II Additional District Judge, Raigarh, who by his award dated December 20, 1958 enhanced the rate of compensation to /4/ per square foot and awarded Rs. 36,808/4/ and Rs. 1,524/8/ to respondents l and 2 respectively as compensation. The Additional District Judge also allowed the solatium at the rate of 15% amounting to Rs. 5.521/4/ and Rs. 228/12/ to respondents 1 and 2 respectively. Aggrieved by the said , Award of the II Additional District Judge, the appellant preferred an appeal to the High Court of Madhya Pradesh at Jabalpur which was registered as Miscellaneous (First) Appeal No. 43 of 1959. In the said appeal, the respondents filed cross objections claiming enhancement of compensation by Rs. 84,518.39 P. The High Court by its 187 judgment dated December 1, 1961 dismissed the aforesaid appeal preferred by the appellant but allowed the cross objections filed by the respondents holding the reasonable rate of compensation to be /8/per square foot. Consequently respondent No. 1 was held entitled to Rs. 73,616 8 O as compensation and Rs. 11,042 8 0 as solatium and respondent No. 2 was held entitled to Rs. 3,049 0 0 as compensation and Rs. 457 8 O as solatium. It is against this judgment of the High Court that the present appeals are directed. Appearing for the appellant, Mr. Gambhir while admitting that in an appeal under Article 136 of the Constitution, the Court is only concerned with finding out whether the principles on the basis of which compensation has been computed for acquisition of land under the Act have been rightly applied or not and cannot re appraise the evidence, has urged that the Additional District Judge and the High Court have erred in treating the land in question which was primarily an agricultural land as abadi land overlooking that it had not been declared as such. Mr. Sanghi has on the other hand urged that even according to the findings of the Additional District Judge, who made the spot inspection, as also of the High Court, it is abundantly clear that the land in question was Abadi land and has been rightly treated as such. Mr. Sanghi has further urged that the said site has great potentialities as building site. The question as to whether a land has potential value of a building site or not is primarily one of fact depending upon several factors such as its condition and situation, the user to which it is put or is reasonably capable of being put, its suitability for building purposes, its proximity to residential, commercial and industrial areas and educational, cultural or medical institutions, existing amenities like water, electricity and drainage and the possibility of their future extension, whether the nearby town is a developing, or a prospering town with prospects of development schemes and the presence or absence of pressure of building activity towards the land acquired or in the neighbourhood thereof. the instant case, the fact that the land in question has a great potential value as a building site is evident not only from the observations made by the Special Land Acquisition officer himself in his aforesaid award to the effect that the land has assumed semi abadi site hut also from the following observations made in his judgment dated December 20, 1958 by the Additional District Judge who had the advantage of inspecting the site: "The land abuts Raigarh town. It is within Municipal limits and the nazul perimeter extends upto it. To the east of 188 the plot there are some kutcha buildings inhabited by respectable persons. To the North is a Municipal road leading to the railway quarters to the west. To the west beyond the railway quarters, there is further habitation` and the locality is called "Banglapara" within Municipal limits. The plot did have a potential value as a building site and it is further supported by the fact that the plot has been used by the Railway authorities for construction of staff quarters thereon though the land was acquired for doubling the rail way line. " It is also not disputed that the Special Land Acquisition officer did not lead any evidence worth the name to show the price of the comparable sites in question and remained content with the production only of the sale statement made by Jujhar Singh, N.A.W.I. Now the sale statement consisted mostly of sales relating to the year 1951 which is not relevant for the question in hand. Moreover, the sale statement by it self without examining either the vendors or the vendees or the persons attesting the sale deeds is not admissible in evidence and can not be relied upon. The sale deed dated December 14, 1956 in favour of Dr. Das for 4,800 square feet of land out of contigious Khasra No. 256 in lieu of Rs. 2,000/ i.e., at approximately 6 1/2 annas per square foot (which has been relied upon by the Additional District Judge and the High Court) could be taken as a safe guide for determine nation of the compensation. From the material adduced in the case, it appears that Raigarh is a growing town, that instead of utilising the land for doubling the railway track, the railway has built staff quarters thereon, that on three sides of the acquired land, there already existed pucca buildings and on the fourth side, there is a metalled road. It is also in evidence that some lawyers have put up some constructions near the sites in question. Taking all the facts into consideration. it cannot be said that the basis on which the Additional District Judge and the High Court proceeded is wrong or that the quantum of compensation awarded by the High Court is in any way excessive or exorbitant. As neither the interest nor compensation on account of severance was claimed in the High Court either by Dr. Harisingh Thakur or by Tikam Singh Thakur, we do not think they can justifiably put up claims in that behalf. Mr. Sanghi appearing on their behalf has fairly stated that he would not like to press his cross appeal. In the result, we do not find any merit in either of the aforesaid appeals. W. would accordingly dismiss them with costs. SEN J. I have had the advantage of reading the judgment by my learned brother Jaswant Singh. Since the appeal involves an important 189 question affecting valuation which has been overlooked by the High Court, I would like to say a few words of my own. Normally, this Court does not interfere in appeal with the valuation by the High Court in land acquisition cases, unless the judgment cannot be supported, as it stands, either by reason of a wrong application of principles or because some important point in evidence has been overlooked or mis applied: The Special Land Acquisition officer, Bangalore vs Adinarayan Setty(1). With respect, I venture to say that the judgment of the High Court cannot be supported by reason of a wrong application of principles. It overlooked the fact that there was no discernible basis on which the Additional District Judge could have changed the mode of valuation adopted by the Special Land Acquisition officer treating the land acquired to be agricultural land and in awarding compensation upon the basis as if it were a building site. Indeed, there was no atempt on their part to determine the ' 'intrinsic character of the land", namely, whether the land acquired should be classified as agricultural land or not. In the present case, the High Court obviously fell into an error in overlooking the, fact that the acquired land situate in village Darogamuda, admeasuring 3.52 acres, was, on the 8th February, 1957 i.e. On the date of the issue of the notification under section 4(1) of the Act, agricultural land. It was recorded as a raiyati land belonging to the two claimants, Dr. Harisingh Thakur and his brother Vikram Singh Thakur who were ex gaontiyas of village Darogamuda. The land was not recorded as abadi as wrongly assumed by the High Court. Perhaps it was misled by the mis description of the land as abadi in the reference made by the Collector under section 18(1). This is an admitted position between the parties. In response to the notice of admissions and denials of documents served by the claimants, the Collector admitted panchsala khasra for the years 1952 53 to 1953 54 and kistbandi khatouni for the years 1952 53 and 1953 54. The claimant Dr. Harisingh Thakur, AW1 admits during his crossexamination that till the month of December 1956, the lands were actually under his cultivation and he had reaped the crops before delivering possession of the same on the 17th January, 1957 to the District Engineer, South Eastern Railway. He further admits that throughout the land was under cultivation i.e. from the time, of his forefathers. In fact, Jujhar Singh NAW1, Assistant Superintendent Land Records, who was at the relevant time a Revenue Inspector, states that the,. land (1) [1959] Supp. (1) S.C.R. 404. 190 acquired was a paddy field and was surrounded by agricultural lands. That being so, the District Judge, was clearly wrong in treating the land to be abadi and calculating compensation on the footing of its being a building site. In awarding compensation at a flat rate of Rs. 3,327.87 P. per acre, the Special Land Acquisition officer took notice of the fact that the land is situate in village Darogamuda, a suburb of Raigarh, which is a town of great commercial importance, though beyond its nazul perimeter. He also took notice of the fact that the land abuts the railway track and there were agricultural fields on two sides. On the other two sides, there existed kutcha hutments of backward classes and a few railway buildings. The award of compensation at the rate of Rs. 3,327.87 P. per acre was based on average of sales of lands in recent years as prepared by Jujhar Singh, Revenue Inspector NAW 1. The Special Land Acquisition officer accordingly observed: "The average value based on the above noted sales comes to Rs. 3,327/14/ per acre and in my opinion it truly re presents the average market value of lands in this predominantly agricultural locality which has assumed semi abadi site value due to the constructions of houses mostly by low class people besides a few buildings of Railway Department. It is for this reason that the average value per acre comes to as much as Rs. 3,327/14/ per acre else the lands in question would have fetched lower price, available in respect of agricultural lands to which class they really belong and stand assessed as such till today. " While it is no doubt true, as my learned brother Jaswant Singh has rightly observed, that the statement of average of sales, prepared by Jujhar Singh NAW 1, was not admissible in evidence unless the Collector proved the transactions in question, upon which it was based, there is no denying the fact that the acquired land was nothing but agricultural land and the mode of valuation had necessarily to be upon that basis. Now, if the purpose for which the land was acquired, i.e., for the construction of staff quarters in connection with the doubling of the railway line by the South Eastern Railway, has no bearing on the question of valuation, the future possibilities of the land, which admittedly was agricultural land, lying in the vicinity of Raigarh if applied to the most lucrative use, having regard to its the then condition, was very little as a building site. The land was lying undeveloped and undiverted. Unless there was a development scheme, the land could not 191 be valued as a building site. The land could, however, be put to that use if there was such development scheme. At the time of the notification under section 4(1), there was no recent building activity near about the land, which was either under cultivation or lying desolate. But as l have already said, the land could be put to a better use provided it was fully developed as a building site. The claimants were, therefore, entitled to the evaluation of the land as agricultural land with an additional allowance being made for its future potentiality as a building site. I just cannot imagine what could be the utility of the acquired land on a building site, looking to its proximity to the railway track. It would, indeed, be very little. In a reference under 9. 18 of the Act, the burden of proving that the amount of compensation awarded by the Collector is inadequate lies upon the claimant, and he must show affirmatively that the Collector had proceeded upon a wrong basis. The nature and the burden of establishing that he was wrong, depend on the nature of the enquiry held by him. When the proceedings before the Collector disclose that the award was not reasonably supported by the material before him, or when the basis was the application of a 'multiple ' which could not be justified on any rational ground, the burden can be discharged by a slight evidence. But that is not the case here. The claimants have led no trustworthy evidence. It is equally well settled that where the claimant leads no evidence to show that the conclusions reached in the award were inadequate, or, that it offered unsatisfactory compensation, the award has to be confirmed. Upon a compulsory acquisition of property, the owner is entitled to the value of the property in its actual condition, at the time of expropriation, with all its advantages and with all its possibilities, excluding any advantage due to the carrying out of the claim for the purpose for which the property is acquired. In Vyricharla Narayana Gajapatjiraju vs Revenue Divisional Officer Vizagapatnam(1) the Privy Council state: "For the land is not to be valued merely by reference to the use to which it is being put at the time at which the value has to be determined. but also by reference to the uses to which it is reasonably capable of being put in the future. It is possibilities of the land and not its realized possibilities that must be taken into consideration. " The value of the acquired property, with all its possibilities has to be ll adjudged on the material on record. (1) 66. I.A. 104. 192 The market price must be fixed with reference to the date of the. notification under section 4 irrespective of any trend, if any, for an increase in the value thereof. The basis for determination of the market value of tel land within section 23 (1) (i) of the Act is the value of the land to the owner. Only such transactions would be relevant which can fairly be said to afford a fair criterion of the value of the property as at the date of the notification. That test is clearly not fulfilled in the present case. Clause fifthly in section 24 interdicts the court from considering any prospective increase in value due to acquisition. Market value of the land acquired has to be fixed with reference to the date of notification under section 4 (1) . In Vyricharla Narayana Gajapatiraju vs Revenue Divisional Officer, Vizagapatam (supra) the Privy Council observed that where the owner is a person who could turn the potentiality of the land into account, it is immaterial that the utilization of the same potentiality is also the purpose for which the land is acquired. The Underlying principle is that a speculative rise in price of land due to acquisition should not be an element which should enter into computation. Sometimes the prices shown in sale deeds executed subsequent in point of time are not the actual prices paid. The sales may be. unreal and may not reflect the true value of the land. There always elapses a certain interval between the time when the intention to acquire Ea certain land first becomes known and the actual notification under section 4(1) is issued. Here though the notification under section 4(1) was issued on 8th February, 1957, but the claimants had, in fact, delivered the possession to the District Engineer, South Eastern Railway on the 17th January, 1957, and were indeed, as it appears from the evidence, aware of the fact that the land was being acquired by the South Eastern Railway much earlier, i.e., in December, 1956. In view of this, the prospective rise in value, if any, has to be kept out of consideration. the principles to determine the quantum of compensation are contained in section 23(1) of the Act. The court in fixing the amount has to take into consideration the prevailing market value of the land at The date of the notification under section 4(1) and the said market value has to be determined by reference to the price which a willing seller might have reasonably expected for similar property from a willing purchaser. The underlying principle of fixing the market value with reference to comparable sales is to reduce the element of speculation. In a comparable sale, the features are: (i) it must be within a reasonable time of the date of notification under section 4.(1); (ii) it should be a bona fide transaction; (iii) it should be a sale of the land acquired or of the land adjacent to the acquired; and (iv) it should possess 193 similar advantages. Before such instances of sales can be considered there must be material evidence either by the production of the sale deeds or by examining the parties to the deeds or persons having knowledge of the sales, to prove that the transactions are genuine. In the light of these principles, the three sale deeds relied upon by the High Court, Ext. P 14, Ext. P 15 and Ext. P 17, pertaining to the small portions of the acquired land executed by the claimants, could not obviously be the basis for the determination of the market value of the land. These sale deeds had clearly been brought into existence by the claimants in quick succession, in an attempt to inflate the price of the land, after they became aware of the proposed acquisition. Of these, the land covered by the sale deed Ext. P 14, dated 14th December, 1956 executed by Tikam Singh Thakur, i.e., just a month before the delivery of the possession, shows a sale of a plot measuring 4,800 sq.ft. to Dr. Dhirendra Chandra Das, AW 2, for a price of Rs. 2,000/ . The rate works out to about 42P per sq. It evidently could not afford a fair criterion of the value of the property on the date of the notification under section 4(1). Dr. Das admits that he is in Railway service and when he purchased the land he knew that it was being acquired by the South Eastern Railway. No doubt Dr. Das is a willing friend of Dr. Harisingh Thakur prepared to lend a helping hand but, by no stretch of imagination, could he be treated to be a willing purchaser. in the true sense of the term. Though Dr. Das asserts that he had purchased the land for building a house, he admits that he did not construct upon it because he would have been required to invest considerable money for levelling the land making it fit to be utilised as a building site. This transaction indubitably does not appear to be a real sale and could not furnish any guide for determination of the true market value. I am afraid, the other two sale deeds, Ext. P 15 dated 19th December, 1956 and Ext. P 17 dated 21st February, 1957 executed by Dr. Harisingh Thakur, by which he sold 300 sq. Of the acquired land to Jhallu Dani, AW 13 for Rs. 150/ and 280 sq. ft to Baido, AW 15, for Rs. 200/ were, in fact, fictitious sales effected by him after delivery of possession to the South Eastern Railway. The transactions speak for themselves. Indeed, Ext. P 17 was executed by him after issue of the notification under s.4(1). The first sale was effected by the claimants to show the price of the land to be 50P per sq. They were evidently not satisfied by this and, therefore, brought the other sale deed into existence, a few days after the notification, showing the rate to be about 72P per sq. It is needless to stress that such fictitious and unreal transactions which are but 194 speculative in nature could not be taken into account by the High Court at all. In Raghubans Narain Singh vs The Uttar Pradesh Government (1) this Court quoted with approval the following passage from one of its earlier decision in N. B. Jeajabhoy vs The District Collector, Thana,(2) where it was said: "the question therefore turns upon the facts of each case. In the context of building potentiality many questions will have to be asked and answered: whether there is pres sure on the land for building activity, whether the acquired land is suitable for building purpose, whether the extension of the said activity is towards the land acquired, what is the pace of the progress and how far the said activity has ex tended and within what time, whether buildings have been put up on the lands purchased for building purposes, what is the distance between the built in land and the land acquired and similar other questions will have to be answered. It is the overall picture drawn on the said relevant circumstances that affords the solution. " In Raghubans Narain Singh 's case (supra) there was evidence to the effect that there was a school building near the acquired land, that the land abutted on the road and that some houses had been built on the opposite side of the road. It was nevertheless held by this Court that all this did not constitute evidence of building potentiality. It was pointed out that there should be evidence, on the record, 'of building activity of a substantial nature, being carried on in the neighbourhood of the acquired land, at about the time when the notification was issued '. There is complete absence of such evidence in this case. It is beyond doubt that the acquired land was agricultural land, and had not been diverted for non agricultural purposes. Indeed, the claimant, Dr. Harisingh Thakur had himself admitted the land to be agricultural land. The land is on the outskirts of Raigarh town but that itself does not show that the land had a potential value for building purposes. It was for the claimants to show that at the relevant time there was a tendency of the town to develop in that direction and that prior to the acquisition new buildings had been constructed in the neighbourhood. Topography of the acquired land which abuts the railway track is given by Jujhar Singh, NAW 1, the then Revenue Inspector, who states that actually paddy used to be grown on the land. To the north of this land, there was cultivation. Beyond it, there was a 10 ft. (1) [1967] I S.C.R. 489. (2) C.A. Nos. 313 to 315 of 1965 decided on August 30, 1965. 195 broad pucca road. About three furlongs way from the land was the house of Ambalal. About one and a quarter miles away there was a skin godown. In the east, there were small huts. Beyond them, in the east, at a distance of about half a furlong, there was the house of Jairamvalji. In the west, about a furlong away, there was an old bungalow. At about the same distance, there is the burial ground. In between and all around, there were agricultural fields. That is the total evidence of the case. On this evidence it cannot be said that valuation should be made on the basis of the potentiality of the land as building site. In the absence of comparable sales, the only other alternative to adopt is the capitalised value. Compensation in respect of the agricultural land should be allowed on the basis of 20 years ' purchase. The capitalisation basis cannot, however, be accepted in a case where, as in the instant case there is no evidence of the profits yielded from the land. I would, therefore, for these reasons allow the appeal of the State of Madhya Pradesh. It is with reluctance that I have written this separate opinion. There has never been a public undertaking in this country Governmental, Municipal, city or industrial, but that the land holder has generally secured anything from four to forty times as much for the land as its agricultural price, i.e., many times its real value. This result unfortunately springs from a general tendency of District Judges in hearing a reference under s.18 of the Land Acquisition Act, 1894, to assume that purely agricultural lands, merely by their proximity to a city or town, become endowed with 'special adaptability ' as a building site. While it is not suggested that unfairly low value should be offered, on the other hand the temptation to over generosity must be equally resisted. Such generosity at the public expense reacts against the development and against the prosperity of the country and imposes an unnecessary burden on the taxpayer. Per Curiam In accordance with the opinion of the majority, the appeals are dismissed with casts. N.V.K. Appeals dismissed.

Agricultural land belonging to the respondents was acquired by the railways for doubling the railway line, compensation payable for the acquired land was fixed at Re. 1/6 per sq. But the respondent claimed Re. /12/ per sq. On the ground that the land had a great potential value as a building site. On reference the Additional District Judge enhanced the rate of compensation to Re. /41 per sq. and allowed solatium at 15%. On appeal the High Court enhanced the compensation to Re. /8/ per sq. on further appeal to this Court it was contended on behalf of the appellants that the courts below had erred in treating the land, which was primarily agricultural land, as abadi land overlooking that it had not been declared as such. [Per Jaswant Singh & Pathak, J. Sen, J. dissenting] Dismissing the appeals. ^ HELD: (1) Taking all the facts into consideration it cannot be said that the basis on which the Additional District Judge and the High Court proceeded was wrong or that the quantum of compensation awarded by the High Court was in any way excessive or exorbitant. [188 F] (2) The question as to whether a land has potential value as a building site or not is primarily one of fact depending upon several factors such as its condition and situation, the user to which it is put or is reasonably capable of being put, its suitability for building purposes, its proximity to residential, commercial and industrial areas and educational, cultural or medical institutions, existing amenities like water, electricity and drainage and the possibility of their future extension, whether the nearby town is a developing or a prospering town with prospects of development schemes and the presence or absence of pressure of building activity towards the land acquired or in the neighbourhood thereof. [ 87F F] (3) In the instant case it was clear from the observations of the Special Land Acquisition officer and the Addl. District Judge that the land had great potential value as a building site. Moreover the Spl. Land Acquisition officer did not lead any evidence worth the name to show the price of comparable sites but remained content with the production only of the sale statement prepared by the Revenue Inspector. The sale statement consisted mostly of sales relating to the year 1951 which is not relevant to the question on hand. Without examining the vendors or vendees, the sale statement was not admissible in evidence and could not be relied upon. From the material on record it was clear that Raigarh was a growing town. Instead of utilising the land for doubling the railway track 184 the railway had built staff quarters. On three sides of the land there were pucca buildings and on the fourth side there was a metalled road. [187G H 188C D. [Per Sen, J.(dissenting)] 1. Upon compulsory acquisition of property, the owner is entitled to the value of the property in its actual condition at the time of expropriation with all its advantages and with all its possibilities, excluding any advantage due to the carrying out of the claim for the purpose for which the property is acquired. The value of the acquired property with all its possibilities had to be adjudged on the material on record. [191 F, H] Vyricharla Narayana Gajapatiraju vs Revenue Divisional officer, Vizagapatnam, 66 IA 104, followed. The market price must be fixed with reference to the date of the notification under section 4 irrespective of any trend, for an increase to the value thereof. The basis for determination of the market value of the land within section 23(1)(i) of the Act is the value of the land to the owner. Only such transactions would be relevant which can fairly be said to afford a fair criterion of the value of the ,, property as at the date of the notification. That test is clearly not fulfilled in l? the present case[192A B] 3. In a reference under section 18 of the Act the burden of providing that the amount of compensation awarded by the Collector is inadequate lies upon the claimant, and he must show affirmatively that the Collector had proceeded upon a wrong basis. The nature and the burden of establishing that he was wrong, depend on the nature of the enquiry held by him. When the proceedings before the Collector disclose that the award was not reasonably supported by the material before him or when the basis was the application of a "multiple" which could not be justified on any rational ground, the burden can be discharged by a slight evidence. But that is not the case here. [191C D] 4. In the present case the High Court fell into an error in overlooking the fact that the acquired land was agricultural land. It was recorded as a raiyati land. The land was not recorded as abadi as wrongly assumed by the High Court. The claimants admitted that the land was actually under cultivation. The Revenue Inspector stated that the land was a paddy field and was surrounded by agricultural lands. That being so the District Judge was clearly wrong in treating the land to be abadi and calculating compensation on the footing of its being a building site. [189E 190A] 5. Secondly, the land was lying undeveloped and undiverted. Unless there was a development scheme the land could not be valued as a building site. At the time of the notification under section 4(1) there was no recent building activity near about the land. The land could be put to better use provided it was fully developed as a building site. The claimants were therefore entitled to the valuation of the land as agricultural land with an additional allowance for its future potentiality as a building site. [190H 191B] 6. In fixing the amount of compensation the court has to take into consideration the prevailing market value of the land at the date of the notification unders. 4(1) and such market value has to be determined by reference to the price which a willing seller might have reasonably expected for similar property from 1 a willing purchaser. In a comparable sale the features are: (1) it must be 185 within a reasonable time of the date of notification under section 4(1), (2) it should be a bona fide transaction; (3) it should be a sale of the land acquired or of the land adjacent to the land acquired and (4) it should possess similar advantages. [92G 193A] 7. In the instant case the sale deeds relied upon by the High Court could not obviously be the basis for the determination of the market value of the land. These sale deeds had clearly been brought into existence by the claimants in quick succession in an attempt to inflate. the price of the land after they became aware of the proposed acquisition. The transactions which were examined by the High Court were apparently fictitious and unreal and are speculative in nature and could not be taken into account at all. [193B C, 193H 194A] 8. On the evidence produced it could not be said that valuation should be made on the basis of potentiality of the land as building site. There is complete absence of evidence of building activity of a substantial nature being carried on in the neighbourhood of the acquired land at about the time when the notification was issued. The claimants themselves did admit that the land was agricultural land. [195B, 194F C] Raghubans Narain Singh vs The U.P. Govt. , ; N. B. Jeejabhoy vs The District Collector, Thana, C.A. Nos. 313 to 315 of 1965 decided on Aug 1965: referred to. In the absence of comparable sales, the only other alternative to adopt is the capitalised value. Compensation in respect of the agricultural land should be allowed on the basis of 20 years ' purchases. The capitalisation basis cannot, however, be accepted in a case where there is no evidence of the profits yielded from the land. [195C]

3911.txt

Civil Appeal No. 1 of 1956. On appeal from the judgment and order dated the 2nd/21st day of September 1955 of the Madras High Court in Writ Appeal No. 65 of 1955 arising out of the order dated the 5th day of May 1955 of the said High Court in Writ Petition No. 158 of 1955. G.S. Pathak, B. Ganapathy Iyer and G. Gopalakrishan, for the appellant. M. O. Setalvad, Attorney General for India, B.K.B. Naidu and Naunit Lal, for respondent No. 2. 1956. March 15. The Judgment of the Court was delivered by IMAM J. This appeal comes before us on a certificate granted by the Madras High Court that the case was a fit one for appeal to this Court as it involved two important questions, namely, the powers of the Government under section 64 A of the , as amended by the Motor Vehicles (Madras Amendment) Act, 1948 for the State of Madras (hereinafter referred to as the Act), to interfere with the orders of subordinate Transport Authorities on the ground of propriety and the limits of judicial review which the courts have under article 226 of the Constitution of India. The appellant and respondent No. 2, had applied for stage carriage permits in the Mayuram Town Service for routes Nos. 1 and 2. These applications, along with others, were considered by the Regional Transport Authority, Tanjore. By its order dated the 31st of May, 1954, it granted a permit for route No. 1 to the appellant and for route No. 2 to respondent No. 2. Both the appellant and respondent No. 2 being dissatisfied appealed under section 64 of the Act to the appropriate authority, the Central Road Traffic Board (hereinafter referred to as the Board), but the appeals were dismissed by its order dated the 18th of August, 1954. As section 64 A conferred upon the State Government certain powers, which have 258 been described in this case as revisional powers, the appellant and respondent No. 2 filed representations thereunder before the State Government against the orders of the Regional Transport Authority and the Board. The State Government set aside the orders passed by the aforesaid authorities and directed that permits for both the routes Nos. 1 and 2 be issued to respondent No. 2. Against this order, the appellant filed an application under article 226 of the Constitution in the High Court for the issue of a writ of certiorari. The application was heard by a single Judge who issued the requisite writ. Against his decision there was a Letters Patent appeal by respondent No. 2, which was allowed and the decision of the single Judge was set aside. The ground upon which the Regional Transport Authority granted the appellant and respondent No. 2 permits for routes Nos. 1 and 2 respectively was that they were experienced and were operating town buses at Kumbakonam. This opinion was approved by the Board which also thought that a certain amount of healthy competition was required in the Mayuram Town routes. It also considered that the Regional Transport Authority was within its rights in not considering the aspect of sector coverage by muffassil buses of the appellant and respondent No. 2. It appears that respondent No. 2 was covering the entire route No. 1 and the appellant was covering a portion of route No. 2. The State Government in setting aside the orders of the Regional Transport Authority and the Board passed the following order: "As between the claims of Sri Raman & Raman Ltd. and Sri Sathi Vilas Bus Service, the Government consider that it will be in the interest of the public to grant both the permits to Sri Sathi Vilas Bus Service, Poryar, since he has better facilities for operation and will be able to serve the public better. The Government of Madras therefore sets aside as improper the order of the Central Road Traffic Board No. R 27792/A2/54 dated the 18th of August, 1954 in so far as it confirms the order of the Regional Transport Authority, Tanjore granting one permit of route 259 No. 1 to Sri Raman & Raman Ltd. and directs that the two permits in question be granted to Sri Sathi Vilas Bus Service, Poryar". Before dealing with the submissions made on behalf of the appellant, it would be desirable to make reference to certain provisions of the Act concerning the grant of permits. Section 42 of the Act prohibits an owner of a transport vehicle from using or permitting it to be used in any public place save in accordance with the conditions of a permit granted by a Regional Transport Authority. Section 43 gives certain powers to the State Government to control road transport. Section 44 authorises the State Government to constitute a State Transport Authority as well as a Regional Transport Authority to perform certain functions mentioned therein. Section 47 sets forth certain matters which a Regional Transport Authority shall bear in mind in deciding to grant or to refuse a stage carriage permit. Section 64 enables a person aggrieved by the order of the Regional Transport Authority, with respect to matters men tioned therein, to appeal to the prescribed authority. Section 64 A states: "The State Government may, of its own motion or on application made to it, call for the records of any order passed or proceeding taken under this Chapter by any authority or officer subordinate to it, for the purpose of satisfying itself as to the legality, regularity or propriety of such order or proceeding and after examining such records, may pay pass such order in reference thereto as it thinks fit". Mr. Pathak, for the appellant, contended that having regard to the terms of section 64 A, there were two stages for the exercise of power thereunder by the State Government. The first stage was the condition precedent for assumption of jurisdiction for the exercise of that power. A collateral fact had to be decided, namely whether the order passed by any authority or officer subordinate to the State Government was in fact illegal, irregular or improper. If the decision was in the affirmative, then and then only would the State Government have jurisdiction to revise the 260 order complained against. The decision of the State Government both with respect to questions of fact and law could be examined by a court in a proceeding for the issue of a writ of certiorari and such court in doing so could decide whether the order which was revised by the State Government was or was not illegal, irregular or improper. In the present case, there was no question of illegality or irregularity in the orders of the Regional Transport Authority and the Board. The only question was as to whether these orders were improper. The propriety of an order does not necessarily mean that it must be correct order. There must be something extraneous to the order it self which made it improper. Merely because the State Government took a different view of the facts to that of the authority or officer subordinate to it would not make the order of such authority or officer improper. The second stage, namely, the passing of an order as the State Government thought fit, 'could only be reached after a decision had been arrived at on the condition precedent conferring jurisdiction on the State Government to revise an order. The substantial ground upon which the State Government revised the order of the authority subordinate to it was that respondent No. 2 had better facilities for operation and would, therefore, be able to serve the public better. The authorities subordinate to the State Government, however, had the representations of the appellant and respondent No. 2, as well as other applicants, which fully stated all material particulars in this respect and it could not be said that these matters were not considered by them. The orders of the subordinate authorities accordingly must be read to mean that as between the appellant and respondent No. 2 both bad equal facilities for operation and that things being equal between them in every way, one permit should be granted for one route to the appellant and another for another route to respondent No. 2. There could be nothing improper in this. The condition precedent to the exercise of jurisdiction to revise the order was therefore absent and the State Government acted in excess of its 261 jurisdiction in revising the orders of its subordinate authorities. Mr. Pathak further contended that there was an error on the face of the record in the order passed by the State Government as it had refused to consider seniority or experience in motor transport as a factor for the granting of a permit and it thought that it could come to any conclusion it liked and reference was made to paragraph 8 of the affidavit filed on behalf of the State Government in the High Court. On the basis of that affidavit and that paragraph, it was also urged that the error on the face of the record was that the Government acted on an erroneous idea of its own jurisdiction. He further contended that section 64 A was an invalid provision. In the alternative, he urged that a court or authority, in the exercise of its revisional powers, cannot take a contrary view of the facts to that taken by the subordinate court or authority. Exercise of such revisional power could only be made in cases where the subordinate court or authority had taken a perverse view of the facts and had arrived at a conclusion which no reasonable person could have arrived at. In support of his first contention, Mr. Pathak relied upon Paragraph 116 at page 59 of Halsbury 's Laws of England, third edition, Vol. 11. It appears from an examination of that paragraph and paragraph 117 at page 60 of the same Volume that there may be cases where the jurisdiction of an inferior tribunal may depend upon the fulfilment of some condition precedent or upon the existence of some particular fact. Such a fact is collateral to the actual matter which the inferior tribunal has to try, and the determination of whether it exists or not is logically and in sequence prior to the determination of the actual question which the inferior tribunal has to try. In such a case, in certiorari proceedings, a court can enquire into the correctness of the decision of the inferior tribunal as to the collateral fact and may reverse that decision if it appears to it, on the 262 materials before it, to be erroneous. There may be tribunals, however, which, by virtue of legislation constituting them, have the powers to determine finally the preliminary facts on which the further exercise of their jurisdiction depends. With respect to them, in such cases, their decision even if wrong on facts or law cannot be corrected by a writ of certiorari. In cases where the fact in question is a part of the very issue which the inferior tribunal has to enquire into, a court will not issue a writ of certiorari, although the inferior tribunal may have arrived at an erroneous conclusion with regard to it. In the present case, if there was at all any collateral fact to be decided, it was whether the appropriate authority had in fact passed any order in respect of which powers under section 64 A could be exercised. It is not disputed that in fact orders were passed by the Regional Transport Authority and the Board, authorities subordinate to the State Government, and that these orders existed when the appellant and respondent No. 2 moved that Government to exercise its powers under section 64 A. The condition precedent and the existence of a collateral fact in that way for the exercise of powers under that section were therefore present when the State Government exercised its powers. In order to satisfy itself whether the order of an authority subordinate to it was legal, regular or proper, the State Government was not deciding the existence of a collateral fact but the issue itself as to the legality, regularity or the propriety of the order. The satisfaction of the State Government in this respect would be an expression of its opinion and not the determination of a fact upon which depended its jurisdiction to exercise its powers under section 64 A. What is the nature of the functions performed under the Act by the Regional Transport Authority, the Board and the State Government in the matter of granting or refusing to grant a permit may now, be considered. That they are not judicial is accepted, but, it is said, they are not administrative but quasi judicial and therefore amenable to the jurisdiction of 263 a court possessing the power to issue a writ of certiorari. In proceedings under sections 47, 64 and 64 A of the Act there is no determination of any individual 's rights and from that point of view the functions of these authorities may be regarded as executive or administrative. On the other hand, it may be said that a person has the fundamental right to carry on his business of plying buses and therefore has the right to have the statutory functions of these authorities properly exercised in which case they would be quasi judicial functions. Assuming this to be so, it has yet to be seen whether the State Government acted in excess of its legal authority. Chapter IV of the Act contains provisions concerning the control of transport vehicles. The Act authorises the State Government to constitute a State Transport Authority and Regional Transport Authorities, and under section 43, subject to its provisions, it can control road transport. In the first instance, the authority to grant or refuse to grant a permit is vested in the Regional Transport Authority, but its order is not final as a dissatisfied party can appeal against the order under section 64 to the appropriate authority. Before section 64 A was inserted into the Act by an Act of the legislature of the State of Madras, it might have been possible to contend that the order of a Regional Transport Authority which bad not been appealed against and the order of the appropriate authority under section 64, where an appeal bad been made, were incapable of interference by the State Government for lack of statutory authority. By enacting section 64 A, the legislature clearly intended that should not be so and that the State Government should have the powers to intervene, if it was satisfied that the order in question was either illegal, irregular or improper. In clothing the State Government with such power the legislature clearly intended the State Government to decide the issue as to whether any order in question was illegal, irregular or improper. It would not be open to a court exercising the power of certiorari to intervene merely be cause it might be of the opinion that the view taken 264 ] by the State Government was erroneous. The word "propriety" has nowhere been defined in the Act and is capable of a variety of meanings. In the Oxford English Dictionary (Vol. VIII), it has been stated to mean. "fitness; appropriateness; aptitude suitability; appropriateness to the circumstances or conditions; conformity with requirement, rule or principle; rightness, correctness, justness, accuracy". If the State Government was of the opinion that respondent No. 2 had better facilities for operation than the appellant and their service to the public ' would be more beneficial, it could not be said that the State Government was in error in think ing that the order of the Board confirming the order of the Regional Transport Authority was improper. It is to be remembered that under section 47 of the Act a Regional Transport Authority in deciding whether to grant or to refuse a permit shall have regard, amongst other things, to the interest of the public generally and the advantages to the public of the service to be provided. Assuming that in the matter of experience there was nothing much to choose between the appellant and respondent No. 2, better facilities for operation of the bus service possessed by respondent No. 2, would be to the interest of the public generally and an advantage to the public Of the service to be provided and therefore was an overriding factor when other things were equal. As between the appellant and respondent No. 2 neither the Regional Transport Authority nor the Board recorded a finding as to which of them had the better facilities for transport operation or that such faci lities as existed between them were of equal merit. The State Government did not have, therefore, the advantage of knowing, on the face of the orders of these authorities, what view they took of this matter. ,Even if it is assumed that their orders meant that the facilities for operation as between the appellant and respondent No. 2 were of equal merit, still the State Government was not in a position to know on what material this opinion was based or that it was a reasonable view. In order to satisfy itself the State 265 Government examined the materials available to it and came to the conclusion that respondent No. 2 bad the better facilities, in other words, it would be unreasonable to hold that respondent No. 2 had not the better facilities. The learned single Judge. of the High Court more than once held that he could not find that there was no material before the State Government to justify its finding that respondent No. 2 had the better facilities, and he further held that was a factor which restricted the jurisdiction of the High Court under article 226 of the Constitution. That should have concluded the matter so far as the High Court was concerned. He, however, thought that it could not be said that the conclusion reached by the State Government was the only conclusion possible and a mere disagreement on the conclusions to be drawn from the available materials, where either view was a reasonable one, was not enough to establish that the orders passed by the Board and the Regional Transport Authority were improper within the meaning of section 64 A. The State Government had therefore acted in excess of its jurisdiction,. It seems to us, that the order of the State Government as it stands cannot be said to be in excess of its jurisdiction nor can it be said that in recording a finding that respondent No. 2 had the better facilities for operation and would serve the public better, it went beyond its powers, in the absence of a finding to the contrary by the authorities subordinate to it. The interests of the public and the advantages to it of the service to be provided were very, it not the most, important factors to be taken into consideration in the matter of granting or refusing to grant a permit. In the conflicting claims of the appellant and respondent No. 2 concerning the facilities available to them for operation of the bus service, the State Government was bound to decide, in the interests of the public generally, which of these had the better facilities. It was within the scope of it 's authority to decide this and a court in certiorari proceedings ought not to interfere with that decision. To hold that the opinion of the Regional Transport Authority and the 266 Board that the facilities for operation were equal as between these persons was a reasonable view would be to constitute the court as the final authority in a matter, in which, by the provisions of the Act, that function was accorded to the State Government. We are not prepared therefore to say that the State Government acted in excess of its statutory authority. There is no error on the face of the record so far as the order of the State Government is concerned and reference to paragraph 8 of the State Government 's affidavit in the High Court does not establish any such thing. That paragraph was in answer to paragraphs 13 and 14 of the appellant 's affidavit and it set out the contentions of the State Government as to its powers. There is nothing in that paragraph to establish that in fact the State Government had declined to consider seniority or experience in the matter of selection. No substantial ground was put forward for supposing that section 64 A was an illegal provision. It was within the competence of the State Legislature to insert section 64 A into the Act. It was a reasonable provision in keeping with the entire scheme of the Act concerning transport vehicles and control of road transport. As to the extent of powers of revision in a court or authority we do not intend to express any opinion in this case having regard to the view we take that the order of the State Government cannot be interfered with by the issue of a writ of certiorari. As regards the limits of judicial review which the courts have under article 226 which is one of the grounds on which the certificate was issued by the High Court, that question has since been considered in the various decisions of this Court, which do not require recapitulation. In our opinion, this is not a case in which it would be reasonable to hold that the State Government acted in excess of its jurisdiction. The appeal is accordingly dismissed with costs to be paid to respondent No. 2.

The appellant and respondent No. 2 along with others applied for stage carriage permits for two routes and the Regional Transport Authority granted a permit for one route to the appellant and for the other route to the respondent No. 2. Both appealed to the Central Road Traffic Board but the appeals were dismissed. Neither the Regional Authority nor the Board recorded any finding as to which of them had the better facilities for transport operation or that they were of equal merit. They applied to the State Government under section 64 A of the Motor Vehicles Act of 1939 as amended by the Motor Vehicles (Madras Amendment) Act of 1948 and the State Government set aside the orders passed by the said subordi nate authorities and issued permits for both the routes to the respondent No. 2 on the ground that he had better facilities for operation and would serve the public better. Against this order of the State Government the appellant moved the High Court for a writ of certiorari and a single Judge issued the writ. On a Letters Patent appeal that decision was set aside. The appellant contended that the State Government had acted in excess of its powers under section 64 A of the Act in setting aside the orders of the subordinate authorities and that the section itself was invalid. Held, that the State Government was within its powers in passing the order it did and the appeal must be dismissed. That it was within the competence of the State Legislature to insert section 64 A into the Act and its legality could not be questioned and the clear intention of the legislation was to empower the State Government to decide the legality, regularity or propriety of any orders passed by the subordinate authorities in the interest of the general public. That the State Government was the final authority to decide which of the rival applicants had the better facilities for operation of the bus service and where it bad come to a decision in favour of an applicant, its decision could not be interfered with under article 226 of the Constitution merely because its view might be erroneous.

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Civil Appeal No. 2534 of 1969. (Appeal by special leave from the judgment and order dated the 19 8 1969 of the Andhra Pradesh High Court at Hyderabad in C.R.P. No. 2190 of 1968.) P. P. Juneja, for the appellant. G. N. Rao, for the respondent. 552 The Judgment of the Court was delivered by BEG J. The defendant appellant had taken a house on rent under a registered lease dated 10th February, 1958, on a monthly rent of rent Rs. 250/ for a period of five years for running a lodging house. It J is admitted by both sides that in February, 1963, the lease had expired. According to the landlord respondent, the defendant appellant had continued to hold over as a tenant "on the same terms" by which he, presumably, meant that it was a month to month tenancy. The Andhra Pradesh Building (Lease, Rent and Eviction) Control Act, 1960, (hereinafter referred to as 'the Act ') came into opera ton before the lease expired. The appellant seemed to be constantly making defaults in payments of rent. The landlord responden had, therefore, to file a suit for arrears of rent in the Court of District Munsif, Visakhapatnam, which was decreed on 4th April, 1962. The landlord respondent had to file a petition on 21st April, 1962, under Section 10 of the Act before the Rent Controller, Visakhapatnam for the eviction of the appellant as no rent was paid from 1st December, 1961 to 31st March, 1962. There was a compromise on 12th October, 1962. The appellant agreed to clear arrears and to pay rents regularly. The appellant, however, wailfully defaulted again in payments of rent from September, 1963 to April, 1964. A notice dated 8th April, 1964, was sent by registered post by the landlord respondent to the appellant terminating his tenancy and calling upon him to pay up the arrears of rent and vacate the house by the end of April, 1964. This came back with the endorsement that the appellant was refusing to accept it. On 9th `` April, 1964, the respondent filed another petition under Section 10 of the Act before the Rent Controller of Visakhapatnam who ordered the eviction of the appellant after holding all the flimsy defenses of the t appellant to be unsubstantiated. The Subordinate Judge of Visakhapatnam dismissed the tenant 's appeal on 23rd October, 1968. The appellant 's revision application to the High Court was also rejected on 19th August, 1969. The only question raised by the appellant before us, in this appeal by special leave, is that no notice under Section 106 of the Transfer of Property Act had been served upon the appellant according to the finding of the Andhra Pradesh High Court itself. It was, therefore, urged , that the petition under Section 10 of the Act could not succeed. The Andhra Pradesh High Court had, however, relied upon Ulligamma Ors. V. section Mohan Rao & ors. (1), where a Division Bench of that High Court had held that the Act, with which we are now concerned, provided a procedure for eviction of tenants which was self contained so that no recourse to the provisions of Section 106 of the Transfer of Property Act was necessary. We may also refer here to the observations of this Court. in Raval & Co. vs K. C. Ramachandran & ors.(2). There, this Court noticed (1) (1969) 1 An. P.R. Law Jolurnal 351. (2) [197412 S.C.R. 629 @ 634 553 Shri Hem Chand vs Shrmati Sham Devi(1), and pointed out "that it was held there that the Act under consideration in that case provided the whole procedure for obtaining the relief of ejectment, and, that being so, provisions of Section 106 of the Transfer of Property Act had no relevance". No doubt the decision mentioned with approval by this Court related to another enactment. But, the principle indicated by this Court was the same as that applied by the Andhra Pradesh High Court. It is true that, in Mangilal vs Sugan. Chand Rathi (Deceased) etc.(2), this Court has held that the provisions of Section 4 of the Madhya Pradesh Accommodation Control Act of 1955 do not dispense with the requirement to comply with the provisions of Section 16 of the Transfer of Property Act. In that case, however, Section 4 of the Madhya Pradesh Act merely operated as a bar to an ordinary civil suit so that service of a notice under Section 106 of the Transfer of Property Act became relevant in considering whether an ordinary civil suit filed on a ground which constituted an exception to the bar contained in Section 4 had to be preceded by a notice under Section 106 of the Transfer of Property Act. In the context of the remedy of ejectment by an ordinary civil suit, it was held that the usual notice of termination of tenancy under Section long of the Transfer of Pro party Act was necessary to terminate a tenancy as a condition precedent to the maintainability of such a suit. In the case before us, the respondent landlord relied upon a provision for special summary proceedings for eviction of tenants under an Act which contains all the requirements for those proceedings. We, therefore think that the learned Judge of the Andhra Pradesh High Court had correctly applied the principle laid down by a Division Bench decision of that Court. He rightly distinguished such a case from Mangilal 's case (supra), where an entirely different kind of provision of another Act in another State was being considered by this Court. The Division Bench decision of the High Court, applied by the learned Judge, had, we think, enunciated the correct principle. A question raised before us by learned Counsel for the respondent is whether the notice sent by the respondent landlord could be held not to have been served at all simply because the postman, who had made the endorsement of refusal, had not been produced. The Andhra Pradesh High Court had relied upon Meghji Kanji Patel vs Kundanmal Chamanlal (a), to hold that the notice was not served. There, a writ of summons, sought to be served by registered post, had been returned with the endorsement "refused". The Bombay High Court held G that the presumption of service had been repelled by the defendant 's statement on oath that he had not refused it as it was never brought to him. In this state of evidence, it was held that, unless the postman was produced, the statement of the defendant on oath must prevail. An (1) I.L.R. [1955] Punj. (2) A.I.R. 1965 SC 101. (3) A.I.R. 1968 Bombay 387. 3 608SCI/76 554 ex paste decree, passed on the basis of such an alleged service was, therefore, set aside. On facts found, the view expressed could not be held to be incorrect. In Nirmalabala Debi vs Provat Kumar Basa(1), it was held by the Calcutta High Court, that a letter sent by registered post, with the endorsement "refused" on the cover, could be presumed to have been duly served upon the addressee without examining the postman who had tried to effect service. What was held there was that the mere fact that the latter had come back with the endorsement "refused" could not raise a presumption of failure to serve. On the other hand, the presumption under section 114 of the Evidence Act would be that, in the ordinary course of business, it was received by the addressee and actually refused by him. This is also a correct statement of the law. The two decisions are reconcilable. The Calcutta High Court applied a rebuttable presumption which had not been repelled by any evidence. In the Bombay case, the presumption had been held to have been rebutted by the evidence of the defendant on oath so that it meant that the plaintiff could not succeed without further evidence. The Andhra Pradesh High Court had applied the ratio disdained of the Bombay case because the defendant appellant before us had deposed that he had not received the notice. It may be that, on a closer examination of evidence on record, the Court could have reached the conclusion that the defendant had full knowledge of the notice and had actually refused it knowingly. It is not always necessary, in such cases, to produce the postman who tried to effect service. The denial of service by a party may be found to be incorrect from its own admissions or conduct. We do not think it necessary to go into this question any further as we agree with the High Court on the first point argued before us. Consequently, this appeal is dismissed with costs. P.B.R. Appear dismissed.

The respondent landlord filed a petition under section 10 of the Andhra Pradesh Building (Lease, Rent and Eviction) Control Act, 1960, for the eviction of the appellant tenant. There was a compromise. Since the tenant defaulted in payment of the rent thereafter, a registered notice terminating the tenancy issued by the landlord, came back with an endorsement that the appellant had refused to accept it. Later. the tenant was ordered to be evicted. 'The tenant 's appeal to the appellate court and then his revision application to the High Court were rejected. Relying upon an earlier Division Bench decision of that Court, the High Court held that the Act provided a self contained procedure for eviction of tenants, and therefore, compliance with the provisions of section 106, Transfer of Property Act was unnecessary. Dismissing the tenant 's appeal, ^ HELD: The High Court has correctly applied the principle laid down by a Division Bench of that court in Mohan & ors. vs section Mohan Rao & Ors. [1969] An. P.R. Law Journal 351. [553 E] Raval & Co. vs K. C. Ramacharndran & ors. [19741 2 SCR 629 @ 634 and Shri Hern Chand vs Shrimali Sham Devi. ILR 1955 Puni. 36, referred to. In Mangilal vs Sugan Chand Rathi [AIR 1955 SC 101] this Court was considering an entirely different kind of provision of another Act in another State, and this case is distinguishable. In the context of the remedy of ejectment by an ordinary civil suit it was held in that case that the usual notice of termination _ of tenancy under section 106. Transfer of Property Act was necesary. [553F & D] boiler [In cases where a party denies receipt of registered notice it is not always necessary to produce the postman who tried to effect service. Denial of service by a party may be found to be incorrect from its own admissions or conduct. The decision of the Bombay High Court in M. K. Patel vs Kundan Mal Chamanlal and that of the Calcutta High Court in Nirmal Bala Devi. vs Provar Kumar Basu are reconcilable. The Calcutta High Court applied a rebuttable presumption under section 114, Evidence Act, that the letter was received by the addressee in the ordinary course of blazons was refused by him because the presumption from the endorsement made upon it had not been repelled by any , evidence. In the Bombay case, the presumption had been held to have been `J rebutted by the evidence of the defendant on oath so that it meant that the plaintiff could not succeed without further evidence.] [554C E]

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ivil Appeal No. 584 of 1982. From the Judgment and Order dated 21.9.1979 of the Punjab and Haryana High Court in Civil Writ Petition No. 2247 of 1979. A.B. Rohtagi and M.S. Mann for the Appellant. Harbans Lal and Ashok K. Mahajan for the Respondents. The following Judgment of the Court were delivered by K. RAMASWAMY, J. I wholly agree with my learned brother Saikia, J. with regard to the reasoning and the conclusions. He has succinctly stated the facts of the case and the relevant provisions of law and they need no reiteration. I would add only few points which I deem relevant to be dealt with. As regards the applicability of the limitation of six months period prescribed under Rule 18 for the exercise of the revisional power by the State Govt. under Section 42 of the Act, assailing legality or propriety of the scheme prepared or confirmation thereof or repartition made in pursuance thereof, it could be angulated from yet another perspective. Indisputably Section 42 was amended by the Amendment Act of 1960 incorporating after the words any order passed "(Scheme prepared or confirmed or repartition made)". Rule 18 was made in exercise of the rule making power by the subordinate legislation. After the amendment of Section 42 was made to exercise the revisional power by the State Govt. against the schemes prepared or confirmed or repartition made, correspondingly, no amendment to Rule 18 was made bringing within its ambit scheme prepared or con firmed or repartition made in pursuance thereof. It is unnecessary to go into the question whether Rule 18 was declared to be intra vires or not. We proceed on the footing that Rule 18 is ultra vires and applies to the exercise of the revisional power by the State Govt. under Section 42. The omission to amend the Rule is an indication of the legislative animation that the limitation of six months prescribed under the Rule 18 would be confined to be ap plicable only to "any order passed by any officer under the Act. Thereby, by necessary implication the prescription of the limitation of six months for filing revision petition against the scheme prepared or confirmed or repartition made in pursuance thereof would stand excluded. It is no 580 doubt true as contended for respondents that the Consolida tion Officer who has prepared the scheme or confirmed it or modified or repartition made when it is objected to by the affected party, has to consider the objections and, as a part thereof by necessary implication, has to assign reasons and the record must contain reasons. But the legislature made a dichotomy between the orders passed and scheme pre pared or confirmation thereof or repartition affected in pursuance thereof. He is not free to take arbitrary deci sion. Assigning reasons are sine quo non for application of the mind though he does not appear to communicate the rea sons therefore. But to an order passed assigning reasons in its support and communication thereof are necessary concomi tants and this was made manifest when Section 19, 20 and 21 are looked into. As regards the exercise of the power under Section 19 and 20 the statute does not envisage passing any orders. But when exercise of the power in Sub sec. 20 of 21, the officer is enjoined to pass orders and appeals are provided within the prescribed limitation against those orders to the appellate forums. This, also, is an indication of the fact that the limitation of six months is confined to the orders to be revised under section 42. It is undoubted that the scheme prepared or confirmed or modified or repartition made in pursuance thereof are amena ble to the revisional jurisdiction under section 42. The State Govt. would consider the legality or propriety of the reasons or the grounds on which the scheme was initially prepared or confirmed or modified or repartition made in pursuance thereof. But that does not mean that it is an order made and the limitation of six months prescribed under Rule 18 would get attracted to the revision filed against the scheme prepared or modified or repartition made in pursuance thereof. Thus I have. little hesitation to hold that the prescription of limitation of six months under Rule 18 would be confined only to order passed by any officer under the Act; it would not apply to the revision filed against the scheme prepared or confirmed or reparti tion made in pursuance thereof. It is undoubted that when there is no limitation pre scribed for exercise of the revisional power under Section 42 against the schemes prepared or confirmed or repartition made, it would be exercised within a reasonable time. What is a reasonable time is always a question of fact depending upon the facts and circumstances in each case. When legisla ture chose not to fix a particular period of limitation by judicial dicta it is not permissible to limit to a particu lar period. The long lapse of time may be a fact for the revisional authority to take into 581 account in the light of the facts and circumstances obtain able in an appropriate case. No absolute or precise period of limitation could be predicated or laid. Take for instance the facts of this case. the previous Sarpanch is a benefici ary from the impugned order and has chosen not to take steps to have the scheme impugned by filing a revision under Section 42 of the Act. The Gram Panchayat, being a juristic person, could not by itself except through the executive authority take. any action against the scheme prepared by the Consolidation Officer to assail its legality or proprie ty by filing the revision. The revision petition was filed soon after the new Sarpanch came into office. Take another instance of a case where the officer concerned and the person benefitted, in confabulation, have made a scheme and repartition affected in pursuance thereto and kept it in dark to the knowledge of the person affected by the scheme prepared or the partition made. Until the person affected had actual knowledge, it is not possible to become award of it. The limitation begins to run from the date of the knowl edge of the fraud so played. It is always open to the af fected person to come forward and say that for the first time he became aware of the scheme prepared or partition made in pursuance thereof only when his rights are sought to be interfered with or exercise of the enjoyment of the property is interdicted. Therefore immediately within a reasonable time thereafter he is to file a revision before the State Govt. Having had the knowledge of the impugned action if he stood by without taking any further action, it is always open to the other party to bring it to the notice of the State Govt. of the ground or the circumstances under which the revision petitioner when he became aware of the scheme prepared or the repartition made and he deliberately chose to acquiesce to it and if the State Govt. is satisfied of the same, unless satisfactory explanation for the delay is given, the State Govt. may decline to interfere with the impugned action or may decline to entertain the revision petition itself. Thus it could be seen that each case has to be angulated on its own given facts and circumstances as to the reasonable period of limitation within which the revi sional power is to be filed. Even though more than 5 years time had elapsed from the date of the preparation of the scheme till date of the filing of the revision under Section 42, there is sufficient ground in this case for the new Sarpanch in not filing a revision within six months from the date of the original scheme and the State Govt. is well justified in exercising the power under Section 42. The High Court is unjustified in interfering with the order passed by the Consolidation Officer. Accordingly, the appeal is al lowed. No costs. 582 K.N. SAIKIA, J. This appeal by special leave is from the Judgment of the High Court of Punjab and Haryana at Chandi garh dated 21.9.1979 in Civil Writ Petition No. 2247 of 1979 allowing the petition and setting aside the order of the Director, Consolidation of Holdings dated 8.2.1979. The appellant Gram Panchayat, hereinafter referred to as the 'Panchayat ', was the owner of 1200 Bighas of land in village Kanonda, Tehsil Bahadurgarh, District Rohtak. A Scheme of consolidation of holdings, hereinafter referred to as 'the Scheme ', of the village was confirmed on 15.1.1974 under section 20 of the East Punjab Holdings (Consolidation and Prevention of Fragmentation) Act, 1948 (50 of 1948), hereinafter referred to as 'the Act '. The Panchayat, there fore, moved an application under section 42 of the Act on 20.9.1977 for setting aside the Scheme, objecting to the utilisation of the land of value of /2/ (two annas) and allotments made to the other rightholders for their benefit. On 24.1. 1979 a Mushtehri Mundadi was made for information of all the villagers concerned, but the rightholders were absent and ex party proceedings were taken against them. The Panchayat 's case was that under the said Scheme the Panchay at land was consolidated, repartitioned and allotted to persons who did not have any right to hold the land. Be sides, the land of Dharat containing two wells and a big house being religious place of worship was also partitioned under the Scheme and consequently the Panchayat has been reduced to a landless person, financially weakened and rendered incapable of rendering service in the village. After hearing the parties the Director in his order dated 8.2. 1979 observed that it was evident from the perus al of the record that the Scheme of Consolidation of the village was confirmed on 15.1. 1974 whereas the application had been filed on 20.9. 1977 and as such the application had been filed too late. After the expiry of six months period the application was time barred. However, he said in his order: "In this case only to benefit some land own ers, the land of the value of two annas has been allotted due to which the deserving persons have been left over and they have not been given even Abadi plots. Apart from this the Panchayat had no other land to cultivate, due to which the Panchayat is unable to devel op the agricultural schemes and in these circumstances of the matter I condone the delay in filing the present application. " 583 He accordingly set aside the Scheme and remanded the case to the Consolidation Officer under section 21(2) of the Act with some directions. Against that order the respondents moved the High Court of Punjab and Haryana in Civil Writ Petition No. 2247 of 1979 urging, inter alia, that the Director of Consolidation of Holdings had condoned the delay without there being any ground for the same and that, in doing so, he had acted illegally and with material irregu larity. The High Court held that from the observations of the Director it was evident that the delay was condoned on extraneous considerations as no reason whatsoever was given by the applicant in the application filed before him under section 42 of the Act as to why it was filed after the period of limitation. In that view of the matter, holding that the Director of Consolidation of Holdings had acted illegally and with material irregularity in condoning the delay, the High Court by the impugned order dated 21.9.79 allowed the writ petition and quashed the order of the Director of Consolidation of Holdings dated 8.2.1979. Mr. A.B. Rohtagi, the learned counsel for the appel lant, submits that the High Court erred in setting aside the Director of Consolidation 's order applying to the confirma tion of the Scheme the period of limitation of six months as prescribed in Rule 18 of the East Punjab Holdings (Consoli dation and Prevention of Fragmentation) Rules 1949, herein after referred to as 'the Rules ', inasmuch as that rule speaks only of orders and not of confirmation of the Scheme; and that a Full Bench of the Punjab and Haryana High Court in Jagtar Singh vs Additional Director, Consolidation of Holdings, Jullundar, , taking the view that the bar of limitation under Rule 18 does not apply to those petitions under section 42 in which the legality or validity of a scheme prepared or confirmed or repartition made is challenged has overruled AIR 1982 Punjab and Har yana 148 and that Full Bench decision has since been followed in Mr. Rohtagi further submits that on merits also there was ample justification for the Director to have taken the view it did inasmuch as Panchayat lands were taken into consolidation and repartitioned and allotted to persons who had no right to obtain the land thereby impoverishing the Panchayat and rendering it incapa ble of giving any help to the villagers. Mr. Harbans Lal, learned counsel for the respondents submits that the Full Bench decision that the limitation under rule 18 does not cover an order confirming a scheme is not tenable inasmuch as confirmation of a scheme is only by an order as contemplated under rule 18, and an applica tion challenging that order of confirmation has, there 584 fore, to be made within six months thereof; and that even assuming that there was no bar of limitation, an application had to be made within a reasonable time which, according to learned counsel, would be 'about two years '; and that by any standard the appellant 's application under section 42 was belated and could not have been allowed. Lastly, counsel submits that there were three earlier applications dismissed by the Director under section 42 of the Act, including one by the Panchayat itself, and the Director had no power to review his own order. The questions to be decided therefore are, whether for the purpose of limitation under rule 18 of the Rules confir mation of a scheme would be an order as envisaged in the rule; if it was not an order, whether the Director was justified in setting aside the scheme and remanding the matter to the Consolidation Officer; and whether the Direc tor 's order was one of review of his earlier order and as such beyond his jurisdiction. To decide the first question we may conveniently refer to the provisions of the Act and rule 18 of the Rules. Section 42 of the Act empowers the State Government to call for proceedings under the Act. It says: "42. Power of State Government to call for proceedings:The State Government may at any time for the purpose of satisfying itself as to the legality or propriety of any order passed, scheme prepared or confirmed or repar tition made by any officer under this Act, call for and examine the record of any case pending before or disposed of by such officer and may pass such order in reference thereto as it thinks fit: Provided that no order or scheme or repartition shall be varied or reversed with out giving the parties interested notice ' to appear and opportunity to be heard except in cases where the State Government is satisfied that the proceedings have been vitiated by unlawful consideration. " From a perusal of this section there arises no doubt that under it the State Government may for the stated purpose call for proceedings wherein any order is passed, scheme prepared or confirmed or repartition made by any officer under this Act. Under the proviso the State 585 Government shall not vary or reverse any order or scheme or repartition without giving the interested parties opportuni ty of being heard except in cases where the State Government is satisfied that the proceedings have been vitiated by unlawful consideration. There is therefore no doubt that this section envisages proceedings wherein order is passed, scheme prepared or confirmed or repartition made. These are the distinct proceedings for the purpose of exercising jurisdiction under this section. Rule 18 deals with limitation for application under section 42, and it reads: "18. Limitation for application under section 42: An application under section 42 shall be made within six months of the date of the order against which it is filed: Provided that in computing the period of limitation, the time spent in ob taining certified copies of the orders and the grounds of appeal, if any, filed under sub section (3) or sub section(4) of section 21, required to accompany the application shall be excluded: Provided further, that an applica tion may be admitted after the period of limitation prescribed therefore if the appli cant satisfies the authority competent to take action under section 42 that he had sufficient cause for not making the application within such period. " From a perusal of this rule there arises no doubt that for applying this rule the application has to be one under section 42 of the Act and it has to be against an order and under the first proviso a certified copy of the order is required to accompany the application and in computing the period of limitation of six months, the time spent in ob taining the certified copy is to be excluded. While the Division Bench comprising P.C. Jain and Tewa tia, JJ of the Punjab and Haryana High Court in the instant case applied the period of limitation to the confirmation of the scheme and in that view of the matter set aside the Director 's order, the Full Bench comprising P.C. Jain, Acting C.J., Tewatia and Tiwana, JJ. held: "A bare perusal of rule 18 of the Rules would show that .it provides limitation only for petitions filed against orders 586 passed. There is no reference in the Rules to a scheme prepared or confirmed or repartition made. The fact that in section 42 of the Act the words 'scheme prepared or confirmed or repartition made ' have been added as a result of amendment, cannot justify the conclusion that in Rule 18 of the Rules these words have also to be read. " We respectfully agree with this view. Rule 18 has to be interpreted as we find it and the words of the rule are simple, precise and unambiguous and no more is necessary than to understand these words in their natural and ordinary sense. Two different meanings cannot be given to the same word 'order ' namely, that in section 42 it does not include scheme prepared or confirmed or repartition made; while in rule 18 it would include them. The Full Bench therefore rightly held that rule 18 of the Rules does not apply to those proceedings in which the legality or validity of the scheme prepared or confirmed or repartition made is chal lenged. The Full Bench rightly approved the decision in Haqiqat Singh vs Addl. Director, Consolidation of Holdings, AIR 1981 Punjab & Haryana 204, wherein it was held that a reading of section 42 as well as the scheme of the Act unmistakably pointed out that the statute made a clear distinction between order passed by an officer under the Act and the performance of duties by the authorities under the Act in the matter of preparation and confirmation of scheme of consolidation and re partition made in pursuance thereof. So it could not possibly be held that preparation or confir mation of a scheme and the repartition carried would fail within the scope of 'order ' as used in rule 18 of the rules. The rule did not come into play when a petitioner challenged either the scheme of consolidation including its preparation or confirmation of the repartition made in pursuance there of. The amendment made this position clear. In a subsequent decision reported in Joginder Singh and Ors. vs The Director, Consolidation of Holdings, decided on August 8, 1988, where the direct hold ers had not challenged any order of the consolidation au thorities but had attacked the validity of the scheme and the repartition, it was rightly held that the bar of limita tion of six months in rule 18 of the Rules was not attracted to the facts of that case. Mr. Harbans Lal submits that the above decisions require reconsideration. We do not agreed. We have perused the provisions of the Act and rule 18. The Act provides for the compulsory consolidation of, and for prevention of fragmen tation of, agricultural holdings in the 587 State of Punjab and for the assignment or reservation of land for common purposes of the village. It appears that prior to the Act there were two methods of consolidation in vogue in the Province, one through the Revenue Department and the other through the Cooperative Department but the progress of consolidation was very slow and lengthy and the Act sought to remedy those defects. Section 19 of the Act provides for publication of draft scheme and on such publi cation any person likely to be affected by such scheme, shall, within 30 days of such publication, communicate in writing to the Consolidation Officer any objections relating to the scheme. The Consolidation Officer, shall, after considering the objections, if any received, submit the scheme with such amendment as he considers necessary togeth er with his remarks on the objections to the Settlement Officer (Consolidation). Thus, in this section we do not find any provisions for any order being passed. Section 20 deals with confirmation of the scheme. Under sub section(2) thereof if any objections are received to the draft scheme published under sub section (1) of section 19 and also if no written or oral objections to the draft scheme are received under subsection (3) of that section by the Settlement Officer (Consolidation) he shall confirm that scheme. Under sub section (3) if any objections are received to the draft scheme published under sub section (1) of section 19 or if any written or oral objections are received by the Settle ment Officer (Consolidation) before the confirmation of the draft scheme by him the Settlement Officer(Consolidation) may after taking the objections into consideration together with the remarks thereon of the Consolidation Officer and also after considering the written or oral objections either confirm the scheme with or without modifications, or refuse to confirm it. In case of such refusal the Settlement Offi cer (Consolidation) shall return the draft scheme, with such directions as may be necessary to the Consolidation Officer, for reconsideration and resubmission . Under sub section (4) upon the consideration of the scheme under sub section (2) or (3) the scheme as confirmed shall be published in the prescribed manner in the estate or estates concerned. Thus, this section also does not envisage passing of any order with reference to any person affected by the scheme. It may be true, as Mr. Harbans Lal submits, that the confirmation may be done in the form of an order. However, the word 'order ' has not been used by the legislature in this sec tion. Section 21 deals with repartition. Under sub section (1) of this section, the Consolidation Officer shall, after obtaining the advice of the land owners of the estate or estates concerned, carry out repartition in accordance with the scheme of consolidation of holdings 588 confirmed under section 20 and the boundaries of the hold ings as demarcated shall be shown on the Shajra which shall be published in the prescribed manner in the estate or estates concerned. There is no provision of passing of any 'order ' under this sub section. Under subsection (2) any person aggrieved by the repartition may file written objec tion within 15 days of the publication before the Consolida tion Officer who shall after hearing the objectors pass such orders as he considers proper confirming or modifying the repartition. Thus this sub section envisages passing of orders on the objections after hearing the objectors. Sub section (3) provides that any person aggrieved by the order of the Consolidation Officer under sub section (2) may within one month of that order file an appeal before the Settlement Officer (Consolidation) who shall after hearing the appellant pass such order as he considers proper. This sub section also clearly envisages passing of an order on appeal by an aggrieved person as above. Subsection (4) provides that any person aggrieved by the order of Settle ment Officer (Consolidation) under sub section (3) whether made before or after the commencement of the East Punjab Holdings (Consolidation and Prevention of Fragmentation) Second Amendment and Validation Act, 1962 may within 60 days of that order appeal to the Assistant Director of Consolida tion and under sub section (5) any appeal against an order of the Settlement Officer (Consolidation) pending under sub section (4) immediately before the commencement of the East Punjab Holdings (Consolidation and Prevention of Frag mentation) Second Amendment and Validation Act, 1962, either before the State or any officer to whom the powers of the State Government in this behalf have been delegated, shall be decided by the Assistant Director of Consolidation. Thus, the above sub sections clearly envisage passing of orders by the respective authorities. We have already extracted section 42 of the Act and Rule 18 of the Rules. It would be clear that though section 42 envisaged orders, preparation or confirmation of scheme and repartition separately, Rule 18 provides for limitation only in respect of an application under that section in a pro ceeding where an order was passed. There is the maxim ex pressio unius est exclusio alterius expression of one thing is the exclusion of another. Mention of one thing implies the exclusion of another. When certain persons or things are specified in a law an intention to exclude all others from its operation may be inferred. When mention has been made only of 'Orders ', the inference would be that preparation or confirmation of scheme and repartition are 589 excluded. Again, Ex praecedentibus et consequentibus optima fit interpretation. The best interpretation is made from the context. As we have seen, while section 19 and 20 did not envisage passing of any order section 21 envisaged passing of orders. Section 42 deals with applications against or ders, preparation or confirmation of scheme and repartition. Rule 18 mentions only orders and hence by inference excludes 'preparation and confirmation of scheme and repartition '. We have accordingly no doubt in approving the Full Bench deci sion in Jagtar Singh vs Additional Director, Consolidation of Holdings (supra). Mr. Harbans Lal 's submission that even if no limitation was prescribed the application of the Panchayat before the Director was inordinately delayed is not tenable. According to the learned counsel the period of two years would be reasonable period. We are unable to agree. In matters like Consolidation of Holdings by a scheme and the preparation and confirmation of the scheme and repartition thereafter the objections may arise at various stages for various reasons and it will not be possible to prescribe any hard and fast rule as to reasonable period after which an appli cation could be made under section 42 of the Act. The legis lature itself did not do so. In the instant case the Pan chayat filed the application on 20th September, 1977 before the Director of Consolidation under section 42 of the Act praying for the revocation of the Scheme and for directions for fresh valuation to be ordered and repartition effected through appropriate authorities stating that the Sarpanch was not given any Nishan Dehi or demarcation on the spot nor was issued any passbook, and the petition was not filed earlier because the new Sarpanch came to know all these only a month ago and so the petition was claimed to be in time. The original Sarpanch was a beneficiary out of the Panchayat land and he took no steps and the present Sarpanch took charge only a few months ago. There were lot of complaints about valuation and allotments to rightholders. Under the above circumstances when the Director himself considered it fit for granting the prayer, it cannot be said that the application was unreasonably delayed. The next submission of Mr. Harbans Lal is equally un tenable. It is true that in Harbhajan Singh vs Karam Singh and Anr., ; , it has been held that there is no provision in the Act granting express power of Review to the State Government with regard to an order made under section 42 of the Act and in the absence of any such power the Director, Consolidation of Holdings could not have reviewed his previous order dismissing an application of the Panchay at 590 under section 42 of the Act, and if so done, the review order of the Director would be ultra vires and without jurisdiction. In the instant case it has not been shown to us that the Panchayat earlier moved any application under section 42 on the same subject matter and the instant order of the Director amounted to a review of his own order. There is no material to hold that the instant order of the Direc tor is an order of review of his earlier order; and Mr. Rohtagi clearly denied that it was so. In the result we allow this appeal, set aside the im pugned order of the High Court and restore that of the Director, Consolidation. We, however, leave the parties to bear their own costs. Y. Lal Appeal allowed.

The appellant Panchayat owned 1200 Bighas of land in Village Kanonda Distt. Rohtak in Haryana. A Scheme of con solidation of Holdings under Section 20 of the East Punjab Holdings (Consolidation and Prevention of Fragmentation) Act 1948 was confirmed on 15.1.1974, as a result whereof the Panchayat 's land was consolidated, repartitioned and allot ted to persons, allegedly having no right to hold the same with the result, the Panchayat was reduced as a landless person, and financially weak. The Panchayat, therefore, on 20.9.1977 moved an application under section 42 of the Act objecting to the utilization of the Land of the value of /2/ (Two annas) and the allotments made to other right holders. After hearing the parties, the Director of Consolidation of Holdings by his order dated 8.2.79 set aside the scheme and remanded the case to the consolidation officer with some directions. The Director took the view that even though the application had been made much beyond the period of limita tion of six months contemplated under Rule 18, yet in view of the fact that the Panchayat had no other land to culti vate due to which the Panchayat was unable to develop the agricultural Schemes, condoned the delay and allowed the application as aforesaid. Against the said orders the Re spondents moved the High Court by means of a Writ Petition urging inter alia that the Director had condoned the delay without there being any ground for the same and thus had acted illegally. The High Court held that the Director condoned the delay on extraneous considerations and accord ingly quashed the impugned 577 order of 8.2.79 passed by the Director. Hence the Panchayat has filed this appeal after obtaining Special Leave. Allowing the appeal, this Court, HELD: (Per K.N. Saikia & M. Fathima Beevi, JJ.) Section 42 of the Act envisages proceedings wherein order is passed, scheme prepared or confirmed or repartition made. These are the distinct proceedings for the purpose of exercising jurisdiction under this section. [585B] Applying Rule 18, the application has to be one under section 42 of the Act, and it has to be against an order and under the first proviso, a certified copy of the order is required to accompany the application and in computing the period of limitation of six months, the time spent in ob taining the certified copy is to be excluded. [585F]. Rule 18 has to be interpreted as it is found, and the words of the rule are simple, precise and unambiguous and no more is necessary than to understand these words in their natural and ordinary sense. Two different meanings cannot be given to the same word "order" namely, that, in section 42 it does not include scheme prepared or confirmed or reparti tion made, while in Rule 18, it would include them. [586B C] The Rule did not come into play when a petitioner chal lenged either the scheme of consolidation including its preparation or confirmation or the repartition made in pursuance thereof. The amendment made this position clear. [586E] Though section 42 envisaged orders, preparation or confirmation of scheme and repartition separately, Rule 18 provides for limitation only in respect of an application under that section in a proceeding where an order was passed. There is the maxim expressio unius est exclusio alterius expression of one thing implies the exclusion of another. When mention has been made only of "orders", the inference would be that preparation or confirmation of scheme and repartition are excluded. [588F G] In matters like consolidation of Holdings by a scheme and the preparation and confirmation of the scheme and repartition thereafter, the objections may arise at various stages for various reasons and it will 578 not be possible to prescribe any hard and fast rule as to the reasonable period after which an application could be made under section 42 of the Act. The Legislature itself did not do so. [589C D] In the instant case, it has not been shown that the Panchayat earlier moved an application under section 42 on the same subject matter. There is no material to hold that the instant order of the Director is an order of review of his earlier order. [590A] (Per K. Ramaswamy, J.) As regards the exercise of the power under sections 19 & 20, the statute does not envisage passing any orders. But when exercising the power, the officer is enjoined to pass orders and appeals are provided within the prescribed limi tation against those orders to the appellate forums. This also, is an indication of the fact that the limitation of six months is confined to the orders to be revised under section 42. [580C D] The prescription of limitation of six months under Rule 18 would be confined only to order passed by an officer under the Act, it would not apply to the revision filed against the scheme prepared on confirmed or repartition made in pursuance thereof. [580F] It is undoubted that when there is no limitation pre scribed for exercise of the revisional power under section 42 against the schemes prepared or confirmed or repartition made, it would be exercised within a reasonable time. [580G] What is reasonable time is always a question of fact depending upon the facts and circumstances of each case. [580G] When legislature chose not to fix a particular period of limitation, by judicial dicta it is not permissible to limit to a particular period. :While exercising power under Sec tion 42, the revisional authority may take into account the long lapse of time as a factor in the light of the facts and circumstances obtainable in an appropriate, case. No abso lute or precise period of limitation could be predicted or laid. [580H] Jagtar Singh vs Additional Director, Consolidation of Holdings, Jullundar, AIR 1984 Punjab & Haryana 216, ap proved. Haqiqat Singh vs Addl. Director, Consolidation of Hold ings, AIR 1981 Punjab & Haryana 204; Joginder Singh & Ors. vs The Director, 579 Consolidation of Holdings, and Harbha jan Singh vs Karam Singh & Anr., ; , referred to.

6219.txt

Civil Appeal No. 2981 of 1987. From the Judgment and Order dated 23.1.1985 of the Allahabad High Court in Civil Revision No. 155 of 1984. Anil Dev Singh and Mrs. Shobha Dikshit for the Appellants. Anil Kumar Gupta for the Respondent. The Judgment of the Court was delivered by RANGANATHAN,J. Special leave granted. This is an appeal to this Court from the judgment of a Single Judge of the Allahabad High Court in a civil revision petition filed by 952 the appellant (C.R.P. 155 of 1984). The result of the judgment was to restore a decree passed against the appellant by the trial court in a suit for eviction instituted by the respondent in 1980. The main ground on which the appellant had resisted the suit was that the suit was barred by the provisions of the Uttar Pradesh Public Buildings (Regulation of Letting, Rent and Eviction) Act, 1972 (which we shall hereinafter briefly refer to as 'the Rent Act '). It is the correctness of this ground of defence that it in issue in this appeal. The appellant, the State of Uttar Pradesh, took on lease a premises at Barabanki belonging to the respondent for the purpose of running a Laprosy Training Centre. The respondent was thus the landlord, and the appellant the tenant, in respect of the premises within the meaning of section 3(a) of the Rent Act. This Act has been enacted "to provide, in the interests of the general public, for the regulation of letting and rent of, and the eviction of tenants from, certain classes of buildings situated in urban areas, and for matters connected therewith. " Section 20 of the Act bars the institution of a suit for the eviction of a tenant, notwithstanding the termination of his tenancy, except on the grounds specified in sub section (2) of that section but none of these grounds were pleaded by the respondent. section 21 of the Act enables a prescribed authority to order the eviction of a tenant in two situations, subject to certain conditions and limitations. These situations are: (a) where the landlord requires the premises for his own use and (b) where, the building being in a dilapidated condition, he desires to demolish the same and put up a new construction. These situations also do not prevail here. The Landlord, however, gave a notice of termination of tenancy under section 106 of the Transfer of Property Act and filed a suit for recovery of possession. The appellant claimed that the suit was not maintainable and that the respondent 's remedy, if any, was only to seek eviction in the circumstances and in the manner outlined in the Act. The respondent sought to overcome this hurdle by contending that the premises in question are not one of the classes of buildings covered by the Rent Act. In support of this contention, he relied upon an exclustion clause incorporated in section 2(1)(a) of the Act. Since the whole case turns on a proper interpretation of this clause and since the clause has undergone changes from time to time, it is necessary to refer to these in some detail to facilitate a proper appreciation of the stands of the parties. (a) In the Rent Act, as originally enacted and brought into force 953 on 15.7.1972, this sub section ran thus: "Nothing in this Act shall apply to (a) any building belonging to, or vested in, the Government of any State or any local authority; or (b) any tenancy created by grant from the State Government or the Government of India in respect of a building taken on lease or requisitioned by such Government." (b) U.P. Act No. 28 of 1976 amended section 2(1) to substitute new clauses in place of the above clauses. The amended sub section, insofar as is relevant for our present purposes, reads thus: "Nothing in this Act shall apply to (a) any public building; or (b) any building belonging to or vested in a recognised educational institution, the whole of the income from which is utilised for the purposes of such institution; (c)x x x x (d)x x x x (e)x x x x (f)x x x x A definition of 'public building ' was inserted in section 3 which reads: "(o) 'public building ' means any building belonging to or taken on lease or requisitioned by or on behalf of the Central Government or a State Government (including the Government of any other State) and includes any building belonging to or taken on lease by or on behalf of any local authority or any public sector corporation". These amendments were made effective from 5.7.1976. 954 (c) It appears that the above provisions were sought to be amended by U.P. Ordinance No. 11 of 1977 (promulgated on 27.4.1977) with retrospective effect from 5.7.1976 by substituting the following as clause (a) of section 2(1) of the Rent Act: "2(1)(a) any building of which the Government or a local authority or a public sector Corporation is the landlord." section 3(0) was left unamended. However, the above Ordinance was allowed to lapse. Thus the amendment had become inoperative by the time the suit in the present case was instituted. (d) The next amendment of the Rent Act was by U.P. Ordinance No. 28 of 1983 promulgated on 18.5.1983. This revived the amendment made by the 1977 Ordinance which had been allowed to lapse. This time this amendment was not allowed to lapse on the expiry of the ordinance but was kept alive by five successive Ordinances: No. 43 of 1983 dated 12.10.83, No. 6 of 1984 dated 24.3.84, No. 8 of 1984 dated 7.5.84, No. 20 of 1984 dated 22.10.84, and finally No. 9 of 1985 dated 26.4.85. All these amendments were made effective from 18.5.1983 in so far as the provision presently under consideration is concerned. The last of these, it may be noted, was promulgated subsequent to the judgment of the High Court presently under appeal. (e) Finally, the U.P. Legislature enacted Act No. 17 of 1985 on 20.8.85 "regularising" the spate of legislation by ordinances. By sections 1 and 2 of this Act, the amendment made to section 2(1)(a) by the 1977 Ordinance and kept alive by the Ordinance of 1983 and 1984 was made effective from 18.5.1983. In this legislative background, the appellant contended, successfully before the Additional District Judge but unsuccessfully before the trial court and High Court, that the premises in question was not a 'public building ' within the meaning of section 3(o) read with section 2(1)(a) of the Rent Act, as amended from 5.7.76 and, hence, the respondent 's remedy for eviction of the appellant was not by way of suit in a civil court. What is the correct interpretation of this clause? This is the question before us. We have set out above the definition of 'public building ' in section 3(o) after the 1976 amendment. The language of this definition is very wide. It takes in three categories of buildings: (i) buildings belonging to (that is, owned by) the Central or State Government; (ii) 955 buildings (not belonging to the Government) but taken on lease or requisitioned by it or on its behalf and (iii) buildings belonging to or taken on lease by or on behalf of any local authority or any public sector corporation. In the present case, the building in question is one taken on lease by the State Government and so it falls squarely within the definition of 'public building '. It is, therefore, exempt from the application of the Act by reason of section 2(1) as it stood at the relevant time. It would follow, therefore, that the respondent 's remedy to recover possession lay under the general law and had to be enforced by a suit for recovery of possession which is exactly what he has done. Prima facie, therefore, the trial Judge and the High Court were right in decreeing his suit. It is, however, contended on behalf of the appellant that section 3(o) should not be given such a wide meaning. The argument runs thus: The intention of the Legislature was to exclude from the purview of the Rent Act only buildings in respect of which the Government was either the owner or the landlord. This is clear from the previous history as well as the subsequent legislations. U.P. Act No. 3 of 1947 (which preceded the 1972 Act) was amended by Ordinance No. 5 of 1949 with effect from 26.9.49 to exclude from its purview "any premises belonging to the Central or State Government and any tenancy or other like relationship created by a grant from the Government in respect of premises taken on lease or requisitioned by the Government". The language section 2(1)(a) of the Rent Act, as it stood before its amendment in 1976, left no doubt in any one 's mind that the legislature intended only to exclude buildings belonging to the Government or any local authority and those taken on lease or requisitioned by Government and rented out by it to others. The only object of the 1976 amendment was to extend the above exclusion also in buildings owned or let out by local authorities and public sector corporations. This was sought to be done by providing that the Act would not apply to 'public buildings ' and inserting a definition of that expression in section 3(o). That definition was, no doubt, phrased somewhat broadly. But, having regard to the previous history as well as the language of the subsequent legislation already referred to above, there can be no doubt that the legislature never intended to exclude the operation of the Rent Act vis a vis premises of which the Government (and, hereinafter, this expression will take in also a reference to local authorities and public corporations) was neither the owner nor the landlord but merely a tenant. Support of the above restricted construction is also sought from 956 the phraseology of section 21(8) of the Rent Act. As has been mentioned earlier. section 21 empowers the prescribed authority, on an application from a landlord, to evict a tenant on two grounds: (a) need of the premises by him for his self occupation; and (b) need to demolish the building and reconstruct it. Sub section (8) enacts a restriction in respect of the first of these grounds. It reads: "(8) Nothing in clause (a) of sub section (a) shall apply to a building let out to the State Government or to a local authority or to a public sector corporation or to a recognised educational institution unless the Prescribed Authority is satisfied that the landlord is a person to whom clause (ii) or clause (iv) of the Explanation to sub section (1) is applicable. " It is submitted that this sub section places it beyond doubt that the Act does apply also to buildings in which a State Government, local authority, public sector Corporation or recognised educational institution is a tenant and proceeds to restrict the scope of an application under section 21 of the Act in such cases. It is pointed out that, if the definition in section 3(o) is given a wide meaning so as to exclude from the application of the Act even buildings in which these bodies are mere tenants, the result would be to render section 21(8) redundant and otiose. Such a construction of the statute, it is submitted, should not be favoured. The above line of argument found favour with a Full Bench of the Allabahad High Court dealing with a batch of petitions filed by a number of public sector corporations resisting suits for eviction instituted against them: Punjab National Bank vs Suganchand, This Full Bench decision was rendered on 29.11.84 but was apparently not available to the learned Judge who decided the present case on 23.1.85. Learned counsel for the appellant urges that we should approve of the Full Bench decision and reverse the judgment under appeal. We are unable to accept the appellant 's contention. The interpretation placed by the Full Bench of the High Court on section 3(o) equates the position under the statute after the amendment of 1976 to the position both as it stood prior to the 1976 amendment and also as it 957 stood after the 1983 Ordinance. Such an approach fails to give any effect at all to the change in language deliberately introduced by the 1976 amendment. No doubt, prior to the amendment, only buildings of which the Government was owner or landlord were excluded from the Act. But the Legislature clearly intended a departure from the earlier position. If the intention was merely to extend the benefit to premises owned or let out by public corporations, it could have been achieved by simply adding a reference to such corporations in section 2(1)(a) and (b) as they stood earlier. Reading section 2(1)(a) & (b) as they stood before amendment and the definition in section 3(o) side by side, the departure in language is so wide and clear that it is impossible to ignore the same and hold that the new definition was just a reenactment of the old exemption. The exclusion was earlier restricted to buildings owned by the Government and buildings taken on lease or requisitioned by Government and granted by it by creating a tenancy in favour of some one. The amendment significantly omitted the crucial words present in the earlier legislation which had the effect of restricting the exclusion to tenancies created by the Government, either as owner or as landlord. Full effect must be given to the new definition in section 3(o) and to the conscious departure in language in reframing the exclusion. The subsequent legislation also reinforces the same conclusion. The 1976 amendment had come up for judicial interpretation and certain decisions referred to in the Full Bench decision as well as the judgment presently under appeal had given the above literal interpretation to section 3(o). If they had run counter to the rule legislative intent, one would have expected the repeated Ordinances since 1983 and the ultimate Amendment Act of 1985 to have placed the position beyond doubt by a retrospective amendment. Though the Ordinance of 1977 made its amendment retrospective from 5.7.76, these later amendments are all specifically given effect to from 18.5.1983. The effect of the decisions rendered remained untouched till then. The fact that the the 1976 amendment marked a departure from the more restricted exclusion available earlier and the fact that the said restriction exclusion was again restored with effect only from 18.5.1983 militate against the correctness of adhering to this narrow interpretation even during the interregnum from 5.5.1976 to 18.5.1983. It may now be considered whether the above interpretation renders section 21(8) redundant. As pointed out by the Full Bench of the High Court, not much thought has gone into the framing of this subsection which has failed to notice that clauses (ii) and (iv) of the 958 Explanation to sub section (1) which are referred to in it, had been omitted by an earlier clause of the same section of the same Act. The Ordinance of 1977 sought to remedy this position by deleting the words "unless the Prescribed Authority is satisfied . is applicable" used in the sub section but this Ordinance was allowed to lapse and the subsequent Ordinances and Amendment Act paid no heed to section 21(8). Nevertheless, despite this clumsy drafting, one would certainly hesitate to give an interpretation to the definition clause in section 3(0) which may have the effect of rendering this sub section otiose. But luckily that is not the position. As pointed out by counsel for the respondent, sub sections (1), (1A) and (8) of section 21 have to be read together. Though section 2(1)(a) excludes public buildings which we have interpreted to include buildings in which the Government is only a tenant section 21(1A) incorporates an exception to this exclusion. "Nothwithstanding anything contained in section 2", it permits an application for eviction being moved under section 21(1)(a) of the Act by a landlord against any tenant but in the limited circumstance set out in that sub section viz. that the landlord has been in occupation of a public building but had to vacate it as he had ceased to be in the employment of the Government, local authority or Corporation. In other words, the landlord of a building in which the Government is a tenant could have moved an application under section 21(1)(a) read with section 21(1A). This is what is prohibited by section 21(8) absolutely in view of clauses (ii) and (iv) of Explanation 1 to sub section (1) being non existent. section 21(8) makes it clear that while a landlord who is compelled to vacate a public building occupied by him due to cessation of his employment can proceed under the Act to evict any tenant occupying his property so that he may use his own property for his residential purposes, he will not be able to do so where his tenant is the Government, a local authority or a public Corporation. Thus read,s. 21(8) does not become otiose or redundant by accepting the wider interpretation of section 3(o). This objection of the appellant is not, therefore, tenable. The Full Bench of the High Court has referred to one general aspect which appears to have considerably influence it in preferring a narrower interpretation of section 3(o). It referred to the increasing difficulties faced even by Government and other public bodies in securing proper accommodation for their functioning and the nearimpossibility, even for them, of securing alternative accommodation at comparative and non exorbitant rates once they are compelled to vacate their existing tenancies. The Court posed to itself the question whether the Legislature can be said to have intended to exclude them from the benefits of the Act and throw them open to eviction by suits 959 following a mere termination of tenancy by notice section 106 of the Transfer of Property Act, at the mere whim and caprice of their landlords. This, the Court thought, was unlikely particularly when, prior to the Amendment Act of 1976, as well as subsequent to 1983, they could have been evicted only on one or other of the grounds available under section 20 or section 21 of the Act and more so because the Amendment manifests an intention to extend to public corporations benefits previously available only to a Government and to a local authority. The object of the exclusion in section 2(1)(a), it is said, was to remove, in respect of buildings where the government or local authority was the landlord either as a owner or principal lessee or requisitioning authority the shackles imposed on other landlords but not to deprive these bodies, when they are mere tenants, of the protection available to other tenants under Act. Having regard to these considerations, the Full Bench of the High Court has invoked a line of decisions of this Court and others which advocate that, in certain situations, importance should be attached to the "thrust of the statute" rather than to the literal meaning of the words used to justify their refusal to give the words of section 3(o) full effect. It is true that there are situations in which Courts are compelled to subordinate the plain meaning of statutory language. Not unoften, Courts do read down the plain language of a provision or give it a restricted meaning, where, to do otherwise may be clearly opposed the object and scheme of the Act or may lead to an absurd, illogical or unconstitutional result. But we think that this mode of construction is not appropriate in the context of the present legislation for a number of reasons. In the first place, such an interpretation does not fit into the legislative history we have traced earlier. It does not explain why the legislature should have, while enacting the 1976 amendment, omitted certain operative words and used certain wider words instead. As we have pointed out earlier, if the idea had only been to add to the exclusion buildings owned or let out by public sector corporations, that result could have been achieved by a minor amendment to section 2(1)(a) as it stood earlier. A conscious and glaring departure from the previous language must be given its due significance. Secondly, the Rent Act is a piece of legislation which imposes certain restrictions on a landlord and confers certain protections on a tenant. It could well have been intention of the legislature that the Government, local bodies and public sector corporations should be free not only from the restrictions they may incur as landlords but also that they need not have the protection given to other ordinary tenants. To say that the legislature considered the Government qua landlord to be in a class of its own and 960 hence entitled to immunity from the restrictions of the Act but that, qua tenant, it should be on the same footing as other tenants will be an interpretation which smacks of discrimination. The legislature could have certainly intended to say that the Government, whether landlord or tenant, should be outside the Act. Thirdly, while it is true that the result of the interpretation we favour would be to facilitate easy eviction of Government, local authorities and public corporations, there is nothing per se wrong about it because, with their vast resources or capacity augment their resources, these bodies would not be in as helpless a position as ordinary tenants for whose benefit the legislation is primarily intended. On the other hand, the ultimate result of the interpretation accepted by the Full Bench will be to practically deny a landlord, who has given his premises on rent to these bodies, any remedy to get back possession of his premises. The contingencies for which eviction is provided for in section 20 are hardly likely to arise in the case of such tenants; section 21(1)(a) is taken out by s.21(8); and, virtually, the only ground on which eviction can be sought by a landlord of such a building against such a tenant, on the interpretation urged by the petitioner, would be the one contained in section 21(1)(b). It is debatable whether the legislature could have contemplated such a situation either. Fourthly, in this case, the legislature has applied its mind to the situation more than once subsequently. If its intention in carrying out the amendment had been misunderstood by the High Court or found ambiguous, the legislature was expected to rectify the situation by a piece of retrospective or declaratory legislation. The 1977 Ordinance was, but the later Ordinances and the 1985 Act, are not, of this nature. They neither are, nor purport to be, declaratory or retrospective from 5.7.76. At least, if the 1985 Act had been made retrospective from 5.7.76, one could have thought it was a clarificatory piece of legislation. But the Legislature has advisedly given these enactments effect only from 18.5.1983. This means that the amendment of 1976 was intended to be effective between 5.7.75 and 18.5.83 and it also means that the amendment of 1983 onwards is not intended to be read back for that period. Lastly, in any event, the interpretation given by us will create no lasting difficulties for the Government and other organisations which are tenants only, since after 18.5.1983 they will be in a position to claim all the immunities available to other tenants under the Act. For the reasons discussed above, we overrule the decision of the Full Bench of the Allahabad High Court in Punjab National Bank vs Sugan Chand, on this point. In the result, this appeal is dismissed. We, however, make no order regarding costs. N.V.K. Appeal dismissed.

% The appellant State of Uttar Pradesh, took on lease the premises belonging to the respondent for the purpose of running a Training Centre. The respondent landlord gave a notice of termination of the tenancy under Section 106 of the Transfer of Property Act and filed a suit for recovery of possession. The appellant claimed that the suit was not maintainable and that the respondent 's remedy, if any, was only to seek eviction in the circumstances and in the manner outlined in the Uttar Pradesh Buildings (Regulation of Letting, Rent and Eviction) Act, 1972. The respondent sought to overcome this hurdle by contending that the premises in question was not one of the classes of 'building ' covered by the aforesaid Rent Act, and in support thereof relied on the exclusion clause incorporated in Section 2(1)(a) of the Rent Act. The appellant contended, successfully before the Additional District Judge, but unsuccessfully before the trial court and the High Court, that the premises in question was not a `public building ' with the meaning of section 3(0) read with section 2(1)(a) of the Rent Act, as amended from July 5, 1976 and hence, the respondent 's remedy for eviction of the appellant was not by way of suit in a Civil Court. Dismissing the Appeal to this Court, 949 ^ HELD: 1. The building in question is one taken on lease by the State Government and so it falls squarely within the definition of `public building ' in Section 3(0) of the Act. It is, therefore, exempt from the application of the Act by reasons of section 2(1) as it stood at the relevant time. It would follow, therefore, that the respondent 's remedy to recover possession lay under the general law and had to be enforced by a suit for recovery of possession which is exactly what he has done.[955B] 2. Sub sections (1), (1A) and (8) of section 21 have to be read together. Though section 2(1)(a) excluded `public buildings ' which has to interpreted to include buildings in which the Government is only a tenant s.21(A) incorporates an exception to this exclusion. "Notwithstanding anything contained in section 2", it permits an application for eviction being moved under section 21(1)(a) of the Act by a landlord against any tenant but in the limited circumstances set out in that sub section viz. that the landlord has been in occupation of a public building but had to vacate it as he had ceased to be in the employment of the Government, Local Authority or Corporation.[958C D] 3. The landlord of a building in which the Government is a tenant could have moved an application under section 21(1) read with section 21(1A). This is what is prohibited by section 21(8) absolutely in view of clauses (ii) and (iv) of Explanation 1 to sub section (1) being non existent. section 21(8) makes it clear that while a landlord who is compelled to vacate a public building occupied by him due to cessation of his employment can proceed under the Act to evict any tenant occupying his property so that he may use his own property for his residential purposes, he will not be able to do so where his tenant is the Government, a local authority or a public Corporation. Thus read, section 21(8) does not become otiose or redundant by accepting the wider interpretation of section 3(0).[958D F] 4(i) The interpretation placed by the Full Bench of the High Court on section 3(0) in Punjab National Bank vs Suganchand, [1985]1 ARC 214 equates the position under the statute after the amendment of 1976 to the position both as it stood prior to the 1976 amendment and also as it stood after the 1983 Ordinance. Such an approach fails to give any effect at all to the change in language deliberately introduced by the 1976 amendment.[956H; 957A] (ii) Prior to the amendment, only buildings of which the Government was owner or landlord were excluded from the Act. But the Legislature clearly intended a departure from the earlier position. If the 950 intention was merely to extend the benefit to premises owned or let out by public corporation, it could have been achieved by simply adding a reference to such corporations in section 2(1)(a) and (b) as they stood earlier. [957A B] (iii) Reading section 2(1)(a) & (b) as they stood before amendment and the definition in section 3(0) side by side, the departure in language is so wide and clear that it is impossible to ignore the same and hold that the new definition was just a re enactment of the old exemption.[957B C] (iv) The amendment significantly omitted the crucial words present in the earlier legislation which had the effect of restricting the exclusion to tenancies created by the Government, either as owner or as landlord. [957D] (v) Though the Ordinance of 1977 made its amendment retrospective from 5.7.76, these later amendments are all specifically given effect to from 18.5.1983. The effect of the decisions rendered remained untouched till then. The fact that the 1976 amendment marked a departure from the more restricted exclusion available earlier and the fact that the said restricted exclusion was again restored with effect only from 18.5.1983 militate against the correctness of adhering to a narrow interpretation even during the interregnum from 5.5.1976 to 18.5.1983. [957F G] (vi) Full effect must therefore be given to the new definition in section 3(0) and to the conscious departure in language in reframing the exclusion. [959D] 5. There are situations in which Courts are compelled to subordinate the plain meaning of statutory language. Not unoften, Courts do read down the plain language of a provision or give it a restricted meaning, where, to do otherwise may be clearly opposed to the object and scheme of the Act or may lead to an absurd, illogical or unconstitutional result. [959D E] 6. This mode of construction is not appropriate in the context of the present legislation for a number of reasons. In the first place, such an interpretation does not fit into the legislative history. It does not explain why the legislature should have, while enacting the 1976 amendment, omitted certain operative words and used certain wider words instead. Secondly, the Rent Act is a piece of legislation which imposes certain restrictions on a landlord and confers certain protections on a 951 tenant. Thirdly, while it is true that the result of the interpretation this Court favours would be to facilitate easy eviction of Government, local authorities and public corporations, there is nothing per se wrong about it because, with their vast resources or capacity to augment their resources, these bodies would not be in as helpless a position as ordinary tenants for whose benefit the legislation is primarily intended. Fourthly, the legislature has applied its mind to the situation more than once. If its intention in carrying out the amendment had been misunderstood by the High Court or found ambiguous, the legislature was expected to rectify the situation by a piece of retrospective or declaratory legislation. The 1977 Ordinances was, but the later Ordinances and the 1985 Act, are not, of this nature. They neither are, nor purport to be, declaratory or retrospective from 5.7.76. At least, if the 1985 Act had been made retrospective from 5.7.76, one could have thought it was a clarificatory piece of legislation. But the Legislature has advisedly given these enactments effect only from 18.5.1983. This means that the amendment of 1976 was intended to be effective between 5.7.76 and 18.5.83 and it also means that the amendment of 1983 onwards is not intended to be read back for that period. Lastly, the interpretation this Court favours will create no lasting difficulties for the Government and other organisations which are tenants only, since after 18.5.1983 they will be in a position to claim all the immunities available to other tenants under the Act. [959E G; 960B G] Punjab National Bank vs Sugan Chand, [1985]1 ARC 214 overruled.

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Appeal No. 1953 of 1969. 320 Appeal by special leave from the, judgment and decree dated ,October 18, 1968 of the Mysore High Court in Regular First Appeal No. 56 of 1963. M. C. Chagla and R. Gopalakrishnan, for the appellant. section V. Gupte, R. V. Pillai Sadasiv Rao and P. Keshava Pillai, for respondent No. 1. The Judgment of the Court was delivered by Hegde, J. This is a plaintiff 's appeal by special leave. The plaintiff sued for possession of the suit properties on the basis of his title. The suit properties originally belonged to the family .of one Veerbaswantji Rao Deshmukh. He died in 1892 without male issues, leaving behind him his widow Ratnabai and a daughter by name Lakshmibai. Ratnabai succeeded to the estate, of her husband. She died in 1924. On her death Lakshmibai became entitled to the suit properties. But one Parwatibai,alias Prayag Bai took unlawful possession of the 'suit properties. Hence Lakshmibai instituted a suit for their possession in the court of Sadar Adalath, Gulbarga, against the said Parwatibai and obtained a decree. In execution of the said decree Lakshmibai obtained delivery of the lands described in Schedule 11 to the plaint. Lakshmibai died in 1948. Sometime thereafter Parwatibai also died. The defendant claiming to be the sister 's son of Veerbaswanth Rao Deshmukh got himself impleaded as the legal representative of Lakshmibai in the execution proceedings and sought delivery of the lands mentioned in Schedule I of the plaint. Meanwhile one Vishwanath alleging to be the legal representative of Parwatibai got himself impleaded in the execution proceedings. Thereafter the defendant and Vishwanath entered into a compromise in pursuance of which Vishwanath delivered possession of the lands included in Schedule I to the defendant. Sometime thereafter the plaintiff applied to the court to reopen the execution proceedings and implead him as the legal representative of Lakshmibai claiming that he is the adopted son of Lakshmibai. The executing court dismissed his application holding that his remedy was by way of a sevarate suit. A revision taken against that order to the High Court was rejected. Thereafter the plaintiff filed a suit in the court of Subordinate District Judge, Bidar, for a declaration that lie is entitled to be impleaded 'in the execution proceedings mentioned earlier as the revresenta tive of Lakshmibai and to proceed with the execution after setting aside the order made by the executing court. on the, basis of the compromise entered into between the defendant and Vishwanath. It may be noted that that was the only relief asked for in the plaint. The purported cause of action for the suit was the dismissal of the plaintiff 's application for impleading him in 321 the execution proceedings. That suit should have been dismissed on the ground that it was not maintainable in law. But strangely enough it was dismissed on the ground that it was hit by section 42 of the Specific Relief Act inasmuch as the plaintiff did not sue for possession of the concerned property. Thereafter the suit from which this appeal arises was instituted by the plaintiff on the basis of his title. The trial court dismissed his suit in respect of the lands mentioned in Schedule I of the; plaint on the ground that the relief in question is barred by Order 2, rule 2, Code of Civil Procedure. It decreed the suit for the possession of the: lands mentioned in Schedule II except items 3 and 9. It also,, decreed the plaintiff 's claim in respect of the cash amount mentioned in the plaint. Both the plaintiff and the defendant went up in appeal to the High Court of Mysore as against the decision of the trial court to the extent that decision was against them. The High Court, affirmed the decision of the trial court. Before the trial court and the High Court, there was contro versy as regards the truth of adoption pleaded by the plaintiff. , Both the courts have upheld the plaintiff 's claim that he was adopted by the husband of Lakshniibai. That question was not reopened before us. Before the High Court, the learned Counsel for the plaintiff conceded that the plaintiff 's suit in respect of items 3 and 9 of ' Schedule II of the plaint is barred by limitation. Hence that question stands concluded. The only question that remains for consideration is whether the High Court and the trial court were right in their conclusions that the plaintiff 's claim in respect of the lands mentioned in Schedule I of the plaint is barred by Order 2, rule 2, Code of ' Civil Procedure. We are of the opinion that the trial court and the High Court erred in holding that the plaintiff 's suit in respect of the lands, mentioned in plaint Schedule I is barred by Order 2, rule 2, Code of Civil Procedure. The suit instituted by the plaintiff. in the court of Subordinate District Judge, Bidar for a declaration that he is ' entitled to be impleaded in the execution proceedings as legal representative of Lakshmibai and to proceed with the execu tion proceedings, was as mentioned earlier, a misconceived one. It was exercise in futility. His remedy was to file a suit for the possession of the concerned properties on the basis of his title. The High Court and the trial court proceeded on the erro neous basis that the former suit was a suit for a declaration of 322 the plaintiff 's title to the lands mentioned in Schedule I of the plaint. The requirement of Order 2, rule 2, Code of Civil Procedure is that every suit should include the whole of the claim which the plaintiff is entitled to make in in respect of a cause of ,action. 'Cause of action ' means the 'cause of action for which the suit was brought '. It cannot be Said that the cause of action on which the present suit was brought is the same as that in the previous suit. Cause of action is a cause of action which gives occasion for and forms the foundation of the suit. If that cause, ,of action enables a person to ask for a larger and wider relief than that to which he limits his claim, he cannot afterwards seek to recover the balance by independent proceedings see Mohd. Hafiz vs Mohd. Zakaria(1). As seen earlier the cause of action on the basis of which the, previous suit was brought does not form the foundation of the present suit. The cause of action mentioned in the earlier suit, assuming the same afforded a basis for a valid claim, did not enable the plaintiff to ask for any relief other than those he prayed for in that suit. In that suit he could not have claimed the relief which he seeks in this suit. Hence the trial court and the High Court were not right in holding that the plaintiff 's suit is barred by Order 2, rule 2, Code of Civil Procedure. In view of our above.conclusion, we have not thought it ,necessary to go into the controversy whether Order 2, rule 2, Code of Civil Procedure is applicable to a suit under section 42 of the Specific Relief Act. We are unable to accept the contention of the learned Counsel 'for the appellant that we should allow to the appellant mesne profits at least from the date of the suit. No claim for mesne profits was made in the plaint. Therefore we cannot go into that ,question in this appeal. For the mesne profits, if any, due to the plaintiff, he must take separate steps according to law. In the result this appeal is allowed and the trial court 's decree is modified by including therein the lands mentioned in Schedule I of the plaint. In other respects the decree of the trial court is sustained. The appellant will be entitled to his costs both in this 'Court as well as in the High Court. Y.P. Appeal allowed. (1) [1922] L.R. 49 I.A. 9.

The appellant applied to the executing court to reopen the execution proceedings in respect of certain properties and to implead him as the legal representative of the owner of the properties, claiming that as the adopted son he was entitled to delivery of possession. The Court dismissed the application holding that his remedy was by way of a separate suit. Thereupon he filed a suit for a declaration that he was entitled to be impleaded in the execution proceedings as the legal representative and proceed with the execution. The purported cause of action for suit was the dismissal of the earlier application for impleading in the execution proceedings. The suit was dismissed on the ground that it was hit by section 42 of the Specific Relief Act inasmuch as it was not one for possession of the concerned property. Thereafter the appellant filed another suit on the basis of his title. The trial court dismissed the suit on the ground that the relief in question was barred by Order 2 rule 2 of the Code of Civil Procedure. The High Court affirmed. On the question whether the plaintiff 's claim in respect of the properties was barred by Order 2 rule2 Code of Civil Procedure, HELD : The High Court and the trial court proceeded on the erroneous basis that the former suit was a suit for a declaration of the appellant 's title to the properties in question. The requirements of Order 2 rule 2, Code of Civil Procedure is that every suit should include the whole of the claim which the plaintiff is entitled to make in respect of a "cause of action. " 'Cause of action ' means the, 'cause of action for which the suit was brought '. It cannot be said that the cause of action on which the present suit was brought is the same as that in the previous. Cause of action is a cause of action which gives occasion for and forms the foundation of the suit. If that cause of action enables a person to ask for a larger and wider relief than that to which he limits his claim, he cannot afterwards seek to recover the balance by independent proceedings. [321 G, 322 A C] In the instant case the cause of action on the basis of which the previous Suit was brought does not form the foundation of the present suit. The cause of action mentioned in the earlier suit, assuming the same afforded a basis for a valid claim, did not enable the plaintiff to ask for any relief other than those he prayed for in that suit. In that suit he could not have claimed the relief which he seeks in this suit. Hence the trial court and the High Court were not right in holding that the plaintiff 's suit was barred by Order 2, rule 2, Code of Civil Procedure. [322 C D]

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Appeal No. 2476 of 1993. From the Judgment and Order dated 21.2.1992 of the Orissa High Court in O.J.S. No. 4866 of 1991. 476 R. K. Mehta for the Appellants. H.L. Aggarwal, S.K. Patri, Abhijat P. Medh, Ms. Kirti Mishra and A.K. Panda for the Respondents. The following Order of the Court was delivered Service of the appellants employed in the school established in the year 1981 recognised in 1983 brought on grants in aid in 1988, were terminated in 1986. Their termination was not approved by the Inspector of Schools. Since the order not approving termination was not given effect to by the Institution the appellants approached the High Court by way of a writ petition for a mandamus to reinstate them and grant them their salaries from the date the school became an aided institution. The High Court did not find any merit in the claim for various reasons. Section 10 A of the Orissa Education Act provides that the termination of a teacher of an aided institution shall be subject to the approval of the Inspector. Use of the word 'aided institution ' is clear indication that the provisions of approval apply only to the aided schools. Since on the date the services of the appellants were terminated the institution was recognised only and not aided the Inspector could not have exercised the power of disapproval. Consequently no right vested in the appellant which he could get enforced in a court of law. The submission that the principle of Section 10 A being benevolent in nature should be extended to teachers of the institution once it has been granted recognition to avoid exploitation and undue harassment of those who are unequal in the bargain cannot be accepted. Recognition of an institution for purpose of imparting education is different than bringing it on grants in aid. To the former the regulatory provisions of the Education Act or the rules do not apply. The Education Departments has no control either on admission of students or members of staff. The High Court, therefore. did not commit any error of law in dismissing the writ petition. The appeal accordingly fails and is dismissed. But there shall be no order as Appeal dismissed.

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

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Appeals Nos. 711 713 of 1962. Appeals by special leave from the judgments and order dated May 27, 25, 1960, of the Assam High Court in Civil Rule Nos. 3 and 25 of 1960 respectively and December 15, 1959 of the Allahabad High Court in Special Appeal No. 502 of 1958. CIVIL APPEAL No. 614 OF 1962. Appeal by special leave from the order dated April 6, 1961 of the Punjab High Court in Letters Patent Appeal No. 81/1961. CIVIL APPEALS Nos. 837 To 839 of 1963. Appeals from the judgment and order date January 18, 1963 of the Assam High Court in Civil Rule 386 to 388 of 1961. B.C. Ghose and P.K. Chatterjee, for the appellants (in C. A. Nos. 711 to 713/1962). I.M. Lall and V.D. Mahajan, for the appellant (in C.A. Nos. 714 of 1962). S.V. Gupte, Additional Solicitor General, Naunit Lal and R.H. Dhebar, for the respondents (in C.A. Nos. 711 714/1962). C.K. Daphtary, Attorney General, R. Ganapathy Iyar and R.H. Dhebar, for the appellants (in C.A. Nos. 837 839/1963). B.C. Ghosh and P.K. Chatterjee, for the respondents (in C.A. Nos. 837 839/1963). R.K. Garg, M.K. Ramamurthi, S.C. Agarwal and D.P. Singh, for the intervener (in C.A. No. 711/ 1962.) 689 R.K. Garg and P.K. Chatterjee, for the intervener ,(in C.A. Nos. 837 839./1963). December 5, 1963. The Judgment of P.B. Gajendragadkar, K. N. Wanchoo, M. Hidayatullah and N. Rajagopala lyyangar, JJ. was delivered by Gajendragadkar J. K. Subba Rao, and K.C. Das Gupta JJ. delivered separate Opinion section J.C. Shah J. delivered a dissenting Opinion. GAJENDRAGADKAR J. These two groups of appeals have been placed before us for hearing together, because they raise a common question of law in regard to the Constitutional validity of Rules 148(3) and 149(3) contained in the Indian Railway Establishment Code, Vol. (hereafter called the Code). The first group consists of four appeals. C.A. Nos. 711 & 712 of 1962 arise from two petitions filed by the appellants Moti Ram Deka and Sudhir Kumar Das respectively in the Assam High Court. Deka was a peon employed by the North East Frontier Railway, whereas Das was a confirmed clerk. They alleged that purporting to exercise its power under Rule 148 of the Code, the respondent, the General Manager North East Frontier ' Railway, terminated their ser vices and according to them, the said termination was illegal inasmuch as the Rule under which the impugned orders of termination had been passed, was invalid. This plea has been rejected by the Assam High Court and the writ petitions filed by the two appellants have been dismissed. It is against these orders of dismissal that they have come to this Court by special leave. Civil Appeal No. 713 of 1962 arises out of a petition filed by the appellant Priya Gupta who was an Assistant Electrical Foreman employed by the North Eastern Railway, Gorakhpur. His services having been terminated by the respondent General Manager of the said Railway, he moved the Allahabad High Court under article 226 of the Constitution and challenged the validity of the order terminating his services on the ground that Rule 148 of the Code was invalid. The appellant 's plea has been rejected 1/SCI/64 44 690 by the said High Court both by the learned single Judge who heard his petition in the first instance and by the Division Bench which heard his Letters Patent Appeal. That is how the appellant has come to this Court by special leave. Civil Appeal No. 714/1962 arises out of a writ petition filed by Tirath Ram Lakhanpal who was a Class A Guard employed by the Northern Railway, New Delhi. His services were terminated by the Respondent General Manager of the said Railway r under Rule 148 of the Code and his writ petition to quash the said order has been dismissed by the Punjab High Court. The learned single Judge who heard this writ petition rejected the pleas raised by the appellant, and the Division Bench which the appellant moved by way of Letters Patent Appeal summarily dismissed his Appeal. It is this dismissal of his Letters Patent Appeal which has brought the appellant to this Court by Special Leave. That is how this group of four appeals raises a common question about the validity of Rule 148. The next group consists of three appeals which challenge the decision of the Assam High Court holding that the orders of dismissal passed by appellant No. 2, the General Manager, North East Frontier Railway, against the three respective respondents S.B. Tewari, Parimal Gupta and Prem Chand Thakur, under Rule 149 of the Code, were invalid. These three respondents had moved the Assam High Court for quashing the impugned orders terminating their services, and the writ petitions having been heard by a special Bench of the said High Court consisting of three learned Judges, the majority opinion was that the impugned orders were orders of dismissal and as such, were outside the purview of Rule 149. According to this view, though Rule 149 may not be invalid, the impugned orders were bad because as orders of dismissal they were not justified by Rule: 149. The minority view was that Rule 149 itself is invalid, and so, the impugned orders were automatically invalid. In the result, the three writ petitions 691 filed by the three respondents respectively were allowed. That is why the Union of India and the General Manager, N.E.F. Railway, appellants 1 & 2 respectively, have come to this Court with a certificate granted by the Assam High Court,. and they challenge the correctness of both the majority and the minority views. Thus, in these three appeals, the question about the validity of Rule 149 falls to be considered. The first group of four appeals was first heard by a Constitution Bench of five Judges for some time. At the hearing before the said Bench, the learned Addl. Solicitor General conceded that the question about the validity of Rule 148 had not been directly considered by this Court on any occasion, and so, it could not be said that it was covered by any previous decision. After the hearing of the arguments before the said Bench had made some progress, the learned Addl. Solicitor General suggested that he was strongly relying on certain observations made in the previous decisions of this Court and his argument was going to be that the said observations are consistent with his contention that Rule 148 is valid and in fact, they would logically lead to that inference. That is why the Bench took the view that it would be appropriate if a larger Bench is constituted to hear the said group of appeals, and so, the matter was referred to the learned Chief Justice for his directions. Thereafter, the learned Chief Justice ordered that the said group should be heard by a larger Bench of seven Judges of this Court. At that time, direction was also issued that the second group of three appeals which raised the question about the validity of Rule 149 should be placed for hearing along with the first group. In fact, the learned counsel appearing for both the parties in the said group themselves thought that it would be appropriate if the two groups of appeals are heard together. That is how the two groups of appeals have come for disposal before a larger Bench; and so, the main question which we have to consider is whether Rule 148(3), and Rule 149(3) which has superseded it are valid. The contention of the 692 railway employees concerned is that these Rules contravene the Constitutional safeguard guaranteed to civil servants by article 311(2). It is common ground that if it is held that the Constitutional guarantee prescribed by article 311(12) is violated by the Rules, they would be invalid; on the other hand the Union of India and the Railway Administration contend that the said Rules do not contravene article 311(2), but are wholly consistent with it. At this stage, it would be. convenient to refer r to the two Rules. Rule 148 deals with the termination of service and periods of notice. Rule 148(1) deals with temporary railway servants; R. 148(2) deals with apprentices, and R. 148(3) deals with other (non pensionable) railway servants. It is with R. 148(3) that we are concerned in the present appeals. It reads thus: "(3) Other (non pensionable) railway servants:The service of other (non pensionable) railway servants shall be liable to termination on notice on either side for the periods shown below. Such notice is not however required in cases of dismissal or removal as a disciplinary measure after compliance with the provisions of Clause (2) of Article 311 of the Constitution, retirement on attaining the age of superannuation, and termination of service due to mental or physical incapacity." "Note: The appointing authorities are empower ed to reduce or waive, at their discretion, the stipulated period of notice to be given by an employee, but the reason justifying their action should be recorded. This power cannot be re delegated. " Then follow the respective periods for which notice has to be given. It is unnecessary to refer to these periods. We may incidentally cite Rule 148(4) as well which reads thus: 693 "In lieu of the notice prescribed in this rule, it shall be permissible on the part of the Railway Administration to terminate the service of a railway servant by paying him the pay for the period of notice. " It is thus clear that R. 148(3) empowers the appropriate authority to terminate the services of other nonpensionable railway servants after giving them notice for the specified period, or paying them their salary for the said period in lieu of notice under R. 148(4). The non pensionable services were brought to an end in November, 1957 and an option was given to the non pensionable servants either to opt for pension. able service or to continue on their previous terms and conditions of service. Thereafter, Rule 149 was framed in place of R. 148. Rule 149(1) & (2) like Rule 148(1) & (2) deal with the temporary railway servants and apprentices respectively. Rule 149(3) deals with other railway servants; it reads thus: "Other railway servants: The services of other railway servants shall be liable to termination on notice on either side for the periods shown below. Such notice is not however, required in cases of dismissal or removal as a disciplinary measure after compliance with the provisions of clause (2) of Article 311 of the Constitution, retirement on attaining the age of superannuation, and termination of service due to mental or physical incapacity" The Rule then specifies the different periods for which notice has to be given in regard to the different categories of servants, It is unnecessary to refer to these periods. Then follow sub rule (4). The same may be conveniently set out at this place: "(4) In lieu of the notice prescribed in this rule, it shall be permissible on the part of the Railway Administration to terminate the service of a railway servant by paying him the pay for the period of notice. Note: The appointing authorites are empowered to reduce or waive, at their discretion, the stipulated period of notice to be given by an employee, but the reason justifying their action should be recorded. This power cannot be re delegated. " Just as under ' Rule 148(3) the services of the railway employees to which it applied could be terminated after giving them notice for the period specified, so under R. 149(3) termination of services of the employees concerned can be brought about by serving them with a notice for the requisite period, or paying them their salary for the said period in lieu of notice under R. 149(4). Rule 149(3) applies to all servants other than temporary servants and apprentices. The distinction between pensionable and non pensionable servants no longer prevails. The question which we have to consider in the present appeals is whether the termination,of services of a permanent railway servant under Rule 148(3) or Rule 149(3)amounts to his removal under article 311(2) of the Constitution. If it does,the impugned Rules are invalid; if it does not, the said Rules are valid. That takes us to the question as to the true scope and effect of the provisions contained in Art.311(2),and the decision of this question naturally involves the construction of article 311(2) read in the light of Articles 309 and 310. In considering this point, if may be useful to refer very briefly to the genesis of these provisions and their legislative background. In this connection, it would be enough for our purpose if we begin with the Government of India Act, 1833. Section 74 of the said Act made the tenure of all Services under the East India Company subject to His Majesty 's pleasure. These servants were also made subject to the pleasure of the Court of Directors with a proviso which excepted from the said rule those who had been appointed directly by His Majesty. In due course, when the Crown took over the government of this country by the Government of India Act, 1858, section 3 conferred on the Secretary of 695 State all powers which has till then vested in the Court of Directors, while the powers in relation to the servants of the Company which had till then vested in the Director were, by section 37, delegated to the Secretary of State. This position continued until we reach the Government of India Act, 1915. This Act repealed all the earlier Parliamentary legislation and was in the nature of a consolidating Act. There was, however a saving clause contained in section 130 of the said Act which preserved the earlier tenures of servants and continued the rules and regulations applicable to them. Section 96B of this Act which was enacted in 1919 brought about a change in the constitutional position of the civil servants. ' Section 96B(1) in substance, provided that "subject to the provisions of this Act and the rules made thereunder, every person in the civil service of the Crown in India holds office during His Majesty 's pleasures and it added that no person in that service may be dismissed by any authority subordinate to that by which he was appointed. It also empowered the Secretary of State in Council to reinstate any person in that service who had been dismissed, except so far as the Secretary of State in Council may, by rules, provide to the contrary. Section 96B(2) conferred power on the Secretary of State in Council to make rules for regulating the classification of the Civil Services in India, the method of recruitment, the conditions of service, pay and allowances and discipline and conduct while sub section (4) declared that all service rules then in force had been duly made and confirmed the same. In 1935, the Government of India Act 1935 was passed and section 96B( 1) was reproduced in subsection (1) and (2) of section 240, and a new sub section was added as sections (3). By this new sub section, protection was given to the civil servant by providing that he shall not be dismissed or reduced in rank until he had be en given a reasonable opportunity of showing cause against the action proposed to be taken in regard to him. The definition contained in section 277 of the said 596 act shows that the expression "dismissal" included removal from service. That continued to be the position until the Constitution was adopted in 1950. The Constitution has dealt with this topic in Articles 309, 310 and 311. Art.310 deals with the tenure of office of persons serving the Union or a State, and provides that such office is held during the pleasure of the President if the post is under the Union, or during the pleasure of the Governor if the post is under a State. The doctrine of pleasure is thus embodied by article 310(1). article 310(2) deals with cases of persons appointed under contract, and it provides that if the President or the Governor deems it necessary in order to secure the services of a person having special qualifications, he may appoint him under a special contract and the said contract may provide for the payment to him of compensation if before the expiration of an agreed period, that post is abolished or he is, for reasons not connected with any misconduct on his part, required to vacate: that post. it is significant that article 310(1) begins with a clause "except as expressly provided by this Constitution" '. In other words,if there are any other provisions in the Constitution which impinge upon it, the provisions of article 310(1) must be read subject to them. The exceptions thus contemplated may be illustrated by ,reference to Articles 124, 148, 218 and 324. Another exception is also provided by article 31 1. In other words, article 311 has to be read as a proviso to article 310, and so, there can be no doubt that the pleasure contemplated by article 310(1) must be exercised subject to the limitations prescribed by article 31 1. article 309 provides that subject to the provisions of the constitution, Acts of the appropriate Legislative may regulate the recruitment, and conditions of service of persons appointed, to public services and posts in connection with the affairs of the Union or of any State. This clearly means that the appropriate Legislature may pass Acts in respect of the terms and conditions of service of persons appointed to public 697 services and posts, but that must be subject to the provisions of the constitution which inevitably brings in article 310(1). The proviso to article 309 makes it clear that it would be competent for the President or such person as he may direct in the case of services and posts in connection with the affairs of the Union, and for the Governor of a State or such person as he may. direct in the case of services and posts in connection with the affairs of the State, to make rules regulating the recruitment, and prescribing the conditions of service of persons respectively appointed to services and posts under the Union or the State The pleasure of the President or the Governor mentioned in article 310(1) can thus be exercised by such person as the President or the Governor may respectively direct in that behalf, and the pleasure thus exercised has to be exercised in accordance with the rules made in that behalf. These rules, and indeed the exercise of the powers conferred on the delegate must be subject to article 310, and so article 309 cannot impair or affect the pleasure of the President or the Governor therein specified. There is thus no doubt that article 309 has to be read subject to Articles 310 and 31 1, and article 310 has to be read subject to Art 311. It is significant that the provisions contained in article 311 are not subject to any other provision of the Constitution. Within the field covered by them they are absolute and paramount. What then is the effect of the provisions contained in article 311(2)? article 311(2) reads thus: "No such person as aforesaid shall be dis missed or removed or reduced in rank until he has been given a reasonable opportunity of showing cause against the action propo sed to be taken in regard to him. " We are not concerned with the cases covered by the proviso to this article in the present appeals. It may be taken to be settled by the decisions of this Court that since article 311 makes no distinction between permanent and temporary posts, its protection must be held to extend to all government servants holding 698 permanent or temporary posts or officiating in any of them. The protection afforded by article 311(2) is limited to the imposition of three major penalties contemplated by the service Rules, viz., dismissal, removal or reduction in rank. It is true that the consequences of dismissal are more serious than those of removal and in that sense, there is a technical distinction between the two; but in the context, dismissal, removal and reduction in rank which are specified by article 311 (2) represent actions taken by way of penalty. In regard to temporary servants, or servants on probation, every case of termination of service may not amount to removal. In cases falling under these categories, the terms of contract or service rules may provide for the termination of the services on notice of a specified period, or on payment of salary for the said period, and if in exercise of the power thus conferred on the employer, the services of a temporary or probationary servant are terminated, it may not necessarily amount to removal. In every such case, courts examine the substance of the matter, and if it is shown that the termination of services is no more than discharge simpliciter effected by virtue of the contract or the relevant rules, article 311(2) may not be applicable to such a case. If, however, the termination of a temporary servant 's services in substance represents a penalty imposed on him or punitive action taken against him, then such termination would amount to removal and article 311(2) would be attracted. Similar would be the position in regard to the reduction in rank of an officiating servant. This aspect of the matter has been considered by this Court in several recent decisions, vide Jagdish Mitter vs Union of India(1) State of Bihar vs Gopi Kishore ' Prasad(2) State of Orissa & Anr. vs Ram Narayan Das(3) section Sukhbans Singh vs The State of Punjab(4) and Madan Gopal vs The State of Punjab & Qrs. (5) (1) A. 1. R. (3) ; (2) ; (4) ; (5) [1963] 3 section C. R. 716. 699 This branch of the law must, therefore, be taken to be well settled. In regard to servants holding substantively a permanent post who may conveniently be describe hereafter as permanent servants, it is similarly wellsettled that if they are compulsorily retired under the relevant service rules, such compulsory retirement does not amount to removal under article 311 (2). Similarly, there can be no doubt that the retire ment of a permanent servant on his attaining the age of superannuation does not amount to his removal within the meaning of article 311(2). The question which arises for our decision in the present appeals is: if the service of a permanent civil servant is terminated otherwise than by operation of the rule of superannuation, or the rule of compulsory retirement does such termination amount to removal under article 311(2) or not ? It is on the aspect of the question that the controversy between the parties arises before us. Before dealing with this problem, it is necessary to refer to the relevant. Railway Rules themselves Speaking historically, it appears that even while the affairs of the country were in charge of the East India Company, there used to be some regulations which were substantially in the nature of administrative instructions in regard to the conditions of service of the Company 's employees. These regulations were continued by section 130(c) of the Government of India Act, 1915 which provided, inter alia that the repeal shall not affect the tenure of office, conditions of service, terms of remuneration or right to pension of any officer appointed before the commencement of this Act. Section 96B(2) which was inserted in the said Act in 1919, however, provided that the said regulations could be modified or superseded by rules framed by the Secretary of State. In due course, the Secretary of State framed certain rules The first batch of rules was framed in December 1920. They applied to all officers in the All India Provincial as well as Subordinate Services and governed 700 even officers holding special posts. The Local Government had a limited power in respect of officers in the All India Services under their employment and this power was confined to imposing on them punishments of censure, reduction, withholding of promotion and suspension (vide Rule 10); in the case of Provincial Services, however, the powers of the Local Government were plenary They could not only impose the penalties to which we have just referred, but also remove or dismiss them (vide Rule 13). It appears that Rule 14 prescribed the procedure which had to be followed in imposing the penalty of dismissal, removal or reduction; and so, it may be said that for the first time these three major punishments were collated together and a special procedure prescribed in that behalf. No definition of removal was, however, prescribed. Incidentally, we may refer to Rule XX which is included in the group of rules relating to appeals. Under this rule, an appeal would not lie against; (1) the discharge of a person appointed on probation before the end of his probation, and (2) the dismissal and removal of a person appointed by an authority in India to hold a temporary appointment. It would be permissible to point out that this provision would show that the termination of the services of a person permanently employed would not have fallen within the ambit of this rule. The Rules thus framed in 1920 were amended from time to time and were re issued in June, 1924. It appears that subsequent to 1924, fresh rules were made under the Governors Provinces Civil Services (Control and Appeal) Rules and Governors Provinces Civil Services (Delegation) Rules of 1926 which were published in March, 1926. Then followed the Rules framed by the Secretary of State in 1930. These Rules were in force when the Government of India Act, 1935 was enacted, and they continue in force even now by reason of Article 313. We ought to add that these Rules superseded all the earlier rules and constitute an exhaustive code as regards disciplinary matters. Rule 3(b) of these rules excluded the 701 Railway Servants from the application of said rules, and that furnishes the historical background why separate Fundamental Rules for Railway corresponding to the Fundamental Rules in other public services, came to be framed. Before we proceed to the relevant Railway Rule we may incidentally mention Rule 49 of the Rules framed by the Secretary of State in 1930. This provides that penalties may, for good and sufficient reason and as hereinafter provided, be imposed upon members of the services comprised in any of the clauses (1) to (5) specified in Rule 14. These penalties. number seven in all. Amongst them are mentioned reduction to a lower post, dismissal and removal. Then follows an explanation which is useful for our purpose. Before quoting that explanation it may be. pointed out that the said explanation which was originally introduced under Rule 49, was subsequently amended once in 1948, then in 1950 lastly in 1955 when explanation No. 2 was added Thus amended, the two explanations read as follows: "Explanation 1 The termination of employment (a) of a person appointed on probation during or at the end of the period of probation, in accordance with the terms of the appointment and the rules governing the probationary service; or (b) of a temporary Government servant appointed otherwise than under contract, in accordance with rule 5 of the Central Civil Services (Temporary Service) Rules, 1949; or (c) of a person engaged under a contract, does not amount to removal or dismissal within the meaning of this rule or of rule 55. Explanation II: Stopping a Government Servant at an efficiency bar in the time scale of his pay on the ground of his unfitness to cross the bar does not amount to withholding of increments or promotions within the meaning of this rule. " 702 Looking at clauses (a), (b) and (c) of Explanation 1, it would be apparent that these clauses deal with persons appointed on probation, or appointed as temporary servants, or engaged on a contract, and the effect of the said explanation is that the termination of the services of such persons does not amount to removal or dismissal within the meaning of Rule 49 or Rule 55. In other words, R. 49 read along with explanation 1, would,prima facie, inferentially support the contention that in regard to a permanent civil servant, the termination of his services otherwise than under the rule of superannuation or compulsory retirement would amount to removal. Let us then consider the relevant Railway Fundamental Rules which have a bearing on the point with which we are concerned. Paragraph 2003 of the Code, Vol. 11 which corresponds to Fundamental Rule 9 contains definitions. Fundamental Rule 9(14) defines a lien as meaning the title of a Railway servant to hold substantively, either immediately or on the termination of a period or periods of absence, a permanent post, including a tenure post, to which he has been appointed substantively. An officiating servant is defined by F.R. 9(19) as one who performs the duties of a post on which another person holds a lien, or when a competent authority appoints him to officiate in a vacant post on which no other railway servant holds a lien. There is a proviso to this definition which is not relevant for our purpose. That takes us to the definition of a permanent post which under F.R. 9(22) means a post carrying a definite rate of pay sanctioned without limit of time. A, temporary post, on the other hand, means under F.R. 9 (29) a post carrying a definite rate of pay sanctioned for a limited time, and a tenure post means under F. R. 9 (30) a permanent post which an individual railway servant may not hold for more than a limited period. It is thus clear that as a result of the relevant definitions, a permanent post carries a definite ate of pay without a limit of time and a servant who substantively holds a permanent post has 703 a title to hold the post to which he is substantively appointed, and that, in terms, means that a permanent servant has a right to hold the post until, of course he reaches the age of superannuation, or until he is compulsorily retired under the relevant rule. It is in the light of this position that we must now proceed to examine the question as to whether the termination of the permanent servant 's services either under Rule 148(3) or R. 149(3) amounts to his removal or not. On this point, two extreme contentions have been raised before us by the parties The learned Addl. Solicitor General contends that in dealing with the present controversy, we must bear in mind the doctrine of pleasure which has been enshrined in article 310(1). He argues that every civil servant holds his office during the pleasure the President or the Governor. It is true that in the present cases, we are dealing with rules framed under the proviso to article 309 and in that sense, the question of pleasure on which so much stress is laid by the learned Addl. Solicitor General may not directly arise; but it must be conceded that the point raised for our decision may have some impact on the doctrine of pleasure, and so it needs to be examined. The argument is that all civil service is strictly speaking precarious in character. There is no guarantee of any security of tenure, because the pleasure of the President or the Governor can be exercised at any time against the civil servant. It is true that this pleasure would not be exercised capriciously, unjustly or unfairly, but the existence of the doctrine of pleasure inevitably imposes a stamp of precarious character on the tenure enjoyed by the civil servant, and so it is urged whether Rule 148 or R. 149 is made or not, it would be open to the President or the Governor to terminate the services of any civil servant to whose case article 110(1) applies. The learned Addl. Solicitor General has also impressed upon us the necessity to construe article 310(1) and article 311 in such a manner that the pleasure contemplated by article 310(1) does not become illusory or is not completely obliterated. He, therefore, suggests that article 311(2) which is in the nature of a proviso or an exception to article 310(1) must be strictly construed and in all cases falling outside the scope of the said provision, the pleasure of the President or the Governor must be allowed to rule supreme. On the other hand, it has been urged by the learned counsel appearing for the railway servants concerned before us that the pleasure of the President is controlled by article 311 and if the argument of the learned Addl. Solicitor General is accepted and full scope given to the exercise of the said pleasure, article 311 itself would become otiose. It is urged that the employment in civil service can be terminated only after complying with article 311 and any rule which violates the guarantee provided by the said Article would be invalid. In fact, the argument on the other side is that the word "removal" should receive a much wider denotation than has been accepted by this Court in its decisions bearing on the point, and that all terminations of services in respect of all categories of public servants should be held to constitute removal within article 311(2). We are inclined to hold that the two extreme contentions raised by both the parties must be rejected. There is no doubt that the pleasure of the President on which the learned Addl. Solicitor General so strongly relies has lost some of its majesty and power, because it is clearly controlled by the provisions of article 31 1, and so, the field that is covered by article 311 on a fair and reasonable construction of the re levant words used in that article, would be excluded from the operation of the absolute doctrine of pleasure. The pleasure of the President would still be there, but it has to be exercised in accordance with the requirements of article 311. Besides, as this Court has held in the State of Bihar vs Abdul Majid(1), the rule of English Law pithily expressed in the latin phrase "duranto bene placito" ("during pleasure") has not been fully adopted either (1) ; , 799. 705 by section 240 of the Government of India Act, 1935, or by article 3 1 0(1). To the extent to which that rule has been modified by the relevant provisions of: section 240 of the Government of India Act, 1935, or article 311 the Government servants are entitled to relief like any other person under the ordinary law and that relief must be regulated by the Code of Civil Procedure. It is mainly on the basis of this principle that this Court refused to apply the doctrine against abdul Majid that a civil servant cannot maintain suit against a State or against the Crown for the recovery of arrears of salary due to him. Thus, the extreme contention based on the doctrine of pleasure enshrined in article 310(1) cannot be sustained. Similarly, we do not think it would be possible to accept the argument that the word "removal" in article 311(2) should receive the widest interpretation. Apart from the fact that the said provision is in the nature of a proviso to article 3 1 0(1) and must, therefore, be strictly construed, the point raised by the contention is concluded by the decisions of this Court and we propose to deal with the present appeals on the basis that the word " removal" like the two other words "dismissal" and "reduction in rank" used in article 311(2) refer to cases of major penalties which were specified by the relevant service rules. Therefore, the true position is that Articles 310 and 311 must no doubt be read together, but once the true scope and effect of article 311 is determined, the scope and effect of article 310(1) must be limited in the sense that in regard to cases falling under article 311(2) the pleasure mentioned in article 310(1) must be exercised in accordance with the requirements of article 311. It is then urged by the learned Addl. Solicitor General that article 310 does not permit of the concept of tenure during good behaviour. According to him, in spite of the rule of superannuation, the services of a civil servant can be terminated by the President exercising his pleasure at any time. The rule of superannuation on this contention merely gives an indication to the civil servant as to the length of time 1/SCI/64 45 706 he may expect to serve, but it gives him no right to continue during the whole of the said period. In fact, the learned Addl. Solicitor General did not disguise the 'act that according to his argument Whether or not a rule of superannuation is framed and whether or not Rule 148 or R. 149 is issued, the President 's pleasure can, be exercised independently of these Rules and the action taken by the President in exercise of his pleasure cannot be "questioned under article 311(2). Alternatively,_ he contends that if article 311(2) is read in a very general and wide sense, even the rule as to the age of superannuation may be questioned as being invalid, because it does put an end to the service of a civil servant. We are not impressed by this argument. We will no doubt have to decide what cases of termination of services of permanent civil servants amount to removal; but once that question is determined, wherever it is shown that a permanent civil servant is removed from his service, article 311(2) will apply and article 310(1) cannot be invoked independently with the object of justifying the contravention of the provisions of article 311(2). In regard to the age of superannuation, it may be said prima facie that rules of superannuation which are prescribed in respect of public services in all modem States are based on considerations of life expectation, mental capacity of the civil servants having regard to the climatic conditions under which they work, and the nature of the work they do. They are not fixed on any ad hoc basis and do not involve the exercise of any discretion. They apply uniformly to all public servants falling under the category in respect of which they are framed. Therefore, no analogy can be suggested between the rule of superannuation and .Rule 148(3) or Rule 149(3). Besides., nobody has questioned the validity of the rule of superannuation, and so, it would be fruitless and idle to consider whether such a rule can be challenged at all. Reverting then to the nature of the right which a permanent servant has under the relevant Railway Rules, what is the true position? A person Who 707 substantively holds a permanent post has a right to continue in service, subject, of course, to the rule of superannuation and the rule as to compulsory retirement. If for any other reason that right is invaded and he is asked to leave his service, the termination of his service must inevitably mean the defeat of his right to continue in service and as such, it is, in the nature of a penalty and amounts to removal. In other words, termination of the services of a permanent servant otherwise than on the ground of superannuation or compulsory retirement, must per se amount to his removal, and so, if by R. 148(3) or IC. 149(3) such a termination is brought about, the Rule clearly contravenes article 311(2) and must be held to be invalid. It is common ground that neither of the two Rules contemplates an enquiry and in none of the cases before us has the procedure prescribed by article 311(2) been followed. We appreciate the argument urged by the learned Addl. Solicitor General about the pleasure of the President and its significance; but since the pleasure has to be exercised subject to the provisions of article 31 1, there would be no escape from the conclusion that in respect of cases falling under article 311(2), the procedure prescribed by the said Article must be complied with and the exercise of pleasure regulated accordingly. In this connection, it is necessary to emphasise that the rule making authority contemplated by article 309 cannot be validly exercised so as to curtail or affect the rights guaranteed to public servants under article 311(1). article 311(1) is intended to afford a sense of security to public servants who are substantively appointed to a permanent post and one of the principal benefits which they are entitled to expect is the benefit of pension after rendering public service for the period prescribed by the Rules. It would, we think, not be legitimate to contend that the right to earn a pension to which a servant substantively appointed to a permanent post is entitled can be curtailed by Rules framed under article 309 so as to make the said right either ineffective or illusory. Once the scope of article 311(1) and (2) is duly determined, it must be held that no Rule 708 framed under article 309 can trespass on the rights guaranteed by article 311. This position is of basic importance and must be borne in mind in dealing with the controversy in the present appeals. At this stage, we ought to add that in a modern democratic State the efficiency and incorruptibility of public administration is of such importance that it is essential to afford to civil servants adequate protection against capricious action from their superior authority. If a permanent civil servant is guilty of misconduct, he should no doubt be proceeded against promptly under the relevant disciplinary rules, subject, of course, to the safeguard prescribed by article 311(2); but in regard to honest, straightforward and efficient permanent civil servants, it is of utmost importance even from the point of view of the State that they should enjoy a sense of security which alone can make them independent and truly efficient. In our opinion, the sword of Damocles hanging over the heads of permanent railway servants in the form of R. 148(3) or R. 149(3) would inevitably create a sense of insecurity in the minds of such servants and would invest appropriate authorities with very wide powers which may conceivably be abused. In this connection, no distinction can be made between pensionable and non pensionable service. Even if a person is holding a post which does not carry any pension, he has a right to continue in service until he reaches the age of superannuation and the said right is a very valuable right. That is why the invasion of this right must inevitably mean that the termination of his service is, in substance, and in law, removal from service. It appears that after Rule 149 was brought into force in 1957, another provision has been made by Rule 321 which seems to contemplate the award of some kind of pension to the employees whose services are terminated under Rule 149(3). But it is significant that the application of R. 149(3) does not require, as normal rules of compulsory retirement do "that the power conferred by the said Rule can be exercised in respect of servants who have 709 put in a prescribed minimum period of service. Therefore, the fact that some kind of proportionate pension is awardable to railway servants whose services are terminated under R. 149(3) would not assimilate the cases dealt with under the ' said Rule to cases of compulsory retirement. As we Will presently point out, cases of compulsory retirement which have been considered by this Court were all cases where the rule as to compulsory retirement came into operation before the age of superannuation was reached and after a Prescribed minimum period of service had been put in by the servant. It is true that the termination of service authorised by R. 148(3) or R. 149(3) contemplates the right to terminate on either side. For all practical purposes, the right conferred on the servant to terminate his services after giving due notice to the employer does not mean much in the present position of unemployment in this country; but apart from it, the fact that a servant has been given a corresponding right cannot detract from the position that the right which is conferred on the railway authorities by the impugned Rules is inconsistent with article 311(2), and so, it ha to be struck down in spite of the fact that a simila right is given to the servant concerned. It has, however, been urged that the railway servants who entered service with the full knowledge of these Rules cannot be allowed to complain that the Rules contravene article 311 and are, therefore invalid. It appears that under Rule 144 (which was originally Rule 143), it was obligatory on railway servants to execute a contract in terms of the re levant Railway Rules. That is how the argument based on the contract and its binding character arise If a person while entering service executes a contract containing the relevant Rule in that behalf with open eyes, how can he be heard to challenge the validity of the said Rule, or the said contract? In our opinion this approach may be relevant in dealing with purely commercial cases governed by rules of contract but it is wholly inappropriate in dealing with a case 710 where the contract or the Rule is alleged to violate a constitutional guarantee afforded by article 311(2); land even as to commercial transactions, it is wellknown that if the contract is void, as for instance, under section 23 of the Indian Contract Act, the plea that it was executed by the party would be of no avail. In any case, we do not think that the argument of contract and its binding character can have validity in dealing with the question about the constitutionality of the impugned Rules. Let us then test this argument by reference to the provisions of article 311(1). article 311(1) provides that no person to whom the said article applies shall be dismissed or removed by an authority subordinate to that by which he was appointed. Can it be suggested that the Railway Administration can enter into a contract with its employees by which authority to dismiss or remove the employees can be delegated to persons other than those contemplated by article 311 (1)? The answer to this question is obviously in the negative, and the same answer must be given to the conten tion that as a result of the contract which embodies the impugned Rules, the termination of the railway servant 's services would not attract the provisions of article 311(2), though, in law, it amounts to removal. If the said termination does not amount to removal, then, of course, article 311(2) would be inapplicable and the challenge to the validity of the impugned Rules would fail; but if the termination in question amounts to a removal, the challenge to the validity of the impugned Rules must succeed notwithstanding the fact that the Rule has been included in a contract signed by the railway servant. There is one more point which still remains to be considered and that is the point of construction. The learned Add1. Solicitor General argued that in construing the impugned Rule 148(3) as well as R. 149(3), we ought to take into account the fact that the Rule as amended has been so framed as to avoid conflict with, or non compliance of, the provisions of article 311(2), and so, he suggests that we should 711 adopt that interpretation of the Rule which would be consistent with article 311(2). The argument is that the termination of services permissible under the impugned Rules really proceeds on administrative grounds or considerations of exigencies of service. If, for instance, the post held by a permanent servant is abolished, or the whole of the cadre to which the post belonged is brought to an end and the railway servant 's services are terminated in consequence, that cannot amount to his removal because the termination of his services is not based on any consi deration personal to the servant. In support ' of this argument, the Addl. Solicitor General wants us to test the provision contained in the latter portion of the impugned Rules. We are not impressed by this argument. What the latter portion of the impugned Rules provides is that in case a railway servant is dealt with under that portion, no notice need be served on him. The first part of the Rules can reason ably and legitimately take in all cases and may be used even in respect of cases falling under the latter category, provided, of course, notice for the specified period or salary in lieu of such notice is give to the railway servant. There is no doubt that on a fair construction, the impugned Rules authorise the Railway Administration to terminate the services of all the permanent servants to, whom the Rules apply merely on giving notice for the specified period, or on payment of salary in lieu thereof, and that clearly amounts to the removal of the servant in question, we are satisfied that the impugned Rules are invalid in as much as they are inconsistent with the provision contained in article 311(2). The termination of the permanent servants" tenure Which is authorised the said Rules is no more and no less than, their removal from service, and so, article 311(2) must come into play in respect of such cases, 'That being so. the Rule which does not require compliance with the procedure prescribed by article 311(2) must be struck down as invalid. It is now necessary to examine some of the cases on which the learned Addl. Solicitor General has 712 relied. In fact, as we have already indicated, his main argument was that some of the observations made in some of the decisions to which we will presently refer support his contention and logically lead to the conclusion that the impugned Rules are valid. That naturally makes it necessary for us to examine the said cases very carefully. In Satish Chandra Anand vs The Union of India(1), this Court was dealing with the case of a person who had been employed by the Government of India on a five year contract in the Resettlement and Employment Directorate of the Ministry of Labour. When his contract was due to expire, a new offer was made to him to continue him in service in his post temporarily for the period of the Resettlement and Employment Organization on the condition that he would be governed by the Central Civil Services (Temporary Service) Rules, 1949. The relevant rule in that behalf authorised the termination of the contract on either side by one month 's notice. Subsequently, his services were terminated after giving him one month 's notice. He challenged the validity of the said order, but did not succeed for the reason that neither article 14 nor article 16 on which he relied really applied. This Court held that it is competent to the State to enter into contracts of temporary employment subject to the term that the contract would be terminated on one month 's notice on either side. Such a contract was not inconsistent with article 311(2). This case, therefore, is of no assistance in the present appeals. In Gopal Krishna Potnay vs Union of India & Anr. (2) a permanent railway employee who was discharged from service after one month notice brought a suit challenging the validity of the order terminating his services. The point about the validity of the Rule was not agitated before the Court. Questions which were raised for the decision of the Court were, inter alia, whether the agreement in question lad been executed by the servant and whether the (1) ; (2) A.I.R. 1954 S.C. 632. 713 termination of his services amounted to a discharge or not. In that connection, reference was made to Rules 1504 and 1505 and it was held that the conduct of the parties showed that the termination of the servant 's services was not more than a discharge in terms of the agreement. This case again is of no assistance. That takes us to the decision in the case of Shyam Lal vs The State of U.P. and the Union of India(1) Shyam Lal 's services were terminated under article 465 A of the Civil Service Regulations and Note I appended thereto. Shyam Lal alleged that his compulsory retirement offended the provisions of article 311(2) on the ground that compulsory retirement was in substance removal from service. This Court considered the scheme of the relevant Rule and held that compulsory retirement did not amount to removal within the meaning of article 311(2). In dealing with this question, this Court observed that removal was almost synonymous with dismissal and that in the case of removal as in the case of dismissal, some ground personal to the servant which was blameworthy was involved. There was a stigma attached to the servant who was removed and it involved a loss of benefit already earned by him. It is in the light of these tests that this Court held that compulsory retirement did not amount to removal. It is true that in dealing with the argument about the loss of benefit, this Court observed that a distinction must be made between the loss of benefit already earned and the loss of prospect of earning something more, and it proceeded to add that in the first case, it is a present and certain loss and is certainly a punishment, but the loss of future prospect is too uncertain, for the officer may die of be otherwise incapacitated from serving a day long and cannot, therefore, be regarded in the eye of law as a punishment. It appears that in dealing with the point, the attention of the Court was drawn to Rule 49 of the Civil Services (Classification, Control and Appeal) Rules, and presumably the explanation (1) ; 713 termination of his services amounted to a discharge or not. In that connection, reference was made to Rules 1504 and 1505 and it was held that the conduct of the parties showed that the termination of the servant 's services was not more than a discharge in terms of the agreement. This case again is of no assistance. That takes us to the decision in the case of Shyam Lal vs The State of U.P. and the Union of India( ) Shyam Lal 's services were terminated under article 465 A of the Civil Service Regulations and Note I appended thereto. Shyam Lal alleged that his compulsory retirement offended the provisions of article 311(2) on the ground that compulsory retirement was in substance removal from service. This Court considered the scheme of the relevant Rule and held that compulsory retirement did not amount to removal within the meaning of article 311(2). In dealing with this question, this Court observed that removal was almost synonymous with dismissal and that in the case of removal as in the case of dismissal, some ground personal to the servant which was blameworthy was involved. There was a stigma attached to the servant who was removed and it involved a loss of benefit already earned by him. It is in the light of these tests that this Court held that compulsory retirement did no amount to removal. It is true that in dealing with th argument about the loss of benefit, this Court observe that a distinction must be made between the loss of benefit already earned and the loss of prospect of earning something more, and it preceded to add that in the first case, it is a present and certain loss and is certainly a punishment, but the loss of future prospect is too uncertain, for the officer may die or be otherwise incapacitated from serving a day longer and cannot, therefore, be regarded in the eye of the law as a punishment. It appears that in dealing with the point, the attention of the Court was drawn to Rule 49 of the Civil Services (Classification, Control and Appeal) Rules, and presumably the explanation (1) ; 714 to the said Rule to which we have already referred, was taken into account in rejecting the argument a that a loss of future service cannot be said to be a relevant factor in determining the question as to whether compulsory retirement is removal or not. The judgment does not show that the invasion of the right which a permanent servant has, to remain in service until he reaches the age of superannuation, was pressed before the Court, and naturally the same has not been examined. Confining itself to the special features of compulsory retirement which was effected under article 465 A and Note I appended thereto, the Court came to the conclusion that compulsory retirement was not removal, We may add that subsequent decisions show that the same view has been taken in respect of compulsory retirement throughout and so, that branch of the law must be held to be concluded by the series of decisions to which we shall presently refer. We would, however, like to make it clear that the observation made in the judgment that every termination of service does not amount to dismissal or removal should, in the context, be confined to the case of compulsory retirement and should not be read as a decision of the question with which we are directly concerned in the present appeals. That problem did not arise before the Court in that case, was not argued before it, and cannot,therefore, be deemed to have been decided by this decision. Then we have a batch of four decisions reported in 1958 which are relevant for our purpose. In Hartwell Prescott Singh vs The Uttar Pradesh Government & Ors.(1) a civil servant held a post in a temporary capacity in the Subordinate Agriculture Service, Uttar Pradesh, and was shown in the gradation list as on probation. He was later appointed with the approval of the Public Service Commission of the United Provinces to officiate in Class II of the said Service. After about 10 years, he was reverted to his original temporary appointment and his services were there after terminated under Rule 25(4) of the Subordinate 1) ; 715 Agriculture Service Rules. Dealing with the said civil servant 's objection that the termination of his services contravened article 311(2), this Court held that reversion from a temporary post held by a person does not per se amount to reduction in rank. To decide whether the reversion is a reduction in rank, the post held must be of a substantive rank and further it must be established that the order of reversion was by way of penalty. As we have already discussed, the cases of temporary servants, probationers and servants holding posts in officiating capacities stand on a different footing and the principles applicable to them are now firmly established and need not detain us. The next decision in the same volume is the State of Bombay vs Saubhagchand M. Doshi(1). This was a case of compulsory retirement under Rule 165 A of the Bombay Civil Services Rules as amended by the Saurashtra Government. In I so far as, this case dealt with the compulsory retirement of a civil servant,, it is unnecessary to consider the Rule in question or the facts relating to the compulsory retirement of the civil servant. It is of interest to note that in dealing with the question as to whether compulsory retirement amounted to removal or not the tests which were applied were in regard to the loss of benefit already accrued and stigma attached to the civil servant. It is, however, significant that in considering the objection based on the contravention of article 311(2), Venkatarama Aiyar J. took the precaution of adding that "questions of the said character could arise only when the rules fix both an age of superannuation and an age for compulsory 'retirement and the services of a civil servant are terminated between these two points of time. But where there is no rule fixing the age of compulsory retirement, or if there is one and the servant is retired before the age prescribed therein, then that can be regarded only as dismissal or removal within article 311 (2). " It would be noticed that the rule providing (1) 716 for compulsory retirement was upheld on the ground that such compulsory retirement does not amount to ,removal under article 311(2) because it was another mode of retirement and it could be enforced only between the period of age of superannuation prescribed and after the minimum period of service indicated in the rule had been put in. If, however, no such minimum period is prescribed by the rule of compulsory retirement, that according to the judgment, would violate article 311(2) and though the termination of a servant 's services may be described as compulsory retirement, it would amount to dismissal or removal within the meaning of article 311(2). With respect, we think that this statement correctly represents the true position in law. The third case in the said volume is the case of parshotam Lal Dhingra vs Union of India.(1) In this case, Das C.J. who spoke for the Bench considered comprehensively the scope and effect of the relevant constitutional provisions, service rules and their impact on the question as to whether reversion of Dhingra offended the provisions of article 311(2). Dhingra was appointed as a Signaller in 1924 and promoted to the post of Chief Controller in 1950. Both these posts were in Class III Service. In 1951, he was appointed to officiate in Class 11 Service as Asstt. Superintendent, Railway Telegraphs. On certain adverse remarks having been made against him, he was reverted as a subordinate till he made good the short comings. Then, Dhingra made a representation. This was followed by a notice issued by the General Manager reverting him to Class III appointment. It was this order of reversion which was challenged by Dhingra by a writ petition. It would thus be seen that the point with which the Court was directly concerned was whether the reversion of an officiating officer to his permanent post constituted reduction in rank or removal under article 311(2). The decision of this question was somewhat complicated by the fact that certain defects were noticed in the work of Dhingra (1) ; 717 and the argument was that his reversion was in the nature of a penalty, and so, it should be treated as reduction under article 311(2). This Court rejected Dhingra 's contention and held that the reversion of an officiating officer to his substantive post did not attract the provisions of article 311(2). Though the decision of the question which directly arose before this Court thus lay within a very narrow compass, it appears that the matter was elaborately argued before the Court and the learned Chief Justice has exhaustively considered all the points raised by the parties. For our present purpose, it is unnecessary to summaries the reasons given by the learned Chief Justice for holding that the reversion of Dhingra did not amount to reduction in rank. The only point which has to be considered by us is whether the observations made in the course of this judgment in regard to permanent servants assist the learned Addl. Solicitor General and if they do, what is their effect? Broadly stated, this decision widened the scope of article 311 by including within its purview not only permanent servants, but temporary servants and servants holding officiating posts also. The decision further held that dismissal, removal and reduction represent the three major penalties contemplated by the relevant service rules and it is only where the. impugned orders partake of the character of one or the other of the said penalties that article 311(2) can be invoked. In the course of his judgment the learned Chief Justice has referred to Rule 49 and the explanation attached thereto. The explanation to the Rule clearly shows that it refers to persons appointed on probation, or persons holding temporary appointments and contractual posts. It is in the light of this explanation that the learned Chief Justice proceeded to examine the contention raised by Dhingra that his reversion amounted to reduction in rank and so, it became necessary to examine whether any loss of benefit already accrued had been incurred or any stigma had been attached to the servant before he was reverted. It is in that connection that the Court also held that though a kind of enquiry may have 718 been held and the short comings in the work of Dhingra may have weighed in the mind of the authority who reverted him, the said motive could not alter the character of reversion which was not reduction within the meaning of article 311(2). All those points have been considered and decided and so far as the temporary servants probationers, or contractual servants are concerned, they are no longer in doubt. In regard to permanent servants, the learned Chief Justice has made some observations which it is now necessary to consider very carefully. "The appointment of a government servant to a permanent post," observed the learned C.J., "may be substantive or on probation or on an officiating basis. A substantive appointment to a permanent post in public service confers normally on the servant so appointed a substantive right to the post and he becomes entitled to hold a lien on the post. "(p. 841) On the same subject, the learned C.J has later added that "in the absence of any special contract, the substantive appointment to a permanent post gives the servant so appointed a right to hold the post until, under the rules, he attains the age of superannuation or is compulsorily retired after having put in the prescribed number of years ' service, or the post is abolished and his service cannot be terminated except by way of punishment for misconduct, negligence, inefficiency or any other disqualification found against him on proper enquiry after due notice to him." (p. 843). Reading these two observations together, there can be no doubt that with the exception of appointments held under special contract, the Court took the view that wherever a civil servant was appointed to a permanent post substantively, he had a right to hold that post until he reached the age of superannuation or was compulsorily retired, or the post was abolished. In all other cases, if the services of the said servant were terminated, they would have to be in conformity with the provisions of article 311(2), because termination in such cases amounts to removal. The two statements of the law to which we have just 719 referred do not leave any room for doubt on this point. Later during the course of the judgment, learned C.J. proceeded to examine Rule 49 and the explanations added to it, and then reverting to the question of permanent servants once again, he observed that "it has already been said that where a person is appointed substantively to a permanent 'post in Government service, he normally acquires a right to hold the post until under the rules, he attains the age of superannuation or is compulsorily retired and in the absence of a contract, express or implied or a service rule, he cannot be turned out of his post unless the post itself is abolished or unless he is guilty of misconduct, negligence, inefficiency or other disqualifications and appropriate proceedings are taken under the service rules read with article 311(2). Termination of service of such a servant so appointed must per se be a punishment, for it operates as a forfeiture of the servant 's rights and brings about a premature end of his employment." (pp. 857 58). With respect we ought to point out that though the learned C. J at this place purports to reproduce what had already been stated in the judgment, he has made two significant additions because in the present statement he refers to a contract or service rules which may permit the authority to terminate the services of a permanent servant without taking the case under article 311(2), though such termination may not amount to ordinary or compulsory retirement. The absence of contract, express or implied, or a service rule, which has been introduced in the present statement are not to be found in the earlier statements to which we have already referred, and addition of these two Clauses apparently is due to the fact that the learned C.J. considered Rule 49 and the explanations attached thereto and brought them into the discussion of a permanent servant, and that, we venture to think is not strictly correct. As we have already seen Explanation No. 1 to R. 49 is confined to the through categories of officers specified by it in its clauses (a) 720 (b) and (c), and it has no relevance or application to the cases of permanent servants. Similarly, the same statement is repeated with the observation "as already stated, if the servant has got a right to continue in the post, then, unless ,the contract of employment or the rules provide to the contrary, his services cannot be terminated otherwise than for misconduct, negligence, inefficiency or other good and sufficient cause. A termination of the service of such a servant on such grounds must be a punishment and, therefore, a dismissal or removal within article 31 1, for it operates as a forfeiture of his right and he is visited with the evil consequences of loss of pay and allowances." (p. 862). With respect, we wish to make the same comment about this statement which we have already made about the statement just cited. In this connection, it may be relevant to add that in the paragraph where this statement occurs, the learned C.J. was summing up the position and the cases there considered are cases of Satish Chandra Anand, (1) and Shyam Lal(2). These two cases were concerned with the termination of a temporary servant 's services and the compulsory retirement of a permanent servant respectively, and strictly speaking, they do not justify the broader proposition enunciated at the end of the paragraph. At the conclusion of his judgment, the learned C.J. has observed that "in every case, the Court has to apply the two tests mentioned above, namely, (1) whether the servant had a right to the post or the rank or (2) whether he has been visited with evil consequences of the kind hereinbefore referred to." (p. 863) It would be noticed that the two tests are not cumulative, but are alternative, so that if the first test is satisfied, termination of a permanent servant 's services would amount to removal because his right to the post has been prematurely invaded. The learned C.J. himself makes it clear by adding (1) ; (2) ; 721. that if the case satisfies either of the two tests, the it must be held that the servant had been punished and the termination of his services must be held to be wrongful and in violation of the constitutional rights of the servant. It would thus be noticed that the first test would be applicable to the cases of permanent servants, whereas the second test would be relevant in the cases of temporary servants, probationers and the like. Therefore, we do not think the learned Addl. Solicitor General is justified in contending that all the observations made in the course of this judgment in regard to permanent servant considered together support his contention. Besides if we may say so, with respect, these observations are in the nature of obiter dicta and the learned Add1 Solicitor General cannot rely solely upon them for the purpose of showing that R. 148(3) or R. 149(3) should be held to be valid as a result of the said observations. The last decision on this point rendered by this Court in 1958 (vide P. Balakotaiah vs The Union of India & Others(1) dealt with the case of Balakotaiah who was a permanent railway servant and whose services had been terminated for reasons of national security under section 3 of the Railway Services (Safe guarding of National Security) Rules, 1949.It appears that in this case, Balakotaiah who challenged the order terminating his services before the High Court of Nagpur, failed because the High Court held that the said order was justified under Rule 148(3) of the Railway Rules. In his appeal before this Court, it was urged on his behalf that the High Court was in error in sustaining the impugned order under the said Rule when the Union of India had not attempted to rely on the said Rule, and the impugned order did not purport to have been passed under it. The argument was that the impugned order had been passed under R. 3 of the Security Rules and the High Court should have considered the matter by reference to the said Rule and not to R. 148(3). This plea was (1) ; 1/SCI/64 46 722 upheld by this Court, and so, Balakotaiah 's challenge to the validity of the impugned order was examined by reference to security rule 3. The scheme of the relevant Security Rules was then considered by this Court and it was held that the said Rules did not contravene either article 14 or article 19(1)(c) of the Constitution as contended by the appellant. Having held that the impugned rule was not unconstitutional, this Court proceeded to examine the further contention that the procedure prescribed by the said rules for hearing of the charges does not satisfy the requirement of article 311 and as such, the said Rules are invalid. Rules, 3, 4 and 5 of the Security Rules which dealt with this point do contemplate some kind of an enquiry at which an opportunity is given to the railway servant concerned to show cause against the action proposed to be taken against him. Rule 7 also provides that a person who is compulsorily retired or whose service is terminated under Rule 3, shall be entitled to such compensation, pension, gratuity and/or Provident Fund benefits as would have been admissible to him under the Rules applicable to his service if he had been discharged from service due to the abolition of his post without any alternative suitable employment being provided. The contention was that the nature of the enquiry contem plated by the relevant Rules did not satisfy the re quirements of article 311(2), and so, the Rules should be struck down as being invalid and the order terminating the services of Balakotaiah should therefore, be held to be invalid. This argument was rejected by this Court, and relying upon the earlier decisions in the cases of Satish Chandra Anand(1), Shyam Lal(2) Saubhagchand M. Doshi(3) and Parshotam Lal Dhingra (4) it was held that the order terminating the services of the railway, employee which can be (1) ; (3) ; (2) ; (4) ; 723 passed under R. 3 is not an order of dismissal or removal, and so, article 311(2) is inapplicable. On that view, the validity of R. 3 was sustained. In recording its conclusion on this point, this Court observed that the order terminating the services under R. 3 stands on the same footing as an order of discharge under Rule 148 and it is neither one of dismissal nor of removal within the meaning of Art 311. Naturally, the learned Addl. Solicitor General relies on this statement of the law. In appreciating the effect of this observation, it is necessary to bear in mind that in the earlier portion of the Judgment, this Court has specifically referred to the argument that the Security Rules had an independent operation of their own quite apart from Rule 148, and has observed that the Court did not desire to express any final opinion on that question "as Mr. Ganapathy Iyer is willing that the validity of the orders in question might be determined on the footing that they were passed under R. 3 of the Security Rules without reference to R. 148. That renders it necessary to decide whether the Security Rules are unconstitutional as contended by the appellant. " It would thus be noticed that having upheld the contention of the appellant Balakotaiah that the High Court was in error in referring to and relying upon R. 148(3) for the purpose of sustaining the impugned order terminating his services, this Court had naturally no occasion to consider the validity, the effect or the applicability of the said Rule to the case before it, and so, the attention of the Court centered round the question as to whether the relevant security rule was valid and whether it justified the order passed against the appellant. In dealing with this aspect of the matter, this Court no doubt came to the conclusion that the termination of Balakotaiah 's services under R. 3 did not amount to his removal or dismissal; but since no argument was urged before the Court in respect of R. 148(3), the reference to the said Rule made by the judgment is purely in the nature of an obiter, and so, we are not prepared to 724 read that statement as a decision that R. 148(3) is valid. To read the said statement in that manner would be to ignore the fact that this Court had reversed the conclusion of the High Court that the impugned order was valid under R. 148(3) specifically on the ground that case had not been made out by the Union of India and should not have been adopted by the High Court. It is thus clear that as, the case was argued before this Court and considered, R. 148(3) was outside the controversy between the parties. That is why it would be unreasonable to rely on the reference to R. 148 in the statement made in the judgment on which the learned Addl. Solicitor General relies. There is another aspect of this question to which we may incidentally refer before we part with this case. We have already quoted the observation of Veinkatarama Aiyar J.; in the case of Subhagchand M. Doshi (1) to the ' effect that if compulsory retirement is permitted by any service rule without fixing the minimum period of service after which the Rule can be invoked, termination of the services of a permanent civil servant by the application of such a Rule would be dismissal or removal under article 311(2), and we have indicated that we regard that statement as correctly representing the true legal position in the matter. It appears that when this Court decided the case of Balakotaiah, this aspect of the matter 'was not argued before the Court and the observation to which we have just referred was not brought to its notice. One more case which still remains to be considered in this context is the decision in Dalip Singh vs The State of Punjab (2). In this case, Dalip Singh was compulsorily retired from service by the Rajpramukh of Pepsu exercising his power under Rule 278 of the Patiala State Regulations, 1931. In the quit from which the appeal before this Court arose he alleged that the order of retirement passed against him amoun (1) ; (2) 725 ted to his dismissal, and so, he claimed to recover Rs. 26,699 13 0 on that basis. The validity of R. 278 was not put in issue in the proceedings at any stage. The only point raised, 'was that the said Rule was not applicable to his case, and it was urged that in the circumstances, the order was an ' order of dismissal. This Court. held that R. 278 applied to the case, And so, the preliminary objection against the applicability of the Rule was rejected. Dealing with the main contention raised before this Court that the compulsory retirement of Dalip Singh was removal from service within the meaning of article 311(2), this Court applied the tests laid down in the case of Shyam Lal(1) and Saubhagchand Doshi(2) and held that the said retirement did not amount to removal. Dalip Singh had not lost the benefit which he earned and though considerations of alleged misconduct or inefficiency may have weighed with the Government in compulsorily retiring him that did not affect the character of the order;in fact full pension had been paid to the officer, and so, it was held that the order of retirement is clearly not by way of punishment. At the end of this judgment, this Court added that the observations made in the case of Doshi(2) which we have already cited, should not be read as laying down the law that retirement under R. 278 would be invalid for the reason that a minimum period of service had not been prescribed before the said Rule could be enforced against the civil servant. It would be recalled that in the case of Doshi(2) Venkatarama Aiyar J. had observed that if the two periods are not prescribed one for superannuation and the other for enforcing the rule of compulsory retirement, compulsory retirement of the officer would amount to dismissal or removal under article 311(2). In Dalip Singh 's case (2), it was stated that the said observation should not be taken to have laid down any rule of universal application in that behalf. The (1) (1955] 1 S.C.R. 26 (2) (1958] 1 S.C.R. (3) 726 learned Addl. Solicitor General has naturally relied on these observations. It is however, necessary to point out that the said observations were made on the assumption that the Patiala Rules did not lay down any minimum period of service which had to be put in by civil servant 'before he could be compulsorily retired under Rule 278. We have already seen that the validity of R. 278 was not challenged before the Court in Dalip Singh 's case; besides, we have now been referred to the relevant Patiala Rules, and it appears that the combined operation of Rules 53, 54, 125, 236, 239, 240, 243 and 278 would tend to show that no officer ,could have been compulsorily retired under R. 278 unless he had put in at least 12 years ' service. We are referring to this aspect of the matter for the purpose of showing that the assumption made by this Court in making the observations to which we have just referred may not be well founded in fact. Apart from that, we think that if any Rule permits the appropriate authority to retire compulsorily a civil servant without imposing a limitation in that behalf that such civil servant should have put in a minimum period of service, that Rule would be invalid and the so called retirement ordered under the said Rule would amount to removal of the civil servant within the meaning of article 311(2). At this stage, we ought to make it clear that in the present appeals, we are not called upon to consider whether a rule of compulsory retirement would be valid, if, having fixed a proper age of superannuation,, it permits a permanent servant to be retired at a very early stage of his career. We have referred to the decisions dealing with cases of compulsory retirement only for the purpose of ascertaining the effect of the obiter observations made in some of those decisions in relation to the question with which we are directly concerned. The question raised by the orders of compulsory retirement so far as it is covered by the said decisions must be deemed to be concluded. Our conclusion, therefore, is that rules 127 148(3) and 149(3) which permit the termination of a permanent railway servant 's services in the manner provided by them, are invalid because the termination of services which the said Rules authorise is removal of the said railway permanent servant and it contravenes the constitutional safeguard provided by article 311(2). After this Court pronounced its decision in the case of Shyam Lal(1) the question about the validity of Rule 148(3) has been considered by several High Courts and it must be conceded that with the exception of two decisions of the Calcutta High Court in Union of India vs Someswar Banerjee(2) and Fakir Chandra Chiki vs section Chakravarti & Ors(3) which have held that R. 1709 and R. 148(3) of the Railway Rules are respectively invalid, the consensus of judicial opinion is in favour of the contention raised by the learned Add1. Solicitor General. These decision have held that R. 148(3) is constitutionally valid (vide Biswanath Singh vs District Traffic Supdt. , N.E Railway, Sonepur(4), The Union of India vs Askaran (5) Hardwari Lal vs General Manager, North Eastern Railway, Gorakhpur(6) and Anr., Kishan Prasad vs The Union of India (7) and D.S. Srinath vs General Manager Southern Railway, Madras(8). In fairness, we ought to add that all these decisions proceeded on the basis that the observations made by this Court either in the case of Shyam Lal (1) or in the case of Dhingra(9) in respect of permanent servants amounted to a decision on that point and were, therefore, binding on the High Courts. Some decisions purport to adopt the said observations and extend them logically in dealing with the question about the validity of Rule 148(3). With respect, we must hold that these decisions do not correctly represent the true legal position in regard to the character of R. 148(3). (1) ; (3) A.I.R. 1954 Cal. (5) A.I.R. 1957 Rajastban 836. (7) A.I.R. 1960 Cal. (2) A.I.R. 1954 Cal. (4) A.I.R. 1956 Patna 221 (6) A.I.R. 1959 All. 439. (8) A.I.R. 1962 Mad 379. (9) ; 728 There is still one more point which must be considered and that is the challenge to the validity of Rules 148(3) and 149(3 on the ground that they contravene article 14 of the Constitution. The pleadings on this part of the case filed by both the parties are not very satisfactory; but as to the broad features '.of the Rules on which the challenge rests, there is no serious dispute. We have already seen the Rules; it is urged that they purport to give no guidance to the authority which would operate the said Rules. No principle is laid down which should guide the decision of the authority in exercising its power under the said Rules. Discretion is left in the authority completely unguided in the matter and the Rules are so worded that the power conferred by them can be capriciously exercised without offending the Rules. It is also not disputed by the learned Addl. Solicitor General that no other branch of public services either under the States or under the Union contains any rule which corresponds to the impugned Rules. Therefore, basing themselves on these two features of the impugned Rules it is argued by the Railway employees before us that the Rules offend article 14. In support of the first argument, it is suggested that though the impugned Rule may not in terms enact a discriminatory rule and in that sense may not patently infringe article 14, it may, nevertheless, contravene the said article if it is so framed as to enable an unequal or discriminatory treatment to be meted out to persons or things similarly situated; and in support of this point, reliance is placed on the decision of this Court in Jyoti Pershad vs The Administrator for the Union Territory of Delhi(1). Such a result, it is said, would inevitably follow where the rule vests a discretion in an authority as an executive officer and does not lay down any policy and fails to disclose any tangible, intelligible, or rational purpose which the power conferred by it is intended to serve. (1) ; at P. 137. 729 On the other hand, the Addl. Solicitor General has contended that the very purpose of the Rule gives guidance to the appropriate authority exercising its power under it; in exercising the said power the appropriate authority will have to take into account all the relevant circumstances in regard to the nature and quality of the work of the railway servant in question and will have to decide whether there are circumstances which require that the services of the said servant should be terminated. In dealing with such a question, it is plain that the appropriate authority would naturally have regard for consideration of public interest and the interest of the Railway Administration. Therefore, it is suggested that the Rule cannot be struck down on the ground that it confers absolute, unguided and uncanalised power on the appropriate authority. Since we have come to the conclusion that the second attack made against the validity of the Rule under article 14 ought to be sustained we do not propose to express any opinion on this part of the controversy between the parties. The other aspect of the matter arises from the fact that no other branch of public service contains such a rule for its civil servants. The true scope and effect of article 14 has been considered by this Court on several occasions. It may, however, be sufficient to refer to the decision of this Court in Shri Ram Krishna Dalmia vs Shri Justice S.R. Tendolker & Ors.(1) After examining the Article and the relevant decisions of this Court bearing on it, Das C.J. who spoke for the Court stated the position in the form of propositions, (a) to (f). Propositions (a) and are relevant for our purpose. "The decisions of this Court establish," said Das C.J., "(a) that a law may be constitutional even though it relates to a single individual if, on account of some special circumstances or: reasons applicable to him and not applicable to others, that single individual may be treated as a class by himself; and (f) that while good faith and knowledge of the existing conditions on the part (1) ; at P. 297. 730 of a legislature are to be presumed, if there is nothing on the face of the law or the surrounding circumstances brought to the notice of the court on Which the classification may reasonably be regarded as based, the presumption of constitutionality cannot be carried to the extent of always holding that there must be some undisclosed and unknown reasons for subjecting certain individuals or corporations to hostile or discriminating legislation. " Applying these two principles, it is difficult to understand on what ground employment by the Railways alone can be said to constitute a class by itself for the purpose of framing the impugned Rules. If considerations of administrative efficiency or exigencies of service justify the making of such a rule, why should such a Rule not have been framed in the Posts & Telegraph Department to take only one instance. The learned Additional Solicitor Generaf frankly conceded that the ' affidavits filed by the Railway Administration or the Union of India afforded no material on which the framing of the Rule only in respect of one sector of public service can be justified. We appreciate the argument that the nature of services rendered by employees in different sectors of public service may differ and the terms and conditions governing employment in all public sectors may not necessarily be the same or uniform; but in regard to the question of terminating the services of a civil servant after serving him with a notice for a specified period, we are unable to see how the Railways can be regarded as constituting a separate and distinct class by reference to which the impugned Rule can be justified in the light of article 14. If there is any rational connection between the making of such a Rule and the object intended to be achieved by it, that connection would clearly be in existence in several other sectors of public service. What has happened is that a provision like R. 148(3) pr R. 149(3) was first made by the Railway Companies when employment with the Railways was a purely commercial matter governed by the ordinary rules of contract. After the Railways were taken over by the State, that position has essen 731 tially altered, and so, the validity of the Rule is now exposed to the challenge under article 14. Therefore we are satisfied that the challenge to the validity of the impugned Rules on the ground that they contravene article 14 must also succeed. There is one more point which we ought to mention before we part with these appeals. In dealing with the validity of R. 149, Nayudu J. of the Assam High Court who has delivered the minority judgment in the case of Shyam Behari Tewari & Ors V. Union of India & Anr.(1), has observed that the Rule would be invalid for the additional reason that it purports to give power to the Railway Administration to terminate the services of any person in permanent employment in railway service on notice at the sweetwill and pleasure of the Railway Administration Such a power, said the learned Judge, can only be exercised by the President in the instant cases where the service is under the Union and not by any other whereas the Rule in question purports to give that power to the Railway Administration. In support of this conclusion, the learned Judge has relied on the observations made in the majority judgment delivered by this Court in The State of Uttar Pradesh and ors (2) vs Babu Ram Upadhya. We ought to point out that the learned Judge has misconstrued the effect of the observations on which he relies. What the said Judgment has held is that while article 310 provides for a tenure at pleasure of the President or the Governor, article 309 enables the legislature or the executive as the case may be, to make any law or rule in regard inter alia, to conditions of service without impinging upon the overriding power recognised under article 310. In other words, in exercising the power conferred by article 309, the extent of the pleasure recognised by article 310 cannot be affected, or impaired In fact, while stating the conclusions in the form of propositions, the said judgment has observed that the Parliament or the Legislature can make a law regulating the conditions of service without affecting (1) A.I.R. 1963 Assam 94 (2) 732 the powers of the President or the Governor under article 310 read with article 311. It has also been stated at the same place that the power to dismiss a public servant at pleasure is outside the scope of article 154 and, therefore, cannot be delegated by the Governor to a subordinate officer and can be exercised by him only in the manner prescribed by the Constitution. In the context, it would be clear that this latter observation is not intended to lay down that a law cannot be made under article 309 or a Rule cannot be framed under the proviso to the said Article prescribing the procedure by which, and the authority by whom, the said pleasure can be exercised. This observation which is mentioned as proposition number (2) must be read along with the subsequent propositions specified as (3), (4), (5) & (6). The only point made is that whatever is done under article 309 must be subject to the pleasure prescribed by article 310. Naidu J. was, therefore, in error in holding that the majority decision of this Court in the case of Babu Ram Upadhya(1) supported his broad and unqualified conclusion that R. 149(3) was invalid for the sole reason that the power to terminate the services had been delegated to the Railway Administration. In the result, the four appeals in the first group succeed and are allowed. The writ petitions filed by the four appellants in the three High Courts are granted and orders directed to be issued in terms of the prayers made by them. The appellants would be entitled to their costs from the respondents. The three appeals in the second group fail and are dismissed with costs. One set of hearing fees in each group. SUBBA RAO J I agree that the impugned rules infringe both article 14 and article 311(2) of the Constitution and are, therefore, void. On 1 article 14, 1 have nothing more to say. But on the impact of the said rules on article 311 of the Constitution, I would prefer to give my own reasons. The short but difficult question is whether 148 of the Indian Railway Establishment Code, (1) ; 733 Vol. 1 (1951) and r. 149 of the revised edition of the said Code of the year 1959 replacing r. 148 of the Code of 1951 edition impinge upon the constitutional safeguard given to a person holding a civil post under the Union Government under article 311(2) of the Constitution. While article 311(2) of the Constitution prohibits the State from dismissing or removing or reducing in rank a civil servant until he has been given a reasonable opportunity of showing cause against the action proposed to be taken in regard to him, rr. 148 and 149 of the said Code in effect enable the Government to terminate his services after issuing the prescribed notice thereunder ' Prima facie the said rules are in conflict with article 311(2) of the Constitution. Broadly stated, the contention of the State is that a Union civil servant holds his office during the pleasure, of the President, that article 311 is not really a limitation on the exercise,of that pleasure, that it only prescribes safeguards against the imposition on him of three unmerited specified penalties, viz., dismissal, removal and reduction in rank, and that the termination of his services for a reason other than misconduct personal to the civil servant is not comprehended by any of the said penalties. The further argument is that the "doctrine of pleasure" implies that a civil servant has no right to an office even in a case where he has a substantive lien on a post and that in any event he has none when there is a specific rule that his services can be terminated after the prescribed notice. This Bench of seven Judges has been constituted to steer clear of conflicting observations, if any, found in the judgments of this Court and to arrive at a conclusion of its own unhampered by such observations. I would, therefore, proceed to consider the relevant provisions in accordance with the natural tenor of the expressions used therein and then to scrutinize whether any of my conclusions would be in conflict with any of the decisions of this Court. At the outset I must make it clear that I propose to confine my discussion only to the question of termi 734 nation of services of a permanent civil servant. None of the observations I may make is intended to have any bearing on the question of termination of the services of other categories of servants. As the argument of the learned Additional Soli citor General is based upon the doctrine of pleasure, it would be convenient at the outset to ascertain the precise scope of the doctrine in the context of the Indian Constitution. Article 309 is subject to the provisions of the Constitution and, therefore, is subject to article 310 thereof Article 311 imposes two limitations on the doctrine of pleasure declared in article 310. The gist of the said provisions is this: Under article 309 of the Constitution the appropriate Legislature may regulate the recruitment and conditions of service of persons appointed to public services and posts in connection with the affairs of the Union or any State; and until provision in that behalf is made, the President or such person as he may direct may make rules regulating the recruitment and conditions of service of persons appointed to the said services and posts in connection with the affairs of the Union. In its ordinary meaning the expression "conditions of service" takes in also the tenure of a civil servant. Under article 310, such a civil servant holds office during the pleasure of the President; but article 311 imposes two conditions to be satisfied before a civil servant can be dismissed, or removed or reduced in rank, namely, (i) he shall not be dismissed, removed or reduced in rank by an authority subordinate to that by which he was appointed, and (ii) he shall be given a reasonable opportunity of showing cause against the action proposed to be taken in regard to him. A combined reading of these provisions indicates that the rules made under article 309 are subject to the doctrine of pleasure; and that the doctrine of pleasure is itself subject to two limitations imposed thereon under article 31 1. This tenure at pleasure is a concept borrowed from English law, though it has been modified to suit the Indian conditions. 735 The English law on the doctrine of tenure at pleasure has now become fairly crystallized. Under the English law, all servants of the Crown. hold office during the pleasure of the Crown. The right to dismiss at pleasure is an implied term in every contract of employment under the Crown. This doctrine is not based upon any prerogative of the Crown but on public policy. If the terms of appointment definitely prescribe a tenure for good behavior or expressly provide for a power to determine for a cause, such an implication of a power to dismiss at pleasure is excluded, and an Act of Parliament can abrogate or amend the said doctrine of public policy in the same way as it can do in respect of any other part of common law. (see The State of U.P. vs Babu Ram Upadhya (1). Section 96 B of the Government of India Act, 1915, for the first time in 1919, by an amendment, statutorily recognized this doctrine, but it was made subject to a condition that no person in the service might be dismissed by an authority subordinate to that by which he was appointed. Section 240 of the Government of India Act, 1935, imposed another limitation, namely, that a reasonable opportunity of showing cause against the action proposed to be taken in regard to a person must be given to him. But neither of the two Acts empowered the appropriate Legislature to make a law abolishing or amending the said doctrine. The Constitution of India practically incorporated the provisions of section 240 and section 241 of the Government of India Act, 1935, in articles 309 and 310. The English doctrine has been enlarged in one direction and restricted in another: while Parliament has no power to deprive the President of his pleasure, the said pleasure is made subject to two limitations embodied in article 311. The English concept is considerably modified to suit the conditions of our country. It is, therefore, not correct to say that article 311 is not a limitation on the power of the President to terminate the services of a Union civil servant at his pleasure. To accept the argument that the (1) ; , 696. 736 relevant expression in article 311 shall be so construed as to give full sway to the doctrine is to ignore the limitations on that doctrine. Both article 310 and article 311 shall be read together and, if so read, it is manifest that the said doctrine is subject to the said two conditions. What is the scope of the relevant words, "dismissed" and "removed ' in article 311 of the Constitution? The general rule of interpretation which is common to statutory provisions as well as to constitutional provisions is to find out the expressed intention of the makers of the said provisions from the words of the provisions themselves. It is also equally well settled that, without doing violence to the language used, a constitutional provision shall receive a fair, liberal and progressive construction, so that its true objects might be promoted. Article 311 uses two well known expressions, "dismissed" and "removed". The Article does not, expressly or by necessary implication, indicate that the dismissal or removal of a Government servant must be of a particular category. As the said Article gives protection and safeguard to a Government servant who will otherwise be at the mercy of the Government, the said words shall ordi narily be given a liberal or at any rate their natural meaning, unless the said Article or other Articles of the Constitution, expressly or by necessary implication, restrict their meaning. I do not see any indication anywhere in the Constitution which compels the Court to reduce the scope of the protection. The dictionary meaning, of the word "dismiss" is "to let go; to relieve from duty". The word " remove ' " means "to discharge, to get rid off, to dismiss". In their ordinary parlance, therefore, the said words mean nothing more or less than the termination of a person 's office. The effect of dismissal or removal of one from his office is to discharge him from that office. In that sense, the said words comprehend every termination of the services of a Government servant. Article 311(2) in effect lays down that before the services of a Government servant are so terminated, 737 he must be given a reasonable opportunity of showing cause against such a termination. There is no justification for placing any limitation on the said expressions, such as that the dismissal or removal should have been the result of an enquiry in regard to the Government servant 's misconduct. The attempt to imply the said limitation is neither warranted by the expressions used in the Article or by the reason given, namely, that otherwise there would be no point in giving him an opportunity to defend himself If this argument the correct, it would lead to an extraordinary result, namely, that a Government servant who has been guilty of misconduct would be entitled to a "reasonable opportunity" whereas an honest Government servant could be dismissed without any such protection. In one sense the conduct of a party may be relevant to punishment; ordinarily punishment is meted out for misconduct, and if there is no misconduct there could not be punishment. Punishment is, therefore, correlated to misconduct, both in its positive and negative aspects. That is to say punishment could be sustained if there was misconduct and could not be meted out if there was no misconduct. Reasonable opportunity given to a Government servant enables him to establish that he does not deserve the punishment, because he has not been guilty of misconduct. That apart, a Government servant may be removed or dismissed for many other reasons, such as retrenchment, abolition of post, compulsory retirement and others. If an opportunity is given to a Government servant to show cause against the proposed action, he may plead and establish that either there was no genuine retrenchment or abolition of posts or that others should go before him. Now let me see whether the history of this constitutional provision countenances any such limitation on the meaning of the said expressions. As we have already noticed, the concept of tenure at pleasure was first introduced in the Government of India Act, 1919. Under section 96 B of that Act, 1/SCI/64 47 738 "(1) Subject to the provisions of this Act and of rules made thereunder, every person in the civil service of the Crown in Ind ia holds office during His Majesty 's pleasure, and may be employed in any manner required by a proper authority within the scope of his duty, but no person in that service may be dismissed by any authority subordinate to that by which he was appointed. " It will be seen that under this section the said concept was introduced subject to a condition; it may also be noticed that the section used only one word "dismissed". In England, under that doctrine, services of a Government servant, whether he is a permanent or a temporary servant, can be terminated without any cause whether he is guilty of misconduct or not. Therefore, when the word "dismissed" is used in section 96 B of the Act in the context of the exercise of His Majesty 's pleasure, that word must have been used in the natural meaning it bears, i.e. terminated. But that section was subject to the provisions of the rules 'made under that Act. In exercise of the power conferred under the Act on the Secretary of State for India in Council, he framed certain rules in December 1920 and with subsequent modifications they were published on May 27, 1930. The said rules were designated as the Civil Services (Classification, Control and Appeal) Rules. Rule 49 of those Rules provided for certain penalties and cl. (6) thereof dealt with "Removal from the civil service of the Crown, which does not disqualify from future employment", and cl. (7) provided for dismissal from the civil service of the Crown, "which ordinarily disqualified from future employment". The explanation to that rule read thus: The termination of employment: (a) of a person appointed on probation during or at the end of the period of probation, in accordance with the terms of the appointment and the rules governing the probationary service; or 739 (b) of a temporary Government servant appointed otherwise than under contract, in accordance with rule 5 of the Central Civil Services (Temporary Service) Rules, 1949; or (c) of a person engaged under a contract, in accordance with the terms of his contract does not amount to removal or dismissal within the meaning of this rule or of rule 55. " The explanation makes it clear that the three specified categories of termination covered by the explanation would amount to dismissal or removal but for the explanation. That is to say, the expression "termination" is synonymous with the term "dismissal" or "removal". Rule 55 of the Rules provided a machinery for dismissing or removing or reducing in rank a Government servant; he should be given thereunder an adequate opportunity to defend himself. Then came the Government of India Act, 1935. In section 240 thereof, the expression used was "dismissed" and that term, in the context of the exercise of His Majesty 's pleasure, could have meant only "termination" of services, though in view of the explanation to r. 49 of the Rules quoted above, the three specified categories of termination mentioned in the explanation might, by construction, be excluded from the natural meaning of the word "dismissal". Then we come to article 311 of the Constitution, which with certain modifications incorporated the provisions of section 240 of the Government of India Act, 1935. It introduced the expression "removed" in addition to the word "dismissed" presumably inspired by rr. 49 and 55 of the Rules. The natural meaning of the said terms takes in every act of termination of service; but, if construed with the help of r. 49 of the Rules, their meaning may be cut down by excluding the three categories of termination covered by the explanation in the manner prescribed therein. If the termination was otherwise than that prescribed therein, it would still be dismissal or removal. If so, the history of the constitutional provisions may 740 lead to the conclusion that though the words "dismissed" and "removed" are words of widest connotation, namely "termination" of service of any category held under the Union, they were used in the limited sense they bear in r. 49 of the Rules, that is to say termination of employment excluding the three categories mentioned in the explanation. So far the words "removed" and "dismissed" are concerned, r. 49 shows that there is no appreciable difference between the two except in the matter of future employment; and article 31 1, presumably, copied the two words from r. 49. Therefore, whether the natural and dictionary meanings of the words "dismissal" and "removal" were adopted or the limited meanings given to those words by r. 49 were accepted, the result, so far as a permanent employee was concerned, would be the same, namely that in the case of termination of services of a Government servant outside the three categories mentioned in the explanation, it would be dismissal or removal within the meaning of article 311 of the Constitution with the difference that in the former the dismissed servant would not be disqualified from future employment and in the latter ordinarily he would be disqualified from such employment. If so, it follows that if the services of a permanent Government servant, which fall outside the three categories mentioned in the explanation, were terminated, he would be entitled to protection under article 311(2) of the Constitution. With this background let me now scrutinise the leading judgment of this Court on the subject, namely, Parshotam Lai Dhingra vs Union of India (1). That was a case of reversion of a Government servant who was officiating in Class 11 Service as Assistant Superintendent, Railway Telegraphs, to his substantive post in Class III Service. This Court, speaking through Das C.J., gave an exhaustive treatment to the scope of article 311(2) of the Constitution, parti (1)[1958] S.C.R. 828. 741 cularly with reference to the meaning of the expressions "dismissed", "removed" or "reduced in rank" found therein. A careful reading of the judgment shows that this Court has heavily relied upon r. 49 of the Civil Services (Classification, Control and Appeal) Rules, and its explanation, and attempted to give a legal basis for the said provisions. On that basis, having considered the different aspects of the problem, the Court has laid down the following two tests at p. 863, to ascertain whether a person is dismissed or removed within the meaning of article 311 of the Constitution; (1) Whether the servant had a right to the post or the rank or (2) whether he has been visited with evil consequences of the kind hereinbefore reference to i.e., loss of pay and allowances, loss of his seniority in his substantive rank or the stoppage or postponement of his future chances of promotion If an officer had a right to a post or rank and if the termination of his services deprived him of that right the said termination would be dismissal or removal as punishment. So too, if the termination had the effect of the officer being visited with evil consequences then whatever may be the phraseology used for putting an end to his services, it would be dismissal as punishment. The motive operating on the mind of the authority concerned or the machinery evolved or the method adopted to put an end to his services are not relevant in considering the question whether he was dismissed, if he had a right to the office or if he had been visted with evil consequences, though the said circumstances may have some relevance as other decisions of this Court disclose, in ascertaining whether he was discharged with a stigma attached to him. While conceding that this decision does not in terms specifically lay down that even in the case of a person holding a permanent post, if there was an appropriate term in the conditions of service that his services could be terminated by notice, article 311 of the Constitution would not be attracted, it is contended that raison d 'etre of the decision and some passages therein lead to that conclusion. Some of the passages relied upon may be extracted: 742 At pp. 857 858: "It has already been said that where a person is appointed substantively to a permanent post in Government service, he normally acquires a right to hold the post until under the rules, he attains the age of superannuation o r is com pulsorily retired and in the absence of a contract express or implied, or a service rule he cannot be turned out of his post unless he is guilty of misconduct, negligence, inefficiency or other disqualifications and appropriate proceedings are taken under the service rules read with article 311(2). " At p. 862: "As already stated if the servant has got a right to continue in the post, then, unless the contract of employment or the rules provide to the contrary, his services cannot be terminated otherwise than for misconduct, negligence, inefficiency or other good and sufficient cause. " These passages certainly lend support to the argument of the learned counsel, but the qualifying clauses on which reliance is placed are only incidental observations. The main principles relevant to the present enquiry were laid down by the Court clearly and precisely at p. 860, thus: "Shortly put, the principle is that when a servant has right to a post or to a rank either under the terms of the contract of employment; express or implied, or under the rules governing the conditions of his service, the termination of the service of such a servant or his reduction to a lower post is by itself and prima facie a punishment, for it operates as a forfeiture of his right to hold that post or that rank and to get the emoluments and other benefits attached thereto." The following observation further pinpoints the principle; "One test for determining whether the termi nation of the service of a government servant 743 is by way of punishment is to ascertain whether the servant, but for such termination, had the right to hold the post." This decision, therefore, clearly lays down, without any ambiguity, that if a person has a right to hold office under the service rules or under a contract the termination of his services would attract Art 311 of the Constitution. It also lays down that a person holding a substantive lien on a permanent post has a right to such office. It does not say, expressly or by necessary implication, that even if a person is deprived of such a right, it will not be punishment unless it is inflicted for misconduct in the manner prescribed by the service rules. Learned Additional Solicitor General further relied upon the decisions of this Court holding that a rule empowering the Government to compulsorily retire a permanent Government servant before that age of superannuation did not violate article 311 of the Constitution and contended that, on parity of reasoning, the impugned rules should likewise be valid. It was asked, with considerable force, what relevant distinction there could be between the said two categories of rules in the context of the question whether the termination of services was dismissal or not within the meaning of article 311 of the Constitution? In the case of a Government servant, the argument proceeded, in either case he was deprived of his title to office and, therefore, both cases were equally covered by the principle laid down in Dhingra 's case(1). This argument certainly deserves serious consideration. The relevant rules pertaining to compulsory retirement of a permanent Government servant considered by this Court in the various decisions relied upon by learned counsel may now be noticed. In Shyam Lal 's case (2) which is the sheet anchor of the appellants ' argument, the rule under consideration was Note 1 to article 465 A of the Civil Services Regulations. The said Note read: (1) ; (2) ; 744 "Government retains an absolute right to retire any officer after he has completed twenty five years qualifying service without giving any reasons, and no claim to special compensation on this account will be ' entertained. This right will not be exercised except when it is in the public interest to dispense with the further services of an officer. " The rule considered in The State of Bombay vs Saubhagchand M. Doshi (1) was r. 165 A of the Bombay Civil Services Rules, applicable to the State of Saurashtra, and it read: "Government retains an absolute right to re tire any Government servant after he has com pleted 25 years qualifying service or 50 years of age, whatever the service, without giving any reason, and no claim to special compensation on this account will be entertained. This right will not be exercised except when it is in the public interest to dispense with the further services of a Government servant such as on account of inefficiency or dishonesty. " Rule 3 of the Railway Services (Safeguarding of National Security) Rules, 1949, was under consideration in Balakotaiah vs The Union of India(2) and it read: "A member of the Railway Service who, in the opinion of the competent authority is engaged in or is reasonably suspected to be engaged in subversive activities, or is associated with others in subversive activities in such manner as to raise doubts about his reliability, may be compulsorily retired from service, or have his service terminated by the competent authority after he has been given due notice or pay in lieu of such notice in accordance with the terms of his service agreement: Provided that a member of the Railway Service shall not be retired or have his service so terminated unless the competent authority is satisfied that his retention in public service is prejudicial to national security, and unless, (1) ; (2) ; 745 where the competent authority is the Head of a Department, the prior approval of the Governor General has been obtained." In Union of India vs Jeewan Ram(1) this Court had to consider sub rr. (3) and (4) of r. 148 of the Indian Railway Establishment Code, Vol. 1. The rule which was under scrutiny in Dalip Singh vs The State Punjab(2) was r. 278 of the Patiala State Regulations, which read: "For all classes of pensions the person who desires to obtain the pension is required to submit his application before any pension is granted to him. The State reserves to itself the right to retire any of its employees on pension on political or on other reasons. " The cases of Shyam Lal and Doshi were decided before Dhingra 's case and the cases of Dalip Singh and Balakotaiah, after Dhingra 'section In all the cases, under the relevant rules the age of superannuation was fixed but the order of compulsory retirement was made before the Government servant reached the age of superannuation. The rule in Shyam Lal 's case ex facie declares that the right will not be exercised except when it is in the public interest to dispensed with the further services of an officer indicating thereby that the compulsory retirement is imposed as punishment for some sort of dereliction of duty on his part and, therefore, the termination of service under that rule necessarily carries a stigma with it. The rule in Doshi 's case(3) iS more emphatic than that in Shyam Lal 's case: the rule in Doshi 's case elaborate what is implicit in the rule considered in Shyam Lal 's case and declares that the right there under shall be exercised by the Government only in the case of inefficiency or dishonesty of the Government servant Rule 3 of the Railway Services (Safeguarding of National Security) Rules considered in Balakotaiah case (4) expressly says that the order of compulsory retirement will be made for misconduct defined therein. (1) A.I.R. 1958 section C. 905. (2) (3) ; (4) 746 The rule in Dalip Singh 's case(1) gives a very wide power to the State to retire any of its employees on pension on political or other reasons before the age of superannuation. In short the rules dealt with in the first three decisions expressly conferred an absolute power on the appropriate authority to terminate the services of a Government servant for misconduct, and the rule in the fourth decision went further and enabled the appropriate authority to dismiss the servant for any reason. It may also be noticed that in Doshi 's cases(2) this Court expressed the view that "when there is no rule fixing the age of compulsory retirement or if there is one and the servant is retired before the age prescribed therein, then that can be regarded only as dismissal or removal within article 311(2) of the Constitution". The emphasis appears to be more on the existence of a rule of compulsory retirement than on the character of the termination itself. But this reservation was not accepted by the Court in Dalip Singh 's case(1), that is to say, the emphasis is shifted to the existence of a rule of termination detracting from the permanency of the post. Pausing here a moment, I ask myself the question whether these decisions can be reconciled with the aforesaid principles laid down in Dhingra 's case(3). In Dhingra 's case this Court held that a termination of the services of a Government servant, who has substantive lien on a permanent post, that is to say a title to his office, is dismissal or removal within the meaning of article 311(2) of the Constitution. In the aforesaid three decisions the Government servant concerned had substantive lien on a permanent post, but he was compulsorily retired before the age of superannuation depriving him of his title to the post. it is neither the phraseology used in respect of nor the nomenclature given to the act of termination of service that is material but the legal effect of the action taken that is decisive in considering the question whether a Government servant is dismissed or not. Whether the services of a permanent Government servant are (1) (3) ; (2) ; 747 terminated by giving him 15 days ' notice or whether his services are dispensed with before the age of superannuation by way of compulsory retirement under or outside a rule of compulsory retirement, the termination deprives him of his title to the permanent post. If in the former case it amounts to dismissal, in the latter case it must be equally so. I would, prefer the principle laid down in Dhingra 's case (1) in the matter of termination of the services of a permanent Government servant to that laid down in the said other decisions. Rule 148 of the Railway Establishment Code, Vol. 1, was considered both in Balakotaiah 's case (2) and in Jeewan Ram 's case(3): in the former, though there were some observations in support of the appellants ' contention, the question of construction of the rule was expressly left open, and in the latter though the Government servant concerned was discharged under that rule, the decision proceeded on the basis that he was expressly removed for misconduct. A number of decisions of the High Courts are cited. I have gone through them carefully. I am not referring to them in detail, as, though some of the judgments contain instructive discussion on though subject, they practically extended the principle of Shyam Lal 's case(4) and held that the termination of service, such as under r. 148(3), was not dismissal within the meaning of article 311 of the constitution As, in my view, Shyam Lal 's case must yield to Dhingra 's case, a further discussion of the said decisions is not called for. The effect of the two rules is the same; the difference is only superficial, which lies more in clever drafting than in their content. Take for instance the following two rules: (i) the Government may terminate the services of a permanent Government servant at any time, or after a specified period but before the normal superannuation age, by way of compulsory retirement; and (ii) the Government may terminate (1) ; (3) A. 1. R. (2) ; (4) ; 748 the services of a permanent civil servant by giving him 15 days ' notice. Arbitrariness is writ large on both the rules: both the rules enable the Government to deprive a permanent civil servant of his office without enquiry. Both violate article 311(2) of the Constitution. Both must be bad or none at all. The following principles emerge from the aforesaid discussion. A title to an office must be distinguished from the mode of its termination. It a person has title to an office, 'he will continue to have it till he is dismissed or removed therefrom. Terms of statutory rules may provide for conferment of a title to an office and also for the mode of terminating it. If under such rules a person acquires title to an office, whatever mode of termination is prescribed, whatever phraseology is used to describe it, the termination is neither more nor less than a dismissal or removal from service; and that situation inevitably attracts the provisions of article 311 of the Constitution. The argument that the mode of termination prescribed derogates from the title that otherwise would have been conferred on the employee mixes up two clear concepts of conferment of title and the mode of its deprivation. Article 311 is a constitu tional protection given to Government servants, who have title to office, against arbitrary and summary dismissal. It follows that Government cannot by rule evade the provisions of the said Article. The parties cannot also contract themselves out of the constitutional provision. Once that principle is accepted the cases dealing with compulsory retirement before the age of superannuation cannot also fall outside the scope of article 311 of the Constitution. Age of superannuation is common to all permanent civil servants: it depends upon an event that inevitably happens by passage of time, unless the employee dies earlier or resigns from the post. It does not depend on the discretion of the employer or the employee; it is for the benefit of the employee who earns a well earned rest with or without pensionary benefits for the rest of his life; it has, by custom and by convention, become 749 an inextricable incident of Government service; and it is an incident of a permanent post. Notwithstanding the rule fixing an age of superannuation, a person appointed to such a post acquires title to it. The same cannot be said of a compulsory retirement before the age of superannuation. It is not an incident of the tenure; it does not work automatically it is not conceived in the interest of the employee it is a mode of terminating his employment at the discretion of the appointing authority. In effect whatever may be the phraseology used in terminating the services of a Government employee, it is punishment imposed on him, for it not only destroys his title but also inevitably carries with it a stigma such a. termination is only dismissal or removal within the meaning of article 311 of the Constitution. I would, therefore, with greatest respect, follow the principle laid down in Dhingra 's case(1) in respect of permanent servants in preference to that accepted by Shyam Lal 's case(2) and the subsequent decisions following it. Now let me turn to the relevant rules of the Indian Railway Establishment Code, hereinafter called that Code. The Code is in two volumes. The first volume embodies all rules governing the service conditions of railway servants with the exception of those rules which correspond to the Fundamental Rules, Supplementary Rules, Pension Rules and the Civil Service Regulations applicable generally to all civil servants under the Government of India. The excepted rules are included in Vol. 11 of the Code. Fundamental Rules embodied in Vol. 11 of the Code describe, inter alia the cadre strength, the different posts in the cadre and the nature of the appointments made in respect of such posts. Broadly the posts are divided as permanent, officiating, temporary and for definite periods. Rule 2003 (14) defines lien to mean th title of a railway servant to hold substantively either immediately or on the termination of a period or periods of absence, a permanent post, including a tenure post, to which he has been appointed substan (1) ; (2) 750 tively. Under r. 2006, "Unless in any case it be otherwise provided in these Rules, a railway servant. on substantive appointment to any permanent post acquires a lien on that post and ceases to hold any lien previously acquired on any other post". Under r. 2009, "A railway servant 's lien on a post may, in no circumstances, be terminated, even with his consent, if the result will be to leave him without a lien or a suspended lien upon a permanent post. " Rule 2042 provides that the pay and allowances of a railway servant who is removed or dismissed from service ceases from the date of the order of removal or dismissal. Rule 2046, under the heading "Compulsory Retirement", fixes the age of superannuation for different categories of service. These rules clearly lay down that a. railway servant on a substantive appointment to a permanent post acquires a lien on that post and he does not lose it till he attains the age of superannuation or is dismissed or removed in the manner prescribed; that is, he acquires a title to hold substantively a permanent post. It is not of much relevance to give any particular nomenclature to that post. It may not be a life tenure. It may not also be a permanent post in the literal sense of the term, but it confers a title to that post with all the advantages appertaining to that post and ordinarily it comes to an end only on the incumbent attaining the age of superannuation, with or without pensionary benefits. Briefly stated, the aforesaid Fundamental Rules embodied in Vol. 11 of the Code create offices of stability and security which for all practical purposes are permanent posts. If so, the termination of services of such a servant can only be dismissal or removal, for he will be deprived of his title to the said office. If that was the legal position, for the reasons already given, the said r. 148(3) And r. 149, conferring a power on the appointing authority to remove such a permanent servant on notice would infringe the constitutional protection given to a Government servant under article 311 of the Constitution. A permanent post and such rules cannot stand together: the latter must inevitably yield to the former. 751 I therefore, hold that r. 148(3) and r. 149 of the Railway Establishment Code, being violative of the provisions of articles 14 and 311 of the Constitution are void and unenforceable. In the result, I agree that Civil Appeals Nos 711 to 713 of 1962 and Civil Appeal No. 714 of 196 should be allowed with costs and that Civil Appeal Nos. 837 to 839 of 1963 should be dismissed wit costs. DAS GUPTA J. The principal question raised in the four appeals which have been numbered 711 to 714 of 1962 is as regards the validity of Rule 148 (3) of the Indian Railway Establishment Code in respect of certain non pensionable railway servants that their services shall be liable to termination on notice for the period as prescribed therein. The appellants all railway employees whose services had been terminated on notice in accordance with the above provision and who have failed to obtain relief against the orders of termination challenge the validity of this provision on two grounds. Their first contention is that this Rule in providing for termination of service on mere notice contravenes the provisions of Art 311(2) of the Constitution; secondly, it is contended that the Rule violates article 14 of the Constitution It will be necessary to examine these two grounds separately. Is the termination as provided for in the above provision, in Rule 148 (3) 'removal ' or 'dismissal within the meaning of article 311(2) of the Constitution? That is the question that falls to be answered for deciding the first grounds. To answer this against we have to determine first the connotation of the two words 'removal ' and 'dismissal ' as used in article 311(2). In my opinion, this matter is completely covered by numerous decisions of this Court. Before turning to the decisions however it will be convenient to examine the matter in the context in which article 311 (2) appears in the Constitution and also the historical background of the protection afforded thereby. For this purpose it is necessary first to consider the three Articles of the Constitu 752 tion, viz., articles 309, 310 and 311. They are in these words: "309. Subject to the provisions of this Con stitution, Acts of the appropriate Legislature may regulate the recruitment, and conditions of service of persons appointed, to public services and posts in connection with the affairs of the Union or of any State : Provided that it shall be a competent for the President or such persons as he may direct in the case of services and posts in connection with the affairs of the Union and for the Governor or Rajpramukh of a State or such person as he may direct in the case of services and posts in connection with the affairs of the State, to make rules regulating the recruitment and the conditions of service of persons appointed to such services and posts until provisions in that behalf is made by or under an Act of the appropriate Legislature under this Article, and any rules so made shall have effect, subject to the provisions of any such Act. (1) Except as expressly provided by this Constitution every person who is a member of a defence service or of a civil service of the Union or of an all India service or holds and post connected with defence or any civil post under the Union, holds office during the pleasure of the President, and every person who is a member of a civil service of a State or holds any civil post under a State holds office during the pleasure of the Governor or, as the case may be, the Raj pramukh of the State. (2) Notwithstanding that a person holding a civil post under the Union or a State holds office during the pleasure of the President or, as the case may be, of the Governor or Rajpramukh of the State, any contract under which a person, not being a member of a defence service or of an all India service or of civil service of, the 753 Union or a State, is appointed under this Constitution to hold such a post may, if the President or the Governor or the Rajpramukh as the case may be, deems it necessary in order to secure the services of a perso n having special qualifications, provide for the payment to him of compensation, if before the expiration of an agreed period that post is abolished or he is, for reasons not connected with any misconduct on his part, required to vacate that post. (1) No person who is a member of a civil service of the Union or an all India service or a civil service of a State or holds a civil. post under the Union or a State shall be dismissed or removed by an authority subordinate to that by which he was appointed. (2) No such person as aforesaid shall be dismissed or removed or reduced in rank until he has been given a reasonable opportunity of showing cause against the action proposed to be taken in regard to him. Provided that this clause shall not apply (a) where a person is dismissed or removed or reduced in rank on the ground of conduct which has led to his conviction on a criminal charge; (b) where an authority empowered to dismiss or remove a person or to reduce him in rank is satisfied that for some reason, to be recorded by that authority in writing it is not reasonably practicable to give to that person an opportunity of showing cause; or (c) where the President or Governor or Rajpramukh, as the case may be, is satisfied that in the interest of the security of the State it is not expedient to give to that person such an opportunity. (3) If any question arises whether it is reasonably practicable to give to any person an opportunity of showing cause under clause (2), the decision thereon of the authority empowered 1/SCI/64 49 754 to dismiss or remove such person or to reduce him in rank, as the case may be, shall be final. " It has to be noticed that both Articles 309 and 310 are subject to article 31 1. In other words, if any rule is made under article 309 as regards the conditions of service of a government servant in the matter of his dismissal or removal or reduction in rank it has to comply with the requirements of article 31 1. Again, before any order dismissing or removing or reducing a government servant in rank is made by the President or the Governor in exercise of his pleasure, the President or the Governor has to comply with the require ments of article 311(2) of the Constitution. Under article 310 all servants of the State hold office at pleasure of the President or the Governor as the case may be. That by itself means that the officer has no right to be heard before his services are terminated. To this article 311 provides an exception in the case of removal or dismissal. It is easy to see that if every termination of service amounted to dismissal or removal the resultant position will be that every officer would have the right to be heard before any action could be taken under article 310. That would leave no field in which article 310 could operate. This by itself is sufficient to show that not all kinds of termination of service were intended to come within article 311. Reading Articles 310 and 311 together it will be reasonable to understand them to say that the officer will have the right to be heard before his services were terminated by dismissal or removal but in all other cases of termination of his service he will not have any such right. I have therefore no hesitation in rejecting the extreme proposition urged on behalf of the appellants that the words dismissal or removal in article 311 include every kind of termination of service. This brings us to the question : what kinds of termination of service come within the words dismissal or removal and what kinds are not. Taking the second Dart of the question first, it is not difficult to mention at least two kinds of termination which 755 cannot reasonably be included within the words dismissal or removal. Take for instance the case where a government servant resigns his post but the resignation is not under the rules effective before it has been accepted by his superiors. Here termination results only when the superior officer accepts the resignation. It may be correct to say that thereby he terminates the service. But it could not reasonably be said that the superior officer has removed the servant from service or dismissed him from service. Such removal or dismissal was not necessary at all because of the resignation. Take again the case of a servant who has been appointed to an office for a period of three years. When the three year period ends he is asked to go. There is termination of service. But nobody would said that the superior officer by asking him to go at the end of the period had dismissed him or removed him from service. The real question however is not so much as what in common parlance would be understood to be the dismissal or removal but what the Constitution intended by these words. In this connection it will be helpful to examine the use of the words dismissal and removal in the earlier Constitution Acts. The Charter Act of 1793 mentions in section 36 that nothing in this Act contained shall extend, or be construed to extend to preclude or take away the power of the Court of Directors of the said Company from removing or recalling any of the officers or servants of the said Company, but that the said Court shall and may at all times have full liberty , to remove, recall, or dismiss any of such officers or servants, at their will and pleasure in the like manner as if this Act had not been passed Section 35 made it lawful to and for the King 's Majesty his heirs and successors, by any writing or instrument under him or their sign manual, countersigned by the President of the Board of Commissioners for the affairs of India, to remove or recall any person or person holding any office, employment, or commission, civil or military, under the said United Company 756 in India for the time being. In the Charter Act of 1833, similar provisions were enacted in sections 74 and 75. Section 74 make it lawful "for His Majesty by any Writing under His Sign Manual,countersigned by the President of the said Board of Commissioners, to remove or dismiss any person holding any office, employment or commission, civil or military, under the said Company in India, and to vacate any Appointment or Commission of any person to any such office or employment. " Section 75 ran thus: "Provided always, and be it enacted, that nothing in this Act contained shall take away the Power of the said Court of Directors to remove or dismiss any of the officers or servants of the said Company but that the said Court shall and may at all Times have full Liberty to remove or dismiss any of such officers or servants at their will and pleasure. . When the Act of 1,858 transferred the government of India to Her Majesty the Queen of England section 38 of the Act provided that. "Any writing under the Royal Sign Manual removing or dismissing any person holding any office employment or commission, civil or military in India, of which, if this Act had not been passed, a copy would have been required to be transmitted or delivered within eight days after being signed by Her Majesty to the Chairman or Deputy Chairman of the Court of Directors, shall, in lieu thereof, be communicated within the time aforesaid to the Secretary of State in Council. " It seems to me that in making these statutory provisions as regards dismissal or removal of public servants the British Parliament had in mind those servants only who had acquired such a right to the post under their conditions of service that but for such statutory provisions their dismissal or removal would have been unlawful. If their service was terminable by the ordinary law of the land there 757 would have been no need in section 36 of the 1793 Act or section 75 of the 1833 Act to speak of the right of the Court of Directors of the Company to remove or dismiss the Company 's officers or servants at their will and pleasure. It is clear that by these provisions the British Parliament was emphasizing the right of the Court of Directors of the Company to remove, or dismiss such servants whose services would not have been terminable under the ordinary law of master and servant. It is also legitimate to read the provisions making it lawful for the King of England to remove or dismiss the Company 's servants (s). 35 in the Charter Act of 1793 and section 75 of the Charter Act of 1833) as intended to terminate the service of the same class of servants, viz., those whose services were not terminable under the ordinary law of the land. In the light of this legislative history, the words removal and dismissal in section 38 :of the Act of 1858 and thereafter in the Government of India Act, 1915 (Section 95 and section 96B ) cannot but be read also to mean termination of service of such servants only who would not have been liable to termination under the ordinary law of master and servant. In other words, only those servants who by their terms and conditions of their appointment to the service bad acquired a right to continue for a particular period which could not under the ordinary law be put an end to were intended to get the benefit of these provisions as regards dismissal or removal. By the time the Government of India Act. , 1935, came to be enacted by Parliament rules had been framed by the Secretary of State in Council under section 96B of the Government of India Act, in which these words, removal and dismissal, were used. Among the rules framed under this section in 1924 was Rule XIII, which was in these words: "Without prejudice to the provisions of any law for the time being in force, the Local Government may for good and sufficient reasons: (1) Censure (2) Withhold promotion from 758 (3) Reduce to a lower post (4) Suspend (5) Remove, or (6) Dismiss any officer holding a post in a provincial or subordinate service or a special appointment. " In the fresh set of rules framed in 1930 Rule 49 took the place of Rule XIII of the earlier Rules and was in these words: "R. 49. The following penalties may, for good and sufficient reason and as hereinafter provided, be imposed upon members of the services comprised in any of the classes (1) to (5) specified in Rule XIV namely: (i) Censure, (ii) withholding of increments or promotion (iii) reduction to a lower post or time scale, or to a lower stage in a time scale, (iv) recovery from pay of the whole or part of any pecuniary loss caused to Government by negligence or breach of orders (v) suspension, (vi) removal from the civil service of the crown, which does not disqualify from future employment, (vii) dismissal from the civil service of the crown, which ordinarily disqualifies from future employment. Explanation The discharge (a) of a person appointed on probation, during the period of probation, (b) of a person appointed otherwise than under contract to hold a temporary appointment, on the expiration of the period of the appointment, 759 (c) of a person engaged under contract, in accordance with the terms of his contract, does not amount to removal or dismissal within the meaning of this Rule. " These Rules show that the Secretary of State in Council considered removal and dismissal from the service of the Crown only as penalties. Explanation to Rule 49 of the 1930 Rules also shows that discharge from service of a person who had not acquired a right to the post was not considered to be removal or dismissal. When the British Parliament made special provision in the Government of India Act, 1935 as regards removal or dismissal of persons in the civil service of the Crown it had before it not only the history of these words removal and dismissal in the Charter Act 1793, Charter Act of 1833, Government of India Act, 1858, the Government of India Act, 1915 but also these Rules framed by the Secretary of State in Council. It is reasonable to think therefore that in making these special provisions in the 1935 Act the British Parliament proceeded on the basis that only terminations of service by way of punishment which could not have been inflicted under the ordinary law of master and servant would come within these words removal and dismissal. Primarily such terminations by way of punishment could be made only in respect of those servants who had not acquired a right to continue in service. It might however be said that even where there was no such right and termination could have been effected therefore under the ordinary law of contract between master and servant any termination which carried with it loss of benefits already acquired, say, forfeiture of pension or of provident fund was also contemplated to come within these words. Termination in no other case could be said to be by way of punishment and in the light of the previous history of the use of the words removal and dismissal in connection with the civil servants of the crown it appears to be abundantly clear that 760 in the Government of India Act, 1935 the words removal and dismissal were not intended to include such other terminations. When the Constitution was framed the provisions as regards removal and dismissal as contained in section 240 of the Government of India Act were embodied 'in articles 310 and 311 with practically little change. Nothing has been shown to us to indicate that the Constitution makers could have meant by these words removal and dismissal in article 31 1, anything different from what the British Parliament had intended to include under those words in the Government of India Act, 1935. The above consideration of the context an previous legislative history leads to the conclusion that the words 'removal ' or 'dismissal ' in article 311 meant only such terminations of service where the servant had acquired a right to continue in the post which right was cut short by the termination and such other terminations even where there was no such right, as resulted in loss of acquired benefits. Turning now to the decided cases we find that the question now under consideration was fully discussed in this Court 's decision in Parshotam Lal Dhingra vs Union of India(1). After an exhaustive discussion of appointments of Government servants to a permanent or temporary post, substantively or on probation or on an officiating basis, and numerous rules of service in connection with such appointments, Das C.J. speaking for the majority of the Court recorded the conclusion thus: "It follows therefore that if the termination of service is sought to be brought about otherwise than by way of punishment, then the government servant whose service is so terminated cannot claim the protection of article 311(2). " The learned Chief Justice went on to say: "The foregoing conclusion however does not solve the entire problem, for it has yet to (1) 761 be ascertained as to when an order for the termination of service is inflicted as and by way of punishment and when it is not. It has already been said that where a person is appointed substantively to a permanent post in Government service, he normally acquires a right to hold the post until under the rules, he attains the age of superannuation or is compulsorily retired, and in the absence of a contract express or implied or a service rule, he cannot be turned out of his post unless the post itself is abolished or unless he is guilty of misconduct, negligence, inefficiency or other disqualifications and appropriate proceedings are taken under the service rules read with article 311(2). Termination of service of such a servant so appointed must per se be a punishment, for it operates as a forfeiture of the servant 's rights and brings abo ut a pre mature end of his employment. Again, where a person is appointed to a temporary post for a fixed term of say five years his service can not, in the absence of a contract or a service rule permitting its premature termination be terminated before the expiry of that period unless he has been guilty of some misconduct, negligence inefficiency or other disqualifications and appropriate proceedings are taken under the rules read with article 311(2). The premature termination of the service of a servant so appointed will prima facie be a dismissal or removal from service by way of punishment and so within the purview of article 311(2). At page 862, the learned Chief Justice again observed: In short, if the termination of service is founded on the right flowing from contract or the service rules then, prima facie, the termination is not a punishment and carries with it no evil consequences and so article 311 is not attracted But even if the Government has, by contract or under the rules, the right to terminate the 762 employment without going through the procedure prescribed for inflicting the punishment of dismissal, or removal or reducing in rank, the Government may nevertheless, choose to punish the servant and if the termination of service is sought to be founded on misconduct, negligence, inefficiency or other disqualification, then it is a punishment and the requirements of article 311 must be complied with. " At page 863, the learned Chief Justice observed thus: "Thus if the order entails or provides for the forfeiture of his pay or allowances or the loss of his seniority in his substantive rank or the stoppage or postponement of his future chances of Promotion, then that circumstance may indicate that although in form the government had purported to exercise its right to terminate the employment or to reduce the servant to a lower rank under the terms of the contract of employment or under the rules, in truth and, reality the Government has terminated the employment as and by way of penalty. " Several years before this the question : what is meant by the words 'removal ' or 'dismissal. ' had been considered by this Court in Shyam Lal vs The State of Uttar Pradesh(1). Shyam Lai, the appellant, had been ordered to retire compulsorily under the provisions of article 465A of the Civil Service Regulations. On behalf of the appellant it was urged inter alia that this order was invalid as the provisions of article 311(2) of the Constitution had not been complied with. In deciding that the compulsory retirement did not amount to dismissal or removal within the meaning of article 311(2) of the Constitution the Court laid down that (1) every termination of service does not amount to removal or dismissal and (2) that dismissal or removal is a punishment imposed on an officer as a penalty which involves loss of benefit already earned (1) ; It was pointed out that on compulsory retirement an officer would not suffer any diminution of the accrued benefit and though in a wide sense the officer might consider himself punished by the deprivation of the chance of serving and getting his pay till he attains the age of superannuation and thereafter to get an enhanced pension, there is clearly a distinction between the loss of benefit already earned and the loss of prospect of earning something more; where the officer did not lose the benefit already earned the same was not dismissal or removal. At page 42 of the Report the Court said: "Finally, Rule 49 of the Civil Service (Classification, Control and Appeal) Rules clearly indicates that dismissal or removal is a punishment. This is imposed on an officer as a penalty It involves loss of benefit already earned. " In Doshi 's Case( ) the Court had to consider an order of compulsory retirement made under Ruled 165A of the Bombay Civil Service Rules as amended by the Saurashtra Government which gave the Government an absolute right to retire any government servant after he had completed 25 years of qualifying service or 50 years of age whatever his service without giving any reason. It was held that such an order was not 'removal ' or 'dismissal ' under article 311 of the Constitution. Speaking for the Court Venkatarama Aiyar J. said: "Now the policy underlying article 311(2) is that when it is proposed to take action against a servant by way of punishment and that will entail forfeiture of benefits already earned by him, he should be heard and given an opportunity to show cause against the order. But that consideration can have no application where the order is not one of punishment and results in no loss of benefits already accrued, and in such a case there is no reason why the terms of employment and the rules of service should not (1) ; 764 be given effect to. Thus, the real criterion for deciding whether an order terminating the services of a servant is one of dismissal or removal is to ascertain whether it involves any loss or benefits previously earned. Applying this test, an order under R. 165A cannot be held to be one of dismissal or removal, as it does not entail forfeiture of the proportionate pension due for past services. " Hartwell 's Case I was one of termination of a temporary servant under the U.P. Subordinate Agricultural Service, who for some time served in a temporary capacity in the U.P. Agricultural Service. He was first reverted to his original appointment in the Subordinate Agricultural Service by an order dated May 3, 1954 and later a notice dated September 13, 1954 was served on him terminating his services in the Subordinate Agricultural Service. The notice purported to be under Rule 25 Cl. 4 of the Subordinate Agricultural Service Rules. The Court held that the termination of the appellant 's services under this rule did not amount to dismissal or removal within the meaning. of article 311 as it was in accordance with the terms of the conditions of service applicable to the appellant. Imam J. speaking for the Court observed: "In principle, we cannot see any clear distinction between the termination of the services of a person under the terms of a contract governing him and the termination of his services in accordance with the terms of his conditions of service. The order complained against did not contravene the provisions of article 311 and was therefore a valid order." The proposition that it is not every termination of service of an employee that falls within the operation of article 31 1 and that it is only when the order is by way of punishment that it is one of dismissal or removal was reaffirmed by this Court in Balakotich vs The Union of India (3 ). Reaffirming also the criteria indicated in Dhingar 's Case(3) as to what amounted (1) ; (2) ; (3) 765 to punishment for the purpose of article 311, Venkatarama Aiyar J. speaking for the Court observed: "The question as to what would amount to punishment for the purposes of article 311 was also fully considered in Parshotam Lal Dhingra 'section Case(1) It was therein held that if a person had a right to continue in office either under the service rules or under a special agreement, a premature termination of his service would result in loss of benefits already earned and accrued, that would also be punishment. " Proceeding to apply this proposition to the facts of the case before it the Court said: "In the present case, the terms of employment provide for the services being terminated on a proper notice, and so, no question of pre mature termination arises. Rule 7 of the Security Rules preserves the rights of the employee to all the benefits of pension, gratuities and the like, to which they would be entitled under the rules. Thus, there is no forfeiture of benefits already acquired. It was stated for the appellants that a person who was discharged under the rules was not eligible for reemployment, and that was punishment. But the appellants are unable to point to any rule imposing that disability. The order terminating services under R. 3 of the Security Rules stands on the same footing as an order of discharge under R. 148, and it is neither one of dismissal nor of removal within the meaning of article 311. " The law as thus settled by this Court was again applied in Dalip Singh vs State of Punjab. (2) Dalip Singh who had been Inspector General of Police, PEPSU, was compulsorily retired from service by the Rajpramukh by an order dated August 18, 1950 which ran as follows "His Highness the Rajpramukh is pleased to retire from service Sardar Dalip Singh, Inspector (1) (2) 766 General of Police, PEPSU, (on leave) for ad ministrative reasons with effect from the 18th August, 1950. " The appellant brought his suit asking for a declaration that the order by which he was removed from the post of Inspector General of Police was unconstitutional, illegal, void, ultra vires and inoperative. Among the grounds on which this declaration was sought was that the compulsory retirement of the appellant which had been made under Regulation 278 of the Patiala State Regulations, was removal from service within the meaning of article 31 1 of the Constitution. Admittedly the requirements of article 311(2) had not been complied with in this case and so the question had to be decided whether such a retirement was removal or dismissal within the meaning of article 31 1. The question was answered by this Court in the negative for the reasons that the order did not amount to punishment because though an enquiry had been held against him the charges or imputations against him had not been made the condition of the exercise of the power of retirement and further because the officer was not losing the benefits he had already earned, as full pension was ordered to be paid. To emphasis the point that where compulsory retirement was in accordance with the rules of service it could not ordinarily be said to be by way of punishment, the Court pointed out that where a rule of service provided for compulsory retirement at any age whatsoever irrespective of the length of service put in, a retirement understand a rule would not be regarded as dismissal or removal. An observation in Doshi 's Case(1) which might appear to indicate otherwise was not followed it being pointed out that in Doshi 's Case this matter did not fall to be considered. Under Rule 278 he State reserved to itself the right to retire any of its employees on pension on political or on other reasons. It did not mention any particular age for retirement under this Rule. Care was taken in this case to mention that if the rule would result in loss (1) ; 767 of pension already earned, the termination would amount to removal or dismissal. It is thus clear both on principle and on authority that the words removal and dismissal in article 311 of the Constitution mean and include only those terminations of service, where a servant had acquired a right to continue in the post on the basis of terms and conditions of service, and such other terminations, where though there were no such right, the order has resulted in loss of accrued benefits; and that terminations of service which did not satisfy either of these two tests do not come within any of these words. Applying these tests to the termination of service under the provision of Rule 148 (3) of the Railway Code that "the service of other (non pensionable) railway servants shall be liable to termination on notice on either side. " I am of opinion that neither of these is satisfied. There is no doubt that this Rule applies not only to temporary railway servants but also to those railway servants who have been substantively appointed to permanent posts in the railways. A "permanent post", under the Fundamental Rules applicable to the railways means a post carrying a definite rate of pay sanctioned without limit of time. On substantive appointment the government servant has a lien on such post, i.e., the right to hold it substantively The right however is limited by all the terms and conditions of service. One of such conditions is in the provision in the Rule for compulsory retirement Rule 2046 of the Railway Code which corresponds to Fundamental Rule 56 provides that generally the date of compulsory retirement of a railway servant, other than a ministerial servant, is the date on which he attains the age of 55 years. He may be retained in service after the date of compulsory retirement with the sanction of the competent authority on public grounds, which must be recorded in writing, but he must not be retained after the age of 60 years except in very special circumstances. Clause 2 of Rule 2046 provides the rule of compulsory retirement for ministerial servants. Those government servants 768 who have entered government service on or after the 1st April, 1938, and those who being in government service on the 31st March, 1938 did not hold a lien or a suspended lien on a permanent post on that date, shall ordinarily be required to retire at the age of 55 years, but if he continues to be efficient, should ordinarily be retained in service upto the age of 60 years but that he must not be retained after that age except in very special circumstances, which must be recorded in writing, and with the sanction of the competent authority. These rules have been modified from time to time but generally speaking a rule has always existed fixing the age beyond which a railway servant will not be allowed to be retained in service. If such a rule of compulsory retirement had not existed, the servant would have had the right to continue in the service till his death. The rule however limits that right, by providing in effect that the service would be terminated at a certain age. Rule 148(3) is just another rule, limiting the servant 's right to continue in ' service. It is as much a condition of service as Rule 2046 and in deciding the nature and extent of the right of a railway servant to whom Rule 148(3) applies to continue in service, Rule 148(3) is of as much importance as Rule 2046. A railway servant to whom Rule 148(3) applies has two limitations put on his right to continue (1) termination on attaining a certain age and (2) termination on service of a notice under Rule 148(3). Where the service is terminated by the order of retirement under Rule 2046, the termination is of a service where the servant has not the right to continue. So, it is not 'removal ' or 'dismissal '. Equally clearly and for the same reason, when the service is terminated by notice under Rule 148(3), the termination is not &removal ' or 'dismissal '. It has not been suggested that the second test of loss of accrued benefits is satisfied in terminations under Rule 148(3). If in any particular instance the order of termination entails loss of accrued benefits that will happen not because of anything in R. 148(3) 169 but for some extraneous action. Where that happens it will be right to consider such terminations as removal or dismissal. But that consideration is foreign to the provisions of Rule 148(3). 1 have therefore come to the conclusion that the first ground raised by the appellants in challenging the validity of Rule 148(3). , viz., that it contravenes the provisions of article 311 of the Constitution must be rejected. It is necessary now to consider the second ground urged by the appellants, viz., that Rule 148(3) contravenes article 14 of the Constitution. Two contentions are urged in support of this ground. First, it is urged that the Rule gives no guidance to the authority who would take action on it as regards the principle to be followed in exercising the power. Secondly, it is urged that the Rule discriminates between railway servants and other public servants. In my opinion, there is considerable force in the first contention. Classifying the statutes which may come up for consideration on a question of its validity under article 14 of the Constitution in Ram Krishna Dalmia vs Justice S.R. Tendolkar & Ors. "I this Court observed under the third class of such statutes thus: "A statute may not make any classification of the persons or things for the purpose of applying its provisions but may leave it to the discretion of the Government to select and classify persons or things to whom its provisions are to apply. In determining the question of the validity or otherwise of such a statute the Court will not strike down the law out of hand only because no classification appears on its face or because a discretion is given to the Government to make the selection or classification but will go on to examine and ascertain if the statute has laid down any principle or policy for the guidance of the exercise of discretion by the government in the matter of the selection or classification." (1) ; 1/SCI/64 49 770 Applying the principle laid down in the above case to the present rule 1 find on scrutiny of the Rule that it does not lay down any principle or policy for guiding the exercise of discretion by the authority who will terminate the service in the matter of selection or classification. Arbitrary and uncontrolled power is left in the authority to select at its will any person against whom action will be taken. The Rule thus enables the authority concerned to discriminate between two railway servants to both of whom Rule 148(3) equally applied by taking action in one case and not taking it in the other. In the absence of any guiding principle in the exercise of the discretion by the authority the Rule has therefore to be struck down as contravening the requirements of article 14 of the Constitution. It is unnecessary for me to consider the other contention as mentioned above, which has been urged in support of this ground. My conclusion therefore is that though the provisions of Rule 148(3) in respect of certain non pensionable railway servants that their services shall be liable to termination on notice for the period prescribed therein does not contravene article 311(2) of the Constitution, it contravenes article 14 of the Constitution and consequently is void. I would accordingly allow with costs the four appeals (C.A. Nos. 711 713/62 and C.A. No. 714/62) set aside the order of the High Court and order that appropriate writs be issued in favour of the appellant as prayed for. The other three appeals (C.A. Nos. 837 839 of 1963) challenge the decision of the Assam High Court in favour of three railway servants whose services had been terminated under Rule 149 of the Railway Code, that these terminations were invalid. Rule 149(3) is in practically the same terms as Rule 148(3) and provides for the termination of certain railway servants on notice on either side for the period prescribed. As, however, before November 1957 non 771 pensionable service had been brought to an end, and option was given to non pensionable servants either to opt for pensionable service or to continue under their previous terms and conditions of service, Rule 149(3) mentions permanent railway servants generally without any reference to their being nonpensionable. The validity of his Rule was attacked on behalf of railway servants on the same ground as have been considered with regard to Rule 148(3). For the reasons already given when discussing Rule 148(3) I am of opinion that Rule 149(3) does not contravene article 311(2) of the Constitution but contravenes article 14 of the Constitution. The terminations of service under Rule 149(3) of the Railway Code were therefore rightly held by the High Court to be invalid. I would accordingly dismiss these appeals with costs. SHAH J. Except as expressly provided by the Constitution, every member of the defence services or of a civil service of the Union or an all India service holds office during the pleasure of the President and every member of a civil service of a State holds office during the pleasure of the Governor of the State: article 310(1). This is the normal tenure of office of persons serving the Union or the State. The doctrine of holding office at pleasure applies even to a person with special qualifications employed under a contract, with the reservation that compensation may be paid to such person if before the expiry of the agreed period the office is abolished, or for reasons not connected with misconduct on his part, he is required to vacate that post: article 310(2). The power to terminate at pleasure vested by the Constitution in the President or the Governor, as the case may be, is not liable to be restricted by any enactment of the Parliament or the State Legislature: it may be exercised only in the manner prescribed by the Constitution and being outside the scope of articles 53 and 154 of the Constitution cannot be delegated : State of Uttar Pradesh vs Babu Ram Upadhya(1) It is open to the (1) ; 772 Parliament and the State Legislatures to enact Acts subject to the provisions of the Constitution to regulate recruitment and conditions of services and posts in connection with the affairs of the Union or a State (article 309), and until such legislation is enacted, it may be observed that the Union Parliament has not enacted any general legislation governing public servants employed by the Union the President or the Governor or such person as may be directed in that behalf may make rules regulating the recruitment and conditions of service of persons appointed to such services and posts, and the rules so made by the President or the Governor shall have effect, subject to the provisions of any such Acts. The power of the President or the Governor under article 310 (which is wholly independent of the power conferred by the rules or legislation under article 309), and the power conferred by legislation enacted or rules made or continued by virtue of article 309 are subject to certain restrictions contained in articles 311 & 314. Article 314 grants certain special protections to members appointed by the Secretary of State or the Secretary of State in Council to a civil service of the Crown in India and who continue on and after the commencement of the Constitution to serve under the Government of India or a State. Article 311 provides, subject to the proviso to cl. (2), two safeguards to all public servants who are members of the civil service of the Union or an all India service or a civil service of a State who hold civil posts under the Union or the States. These safeguards are "(1) that such members of the service shall not be dismissed or removed by an authority subordinate to that by which he was appointed; and (2) that he shall not be dismissed or removed or reduced in rank until he has been given a reasonable opportunity of showing cause against the action proposed to be taken in regard to him." 773 The proviso to cl. (2) of article 311 excludes three specific classes of cases from the protection of the second guarantee. Guarantees under article 311 are, except to the extent specifically provided, absolute and are not subject to the exercise of power, legislative or executive. Accordingly the pleasure of the President or of the Governor cannot be exercised in a manner inconsistent with cl. (2) of article 311. Article 310 must therefore be read subject to article 311(2), and the rules made or legislation enacted under article 309 must also be read subject to article 31 1. It must be emphasized that the guarantees protect all servants, whether appointed to substantive posts, or employed temporarily or on probation, or for limited duration under contracts, but they do not encompass all penalties or terminations of employment. The guarantee under cl. (1) is against dismissal or removal by an authority subordinate to that by which the public servant was appointed, and under cl. (2) against dismissal, removal or reduction in rank without being afforded a reasonable opportunity of showing cause against the action proposed to be taken in regard to him. The guarantee under cl. (2) does not affect the investment of power to dismiss, remove or reduce in rank a member of the civil service; it merely places restrictions upon the exercise of the power. Temporary servants on probation, officiating servants and even those holding posts under contracts all have the protection of article 31 1. But the consequences of mere determination of employment in the very nature of things must vary according to the conditions or terms of employment. Mere determination of employment of temporary servants, or probationers, and of servants whose tenure is governed by contracts, will not ordinarily amount to dismissal or removal, for, dismissal or removal according to the rules implies determination as a disciplinary measure. The appellants in appeals Nos. 711 to 714 of 1962 are public servants employed in the Railways under the management of the Government of India 774 and were governed by the rules made under article 309, and their services were terminated in purported exercise of powers under Rule 148(3). Rule 148, the validity of which is challenged by the appellants in these appeals, was originally framed in 1951 in exercise of the authority conferred by article 309, and was later modified so as. to exclude from its operation determination of employment operating as dismissal or removal as a disciplinary measure. The first clause deals with a temporary railway servant who holds no lien on a permanent post under the Union. Such a person need be given no notice of termination of employment, if the termination is due to the expiry of sanction to the post, or of the officiating vacancy or is due to mental or physical incapacity, or where it amounts to removal or dismissal as a disciplinary measure. Clause (2) deals with apprentices. Clause (3) deals with (non pensionable) railway servants, who are substantively appointed to permanent posts. Clauses (3) & (4) provide: "(3) Other (non pensionable) railway servants The service of other (non pensionable) railway servants shall be liable to termination on notice on either side for the periods shown below. Such notice is not however required in cases of dismissal or removal as a disciplinary measure after compliance with the provisions of clause (2) of Article 311 of the Constitution, retirement on attaining the age of superannuation, and termination of service due to mental or physical incapacity: (a) Probationary officers and officers on probation other than those in the Medical Department 3 months ' notice (b) Officers on probation in the Medical Department `month 's notice (c) Permanent Gazetted Officers 6 months ' notice (d) Permanent Non gazetted employees `month 's notice. 775 "(4) In lieu ' of the notice prescribed in this rule, it shall be permissible on the part of the Railway Administration to terminate the service of a railway servant by paying him the pay for the period of notice. " In this group of appeals (Nos. 711 714 of 1962) the principal question raised by the appellants is that the third clause of Rule 148 is invalid. The clause declares that the service of any railway servant who holds non pensionable employment is liable to be terminated on notice on either side of the periods set out in the Rule, but notice terminating employment by the Railway Administration is not a condition of dismissal or removal or of retirement on attaining the age of superannuation and of termination of service due to mental or physical incapacity. The clause prescribes the mode of determination of employment of non pensionable railway servants by notice and proceeds to state that in the specified cases no notice for termination of employment by the Railway Administration shall be necessary. It, ' however, does not follow that in the excepted classes of cases of the right of the Railway Administration to terminate employment is absolute or unrestricted: it is merely intended to be enacted by cl. (3) that notice will be necessary where on compliance with other appropriate conditions, there is retirement on attaining the age of superannuation, or determination of employment in compliance with the provisions of the Constitution, or for mental or physical incapacity. Clause (3) of Rule 148 is impugned by the appellants on two principal grounds: (1) that it is inconsistent with the protection which is guaranteed to all public servants by article 311(2); and (2) that it contravenes the fundamental freedom under article 14 of the Constitution in that certain classes of railway servants are selected for special prejudicial treatment when no such conditions of service are applicable in any other public employment and that in 776 any event an arbitrary power is conferred upon the authority competent in that behalf under the rules to terminate employment without any principle to guide him. Under the first head it is urged that termination by ,.notice of employment of non pensionable servants under Rule 148(3) being removal from service, in the absence of rules prescribing machinery for affording a reasonable opportunity of showing cause against the action proposed to be taken in regard to such employees, the Rule infringes the constitutional guarantee under article 311 and is void. This plea assumes that every termination of employment by notice under Rule 148(3) amounts to removal. But on the plain text of cl. (3) it is evident that the right to determine employ ment by notice cannot be exercised in the excepted cases and since dismissal or removal as a disciplinary measure falls within those excepted cases, the President has, by framing cl. (3) of Rule 148, clearly 1 expressed the intention that determination of employment which amounts to dismissal or removal cannot be effected by notice. In terms the clause makes a distinction between determination of employment by notice and determination of employment as a disciplinary measure, retirement on superannuation, and termination for reasons of physical or mental incapacity: it does not confer authority upon the Railway Administration to terminate employment of a public servant holding a substantive post, as a disciplinary measure. The Rule is framed under article 309, and undoubtedly makes the tenure of a public servant appointed even substantively to hold a permanent post precarious. Ordinarily a railway servant appointed substantively to a permanent post would, under the rules governing employment, continue in service till he attains the age of superannuation but that tenure is made subject to compulsory retirement after he attains the prescribed age if the railway servant belongs to certain specified classes: vide Rule 2046(2) & (3) of the Railway Code, 1958, and to discharge from employment under Rule 148(3) if his service is non pensionable. Inci 777 dents relating to termination of employment on superannuation, on orders of compulsory retirement and on discharge from service under Rule 148(3) are parts. of an organic scheme of rules governing the tenure of office of railway servants which also includes provisions relating to dismissal, removal or reduction in rank as a disciplinary measure. By being appointed to a post a railway servant becomes entitled to the pay and allowances, increments subject to efficiencybar, leave, gratuity, pension etc. These are also incidents of employment of the same character as the incident of determination of employment by compulsory retirement, discharge by notice and dismissal or removal. In considering what the expression "dismissed or removed" used in article 311 means, a brief review of the relevant legislative history dealing with the tenure of office of civil servants in the employment of the Government of India may be useful. It is sufficient to note that since the earliest time all persons holding office civil or military under the East India Company were liable to be removed at the pleasure of the King of England: see section 35 Charter Act 1793 (33 Geo. III Ch. 2): and 74 Charter Act 1833 (3 & 4 will IV Ch. 85). These provisions however did not take away the power of the Court of Directors to remove or dismiss any of its officers or servants not appointed by the Crown in England. The same tenure of service prevailed after the British Crown took over the governance of India, the power to make regulations in relation to appointments and admission to services and matters connected therewith being vested in the Secretary of State in Council: section 37 Govern ment of India Act 1858 (21 & 22 Vict. Ch. 106). For the first time under the Government of India Act, 1919 (9 & 10 Geo. V. Ch. 101) some protection was conferred upon the civil servants. By the first clause of section 96 B the tenure of office of every employee under the civil service of the Crown was during pleasure of His Majesty, but dismissal from service by an authority subordinate to that by which the officer 678 was appointed was prohibited. The power of the Secretary of State for India in Council to make rules regulating classification of civil services, method of recruitment, conditions of service, pay, allowances, discipline and conduct was reaffirmed. This was followed by sections 240 to 243 of the Government of India Act, 1935 (26 Geo. V. & 1 Ed. 8 Ch. 2) which made detailed provisions relating to the tenure of office of persons employed in civil capacities, recruitment and conditions of service and rules to be made in that behalf including rules applicable to railway, custom, postal and telegraph services, and special provisions relating to the police. By section 240, a guarantee against dismissal without being afforded an opportunity of showing cause to persons employed in civil capacities was provided. By cl. (1) except as provided by the Act, every member of a civil service held office during His Majesty 's pleasure: by cl. (2) it was enacted that "no such person shall be dismissed from service, by any authority subordinate to that by which he was appointed" and by cl. (3) it was enacted that "No such person as aforesaid shall be dismissed or reduced in rank until he has been given a reasonable opportunity of showing cause against the action proposed to be taken in regard to him". This was the guarantee of protection conferred by the Government of India Act 1935 upon members of the civil services and has since been affirmed by the Constitution in article 311 in almost the same terms the slight verbal alteration substituting "dismissed or removed" for "dismissed" having made no variation in the content of the guarantee. In 1930 Rules were promulgated by the Secretary of State for India in Council under. 96 B(2) of the Government of India Act, 1919,called the Classification, Control and Appeal Rules. These Rules did not in terms apply to railway servants, who were governed by a set of rules published as the Railway Establishment Code, but these were for all practical purposes in terms similar to the Civil Services (Classification, Control and Appeal) Rules, which may be called 'the General Rules '. Under cl. 49 of the General Rules penalties which could be imposed 679 upon civil servants were enumerated and cl. 55 provided that no order of dismissal, removal or reduction shall be passed upon a civil servant unless he has been informed in writing of the grounds on which it is proposed to take action and he has been afforded adequate opportunity of showing cause against the action proposed to be taken. These Rules remained in force after the Government of India Act, 1935, was brought into operation. Even after the Constitution was brought into force, the rules continued to remain in operation till 1955, when a new set of rules were promulgated, but thereby in Rules 49 & 55 no substantial variation was made It is clear that, under the scheme of rules governing the employment of civil servants which obtained prior to the Constitution dismissal. or removal had acquired a definite connotation, and when the Constitution makers adopted the scheme of protection of public servants in the same form in which it prevailed earlier, an intention to attribute to the expression "dismissed and removed" the same content may be assumed in the absence of any expressed intention to the contrary. Since the constitutional guarantee of protection to public servants is couched in the same terms, the expression "removal" in the Service Rules having the same meaning as "dismissal" i.e., determination of employment as a disciplinary measure for misconduct, subject to the slight variation that an employee removed from service is not disqualified from future employment in public service, whereas a dismissed employee is so disqualified, it may reasonably be held that in the context of this development under the Constitution the expression "dismissed or removed" has not acquired a wider signification to include all terminations of public employment, whatever be the cause. Apart from the historical evolution of the guarantee, there is inherent indication in the constitutional provisions that it was not the intention of the Constitution makers to include in the expression "dismissed or removed" all terminations of employ 780 ment. Guarantee of reasonable opportunity of showing cause against the action proposed to be taken in regard to a public servant, would, be wholly inappropriate in cases of superannuation, expiry of the contractual priod of employment, expiry of the priod of probation or temporary employment, and resignations. It would be futile in such cases to provide for "showing cause". The use of the expression "action proposed to be taken in regard to him" also suggests that termination of employment is of the nature of penal action. There is yet another ground which must be taken into account. For nearly two centuries prior to the Constitution tenure of public servants has been expressly declared to be during the pleasure of the British Crown and that tenure has been repeated in the Constitution in article 310(1) with appropriate variations entrusting the power to the President or the Governor, as the case may be. Vitality of this declaration is emphasized in cl. (2) of article 310 so as to enable the President or the Governor to terminate even contractual employments at their respective pleasure. If the Constitution makers intended that every termination of employment amounted to dismissal or removal within article 311, the provision of article 310, solemnly declaring that members of the services civil and defence hold office during the pleasure of the President is reduced to a meaningless formula having no practical content. The argument that it continues to apply to probationers and temporary employees ignores the plain words of the Constitution, beside unduly minimising the content of the guarantee in article 311 which protects all public servants temporary, probationers, contractual as well as those holding substantive posts. There is also a consistent body of authority which has taken the view that the expression "dismissed or removed" within the meaning of article 311 of the Constitution involves determination of employment as a disciplinary measure that is termination of employment on some ground personal to the officer concerned, such as incapacity or imputation 781 of charge against him which renders it inexpedient undesirable that he should continue in public employment: Satish Chandra Anand vs Union of India(1) Shyam Lal vs State of Uttar Pradesh & The Union of India(2); and Parshotam Lal Dhingra vs Union of India (3). In considering whether termination of employment of a. public servant amounts to dismissal or removal, the primary test settled by a uniform course of authority is: does the termination amount to punishment of the public servant, i.e., has it the effect of depriving the public servant concerned of the right which he has already acquired as a public servant, or does it involve evil consequences such as forfeiture of pay or allowances or other benefits which by the rules governing the tenure he has earned, or impute a stigma? A public servant appointed substantively to a post normally acquires a right to hold the post until he attains the age of superannuation, and in the absence of a contract or service rules governing the tenure, discharge from service would deprive him of the right he has to the post. Such deprivation of rights already accrued, or involving evil consequences, must in all cases amount to dismissal or removal, for, it amounts to imposing. punishment. But mere termination of the right to hold a post not as a discip linary measure, but according to the contract or rules governing his appointment and tenure, cannot be so regarded, because the rules which govern his right to the post make determination in the manner provided inherent in the right. By appointment to an office a public servant does not acquire a right to hold it for his natural life time or even during good behaviour His right to hold it is during the pleasure of the President or the Governor, according as his employment is under the Union or the State: the right is also subject to the contract or rules governing the employ ment. Rules framed under article 309 relating to super annuation, to compulsory retirement on attaining (1) ; (2) (1955] 1 S.C.R. (3) ; 782 a certain age, or completing a specified period of service, or to determination of employment of temporary or quasi permanent servants, or those on probation, form conditions of service, and govern the tenure, and it is difficult to perceive any distinction between those conditions of service, and the condition which expressly provides for determination of employment otherwise than as a matter of disciplinary measure. The title of a railway servant holding a non pensionable office is subject to the condition of determination by notice under Rule 148(3) which as the clause expressly provides is not according to its terms exercisable as a disciplinary measure. It cannot be assumed that on acquisition of the office, a railway servant becomes entitled to a right to the post free from the conditions attaching thereto by the rules governing his employment. He is liable to ' vacate the office on superannuation, on compulsory retirement, on notice of determination, and on dismissal or removal alike, i.e., on the supervention of the prescribed conditions determination of employment of the prescribed class results, and not otherwise. Terminations resulting from causes other than dismissal or removal are solely governed by the rules, but in the matter of dismissal or removal, beside the conditions prescribed by the appropriate rules, the overriding provisions of the Constitution must be complied with. Under the Indian Railway Establishment Code, Vol. 11, "lien" is defined in Rule 2003(14) as meaning the title of a railway servant to hold substantively, either immediately or on the termination of a priod or periods of absence, a permanent post, including a tenure post to which he has been appointed substantively. Evidently lien is the title which the railway servant has to a post, and a public servant appointed substantively must always till he is superannuated have lien on a specific post. On substantive promotion his lien would attach to another post, his earlier lien being superseded. While a railway servant appoin 783 ted to another post substantively must have a lien to that post, it cannot be assumed that his lien continues to attach to any particular post. The lien is however subject to the rules: it does not in any manner confer a right to hold a post indefinitely. Counsel for the appellants contended that all the appellants in this group of appeals were permanent employees, and even superannuation did not put an end to employment, since under the rules the superannuated employees had a right to pension. it is impossible to hold that a superannuated employee continues to remain employed. His employment is at an end: he is under no obligation to serve and earns no remuneration. The pension is but a payment made by the State for services already rendered and not in lieu of services being rendered, or which the public servant may be called upon to render There can therefore be no distinction in principle between termination of employment of the employee attaining the prescribed age of superannuation, and termination of services in the manner prescribed by the rules, by notice, or by an order of compulsory retirement. In all cases employment comes to an end Though the causes which result in termination are different, the effect is the same, viz., the public servant ceases to be employed. The argument that on being appointed to a public service, the employee acquires right to continue in employment, proceeds upon a misconception of the nature of appointment to a public post. Appointment to a public post is always subject to the pleasure of the President, the exercise of such pleasure being restricted in the manner provided by the Constitution A person appointed substantively to a post does not acquire a right to hold the post till he dies, he acquires thereby merely a right to hold the post subject to the rules i.e., so long as under the rules the employment is not terminated. If the employment is validly terminated, the right to hold the post is determined even apart from the exercise of the pleasure of the President or the Governor. There is in truth no permanent 784 appointment of a public servant under the Union or the State. Nor is the appointment to a public post during good behaviour, i.e., a public servant cannot claim to continue in office so long as he is of a good behaviour. Such a concept of the tenure of a public servant 's office is inconsistent with articles 309 and 310 of the Constitution. It may be recalled that the guarantee under article 311 protects a public servant against dismissal or removal or reduction in rank as a disciplinary measure. But if the determination of service does not amount to dismissal or removal as a disciplinary measure, there is nothing in the Constitution which prohibits such determination provided it is consistent with article 309 of the Constitution. The tenure of office is subject to article 310, prescribed by article 309 that is the governing code. The rules cannot undoubtedly provide for dismissal or removal otherwise than in a manner consistent with article 311. Nor can an authority acting under the rules validly terminate an appointment to a post in a manner contrary to the Constitution or the rules. Article 311 however covers only a part of the field governing the tenure of employment and in substance provides for a procedure for exercising the right to determine employment in certain specified classes of cases. To hold that this determination of employment must in all cases, whatever may be the source or the power in the exercise of which it is determined, is to attribute to it a more exalted effect than is warranted by the scheme of the Constitution disclosed by articles 309 and 310. The view which I have expressed is consistent with an overwhelming body of uniform authority dealing with different classes of cases in this Court, and we are asked to ignore the principle derived from that body of authority not on the ground of any demonstrable error but on the sole ground of a possible misuse of the powers entrusted to the Railway Administration and that was, as I understood, practically the only argument advanced at the Bar to justify a 785 departure from the settled course of authority. But in considering whether cl. (3) of Rule 148 infringes, the constitutional guarantee under article 311(2), the Court will not assume that in exercising the power to determine employment the authority competent in that. behalf may not act honestly. The presumption always is that the high officials in whom the power is vested Will perform the duties of their office honestly. A mere possibility that the power may in some cases be misused or abused, will not per se induce the Court to deny validity to the entrustment of the power. The impact of article 311 upon Rule 148(3), must be adjudged in the light of action which may be taken bona fide under the Rule. If in a given case the order is not bona fide, and is intended to camouflage an order of removal from service as a disciplinary measure, the protection of article 311(2) would undoubtedly be attracted, for such an order cannot be regarded as made in exercise of authority conferred by Rule 148(3). But the Court will not adjudge the rule invalid on the assumption that the rule may possibly be abused and may be made a cloak for imposing a punishment on a public servant or that the provision might be utilised for a collateral purpose. I will briefly refer to some of the illustrative decisions of this Court. In Satish Chandra Anand 's case(1) discharge from service by notice of a public servant employed under a contract for the duration of the Resettlement and Employment Organisation of the Union was held not to attract the protection of article 311 of the Constitution. The public servant in Satish Chandra Anand 's case(1) was continued in service after expiry of the period of his original employment, under a contract for the duration of the Organisation on condition that he was to be governed by the Central Civil Services (Temporary Service) Rules, 1949, which provided, inter alia, for termination of the contract by a month 's notice on either side. This Court held that to termination of his service (1) ; 1/SCI/64 50 786 by notice according to the 'rules governing his employment, article 311 had no application. In the view of the court the case was not of dismissal or removal from service, because the State has power to enter into contracts of temporary employment and impose special terms not inconsistent with the Constitution, and those who chose to accept the terms and entered into the contract were bound by them, even as the State was bound. This was a case of a premature termination of a contractual employment in exercise of a power reserved by Rules. The view expressed in Satish Chandra Anand 's case(1) was approved in Parshotam Lal Dhingra 's case(2) . Several cases dealing with termination of employment of temporary employees or employees on probation have since arisen, and it has consistently been held that mere termination of employment of these employees not on the ground of any misconduct did not amount to dismissal or removal within the meaning of article 311. In Hartwell Prescott Singh vs The Uttar Pradesh Government and others(3) an order discharging a temporary employee from service by giving him a month 's notice as prescribed by Rule 25(4) of the U.P. Subordinate Agriculture Service Rules, by which he was governed, was held not to amount to dismissal or removal within the meaning of article 31 1. It was observed in that case that in principle there was no distinction between the termination of service under the "terms of a contract" and that in accordance with the "terms of conditions of service". In Parshotam Lal Dhingra 's case (2), Das, C.J., who entered upon an exhaustive review of the Rules governing service conditions of public servants of different classes (and with him all other members of the Bench except Bose J., agreed) observed at p. 842: ". in the case of an appointment to permanent post in a Government service on (1) [19531 S.C.R. 6 5. (2) ; (3) [19581 section C. R. 509. 787 probation or on an officiating basis, the servant so appointed does not acquire any substantive right to the post and consequently cannot complain, any more than a private servant employed on probation or on an officiating basis can do, if his service is terminated at any time. Likewise an appointment to a temporary post in a Govern ment service may be substantive or on probation or on an officiating basis. Here also, in the absence of any special stipulation or any specific service rule, the servant so appointed acquires no right to the post and his service can be terminate d at any time except in one case, namely when the appointment to a temporary post is for a definite period. " In The State of Bihar vs Gopi Kishore Prasad(1) Sinha C.J., speaking for the Court summarised certain propositions governing the tenure of temporary public servants of which the following two are material: "(1) Appointment to a post on probation gives to the person so appointed no right to the post and his service may be terminated, without any taking recourse to the proceedings laid down in the relevant rules for dismissing a public servant or removing him from service. (2) The termination of employment of a person holding a post on probation without any enquiry whatsoever cannot be said to deprive him of any right to a post and is, therefore, no punishment. " In The State of Orissa and another vs Ram Narayan das (2) this Court held that a probationer may be discharged in the manner provided by Rule 55 B of the Civil Services (Classification, Control and Appeal) Rules, and to such discharge from service article 311(2) did not apply, for mere termination of employment does not carry with it any evil consequences and an order discharging a public servant, even if he is a (1) ; (2) ; 788 probationer, on the result of an enquiry on charges of misconduct, negligence, inefficiency or other dis qualification, may appropriately be regarded as one by way of punishment, but an order discharging a probationer after an enquiry to ascertain whether he was fit to be confirmed, is not of that nature. In section Sukhbans Singh vs The State of Punjab(1) it was held that the protection of article 311 is available only where dismissal, removal or reduction in rank is sought to be inflicted by way of punishment, and one of the tests for ascertaining whether the termination of service was by way of punishment is whether under the Service Rules, but for such termination, the servant has the right to hold the post. The same view. was expressed in Union Territory, Tripura vs Gopal Chandra Datta(2) and in Ranendra Chandra Bannerjee vs The Union of India(3). Two cases on the other side of the line, which emphasize the distinction between a mere order of discharge of a temporary servant, and an order dismissing a public servant as a disciplinary measure may be noticed. In Madan Gopal vs The State of Punjab and others(4), this Court pointed out that where the employment of a temporary government servant, even though liable to be terminated by notice of one month without assigning any reason, is not so terminated, and the appointing authority holds an enquiry into his alleged misconduct, the termination of service is by way of punishment, because it casts a stigma on his competence and thus affects his career. In such a case the public servant is entitled to the protection of article 311(2) of the Con stitution. In Jagdish Mitter vs The Union of India (5) it was held that an order discharging a temporary servant from employment b notice after recording that he was "found undesirable to be retained in Government service" was one casting a stigma, and (1) ; (2) [1963] Supp. 1 S.C.R. 266. (3) ; (4) [1963] 3 S.C.R. 716. (5) A. I. R. 789 was therefore an order of dismissal attracting the application of article 311 (2) of the Constitution. There is still another class of cases which illustrate the rule that termination of employment otherwise as a disciplinary measure does not amount to dismissal or removal. This Court has held that rules providing for compulsorily retiring public servants holding posts substantively are valid, and that termination of employment consequent upon such compulsory retirement does not amount to dismissal or removal from service so as to attract the protection of article 311(2). In Shyam Lal 's case(1) challenge to the validity of termination of employment of a member of the Indian Service of Engineers compulsorily retired after be completed service for 25 years was discountenanced by this Court on the ground that compulsory retirement under the Civil Services (Classification, Control and Appeal) Rules, after a public servant had served for 25 years, did not amount to dismissal or removal within the meaning of article 311 of the Constitution. It was observed that the word "removal" used synonymously with the term "dismissal" generally implied that the officer was regarded as in some manner blameworthy or deficient, the action of removal being founded on some ground personal to the officer involving leveling of some imputation or charge against him. But there was no such element of charge or imputation in the case of compulsory retirement which did not involve any stigma or implication of misbehavior or incapacity, for, by the compulsory retirement the person concerned did not lose any benefit he had earned and loss of future prospects of earning could not be taken into account in considering whether the order of compulsory retirement amounted to imposing punishment. In The State of Bombay vs Subhagchand M. Doshi(2) it was held that Rule 165 A of the Bombay Civil Services (Conduct, Discipline and Appeal) Rules adopted by the State of Saurashtra, subject to amendment, authorising the State Government to compulsorily (1) ; (2) ; 790 retire any public servant who had completed 25 years of qualifying service or had attained the age of 50 'years, without giving any reason was not violative of article 311(2) of the Constitution, as the order made under Rule 165 A was not one of dismissal or removal. Venkatarama Aiyar, J., observed at p. 579 (obiter as was pointed out in a later case): "It should be added that questions of the above character could arise only when the rules fix both an age of superannuation and an age for compulsory retirement and the services of a civil servant are terminated between these two points of time. But where there is no rule fixing the age of compulsory retirement, or if there is one and the servant is retired before the age prescribed therein, then that can be reregistration only as dismissal or removal within article 311(2)." In P. Balakottaiah vs The Union of India and others(1) an order for compulsory retirement under Rule 3 of the Railway Services (Safeguarding of National Security) Rules, 1949, was challenged as contravening article 311(2). The public servants concerned in those appeals were railway servants and their services were terminated on the ground that the General Manager of the Railways had reason to believe that they were guilty of "subversive activities". Notices were issued to them under section 3 of the Rules to show cause against certain charges. The Committee of Advisers enquired into the charges and the explanations furnished by the public servants found the charges true. The General Manager acting on the report of the Committee terminated the services of the railway servants concerned giving them a month 's salary in lieu of notice. It was held by this Court that it is not every termination of the services of an employee that falls within the operation of article 311, and that it is only when the order is by way of punishment that it is one of dismissal or removal under that Article. It was further observed at p. 1065: (1) ; 791 "In the present case, the terms of employment provide for the services being terminated on a proper notice, and so, no question of prema ture termination arises. Rule 7 of the Security Rules preserves the rights of the employees to all the benefits of ' pension, gratuities and the like, to which they would be entitled under the rules. Thus, there is no forfeiture of benefits already acquired. The order terminating the services under R. 3 of the Security Rules stands on the same footing as an order of discharge under R. 148, and it is neither one of dismissal nor of removal within the meaning of article 311. " The Court in that case appeared to express the opinion, though it was not necessary for deciding the case, that an order of discharge under Rule 148(3) was neither one of dismissal nor removal within the meaning of article 311(2). In Parshotam Lal Dhingra 's case (1) the Court also considered the question whether an order of compulsory retirement of a public servant under the appropriate rules governing him amounts to dismissal or removal from service. At p. 861, Das C.J., speaking for the majority of the Court observed: " . every termination of service is not dismissal, removal or reduction in rank. A termination of service brought about by the exercise of a contractual right is not per se dismissal or removal, Likewise the termination of service by compul sory retirement in terms of a specific rule regulating the conditions of service is not tantamount to the infliction of a punishment and does not attract article 311(2), as has also been held by this Court in Shyam Lal vs The State of Uttar Pradesh. In either of the two above mentioned cases the termination of the service did not carry with it the penal consequences of loss of pay, or allowances under r. 52 of the Fundamental Rules." (1) ; 792 .lm0 In a still more recent case Dalip Singh vs State of Punjab(1) it was held by this Court that an order of compulsory retirement of a public servant for administrative reasons under R. 278 of the Patiala State Regulations which Regulations did not fix the minimum age or length of service after which an order of compulsory retirement could be made,was not one of dismissal or removal from service within the meaning of article 311(2) of the Constitution, because retirement under a Service Rule which provided for compulsory retirement at any age irrespective of the length of service put in, cannot necessarily be regarded as dismissal or removal within the meaning of article 311, and the observations (hereinbefore quoted) made by Venkatarama Aiyar, J., in Saubhagchand Doshi 's case(2) were for the purposes of deciding that case obiter, and that it was not a general rule that an order of compulsory retirement not amounting to dismissal or removal can take place only under a rule fixing the age of compulsory retirement. These decisions which examine diverse facets of the tenure of employment of public servants, establish beyond doubt that mere determination of employment of a public servant whether he be a temporary employee, a probationer, a contractual appointee or sub stantively holding a permanent post will not attract the provisions of article 311 (2) of the Constitution, unless the determination is imposed as a matter of punishment. All these decisions weave a clear pattern of employment of public servants who are governed by Rules providing for premature determination of employment. Such determination of service, founded on a right flowing from contract or the service rules, is not punishment and carries with it no evil consequences. It does not deprive the public servant of his right to the post, it does not forfeit benefits already acquired., and casts no stigma upon him. A railway employee who has accepted employment on the conditions contained in the rules cannot after having obtained employment, claim that the (1) ; 88 (4) ; (2) [1958] S.C.R. 1052. 793 conditions which were offered to him and which he accepted, are not binding upon him. The sole exception to that rule is in cases where the condition prescribed by contract or statutory regulations is void as inconsistent with the constitutional safeguard, the exception being founded not on any right in the public servant to elect, but on the invalidity of the covenant or regulation. If the principle of the binding nature of the rules as condition of employment is valid, I am unable to see any distinction between cases of termination of employment resulting from attaining the age of superannuation or from orders of compulsory retirement, terminating contracts, terminating temporary employment, or employments on probation, and orders terminating employment after notice under Rule 148(3). If Rule 165 A of the Bombay Civil Services (Classification, Control and Appeal) Rules, as amended, which fell to be considered in Saubh Chand Doshi 's case (1) was not invalid, if Rule of the Railway Services (Safeguarding of National Security) Rules, 1949, which fell to be considered in P. Balakottaiah 's case(2) was not invalid, if Rule 278 of the Patiala State Regulations which fell to be considered in Dalip Singli 's case (3) was not invalid, if Rule 5(a) of the Central Government Services (Temporary Service) Rules, 1949, which fell to be considered in Satish Chandra Anand 's case (4) was also not invalid, it is difficult to appreciate any ground either of logic or of law on which the vice of invalidity as infringing article 311(2) may be attributed to Rule 148(3). The termination of employment under Rule 148(3) does not involve the public servant concerned in loss of any right which he has already acquired, it does not amount to loss of a post to which he is entitled under the terms of his employment, because the right to the post is necessarily circumscribed by the conditions of employment which include Rule 148(3) and does not cast any stigma upon him. In the result I am unable to agree that (1) ; (2) ; (3) (4) (1953] S.C.R. 655. 794 Rule 148(3) was invalid as infringing the guarantee of constitutional protection under article 311(2). In appeals Nos. 837 839 of 1963 the question as to the validity of the Rule 149(3) falls to be determined. That Rule was substituted for the original Rule 148(3) some time in year 1959. Rule 149 deals, by its first clause, with temporary railway servants and cl. (2) deals with apprentices. We are not concerned in these appeals either with temporary railway servants or with apprentices. In this Rule cl. (3) deals with the other railway servants. It provides: "The service of other railway servants shall be liable to termination on notice on either side for the periods shown below. Such notice is not, however, required in cases of dismissal or removal as a disciplinary measure after compliance with the provisions of clause (2) of Article 311 of the Constitution, retirement on attaining the age of superannuation and termination of service due to mental or phvsical incapacity. The Rule then proceeds to set out the different periods for which notice may be given terminating employment. Clause (4) of the Rule provides for payment in lieu of notice. Rule 149(3) makes a departure from Rule 148(3). The latter Rule applied only to members of the non pensionable service, whereas Rule 149(3) applies to all members of the railway service holding substantive appointments, and brings within its fold all employees even those who have entered employ ment before the date on which the Rule was framed. But if by the terms of his appointment a railway servant who was not governed by Rule 148(3) is brought within Rule 149(3) so as to make his employment precarious by exposing him to liability to termination of employment, different considerations may apply. For reasons which I have already set out the conditions of service validly made under article 309 of the Constitution and in existence on the date when a public servant enters service would be binding upon him. There is nothing in Rule 149(3) which renders determination of employment in the 795 manner provided therein per se inconsistent with article 311. But exercise of the power by the Railway Administration to determine employment of persons who were otherwise not subject to the new condition of service would, in my judgment, amount to imposing a penalty of dismissal or removal. Therefore termination of services of a person who held appointment to a substantive post and was entitled under the previous rules to continue until he attained the age of superannuation, or till compulsory retirement, Rule 149(3) made applicable to him after he entered service would per se amount to dismissal or removal and it would be inconsistent with article 311. This is not because the Rule is invalid, but because it would expose the public servant concerned to forfeiture, by amendment of the rules which were in existence at the time when he entered service, o rights which he had already acquired. The alternative ground of invalidity that the rule infringes the fundamental right of equal protection of the laws under article 14 of the Constitution may now be considered. This ground was set up under two broad heads. (1) There is no other public employment under the Government of India in which conditions similar to these contained in Rule 148(3) or Rule 149(3) exist, and therefore discrimination between public servants employed in Railways and public servants employed in other branches of public undertakings or Administrative Services without any rational basis to support it, infringing the equal protection of laws guaranteed by article 14 of the Constitution, results. The argument posed in this form does not appear to have been raised before the High Court and no investigation has been made whether similar conditions of service do or do not exist in other public employments. In any event, employment in the Railways is in a vitally important establishment of the Union in which the employees are entrusted with 796 valuable equipment and a large measure of confidence has to be reposed in them and on the due discharge of the duties the safety of the public and the efficient functioning of the governmental duties depend. Not only the travelling public, but the Union and the States have in a considerable measure to depend upon rail transport for the functioning of the governmental machinery and its welfare activities. It would be possible even for one or a few employees of the Railway to paralyse communications and movement of essential supplies leading to disorder and confusion. The Railway service has therefore a special responsibility in the smooth functioning of our body politic and a doctrinaire approach to equality of conditions of service in different branches of public employment, irrespective of the nature of the duties performed, irrespective of the possibility of harm to the community which misguided members or units may be capable of doing, and irrespective of the necessity to entrust special powers to terminate employment in deserving cases may not be permitted. If for the purpose of ensuring the interests and safety of the public and the State, the President has reserved to the Railway Administration power to terminate employment under the Railways, it cannot be assumed that such vesting of authority singles out the railway servants for a special or discriminatory treatment so as to expose the Rule which authorises termination of employment to the liability to be struck off as infringing article 14. Article 14 undeniably forbids class legislation, but it does not forbid reasonable classification for the purpose of legislation. Legislation satisfying the test of classification founded on an intelligible differential distinguishing persons, objects or things grouped together from others left out of the. group, such differentia having a rational relation to the object sought to be achieved by the statute, has consistently been regarded as not open to challenge on the ground of infringing the equality clause of the constitution. The special conditions in which the Railways have to operate and the interests 797 of the nation which they serve justify the classification, assuming the argument of classification to be factually correct. It need hardly be pointed out that the basis of classification need not be expressly mentioned by the impugned statute: it may be gathered from the surrounding circumstances known to or brought to the notice of the Court. (2) Rules 148(3) and Rule 149(3) are so framed as to lead to discriminatory treatment of Railway servants, because by the exercise of the arbitrary and uncontrolled power thereby conferred, exercise of which is not to be tested by any objective standard, service of any public servant falling within the classes to which they apply may be terminated Conferment of such a power leads to denial of the equal protection of the laws. Rule 148(3 ) as it stood applied only to non pensionable services and not to pensionable services, and Rule 149(3) applies to all railway servants holding posts pensionable and non pensionable. In dealing with a similar argument in Satish Chandra Anand 's case(1) in the context of termination of employment of a servant employed on a contract for the duration of an Organisation but whose tenure was governed by the Central Civil Services (Temporary Service) Rules, 1949, Bose, J., observed at p. 659: "There was no compulsion on the petitioner to enter into the contract he did. He was as free under the law as any other p erson to accept or to reject the offer which was made to him. Having accepted, he still has open to him all the right and remedies available to other persons similarly situated to enforce any rights under his contract which have been denied to him, assuming there are any, and to pursue in the ordinary courts of the land such remedies for a breach as are open to him to exactly the same extent as other persons similarly situated. He has not been discriminated against and he has not been denied the protection (1) ; 798 of any laws which others similarly situated could claim. " These observations in my judgment would, with appropriate variations, be applicable in considering the validity of Rules 148(3) & 149(3). In adjudging 'whether there is by the impugned rules a denial of the equal protection of the laws, no rational ground of distinction can be found between an employee who is but for the rule for termination of em ployment by notice, by the contract entitled to continue in employment for a specified duration, and one who is appointed to a substantive post till superannuation. In one case the employment is. for a period defined or definable, in the other there is employment till superannuation, and in both cases liable to be terminated by notice. If with his eyes open, a candidate for employment accepts a post permanent or temporary, tenure of which is governed by Rules, he cannot after accepting the post seek to avoid the onerous terms of employment. This is not to say that acceptance of covenants or rules which are inconsistent with the Constitution is binding upon the public servant by virtue of his employment. Such covenants or rules which in law be regarded as void, would not affect the tenure of his office. The law which applies to railway servants falling within the class to which Rules 148(3) and 149(3) apply is the same. There are no different laws applicable to members of the same class. The applicability of the law is also not governed by different considerations. It is open to the appointing authority to terminate appointment of any person who falls within the class. There is therefore neither denial of equality before the law, nor denial of equal protection of the laws. All persons in non pensionable services were subject to Rule 148(3). There was no discrimination between them: the same law which protected other servants in the same group non pensionable servants protected the appellants in appeals Nos. 711 714 of 1962, and also provided for determination of their employment. 799 The Rule, it is true, does not expressly provide for guidance to the authority exercising the power conferred by Rule 148, but on that account the Rule, cannot be said to confer an arbitrary power and be unreasonable, or be in its operation unequal. The power is exercisable by the appointing authority who normally is, if not the General Manager, a senior officer of the Railways. In considering the validity of an order of determination of employment under Rule 148, an assumption that the power may be exer cised mala fide and on that ground discrimination may be practised is wholly out of place. Because of the absence of specific directions in Rule 148 governing the exercise of authority conferred thereby, the power to terminate employment cannot be regarded as an arbitrary power exercisable at the sweet will of the authority, when having regard to the nature of the employment and the service to be rendered, the importance of the efficient functioning of the rail transport in the scheme of our public economy, and the status of the authority invested with the exercise of the power, it may reasonably be assumed that the exercise of the power would appropriately be exercised for the protection of public interest on grounds of administrative convenience. Power to exercise discretion is not necessarily to be assumed to be a power to discriminate unlawfully, and possibility of abuse of power will not invalidate the conferment of power. Conferment of power has necessarily to be coupled with the duty to exercise it bona fide and for effectuating the purpose and policy underlying the rules which provide for the exercise of the power. If in the scheme of the rules, a clear policy relating to the circumstances in which the power is to be exercised is discernible, the conferment of power must be regarded as made in furtherance of the scheme, and is not open to attack as infringing the equality clause. It may be remembered that the rules relating to termination of employment of temporary servants and those on probation, and even those relating to compulsory retirement generally do not lay down any specific directions governing the exercise of the powers 800 conferred thereby. The reason is obvious: the appointing authority must in all these cases be left with discretion to determine employment having regard to the exigencies of the service, suitability of the employee for absorption or continuance in the cadre, and the larger interests of the public being served by retaining the public servant concerned in service. In my view Rule 148(3) cannot, therefore, be regarded as invalid either as infringing article 311(2) of the Constitution or as infringing article 14 of the Constitution. For the same reasons Rule 149(3) cannot also be regarded as invalid. But the orders imposing upon the public servants determination of employment in exercise of the powers under Rule 149(3) made applicable to them when prior to the date on which the Rule was framed they were not applicable to them would be void as infringing article 311(2) of the constitution As, however, on this part of the case there has been no investigation by the High Court, I would remand appeals Nos. 837 839 of 1963 to the High Court and dismiss appeals Nos. 711 714 of 1962. ORDER BY COURT In accordance with the opinion of the majority Civil Appeals Nos. 711 713 of 1962 and Civil Appeal No. 714 of 1962 are allowed with costs. The writ petitions filed by the four appellants in the three High Courts are granted and Orders directed to be issued in terms of the prayers made by them. Civil Appeals Nos. 837 839 of 1963 are dismissed with costs. One set of hearing fees in each group.

Moti Ram Deka was a peon employed by the North East Frontier Railway and Sudhir Kumar Das was a confirmed clerk. General Manager, North East Frontier Railway, terminated th services under R. 148(3) of Indian Railway Establishment Co Vol. They challenged the termination of their services but th writ petitions were rejected by the Assam High Court and t came to this court by special leave. Priya Gupta was an Assistant Electrical Foreman in North Eastern Railway. His services were terminated under R. 148. His writ petition and Letters Patent Appeal challenging termination of his services having been rejected by Allahabad High Court, he came to this Court by special leave. Tirath Ram Lakhanpal was a Guard employed by the Northen Railway. His services were terminated under R. 148. His writ petition and Letters Patent Appeal were dismissed by Punjab High Court and he came to this court by special leave. S.B. Tewari, Parimal Gupta and Prem Chand Thakur employed in the. North Eastern Frontier Railway. Their service were terminated under R. 149. Their writ petitions challenging termination of their services were accepted by the Assam High Court and Union of India came to this Court after getting a certificate of fitness from the Assam High Court. The only question involved was the constitutional validity or otherwise of Rules 148(3) and 149(3) of the Indian Railway Establishment Code on the ground that they violated articles 14 and 311(2) of Constitution of India. Held: By majority by Gajendragadkar, Wanchoo, Hidaya tullah, Ayyangar, Subba Rao and Das Gupta JJ.(Shah J. dissenting) 684 that Rules 148(3) and 149(3) of Indian Railway Establishment Code were invalid. Per Gajendragadkar, Wanchoo, Hidayatullah and Ayyangar, jj. Rules 148(3) and 149(3) are invalid inasmuch as they are inconsistent with the provisions of articles 311(2). The termination of the services of a permanent servant which is authorised by those rules, is no more and no less than his removal from service and hence article 311(2) must come into play in respect of such cases. The rule which does not require compliance with the procedure prescribed under article 311(2) must be struck down as invalid. A person who substantively holds a permanent post has a right to continue in service, subject to the rules of superannuation and compulsory retirement. If for any other reason that right is invaded and he is asked to leave his service, the termination of his service must inevitably mean the defeat of his right to continue in service and as such it is in the nature of a penalty and amounts to removal. In other words, termination of the services of a permanent servant otherwise than on ground of superannuation or compulsory retirement, must per se amount to his removal and if by R. 148(3) or R. 149(3), such a termination is brought about, the rule clearly contravenes article 311(2) and must be held to be invalid. Rules 148(3) and 149(3) contravene article 14 of the Constitu tion. It is difficult to understand on what ground employment by the Railways alone can be said to constitute a class by itself for the purposes of framing the impugned rules. If considerations of administrative efficiency or exigencies of service justify the making of such a rule, such rules should have been framed in other departments also. The pleasure of the President has lost some of its majesty and power as it is controlled by the provisions of article 311. Rules of superannuation are based on considerations of life expectation, mental capacity of civil servants having regard to climatic conditions under which they work and the nature of the work they do. They are not fixed on any ad hoc basis and do not involve the exercise of any discretion. They apply uniformly to all public servants falling under the category in respect of which they are framed. There can be no analogy between the rule of superannuation and rules 148(3) and 149(3) of the Code. If any rule permits the appropriate authority to retire compulsorily a civil servant without imposing a limitation in that behalf that such civil servant should have put in a minimum period of service, that rule would be invalid and the so called retirement ordered under the said rule would amount to removal of the civil servant within the meaning of article 311(2). 685 Where a rule is alleged to violate the constitutional guarantee afforded by article 311(2), the argument of contract between the parties and its binding character is wholly inappropriate. Per Subba Rao, J. Rules 148(3) and 149(3) which confer a power on the appointing authority to remove a permanent servant on notice, infringe the constitutional protection guaranteed a Government servant under articles 14 and 311 of the Constitution A permanent post and rules such as 148(3) and 149(3) cannot stand together and the latter must inevitably yield to the former. It is neither the phraseology nor the nomenclature given to the act of termination of service that is material but the legal effect of the action taken that is decisive in considering the question whether a Government servant is dismissed or not. Whether the services of a permanent Government servant are terminated by giving him 15 day 's notice or whether his services are dispensed with before the age of superannuation by way of compulsory retirement under or outside a rule of compulsory retirement, the termination deprives him of his title to the permanent post. If in the former case it amounts to dismissal,in the latter case,it must be equally so. In both cases, article 311(2) is attracted. Compulsory retirement before age of superannuation is not an incident of tenure. It does not work automatically. It is not conceived in the interest of the employee. It is a mode of terminating his employment at the discretion of the appointing authority. As a matter of fact, whatever the language used in that connection, it is a punishment imposed on him. It not only destroys his title but also inevitably carries with it a stigma and hence such a termination is dismissal or removal within the meaning of article 311. A title to an office must be distinguished from the mode of its termination. If a person has title to an office, he will continued to have it till he is dismissed or removed from there. Terms of statutory rules may provide for conferment of a title to an office and also for the mode of protecting it. If under such rules, a person acquires title to an office, whatever mode of termination is prescribed and whatever phraseology is used to describe it, the termination is neither more nor less than a dismissal or removal from service and that inevitably attracts the provisions of article 311 of the Constitution. The argument that the mode of termination prescribed derogates from the title that otherwise would have been conferred on the employee mixes up two clear concepts of conferment of title and the mode of its deprivation. Article 311 is a constitutional protection given to Government servants, who have title to office against their arbitrary and summary dismissal. Government cannot by rule evade the provisions of article 311. Parties also cannot contract themselves out of the constitutional provision Per Das Gupta, J. Rule 148(3) does not contravene Art 311(2). A railway servant to whom R. 148(3) applied has two 686 limitations put on his right to continue in service, viz., termination on attaining a certain age and termination of service on a notice under R. 148(3). Where service is terminated by order of retirement under R. 2046, the termination is of a service where the servant has no right to continue and it is not removal or dismissal. Likewise when service is terminated by notice under R. 148(3) that termination is not removal or dismissal. The words 'removal ' and 'dismissal ' in article 311 mean and include only those terminations of service where a servant has acquired a right to continue in the post on the basis of terms and conditions of service and such other terminations where though there is no such right, the order has resulted in loss of accrued benefits. Terminations of service which do not satisfy either of these two tests do not come within any of these words. Both articles 309 and 310 are subject to article 311. If any rule is made under article 309 as regards conditions of service of a Government servant in the matter of his dismissal or removal or reduction in rank, it has to comply with the requirements of article 31 1. Before an order dismissing or removing or reducing a Government servant in rank is made by President or Governor in exercise of his pleasure, President or Governor has to comply with the requirements of 311(2). Under Art 310, all servants of the State hold office during the pleasure of the President or Governor as the case may be. That means that the officer has no right to be heard before his services are terminated. Article 311 provides an exception in the case of removal or dismissal. However, R. 148(3) contravenes article 14 as it does not give any guidance for exercise of discretion by the authority concerned and hence is invalid. Per Shah, J.Rules 148(3) and 149(3) do not infringe Art.311(2) or article 14of the Constitution. There is neither logic nor law in support of the contention that r. 148(3) contravenes article 311(2). The termination of employment under r. 148(3)does not involve the public servant concerned in loss of any right which he has already acquired. It does not amount to loss of a post to which he is entitled under the terms of his employment because the right to a post is necessarily circumscribed by the conditions of employment which include r. 148(3). It also does not cast any stigma upon him. Mere determination of employment, of a public servant, whether he is a temporary employee, a probationer, a contractual appointee or appointed substantively to hold a permanent post, will not attract the provisions of article 311(2) unless the determination is imposed as a matter of punishment. A railway servant who has accepted employment on the conditions contained in the rules, cannot after having obtained employment, claim that the conditions which were offered to him and which he accepted, are not binding upon him. The sole exception to that rule is in cases where the 687 condition prescribed by contract or statutory regulations is void as inconsistent with the constitutional safeguard. This exception is founded not on any right in the public servant to elect, but on t invalidity of the covenant or regulation. There is no distinction between cases of termination of employment resulting from attaining the age of superannuation or from orders of compulsory retirement terminating temporary employment or employment on probation and orders terminating employment after notice under R. 148(3) An appointment to a public post is always subject to th pleasure of the President, the exercise of such pleasure being restricted in the manner provided by the Constitution. A person appointed substantively to a post does not acquire a right t hold the post till he dies. He acquires merely a right t hold the post subject to the rules. If employment is validly terminated, the right to hold the post is determined even apart from th exercise of the pleasure of the President or the Governor. public servant cannot claim to remain in office so long as he is of good behavior. Such a concept of the tenure of a public servant 's post is inconsistent with articles 309 and 310 of the Constitution. Rules 148(3) and 149(3) do not infringe article 14 of the Constitution. article 14 forbids class legislation but it does not forbid reasonable classification for the purpose of legislation. special conditions in which the railways have to operate and t interests of the nation which they serve, justify the classification If for the purpose of ensuring the interests and safety of the public and the State, the President has reserved to the Railway Administration power to terminate employment under the Railways, it cannot be assumed that such vesting of authority singles out the railway servants for a special or discriminatory treatment so as to expose the rule which authorises termination of employment to the liability to be struck off as infringing article 14. It is true that R. 148(3) does not expressly provide for guidance to the authority exercising the power conferred by it, but on that account, the rule cannot be said to confer an arbitrary power and be unreasonable or be in its operation unequal. The power exercisable by the appointing authority who normally is if not the General Manager, a Senior Officer of the Railways. In considering the validity of an order of determination of employment under r. 148, an assumption that the power may be exercised mala fide and on that ground discrimination may be practiced, is wholly out of place. Because of the absence of specific directions in R. 148, governing the exercise of authority conferred the by the power to terminate employment cannot be regarded as an arbitrary power exercisable at the sweet will of the authority when having regard to the nature of the employment and the service to be rendered, importance of the efficient functioning of the rail transport in the interest of national economy and the 688 status of the authority invested with the exercise of power, it may reasonably be assumed that the exercise of the power would appropriately be exercised for the protection of public interest or on grounds of administrative convenience. Power to exercise discretion is not necessarily to be assumed to be a power to discriminate unlawfully and possibility of abuse of power will not invalidate the conferment of power. Case law referred to.

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: Special Leave Petition (Criminal) No. 1543 of 1984. From the Judgment and order dated the 3rd day of May, 1984 of the Delhi High Court in Crl. M(M) No. 421 of 1984 995 R.N. Poddar for the Petitioner. Miss Rani Jethmalani for the Respondent. The Judgment of the Court was delivered by B VENKATARAMIAH, J. Four persons Maj. General (Retd.) F.D. Larkins, Air Vice Marshal (Retd.) K.H. Larkins, Lt. Col. (Retd.) Jasbir Singh and Jaspal Singh Gill alias Jassi Gill, the respondent herein, were accused of having committed offences punishable under sections 3, 5 and 9 of the Official Secrets Act, 1923 read with section 120 B of the Indian Penal Code and of them F.D. Larkins and Jasbir Singh were also accused of having committed the offence punishable under section 6 of the Official Secrets Act, 1923 in a complaint filed by the Deputy Commissioner of Police, Special Branch, Delhi with the authorisation of the Government of India before the Additional Chief Metropolitan Magistrate, Patiala House, New Delhi. The prosecution case appears to rest inter alia on the following facts: On March 24, 1983, Group Captain Jasjit Singh informed the Air Vice Marshal (now Air Marshal) Shri section Raghavendran that for some days immediately prior to that date AVM (Retd.) K.H. Larkins then resident of Azad Apartments, Mehrauli Road, New Delhi, under whom he had served earlier was inducing him to pass on secret manuals of aircrafts used by the Indian Air Force for a consideration of Rs. 20,000/ per document. AVM Raghavendran brought this to the notice of his superiors. Thereafter further information was collected and the movements of AVM (Retd.) K.H. Larkins were kept under observation. The links of the said K.H. Larkins and his brother Major General (Retd.) F.D. Larkins were discovered. A First Information Report was registered at Police Station, Tughlak Road, New Delhi. On November 11, 1983 raids were conducted at the residence of K.H. Larkins as well as that of F.D. Larkins. Certain incriminating items are stated to have been recovered from the latter 's 996 house. It is alleged that on interrogation after arrest F.D. Larkins and K.H. Larkins confessed that they had been passing on classified information relating to the defence of the country to a foreign agency. It is further alleged that Major General (Retd). F.D. Larkins stated that he had engaged Lt. Col. (Retd.) Jasbir Singh as his sub agent for procuring secret/restricted documents and manuals relating to armament. On this disclosure the search of the house of Jasbir Singh was conducted on November 13 1983 and he was arrested and remanded to police custody. It is stated that on interrogation he disclosed that he had been passing on secret/classified information to Major General (Retd.) F.D. Larkins and Jaspal Singh Gill, the respondent, for monetary consideration. He appears to have further disclosed that many secret/restricted manuals and documents were unauthorisedly got issued to him from D.G.I. and EME libraries to which he gained access through the good offices of certain Army Officers and by impersonating himself as a serving officer when actually he was retired and that the information contained in these documents and manuals was passed on by him to Major General (Retd.) F.D. Larkins and Jaspal Singh Gill alias Jassi Gill resident of 82, Sunder Nagar, New Delhi, the respondent, who represented a private firm namely, M/s EMGEE International Pvt. Ltd, and with whom he, Lt. Col (Retd.) Jasbir Singh, was also working as consultant. On the basis of the said disclosure made by the said Jasbir Singh the search of the house of Jaspal Singh Gill alias Jassi Gill, the respondent herein was conducted at 82, Sunder Nagar, New Delhi. Some secret/restricted documents alongwith a Defence telephone directory connected with the Army are stated to have been recovered from his possession and he was arrested on November 19, 1983. It is alleged that the respondent herein had obtained classified information on defence matters through the aforesaid Jasbir Singh for monetary consideration and had passed on the information to the U.S. Intelligence Operator. During the search of the house of Jaspal Singh as many as 13 invitation cards from the U.S. Officials for cocktail and dinner parties are alleged to have been recovered showing the association of the respondent 997 with foreign agents as defined in section 4 of the Official Secrets Act. It is alleged that the respondent was paying Rs. 1,000/ per month to the Jasbir Singh and Rs. 1,000/ per month to the wife of Jasbir Singh. It is further alleged that the copy of the Defence telephone directory was a restricted document, the disclosure of the contents of which to unauthorised persons is prejudicial to the interest and security of the country. All the accused persons including the respondent have been committed to the Court of Sessions for the various offences which are really of a serious nature. During the investigation, the respondent made an application for bail before the Addl. Sessions Judge, New Delhi and it was rejected in January, 1984. Then again he made another application for bail before the Sessions Court. Before the said application could be taken up, he made an application under section 482 of the Criminal Procedure Code before the High Court of Delhi for bail. The learned Judge of the High Court who heard the bail application went into the merits of the case and after holding that the material before the Court was insufficient to sustain the conviction of the respondent proceeded to enlarge him on bail subject to his furnishing a personal bond in the sum of Rs. 5,000/ with one surety in the like amount. It may be stated here that the very same learned Judge had dismissed earlier the bail application of Jasbir Singh who was the employee of the respondent. Aggrieved by the order of the High Court enlarging the respondent on bail, the prosecution has filed this Special Leave Petition for revoking the said order of bail. The offence punishable under section 3 of the Official Secrets Act, 1923 with which the respondent is charged relates to military affairs and it is punishable with imprisonment which may extend to fourteen years. This Court in The State vs Captain Jagjit Singh has indicated that the Court should exercise a 998 greater degree of care in enlarging on bail an accused who is charged with the offence punishable under section 3 of the Official Secrets Act when it relates to military affairs. I have also gone through the decisions of this Court in Gurcharan Singh & Ors. vs State (Delhi Administration) and Gudikanti Narasimhulu & Ors. vs Public Prosecutor, High Court of Andhra Pradesh which deal with the principles governing the grant of bail. It may be mentioned here that in the last of the above cases, the accused had been acquitted by the trial court but convicted by the High Court on appeal. On a consideration of the above three decisions, I am of the view that the Court before granting bail in cases involving non bailable offences particularly where the trial has not yet commenced should take into consideration various matters such as the nature and seriousness of the offence, the character of the evidence, circumstances which are peculiar to the accused, a reasonable possibility of the presence of the accused not being secured at the trial, reasonable apprehension of witnesses being tampered with, the larger interests of the public or the State and similar other considerations. On going through the order passed by the High Court, I feel that its decision that the material collected by the prosecutions and the evidence to be adduced at the trial would not be sufficient to sustain a conviction appears to be a premature one in the circumstances of this case. Since the trial is yet to begin, I do not propose to say anything more at this stage lest it should prejudice either the accused or the prosecution than observing that on a perusal of the complaint and the other material available in the case, it cannot reasonably be stated that the prosecution case against the respondent is such that it can be thrown out at the threshold. It appears that a prima facie case is made out against the respondent. The gravity of the offences is quite obvious. They relate to the security of the State, Espionage and intelligence are utilised to pass on information regarding military plans, equipment, technical advances etc. of one country to another. Naturally passing on of such information from our country to a foreign country is bound to be most harmful to our country. The 999 persons accused alongwith the respondent are admittedly ex military men well versed in military affairs who are capable of establishing bridges with the sensitive sections of the defence services. The respondent is also alleged to be having some dealings with the defence department and Jasbir Singh is in the employment of the respondent. The allegations made by the prosecution which no doubt have still to be established at the trial suggest that the respondent and the persons accused alongwith him are persons of easy conscience in so far as the interests and security of the country are concerned. The current situation in the country is such that it can be easily be exploited by unscrupulous men to their own or to some foreign power 's advantage. These aspects of the case do not appear to have been considered by the High Court. It is seen that while dismissing the bail application of Jasbir Singh on April 24, 1984, the learned Judge of the High Court had relied on the decision of this Court in Captain Jagjit Singh 's case (supra), he has not even referred to that decision while granting bail to the respondent on May 3, 1984. Some of the observations made by the High Court against the sustainability of the case of criminal conspiracy alleged by the prosecution at this stage were not called for. The circumstances of this case are such that the question whether the case of criminal conspiracy had been made out or not should have been left to be decided by the trial court at the end of the trial on a consideration of the entire evidence adduced in the case. In the circumstances, I am of the view that the High Court should not have enlarged the respondent on bail in the larger interests of the state. It is urged that the respondent is a person who has undergone a cardiac operation and needs constant medical attention. I am sure that the prison authorities will arrange for proper treatment of the respondent whenever the deed for it arises. I am informed that in a criminal revision petition filed by one of the accused, the High Court has stayed the trial of the case The High Court is requested to dispose of the case early since the accused are all in judicial custody. The order of bail passed by the High Court was suspended by this Court by an order made on June 4, 1984 and the respon 1000 dent was ordered to be re arrested and kept in judicial custody The respondent is now taken back into judicial custody. In the result, the order of the High Court enlarging the respondent on bail is set aside and the respondent is directed to remain judicial custody until further orders to be passed by a competent court. The trial court shall proceed to dispose of the case without feeling itself bound by any of the observations of the High Court.

The respondent along with three others were accused of having committed offences punishable under sections 3,5 and 9 of the Official Secrets Act, 1923 read with section 120 B of the Indian Penal Code and therefore committed to the Court of Sessions for the said offences which are of a serious nature. During the investigation, the respondent made an application for bail before the Additional Sessions Judge, New Delhi and it was rejected in January, 1984. Then again he made another application for bail before the Sessions Court. Before the said application could be taken up he made an application under section 482 of the Criminal Procedure Code before the High Court of Delhi for bail. The learned Judge of the High Court who heard the bail application went into the merits of the case and after holding that the material before the Court was insufficient to sustain the conviction of the respondent proceeded to enlarge him on bail subject to his furnishing a Personal bond in the sum of Rs. 5,000/ with one surety in the like amount. However, the very same Learned Judge had dismissed earlier the bail application of Jasbir Singh who was the employee of the respondent. Aggrieved by the order of the High Court enlarging the respondent on bail, the prosecution has filed this special leave petition for revoking the said order of bail: Allowing the petition, the Court. ^ HELD: 1:1. The Court before granting bail in cases involving non bailable offences particularly where the trial has not yet commenced should 994 take into consideration various matters such as the nature and seriousness of the offence, the character of the evidence, circumstance which are peculiar to the accused, a reasonable possibility of the presence of the accused not being secured at the trial, reasonable apprehension of witnesses being tampered with, the larger undressed of the public or the State and similar other considerations. Further, the Court should exercise a greater degree of care in enlarging on bail an accused who is charged with the offence punishable under section 3 of the Official Secrets Act when it relates to military affairs. Here the offence punishable under section 3 of the Official Secrets Act, 1923 with which the respondent is charged relates to military affairs and it is punishable with imprisonment which may extend to fourteen years. The State vs Captain Jagjit Singh, ; Gurcharan Singh & Ors vs State (Delhi Admn.), ; ; Gudikanti Narsaimhulu & Ors. vs Public Prosecutor, High Court of Andhra Pradesh, [1978] 2 S.C.R. 361, referred to [998C D; 998A; 997H] 1:2. The decision of the High Court that the material collected by the prosecution and the evidence to be adduced at the trial would not be sufficient to sustain a conviction appears to be a premature one in the circumstances of this case. The allegations made by the prosecution which no doubt have still to be established at the trial suggest that the respondent and the persons accused alongwith him are persons of easy conscience in so far as the interests and security of the country is concerned. The current situation in the country is such that it can easily be exploited by unscrupulous men to their own or to some foreign power 's advantage. These aspects of the case do not appear to have been considered by the High Court. Further, while dismissing the bail application of Jasbir Singh on April 24, 1984, the learned Judge of the High Court had relied on the decision of this Court in Captain Jagjit Singh 's case, he has not even referred to that decision while granting bail to the respondent on May 3, 1984. Some of the observations made by the High Court against the sustainability of the case of criminal conspiracy alleged by the prosecution at this stage were not called for. The circumstance of this case are such that the question whether the case of criminal conspiracy had been made out or not should have been left to be decided by the trial court at the end of the trial on a consideration of the entire evidence adduced in the case. Therefore, the High Court should not have enlarged the respondent on bail in the larger interest of the State. [998E; 999B F]

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vil Appeal No. 1 of 1986 From the Judgment and Order dated 7.2.1986 of the Bombay High Court in W. P. No. 4802 of 1984 D.R. Thadani and Shri Narain for the Appellants. N.N. Keshwani, R.N. Keshwani and Girish Chandra for the Respondents. The Judgment of the Court was delivered by B.C. RAY, J. The Maitrai Park Co operative Housing Society Ltd. has filed a dispute before the first Co operative Court, Bombay stating inter alia that the opposite party No. I Smt. Mohini R. Adwani PG NO 34 who is a member of the society and was allotted flat No. 15 in Societies 'F ' building in scheme No. 1 at Chambur Bombay 71 inducted the appellant opposite party No. 2 without obtaining the prior written consent of the society in May 1969, on the basis of a leave and licence agreement for a period of 11 months. The said society Maitrai Cooperative Housing Society Ltd. was divided into two units that is Maitrai Park Co op. Housing Society Ltd., Chambur which is the owner of the building in Scheme No. I including Building No. F and the Maitrai Bijoy Co op. Housing Society Ltd. Chembur 74 Scheme No. 2, by order of the Assistant Registrar Co operative Housing Society Ltd. Bombay. By virtue of the division of the society the assets and liabilities so far as scheme No. 1 were taken over by the present disputant society, that is Maitrai Park Co operative Housing Society Ltd. and the members in respect of the said building in scheme No. I automatically became members of the society by the Order No. BCM/ HSG/4633 of 1970 from 6.8.1971. The respondent opponent No. 2 automatically became a member of the disputed society in respect of the said flat No. 15 in 'F ' building. The opposite party appellant who was occupying the premises unauthorisedly after the expiry of the period of the licence was asked to vacate the flat by the member of the society that is the respondent No. 2. As he did not accede to the request the respondent No. 1 society had to take steps for evicting the appellant from the said flat so that the respondent No. 2 can occupy the same for her residence. The society served a notice on the appellant for vacating the flat. But the appellant did not vacate the flat. Therespondent No. l, the housing society, filed a dispute before the Cooperative Court for eviction of the appellant who was in unauthorised occupation of the flat and who had been using the said residential flat by opening a canteen therein in violation of the bye laws framed by the society. The appellant questioned jurisdiction of the Co operative Court to entertain the dispute on the ground that the dispute does not come within purview of Section 9 l of the Co operative Societies Act as he has been continuing in possession as licencee till the date of filing of the dispute and the respondent No. 1, the member of the society, has been receiving licence fees from him. It has also been stated that in one of the receipts issued by the member. The word rent ' has been used. The appellant also pleaded that continuing as a licencee he has become a tenant under section l5A of the amended Bombay Rent Act on and from Ist of February, 1973. The dispute is as such beyond the jurisdiction of the Co operative Court. The Co operative Court after hearing the parties made an award holding that the dispute fell within the purview of section 9 l of the Maharashtra Co operative Societies Act, 1960 as the appellant is claiming to be in possession of the flat as licencee through a member of the PG NO 35 society. It also held that there was no subsisting agreement of licence in favour of the appellant on the d ate of the enforcement of section 15A of the Bombay Rent Act and so the appellant had not become a deemed tenant. Against this award an appeal was filed before the Maharashtra State Co op. Appellate Court. The appeal was dismissed and the award of the Co operative Court directing eviction of the petitioner from the Flat No. 15 was affirmed. The appellant thereafter moved the High Court of Bombay in Writ Petition No. 4802 of 1984. The said writ petition was dismissed with costs. The appellant thereafter filed the instant special leave petition. The facts of the case are more or less similar to the facts of C.A. No. 472 of 1985. We have already held that the dispute in question comes within purview of Section 91 of the Cc operative Act as the appellants claim to be in possession of the flat through a member of the society which is a Co partnership Housing Society and Section 15A of the Bombay Rent Act does not apply as there was no subsisting agreement of licence on 1.2.1973. Therefore, the judgment rendered by us in C.A. No. 472 of 1975 will also govern this case. The appeal is, therefore. dismissed without any order as to costs. The decree will not be executed for a period of four months from the date of this order subject to the appellant 's filing an usual undertaking within a period of two weeks from today to the effect that the appellant will not transfer, assign or encumber the flat in question in any manner whatsoever and on undertaking that he will hand over peaceful possession of the flat question to the respondent on or before the expiry of the aforesaid period and he will go on paying the occupation charges equivalent to the amount he had been paying for each month by the 7th of succeeding month. In default of compliance of any these terms,the decree shall become executable forthwith.

Mohini R. Adwani, a member of the Maitrai Co operative Housing Society Ltd., was allotted flat No.15 in Societies 'F ' building in Scheme No. I at Chambur Bombay 71. She inducted the appellant in the premises aforesaid without obtaining the prior written consent of the society, on the basis of a leave & licence agreement for a period of 11 months. The said society was divided by order of the Assistant Registrar Co operative Housing Society Ltd. Bombay into two units i.e Maitra Park Co operative Housing Society Ltd., Chambur (and the Maitra BUoy Co operative Housing Society Ltd., Chambur 74 Scheme No. 2) the former being the owner of the building in Scheme No. i including building No. F '. Thus on division Smt. Mohini R. Adwani automatically became a member of the disputed society in respect of the said flat No. 15 in `F ' building. The appellant after the expiry of the period of the licence was occupying the premises unauthorisedly & was asked to vacate the flat by the member of the society. As he did not accede to her request. the society had to take steps for evicting the appellant from the said flat so that Respondent 2 could occupy the same for her residence. The society accordingly served a notice on the appellant asking him to vacate the flat. On his failure to vacate, the society filed a dispute before the Co operative Court for eviction of the appellant who was in unauthorised occupation of the premises and was using the residential flat for canteen purposes in violation of the bye laws framed by the Society. The appellant questioned the jurisdiction of the Co operative Court to entertain the matter on the ground that the dispute in question does not come within the purview of section 91 of the Co operative Societies Act as he was continuing in possessing as licencee and the member of the Society was receiving licence fee from him till the date of filing the dispute. He also asserted that in one of the receipts issued to him the word "rent" has been used. He also pleaded that as a licencee he has became a tenant u/s 15A of the amended PG NO 33 Bombay Rent Act on and from 1st February, 1973. The Co operative Court found against the appellant and made an award holding that the dispute is covered u/s 91 of the Maharashtra Co operative Societies Act, 1960 as the appellant is claiming to be in possession of the flat as licencee through a member of the Society. It also held that there was no subsisting agreement of licence in favour of the appellant on the date of the coming into force of section 15A of the Bombay Rent Act and as such the appellant could not become deemed tenant. Appellant 's appeal before the Maharashtra State Co operative Appellate Court having failed he moved the High Court by means of Writ Petition. On dismissing the Writ Petition by the Bombay High Court, the appellant filed this appeal by special leave. Following the Court 's Judgment in CA. No. 472 of 1985, M section A. V.R. & Co. & Ors. vs Fairfield Co operative Housing Society Ltd., [1988] Supp. 3 S.C.R. 84 Court dismissed the appeal, but directed that the decree should not be executed for a period of 4 months subject to the appellants filing usual undertaking. The Court, HELD: That the dispute in question comes within the purview of section 91 of the Maharashtra Co operative Societies Act, 1960 as the appellant claims to be in possession of the flat through a member of the Society which is a Co partnership Housing Society and Sec. 15A of the Bombay Rent Act does not apply as there was no subsisting agreement of licence on 1.2.1973. [34G H;35A]

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Appeal No. 728 of 1964. Appeal by special leave from the. judgment and decree dated September 25, 1961 of the Punjab High Court in Civil Regular Second Appeal 343 of 1961. section K. Mehta and K. L. Mehta, for the appellant. A. D. Mathur, for the respondents. The Judgment of the Court was delivered by Bhargava, J. One Ramji Dass died leaving behind a widow, Smt. Bhagwani. At the time of his death, he owned some land and a house. 4 bighas and 17 biswas of the land were mortgaged by Smt. Bhagwani on 2nd May, 1948 in favour of respondent No. 3, Babu Ram. Later, on 22nd August, 1949, she executed a deed of gift in respect of the house and the land covering an area of 50 bighas and 14 biswas in favour of Smt. Kala Wanti who was related to her as a grandniece. Sawan Ram appellant instituted a suit for a declaration that both these alienations were without legal necessity and were not binding on him, claiming that he was the nearest reversioner of Ramji Dass, being his collateral. In that, suit, Smt. Bhagwni the donee, Smt. Kala Wanti, respondent No. 1, and the mortgagee, Babu Ram, respondent No. 3, were impleaded as defendants. That suit was decreed and Smt. Bhagwani went up in appeal to the High Court. During the pendency of the appeal, Smt. Bhagwani adopted respondent No. 2, Deep Chand, the son of Brahmanand and his wife, respondent No. 1, Smt. Kala Wanti. A deed of adoption was executed by her in that respect on 24th August, 1959. The appeal was dismissed in spite of this adoption. Bhagwani died on 31st October, 1959, and thereupon, the appellant brought a suit for possession of the house and the land which had been gifted by Smt. Bhagwani to respondent No. 1 as well as for possession of the land which she had mortgaged with respondent No. 3. It was claimed that Smt. Bhagwani had only a life interest in all these properties, because she had divested herself of all the rights in those properties on 22nd August, 1949, before the (No. 30 of 1956) came into force. The adoption of Deep Chand was also challenged as fictitious and ineffective. It was further urged that, even if that adoption was valid, Deep Chand became the adopted son of Smt. Bhagwani and could not succeed to the properties of Ramji Dass. The suit was dismissed by the trial court, holding that the adoption of Deep Chand was valid and that, though Smt. Bhagwani had not become the full owner of the property under the , Deep Chand was entitled to succeed to the property of Ramji Dass in preference to the appellant, so that the appellant could not claim possession of these pro 689 perties. That order was upheld by the High Court. of Punjab, and the appellant has now come up to this Court in appeal by special leave. In this appeal before us, only two points have been urged by learned counsel for the appellant. The first point taken is that, even though the appellant did not challenge the finding of fact that respondent No. 2 was, in fact, adopted by Smt. Bhagwani, that adoption was invalid under clause (Ii) of section 6 read with sub section (2) of section 9 of the (No. 78 of 1956) (hereinafter referred to as "the Act"). It is urged that, under section 9 (2) of the Act, if the father of a child is alive, he alone has the right to give in adoption, though the right is not to be exercised, save with the consent of the mother. In this case, reliance was placed on the language of the deed of adoption dated 14th August, 1959, to urge that Deep Chand was, in fact, given in adoption to Smt. Bhagwani by his mother, respondent No. 1, even though his father, Brahmanand, was alive. This point raised on behalf of the appellant is negatived by the evidence on the record. There is oral evidence of the adoption which has been accepted by the lower courts, and it shows that. Deep Chand was given in adoption by both the parents to Smt. Bhagwani. Even the deed of adoption dated 24th August, 1959, on which reliance was placed on behalf of the appellant in support of this argument, does not bear out the suggestion that Deep Chand was given in adoption by his mother and not by his father. The deed clearly mentions that "the parents of Deep Chand have, of their own free will, given, Deep Chand to me, the executant, today as my adopted son. " This recitation is followed by a sentence which states : "Mst. Kala Wanti, mother of Deep Chand, has put her thumb mark hereunder in token of her consent. " It was from this solitary sentence that inference was sought to be drawn that Deep Chand had been given in adoption by his mother, Kala Wanti and not by the father. The deed, in the earlier sentence quoted above, clearly mentions that Deep Chand had been given in adoption by his "parents" which necessarily includes the father. This later sentence, it appears, was put in the deed, because section 9(2) of the Act mentions that the father is not to exercise his right of giving his child in adoption, save with the consent of the mother. "The consent of the mother" having been used in the Act which was applicable, the draftsmen of the deed included in it the fact that Deep Chand 's mother had actually given her consent and obtained her thumb impression in token thereof. This mention of the consent cannot, in these cir cumstances, be held to show that it was the mother who, in fact, gave the child in adoption and not the father. The second point and the one, on which reliance is mainly placed by learned counsel for the appellant, is that, according 690 to him, under the Act, an independent right of adoption is given to a Hindu female and if a widow adopts a son, he becomes the adopted son of the widow only and is not to be deemed to be the son of her deceased husband. Under the Shastric Hindu Law, no doubt, if a Hindu widow made an adoption after the death of her husband on the basis of consent obtained from him in his lifetime, the adopted son was deemed to be the son of the deceased husband also; but it is urged that the Act has completely changed this policy. In support of this proposition, learned counsel drew our attention to the provisions of section 8 of the Act, under which any female Hindu, who is of sound mind, who is not a minor, and who is not married, or if married, whose marriage has been dissolved or whose husband is dead or has completely and finally renounced the world or has ceased to be a Hindu or has been declared by a court of competent jurisdiction to be of unsound mind, has been granted the capacity to take a son or a daughter in adoption. Then reference was made to section 12 of the Act, which runs as follows : "12. An adopted child shall be deemed to be the child of his or her adoptive father or mother for all purposes with effect from the date of adoption and from such date all the ties of the child in the family of his or her birth shall be deemed to be severed and replaced by those created by the adoption in the adoptive family; Provided that (a) the child cannot marry any person whom he or she could not have married if he or she had continued in the family of his or her birth; (b) any property which vested in the adopted child before the adoption shall continue to vest in such person subject to the obligations, if any, attaching to the owner ship of such property, including the obligation to maintain relatives in the family of his or her birth , (c) the adopted child shall not divest any person of any estate which vested in him or her before the adoption. " Reliance was also placed on sections 13 and 14 of the Act which are reproduced below: "13. Subject to any agreement to the contrary, an adoption does not deprive the adoptive father or mother of the power to dispose of his or her property by transfer inter vivos or by will. (1) Where a Hindu who has a wife living adopts a child, she shall be deemed to be the adoptive mother. 691 (2) Where an adoption has been made with the consent of more than one wife, the senior most in marriage among them shall be deemed to be the adoptive mother and the others to be, step mothers. (3) Where a widower or a bachelor adopts a child, any wife whom he subsequently marries shall be. deemed to be; the stepmother of the adopted child. (4) Where a widow or an unmarried woman adopts a child, any husband whom she marries subsequently shall be deemed to be the stepfather of the adopted child. " On the basis of these provisions, it was urged that the scheme of the Act is that, when a Hindu female adopts a child, he becomes the adopted son of the Hindu female only and does not necessarily become the son of the deceased husband, if the Hindu female be a widow. Emphasis was laid on the fact 'that even an unmarried female Hindu is permitted to take a son or daughter in adoption and in such a case, naturally, no question would arise of the adopted child becoming the adopted son of a Hindu male also. In this connection, reliance was placed on a decision of the High Court of Andhra Pradesh in Nara Hanumantha Rao vs Nara Hanumayya and Another(1). For convenience, the facts of that case may be briefly reproduced as given in the head note to indicate the question of law that fell to be decided. A and his two sons B and C were members of a Hindu joint family. B died on 26th August, 1924 leaving behind his widow D. A died in the year 1936. On 17th June, 1957, D adopted E, and E filed the suit against C and his son F for partition and separate possession of a half share in the properties. The trial court held : (1) that there is a custom among the members of the Kamma caste, to which the parties belonged, whereby the adoption of a boy more than 15 years old is valid; and (2) that the adoption of E could not have the result of divesting the interest of B that had vested in C long prior to the date of the adoption, having regard to the provisions of the Act. In appeal, the High Court upheld the decision of the trial court on both the points that were raised. The existence of the caste custom, by which boys aged more than 15 years could be adopted, was held to be sufficiently proved by evidence. Then the High Court proceeded to consider the provisions of the Act to find out whether E could claim a share in the property of B, the deceased husband of D who had adopted him. The learned Judges of the High Court enumerated the contents of the various relevant sections of the Act and then proceeded to consider whether E could claim a right in the property left by B. The Court, after reproducing the provisions of section 12 of the Act held : (1) [1964] I Andhra Weekly Reporter, 156. 69 2 "Under the terms of the above section, an adopted child is deemed to be the child of his or her adoptive father or mother for all purposes with effect from the date of the adoption. Relying on the words "for all purposes", it is argued that the adopted child has the same rights and privileges in the family of the adopter as the legitimate child. From the language of the section, it is manifest that an adopted child is deemed to be the child of his or her adoptive father or mother. The use of the word "or" between the words "father" and "mother ' makes this abundantly clear. The use of the expression "with effect from the date of adoption" as also the language of clause (c) of the Proviso are important. The expression "with effect from the date of adoption" introduces a vital change in the pre existing law. Under the law as it stood before the Act came into operation, the ground on which an adopted son was held entitled to take in defeasance of the rights acquired prior to his adoption was that, in the eye of law, his adoption related back, by a legal fiction, to the date of death of his adoptive father. The rights of the adopted son, which were rested on the theory of "relation back", can no longer be claimed by him. This is clear from the specific provision made in section 12 that the rights of the adopted are to be determined with effect from the date of adoption. Clause (c) of the Proviso to section 12 lays down the explicit rule that the adoption of a son or daughter, by a male or female Hindu is not to result in the divesting of any estate vested in any person prior to the adoption. " When finally expressing its opinion on the question of law, the Court said : "The Act has made a notable departure from the previous law in allowing a widow to adopt a son or daughter to herself in her own right. Under the Act, there is no question of the adopted child divesting of any property vested in any person or even in herself. The provisions of section 13 make this position clear, by providing that an adoption does not deprive the adoptive father or mother of the powers to dispose of his or her property by transfer inter vivos or by will. On a fair interpretation of the provisions of section 12 of the Act, we are of the opinion that the section has the effect of abrogating the ordinary rule of Mitakshara law that, as a result of the adoption made by the widow, the adoptee acquires rights to the share of his. deceased 39 6 adoptive father which has passed by survivorship to his father 's brothers. " We are unable to accept this interpretation of the provisions of the Act by the Andhra Pradesh High Court as it appears to us that the High Court ignored two important provisions of the Act and did not consider their effect when arriving at its decision. The first provision, which is of great significance, is contained in section 5 (1) of the Act which lays down : "No adoption shall be made after the commencement of this Act by or to a Hindu except in accordance with the provisions contained in this Chapter, and any adoption made in contravention of the said provisions shall be void. " It is significant that, in this section, the adoption to be made is mentioned as "by or to a Hindu". Thus, adoption is envisaged as being of two kinds. One is adoption by a Hindu, and the other is adoption to a Hindu. If the view canvassed on behalf of the appellant be accepted, the consequence will be that there will be only adoptions by Hindus and not to Hindus. On the face of it, adoption to a Hindu was intended to cover cases where an adoption is by one person, while the child adopted becomes the adopted son of another person also. It is only in such a case that it can be said that the adoption has been made to that other person. The most common instance will naturally be that of adoption by a female Hindu who is married and whose husband is dead, or has completely and finally renounced the world, or has been declared by a court of competent jurisdiction to be of unsound mind. In such a case, the actual adoption would be by the female Hindu, while the adoption will be not only to herself, but also to her husband who is dead, or has completely and finally renounced the world or has been declared to be of unsound mind. The second provision, which was ignored by the Andhra Pradesh High Court, is one contained in section 12 itself. 'The section, in its principal clause, not only lays down that the adopted child shall be deemed to be the child of his or her adoptive father or mother for all purposes with effect from. the date of the adoption, but, in addition, goes on to define the rights of such an adopted child. It lays down that from such date all the ties of the child in the family of his or her birth shall be deemed to be severed and replaced by those created by the adoption in the adoptive family. A question naturally arises what is the adoptive family of a child who is adopted by a widow, or by a married woman whose husband has completely and finally renounced the world or has been declared to be of unsound mind even though alive. It is well recognized that, after a female is married, she belongs to the family of her husband. The child adopted by her must also, therefore, belong to the same family. On adoption by a widow, therefore, the adopted son is to be deemed to be a member of the family of the deceased husband of the widow. Further still, he loses all his rights in the family of his birth and those rights 694 are replaced by the rights created by the adoption in the adoptive family. The right, which the child had, to succeed to property by virtue of being the son of his natural father, in the family of his birth, is, thus, clearly to be replaced by similar rights in the adoptive family and, consequently, he would certainly obtain those rights in the capacity of a member of that family as an adopted son of the deceased husband of the widow, or the married female, taking him in adoption. This provision in section 12 of the Act, thus, itself makes it clear that, on adoption by a Hindu female who has 'been married, the adopted son will, in effect, be the adopted son of her husband also. This aspect was ignored by the Andhra Pradesh High Court when dealing with the effect ,of the language used in other parts of this section. It may, however, be mentioned that the conclusion which we have arrived at does not indicate that the ultimate decision given by the Andhra Pradesh High Court was in any way incorrect. As we have mentioned earlier, the question in that case as whether E, after the adoption by D, the widow of B, could divest C of the rights which had already vested in C before the adoption. It is significant that by the year 1936 C was the sole male member of ,the Hindu joint family which owned the disputed property. B died in the year 1924 and A died in 1936. By that time, the Hindu Women 's Rights to Property Act had not been enacted and, consequently, C, as the sole male survivor of the family became full owner of that property. In these circumstances, it was clear that after, the adoption of E by D, E could not divest C of the rights already vested in him in view of the special provision contained in clause (c) of the proviso to section 12 of the Act. It appears that, by making such a provision, the Act has narrowed down the rights of an adopted child as compared with the rights of a child born posthumously. Under the Shastric law, if a child was adopted by a widow, he was treated as a natural born child and, consequently, he could divest other members of the family of rights vested in them prior to his adoption. It was only with the limited object of avoiding any such consequence on the adoption of a child by a Hindu widow that these provisions in clause (c) of the proviso to section 12, and section 13 of the Act were incorporated. In that respect, the rights of the adopted child were restricted. It is to be noted that this restriction was placed on the rights of a child adopted by either a male Hindu or a female Hindu and not merely in a case of adoption by a female Hindu. This restriction on the rights of the adopted child cannot, therefore, in our opinion, lead to any inference that a child adopted by a widow will not be deemed to be the adopted son of her deceased husband. The second ground taken on behalf of the appellant also, therefore, fails. The appeal is, consequently, dismissed with costs. Y.P. Appeal dismissed.

A widow, whose husband had died before the Hindu Succession Act came into force, adopted respondent 2 after the enforcement of the Act. On the widow 's death, the appellant the nearest reversioner of her husband, filed a suit challenging the adoption. The trial court dismissed the suit, which, in appeal, the High Court upheld. In appeal, to this Court the appellant contended that (i) the adoption was invalid under (ii) of section 6 read with section 9 (2) of the as the son was given in adoption by his mother, even though his father was alive; and (ii) under the , an independent right of adoption is given to Hindu female and if a widow adopts a son, he becomes the adopted son of the widow only and was not deemed to be the son of her deceased husband. HELD : The appeal must be dismissed. (i) The evidence on record established that the son was given in adoption by both the parents. The deed of adoption mentions that the had been given in adoption by his "Parents which necessarily includes the father. The following sentence stating that the mother of the boy had 'put her thumb mark hereunder in token of her consent, ' was put in the deed, because section 9(2) of the Adoptions and Maintenance Act mentions that the father is not to exercise his right of giving his child in adoption, save with the consent of the mother. "The consent of the, mother" having been used in the Act which was applicable, the draftsmen of the deed included in it the fact that the boy 's mother had actually given her consent and obtained her thumb impression in token thereof. 689D H] (ii) The provision in section 12 of the Act, makes it clear that, on adoption by a Hindu female who has been married, the adopted son will, in effect, be the adopted son of her husband also. Under the Shastric Law if a child was adopted by a widow, he was treated as a natural born child and, consequently, he could divest other members of the family of rights vested in them prior to his adoption. It was only with the limited object of avoiding any such consequence on the adoption of a child by a Hindu widow that the provisions in clause (c) of the proviso to section 12, and section 13 of the Act were incorporated. In that respect, the rights of the adopted child were restricted. It is to be noted that this restriction was placed on the rights of a child adopted by either a male Hindu or a female Hindu and not merely in a case of adoption by a female Hindu. This restriction on the rights of the adopted child cannot, therefore, lead to any inference that a child adopted by a widow will not be deemed to be the adopted son of her deceased husband. [694B C,F H] Nara Hanumantha Rao vs Nara Hanumayya and another, [1964] 1 Andhra Weekly Reporter, 156, discussed.

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vil Appeal Nos. 18083 of 1985. From the Judgment and Order dated 12.9.1983 of the Rajasthan High Court in D.B. (Civil) Spl. Appeal Nos. 35 of 1982, 76, 268 and 270 of 1983. S.K. Bagga for the Appellants. B.D. Sharma for the Respondents. The Order of the Court was delivered by 247 VENKATARAMIAH, CJ. In these appeals the appellants have questioned the validity of Section 15 (as amended) of the Rajasthan Imposition of Ceiling on Agricultural Holdings Act, 1973. It is not disputed that this Act was enacted by the Rajasthan Legislature for bringing about Agrarian Re forms in the State of Rajasthan. The validity of some of the provisions of the Act came up for consideration before this Court in Bansidhar vs State of Rajasthan, ; before a Constitution Bench of this Court and this Court made declaration that the Rajasthan Imposition of Ceiling Agricultural Holdings Act, 1973 was a legislation which was made for the purpose of bringing out Agrarian Reform. In view of the above finding, it is clear that the provisions including section 15 (as amended) contained therein are protected by Article 31(A)(1)(a) of the Constitution notwithstanding the fact that some of these provisions contravened Articles 14 and 19. The Grounds urged in respect of the appeal are that Section 15 (as amended) in question was violative of Article 14. Since the provisions of the Act as already stated are protected by Article 31(A)(1)(a), the attack does not sur vive. The High Court was therefore right in upholding the validity of Section 15 of the Act. Therefore, there is no ground to interfere with the Judgment of the High Court. These appeals fail and are dismissed. Interim orders passed if any, in these cases stand vacated. T.N.A. Appeals dis missed.

In these appeals on the question: whether section 15 (as amended) of the Rajasthan Imposition of Ceiling on Agricul tural Holdings Act, 1973 was violative of Article 14 of the Constitution of India. Dismissing the appeals, this Court, HELD: Rajasthan Imposition of Ceiling on Agricultural Holdings Act, 1973 was a legislation which was made for the purpose of bringing about agrarian reforms. The provisions of the Act including section 15 (as amended) are protected by Article 31(A)(1)(a) of the Constitution. Therefore, the attack that section 15 of the Act was violative of Article 14 of the Constitution does not survive. The High Court was right in upholding the validity of section 15 of the Act. [247B; C D] Bansidhar vs State of Rajasthan, ; , followed.

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Civil Appeal No. 1823 of 1969. Apeal by Special Leave from the Judgment and Order dated the 27th/28th/30th January, 1967 of the Gujarat High Court in Special Civil Application No. 163 of 1962. B. R. Agarwala for the Appellant. I. N. Shroff for the Respondents. Dr. L. M. Singhvi, Advocate General, Rajasthan, V. section Dave and section M. Jain for Intervener, Municipal Council, Jodhpur. The Judgment of the Court was delivered by SHINGHAL, J. This appeal by special leave arises from the judgment of the Gujarat High Court dated January 27, 28 and 30, 83 1967. The two petitioners before the High Court were firms trading in certain commodities within the limits of the Municipal Borough of Broach. The grievance in one of the petitions was that the Municipality had collected certain amounts wrongfully, and the grievance in the other petition was that the Municipality had refused some amounts even though they were refundable under its byelaws. Both the petitions concerned goods which were "imported" within the octroi limits of the Municipality but came to be "exported" therefrom. The first petition was in respect of a consignment which was designated as a through consignment, and the second petition concerned goods in transit and goods for export other than those which could be called goods in transit. The amounts in dispute related to the levy of octroi under section 73(i) of the Bombay Municipal Boroughs Act, 1923, hereinafter called the Act, which provides as follows: "73 (i) Subject to any general or special orders which the State Government may make in this behalf and to the provisions of sections 75 and 76, a Municipality may impose for the purposes of this Act any of the following taxes, namely: * * * * * (iv) an octroi on animals or goods or both, brought, within the octroi limits for consumption, use or sale therein;. " The word "sale" was included within the ambit of octroi when the Act was amended in 1954. The High Court took note of the rules and the bye laws and held that it was not possible to take the view that the rules contemplated that no refund was payable in case the goods had undergone a sale during the course of their stay in octroi limits. It accordingly came to the conclusion that in regard to goods meant for export in the sense defined in the rules, refund was claimable even if a sale transaction in the larger sense (i.e. in a sense other than a sale to a consumer or with the intention that the goods must pass into hands of the ultimate consumer) took place in regard thereto, provided that the other conditions were satisfied. The High Court then examined the correct interpretation of the word "sale" in clause (iv) of section 73(i) of the Act and after considering this Court 's judgment in Burmah Shell Oil Storage and Distributing Co. India Ld. vs The Belgaum Borough Municipality,(1) it held that the word "sale" could not be given the narrow meaning of a sale for consumption to the ultimate consumer because, in that sense, the Legislature would be guilty of having introduced a word which it was not necessary for it to introduce. The High Court made a reference to the definition of "sale" in section 4 of the Sale of 84 Goods Act and held that the expression "sale" as used in the definition of 'through consignments" in the rules had the same connotation as in the Sale of Goods Act and therefore "if a consignment is brought within the octroi limits and if the municipal authorities are satisfied that the consignment has been brought in for the purpose of effecting a sale in the aforesaid sense, then the consignment does not become a through consignment." According to the High Court, it was not enough merely to prove that the consignment left the octroi limits within six hours after the goods were imported and that it was necessary to show that the goods were intended only to pass through in the sense that they were not meant for consumption, use or sale, and that in regard to such goods there was no intention of changing hands by way of sale or that there was no intention of breaking their bulk or detaining them beyond six hours or unloading them. In the view it took, the High Court issued some directions for compliance by the authorities concerned. The writ petitioners felt dissatisfied with the view taken by the High Court and applied for a certificate under articles 132(1) and 133(1) (c) of the Constitution. The High Court held that no question arose under article 132, and no certificate could be granted under article 133 as there was no final order. The petitioners however applied to this Court for special leave on the ground, inter alia, that the High Court put a wrong interpretation on the expression "sale" in section 73(i)(iv) of the Act inspite of the decision of this Court in Burmah Shell 's case (supra). As has been stated, they succeeded in obtaining special leave from this Court. When the case came up for hearing before a Division Bench, it noticed the decision in Burmah Shell 's case (supra) and felt that there were "burred areas" of sale within the territory which may attract a tax under entry 52 (List II of Seventh Schedule) left uncertain by the aforesaid decision of this Court so that the matter deserved consideration by a larger Bench. This is how the case has come up before us for hearing. We have allowed Municipal Council, Jodhpur, to intervene in the hearing at its request. The short question before us is whether this Court 's decision in the Burmah Shell 's case (supra) squarely covers the present controversy or whether that decision requires reconsideration. The learned counsel have in fact confined their arguments to this narrow field. In order to appreciate the controversy, it will be desirable to refer to the basic facts of the Burmah Shell 's case (supra). The Burmah Shell Oil Storage and Distribution Co. India Ltd., hereinafter referred to as the Company, was a dealer in petrol and other petroleum products which it manufactured in its refineries situated out side the octroi limits of Belgaum Municipality. It brought these products inside that area either for use or consumption by itself or for sale generally to its dealers and licensees who in their turn sold them to others. According to the Company the goods brought by 85 it within the octroi limits could be divided into four categories as follows: 1. Goods consumed by the Company; 2. Goods sold by the Company through its dealers or by itself and consumed within the octroi limits by persons other than the Company; 3. Goods sold by the Company through its dealers or by itself inside the octroi limits to other persons but consumed by them outside the octroi limits; and 4. Goods sent by the Company from its Depot inside the octroi limits to extra municipal points where they are bought and consumed by persons other than the company. This Court examined the scheme of taxation under the Act and the rules and the bye laws made by the Municipality for the levy of octroi. It also took note of the fact that the words "use or sale" were substituted for the words "or use" by Bombay Act 35 of 1954, which are the subject matter of a fresh controversy before us, and made a reference to the Legislative Lists in the Government of India Act, 1935 and the Constitution. After examining the history of octrois and terminal taxes, this Court held that "octrois were taxes on goods brought into the local area for consumption, use or sale", and that "they were leviable in respect of goods put to some use or other in the area but only if they were meant for such user. " It was specifically clarified that the word "sale" was included only in 1954 in order to bring the description of octroi in the Act in line with the Constitution, and that the expression "consumption" and "use" together "connote the bringing in of goods and animals not with a view to taking them out again but with a view to their retention either for use without using them up or for consumption in a manner which destroys, wastes or uses them up. " Looking to the trade of the Company, this Court held that sale by it directly to consumers or to dealers was "merely the means for putting the goods in the way of use or consumption" and that the word "therein" does not mean that all the act of consumption must take place in the area of the municipality. The Court therefore went to hold as follows. "In other words, a sale of the goods brought inside, even though not expressly mentioned in the description of octroi as it stood formerly, was implicit, provided the goods were not re exported out of the area but were brought inside for use or consumption by buyers inside the area. In this sense the amplification of the description both in the Government of India Act, 1935 and the Constitution did not make any addition to the true concept of 'octroi ' as explained above. That concept included the bringing in of goods in a local area so that the goods come to a repose there. When the Government of India Act, 1935 was enacted, the word 86 'octroi ' was deliberately avoided and a description added to forestall any dispute of the nature which has been raised in this case. In other words, even without the description the tax was on goods brought for 'consumption, use or sale '. The word 'octroi ' was also avoided because terminal taxes are also a kind of octroi and the two were to be allocated to different legislatures. In our opinion, even without the word 'sale ' in the Boroughs Act the position was the same provided the goods were sold in the local area to a consumer who bought them for the purpose of use or consumption or even for resale to others for the purpose of use or consumption by them in the area. It was only when the goods were re exported out of the area that the tax could not legitimately be levied. " This Court categorically held that the Company was liable to pay octroi on goods brought into the local area (a) to be consumed by itself or sold by it to consumers direct, and (b) for sale to dealers who in their turn sold the goods to consumers within the municipal area irrespective of whether such consumers bought them for use in the area or outside it, but it was "not liable to octroi in respect of goods which it brought into the local area and which were re exported. " The law on the subject matter of the present controversy has thus been laid down quite clearly in the Burmah Shell 's case (supra) and the present case squarely falls to be governed by it. We are also in agreement with that interpretation of the law. It may be mentioned that the learned counsel have not been able to advance any new argument justifying a reconsideration of the decision. The appeal is allowed, the impugned judgment of the High Court is set aside and the respondents are directed to examine and determine the claims of the appellant in accordance with the above decision. The appellant will be entitled to costs from the respondents. P.B.R. Appeal allowed.

Section 73(i)(iv) of the Bombay Municipal Boroughs Act 1925 empowers a municipal borough to impose octroi on animals or goods or both brought within the octroi limits for consumption, use of sale therein. The appellant imported certain consignments of goods within the octroi limits of the municipality and exported them, the consignments being termed as "through consignments" or "goods in transit" or "goods for export". Octroi duty was imposed on the goods and the appellant filed a petition before the High Court challenging the levy. The High Court held that the expression 'sale ' used in the definition of "through consignments" in the rules had the same connotation as in the Sale of Goods Act and, therefore, if a consignment was brought within the octroi limits and if the municipal authorities were satisfied that the consignment had been brought in for the purpose of sale, then the consignment did not become a through consignment. Allowing the appeal to this Court, ^ HELD: The law on the subject has been clearly laid down in Burmah Shell Oil Storage and Distributing Company (India) Ltd. vs The Belgaum Borough Municipality and the present case is governed by that decision. It was held in that case that the company was liable to pay octroi on goods brought into the local area, if the goods are: (a) to be consumed by the Company itself or sold by it to consumers direct and (b) for sale to dealers who in their turn sold the goods to consumers within the municipal area and irrespective of whether such consumer bought them for use in the area or outside it; but it was not liable to octroi in respect of goods which were brought into the local area and were re exported. [86 C D] Buimah Shell Oil Storage and Distributing Co. India Ltd. vs The Belgaum Borough Municipality [1963] Suppl. 2 S.C.R. 216, explained and applied

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Appeal No. 339/60. Appeal from the judgment and decree dated November 17, 1955, of the Andhra Pradesh High Court in A. section No. 51/1951. A. Banganadham Chetty, A. V. Rangam, A. Vedavalli and K. R. Chaudhri. for the appellants. B. Ganapathy Iyer, R. Thiagarajan and G. Gopalakrishnan, for the respondent No. I. 1962. December 12. The judgment of ' the Court was delivered by 997 MUDHOLKAR, J. This is an appeal by a certificate granted by the High Court of Andhra Pradesh under article 133 (1) (a) of the Constitution. The relevant facts arc these The plaintiff respondent Ramaswamy & Co who carry on business in tobacco at Guntur instituted a suit against the appellant firm which also carries on similar business at that place and its alleged partners Kurapati Venkata Mallayya and Mittapalli Abbayya, for the recovery of the price of 112 bales of DB tobacco strips (hereafter referred to as DB strips) sold to them on June 5, 1946, amounting to Rs. 14,099/ and interest thereon from the date of purchase to the date of suit. In addition, the respondent firm claimed interest from the date of suit to the date of realization. It is the respondent firm 's case that the tobacco weighed 28,196 pounds and that the appellant firm purchased it by agreeing to pay its price at 8 annas per pound. Further according to the respondent firm the appellant firm agreed to pay interest on the amount at 9% per annum. The appellant firm denied having purchased 112 bales of tobacco from the respondent firm and denied also having agreed to pay its price at annas per pound or at any other rate. They also denied the existence of any agreement to pay any interest. According to the appellant firm in May, 1946 it secured a contract to supply to the Russian Government 3,000 bales of inferior tobacco at the rate of 8 annas per pound. One Kottamasu Venkateswarlu (who was distantly 'related to the partners of the appellant firm) was managing partner of the respondent firm. This firm had some inferior tobacco and Venketashswarlu pressed the appellant firm to take over 112 bales of the tobacco from it and tender them towar ds the contract with the Russian Government saying that the appellent firm may deduct one 998 anna per pound from the price received from the Russian Government towards their expenses and commission. The appellant firm had reluctantly agreed to this request and despatched 97 out of the 112 bales to Kakinada after getting Agmark certificate with respect to them, with the assistance of Venkateswarlu The representative of the Russian Government, however, rejected the goods on the ground that they were of inferior quality. Five bales out of these 97 bales were rejected by the Agmark authorities after re inspection of the goods at Kakinada. Those bales were returned to Guntur along with other rejected bales which belonged to the appellant firm but they were consumed in an accidental fire in the godown of the a pellant firm. The remaining 92 bales are said to be apeal lying with the shipping agent at Kakinada and that as the tobacco is of very poor quality no purchaser had yet been found for it. Fifteen bales out of the 112 bales which had not been sent to Kakinada got damaged and had to be rebaled. As a result of the rebaling they were reduced to ten bales and these are still lying with the appellant firm, which the appellantfirm was willing to return to the respondent firm on its paying the godown charges. Thus, the main defence of the appellant firm is that it never purchased 112 bales of tobacco from the respondent firm and, therefore, the respondent firm could not sue it for the price of those bales. It may be mentioned that before the institution of the suit a Receiver had been appointed in another suit for realization of the debts due to the 'respondent firm The court before which the suit was pending had made an order on June 22, 1949 permitting the ]Receiver to collect the debts due to the respondentfirm. In pursuance of this order the Receiver Suryanarayana instituted the suit out of which this appeal arises, describing himself thus in the plaint: " 'I, Suryanarayana Garu, Receiver appointed 'in O.S. 999 275 of 1948 on the file of the District Munsif 's Court, Guntur". The appellant firm contended that the suit was untenable because a Receiver has no right to institute a suit in his own name and further that the Receiver had not been expressly authorised by the court to institute the suit in question. The appellantfirm also contended that the suit was barred by time. It specifically contended that the respondent firm was not entitled either to the alleged price or to any interest. The appellant firm further contended that Mittapalli Abbayya ceased to be a Partner of the firm since the vear 1942 because as a result of a partition between Abbayya and his son ., Abbayya 's interest in the appellant firm fell to the share of one of his sons, Kotilingam. In consequence of the plea taken by the appellant firm that the suit was not tenable the respondentfirm amended the plaint with the leave of the court on December 27, 1949 by describing the plaintiff as ""Messrs. Thondepu Ramaswami & Co., represented by Suryanarayana Garu receiver appointed in O.S. 275 of 1948 on the file of the District Munsif 's Court, Guntur" in place of the original "I. Suryanarayana Garu, Receiver appointed in O.S. 275 of 1948 on the file of the District Munsif 's Court, Guntur". Thereupon the appellant firm filed an amended written statement in which it contended that the amendment was made long after the period of limitation and that it does not cure the initial defect in the suit of having been filed by a person other than the one who was entitled to institute a suit and that consequently the suit was barred by limita. The trial court held that the respondent firm had established the contract alleged by it but that it had not established that the appellant firm had agreed to pay the price at the rate of 8 annas per pound. It, however, held that the price of tobacco 1000 was Rs. 5,639 3 0, but it, dismissed the suit on the ground that I, Suryanarayana was not entitled to institute a suit in his capacity as Receiver in 0. section 275 of 1948, that the amendment of the plaint was made beyond the period of limitation and that, therefore, the suit was barred by time. In appeal the High Court held that the Receiver was entitled to institute the suit having been authorised by the court to collect the debts of T. Ramaswami & Co., that at the most 'there was a misdescription of the plaintiff firm in the cause title of the suit which could be corrected any time and that consequently the suit was within time. It further held that the price of tobacco agreed to between the parties was 8 annas per pound and that the plaintiff was entitled to a decree for Rs. 14,098/ and interest at 6% p.a. from the date of delivery of the goods till realisation. The first point urged before us by Mr. Ranganadham Chetty on behalf of the appellant firm is that the High ' Court, as well as the Subordinate judge were in error in holding that the bales in question had been purchased by the appellant firm from the respondent firm. This, however, is a question of fact and since the two courts below have found against the appellant firm on this point this court would not ordinarily interfere with such a finding. Mr. Ranganadham Chetty, however, contended on the authority of the decision in Srimati Bibhabati Devi vs Kumur Ramendra Narayan Roy( ') that the practice of the court in appeals by special leave is not a castiron one and that it, would, therefore, be open to this Court to depart from it in, an appropriate case. The aforesaid decision was referred to by this Court in Srinivas Ram Kumar vs Mahabir Prasad (2 ) and it was pointed out that when the courts below have given concurrent findings on pure questions of fact, this court would not ordinarily interfere with them (1) (1946) L.R. 73 I.A. 246, 259. (2) (1951] S.C.R 277,281. 1001 and review the evidence for the third time unless there are exceptional circumstances justifying a departure from the normal practice. Learned counsel contended that this is an unusual case because the reasons given by the High Court for holding that the transaction was a sale are quite different from those given by the trial court and in fact one of the reasons given by the High Court proceeds on a view of an important piece of evidence which is diametrically opposite to that expressed by the trial court. Mr. Ringanadham 'Chetty pointed out that in support of its claim the respondent firm relied upon two entries in its account books Exs. A 13 and A 14, that these entries were not relied tin by the trial court, but the High Court has without giving any reason for regarding them as genuine acted upon them. What the trial court has said in para 14 of its judgment is as follows : " 'In order to establish the sale of 122 bales of flue cured virginia tobacco strips,, Ramaswami relies on certain entries in the account books of his firm. Exhibit A 13 is the katha on page 27 of the day book of Thondepu Ramaswami & Co., containing an entry in respect of 112 bales weighing 28, 196 pounds at Re 0 8 0 per pound and debiting a sum of Rs. 14,098/ . The words " 'Re. 0 8 0 per pound" are contai ned in the third line of the entry. The words "112 bales weighing 28.,196 pounds at Re. 0 8 0 per pound" appear to be written closely. The sum of Re. 14,098 appears in different ink. Exhibit A 14 is the katha of the 1st defendant firm found on page 111 of the corresponding, ledger of Thondepu Ramaswami & Co. On 5 6 1964 a sum of Rs. 14,098 was debited in respect of 112 bales of barn tobacco weighing 28 196 pounds at Re. 0 8 0 per pound. ' In the second line of the entry the price therefore (in Telugue) and the debit 1002 of the sum of Rs. 14,098are found. On 21st August, 1946 interest of Rs. 267 1 9 was added. Exhibit A 17 is the interest Katha of Messrs. Thoadepu Ramaswami & Co, Exhibit A 16 is the katha at page 41 of the day book of Thondepu Ramaswami & Co. The katha shows that on 21 8 1946 to balancing entries 21 8 1946 two balancing entries for interest of Rs. 267 13 6 were made in the day book. The entry on the right hand side has been scored out and Ramaswamy has not been able to explain why and under what circumstances the entry happens to be scored out. The entry on the left hand side however, was not scored out. The totals do not tally unless the sum of Rs. 267 13 6 is included in the aggegate sum mentioned on the right hand side on page 41. It has been commented on behalf of the defendants that Ramaswamy himself has no personal knowledge of the entries, that the clerks who made the entries in the account books have not been examined and that Exhibits A 13, A 14 and A 1 6 cannot be relied on in order to come to the conclusion that the transaction relating to 112 bales was a sale and only a sale. Though Ramaswamy was not present when the entries were made in the several registers of his firm, it is not disputed that the accounts have been maintained in the usual course of business. " ling with the question of price the trial court has ob served: " 'Much reliance cannot be placed on the rate mentioned in Exhibits A 13 and A 14 and the price has to be determined independently having regard to the fact that the price of tobacco depreciates gradually with its age. " If will thus be seen that the trial court has not rejected these entries outright but only rejected them in so far as they were intended to establish the price agreed to be paid to the respondent firm. 1003 Dealing with this matter the High Court has observed thus : " 'Exhibit A 13 is the entry in the day book of Thondepu Ramaswami & Co. under date 5 6 1946 wherein a sum of Rs. 14,098 is debited to the defendant firm in respect of 112 bales of tobacco weighing 286196 pounds at 8 annas per pound. Though the figures "Rs. 14,098" were written in a different ink from the rest of the entry this is not a suspicious circumstance because the rest of the entry which is in the same ink and which is written in a normal manner contains reference to the sale of 28,196 pounds at 8 annas per pound. The resultant total is entered in the column on the right hand side as Rs. 14,098. It may be that the figure of Rs. 14 098 was entered a: little later before the accounts for the day were closed. Exhibit A 14 is the corresponding ledger of Thondepu Ramaswami & Co. and the entries in the day book are duly incorporated in the ledger. " Then later on the High Court has observed "At the same time the entries in the regularly kept books of the plaintiff firm cannot be thrown overboard particularly when no challenge was made of their genuineness. " The High Court has also stated : ""It is apparent from Exhibit A 23 that the defendant firm was shown to be a debtor not merely with respect to Rs. 14,098 the price of 28,196 pounds but also in respect of the interest due upon the sum, and the plaintiff firm has paid income tax thereon." toto the High Court has given certain reasons and even though we may not agree with them it cannot be said that there is any unusual circumstance which would warrant our reviewing afresh the evidence on 1004 the point as to whether the transaction in question was a sale or not. Mr. Ranganadham Chetty next contended that the courts below have not borne in mind the true significance of the words ""no price" occurring in the entry relating to the 112 bales in question in the verification register exhibit A 28. The Entry reads thus "5 6 46 For 112 bales of Baru tobacco no price at Re. 0 8 0 per pound The entries were in Telugu and the actual words used are and according to Mr. Ranganadham Chetty they mean that there was no sale. The Courts below, however, which were conversant with the language, have understood the entry to mean "no price" and that is how the ' expression has been translated in the paper book and it is not open to Mr. Ranganadham Chetty to say that the meaning is otherwise than this. Mr. Chetty then contended that even accepting that the meaning is only " 'no price" the proper inference to be drawn is that there was no transaction of sale and that the rate of 8 annas per pound stated in the entry is given merely for valuing the 112 bales. That may be so but it does not negative the effect of the other entries which clearly point to the transaction being a sale. Some point was also sought to be made by Mr. Ranganadham Chetty from the fact that no copy of the transport permit required to be taken for the transfer of excisable articles from one bonded warehouse to another was placed on record. We fail to see the significance of this because the appellant firm admits that 112 bales of tobacco were actually received by it from the respondent firm. It will thus be seen that there are no exceptional circumstances or unusual reasons which would induce us to re examine the entire evidence on the point ourselves. We, therefore, decline to do so. 1005 The next question is whether the suit was in proper form and was within time. Though the case of section for the suit arose on June 5, 1945, it is admitted before us that the courts were closed on June 5, 1949 and the suit was filed on the day on which they reopened. It would, therefore, be within time if it was properly constituted on the date on which it was filed. In Jagat Parini Dasi vs Naba Gopal Chaki (1) which is the leading case on the point it was held by the Calcutta High Court that a court must authorise a Receiver to sue in his own name and a Receiver who is authorised to sue though not expressly in his own name, may do so by virtue of his appointment with full powers under section 503 of the Code of Civil Procedure (Act XIV of 1882). In coming to this conclusion the learned judges pointed out that though, the object and purpose of the appointment of a Receiver may be generally stated to be the Preservation of the subject matter of the litigation pending judicial determination of the rights of the parties it does not necessarily follow that if he is authorised to sue, he cannot sue in his own name. Then the learned judges pointed out : ,,Though he is in one sense a custodian of the property of the person, whom in certain respects he is made to supplant, there seems to be no reason why his power should not be held to be co extensive with his functions. It is clear that he cannot conveniently perform those functions, unless upon the theory that he has sufficient interest in the subject matter committed to him, to enable him to sue in respect thereof by virtue of his office, in his own name. On the whole, we are disposed to take the view that, although a receiver is not the assignee or beneficial owner of the property entrusted to his care, it is an incomplete and inaccurate statement of his relations to the property to say that (1) Cal. 305. 1006 he is merely its custodian, When a Court has taken property into its own charge and custody for the purpose of administration in accordance with the ultimate rights of the Parties to the litigation, it is in custodia legis. The title of the property for the time being, and for the purposes of the administration, may, in a sense, be said to be in the Court. The receiver is appointed for the benefit of all concerned; he is the representative of the Court, and of all Parties interested in the litigation, wherein he is appointed. He is the rightarm of the Court in exercising the jurisdiction invoked in such cases for administering the property; the Court can only administer through a receiver. For this reason; all suits to collect obtain possession of the property must be prosecuted by the receiver, and the proceeds received and controlled by him alone. If the suit has to be nominally prosecuted in the name of the true owners of the property, it is an inconvenient as well as useless form inconvenient, because in many cases, the title of the owners may be the subject matter of the litigation in which the receiver has been appointed useless, because the true owners have no discretion as to the institution of the suit, no control over its management, and no right to the possesion of the proceeds." (pp. 316 317) Later the learned judges pointed out, that for the time being and for the purpose of administration of the assets the real party interested in the litigation is the Receiver and, therefore, there is no reason why the suit could not be instituted in his own name. The learned Judges then referred to a number of cases in support of their conclusion. It seems to us that the view of the Calcutta High Court that a Receiver who is appointed with full powers to administer the property which is Custodia legis or 1007 who is expressly authorised by the court to institute a suit for collection of the assets is entitled to institute a suit in his own name provided he does so. in his capacity as a Receiver. If any property is in custodia legis the contesting parties cannot deal with it in an manner, and, therefore, there must be some authority competent to deal with it, in the interest of the parties themselves. A Receiver who is placed in charge of the property on behalf of a court can be the only appropriate person who could do so. His function cannot be Limited merely to the preservation of the property and it is open to a court if occasion demands, to confer upon him the power to take such steps including instituting suits in the interest of the parties themselves. Here apparently the Receiver was not a person with full powers but by its order dated June 26, 1949 the, court authorised him to collect debts, particularly as some debts were liable to get barred by time. The Receiver, therefore, had the right to institute the suit in question. It is, however, contended that the order does not say specifically that he should institute a suit. In our opinion, the authority given to the Receiver ",to collect the debts" is wide enough to empower the Receiver to take such legal steps as he thought necessary for collecting the debtsincluding instituting a suit. The suit as originally instituted, was thus perfectly competent. The High Court has observed that even assuming that it would have been more appropriate for the Receiver to show in the cause title that it was the firm which was the real plaintiff and that the firm was suing through him it was merely a case of misdescription and that the plaint could be amended at any time for the purpose of showing the correct description of the plaintiffs We agree with the High Court that where there is a case of misdescription of parties it is open to the court to allow an amendment of the plaint at any time and the question of limitation would not arise in such a case. 1008 [His Lordship then dealt with the point regarding the rate of interest.] x x x x x x x x x Accordingly we set aside the decree of the High Court, allow the appeal in part and pass a decree in favour of the respondent firm for Rs. 5,639/3/ with interest at 6 per cent per annum from the date of the transaction till realization. The respondent firm will proportionate costs throughout from the appellant firm, which would bear its own costs. Appeal allowed in part.

A Receiver authorised and appointed by a Court to collect the debts due to the plaintiff respondent instituted a suit against the appellant firm and its alleged partners for the recovery of the price of tobacco and interest thereon. The right of the receiver to institute a suit in his own name was challenged by the appellant. Thereupon the respondent firm amended the Plaint by describing the plaintiff as "M/s. T. R. & Co., represented by I. Surayanarayana Garu receiver appoin. ted in O.S. 275 of 1948 on the file of the District Munsiff 's Court Guntur. " The appellant firm amended the written statement and contended that the amendment of the plaint was timebarred, that it did not cure the initial defect in the suit and that consequently, the suit was barred by limitation. The trial court dismissed the suit on the ground that Suryanarayana was not entitled to institute a suit in his capacity as Receiver, that the amendment of the plaint was beyond time and that the suit was therefore time barred. On appeal the High 996 Court held that the Receiver was entitled to institute the suit, that at the most there was a misdescription of the plaintifffirm in the cause title of the suit which could be corrected any time, that consequently the suit was within time and that the plaintiff was entitled to a decree with interest from the date of delivery of the goods till realization. Held, that a Receiver invested with full powers to administer the property which is custodia legis or who is expressly authorised by the court to institute a suit for collection of the assets is entitled to institute a suit in his own name provided he does so in his capacity as a Receiver. His function cannot be limited merely to the preservation of the property and it is open to a court, if occasion demands, to confer upon him the power to take such steps including instituting suits in the interest of the parties themselves. The suit as originally instituted, was thus perfectly competent. The High Court rightly held, that where there is a case of misdescription of parties it is open to the court to allow an amendment of the plaint at any time and the question of limitation would not arise in such a case. Jagat Tarini Dasi vs Naba Gopal Chaki (1907) r. L. R. , relied on. Held, further that this court does not interfere with the concurrent findings of the courts below on a pure question of fact, unless there are exceptional circumstances or unusual reasons which induce it to re examine the entire evidence. Srimati Bibhabati Devi vs Kumar Ramendra Narayan Boy, (1946) L. R. 73 1. A. 246 and Sriniwas Ram Kumar vs Mahabir Prasad, ; , referred to.

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Civil Appeal No. 2047 of 1969. A Appeal by Special Leave from the Judgment and Order dated 25 6 1969 of the Andhra Pradesh High Court in Civil Revision Petition No. 346/67. Y. section Chitaley, section K. Mehta, P. N. Puri and E. M. Sarul Anam for the Appellant. A. T. M. Sampath and P. N. Ramalingam for the Respondent. The Judgment of the Court was delivered by CHlNNAPPA REDDY, J. The short question for consideration in this appeal is whether the practice of the legal profession is 'business ' within the meaning of Section 10(3) (a) (iii) of the Andhra Pradesh Buildings (Lease, Rent and Eviction) Control Act, 1960. The question arises this way. The respondent, an Advocate filed an application before the Rent Controller seeking eviction of the appellant, his tenant, from the premises in question on the ground that he required the premises for the purpose of carrying on his profession as an Advocate. The application was contested by the appellant who was carrying on the business of manufacturing art jewellery in the premises. We are not concerned in this appeal with the several defences which were raised by the appellant. Nor are we concerned with the vicissitudes which the case underwent. For the purposes of this appeal it is sufficient to say that the final Court of fact, namely the Chief Judge of the Court of Small causes, Hyderabad, found that the respondent bona fide required the premises for the purpose of carrying on his profession as an Advocate and that the tenancy was not such as could be split up. The Appellate authorities passed an order of eviction against the appellant. Before the High Court, in revision, it was contended by the appellant that the practice of the profession of an Advocate was not business within the meaning of Section 10(3) (a) (iii) and, therefore, the respondent could not seek the eviction of the appellant on the ground that he required the premises for the purpose of carrying on his profession as an Advocate. It was contended that Section 10(3) (a) (iii) used the expression 'business ' only and not the expression 'profession. ' The contention was negatived by a Division Bench of the High Court of Andhra Pradesh consisting of Gopalrao Ekbote and Ramachandra Rao, JJ. The tenant has appealed by special leave to this Court. Dr. Chitaley learned counsel for the appellant argued that there was a clear distinction between 'business ' and 'profession ' and that the practice of a liberal profession like that of an Advocate or a Doctor which 14 had nothing commercial about it was not business within the meaning of Section 10 (3) (a) (iii) of the Andhra Pradesh Buildings ( Lease, Rent and Eviction) control Act 1960. He argued that though the Andhra Pradesh Act broadly classified buildings into residential and non residential buildings, the landlord of a non residential building could not seek to evict his tenant on the ground of his requirement unless it was for the purpose of carrying on a business. According to the learned Counsel this indicated that the expression business was to be given a narrow meaning and was to be confined to activities of a commercial nature. The learned Counsel also urged that the Court should favour a construction which would be beneficient to the tenant. Dr. Chitaley relied on M. P. Sethurama Menon vs Thaiparambath Kunhukutty Amma 's daughter, Meenakshi Amma and Ors. (1) Bangalore Water Supply & Sewerage Board etc. vs R. Rajappa & Ors. (2) and Stuchbery & Ors. vs General Accident Fire and Life Insurance Corporation Ltd.(3) The expression business has not been defined in the Andhra Pradesh Buildings (Lease, Rent and Eviction) Control Act, 1960. It is a common expression which is sometimes used by itself and sometimes in a collocation of words as in "business, trade or profession". It is a word of large and wide import,, capable of a variety of meanings. It is needless to refer to the meanings given to that term in the various Dictionaries except to say that everyone of them notices a large number of meanings of the word. In a broad sense it is taken to mean everything that occupies the time attention and labour of men for the purpose of livlihood or profit '. In a narrow sense it is confined to commercial activity. It is obvious that the meaning of the word must be gleaned from the context in which it is used. Reference to the provisions of the Constitution or other statutes where! the expression is used cannot be of any assistance in determining its meaning in Section 10(3) (a) (iii) of the Andhra Pradesh Building (Lease, Rent and Eviction) Control Act, 1960. It is not a sound principle of construction tn interpret expressions used in one Act with reference to their use in another Act; more so, if the two Acts in which the same word is used are not cognate Acts. Neither the meaning, nor the definition of the term in one statute affords a guide to the construction of the same term in another statute and the sense in which the term has been understood in the several statutes does not necessarily throw any light on the manner in which the term should be understood generally. On the other hand it is a (1) A.I.R. 1967 Kerala 88. (2) ; (3) [1949] 2 K. B. D. 256. 15 sound, and, indeed, a well known principle of construction that meaning of words and expressions used in an Act must take their colour from the content in which they appear. Dr. Chitaley very frankly and fairly conceded as much. Now the Andhra Pradesh Buildings (Lease, Rent and Eviction) Control Act, 1960, is an 'Act to consolidate, and amend the law relating to the regulation of leasing of buildings, the control of rent thereof an(l the prevention of unreasonable eviction of tenants therefrom in the State of Andhra Pradesh. It applies to the cities of Hyderabad and Secunderabad and to all municipalities in the State of Andhra Pradesh. The provisions of the Act, however, do not apply to buildings owned by the Government and to buildings constructed on or after 26th August, 1957. Building is broadly defined as meaning any house or hut or a part of a house or hut, let or to be let separately for residential or nonresidential purposes. Landlord is defined as the owner of a building, including a person who is receiving or is entitled to receive the rent of a building, on his own account or on behalf of another person etc. Tenant is defined as a person by whom or on whose account rent is payable for a building. Section 4 provides for the determination of a fair rent of a building on the application of the tenant or landlord. Section 10(1) provides that a tenant shall not be evicted whether in execution of a decree or otherwise except in accordance with the provisions of Sections 10, 12 and 13. Section 10(2) mentions several grounds on which a landlord may seek to evict a tenant. The grounds are default of payment of rent, sub letting of premises, used for a purpose other than that for which it was leased, commission of acts of waste, conduct amounting to nuisance to the occupiers of the other portions in the same building, securing of alternative accommodation by the tenant and denial of the title of the landlord. The grounds mentioned in Section 10(2) apply both to residential and non residential buildings. Section 10(3) (a) (i) provides for the eviction of a tenant where the landlord of a residential building requires it for his own occupation. Section 10(3)(a)(iii) provides for the eviction of a tenant from a non residential building where "the landlord is not occupying a non residential building in a city town or village concerned which is his own or to the possession of which he is entitled whether under the Act or otherwise (a) for the purpose of a business which he is carrying on on the date of the application, or (b) for the purpose of a business which in the opinion of the Controller, the landlord bona fide proposes to commence". Section 12 and 13 contain special provisions relating to recovery of buildings by landlord for the purpose of effecting repairs, alterations or additions or for reconstruction. The scheme of the Act is to prevent unreasonable eviction of 16 tenants by landlords and to provide for eviction on specified grounds. The Act is of general application and its protection not confined to any classes of tenants nor is the right to evict under the Act limited to any class of landlords. There is no reason why a landlord who is a member of the legal or medical professions and who requires the premises for carrying on the practice of his profession should be wholly debarred from obtaining possession of the premises. It is impossible to discover any reason for so making a discrimination against the liberal professions. But, that would be the result if the expression 'business ' is given a narrow meaning which the appellant wants us to give to that expression. It would indeed be anamolous to hold that all the provisions of the Act including Section 4 which provides for the determination of fair rent and Section 10(1) which bars the eviction of tenants apply to nonresidential buildings owned by an Advocate but not Section 10 (3) (a) (iii) only. In our view the expression business occurring in Section 10(3)(a)(iii) is used in a wide sense so as to include the practice of the profession of an Advocate. The Kerala High Court in M.P. Sethurama Menon vs Meenakshi Amma & Ors. , (supra) construed the expression 'trade or business ' as connoting commercial activity and as not including the practice of the legal profession. The learned Judges referred to Article 19(1)(g) of the Constitution, Section 49 of the , the Madras Shops and Establishments Act, 1947 and drew a distinction between the words 'business ' and 'profession. ' As mentioned by us earlier, we do not think that it is right to ascribe to the word 'business ' occurring in the Andhra Pradesh Buildings (Lease, Rent and Eviction) Control Act, 1960, the same meaning that the word may have when it occurs in other statutory provisions. The word must be interpreted in the context of the statute in which it occurs and not in the context of other statutes or in a manner alien to the context of the statute concerned. In Bangalore Water Supply & Sewerage Board etc. vs R. Rajappa Ors., (supra) Chandrachud, J. (as he then was) observed ". I find myself unable to accept the broad formulation that a Solicitor 's establishment cannot be an industry. A Solicitor, undoubtedly, does not carry on trade or business when he acts for his client or advises him or pleads for him, if and when pleading is permissible to him. He pursues a profession which is variously and justifiably described as learned, liberal or noble. " The observations of the Learned Judge were made in the context of the question whether a Solicitor 's establishment would fall within the definition of 'industry ' under the 17 Industrial Disputes Act. It would be most unwise to apply this A observation to determine whether the practice of the liberal professions is within the meaning of the expression 'business ' in Rent Control legislation. In Stuchbery & Ors. vs General Accident Fire and Life Assurance Corporation Ltd., (supra) it was observed that the carrying on of a Solicitor 's business was the carrying on of a profession and was not the carrying on of a trade or business within the meaning of that phrase in the Landlord and Tenant Act, 1927. The observation was made in the context of that Act which made a distinction between 'trade or business ' and 'profession '. In fact sub section 3(a) of Section 17 of the Act expressly said: "for the purposes of this Section premises shall not be deemed to be premises used for carrying on there at a trade or business by reason of their being used for the purpose of carrying on there at any profession". The question in that case was about the right to compensation for the goodwill attached to the premises where the "business" or "profession" was being carried on. We do not think 1 that the case is of any help to the appellant. We may refer here to the decision of Danckwerts, J., in Re Williams ' Will Trusts, Chartered Bank of India, Australia and China and Another vs Williams and Others.(1) where the question was whether the bequest to a son for the purpose of starting him in 'business ' was affective to start the son in medical practice. The learned Judge held that it did, observing that the word 'business ' was capable of including the practice of a profession and that it plainly included the profession of a Doctor. We may refer to just one more case i.e. Taramal vs Laxman Sewak Surey Ors(2) where this very question whether the practice of law was a 'business ' within the meaning of the Madhya Pradesh Accommodation Control Act came for consideration before A. P. Sen, J. The learned Judge held that in the context of the Madhya Pradesh Act, the word 'business ' had to be given a wide meaning so as to include any profession. We, therefore, agree with the High Court that the practice of law is 'business ' within the meaning of that expression in Section 10(3) (a) (iii) of the Andhra Pradesh Buildings (Lease, Rent and Eviction) Control Act, 196(). The appeal is, therefore, dismissed with costs. M. R. Appeal dismissed.

The respondent, an advocate, sought to evict his tenant, the appellant, under section 10(3) (a) (iii) of the Andhra Pradesh Building (Lease, Rent and Eviction) Control Act, 1960, on the ground that he required the disputed premises for carrying on his profession. The court of small causes, Hyderabad, finding that the requirement was bona fide, passed an eviction order against the appellant. In revision, the High Court negatived the contention that the expression "business" used in section 10(3)(a)(iii), did not include the 'profession ' of an advocate. Dismissing the appeal, the Court, ^ HELD: 1. "Business" is a word of large and wide import, capable of a variety of meanings. In a broad sense it is taken to mean 'everything that occupies the time, attention and labour of men, for the purpose of livlihood or profit '. The practice of law is 'business ' within the meaning of that expression in section 10(3)(a)(iii). The Act is of general application, and its protection is not confined to any classes of tenants, nor is the right to evict under the Act, limited to any class of landlords. There is no reason why a landlord who is a member of the legal or medical professions and who requires the premises for carrying on the practice of his profession, should be wholly debarred from obtaining possession of the premises. It would be anamolous to hold that all the provisions of the Act apply to non residential buildings owned by an Advocate, excepting section 10(3)(a)(iii). [14D, E, 16A B, C D] Williams ' Will Trusts, Chartered Bank of India, Australia and China and Anr. vs Williams and Ors. , [1953] 1 All. ELR 536; Taramal vs Laxman Sewak Surey & Ors. , approved. M. P. Sethurama Menon vs Thaiparambath Kunhukutty Amma 's daughter, Meenakshi Amma & Ors., AIR 1967 Kerala 88; Bangalore Water Supply Sewerage Board, etc. vs R. Rajappa & Ors., ; ; Stuchbery & Ors. vs General Accident Fire and Life Assurance Corp. Ltd., [1949] 2 KBD 256; distinguished. It is a sound principle of construction that, meaning of words and expressions used in an Act, must take their colour from the context in which they appear. Neither the meaning, nor the definition of a term in one statute, affords a guide to the construction of the same term in another statute, more so, if the two Acts in which the same word is used, are not cognate Acts and the sense in which a term has been understood in several statutes, does not necessarily throw any light on the manner in which it should be under stood generally. [14G H & 15A] 13

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ivil Appeal No. 4565 of 1989. 85 From the Judgment and Order dated 4.5.1988 of the Cal cutta High Court in Appeal No. 806 of 1987 A.K. Sen, P.L. Sen, Bhaskar Sen, D.K. Sinha, A.N. Chat terjee, N.D.B. Raju and V.K. Jain for the Appellant. F.S. Nariman, R.C. Nag, S.B. Mukharjee, R.F. Nariman, Kusum Agarwal, O.C. Mathur and D.N. Misra for the Respond ent. The Judgment of the Court was delivered by OJHA, J. Special leave granted. This appeal by special leave has been preferred against the judgment dated May 4, 1988 of a Division Bench of the Calcutta High Court in Appeal No. 806 of 1987. Facts in brief necessary for consideration of the submissions made by learned counsel for the parties are that the respondent, Pradip Kumar Sarkar made an application under section 155 of the (hereinafter referred to as the Act) for rectification of the share register of the appellantcom pany by inserting his name therein as a registered share holder of certain shares transferred in his favour. These shares were fully paid up and the company had no lien over them. According to the respondent, notwithstanding the shares being duly lodged with the Company along with the transfer deeds and requisite fees for registration being paid the Board of Directors of the Company disapproved of the registration of the said shares. This disapproval led the respondent to make the application under section 155 of the Act for rectification of the share register. The case of the respondent was that the shares in question being fully paid up and the company having no lien over them the regis tration of the transfer of the shares in his favour could not be refused under Article 39 of the Articles of Associa tion of the Company which was the article relevant for the purpose. The application aforesaid was contested by the Company on various grounds. Overruling the objections raised by the Company a learned single judge allowed the application. Aggrieved, the Company preferred the appeal aforesaid before a Division Bench of the High Court which has been dismissed by the judgment appealed against. It has been urged by learned counsel for the appellant that even if the Articles of Association do not make any specific provision in this behalf the Company had residuary inherent power to refuse registra 86 tion of the transfer of the shares for the benefit of the Company and its existing sharesholders. Power of refusal to register the transfer of shares was also sought to be de rived from the words "or otherwise" used in Article 42 of the Articles of Association and section 111(2) of the Act. The transferor not being made a party to the application under section 155 of the Act was also pleaded in justifica tion of the submission that the said application deserved to be dismissed. It was also urged that in view of section 108 of the Act the Company was entitled to go into the question as to whether the consideration for transfer of shares as shown in the transfer deeds was real consideration for purposes of finding out as to whether the transfer deeds were duly stamped and refuse registration of the transfer of the shares if the Company was of the view that the transfer deeds were not duly stamped. For the respondent on the other hand it was urged by his learned counsel that in view of the specific provision contained in this behalf in Article 39 of the Articles of Association and no residuary power whatsoev er having been conferred on the Company or its Directors to refuse registration of the transfer of shares it did not have the power claimed by it in aid of refusal of registra tion of the shares transferred to the respondent. Having heard learned counsel for the parties we are of the opinion that unless there is any impediment in the transfer of a share of a public limited company, such as the appellant, a shareholder has the right to transfer his share. Correspondingly, in the absence of any impediment in this behalf the transferee of a share, in order to enable him to exercise the rights of a sharesholder as against the Company and third parties, which is not possible until the transfer is registered in the company 's register, is enti tled to have a rectification of the share register of the company by inserting his name therein as a registered share holder of the share transferred to him. To have such recti fication carried out is the right of the transferee and can be defeated by the company or its Directors only in pursu ance of some power vested in them in this behalf. Such power has to be specified and provided for. It may even be residu ary but in that case too it should be provided for and traceable either in the Act or the Articles of Association. Even if the power of refusal is so specified and provided for the registration of a transferred share cannot be re fused arbitrarily or for any collateral purpose, and can be refused only for a bona fide reason in the interest of the company and the general interest of the sharesholders. If neither a specific nor residuary power of refusal has been so provided, such power cannot be exercised on the basis of the so called undeclared inherent power to refuse registra tion on the ground that the 87 company or its Directors take the view that in the interest of the company and the general interest of the shareholders, registration of the transfer of shares should be refused. Indeed making a provision in the Act or the Articles of Association etc. conferring power of refusal would become futile if existence of an inherent power such as claimed by the company in the instant case is assumed, for the simple reason that the amplitude of the so called undeclared inher ent power would itself take care of every refusal to regis ter the transfer of share. Assumption of such a power would result in leaving the matter of transfer of share and its registration at the mercy and sweet will of the company or its Directors, as the case may be. In the absence of any valid and compelling reason it is difficult to comprehend such a proposition. Even the submission based on the words "or otherwise" in subsection (2) of Section 111 of the Act and in Article 42 of the Articles of Association to the effect that these words recognise the existence of an inherent power to refuse registration of the transfer of the share does not commend itself to us. The words "or otherwise" were inserted in sub section (2) of Section 111 of the Act in 1960 and it is this subsection so amended which is applicable to the facts of the instant case. Sub section (2) of Section 111 does not confer any right but only casts a duty to give notice of refusal to register the transfer of a share and provides for punishment in case of default in doing so. Giving of notice is necessary, inter alia, to facilitate the exercise of the right of appeal conferred by sub section (3) and (4) of Section 111. To introduce a concept of either conferment or recognition of a right to refuse registration of the trans fer of a share in sub section (2) militates against and runs counter to the very texture and purpose of this sub section. Such an interpretation would have the effect of imputing to the legislature an intention of making an effort to fix a square peg in a round hole, when the purpose, if it was to confer or recognise any inherent power to refuse registra tion of the transfer of a share, could plainly be achieved by inserting the words "or otherwise" after the words "under its articles" and before the words "to refuse to register" in sub section (1) of Section 111 which is the sub section relevant for such purpose. The words "or otherwise" take colour from the context in which they are used. In our opinion, the words "under its articles" in subsection (2) of Section 111 of the 'Act have been used in the same sense as is expressed in legal termi nology by the familiar words "conferred by law". Consequent ly, if the opening part of sub section (2) is read as "If a Company refuses, whether in pursuance of any power conferred by 88 law or otherwise" it would be incongruous to suggest that the legislature in using the words "or otherwise" intended to give recognition to a power to refuse registration of the transfer of a share even otherwise than in accordance with law. This would be tantamount to putting a premium on taking the law into one 's own hands. The legislature cannot be imputed with any such intention. For these reasons, we are of the view that in the context in which the words "or otherwise" have been used in sub section (2) of Section 111, they only purport to cast a duty or impose an obligation of giving notice of refusal to register the transfer of a share irrespective of the fact whether such refusal is under the Articles of Association of the Company or de hors the Arti cles, which would include even a case where such refusal has been made arbitrarily or for any collateral purpose. A fortiorari, this would be the interpretation of even Article 42 of the Articles of Association of the Company inasmuch as on its plain language which, except for the provision for punishment, is in pari materia with sub section (2) of Section 111 of the Act, the purpose of this Article is the same as of the said sub section (2). Even the marginal note of Article 42 lends support to this interpretation. At this place, we may point out that it has not been disputed before us by learned counsel for the appellant that the shares in question having been fully paid up and the Company having no lien over them, Article 39 of the Articles of Association could not be invoked to refuse registration of the transfer of these shares. We may now advert to the text books and the decided cases on which reliance has been placed by learned counsel for the appellant in support of the submission that the Company had an inherent power to refuse registration of the transfer of the shares. It was pointed out that the board of directors is now the principal organ of a company. The management of the affairs of the company is vested in the board of directors and all powers excepting those which are specifically reserved for the general meeting by the act or the articles or memorandum of association or otherwise must now be done by the board of directors vide section 291 of the Act (The New Frontiers of Company Law by S.C. Sen 1971 Edition Page 51). Whatever may fairly be regarded as inci dental to the objects for which the Corporation was created is not to be taken as prohibited. The incidental power is one that is directly and immediately appropriate to the execution of the specific power created and not one that has a slight or remote relation to it. Furthermore, the want of an express enumeration of powers does not exclude such incidental powers as are reasonably 89 necessary to accomplish the corporate purpose. The mere creation of a corporation was alone sufficient, in the absence of prohibition, to confer upon such corporation all those powers which are regarded as incident to corporate existence. (Thomsons ' Commentaries on the Law of Corporation 3rd Edition Vol. 3 Pages 820 to 822) As to the relationship between the general meeting and the directors to some extent a more exact analogy would be with the division of powers between the Federal and State Legislatures under a Federal Constitution and the residual powers are in this case with the directors (Gower 's Principles of Modern Company Law 4th Edition Page 147). Corporate authority (powers) are deter mined by reference to (1) charter, (2) incorporation law or act, (3) general and special corporation statutes relevant, (4) other applicable statutes, (5) case decisions (6) cus tomary practices, and (7) treatises and other discussions. They include (1) general powers usually recognized in all corporations, (2) general powers usually recognized in corporations of the particular type, (3) powers inherent in or limited by the purposes or business as stated in the charter, and (4) implied powers to do all things reasonably and properly incidental to the specified purpose and busi ness. (Modern Corporation Law by Howard L. Oleck Vol. It is a well recognised rule that a Corporation is not restricted to the exercise of the powers expressly conferred upon it by its charter but has the implied or incidental power to do whatever is 'reasonably necessary to effectuate the powers expressly granted and to accomplish the purposes for which it was conferred unless a particular act sought to be done is prohibited by the law or its charter. (American Jurisprudence 2nd Edition Vol. Every corpora tion is of course created with certain express powers but in addition to those every corporation has also certain powers which attach to it as an incident to its corporate exist ence. The powers which are incidental to corporate existence and which are always implied in the absence of express restrictions are: (1) The power to have perpetual succes sion, or succession during the period for which the corpora tion is created which includes the power to elect members in the place of those who are removed by death or otherwise, (2) The power to have a corporate name, (3) The power to purchase and hold land and chattels for authorised corporate purposes, (4) The power to have a common seal, (5) The power to make by laws for the government of the corporation, (6) The power to disfranchisement or removal of members except in the case of modern joint stock corporations. (Corpus Juris Secundum Vol. XlX Pages 372 373) Suffice it to say in this behalf that what has been stated above with regard to residuary, implied or incidental powers is calculated to 90 accomplish the objects, the corporate purpose or corporate existence of the corporation. Refusal to register the trans fer of a share obviously does not fall in this category. As has been pointed out in Palmer 's Company Law 24th Edition Page 121 the objects or purposes for which a company is created should be distinguished from the powers which it can exercise. So far as refusal to register the transfer of a share is concerned it is almost the consistent view in decided cases that the power has to be specified and can be exercised only in the manner specified and within the frame work of the said specification. There is no inherent power in this behalf. (See: In re Smith, Knight, & Co., IV Chan cery Appeal Cases Page 20; In re National Provincial Marine Insurance Company, V Chancery Appeal Cases Page 559; Moffatt vs Parqunar, V11 Chancery Division Page 59 1; In re Cawley & Co., XLII Chancery Division Page 209; In re Discovers Fi nance Corporation, Limited, [1910] 1 Chancery Division Page 312 and Sadashiv vs Gandhi Sewa Samaj, A.1.R. 1958 Bombay Page 247) Reliance was then placed by learned counsel for the appellant on The Conservators of the River Tone vs Ash, 109 English Reports Page 479. In that case by an Act for making and keeping the river Tone navigable, it was enacted, that the thirty persons therein named and their successors should be conservators of the river; and should have various powers referred to therein. By a subsequent Act some more powers were conferred on them. A question arose as to whether the conservators were entitled to sue in their corporate name for an injury done to their real property. It was held that as it manifestly appeared from the different clauses of the Acts of Parliament that the conservators should take land by succession and not by inheritance, although they were not created a corporation by express words they were so by implication and that being so they were entitled to sue in their corporate name for an injury done to their real property. In our opinion, on the basis of this decision it is difficult to cull out any power in the board of directors of the company in the instant case to refuse to register the transfer of a share by implication. Reliance was also placed on Attorney General vs The Lord Mayor Etc. of the City of Leeds, [1929] 2 Chancery Division Page 291 where it was pointed out that a corporation incor porated by royal charter stands on a different footing from a statutory corporation, the difference being that the latter species of corporation can do only such acts as are authorised directly or indirectly by the statute creating it whereas the former can, speaking generally, do anything that an ordinary individual can do. If, however, the corporation by charter be a 91 municipal corporation then it is subject to the restriction imposed by the Municipal Corporations Act, 1882. The ques tion in connection with which the above observations were made was whether the Corporation of Leeds, a municipal corporation, was entitled to work or run certain omnibuses along any route whether within or without the boundaries of the City of Leeds. This again was obviously a question relating to the business of the corporation to work or run omnibuses and has no bearing on the question as to whether the directors of the appellant company in the instant case had inherent power to refuse to register the transfer of shares. In E.M. Muthappa Chettiar vs Salem Rajendra Mills Ltd. XXV Company Cases Page 283 it was held that if a person is of such a character as to throw their company into confusion and if he was not a desirable one, then the Board of Direc tors would certainly be acting in the best interests of the company in refusing to register the shares in his name and such a reason is quite a valid reason. Suffice it to say so far as this case is concerned that Article 56 which was the relevant article dealing with the refusal to register the transfer of a share itself clearly conferred power on the board of directors to refuse to register the transfer of a share inter alia "if the transferee of the share is not approved". It was thus a case where power had been conferred by an article and was not a case of refusal to register under any inherent power. Lastly, reliance was placed on Life Insurance Corpora tion of India vs Escorts Ltd. & Ors., [1985] Supp. 3 S.C.R. Page 909. In that case with reference to an earlier decision of this Court in Bajaj Auto Ltd. vs N K. Firodia and Anoth er, 41 Company Cases page 1, it was held that where the articles permitted the directors to decline to register the transfer of shares without assigning reasons the court would not necessarily draw adverse inference against the directors but will assume that they acted reasonably and bona fide. Here again, as is apparent from the decision in the case of Bajaj Auto Ltd. (supra) Article 52 of the appellant company in that case provided that the directors might at their absolute and uncontrolled discretion decline to register any transfer of shares. This too was, therefore, a case of power being conferred by the articles of association and not a case of exercise of inherent power. We may also point out that at page 997 of the Reports of Escorts Ltd. (Supra) it was held that even though it was open to the company and indeed it was bound to refuse to register the transfer of shares of an Indian company in favour of a non resident where the requisite permission under the FERA was not ob tained but 92 once permission was obtained whether before or after the purchase the shares, the company could not thereafter refuse to register the transfer of shares. The third submission made by learned counsel for the appellant that the application under section 155 of the Act was not maintainable as the transferors had not been made parties therein, may now be considered. A similar submission had been made before the Division Bench of the High Court also and was repelled by holding that the transferor is not a necessary party to an application under section 155 of the Act unless the transfer was disputed by him. It was pointed out that even though in the instant case the transferors had been served with notice and in any event had knowledge of the proceedings for registration of transfer of shares they had not disputed the transfer of the shares. We do not find any infirmity in the order of the High Court on this point. Likewise, we find no substance even in the submission made by learned counsel for the appellant based on section 108 of the Act for the simple reason that after taking into consideration the evidence produced by the parties it has been found as a fact by the High Court that it had not been proved that the respondent had paid higher prices for the shares than those stated in the transfer deeds. We find no justification for interferring with the said finding of fact in the present appeal. On this finding the transfer deeds could not be termed as unduly stamped and power to refuse the registration of the transfer of shares contemplated by section 108 of the Act would not be invoked. In the result, we find no substance in this appeal and it is accordingly dismissed with costs assessed at Rs.2,000. T.N.A. Appeal dismissed.

The respondent lodged certain fully paid up shares with the appellant company for transfer in his name. The Board of Directors of the Appellant company disapproved the registra tion of the shares. The respondent filed an application under section 155 of the for rectifica tion of the share register i.e. for inserting his name in the share register as a registered share holder which was allowed by a single judge of the High Court. The Company preferred an appeal which was dismissed by the Division Bench of the High Court. In appeal to this Court it was contended on behalf of the company that (i) the Company had residuary inherent power to refuse the registration of the transfer of shares; (ii) the words "or otherwise" in Article 42 of the Articles of Association and section I 11(2) of the recognise the existence of an inherent power to refuse registration of the transfer of shares; (iii) the applica tion under section 155 was not maintainable as the transfer or had not been made parties therein; and (iv) the company was entitled to examine the correctness of transfer consi 83 deration shown in the transfer deeds and refuse registration of the transfer of shares if the transfer deeds were not duly stamped. Dismissing the appeal, this Court, HELD: 1. Unless there is any impediment in the transfer of a share of a public limited company, a shareholder has the right to transfer his share. Correspondingly, in the absence of any impediment in this behalf the transferee of a share is entitled to have a rectification of the share register of the company by inserting his name therein as a registered shareholder of the share transferred to him. To have such rectification carried out is the right of the transferee and can be defeated by the company or its Direc tors only in pursuance of some power vested in them in this behalf. Such power has to be specified and provided for. It may even be residuary but in that case too it should be provided for and traceable either in the Act or the Articles of Association. Even if the power of refusal is so specified and provided for the registration of a transferred share cannot be refused arbitrarily or for any collateral purpose, and can be refused only for a bona fide reason in the inter est of the company and the general interest of the share holders. If neither a specific nor residuary power of refus al has been so provided, such power cannot be exercised on the basis of the so called undeclared inherent power to refuse registration on the ground that the company or its Directors take the view that in the interest of the Company and the general interest of the shareholders, registration of the transfer of shares should be refused. Indeed making a provision in the Act or the Articles of Association etc. conferring power of refusal would become futile if existence of an inherent power is assumed, for the simple reason that the amplitude of the so called undeclared inherent power would itself take care of every refusal to register the transfer of share. Assumption of such a power would result in leaving the matter of transfer of share and its registra tion at the mercy and sweet will of the company or its Directors, as the case may be. [86E H; 87A B] 2. The objects or purposes for which a company is creat ed should be distinguished from the powers which it can exercise. So far as refusal to register the transfer of a share is concerned the power has to be specified and within the framework of the said specification. There is no inher ent power in this behalf. [90B] In re Smith Knight & Co., IV Chancery Appeal Cases 20; In re National Provincial Marine Insurance Company, V Chan cery Appeal Cases 559; Moffatt vs Parqunar, VII Chancery Division 591; In re 84 Cawley & Co., XLH Chancery Division 209; In re Discoverers Finance Corporation Ltd., [1910] 1 Chancery Division 312 and Sadashiv vs Gandhi Sewa Samaj, AIR 1958 Bom. 247 followed. Palmer 's Company Law 24th Edn. p. 121 referred to. The Conservators of the River Tone vs Ash, 109 English Reports 479; Attorney General vs The Lord Mayor etc. of the City of Leeds, [1929] 2 Chancery Division 291; E.M. Muthappa Chettiar vs Salem Rajendra Mills Ltd., XXV Company Cases 283; Life Insurance Corporation of India vs Escorts Ltd. & Ors., [1985] Suppl.3 S.C.R. 909 and Bajaj Auto Ltd. vs N.K. Firodia and Anr., 41 Comp. Cases 1, distinguished. In the context in which the words "or otherwise" have been used in sub section (2) of section 111, they only purport to cast a duty or impose an obligation of giving notice of refusal to register the transfer of a share irre spective of the fact whether such refusal is under the Articles of Association of the Company or de hors the Arti cles, which would include even a case where such refusal has been made arbitrarily or for any collateral purpose. A fortiorari, this would be the interpretation of even Article 42 of the Articles of Association of the Company inasmuch as on its plain language which, except for the provision for punishment, is in pari materia with sub section (2) of Section 111 of the Act. The purpose of this Article is the same as of the said sub section (2). To introduce a concept of either conferment or recognition of a right to refuse registration of the transfer of a share in sub section (2) militates against and runs counter to the very texture and purpose of this subsection. [88A C; 87E] 4. The transferor is not a necessary party to an appli cation under section 155 of the Act unless the transfer was disputed by him. [92B C] 5. In the instant case, it has been found as a fact by the High Court that it had not been proved that the respond ent had paid higher prices for the shares than those stated in the transfer deeds. Therefore, there is no justification for interfering with the said finding of fact. On this finding the transfer deeds could not be termed as unduly stamped and power to refuse the registration of the transfer of shares contemplated by section 108 of the Act could not be invoked. [92D E]

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Special Leave Petition (Civil) No. 5665 of 1986 From the Judgment and Order dated 17.1.1986 of the Madhya Pradesh High Court in Misc. Petition No. 188 of 1986. B.P. Singh and Ranjit Kumar for the Petitioner. The Order of the Court was delivered by VENKATARAMIAH, J. On the expiry of the period of a permit : to run a stage carriage on the route Jashpurnagar Ambikapur issued under the (hereinafter referred to as 'the Act ') in favour of the Janta Transport Co operative Society. the petitioner and some others filed applications for the grant of the said permit before the Regional Transport Authority, Bilaspur. The Janta Transport Co operative Society also made an application for the renew al of the permit in its favour. The application for renewal filed by the Janta Transport Co operative Society was re jected by the Regional Transport Authority on the ground that it was barred by time. On a consideration of the rela tive merits of the other applicants, namely. the petitioner and others, the Regional Transport Authority granted the permit in favour of the petitioner. The said order was challenged in appeal by M/s. Ali Ahmed & Sons respondent No. 3, which was also 203 an applicant for the said permit before the State Transport Appellate Tribunal. The other unsuccessful applicants also filed separate appeals questioning the grant in favour of the petitioner. The State Transport Appellate Tribunal heard all the appeals together. The Tribunal by its order dated 19.9.1985 set aside the order granting the permit in favour of the petitioner on two grounds, namely, that Mohd. Jhahid Khan, the proprietor of the petitioner concern was a prac tising advocate and that he had ceased to carry on the transport business in his individual capacity and granted the permit in favour of M/s. Ali Ahmed & Sons. Aggrieved by the order of the Tribunal the petitioner filed a writ peti tion in M.P. No. 2945 of 1985 on the file of the High Court of Madhya Pradesh at Jabalpur under Articles 226/227 of the Constitution of India. That petition was taken up for hear ing on 4.10.1985 by the High Court. On that day the High Court passed the following order: "Shri Y.S. Dharmadhikari, learned counsel for the petitioner seeks permission to withdraw the petition. He is permitted to do so. The petition is dismissed as withdrawn." Later on the petitioner again filed another writ peti tion before the High Court in M.P. No. 188 of 1986. That petition came up for hearing on 17.1.1986. At the conclusion of the hearing the High Court passed the following order: "Shri P.R. Bhave for the petitioner heard on admission. This writ petition is directed against the order of the State Transport Appellate Tribu nal setting aside the grant in favour of the petitioner, and instead giving the permit. to the respondent No. 3. The petitioner earlier filed writ petition No. M.P. No. 2945/85 against the impugned order which was withdrawn on 4.10.1985. No second writ petition lies against the same order. The earlier petition was not withdrawn with permission to file a fresh petition. Besides, we do not find any merit in this petition. The Appellate Tribunal has granted the permit to the respondent No. 3 as he has been found superior to the petition er. Besides, he being a practising lawyer could not be doing the transport business. Similar petition of other operators has al ready been dismissed by this Court. Accordingly, the petition is dismissed sum marily. 204 Aggrieved by the above order rejecting the writ petition at the stage of admission, the petitioner has filed the above special leave petition requesting the Court to grant the special leave to prefer an appeal against the order of the High Court. The main contention urged before this Court by the learned counsel for the petitioner is that the High Court was in error in rejecting the writ petition out of which this case arises, on the ground that the petitioner had withdrawn the earlier writ petition in which he had ques tioned the order passed by the Tribunal on 4.10. 1985 with out the permission of the High Court to file a fresh peti tion. It is urged by the learned counsel that since the High Court had not decided the earlier petition on merits but only had permitted the petitioner to withdraw the petition, the withdrawal of the said earlier petition could not have been treated as a bar to the subsequent writ petition. In this case we are called upon to consider the effect of the withdrawal of the writ petition filed under Articles 226/227 of the Constitution of India without the permission of the High Court to file a fresh petition. The provisions of the Code of Civil Procedure. 1908 (hereinafter referred to as 'the Code ') are not in terms applicable to the writ proceedings although the procedure prescribed therein as far as it can be made applicable is followed by the High Court in disposing of the writ petitions. Rule 1 of Order XXIII of the Code provides for the withdrawal of a suit and the consequences of such withdrawal. Prior to its amendment by Act 104 of 1976, rule 1 of Order XXIII of the Code provided for two kinds of withdrawal of a suit. namely, (i) absolute withdrawal, and (ii) withdrawal with the permission of the Court to institute a fresh suit on the same cause of action. The first category of withdrawal was governed by sub rule (1) thereof as it stood then, which provided that at any time after the institution of a suit the plaintiff might, as against all or any of the defendants 'withdraw ' his suit or abandon a part of his claim. The second category was gov erned by sub rule (2) thereof which provided that where the Court was satisfied (a) that a suit must fail by reason of some formal defect, or (b) that there were sufficient grounds for allowing the plaintiff to institute a fresh suit for the subject matter of a suit or part of a claim. it might, on such terms as it thought fit, grant the plaintiff permission to withdraw from such suit or abandon a part of a claim with liberty to institute a fresh suit in respect of the subject matter of such suit or such part of the claim. Sub rule (3) of the former rule 1 of order XXIII of the Code provided that where the plaintiff withdrew from a suit or abandoned a part of a claim without the permission referred to in 205 sub rule (2) he would be liable to. such costs as the Court might award and would be precluded from instituting any fresh suit in respect of such subject matter or such part of the claim. Since it was considered that the use of the word 'withdrawal ' in relation to both the categories of withdraw als led to confusion, the rule was amended to avoid such confusion. The relevant part of rule 1 of Order XXIII of the Code now reads thus: "Rule 1. Withdrawal of suit or abandonment of part of claim (1) At any time after the institution of a suit, the plaintiff may as against all or any of the defendants abandon his suit or abandon a part of his claim: **** **** **** (3) Where the Court is satisfied (a) that a suit must fail by reason of some formal defect, or (b) that there are sufficient grounds for allowing the plaintiff to institute a fresh suit for the subject matter of a suit or part of a claim, it may, on such terms as it thinks fit, grant the plaintiff permission to withdraw from such suit or such part of the claim with liberty to institute a fresh suit in respect of the subject matter of such suit or such part of the claim. (4) Where the plaintiff (a) abandons any suit or part of claim under sub rule (1), or (b) withdraws from a suit or part of a daim without the permission referred to in sub rule (3), he shall be liable for such costs as the Court may award and shall be precluded from insti tuting any fresh suit in respect of such subject matter or such part of the claim. " It may be noted that while in sub rule (1) of the former rule 1 of Order XXIII of the Code the words 'withdraw his suit ' had been used, in sub rule (1) of the new rule 1 of Order XXIII of the Code, the words 'abandon his suit ' are used. The new sub rule (1) is applicable to a case 206 where the Court does not accord permission to withdraw from a suit or such part of the claim with liberty to institute a fresh suit in respect of the subject matter of such suit or such part of the claim. In the new sub rule (3) which corre sponds to the former sub rule (2) practically no change is made and under that sub rule the Court is empowered to grant subject to the conditions mentioned therein permission to withdraw from a suit with liberty to institute a fresh suit in respect of the subject matter of such suit. Sub rule (4) of the new rule 1 of Order XXIII of the Code provides that where the plaintiff abandons any suit or part of claim under sub rule (1) or withdraws from a suit or part of a claim without the permission referred to in sub rule (3), he would be liable for such costs as the Court might award and would also be precluded from instituting any fresh suit in respect of such subjectmatter or such part of the claim. The Code as it now stands thus makes a distinction between 'abandonment ' of a suit and 'withdrawal ' from a suit with permission to file a fresh suit. It provides that where the plaintiff abandons a suit or withdraws from a suit without the permission, referred to in subrule (3) of rule 1 of Order XXIII of the Code, he shall be precluded from instituting any fresh suit in respect of such subject matter or such part of the claim. The principle underlying rule 1 of Order XXIII of the Code is that when a plaintiff once institutes a suit in a Court and thereby avails of a remedy given to him under law, he cannot be permitted to institute a fresh suit in respect of the same subject matter again after abandoning the earlier suit or by withdrawing it without the permission of the Court to file fresh suit. Invito benificium non datur. The law confers upon a man no rights or benefits which he does not desire. Whoever waives, abandons or disclaims a right will loose it. In order to prevent a litigant from abusing the process of the Court by instituting suits again and again on the same cause of action without any good reason the Code insists that he should obtain the permission of the Court to file a fresh suit after establishing either of the two grounds mentioned in sub rule (3) of rule 1 of Order XXIII. The principle underlying the above rule is rounded on public policy, but it is not the same as the rule of res judicata contained in section 11 of the Code which provides that no court shall try any suit or issue in which the matter directly or sub stantially in issue has been directly or substantially in issue in a former suit between the same parties, or between parties under whom they or any of them claim, litigating under the same title, in a Court competent to try such subsequent suit or the suit in which such issue has been subsequently raised, and has been heard and finally decided by such Court. The rule of res judicata 207 applies to a case where the suit or an issue has already been heard and finally decided by a Court. In the case of abandonment or withdrawal of a suit without the permission of the Court to file a fresh suit, there is no prior adjudi cation of a suit. or an issue is involved, yet the Code provides, as stated earlier, that a second suit will not lie in sub rule (4) of rule 1 of Order XXIII of the Code when the first suit is withdrawn without the permission referred to in sub rule (3) in order to prevent the abuse of the process of the Court. The question for our consideration is whether it would or would not advance the cause of justice if the principle underlying rule 1 of Order XXIII of the Code is adopted in respect of writ petitions filed under Articles 226/227 of the Constitution of India also. It is common knowledge that very often after a writ petition is heard for some time when the petitioner or his counsel finds that the Court is not likely to pass an order admitting the petition, request is made by the petitioner or by his counsel, to permit the petitioner to withdraw from the writ petition without seek ing permission to institute a fresh writ petition. A Court which is unwilling to admit the petition would not ordinari ly grant liberty to file a fresh petition while it may just agree to permit the withdrawal of the petition. It is plain that when once a writ petition filed in a High Court is withdrawn by the petitioner himself he is precluded from filing an appeal against the order passed in the writ peti tion because he cannot be considered as a party aggrieved by the order passed by the High Court. He may as stated in Daryao and Ors. vs The State of U.P. and Ors., in a case involving the question of enforcement of fundamental rights file a petition before the Supreme Court under Article 32 of the Constitution of India because in such a case there has been no decision on the merits by the High Court. The relevant observation of this Court in Daryao 's case (supra) is to be found at page 593 and it is as follows: "If the petition is dismissed as with drawn it cannot be a bar to a subsequent petition under article 32, because in such a case there has been no decision on the merits by the Court. We wish to make it clear that the conclusions thus reached by us are confined only to the point of res judicata which has been argued as a preliminary issue in these writ petitions and no other." The point for consideration is whether a petitioner after withdrawing a writ petition filed by him in the High Court under Article 226 of the Constitution of India without the permission to institute a 208 fresh petition can file a fresh writ petition in the High Court under that Article. On this point the decision in Daryao 's case (supra) is of no assistance. But we are of the view that the principle underlying rule 1 of Order XXIII of the Code should be extended in the interests of administra tion of justice to cases of withdrawal of writ petition also, not on the ground of res judicata but on the ground of public policy as explained above. It would also discourage the litigant from indulging in bench hunting tactics. In any event there is no justifiable reason in such a case to permit a petitioner to invoke the extraordinary jurisdiction of the High Court under Article 226 of the Constitution once again. While the withdrawal of a writ petition filed in a High Court without permission to file a fresh writ petition may not bar other remedies like a suit or a petition under Article 32 of the Constitution of India since such withdraw al does not amount to res judicata, the remedy under Article 226 of the Constitution of India should be deemed to have been abandoned by the petitioner in respect of the cause of action relied on in the writ petition when he withdraws it without such permission. In the instant case the High Court was fight in holding that a fresh writ petition was not maintainable before it in respect of the same subject matter since the earlier writ petition had been withdrawn without permission to file a fresh petition. We, however. make it clear that whatever we have stated in this order may not be considered as being applicable to a writ petition involving the personal liberty of an individual in which the petition er prays for the issue of a writ in the nature of habeas corpus or seeks to enforce the fundamental fight guaranteed under Article 21 of the Constitution since such a case stands on a different footing altogether. We however leave this question open. Even on merits we do not find any ground to reverse the decision of the High Court. In the result we dismiss the special leave petition. P.S.S. Petition dismissed.

Sub rule (1) of rule 1, Order XXIII of the Code of Civil Procedure ) permits a plaintiff to abandon his suit against all or any of the defendants at any time after the institu tion of the suit; sub rule (3) lays down that where the court is satisfied (a) that a suit must fall by reason of some formal defect, or (b) that there are sufficient grounds for allowing the plaintiff to institute a fresh suit for the subject matter of the suit, it may grant permission to him to withdraw from such suit with liberty to institute a fresh suit, while sub rule (4) provides that where the plaintiff abandons any suit under sub rule (1) or withdraws from it without the permission referred to in sub rule (3), he shall be precluded from instituting any fresh suit in respect of such subject matter. The provisions of the Code of Civil Procedure, 1908 are not in terms applicable to the writ proceedings. However, the procedure prescribed, therein, as far as it can be made applicable, is followed by the High Court in disposing of the writ petitions. The petitioner withdrew its earlier writ petition filed under article 226/227 of the Constitution without permission of the Court to file a fresh petition. Later on it filed anoth er writ petition against the order assailed in the first petition. The High Court summarily dismissed it taking the view that no second writ petition lies against the same order where the earlier petition was not withdrawn with permission to file a fresh petition. In this petition for special leave it was contended that since the 201 High Court had not decided the earlier petition on merits but had only permitted the petitioner to withdraw it the withdrawal could not be treated as a bar to the subsequent writ petition. On the question: Whether a petitioner after withdrawing a writ petition filed by him in the High Court under article 226/227 of the Constitution without permission to institute a fresh petition can file a fresh writ petition in the High Court under these Articles, and whether it would advance the cause of justice if the principle underlying rule 1, Order XXIII of the Code of Civil Procedure is adopted in respect of the writ petitions under these Articles. Dismissing the special leave petition, the Court. HELD:1. The High Court was right in holding that a fresh petition was not maintainable before it in respect of the same subject matter since the earlier writ petition had been withdrawn without permission to file a fresh petition. [208D] 2. 1 The principle underlying rule 1, Order XXIII of the Code of Civil Procedure that when a plaintiff once insti tutes a suit in a Court and thereby avails of a remedy given to him under law, he cannot be permitted to institute a fresh suit in respect of the same subject matter again after abandoning the earlier suit or by withdrawing it without the permission Of the Court to file fresh suit. should be ex tended in the interest of justice on the ground of public policy to cases of withdrawal of writ petition also. [206D, 208A] 2.2 Invito beneficium non datur. The law confers upon a man no rights or benefits which he does not desire. Whoever waives. abandons or disclaims a right would loose it. [206E] 2.3 Where a petitioner withdraws a writ petition filed by him in the High Court under article 226/227 without permis sion to institute a fresh petition he should be deemed to have abandoned the remedy under these Articles in respect of the cause of action relied on in the writ petition and barred from filing a fresh petition. [207H,208C] 3.1 The principle embodied in rule 1, Order XXIII of the Code is rounded on public policy. It is not the same as the rule of res judicata contained in section II of the Code, which applies to a case where the suit or an issue has already been heard and finally decided by a Court. In the case of abandonment or withdrawal of a suit, there is no prior adjudica 202 tion of a suit nor an issue is involved. The plaintiff is precluded from instituting any fresh suit in respect of the same subject matter to prevent the abuse of the process of the Court. [206G, H, D, 207B] 3.2 Such withdrawal would not bar other remedies like a suit or a petition under article 32 of the Constitution before the Supreme Court in a case involving the question of en forcement of fundamental rights since such withdrawal does not amount to res judicata and there has been no decision on the merits by the High Court. [208C, 207E] Daryao and Ors. vs The State of U.P. and Ors., referred to. [A petition involving the personal liberty of an indi vidual in which the petitioner prays for the issue of a writ in the nature of habeas corpus or seeks to enforce the fundamental right guaranteed under article 21 of the Constitu tion stands on a different footing altogether. This question is left open.] [208E]

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CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2152 of 1968. Appeal by special leave from the _judgment and decree dated July 19, 1968 of the Madras High Court in Second Appeal No. 1173 of 1964. M. C. Chagla, R. Gapalakrishnan and T. L. Garg, for the appellant. M. K. Ramamurthi, Ramamurthy and Vineet Kumar, for res pondents Nos. 1 and 6 to 9. The Judgment of A. N. RAY and M. H. BEG was delivered by BEG J. SIKRI C.J. gave a separate Opinion. Beg, J. Jayaram Mudaliar, the Appellant before us by Special Leave, purchased some lease hold land for Rs. 10,500/ from Munisami Mudaliar and others under a sale deed of 7 7 1958 (Exhibit B 7) and some other lands shown in a sales certificate dated 15 7 1960, (Exhibit B 51) sold to him for Rs. 6,550/ at a public auction of immovable property held to realise the dues in respect of loans taken by Munisami Mudaliar under the Land Improvement Loans ' Act 19 of 1883. Both Jayaram and Munisami, mentioned above, were impleaded as co defendants in a 142 Partition suit, in Vellore, Madras,, now before us in appeal, commenced by a pauper application dated 23 6 1958 filed by the plaintiff respondent Ayyaswami Mudaliar so that the suit must be deemed to have been, filed on that date. The plaintiff respondent before us had challenged, by an amendment of his plaint on 18 9 1961, the validity of the sales of land mentioned above, consisting of items given in schedule 'B ' to the plaint, on the ground, inter alia, that these sales, of joint property in suit, were struck by the doctrine of lis pendens embodied in section 52 of the Indian Transfer of Property Act. As this is the sole question, on merits, raised by the appellant before us for consideration, we will only mention those facts which are relevant for its decision. Before, however, dealing with the above mentioned question, a preliminary objection to the hearing of this appeal may be disposed of. The Trial Court and the Court of first appeal having held that the rule of lis pendens applied to the sales mentioned above, the appellant purchaser had filed a second appeal in the High Court of Madras, which was substantially dismissed by a learned Judge of that Court, on 19 7 1968, after a modification of the decree. Leave to file a Letters Patent appeal was not asked for in the manner required by Rule 28, Order IV of the Rules of Madras High Court, which runs as follows "28.When an appeal against an appellate decree or order has been heard and disposed of by a single Judge, any application for a certificate that the case is a fit one for further appeal under clause 15 of the Letters Patent shall be made orally and immediately after the judgment has been delivered. " But, the appellant, after obtaining certified copies of the judgment and decree of the High Court, sent a letter to the Registry that the case be listed again for obtaining, a certificate of fitness to file a Letters ' Patent appeal. The case was, therefore, listed before the learned Judge and an oral application which was then made for grant of a certificate, was rejected on 6 9 1968 on the ground that it had not been made at the proper time. It was contended, on behalf of the respondent, that, in the circumstances stated above, the appellant must be deemed to have been satisfied with the Judgment of the High Court as his Counsel did not ask for leave to file a Letters ' Patent appeal as required by Order IV Rule 28 of the Rules of the Madras High Court (that is to say, immediately after the judgment has been delivered). The following observations of this Court in Penu Balakrishna Iyer & Ors.vs Sri Ariva M. Ramaswami lyer & Ors.(1) were cited to contend that, the appeal before us should be rejected in limine : (1) ; @ 52 53 143 .lm15 "Normally, an application for special leave against a second appellate decision would not be granted unless the remedy of a Letters Patent Appeal has been availd of. In fact, no appeal against second appellate decisions appears to be contemplated by the Constitution .as is evident from the, fact that article 133(3) expressly provides that normally an appeal will not lie to this Court from the judgment, decree, or final order of one Judge of the High Court. It is only where an application for special leave against a second appellate judgment raises issues of law of general importance that the Court would grant the application and proceed to deal with the merits of the contentions raised by the appellant. But even in such cases, it is necessary that the remedy by way of a Letters ' Patent Appeal must resorted to before a party comes to this Court". In reply to the preliminary objection, Mr. Chagla, appearing for appellant, has assailed the validity of the above mentioned Rule 28 of Order IV itself. It is submitted that the rule conflicts with the provisions of clause 15 of the Letters ' Patent of the Madras High Court requiring only that the Judge who passed the Judgment should declare that the case is fit one for appeal as a condition for appealing. It was urged that the period of limitation for filing an appeal should not, in effect, be cut down by a rule such as the one found in Rule 28, Order IV of the Rules of Madras High Court. It was urged that, before article 117 of the of 1963 introduced a period of thirty days from a decree or order for filing a Letters Patent appeal, the period of limitation for such appeals fell under the residuary article 181 of the old . As applications for certification fen outside the provisions of the Civil Procedure Code and there was no specific provision for them in the the High Court could frame its own rule prescribing the mode and time for making such applications. Rule 28 of Order IV of the Madras High Court does not purport to affect the power to give the declaration contemplated by clause 15 of the Letters ' Patent,. In some High Courts, there is no rule of the Court laying down that the application should be oral and made immediately after the judgment has been delivered. It is, however, evident that a rule such as Rule 28 of Order IV the Madras High Court is most useful and necessary particularly when a period of thirty days only for filing an appeal has been prescribed in 1963. The Judge pronouncing the judgment can decide then and there, in the presence of parties or their counsel, whether the case calls for a certificate. In a suitable case, where a party is able to prove that it was prevented due to some cause beyond its control from asking for leave at the proper time, the Judge concerned may condone non compliance 144 by a party with Rule 28, Order IV, of the Madras High Court, or extend time by applying Section 5 of the . This salutary rule could not, therefore, be held to be ultra vires or invalid. There is, however, another answer to the preliminary objec tion. It was contended that the case before us is covered by what was laid down by this Court in Penu Balakrishna Iyer 's case (Supra) when it said (at page 53) ". we do not think it would be possible to lay down an unqualified rule that leave should not be granted if the party has not moved for leave under the Letters Patent and it cannot be so granted, nor is it possible to lay down an inflexible rule that if in such a case leave has been granted it must always and necessarily be revoked. Having regard to the wide scope of the powers conferred on this Court under article 136, it is not possible and, indeed, it would not be expedient, to lay down any general rule which would govern all cases. The question as to whether the jurisdiction of this Court under article 136 should be exercised or not, and if yes, on what terms and conditions, is a matter which this Court has to decide on the facts of each case". In that particular case, this Court had actually heard and allowed the appeal by Special leave because it held that there was no general inflexible rule that special leave should be refused where the appellant has not exhausted his rights by asking for a certificate of fitness of a case and because that case called for interference. It is urged before us that the appellant had done whatever he possibly could, in the circumstances of the case, to apply for and obtain a certificate of fitness after going through the judgment of the High Court, so that the rule that alternative modes of redress should be exhausted before coming to this Court had been really complied with case must, we think, be decided upon its own facts. In the case before us, although the appellant was not shown to have attempted any explanation of failure to apply for the certificate at the proper time, yet, +,he special leave petition having been granted, and the case having passed, without objection, beyond the stage of interim orders and printing of the records, we have heard arguments on merits, also. The merits may now be considered. The challenge on the ground of lis pendens, which had been accepted by the Courts in Madras, right up to the High Court, was directed against two kinds of sales : firstly,% there was the ostensibly voluntary sale of 7 7 1958 under a sale deed by the defendant Munisami Mudaliar and his major son Subramanian Mudaliar and three minor sons Jagannathan, Duraisami alias 145 Thanikachalam, and Vijayarangam in favour of the defendant appellant; and, secondly, there was the sale evidenced by the sale certificate (Exhibit B. 51) of 15 7 1960 showing that the auction sale was held in order to realise certain, "arrears under hire purchase system due to Shri O. D. Munisami Mudaliar. The words "due to" must in the context, be read as "due from" ' because "falsa demostration non nocet". The deed of the voluntary sale for Rs. 10,5001/ showed that Rs. 7375.11 Ans were to be set off against the money due on a. decree obtained by the purchaser against the sellers in original suit 2/56 of the Vellore Sub Court , Rs. 538.5 Ans.were left to liquidate the amount due for principal and interest due to the purchaser on a bond dated 14 10 1957, by Munisami Mudaliar, Rs. 662.9 Ans.was to be set off to liquidate another amount due to the purchaser from Munisami on account of the principal and, interest on another bond executed by Munisami, Rs. 1250.0.0 was left to pay off and liquidate the balance of a debt due to one Thiruvenkata Pillai from Munisami, Rs. 100.0.0 were meant to settle a liability to the Government in respect of a purchase of cattle and for digging of some well, Rs. 51.13 Ans.were to go, towards settling a similar liability, and only Rs. 521.11 Ans.were paid in cash to the seller after deducting other amounts for meeting liabilities most of which were shown as debts to the purchaser himself. It may be mentioned here that, on 17 1 1944, Munisami had executed a mortgage of some of the property in Schedule 'B ' of the plaint for Rs. 7,500/ in favour of Kannayiram, and he had executed a second mortgage in respect of one item of property of Schedule 'B ' in favour of Patta Mal, who had assigned his rights to T. Pillai. A third mortgage of the first item of Schedule 'B ' properties was executed on 27 5 1952 by Munisami, in favour of the appellant Jayaram, was said to be necessitated by the need to pay arrears of Rs. 3,000/ incometax and for discharging a debt and a promote in favour of a man called Mudali. In 1955, an original suit No. 124/1955 had been filed by T. Pillai who had obtained orders for the sale of the first item of Schedule 'B ' properties shown in the plaint. The original suit No. 2 of 1956 had been filed for principal and interest due on 27 5 1952 to the appellant who had obtained an attachment on 5 1 1956 of some schedule 'B ' properties. The appellant had obtained a preliminary decree on 25 1 1956 in his suit and a final decree on 14 9 1957. All these events had taken Place before the institution of the partition suit on 23 6 1968. But, the voluntary sale to satisfy decretal amounts was executed after this date. The second sale was an involuntary sale for realisation of dues under the provisions of section 7 of the Land Improvement Loans Act 19 of 1883 which could be realised as arrears of land revenue. There was nothing in the sale certificate to show that the due for 146 which properties were sold were of anyone other than Munisami individually. On the facts stated above, the appellant Jayaram claims that both kinds of sales were outside the purview of the doctrine of lis pendens inasmuch as both the sales were for the discharge of preexisting liabilities of the Hindu joint family of which Munisami was the karta. The liabilities incurred by Munisami, it was submitted, as karta of the family, had to be met, in any case, out of the properties which were the subject matter of the partition suit. It was urged that where properties are liable to be sold for, pay ment of such debts as have to be discharged by the whole family, ,only those properties would be available for partition in the pending suit which are left after taking away the properties sold for meeting the pre existing liabilities of the joint family. In the case of the sale for discharging dues under the Land Improvement Loans Act it was also contended that they obtained priority .,over other claims, and, for this additional reason, fell outside, the scope of the principle of lis pendens. The defendant respondent Munisami and the defendant appellant Jayaram had both pleaded that the properties in suit were acquired by Munisami with his own funds obtained by separate business in partnership with a stranger and that Ayyaswami, plaintiff, had no share in these properties. The plaintiff respondent 's case was that although the properties were joint, the liabilities sought to be created and alienations made by Munisami were fraudulent and not for any legal necessity, and, therefore, not binding on the family. ' The Trial Court had found that the properties given in Schedule 'B ' were joint family properties of which the defendant respondent Munisami was the karta in possession. This finding was affirmed by the first Appellate Court and was not touched in the High Court. It did not follow from this finding that all dealings of Munisami with joint family properties, on the wrong assumption that he was entitled to alienate them as owner and not as karta, would automatically become binding on the joint family. A karta is only authorised to make alienations on behalf of the whole family where these are supported by legal necessity. It was no party 's case that the alienations were made on behalf of, and, therefore, were legally binding on the joint family of which plaintiff respondent Ayyaswami was a member., The Trial Court recorded a finding on which the learned Counsel for the appellant relies strongly : "There is over whelming documentary and oral evidence to show that the sale deed Exhibit B.7 and the revenue sale are all true and supported by consideration and that the 12th Defendant would be entitled to them, if these sales were not affected by the rule of lis pendens 'Within the meaning of Section 52 of the Transfer of Property Act. " 147 It may be mentioned here that the 12th Defendant is no other than, the appellant Jayaram Mudaliar, the son in law of defendant respondent Munisami Mudaliar, who had purchased the properties covered by both the impugned sales. The plea of the plaintiff respondent Ayyaswami that the sales in favour of Jayaram, the 12th defendant appellant, were fraudulent and fictitious and the trial Court 's decree for the partition included the, properties covered by the two impugned sales evidenced by exhibit B.7 and B.5 1, yet, the Commissioner who was to divide the properties by metes and bounds, was directed to allot to Munisami 's share, so far as possible, properties which were covered by Exhibit B.7, and B.51. This implied that the liabilities created by the decrees for whose satisfaction the sale deed dated 7 7 58 (Exhibit B 7) was executed and the revenue sale of 16 3 1960 for loans under an agreement were treated as the separate liabilities of the defendant Munisami and not those of the joint family. The Trial Court as well as the First Appellate Court had also rejected the plea that the revenue sale of 16 3 1960 to satisfy pre existing liabilities of Munisami had any priority over the rights of the plaintiff respondent may get in the partition suit. The result was that the partition suit was decreed subject to a direction for the allotment of the Properties covered by Exhibit B. 7 and B. 51 so that the purchaser may retain these properties if they were allotted to Munisami. The High Court of Madras had described the sale of 7 7 1958 as a "voluntary alienation", and, thereby, placed it on a footing different from an involuntary sale in execution of a decree in a mortgage suit. The obligations incurred before the sale of 7 7 1958, by reason of the decrees in the mortgaged suits, were not on this view, liabilities which could be equated with either transfers prior to the institution of the partition suit or with sales in execution of mortgage decrees which are involuntary. So far as the revenue sale was concerned, the High Court, after setting out the terms of Section 7 of the Land Improvement Loans Act 19 of 1883, held that only that land sold was to be excluded from the purview of the principle of lis pendens for the improvement of which some loan was taken. This meant that only that part of the loan was treated as a liability of the joint family as could be said to be taken for the joint land. It, therefore, modified the decrees of the Courts below by giving a direction that further evidence should be taken before passing a final decree to show what land could be thus excluded from partition. The plaintiff appellant has relied upon certain authorities laying down that the doctrine of lis pendens is not to be extended to cover involuntary sales in execution of a decree in a mortgage suit where the mortgage was, prior to the institution of the suit in which 148 the plea of lis pendens is taken, because the rights of the purchaser in execution of a mortgage decree date back to the mortgage itself. They are: Chinnaswami Paddayachi vs Darmalinga Paddyachi(1) Gulam Rasool Sahib vs Hamida Bibi(2 ) , Baldeo Das Bajoria & Ors.vs Sarojini Dasi & Ors.,(3) Har Prashad Lal vs Dalmardan Singh(4). Reliance was also placed on the principle laid down in Sityam Lal & Anr vs Sohan Lal & Ors.,(5) to contend that, since Section 52 of the Transfer of Property Act does not protect transferors, a transfer on behalf of the whole joint Hindu family would be outside the purview of the principle in a partition suit. The contention advanced on the strength of the last mentioned case erroneously assumes that the impugned sales were on behalf of the joint family. Learned Counsel for the plaintiff respondent has, in reply, drawn our attention to the following observations of Sulaiman, Ag.C.J., expressing the majority opinion in Ram Sanehi Lal & Anr.vs Janki Prasad & Ors.(6) (FB) : "the language of section 52 has been held to be applicable not only to private transfers but also to Court sales held in execution of decrees. section 2 (d) does not make section 52 inapplicable to Ch. 4, which deals with mortgages. This is now well settled : vide Radhama 'dhub Holdar vs Manohar Mukerji (A) and Moti Lal vs Kharrabuldin (B) followed in numerous cases out of which mention may be made of Sukhadeo Prasad V. Jamna (C) ". But, as we have no actual sale in execution of a mortgage decree, this question need not be decided here. Another decision to which our attention was drawn was : Maulabax vs Sardarmal & Anr. The suggestion made on behalf of the appellant, that attach ment of some schedule 'B ' property before judgment in the purchaser 's mortgage suit could remove it from the ambit of lis pendens, is quit, , unacceptable. A contention of this kind was, repelled, in K. N. Lal vs Ganeshi Ram, (8) by this Court as clearly of no avail against the embargo imposed by Section 52 of the Transfer of Property Act. (1) AIR 1932 Madras 566. (3) AIR 1929 Calcutta 697. (5) AIR 1928 All. (7) AIR 1952 Nag. 341, (2) AIR 1950 Madras 189. (4) ILR 32 Calcutta 891. (6) AIR 1931 All. P. 466 @ 480. (8) ; at 21 149 The High Court had rightly distinguished cases cited on behalf of the appellant before it by holding that exemption from the scope of As pendens cannot be extended to voluntary sales in any case. Obviously, its view was that, even where a voluntary sale takes place in order to satisfy the decretal amount in a mortgage suit, the result of such a sale was not the same as that of an involuntary sale in the course of execution proceedings where land is sold to satisfy the decree on the strength of a mortgage which creates an interest in the property mortgaged. The High Court had observed that, as regards the satisfaction of the mortgage decree in his favour, which was part of the consideration for the sale of 7 7 1958, the appellant purchaser decree holder could get the benefit of Section 14 and still execute his decree if it remained unsatisfied due to failure of consideration. An examination of the sale deed of 7 7 1958 discloses that it is not confined to the satisfaction of the decretal amounts. Other items are also found in it. The sale deed does not purport to be on behalf of the Hindu joint family of which Ayyaswami the plaintiff and Munisami Defendant No. 1 could be said to be members. It no doubt mentions the sons of Munisami Mudaliar but not Ayyaswami, plaintiff, among the sellers. As already indicated, Munisami, Defendant Respondent, as well as Jayaram Defendant Appellant, having denied that the, properties in dispute were joint, could not take up the position that the sales were binding on the whole family. Therefore, we are unable to hold that the assumption of the Madras High Court that the voluntary sale could not bind the whole family, of which Munisami was the karta, was incorrect. Learned Counsel for the appellant had also relied on Bishan Singh vs Khazan Singh.(1) That was a case in which, before the deposit of money by the pre emptors in a suit to enforce their rights to pre emption, the vendee had sold his rights to the appellant who had an equal right of pre emption. It was held there that the claim for pre emption could be defeated by such a device which fell outside the purview of the principle of lis pendens. We think that this decision turns Upon its own facts and on the nature of the right of pre emption which, as was observed there, is a weak right. This Court had held that this weak right could be defeated by a sale which a vendee is compelled to make for the purpose of defeating the 'night, provided the purchaser 's superior or equal right to Pre emption had not been barred by limitation. On the question considered there the view of the East Punjab High Court in Wazir Ali Khan vs Zahir Ahmad Khan(2) was preferred ,to the view of the Allahabad High Court in Kundan Lal vs Amar (1) ; (2) A.T.R. 1949 East Punj.150 Singh.(1) The observations made by this Court with regard to the doctrine of lis pendens when a plaintiff is enforcing a right of preemption must, we think, be confined to cases of sales which could defeat preemptors claims. It has to be remembered that a technical rule of the law of preemption is that the preemptor, to succeed in his suit, must continue to possess the right to preempt until the decree for possession is passed in his favour. As regards the revenue sale of 16 3 1960 (Exhibit 0.51) we find that the, sale certificate is even less informative than the voluntary sale deed considered above. Nevertheless, the view taken by: the Madras High Court was that any land for to improvement of which loan is shown to have been taken by Munisami Mudaliar would be excluded from the purview of the doctrine of lis pendens. It is, however, urged that the High Court had given effect to clause, (c) of Section 7 of the Land improvement Loans Act of 1883, but had overlooked clause (a). 1 Here, the relevant part of Section 7, sub section(1) of this Apt may be, set out. It reads as follows "7.Recovery of loans. (1) Subject to such rules as may be made under Section 10, all loans granted under this Act, all interest (if any) chargeable thereon, and 'Costs (if any) incurred in making the same shall, when they become be ' recoverable by the, Collector in all or any of the following modes, name (a) from the borrower as if they were arrears of land revenue due by him; (b) from his surety (if any) as if they were arrears of land revenue due by him;, (c) out of the land for the benefit of which the loan has been granted as if they were arrears of land revenue due in respect of that land; (d) out of the property comprised in the collateral security (if any) according to the procedure for the realization of land revenue by the sale of immovable property other than the land on which that revenue is due : Provided that no proceeding in respect of any land under clause (c) shall affect any interest in that land which existed before the date of the order granting the loan, other than the interest of the borrower, and of mortgages of, or persons having charges on, that interest and where the loan is ' granted under Section 4 with the consent of another person, the interest of that person, and of mortgagees of, or persons having charges on, that interest. " Reliance was also placed on Sec.42 of the Madras Revenue Recovery Act of 1864 which reads as follows: "All lands brought: to sale on account of arrears of revenue shall be sold free of all incumbrances, and if any balance shall remain after liquidating the arrears with interest and the expences of attachment and sale and other costs due in respect to such arrears, it shall be paid over to the defaulter unless such payment be ' prohibited by the injunction of a Court of competent jurisdiction. " It will be seen that the assumption that the dues could be realised as arrears of land revenue would only apply to the interest of the borrower so far as clause (7) (1) (a) ls concerned. The proviso enacts that even recoveries falling under Sec 7 ( 1 ) (c) do not affect prior interests of, persons other than the borrower or of the party which consents to certain loans. In the case before us, the borrower had himself taken up the case that the loan was taken by him individually for the purpose of purchasing a pumping set installed on the land. It did not, therefore, follow that this liability was incurred on behalf of the joint family unless it amounted to an unprovement of the joint land. Every transaction of Munisami or in respect of joint property in his possession could not affect rights of other members. It was for this reason that Section 7 (1) (a) was not specifically applied by the High Court,. But, at the same time, the direction that the properties sold should, so far as possible, be allotted to Munisami meant that the purchaser could enforce his rights to them if they came to the share of Munisami. The question of paramount claims or rights of the Government for the realisation of its taxes or of dues which are equated with taxes was also raised on behalf of the appellant on the strength of Builders Supply Corporation vs The Union of India(1) In that case, the origin of the paramount right of the State to realise taxes due, which could obtain priority over other claims, was traced to the prerogatives of the British crown in India. Apart of the fact that there is no claim by, the State before us, we may observe that, where a statutory provision is relied upon for recovery of dues, the effect of it must be confined to what the statute en acts. Even under the English law, the terms of the statute displace any claim based on prerogatives of the Crown (1) 152 vide Attorney General v. De Keyser 's Royal hotel Ltd. (1) And, in no case, can the,claim whatever its basis, justify a sale of that property which doesnot belong to the person against whom the claim exists. As already observed a claim under Section7(1)(a) of the Land Improvement Loans Act of 1883 could only be made from the borrower. This meat that, unless it was proved that Munisami, in taking a loan under the Act, was acting as the, karta of the, joint Hindu family of which Ayyaswamy was a member, recovery of arrears could only be made from Munisami 's share in the, 1and. That this could be done was, in our opinion implied in the direction that the properties sold should, so far as possible, be allotted to the share of Munisami. As some argument has been advanced on the supposed in applicability of the general doctrine of lis pendem to the impugned sales, the nature, the basis, and the, scope of this doctrine may be ,considered here. It has been pointed out, in Bennet "On lis pendens", that, even before Sir Francis Bacon framed his ordinances in 1816 " 'for the better and more regular administration of justice in the chancery, to be daily observed" stating the doctrine of lis pendens in the 12th ordinance, the doctrine was already recognized and enforced by Common law Courts. Bacon 's ordinance on the ,Subject said : "No decree bindeth any that commeth in bona fide, by conveyance from the, defendant before the bill exhibited, and is made no party, neither by bill, nor the order; but, where he comes in pendente life, and, while the suit is in full prosecution. and without any colour of allowance or privity of the court, there regularly the decree bindeth; but, if there were any intermissions of suit, or the court made acquainted with the conveyance, the court is to give order upon the special matter according to justice. " The doctrine, however, as would be evident from Bennet 's work mentioned above, is derived from the rules of jus gentium which became embodied in the Roman Law where we find the maxim: "Rem dequa controversia prohibemur in acrum dedicate" (a thing concerning which there is a controversy is prohibited, during the suit from being alienated). Bell, in his commentaries on the lows of Scotland(1) said that it was grounded on the,maxim: "Pendente lite nibil innovandum". He observed "It is a general rule which seems to have been recognized in all regular systems of jurisprudence, that during the pendence of an action., of which the object is to (1) ; (2) 2 Bell 's Com. on laws of Scotland, p. 144.153 vest the property or obtain the possession of real estate, a purchaser shall be held to take that estate as it stands in the person of the seller, and to be bound by the claims which shall ultimately be pronounced. " In the Corpus Juris Secundum (Vol.LIV P. 570), we find the following definition : "Lis pendens literally means a pending suit; and the doctrine of lis pendens has been defined as the jurisdiction, power, or control which a court acquires over property involved in suit, pending the continuance of the action, and until final judgment therein. " Expositions of the doctrine indicate that the need for it arises from the very nature of the jurisdiction of Courts and their control over the subject matter of litigation so that parties litigating before it may not remove any part of the subject matter outside the power of the court to deal with it and thus make the proceedings infructuous. It is useful to remember this background of Section 52 of our Transfer of Property Act which lays down : "During the pendency in any Court. of any suit or proceeding which is not collusive and in which any right to immovable property is directly and specifically in question, the property cannot be transferred or otherwise dealt with by any party to the suit or proceeding so as to affect the rights of any other party thereto under any decree or order which may be made there,in, except under the authority of the Court and on such terms as it may impose. " It is evident that the doctrine, as stated in Section 52, applies not merely to actual transfers of rights which are subject matter of litigation but to other dealings with it "by any party to the suit or proceeding, so as to affect the right of any other party thereto". Hence, it could be urged that where it is not a party to the litigation but an outside agency, such as the tax Collecting authorities of the Government, which proceeds against the subject matter of litigation, without anything done by a litigating party, the resulting transaction will not be hit by Section 52. Again, where all the parties which could be affected by a pending litigation are, themselves parties to a transfer or dealings with property in such a way that they cannot resile from or disown the transaction impugned before the Court dealing with the litigation, the Court may bind them to their own acts. All these are matters which the Court could have properly considered. The purpose of Section 52 of the Transfer of Property Act is not to defeat any just and equitable claim but only to subject them to the authority of the Court which is dealing with the property to, which claims are put forward. 11 1208S ipCT/72 154 In the case before US, the Courts had given directions to safeguard such just and equitable claims as the purchaser appellant may have obtained without trespassing on the rights of the plaintiff respondent in the joint Property involved in the partition suit before the Court. Hence, the doctrine of lis pendens was correctly applied. For the reasons given above, there is no force in this appeal which is dismissed with costs. Sikri, C. J. I have had the advantage of perusing the judg ment prepared by my brother, Beg J., but as I arrive at the same conclusion by a slightly different route I am writing a separate judgment. I may give a few facts to, make the judgment self sufficient. The following pedigree may enable us to appreciate the facts Muniappa Mudaliar Doraiswamy Mudaliar ChidambaraGovindaswamy Muda (died on 4 9 1937) Mudaliarliar (died 1940) wife 6th Def.(died pendingAnnammal 10th Def.suit) Muniswami Ayyaswami Def.7 Def8 Def. 9 Mudaliar (1st Def.Mudaliar died pending suit) (Plaintiff) Def./ 2 Def.3 Def. 4 Def. / 5 12th Def.(Jayaram Mudaliar) alinee of Def.No. 1. On June 23, 1956 Ayyaswami (Plaintiff) filed a pauper petition No. 137/1958. In the plaint he claimed a partition of B Schedule properties which, according to him belonged to Joint Hindu Family consisting of himself and the defendants. While this suit was pending, defendant No. 1 Muniswami Mudaliar and four of his sons executed a sale deed (exhibit B7) in respect of some lands in Ozhaiyathur village in favour of Jayaram Mudaliar on July 7, 1958. These properties comprised items 5, 15 to 19, 24 and 28 of Schedule B. On July 15, 1960 a certificate of sale (exhibit B51) was issued stating that Jayaram Mudaliar had purchased at public auction immoveable property (described in the certificate) for Rs. 6,500/ . The property is stated to have been sold for " pumpset arrears under Hire Purchase System due by Muniswami Mudaliar". Exhibit B 51 covered items 4, 18, 20, 23 to 27 and 155 31.It is common ground that these properties were included in the B Schedule mentioned in the plaint. It is stated in the judgment of the Trial Court that Jayaram Mudaliar got himself impleaded as 12th defendant. He filed a written statement inter alia alleging that the Plaint B Schedule properties were the sole and absolute properties of the 1st defendant. Additional issues were framed in the suit. It appears that by virtue of order dated September 18, 1961, the plaint was amended and paras 24(a) and 24(b) inserted. They read : "24(a) The 12th defendant is a close agnate of the son in law of the 1st defendant. He executed the sham and nominal sale deed dated 7 7 1958 in favour of the 12th defendant to defeat the plaintiff 's rights and to secrete the properties. It was not acted upon. It is the 1st defendant that continues to be in possession even now. The alleged sale deed is not supported by consideration. The mortgage itself was brought about to defeat any rights. In any event on the date of the alleged sale deed dated 7 7 1958 the mortgage decree debt was, not subsisting. The plaint was filed in forma pauperis as O.P. 137 of 1958 on the file of this Hon 'ble Court on 23 6 1958. Thus in any event the sale is, hit by the rule of lis pendens and the sale deed dated 7 7 1958 cannot and does not confer any rights on the 12th defendant. 24(b) The revenue sale is brought about collusively and fraudulently. There was no publication. The 12th defendant never got into possession of any property. The possession still continues to be with the 1st defendant on behalf of the joint family. The sale is also hit by the rule of lis pendens. It also does not and cannot confer any rights on the 12th defendant. " Following additional issues were raised out of the pleadings of the 12th defendant : (1) Whether the plaint B Schedule properties are joint family properties ? (2) Whether the plaintiff is entitled to question the, alienations in favour of the 12th defendant ? (3) Whether the sale deed dated 7 7 1958 by the 1st defendant in favour of the 12th defendant true, valid and binding on the plaintiff and is affected by LIS PENDENS ? 156 (4) Whether the Revenue sale by the Collector dated 16 3 1960 is liable to be questioned by the plaintiff ? (5) Is the suit without impleading the Government liable to be questioned by the plaintiff ? (6) Is the sale of pump set by the 1st defendant to the 12th defendant true, valid and binding on the plaintiff ? (7) Whether the plaintiff and other members became divided from the 1st defendant after 1939 ? (8) To what equities, if any, is the 12th defendant entitled ? (9) Is the plaintiff estopped from questioning the alienations and claiming any right in the B Schedule properties ? We are only concerned with issues 3 and 4 above. The Trial Court held that the sale deed, exhibit B7, and the revenue sale "are all true and supported by consideration and that the 12th defendant would be entitled to them, if these sales were not affected by the rule of 'lis pendens ' within the meaning of section 52 of the Transfer of Property Act". Regarding lis pendens he held that the purchases under both exhibit B7 and exhibit B51 were affected by the rule of lis pendens. The Trial Court passed a preliminary decree for partition of B Schedule properties (items 2 to 31) into six equal shares. It protected the interest of the 12th defendant by stating that "as far as possible the Commissioner appointed in the suit for division of the properties will allot to the plaintiff 's share such of the properties which are not covered by Exs.B 7 and B 51". The District Judge confirmed the decree. Before the High Court, in appeal by defendant No. 12, the only point considered was that of lis pendens. The High Court held that exhibit B7 was a case of voluntary alienation and was hit by lis pendens, as the sale was not in execution of a mortgage decree. Regarding exhibit B51 the High Court, relying on Ponnuswami vs Obul Reddy(1) held that exhibit B51 would not be affected by lis pendens, as the loans were granted under the Land Improvement Loam Act to the extent that the loans were taken for the improvement of the properties. As it had not been considered whether all the properties which were sold in revenue sale and conveyed under exhibit B51 were, lands for the improvement of which loans were taken, the High Court directed (1) A.I.R. 1939 Mad.157 "In the final decree proceedings, the trial court were to consider what were the properties for the improvement of which the loans under the Land Improvement Loans Act were taken by the first defendant, in respect of those properties alone the doctrine of lis pendens will not apply. In respect of other properties, the doctrine of lis, pendens will apply. The trial court take evidence for the purpose of deciding the properties in respect of which the loans under the Land Improvement Loans Act were taken." With this modification the High Court dismissed the appeal. Defendant No. 12 applied for a certified copy of the Judgment and Decree on July 22, 1968, and these were made ready on August 9, 1968 and delivered on August 12, 1968. Defendant No. 12 moved the High Court by letter dated August 22, 1968 "requesting the posting of the appeal for being mentioned for the purpose of the issue of the Certificate for leave to appeal under the Letter Patent". The learned Judge who heard the appeal by his order dated September 6, 1968 refused the leave on the ground that the leave was not asked for immediately on delivery of judgment and that it could not be asked for afterwards. Rule 28 of Order 4 of the Rules of the High Court of Madras Appellate Side, 1965 under which the leave asked for was refused reads "28. When an appeal against an appellate, decree or order has been heard and disposed of by a single judge, any application for a certificate that the case is a fit one for further appeal under clause 15 of the Letters Patent shall be made orally and immediately after the judgment has been delivered." This Court granted special leave. At the outset, Mr. Chagla raised the preliminary objection that the appeal was incompetent as Defendant No. 12 failed to ask for certificate orally and immediately after the judgment was delivered. The learned counsel for Defendant No. 12 urged that Rule 28 of Order 4 was ultra vires. Two points thus arise out of the contentions of the parties : (1) Is Rule 28 of Order 4 of the Rules of the High Court of Madras Appellate Side ultra vires ? (2) Are the Sales by exhibit B7 and exhibit B51 hit by the rule of lis pendens ? Clause 15 of the Letters Patent inter alia provides for an appeal to the High Court from a judgment of one judge made in 158 exercise of the appellate jurisdiction in respect of a decree or order made in the exercise of appellate jurisdiction by a court subject to its superintendence, where the Judge who passed the judgment declares that the case is a fit one for appeal. Clause 37 ,of the Letters Patent confers powers on the High Court to make rules and orders for the purpose of regulating all proceedings in civil cases. This Court held in The Union of India vs Ram Kanwar(1) that under el.27 of the Letters Patent which is in similar terms as el. 37 mentioned above, the High Court of Judicature at Lahore had the power to make a rule prescribing the period of limitation in respect of appeals from Orders made by that Court in exercise of its original jurisdiction to a Division Bench ,of that Court. It seems to me that the High Court can equally frame a rule regulating, the 'time at which and the manner in which the application for a certificate shall be made. Rule 28 of Order 4 does not take away any right conferred by el. 15 of the Letters Patent. It only regulates the manner of the exercise of that right. It was said that the rule unduly restricts the right of the litigant to peruse the judgment and make, up his mind whether to appeal or not. But if the declaration is made immediately by the Judge that the case is fit one for appeal there is nothing to prevent the litigant ;from not filing the appeal if he considers it inadvisable to do so. I need not discuss the point whether the Judge will have the right to condone a breach of the Rule because no application seems to have been made to condone the breach of the Rule. But this conclusion does not render the appeal before us incompetent. Leave was given by this Court after hearing the respondents on October 14, 1968. On April 22, 1969 the respondents obtained an order from this Court for expediting the hearing. No application was made at that stage to raise the point of incompetency of appeal. In the circumstances I consider that the appeal should be disposed of on merits. Coming to the second point, this Court has considered the 7scope of section 52 of the Transfer of Property Act and the rule of lis pendens in a number of cases. There is no difficulty in holding that exhibit B7 falls within the provisions of section 52 of the Transfer of Property Act. But exhibit B51 stands in a different position. It was held in Samarendra Nath Sinha & Anr.vs Krishna Kumar Nag(1) that the principle of lis pendens applies even to involuntary alienations like court sales. Shelat J., observed : "The purchaser pendente lite under this doctrine is bound by the result of the litigation on the principle that since the result must bind the party to, it so must it bind the person deriving his right, title and interest from or through him. This principle is well illustrated in Radhamabhub Holder vs Monohar(1) where the facts were almost similar to those in the instant case. It is true that section 52 strictly speaking does not apply to involuntary alienations such as court sales. But it is well established that the principle of lis pendens applies to such alienations. [See Nilkant vs Suresh Chandra(2) and Motilal vs Karrabuldin (3).] These observations were referred to with approval by this Court in Kedar Nath Lal vs Ganesh Ram(1). If the principle of lis pendens applies to court auctions there is no reason why it should not apply to revenue sales. But the effect of the application of the principle ' may vary according to the nature of the provisions under which the revenue sale is held. The principle of lis pendens does not affect pre existing rights. If there is a valid charge or mortgage on a property, this does not vanish because the property becomes the subject matter of a partition suit. In this case according to defendant No. 12 a valid charge subsisted on the lands by virtue of the provisions of the Land Improvement Loans Act. Under section 7 of the Land Improvement Loans Act loans are recoverable by the Collector in all or any of the following modes, namely: (a) from the borrower as if they were arrears of land revenue due by him; (b). . (c) out of the land for the benefit of which the loan has been granted as if they were arrears of land revenue due in respect of that land; The proviso to section 7 reads "Provided that no proceeding in respect of any land under clause (c) shall affect any interest in that land which existed before the date of the order granting the loan, other than the interest of the borrower, and of mortgagees of, or persons having charges on, that interest, and where the loan is granted under Section 4 with the consent of another persons, the interest of that person, and of mortgagees of, or persons having charges on, that interest. " Section 42 of the Madras Revenue Recovery Act provides that all lands brought to sale on account of arrears of revenue shall be sold free of all encumbrances. The liability of the land to be sold under section 7 (c) of the Act was a pre existing charge and that subsisted as from the date of the loan. This was not affected by the institution of the suit for partition. This charge could be enforced by the State, notwithstanding the pendency of the partition suit. No decree in the Partition suit could have effaced the charge. Therefore, if the State has sold only the property in respect of which loan was taken, the purchaser defendant No. 12 is not prejudiced by the, principle of lis pendens. Therefore, the direction of the High Court was right insofar as it directed the Trial Court to separate the properties for the improvement of which the loans under the Land Improvement Loans Act were taken, from the other properties. In the result the appeal fails and is dismissed. G C. Appeal dismissed.

The plaintiff respondent filed a suit for partition of properties men the first defendant (plaintiff 's brother) was the Karta. After the filing of the suit the first defendant and his sons made a voluntary sale of some of the properties in suit by sale deed exhibit B7, to the appellant. Certain other suit properties mentioned in exhibit, B51 were sold at a public auction under the provisions of the Land Improvement Loans Act 19 of 1883 in connection with arrears of a loan taken by the first defendant for the purchase of a pump set. These properties were also purchased .by the, appellant. The plaintiff respondent challenged the validity of the sales under exhibit B7 and exhibit B51 relying on the doctrine of lis pendens embodied in section 52 of the Transfer of Property Act. The .trial court held that the sales were genuine and that the proper ties sold were joint family properties, negativing the claim of the first defendant that they were his individual properties. The doctrine of his pendens held to be applicable to the properties sold. In the decree for part however the trial court directed the Commissioner who was to divide the properties by metes and bounds to allot to the share of the first defendant, so far as possible, properties which were covered by exhibit B7 and B51. The High Court in second appeal held that although the sale under exhibit B7 was made to satisfy the decree in certain mortgage suits it was a voluntary sale and could not be equated with sales in execution of mortgage decrees which are involuntary. So far as the revenue sale under exhibit B51 was concerned the High Court after setting out the terms of section 7 of Act 19 of 1883 held that only that land sold was to be excluded from the purview of the principle of lis pendens for the improvement of which some loan was taken. It therefore modified the decrees of the Courts below by giving a direction that further evidence should be taken before ' passing a final decree to show what land could be thus excluded from partition. The High Court rejected the application of the appellant for leave to appeal to the Division Bench on 'the ground that no oral request immediately after delivery of judgment was made as provided in Rule 28 Order 4 of the Madras High Court Appellate Side Rules 1965. This Court however allowed special leave to appeal under article 136 of the Constitution. Apart from the writs the Court had to consider a preliminary objection requiring the appeal to be dismissed in limine. In this connection the validity of Rule 28 Order 4 also fell for consideration HELD : (i) Per Ray and Beg, JJ. Rule 28 of Order 4 of the Madras High Court Rules does not purport to affect the power to give the declaration contemplated by clause 15 of the Letters Patent. It is evident that the rule is most useful and necessary particularly when a period of thirty days only for filing an appeal has been prescribed by the . The judge pronouncing the judgment can decide then and there, in the presence of the parties or their counsel, whether the case calls for a certificate. In a suitable case, where a party is able to prove that it 140 was prevented due to some cause beyond its control from asking for leave at the proper time, the judge concerned may condone the delay or extend the time by applying section 5 of the . This salutary rule could not therefore be held to be ultra vires or invalid. [143 F H] Penu Balakrishna Iyer & Ors, vs Sri Ariya M. Ramaswami Iyer In the present ease although the appellant was not shown to have attempted any explanation of failure to apply for the certificate at the proper time, yet, the, special leave petition having been granted and the case having passed without objection, beyond the stage of interim orders and printing of records, the Court heard arguments on merits also. [144 F G] Per Sikri, C.J. (concurring) The High Court can regulate the time at which and the manner in which the application for certificate & WI be made. Rule 28 Order 4 does not take away any right conferred by cl. 15 of the Letters Patent. It only regulates the manner of the exercise of that right. Union of India vs Ram Kanwar, ; , referred to. (ii) Per Ray & Beg, JJ. Expositions of the doctrine of lis pendens indicate that the need for it arises from the very nature of the jurisdiction of Courts and their control over the subject matter of litigation so that the parties litigating before them may not remove any part of the subject matter outside the power of courts to deal with it and thus make proceedings infructuous. [153C] The purpose of section 52 of the Transfer of Property Act is not to defeat any just and equitable claim but only to subject them to the authority of the Court which is dealing with the property to which claims are put forward. In the present case the Courts had given directions to safeguard such just and equitable claims as the purchaser may have obtained without trespassing on the rights of the plaintiff respondent in the joint property involved in the partition suit before the Court. Hence, the doctrine of lis pendens was correctly applied. [153H, 154A] In regard to the sale under exhibit B7 the High Court had rightly distinguished cases cited on behalf of the appellant before it by holding that exemption from the scope of lis pendens cannot be extended to voluntary sales in any case. [149 A] An examination of the sale deed exhibit B7 disclosed that it was not confined to the satisfaction of decretal amounts. Other items were also found in it. The sale deed did not purport to be on behalf of the Hindu joint family of which the plaintiff and the first defendant could be said to be members. The sons of the first defendant were among the sellers but not the plaintiff. At most it could be a sale binding on the shares of the sellers. The first defendant as well as the appellant having denied that the properties in dispute were joint, could not take up the position that the sales were binding on the whole family. Therefore it could not be held that the assumption of the High Court that the voluntary sale could not bind the whole family, of which the first defendant was the Karta, was incorrect. Bishan Singh vs Khazan Singh, [1959] S.C.R . 878, distinguished. As regards the revenue sale under exhibit B51 the assumption that the dues could be realised as arrears of land revenue would only apply to the interest of the borrower so, far as clause 7(1)(a) of Act 19 of 1883 is concerned. The proviso enacts that even recoveries falling under section 7(1) (C) do not affect prior interests of persons other than the borrower or of the party which consents to certain loans. In the present case the borrower had himself taken up the case that the loan was taken by him individually, for the purpose of purchasing a pumping set installed. on the 141 land. It did not therefore follow that this liability was incurred On behalf of the joint family unless it amounted to an improvement of the joint land. Every transaction of the first defendant or in respect of joint property in his possession could not affect rights of other members. it was for this reason that section 7(1) (a) was not specifically applied by the High Court. But at the same time, the direction, that the properties sold should, so far as possible, be allotted to the first defendant meant that the purchaser could enforce his rights to them if they came to the share of the first defendant. [151D F] Where a statutory provision is relied upon for recovery of dues, the effect of it must be confined to what the statute enacts. Even under the English law the terms of the statute displace any claim based on the prerogatives of the Crown. And in no case can the claim whatever its basis, justify a sale of that property which does not belong to the person against whom the claim exists. [151H] Builders Supply Corporation vs The Union of India, and Attorney General vs Dekerysis Royal Hotel., Ltd., ; , referred to. Per Sikri C.J. (concurring) Section 42 of the Madras Revenue Recovery Act provides that all lands brought to sale on account of arrears of revenue shall be sold free of all encumbrances. The liability of the land to be sold under section

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