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l Appeal Nos. 2130 and 2131 of 1969. Appeals by special leave from the judgment and order dated June 16, 19, 1969 of the Bombay High Court in Special Civil Application No. 41 of 1969 and S.C.A. No. 1774 of 1969. C. K. Daphtary, Suresh A. Shroff, P. C. Bhartari and O. C. Mathur, for the appellants (in both the appeals). H. R. Gokhale, N. H. Gurshani and N. N. Keswani, for res pondent No. 1 (in both the appeals). B. D. Sharma and section P. Nayar, for respondent No. 2 (in both the appeals). 856 The Judgment of the Court was delivered by Civil Appeal No. 2130 of 1967 Shah, J. The High Court of Bombay dismissed in limine a petition filed by the Century Spinning Manufacturing Co. Ltd. hereinafter called 'the Company 'for the issue of a writ restraining the respondent Municipality from enforcing the provisions of the Maharashtra Municipalities Act 40 of 1965 relating to the levy, assessment, collection recovery of octroi and in particular section 105 and Ss. 136 to 144 thereof, and from enforcing the Maharashtra Municipalities (Octroi) Rules, 1967, and from acting upon resolutions passed by the Municipal Council dated September 9, 1968 and ' September 13, 1968, and from levying, assessing, collecting, recovering or taking any other step under the Act, rules or the resolu tions and for an order restraining the Municipality of Ulhasnagar from levying, assessing, collecting any octroi on the goods imported by the Company within the limits of the Municipal Council for a period of 7 years from the date of its first imposition. With special leave, the Company has appealed 'against, the order rejecting the petition. The Company was incorporated under the Indian Companies Act, 1913. It set up its factory in 1956, within the limits of village Shahad, Taluka Kalyan on a site purchased from the State of Bombay, and within an area known as the 'Industrial Area '. No octroi duty was then payable in respect of goods imported by the Company into the Industrial Area for use in the manufacture of its products. On October 30, 1959, the Government of Bombay issued a notification announcing its intention to constitute a Municipality for certain villages, including the Industrial Area. The Company and other manufacturers who had set up their plants and factories objected to the proposed constitution of the Municipal Area. On September 20, 1960, the State of Maharashtra (successor to the State of Bombay) published a notification constituting with effect from April 1, 1960 the Municipality including the area in which the Industrial Area was included. Representations were then made by the Company and other manufacturers for excluding the Industrial Area from the Ulhasnagar Municipal District Area. On April 27, 1962 the Government of Maharashtra (the new State of Maharashtra having been constituted under the Bombay Reorganization Act, 1960) proclaimed that the Industrial Area be excluded from the Municipal jurisdiction. The District Municipality then made a representation to the Government of Maharashtra that the proclamation dated April 27, 1962, be withdrawn by the Government. The Municipality agreed to exempt the existing factories viz., the Company and other manufacturers whose factories were then existing in the Industrial Area from payment of octroi for a period of seven years from the date of levy of octroi and for exempting new industrial units from payment of octroi for 8 5 7 a similar period from the date of establishment. The Government of Maharashtra acceded to the request of the Municipality to retain the Industrial Area within the local limits of the Municipality. On August 24, 1963, the District Municipality passed a resolution to implement the agreement. It was resolved that the Municipality "agrees to give a concession to the existing factories by exempting them from the payment of octroi for a period of 7 years from the date of levy of octroi tax and by exempting new factories from the payment of the octroi tax for a period of 7 years from the date of their establishment as recommended by the Government of Maharashtra". On October 31, 1963, the Government of Maharashtra issued a notification withdrawing the proclamation dated April 27, 1962, and the Industrial Area became part of the Ulhasnagar Municipal District. Relying upon the assurance and undertaking given by the Municipality the Company claims that it had expanded its activities and commenced manufacturing new products by, setting up additional plant which it would not have done "but for the concessions given, assurances and representations made and agreement arrived at on May 21, 1963". On September 10, 1965, the Legislature of the State of Maha rashtra enacted the Maharashtra Municipalities Act which repealed the Bombay District Municipal Act 3 of 1901. the notification declaring the area of the former District Municipality of Ulhasnagar into the Ulhasnagar Municipality became effective as from June 15, 1966. The Ulhasnagar Municipality took over as successor to the Ulhasnagar District Municipality, the assets and the affairs of that body. On September 9, 1968 the Ulhasnagar Municipality resolved "to levy minimum rates of octroi duty as shown in columns 4 and 6 on all items shown in Sch. 1 to the Rules", and by resolution dated September 13, 1968, the Municipality 'adopted with effect from January 1, 1969, the rates for the imposition of octroi duty on the goods imported for use, sale and consumption within the Municipal Council limits. At a special meeting held on December 24, 1968, the Munici pal Council considered the letters written by the Government of Maharashtra dated November 22, 1968 and December 10, 1968, drawing the attention of the Municipality to the circumstances in which the Industrial Area was included and retained in the local limits of the Ulhasnagar District Municipality and continued to reman within the local limits of the Municipality, and "advised the Municipality to pass a resolution confirming such exemption and honour the commitments of its predecessor." The Municipality ignored the advice and resolved that the Government of Maharashtra be informed that the Municipality would consider afresh on Sup. CI(NP)70 10 858 merits any representation of a tax payer for exemption from payment of octroi, and if any such representation was made by the factories situate in the Industrial Area, the Council would consider the same and take such action as it would deem fit. Thereafter the Municipality sought to levy octroi duty and to recover from the Company octroi duty amounting to approximately Rs. 15 lakhs per annum. The Company moved a petition before the High Court of Bombay under article 226 of the Constitution for the writs set out earlier seeking to restrain the Ulhasnagar Municipality from enforcing the octroi Rules. The High Court may, in exercise of its discretion, decline to ,exercise its extra ordinary jurisdiction under article 226 of the Constitution. But the discretion is judicial : if the petition makes a claim which is frivolous, vexatious, or prima facie unjust, or may not appropriately be tried in a petition invoking extra ordinary jurisdiction, the Court may decline to entertain the petition. But a party claiming to be aggrieved by the action of a public body or authority on the plea that the action is unlawful, high handed, arbitrary or unjust, is entitled to a hearing of its petition on the merits. Apparently the petition filed by the Company did not raise any complicated questions of fact for determination, and the claim could not be characterised as frivolous, vexatious or unjust. The High Court has given no reasons for dismissing the petition in limine, and on a consideration of the averments in the petition and the materials placed before the Court we are satisfied that the Company was ,entitled to have its grievance against the action of the Municipality, which was prima facie unjust, tried. The Company pleaded that the, Ulhasnagar Municipality had" entered into a solemn arrangement" not to levy octroi duty for aperiod of seven years from the date of its imposition. The evidence relating to the undertaking was contained in public records. The Government of Maharashtra advised the Municipality that it was acting in violation of the terms of that undertaking. By its resolution the Municipality declined to abide by the undertaking of itspredecessor. There is undoubtedly a clear distinction between a represen`tation of an existing fact and a representation that something will be done in future. The former may, if it amounts to a representation as to some fact alleged at the time to be actually in existence, raise an estoppel, if another person alters his position relying upon that representation. A representation that something will be done in the future may result in a contract, if another person to whom it is 859 addressed acts upon it. A representation that something will be done in future is not a representation that it is true when made. But between a representation of a fact which is untrue and a representation express or implied to do something in future, there is no clear antithesis. A representation that sotmething will be done in future may involve an existing intention to act in future in the manner represented. If the representation is acted upon by another person it may, unless the statute governing the person mak ing the representation provides otherwise, result in an agreement enforceable at law; if the statute requires that the agreement shall be in a certain form, no contract may result from the representation and acting thereupon but the law is not powerless to raise in appropriate cases an equity against him to compel performance of the obligation arising out of his representation. Public bodies are as much bound as private individuals to carry out representations of facts and promises made by them, relying on which other persons have altered their position to their prejudice. The obligation arising against an individual out of his representation amounting to a promise may be enforced ex contractu by a person who acts upon the promise : when the law requires that a contract enforceable at law against a public body shall be in certain form or be executed in the manner prescribed by statute, the obligation may be if the contract be not in that form be enforced against it in appropriate cases in equity. 'In Union of India & Ors. vs Mls. IndoAfghan Agencies Ltd.(1) this Court held that the Government is not exempt from the equity arising out of the acts done by citizens to their prejudice, relying upon the representations as to its future conduct made by the Government. This Court held that the following observations made by Denning, J., in Robertson vs Minister of Pensions(1) applied in India "The Crown cannot escape by saying that estoppe ls do not bind the Crown for that doctrin e has long been explode d. Nor can the Crown escape by praying in aid the doctrin e of executi ve necessi ty, that is, the doctrin e that the Crown cannot bind itself so as to fetter its future executi ve action. , We are in this case not concerned to deal with the question whether Denning, L.J., was right in extending the rule to a different class of cases as in Falmouth Boat Construction Co. Ltd. vs Howell(1) where he observed at p. 542 : "Whenever Government officers in their dealings with a subject take on themselves to assume authority in a (1) ; (2) (3) 8 6 0 matter with which the subject is concerned, he is entitled to rely on their having the authority which they assume. He does not know, and cannot be expected to ]mow, the limits of their authority, and he ought not to suffer if they exceed it. " It may be sufficient to observe that in appeal from that judgment (Howell vs Falmouth Boat Construction do. Ltd.) Lord Simonds observed after referring to the observations of Denning, L.J. "The illegality of an act is the same whether the action has been misled by an assumption of authority on the part of a government officer however high or low in the hierarchy. . . The question is whether the character of an act done in force of a statutory prohibition is affected by the fact that it had been induced by a misleading assumption of authority. In my opinion the answer is clearly : No." If our nascent democracy is to thrive different standards of conduct for the people and the public bodies cannot ordinarily be permitted. A public body is, in our judgment, not exempt from liability to carry out its obligation arising out of representations made by it relying upon which a citizen has altered his position to his prejudice. Mr. Gokhale appearing on behalf of the Municipality urged that the petition filed by the Company apparently raised questions of fact which in the view of the High Court could not appropriately be tried in the exercise of the extra ordinary jurisdiction under article 226. But the High Court has not said so, and on a review of the averments made in the petition this argument cannot be sustained. Merely because a question of fact is raised, the High Court will got be justified in requiring the party to seek relief by the somewhat lengthfiy, dilatory and expensive process by a civil suit against 'a public body. The questions of fact raised by the petition in this case are elementary. The order passed by the High Court is set aside and the case is remanded to the High Court with a direction that it be readmitted to the file and be dealt with and disposed of according to law. The High Court will issue rule to the Municipality and the State and dispose of the petition. We recommend that the case may be taken up for early hearing. We had during the pendency of the appeal in this Court made an order restraining the levy of octroi duty. We extend the operation of the order for a fortnight from this date to enable the 861 Company to move the High Court for an appropriate interim order pending hearing and disposal of the writ petition. There will be no order as to costs in this Court. Costs in the High Court will be costs in the cause. Since we have granted special, leave against the order dismissing the petition, we do not deem it necessary to consider whether the order rejecting the application for certificate was erroneous. Civil Appeal No. 2131 of 1969 is therefore dismissed.

The appellants companies set up their factories within an "Industrial Area", No octroi duty was payable in respect of goods imported by the appellants into the Industrial Area for use in the manufacture of its products. The State of Maharashtra constituted a Municipality for certain villages including the Industrial Area. On representations made by the appellants and other manufacturers, the State proclaimed the exclusion of the Industrial Area from the Municipal Jurisdiction. The Municipality made representations to the State requesting that the proclamation, be withdrawn, agreeing to exempt the factories in the Industrial Area from payment of octroi for seven years from the date of the levy. The State acceeded to the request of the Municipality. The appellants claimed to expand their activities relying upon the Municipality 's assurance and undertaking. The Maharashtra Municipalities Act was enacted and the respondent Municipality took over the administration of the former municipality as its successor. Thereafter, the respondent Municipality sought to levy octroi duty on the appellant amounting to about Rs. 15 lakhs per annum. The appellants filed a petition under article 226 of the Constitution to restrain the respondent Municipality from enforcing the levy of the Octroi. The High Court dismissed the petition in limine. In appeal by special leave, HELD : The case must be remanded to the High Court for being readmitted to its file and dealt with and disposed of according to law. The High Court may, in exercise of its discretion, decline to exercise its extra ordinary jurisdiction under article 226 of the Constitution. But the discretion is judicial; if the petitioner makes a claim which is frivolous, vexatious, or prima facie unjust or which may not appropriately be true in a petition invoking extraordinary jurisdiction, the Court may decline to entertain the petition. But a party claiming to be aggrieved by the action of a public body or authority on the plea that the action is unlawful, highhanded, arbitrary or unjust is entitled to a hearing of its petition on the merits. Apparently the petition filed by the Company did not raise any complicated questions of fact for determination, and the claim could not be characterised as frivolous, vexatious or unjust. The High Court has given no reason for dismissing the petition in limine, and on a consideration of the averments in the petition and the materials placed before the Court the appellants were entitled to have its grievance against the action of the Municipality, which was prima facie unjust, tried. Merely because a question of fact is raised, the High Court will not be justified in requiring the party to seek relief by the somewhat lengthy, dilatory and expensive process by a civil suit against a public body. The questions of fact raised by the petition in this case are elementary. [858 C F] Public bodies are as much bound as private individuals to carry out representations or facts and promises made by them, relying on which 855 other persons have altered their position to their prejudice. The obligation arising against an individual out of his representation amounting to a promise may be enforced ex contractu by a person who acts upon the promises when the law requires that a contract enforceable at law against a public body shall be in certain form or be executed in the manner prescribed by statute and if the contract be not in that form the obligation may still be enforced against the body in appropriate cases, in equity. [859 D] If our nascent democracy is to thrive different standards "of conduct ,for the people and the public bodies cannot ordinarily be permitted. A public body is not exempt from liability to carry out its obligation arising out of representations made by it relying upon which a citizen has altered his position to his prejudice. [860 D] There is undoubtedly a clear distinction between a representation of an existing fact and a representation that something will be done in future. The former may, if it amounts to a representation as to some fact alleged at the time to be actually in existence, raise an estoppel if another person alters his position relying upon that representation A representation that something will be done in future may result in a contract, if another person to whom it is addressed acts upon it. A representation that something will be done in future is not a representation that it is true when made. But between a representation of a fact which is untrue and a representation express or implied to do something in future there is no clear anti thesis. A representation that something will be done in future may involve an existing intention to act in future in the manner represented. If the representation is acted upon by another person it may, unless the statute governing the person making the representation provides otherwise, result in an agreement enforceable at law; if the statute requires that the agreement shall be in a certain form, no contract may result from the representation and acting thereupon but the law is not powerless to raise in appropriate cases an equity against him to compel performance of the obligation arising out of his representation. [858 H 859 C] Union of India & Ors. vs M/s. Indo Afghan Agencies Ltd., ; Robertson vs Minister of Pensions, ; Falmouth Board Construction Co. Ltd. vs Howell, , referred to.

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Appeal Nos. 429 and 430 of 1966 Appeals by special leave from the judgments and orders dated January 22, 1964 of the Calcutta High Court in Appeals Nos. 199 and 200 of 1962 from Original Order. B.Sen and section P. Nayar, for the appellants (in both the appeals). A.N. Sinha and D. N. Gupta, for respondent No. 1 (in both the appeals). The Judgment of the Court was delivered by Hidayatullah, C.J. This is an appeal against the judgment and decree of the High Court of Calcutta refusing to enter satisfaction of two decrees under O. 21 r. 2 of the Code of Civil Procedure obtained by the respondents against the Union of India in the following circumstances. The respondents M/s Soorajmull Nagarmull imported spindle oil from Philadelphia. The firm was required to pay Customs Duty under Item 27(3) of the First Schedule to the Tariff Act, 1934 at 27% ad valorem. The firm filed two suits asking for refund of excess duty claiming that the oil was dutiable only under Item 27(8) at /2/6 per imperial gallon. The suits were filed against the Collector of Customs, the Assistant Collector of Customs for Appraisement and the Union of India. The suits were successful and decrees were passed against the Union of India for refund of the amount charged in excess. In one suit the decree was for payment of Rs. 43,723/ with interest at 6% per annum from 1st day of April, 1952 until realisation. In the second suit the decree was for Rs. 75,925/ with similar interest. Since the firm had not paid a sum of Rs. 18,08,667.72 as tax the Income Tax Officer, Circle 11, Calcutta issued a notice under section 46(5a) of the Indian Income Tax Act, 1922 calling upon the Collector of Customs to pay the amount of the decree to him and stating that his receipt would constitute a good and sufficient discharge of the liability for refund to the firm. The Collector of Customs paid the amount into the Reserve Bank and the Reserve Bank issued receipts crediting the amount against Super 125 tax due from the firm. The Collector of Customs then applied to the High Court of Calcutta under 0. 21 r. 2 of the Code of Civil Procedure for the adjustment of the decrees by this payment. This was refused by a learned single Judge who gave no reasons while dismissing the petition. On appeal to the Division Bench it was held by the Division Bench on January 22, 1964 that the adjustment of the decrees could not be granted. It is against the last order that the present appeals have been filed by ,special leave of this Court. The High Court in reaching the conclusion observed that the decrees were against the Union of India and not the Collector of Customs. Further the sums were held by the Collector of Customs on behalf of the Union of India and not on behalf of the firm. The High Court found the notice to be defective inasmuch as it asked for payment towards Income tax and towards penalty, while in the receipts which were granted to the firm, stated that the amount was for Super tax. On these three grounds, the High Court held that the learned single Judge was right in dismissing the application of the Collector of Customs for the adjustment of the decrees. Order 2 1, r. 2 of the Code of Civil Procedure takes note of payments out of court to decree holders and provides that where any money payable under a decree of any kind is paid out of Court, or the decree is otherwise adjusted in whole or in part to the satisfaction of the decree holder, the decree holder shall certify such payment or adjustment to the Court whose duty it is to execute the decree, and the Court shall record the same accordingly. It is also provided that the judgment debtor also may inform the Court of such payment or adjustment, and apply to the Court to issue a notice to the decree holder to show cause why such payment or adjustment should not be recorded as certified. The contention of the respondents in these appeals is that the decrees were not passed against the Collector of Customs but against the Union of India and that payment by the, Collector of Customs was not a payment by the judgment debtor. In our judgment this plea is highly technical. The amount was recoved by the Collector of Customs from the firm and was being held by the Union of India through the Collector of Customs. The Collector of Customs paid the money not on behalf of himself but on behalf of the Union of India and it must be treated as a proper payment of the amount to the firm. The objection of the respondent that it amounts to a payment by one Department of the Government to another does not, in our opinion, hold much substance. It is also extremely technical. The Union of India 126 operates through different Departments and a notice to the Collector of Customs in the circumstances was a proper notice to issue because it was the Collector of Customs who had in the first instance recovered this money and held it from the firm. It is next contended that the notice is defective inasmuch as it shows that the money was lying with the Collector of Customs whereas it was, in fact, lying with the Union of India and that it was not money held by the Collector of Customs on behalf of the firm. Section 46(5A) of the Income tax Act reads as follows : "46. Mode and time of recovery. (5A) The Income tax Officer may at any time or from time to time, by notice in writing (a copy of which shall be forwarded to the asessee at his last address known to the Income tax Officer) require any person from whom money is due or may become due to the assessee or any person who holds or may subsequently hold money for or on account of the assessee to pay to the Income tax Officer, either forthwith upon the money becoming due or being held or at or within the time specified in the notice (riot being before the money becomes due or is held) so much of the money as is sufficient to pay the amount due by the tax payer in respect of arrears of income tax and penalty or the whole of the money when it is equall to or less than that amount. Any person making any payment in compliance with a notice under this I sub section shall be deemed to have made the payment under the authority of the assessee and the receipt of the income tax Officer shall constitute a good and sufficient discharge of the liability of such person to the assessee to the extent of the amount referred to in the receipt. Any person discharging any liability to the assessee after receipt of the notice referred to in this sub section shall be personally liable to the Income tax Officer to the extent of the liability discharged or to the extent of the liability of the assessee for tax and penalties, whichever is less. 127 If the person to whom a notice under this sub section is sent fails to make payment in pursuance thereof to the Income tax Officer, further proceedings may be taken by and before the Collector on the footing that the Income tax Officer 's notice has the same effect as an attachment by the Collector in exercise of his powers under the proviso to sub section (2) of section 46. Such notices of the Income tax Officer are no more than a kind of a garnishee order issued to the person holding money which money is due to an assessee. The Collector of Customs had recovered this money and under the decrees of the Court the Union of India was liable to refund it to the firm. A garnishee order is issued to a debtor not to pay to his own creditor but to some third party who has obtained a final judgment against the creditor. By a parity of reasoning this amount, which was with the Collector of Customs, could be asked to be deposited with the Income tax Authorities under section 46(5A). The argument is extremely technical for that the firm is entitled to get a double benefit of the decree, first by having the decretal amount paid to the benefit of the firm and then to recover it again from the Union of India. It is contended lastly that the notice of the Income tax Officer spoke of Income tax and/or penalty whereas the amount was taken towards payment of Super tax due from the firm It is, however, conceded in the face of authorities cited at the Bar that the Super tax is also a kind of Income tax and, therefore, the notice could issue in the form it did. The leading case on the subject is In re Beckitt(1) and learned counsel for the respondents did not controvert the proposition laid down there. It is, however argued on the authority of Bidhoo Beebee vs Keshub Chunder Baboo and Ors., (2) Mahiganj Loan Office, Ltd. vs Behari Lal Chaki,(3) A. P. Bagchi vs Mrs. F. Morgan(4 ) and Thomas Skinder vs Ram Rachpal(5), that the payment which can be adjusted under O. 21, r. 2 is a voluntary payment by the judgment debtor to the decree holder and that this iS not a case of voluntary payment, at, all. The rulings which have 'been cited do not, in our opinion, apply here. This point was not considered in the High Court and seems to have been thought of here. Order 21, r. 2 merely contemplates payment out of court and says nothing about voluntary payment. A garnishee order can never by its nature (1) ; (2) (3) 1. L. R. (4) A. 1. R. 1935 All. 513. (5) 1. L. R. 1938 All. 128 lead to a voluntary payment and it is not to be thought that a garnishee, order does not lead to the adjustment of the decree sufficient for being certified by the Court. Payment by virtue of section 46(5A), as we have stated before, is in the nature of a garnishee payment and must, therefore, be subject to the same rule. The rulings themselves do not control the present matter. In the payment was not under a garnishee order but under the process of the court issued in execution by arrest of the judgment debtor. Contrasting what had happened in the case with the words of the second rule of 0. 21 (then section 206 of the Code of 1859) the learned Judges observed that section 206 covers cases of voluntary payment. The debtor was protected by treating the payment as being made through the court. The exact point we are dealing with was not before the Court. In I.L.R. there was a scheme framed by the depositors of a banking Company for return of their deposits in spite of opposition from decree holders depositor of the Company. The scheme was sanctioned by the Court. The scheme was binding on the decree holder but it was not treated as an adjustment within O. 21, r. 2 of the Code of Civil Procedure. The reason given was that the adjustment must be to the satisfaction of the decree holder and must be with the consent of both the decree holder and the judgment debtor and not one which is made binding by operation of law. It is to be noticed that that was a payment to which the judgment debtor had objected although it was binding on him. We see no reason for making a distinction between a voluntary payment out of court and a payment out of court which the law regards as valid. No reasons are given in the judgment why such a distinction should be made. In I.L.R. [1938] An. 294 the payment was made in court and not outside court. This ' is the nearest case to the present one and but for this difference, it is reasonable to think that the learned Judges would have taken the same view of the matter as we have taken. The reason given by the learned judges brings out the real object of the rule : "where a judgment debtor makes payment outside the Court, the Court knows nothing about the payment ' and therefore r. 2, 0. 21 ordains that the parties should inform the Court about the payment. " This object in our opinion is fully achieved when there is payment under a garnishee order outside the Court. In the case cited the Court knew of the payment and could give protection in other ways. In A.I.R. 1935 All. 513 the payment was again without the consent of the Judgment debtor either in fact or in law. Too much emphasis appears to have been placed upon mutual understanding and too little on payment out of court which is the essence 129 of the rule. The case turned on whether there was any understanding and too little on payment out of court which is the essence debtor on repairs would be set off against the decretal amount and therefore O. 21, r. 2 of the Code of Civil Procedure was held inapplicable. In none of the cases the point of a garnishee order was considered. In our opinion, a case of a garnishee payment or one made under section 46(5A) of the Income tax Act of 1922 stands on a different footing and if the payment has been legally made out of Court in full and final discharge of the liability under a decree, there is no reason why the judgment debtor cannot move the Court for getting the adjustment or payment certified, The payment was required to be certified under O. 21, r. 2 of the Code of Civil Procedure and we order that it be so certified. The appeals are accordingly allowed with costs here and in the High Court. R.K.P.S. Appeals allowed.

The respondent filed suits against the Collector of Customs and the Union of India claiming refund of excess customs duty levied on spindle oil imported into India. The trial court granted decrees against the Union of India for the amounts charged in excess. As the respondent had large outstandings of tax, the Income Tax Officer issued a notice under section 46(5A) of the Income Tax Act, 1922 calling upon the Collector of Customs to pay the amount of the decree to him. The Collector paid the amount into the Reserve Bank, who issued receipts crediting the amount against super tax due from the respondent. He then applied to the High Court under O. 21 r. 2 C.P.C. for the adjustment of the decree by this amount. This was refused by a single Judge as well as in appeal by a division bench. It was held that the decrees were against the Union of India and not the Collector of Customs and that payment by the Collector was not a payment by the judgment debtor. Furthermore the amounts were held by the Collector on behalf of the Union of India and not on behalf of the Firm. The High Court also found the notice to be defective inasmuch as it asked for payment towards income tax and penalty, while the receipts which were granted to the Firm stated that the amount paid was against super tax due. On appeal to this Court, HELD : The Union of India operates through different Departments and a notice to the Collector of Customs in the circumstances was a proper notice to issue because it was the Collector of Customs who had in the first instance recovered the amount and held it from the respondent. Collector paid the amount on behalf of the Union of India. [126 A] A notice under section 46(5A) is no more than a kind of garnishee order issued to the person holding money and the money is due to an assessee. The amount which was held. by the Collector of Customs could properly be asked to be deposited with the income tax authorities under section 46(5A). [127 B D] Super tax is also a kind of income tax and therefore, the notice could issue in the form it did. There was no force in the contention that the amount, which could be adjusted under O. 21, r. 2, is a voluntary payment by the judgment debtor to the decree holder and the present case was not one of voluntary payment at all. Order No. 21, r. 2 merely contemplates payment out of court and says nothing about voluntary payment. A garnishee order can never by its nature lead to a voluntary payment and it is not to be thought that a garnishee order does not lead to the adjustment of the decree 124 sufficient for being certified by the Court. Payment by virtue of section 46(5A) is in the nature of a garnishee payment and must, therefore, be subject to the same rule. [127 G 128 B] In re Beckitt, [1933].T.R. 1, Bidhoo Beebee vs Keshub Chunder Baboo & Ors. , Mahiganj Loan Office Ltd. vs Behari Lal Chaki, I.L.R. , A. P. Bagchi vs Mrs. F. Morgan A.I.R. 1935, AU 513, Thomas Skinner vs Ram Rachpal I.L.R. [1938] All 294, distinguished.

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Appeal No. 19 of 1964. Appeal by special leave from the judgment and order dated October 29, 1963, of the Madras High Court in Writ Appeal No. 214 of 1962. section Mohan Kumar amagalam, M. N. Rangachari, R. K. Garg, M. K. Ramamurthi, for the appellant. R. Ganapathy Iyer, for respondents Nos. 2 and 3. A. Ranganadham Chetty and A. V. Rangam, for respondent No. 4. M. C. Setalvad, N. C. Krishna Iyengar and 0. C. Mathur, for Intervener. March 5, 1964. The judgment of the Court was delivered by GAJENDRAGADKAR, C.J. The short but important point of law which has been raised for our decision in this appeal by special leave is whether G.O. No. 1298 issued by the Gov ernment of Madras on April 28, 1956 in exercise of its powers conferred by section 43A of the (Central Act IV of 1939) (hereinafter called the Act) inserted by the Madras Amending Act 20 of 1948, is valid. Mr. Mohan Kumaramangalam who appears for the appellant contends that the impugned Government order is invalid for the simple reason that it is outside the purview of section 43A. The impugned order was issued as early as 1956 and since then, its validity 3 has never been impeached in judicial proceedings. Litigation in regard to the grant of permits under the relevant provisions of the Act has figured prominently in the Madras High Court in the form of writ petitions invoking the said High Court 's jurisdiction under article 226 of the Constitution and several aspects of the impugned order have come to be examined. The echoes of such litigation have frequently been heard in this Court and this Court has had occasion to deal with the impugned order, its character, its scope and its effect , but on no occasion in the past, the validity of the order appears to have been questioned. The legislative and judicial background of the order and the course of judicial decisions in regards to the points raised in the enforcement of this order would prima facie and at the first blush suggest that the attack against the validity of the order may not be wellfounded and that would tend to make the initial judicial response to the said challenge more hesitant and reluctant. But Mr. Kumaramangalam contends that section 43A under which the order purports to have been passed would clearly show that the said order is outside the purview of the authority conferred on the State Government and is therefore invalid. It is obvious that if this contention is upheld, its impact on the administration of the system adopted in the State of Madras for granting permits under the Act would be very great and so though the question lies within a narrow compass, it needs to be very carefully examined. The facts which lead to the present appeal conform to the usual pattern of the permit litigation in which the grant or refusal to grant a permit is chal lenged under the writ jurisdiction of the High Court under article 226. The appellant B. Rajagopala Naidu is a bus operator in the State of Madras and he runs a number of buses on various routes. On June 26, 1956, the State Transport Authority by a notification invited applications for the grant of two stage carriage permits on the route Madras to Krishnagiri. The buses on this route were to be run as express service. The appellant and 117 bus operators including respondents 2 and 3 D. Rajabahar Mudaliar, proprietor of Sri Sambandamoorthy Bus Service and K. H. Hanumantha Rao, proprietor of Jeevajyoti Bus Service respectively, submitted applications for the two permits in question. The State Transport Authority considered the said applications on the merits. In doing so, it proceeded to award marks in accordance with the principles prescribed by the impugned order and came to the conclusion that the appellant satisfied the requirements enunciated by the State Transport Authority for running an efficient bus service on this long route, and so, it granted the two permits to the appellant on May 8, 1958. L/P(D)1SCI 1(a) 4 Against this decision, 18 appeals were preferred by the unsuccessful applicants including respondents 2 and 3. All these appeals were heard together by the State Transport Ap pellate Tribunal, Madras in June 1959. It appears that before the appeals were thus heard, the State Government had superseded the principles enunciated in the order in so far as they related to the grant of stage carriage permits and had issued another direction under section 43A known as G.O. 2265 on August 9, 1958. Incidentally, it may be added that by this order, different criteria had been prescribed for selection and a different marking system had been devised. The Appellate Tribunal considered the claims of the rival bus operators and allotted marks in accordance with the principles laid down by the earlier order. As a result, respondents 2 and 3 secured the highest marks and their appeals were allowed, the order under appeal was set aside and two permits were granted to them. This order was passed on July 4, 1959. The appellant then invoked the jurisdiction of the Madras High Court under article 226 of the Constitution by this writ petition No. 692 of 1959. In his writ petition the ap pellant challenged the validity of the order passed by the Appellate Tribunal on several grounds. One of them was that the impugned order on which the decision of the Appellate Tribunal was based, was invalid. This plea along with the other contentions raised by the appellant failed and the learned Single Judge who heard his writ petition dismissed the petition, on October 18, 1962. The appellant then challenged the correctness of this decision by a Letters Patent Appeal No. 214 of 1962 before a Division Bench of the said High Court. The Division Bench, however, agreed with the view taken by the Single Judge and dismissed the Letters Patent Appeal preferred by the appellant. The appellant then moved the said High Court for leave, but failed to secure it, and that brought him here with an application for special leave which was granted on November 14, 1963. It is with this special leave that the appellant has brought this appeal before us for final disposal. Before dealing with the points raised by the appellant, it is necessary to consider the background of the impugned order, and that takes us to the decision of the Madras High Court in Sri Rama Vilas Service Ltd. vs The Road Traffic Board, Madras, by its Secretary(1). In that case, the appellant had challenged the validity of a Government order No. 3898 which had been issued by the Madras Government on December 9, 1946. This order purported to direct the transport authorities to issue only temporary permits as the Government intended to nationalise motor transport. Accordingly, instruction No. 2 in the said order had provided that when (1) 5 applications were made for new routes or new timings in existing routes, then small units should be preferred to old ones. In accordance with this instruction, when the application for permit made by the appellant, Sri Rama Vilas Service was rejected, the order stated that it so rejected in the interests of the public generally under section 47(1)(a) of the Act. The appellant preferred , in ' appeal against the order to the Central Board namely the Provincial Transport Authority which had been constituted by the Government under section 44 of the Act. His appeal failed and so, he moved the Madras High Court under section 45 of the Specific Relief Act for an order directing the respondent the Road Traffic Board, Madras to consider the application of the appellant in accordance with the provisions of the Act and the rules made thereunder for renewal of the permit for plying buses. The High Court held that G. O. No. 3898 was in direct conflict with the proviso to section 58 sub section (2) of the Act, and so, was invalid. This decision showed that there was no authority or right in the State Government to issue instructions such as were contained in the said Government order. In reaching this decision, the High Court emphasised the fact that the Central Transport Board and the Regional Transport Board were completely independent of the Government except that they must observe the notifications made pursuant to section 43 of the Act. It was conceded that if and when the Government acted as an Appellate Tribunal, it had judicial functions to discharge. But these functions did not include the power to give orders to any Board which was seized of an application for renewal of permits. That is how it was established by this decision that as the Act stood, the State Government had no authority to issue directions as to how applications for permits or their renewal should be dealt with by the Tribunals constituted under the Act. This judgment was pronounced on November 19, 1947. As a result of this judgment, the Madras Legislature amended the Central Act by Act XX of 1948 which came into force on December 19, 1948. Amongst the amendments made by this Act was the insertion of section 43A with which we are concerned in the present appeal. This section clothed the State Government with powers to issue certain directions and orders. As we have already indicated, the point which we are, considering in the present appeal is whether the impugned order falls within the purview of the power and authority conferred on the State Government by this section. We will read this section later when we address ourselves to the question of its construction. The amendment of the Central Act led to the next round of controversy between the bus operators and the State Gov ernment and that resulted in the decision of the Madras High 6 Court in C.S.S. Motor Service Tenkasi vs The State of Madras and another(1). In that case, the validity of several provisions of the Act including the provisions introduced by the Madras Amendment Act were challenged. It will be recalled that at the time when this challenge was made, the Constitution had come into force and the appellant C.S.S. Motor Service urged before the High Court that under article 19(1)(g) it had a fundamental right to ply motor vehicles on the public pathways and the impugned provisions of the Act invaded its aforesaid fundamental right and were not justified by article 19(6). The High Court elaborately considered the first part of the contention and it took the view, and we think rightly, that a citizen has a fundamental right to ply motor vehicles on the public pathways for hire or otherwise and that if any statutory provision purports or has the effect of abridging such fundamental right, its validity would have to be judged under the relevant clause of article 19. Proceeding to deal with the dispute on this basis, the High Court examined the validity of the several impugned provisions of the Act. In regard to section 43A, the High Court came to the conclusion that the said section was valid though it took the precaution of adding that the orders passed thereunder might be open to challenge as unconstitutional. It is, however, necessary to emphasise that the main reason which weighed with the High Court in upholding the validity of this section was that the High Court was satisfied that the said section was "intended to clothe the Government with authority to issue directions of an administrative character." Thus, section 43A was held to be valid in this case and the correctness of this conclusion is not disputed before us. In other words, we are dealing with the appellant 's challenge against the validity of the impugned order on the basis that section 43A itself is valid. This judgment was pronounced on April 25, 1952. Some years after this judgment was pronounced, the impugned Government order was issued on April 28, 1956. This order purported to issue instructions or directions for the guidance of the Tribunals constituted under the Act. In fact, it refers to the judgment of the Madras High Court in the case of C.S.S. Motor Service. It would appear that the Madras Government wanted to give effect to the said decision by issuing appropriate directions under its authority derived from section 43A which was held to be valid. The impugned order deals with five topics. The first topic has relation to the instructions which had to be borne in mind whilst screening the applicants who ask for permits. This part of the order provides that the applicants may be screened and disqualified on one or more of the principles enunciated in cls.1 to 4 in that part. The second part deals with the system of assigning marks to (1) A.L.R. 7 the several claimants, under four columns. In laying down these principles, the impugned order intended to secure precision in the disposal of claims for permits and to enable quick consideration of the merits of such claimants. This part of the order, however, made it clear that in cases where the system of marking worked unfairly the Regional Transport Authority may ignore the marks obtained for reasons to be stated. It is this ' part of the order which has introduced the marking system which has been the special feature of adjudication of claims for permits in the State of Madras. These two parts are described as "A." in the Government order. Part 3 deals with the variation, or extension of routes granted under the permits. Part 4 deals with the revision of timings and Part 5 has reference to suspension or cancellation of permits. That in brief is the nature of the directions issued by the impugned order. After this order was issued and the Tribunals constituted under the Act began to deal with applications for permits in accordance with the principles prescribed by it, the decisions ,of the said Tribunals came to be frequently challenged before the Madras High Court and these disputes have, often been brought before this court as well. In these cases, the character of the order passed by the Tribunal was examined, the nature of the instructions issued by the impugned order was considered and the rights of the parties aggrieved by the quasi judicial decisions of the tribunals also fell for discussion and decision. A question which was often raised was whether it was open to a party aggrieved by the decision of the Tribunal to contend that the said decision was based either on a misconstruction of the impugned order or in contravention of it, and the consensus of judicial opinion on this part of the controversy appears to be that the proceedings before the Tribunals constituted under the Act are quasijudicial proceedings and as such liable to be corrected under article 226 of the Constitution. It also appears to be well estab lished that the impugned order is not a statutory rule and has therefore no force of law. It is an administrative or executive direction and it is binding on the tribunals; it does not, however, confer any right on the citizen and that means, that a citizen cannot be allowed to contend that a misconstruction of the order or its contravention by any decision of the Tribunal functioning under the Act should be corrected under Article 226. In M/s Raman and Raman Ltd. vs The State of Madras and others(1), this Court by a majority decision held that section 43A of the Act as amended by the Madras Amendment Act, 1948 must be given a restricted meaning and the jurisdiction it conferred on the State Government to issue orders and directions must be confined to administrative functions. An order or (1) 8 direction made thereunder by the State Government was con sequently denied the status of law regulating rights of parties. and was treated as partaking of the character of an administrative order. Similarly, in R. Abdulla Rowther vs The State Transport Appellete Tribunal, Madras and others(1) this Court held by a majority decision that the orders and directions issued under section 43A were merely executive or administrative in character and their breach, even if patent, would not justify the issue of a writ of certiorari. It was also observed that though the orders were executive and did not amount to statutory rules, they were rules binding on the transport authorities for whose guidance they have been issued, but that did not confer any right on the citizen and so a plea that a contravention of the orders should be corrected by the issue ,of an appropriate writ was rejected. Such contravention, it was held, might expose the Tribunal to the risk of disciplinary or other appropriate action, but cannot entitle a citizen to make a complaint under article 226. It is necessary to emphasise that in both these cases no argument was urged that the impugned order was itself invalid and should have been ignored by the Tribunals exercising quasi judicial authority under the relevant provisions of the Act. The Court was no doubt called upon to consider the character of the impugned order and some of the reasons given in support of the conclusion that the impugned order is administrative or executive seem to suggest that the said order would, prima facie, be incon sistent with the provisions of section 43A which received a narrow and limited construction from the court. Nevertheless, since the point about the validity of the impugned order was not raised before the court, this aspect of the question was not examined and the discussion and decision proceeded on the basis that the impugned order was valid. Now that the question has been raised before us, it has become necessary to examine the validity of the impugned order. Before proceeding to examine the scope and effect of the provisions of section 43A, it is necessary to bear in mind two general considerations. The first broad consideration which is relevant has relation to the scheme of the Act in general and the scheme of Ch.IV in particular. The Act consists of 10 chapters and deals mainly with administrative problems in relation to motor vehicles. Chapter 11 deals with licensing of drivers of motor vehicles. Chapter IIA deals with licensing of conductors of State carriages and Chapter III with registration of motor vehicles. Chapter IV is concerned with the control of transport vehicles and in this chapter are included the relevant provisions for the applications for grant of permits, the consideration of those applications and other allied topics. Chapter IVA includes the provisions relating to (1) A.I.R. (1959) S.C. 896. 9 State Transport Undertakings. Chapter V addresses itself to the construction, equipment and maintenance of motor vehi cles, Chapter VI deals with the control of traffic, Chapter ' VII has reference to motor vehicles temporarily leaving or visiting India, Chapter VIII with the question of insurance of motor vehicles against third party risks, Chapter IX prescribes offences, penalties and procedures to try the offences and Chapter X contains miscellaneous provisions. This scheme shows that the hierarchy of transport autho rities contemplated by the relevant provisions of the Act is clothed both with administrative and quasi judicial functions and powers. It is well settled that sections 47, 48, 57, 60, 64 and 64A deal with quasi judicial powers and functions. In other words, when applications are made for permits under the relevant provisions of the Act and they are considered ,on the merits, particularly in the light of the evaluation of the claims of the respective parties, the transport authorities are exercising quasi judicial powers and are discharging quasijudicial functions, and so, orders passed by them in exercise of those powers and in discharging those functions are quasijudicial orders which are subject to the jurisdiction of the High Court under article 226, vide New Prakash Transport Co. Ltd. vs New Suwarna Transport Co. Ltd.(1) and M/s Raman and Raman Ltd. vs The State of Madras and others(3) and R. Abdulla Rowther vs The State Transport Appellate Tribunal Madras and others(3) so that when we examine the question about the validity of the impugned order, we cannot lose sight of the fact that the impugned order is concerned with matters which fall to be determined by the appropriate transport authorities in exercise of their quasi judicial powers and in discharge of their quasi judicial functions. The other broad consideration relevant in dealing with the present controversy is that there are three sets of provi sions under the Act which confer legislative, judicial and administrative powers respectively on the State Government. Section 67 which confers on the State Government power to make rules as to stage carriages and contract carriages and section 68 which confers power on the State Government to make rules for the purposes of Ch.IV are obviously legislative powers, and in exercise of these powers, when the rules are framed, they become statutory rules which have the force of law. Naturally, the exercise of these legislative powers is controlled by the safeguard provided by section 133 of the Act. This latter section requires that when power is exercised by the State Government to make rules, it is subject to the condition that the rules must be previously published before they are (1) p. 118.[1959] 2 S.C.R. p. 227.A.I.R. (1959) S.C. 896.10 made. That is the effect of section 133(i). Sub cl.(2) of section 133 provides that all rules made under this Act shall be published in the Official Gazette after they are made and shall, unless some later date, is appointed, come into force on the date of such publication. Clause 3 is important. It provides that all rules made under the Act shall be laid for not less than fourteen days before the appropriate Legislature as soon as possible after they are made, and shall be subject to such modifications as the appropriate Legislature may make during the session in which they are so laid. So that if statutory rules are made by the Government in exercise of legislative powers conferred on it by sections 67 and 68, they are subject to the control of the appropriate legislature which can make changes or modifications in the said rules if it is thought necessary or expedient to do so. Publication before the rules are made and publication after they are made also afford another statutory safeguard in that behalf. That is the nature of the legislative power conferred on the State Government. Section 64A confers judicial power on the State Transport Authority, because the said authority is given revisional jurisdiction to deal with orders therein specified, subject to the limitations and conditions prescribed by the two provisos to the said section. This is a clear provision conferring judicial power on the State Transport Authority. Along with the legislative and judicial powers which have thus been conferred, there is the administrative power con ferred on the State Government by section 43A. Section 43A reads thus: ,,The State Government may issue such orders and directions of a general character as it may consider necessary, in respect of any matter relating to road transport, to the State Transport Authority or a Regional Transport Authority; and such Transport Authority shall give effect to all such orders and directions". It is the construction of this section which is the basis of the challenge to, the validity of the impugned rules in the present appeal. It may be conceded that there are some words in the section which are against the construction for which Mr. Kumaramangalam contends. The words "in respect of any matter relating to road transport" are undoubtedly wide enough to take in not merely administrative matters but also matters which form the area of the exercise of quasi judicial authority by the Tribunals constituted under the Act. Prima facie, there are no words of limitation in this clause and it would, therefore, be possible to take the view that these are matters which are scrutinised by the appropriate authorities in exercising their quasi judicial jurisdiction. Similarly, the State Transport Authority and the Regional Transport 11 Authority to which reference is made in this section are clothed not only with administrative power but also with quasijudicial jurisdiction so that reference to the two authorities and reference to any matter relating to road transport would indicate that both administrative and quasi judicial matters come within the sweep of section 43A. But there are several other considerations which support Mr. Kumaramangalam 's construction. The first is the setting and the context of the section. As we have already seen, this section has been introduced by the Legislature in response to the decision of the Madras High Court in C.S.S. Motor Service case(1) and that would indicate that the Madras Legislature intended to confer on the State Government power to issue administrative orders or directions of a general character. Besides, the two preceding sections section 42 and section 43 and section 44 which follows support the argument that the field covered by section 43A like that covered by sections 42, 43 and 44 is administrative and does not include the area which is the subjectmatter of the exercise of quasi judicial authority by the relevant Tribunals. Then again, the use of the words 'orders and directions ' would not be appropriate in regard to matters which fall to be considered by authorities exercising quasi judicial powers. These words would be appropriate if they have reference to executive matters. And lastly, the provision that the relevant transport authority shall give effect to all orders and directions issued under section 43A would be clearly inappropriate if the instructions issued under the said section are meant for the guidance of quasi judicial bodies. If the direction is issued by the appropriate Government in exercise of its powers under section 43A and it is intended for the guidance of a tribunal discharging its quasi judicial functions, it is hardly necessary to say that the authority shall give effect to such directions. Section 43A being valid, if the orders and directions of a general character having the force of law can be issued within the scope of the said section, then such orders or directions would by themselves be binding on the transport authorities for whose guidance they are made; and it would be superfluous to make a specific provision that they are so binding. On the other hand, if the orders and directions are in the nature of administrative orders and directions, they do not have the force of statutory rules and cannot partake of the character of provisions of law, and so, it may not be inappropriate to that the said orders and directions shall be followed by the appropriate tribunals. Therefore, it seems to us that on a fair and Leasonable construction of section 43A, it ought to be held that the said section authorises the State Government .R. 12 to issue orders and directions of a general character only tin respect of administrative matters which fall to be, dealt with by the State Transport Authority or Regional Transport Authority under the relevant provisions of the Act in their administrative capacity. In reaching this conclusion, we have been influenced by certain other considerations which are both relevant and material. In interpreting section 43A, we think, it would be legitimate to assume that the legislature intended to respect the basic and elementary postulate of the rule of law, that in exercising their authority and in discharging their quasi judicial function, the tribunals constituted under the Act must be left absolutely free to deal with the matter according to their best judgment. It is of the essence of fair and objective administration of law that the decision of the Judge or the Tribunal must be absolutely unfettered by any extraneous guidance by the executive or administrative wing of the State. If the exercise of discretion conferred on a quasi judicial tribunal is con trolled by any such direction, that forges fetters on the exercise of quasi judicial authority and the presence of such fetters would make the exercise of such authority completely inconsistent with the well accepted notion of judicial process. It is true that law can regulate the exercise of judicial powers. It may indicate by specific provisions on what matters the tribunals constituted by it should adjudicate. It may by specific provisions lay down the principles which have to be followed by the Tribunals in dealing with the said matters. The. scope of the jurisdiction of the Tribunals constituted by statute can well be regulated by the statute and principles for guidance of the said tribunals may also be prescribed subject of course to the inevitable requirement that these provisions do not contravene the fundamental rights guaranteed by the Constitution. But what law and the provisions of law may legitimately do cannot be permitted to be done by adminis trative or executive orders. This position is so well established that we are reluctant to hold that in enacting section 43A the Madras Legislature intended to confer power on the State Government to invade the domain of the exercise of judicial power. In fact, if such had been the intention of the Madras Legislature and had been the true effect of the provisions of section 43A, section 43A itself would amount to an unreasonable contravention of fundamental rights of citizens and may have to be struck down as unconstitutional. That is why the Madras High Court in dealing with the validity of section 43A had expressly observed that what section 43A purported to do was to clothe the Government with authority to issue directions of an administrative character and nothing more. It is somewhat unfortunate that though judicial decisions have always emphasised this aspect of the matter, occasion did not arise so long 13 to consider the validity of the Government order which on the construction suggested by the respondent would clearly invade the domain of quasi judicial administration. There is another consideration which is also important. If section 43A authorises the State Government to issue directions or orders in that wide sense, section 68 would become redundant and safeguards so elaborately provided by section 133 while the State Government purports to exercise its authority under section 68, would be meaningless. If orders and directions can be issued by the State Government which are not distinguishable from statutory rules, it is difficult to see why section 68 would have dealt with that topic separately and should have provided safeguards controlling the exercise of that power by section 133. It is likewise significant that the directions and orders issued under section 43A are not required to be published nor are they required to be communicated to the parties whose claims are affected by them. Proceedings before the Tribunals which deal with the applications for permits are in the nature of quasijudicial proceedings and it would, indeed, be very strange if the Tribunals are required to act upon executive orders or directions issued under section 43A without conferring on the citizens a right to know what those orders are and to see that they are properly enforced. The very fact that these orders and directions have been consistently considered by judicial decisions as administrative or executive orders which do not confer any right on the citizens emphatically brings out the true position that these orders and directions are not statutory rules and cannot therefore seek to fetter the exercise of quasi judi cial powers conferred on the Tribunals which deal with applications for permits and other cognate matters. It is, however, urged that the principles laid down in the impugned order are sound principles and no challenge can be made to the validity of the order when it is conceded that the order enunciates very healthy and sound principles. This order, it is argued, can be considered as expert opinion the assistance of which is afforded by the State Government to ,he Tribunals dealing with the question of granting permits. We are not impressed by this argument. It is not the function of the executive to assist quasi judicial Tribunals by issuing directions in the exercise of its powers conferred under section 43A. Besides, if section 43A is valid and an order which is issued under it does not fall outside its purview, it would be open to the State Government to issue a direction and require the Tribunal to follow that direction unquestionably, in every case. It is true that in regard to the marking system evolved by the im pugned rule, liberty is left to the Tribunal not to adopt that system for reasons to be recorded by it. This liberty in practice 14 may not mean much; but even theoretically, if the impugned order is valid, nothing can prevent the State Government from issuing another order requiring that the marking system prescribed by it shall always be followed. We have already seen that section 43A itself provides that effect shall be given to the orders issued under it, and so, if an order issued under section 43A itself were to prescribe that it shall be followed, it will have to be followed by the Tribunal and no exception can be made in that behalf. Therefore, we cannot accept the argument strongly pressed before us by Mr. Ganapathy Iyer on behalf of respondent No. 1 that the validity of the order cannot be challenged on the ground that the principles laid down by it are sound and healthy. We have, therefore, come to the conclusion that the impugned order is outside the purview of section 43A inasmuch as it purports to give directions in respect of matters which have been entrusted to the Tribunals constituted under the Act and which have to be dealt with by these Tribunals in a quasi judicial manner. We cannot overlook the fact that the validity of the Act particularly in reference to its provisions prescribing the grant and refusal of permits, has been sustained substantially because this important function has been left to the decision of the Tribunals constituted by the Act and these Tribunals are required to function fairly and objectively with a view to exercise their powers quasijudicially, and so, any attempt to trespass on the jurisdiction of these Tribunals must be held to be outside the purview of section 43A. We are conscious of the fact that the impugned order was issued after and presumably in response to the decision of Madras High Court in the case of C.S.S. Motor Service(1) though it Would appear that what the High Court had suggested was presumably the making of the rules under section 68 of the Act. It cannot also be disputed that the main object of the State Government in issuing this order was to avoid vagaries, and introduce an element of certainty and objec tivity, in the decision of rival claims made by applicants in respect of their applications for permits. It may have been thought by the State Government that if the Tribunals are allowed to exercise their discretion without any guidance, it may lead to inconsistent decisions in different areas and that may create dissatisfaction in the public mind. It does appear, however, that in some other States the problem of granting permits has been resolved without recourse to the marking 15 system. But apart from that, even if it is assumed that the, marking system, if properly applied, may make the decisions in regard to the grant of permits more objective, fair and consistent, we do not see how that consideration can assist the decision of the problem raised before us If the State Government thinks that the application of some kind of marking system is essential for a fair administration of the Act, it may adopt such course as may be permissible under the law. Section 47(1)(a) requires inter alia that the interests of the public generally have to be borne in mind by the Regional Transport Authority in considering applications for stage carriage permits. The said section refers to other matters which have, to be borne in mind. It is unnecessary to indicate them for our present purpose. The Legislature may amend section 47 by indicating additional considerations which the Transport Authority has to bear in mind; or the Legislature may amend section 47 by conferring on the State Government expressly and specifically a power to make rules in that behalf or the State Government may proceed to make rules under section 68 without amending section 47. These are all possible steps which may be taken if it is thought that some directions in the nature of the provisions made by the impugned order must be issued. That, however, is a matter with which we are not concerned and on which we wish to express no opinion. As this court has often emphasised, in constitutional matters it is of utmost importance that the court should not make any obiter observations on points, not directly raised before it for its decision. Therefore, in indicating the possible alternatives which may be adopted if the State Government thinks that the marking system helps the administration of the Act, we should not be taken to have expressed any opinion on the validity of any of the courses specified. That leaves only one point to be considered. Mr. Ganapathy Iyer urged that even though the impugned order may be valid, that is no reason why the order passed by the Appellate Tribunal which has been confirmed by the High Court in the present writ proceedings should be reversed. He argues that what the Appellate Tribunal has done, is to act upon the principles which are sound and the fact that these principles have been enunciated by an invalid order should not nullify the decision of the Appellate Tribunal itself. Thus presented, the argument is no doubt plausible; but a closer examination of the argument reveals the fallacy under lying it. If the Appellate Transport Authority had considered these, matters on its own without the compulsive force of the impugned order, it would have been another matter , but the order pronounced by the Appellate Authority clearly and unambiguously indicates that it held and in a sense rightly, that it was bound to follow the impugned order unless in the exercise of its option it decided to depart from it and was prepared to record its reasons for adopting that course. It would, We think, be idle to suggest that any Transport Authority functioning in the State would normally refuse to comply with the order issued by the State Government itself. Therefore, 16 we have no hesitation in holding that the decision of the Appellate Tribunal is based solely on the provisions of the impugned order and since the said order is invalid, the decision itself must be corrected by the issue of a writ of certiorari. In the result, we allow the appeal, set aside the order passed by the High Court in Writ Petition No. 692 of 1959 and direct that the said Writ Petition be allowed. There would be no order as to costs throughout. In accordance with this decision a writ of certiorari shall be issued setting aside the order passed by the Appellate Tribunal and remanding the matter to the Regional Transport Authority for disposal in accordance with law.

The appellant is a bus operator in the State of Madras. On an invitation for applications for the grant of two stage carriage permits he submitted his applications along with many others. The State Transport Authority considered the merits of the application awarding marks in accordance with the principles prescribed by Madras G.O. No. 1298, dated April 28, 1956 issued under section 43A of the inserted by the Madras Amending Act 20 of 1948. The Transport Authority on this basis granted the two permits to the appellant. Against this order a number of appeals were filed by some of the unsuccessful applicants including respondents Nos. 2 and 3 in the present appeal. The Appellate Tribunal re allotted marks in accordance with the above G.O. and respondents 2 and 3 having secured the maximum number of marks were granted the permits. On the rejection of a petition under article 226 of the Constitution and after appealing without success to a Division Bench the appellant applied for a certificate to appeal to this Court which rejected. The present appeal was filed on special leave granted by this Court. It was contended on behalf of the appellant before this Court that since Madras G.O. No. 1298, dated April 28, 1956, purports to issue direction to the Transport Authority in the discharge of its quasi judicial functions it is beyond the powers conferred by section 43A of the which authorises only the issue of directions to the said authority in the discharge of its administrative functions and therefore it is bad. Held, (i) Section 43A confers power on the State Government to issue orders and directions to the State Transport Authority only in relation to its administrative functions. M/s. Raman and Raman vs The State of Madras [1959] 2 S.C.R. 227, relied on. (ii)It is well settled that sections 47, 48, 57, 60, 64 and 64A deal with quasi judicial functions and when the transport authorities are dealing with applications for permits and evaluating the respective claims of the parties, the transport authorities are discharging quasi judicial functions and their orders are quasi judicial orders subject to the jurisdiction of the High Court under article 226. L/P(D)1SCI 1 2 New Prakash Transport Co. Ltd. vs Suwarna Transport Co. Ltd. M/s Raman and Raman Ltd. vs State of Madras, , B. Abdulla Rowther vs State Transport Appellate Tribunal, Madras, A.I.R. 1959, S.C. 896, relied on. (iii) In interpreting section 43A it is legitimate to assume that the legislature intended to respect the basic and elementary postulate of the, rule of law that in exercising their authority and discharging their quasi judicial functions, the tribunals constituted under the Act must be left absolutely free to deal with the matter according to their best judgement. It is of the essence of fair and objective administration of law that the decision of judges or tribunals must be absolutely unfettered by any extraneous guidance by the executive or administrative wing of the State. (iv) The impugned order is outside the purview of section 43A inasmuch as it purports to give directions in respect of matters which have been entrusted to the tribunals constituted under the Act and which have to be dealt with by them in quasi judicial manner. (v) The decision of the appellate Tribunal is solely based on the provisions of the impugned order and since the said order is invalid, the decision is also bad.

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peals from the judgments and decrees dated the 23rd February, 1945, of the High Court of Judicature at Calcutta (Akram and Blank JJ.) in Second Appeals Nos. 861 to 885 of 1939 from the judgments and decrees dated the 16th December, 1938, of the Court of the District Judge, Birbhum, in Title Appeals Nos. 23 to 47 of 1938. Sitaram Bannerjee (Arun Kumar Dutta and Amiya Kumar Mukherjee, with him) for the appellant in Civil Appeals Nos. 68 to 74 of 1951. Urukramdas Chakravarthy (section N. Mukherjee, with him) for the respondent No. 1 in Civil Appeals Nos. 68 to 74 of 1951. Sitaram Bannerjee (Arun Kumar Dutta and Amiya Kurnar Mukherjea, with him) for the appellant in Civil Appeals Nos. 75 to 92 of 1951. Panchanan Ghose (Chadra Nath Mukherji, with him) for the respondents Nos. 1 to 3 in Civil Appeals No. 75 to 92 of 1951. April 2. The Judgment of the Court was delivered by MAHAJAN J. These appeals are directed against the judgment and decrees of the High Court of Judicature at Calcutta, dated 23rd February, 1945, reversing the judgment and decrees passed by the District Judge of Birbhum dated 16th December, 1938. The principal questions for determina tion are the same in 102 784 all of them and can be conveniently disposed of by one judgment. It is necessary to set out briefly the history of this half a century old litigation I The seven suits out of which arise Appeals Nos. 68 to 74 were filed in September, 1904, by Maharaja Bahadur Singh in the court of the differ ent Munsifs at Rampurhat, against Raja Ranjit Singh Bahadur, deceased, and others, for a declaration of his title to the lands mentioned in the different suits and for mesne profits from the year 1899 till recovery of possession. It was alleged that the lands in the several suits were chowkidari chakran lands within the plaintiff 's patnidari, granted to his predecessors in interest on 14th November, 1853, by the ancestors of the defendant, that as the lands were in the possession of village watchmen on service tenures, they were excluded from assessment of land revenue and no rent was paid on them, that in the year 1899 under the provisions of sections 50 and 51 of Bengal Act VI of 1870 Government resumed the lands, terminated the service tenures and settled them with the zamindar, that in this situation the plaintiff as patnidar became entitled to their actual physi cal possession, that the zamindar wrongfully took physical possession of them and denied the right of the plaintiff and hence he was entitled to the reliefs claimed. The suits were decreed on 17th August, 1905, and 19th August, 1905, by the two courts respectively and the decisions were affirmed on appeal by the District Judge. On special appeal to the High Court, the suits were remanded for trial on the ques tion of limitation, and after remand they were dismissed by the trial court and the Court of appeal as barred by limita tion. On second appeal, it was held that the suits were within limitation and were then decreed for the second time. This decision was affirmed on appeal to His Majesty in Council. The plaintiff actually obtained possession of the lands involved in these suits in August, 1913. An applica tion was made for ascertainment of mesne profits on 785 6th November, 1918. This was resisted by the defendant and it was pleaded that the plaintiff was not entitled to inter est on mesne profits, that the zamindar was entitled to receive the profits of the disputed lands and that deduc tion should be made out of the amount of the mesne profits on account of munafa and the amount of chowkidari dues as well as cesses due to him or paid by him. Five years later, on 24th June, 1927, another set of objections was filed by the zamindar claiming deduction out of mesne profits by way of equitable set off of the payments made by him subsequent to the date of delivery possession as well as for the amount of munafa that became payable to him after that date. After a prolonged enquiry the trial court on 18th December, 1937, decreed the plaintiff 's claim for mesne profits after allow ing the zamindar the deductions claimed by him up to the date of assessment of mesne profits but disallowed the amount claimed by way of equitable set off for the subse quent period. The learned District Judge on appeal reversed this decision and allowed the defendant the amount claimed by him by way of equitable set off, subject, however, to the condition that the dues of the defendant should be deducted from the dues of the plaintiff till the defendant 's dues were wiped off. The relevant part of his judgment runs thus : "The broad fact is that they (plaintiffs) have been in possession of the lands since 1910 and have been in enjoy ment of rent from the tenants from that date and according to law they are not entitled to possess the land uncondi tionally. Now that all the facts are before the court and the time has come for final adjustment of accounts between the parties the court should try to do substantial justice between the parties. It is not sufficient answer to say that the plea of equitable set off was not raised in the beginning. The circumstances in all these cases are pecul iar and it could hardly be expected that such plea would have been taken in the very beginning. The course of liti gation in these cases has not run along 786 easy and smooth channels: on the contrary its course has been extremely tortuous and disturbed frequently by con flicting decisions. No one could have reason ably antici pated in the beginning that the litigation would be pro tracted in this extraordinary way. It is the duty of the court to take notice of the subsequent events in order to do justice between the parties . As we are dealing with the question of equitable set off, no question of time barred debts or unascertained sum can arise . The plea of equitable set off in respect of time barred debts can be set up as a shield by way of defence nor can any question of payment of court fees arise. There is, in my opinion, no substantial difference in the character of the respective parties during the entire period and it would be futile to make an attempt at distinction by oversubtle argument where there is really no difference in substance. There is considerable force in the argument advanced on the side of the appellant, namely, the appellant 's claim to the equitable set off is really in the nature of cross demand arising out of the same transaction and connected in its nature and circumstances . From whatever standpoint the matter may be looked at I am of the opinion that the claim of the appellant for equitable set off for the subsequent period by way of deduction of the chowkidari revenue and cess paid by him as well as on account of munafa should be allowed. This amount will also carry interest at 6 per cent per annum up to date. The subsequent period means the period since the date of delivery of possession up to 1927 28. " Against the judgment and decrees of the District Judge the plaintiff preferred appeals to the High Court at Calcut ta. The High Court by the judgment under appeal modified the decrees of the District Judge and disallowed the claim for equitable set off in its entirety for the subsequent period and restored the decree of the trial court. The zamindar filed applications for leave to appeal to His Majesty in Council. These applications were consolidated with similar applications filed in the second batch of suits. A certifi cate 787 was granted for leave to appeal to His Majesty in Council. By an order dated 9th June, 1947, all the appeals were admitted and it was directed that the proceedings be printed and. transmitted to England. During the pendency of the proceedings in the High Court, Raja Bhupendra Narayan Singh died and the present appellant was impleaded as his heir and representative. An application was also made in the High Court for permission to urge additional grounds not already taken. After the abolition of the jurisdiction of the Privy Council these appeals were transmitted to this Court. An application under Order XIX, rule 4, of the Supreme Court Rules was presented at the hearing of the appeals that the appellant be allowed to urge the following additional grounds in support of the appeals, viz. : (1) That the munafa (rent) should not be calculated on the basis of the principles laid down in Radhacharan vs Maharaja Ranjit Singh(1). (2) That the said munafa should have been assessed on a fair share of the profits from the land. The second batch of appeals (Nos. 75 to 92 of 1951) arises out of 18 suits instituted in the court of the Munsif of Rampurhat on 22nd December, 1909, by Ganpat Singh and Narpat Singh, predecessors in interest of respondents 1 to 3 against the predecessor in interest of the appellant, late Raja Ranjit Singh Bahadur, and also some other persons who were tenants under him, for a declaration of the plaintiffs ' title to the resumed chowkidari chakran lands and for khas possession of the same and for mesne profits. The allega tions in these suits were the same as in the first set of suits. The defence to the suits was also the same. The suits were decreed by the trial Judge on 30th September, 1910, in the following terms : "The plaintiffs ' title is declared to the lands in suit and they will get khas possession of the same by ejecting the tenant defendants; on condition of paying (1) 788 to the defendant No. 1 an additional rent, to be deter mined on the principle that the original patni rent should bear the same ratio to the patni rent now payable by the plaintiffs as the original Hustbood at the time of the creation of the patni should bear to the present increased Hustbood, or any other fair and equitable rent which may be determined at the time of assessing the mesne profits. The plaintiffs will get Wasilat from defendant No. 1 up to the date of delivery of possession of the land in suit to them. The amount will be determined in a separate enquiry." The District Judge on appeal remanded the cases for determination of the conditions and terms under which the patnidar was to hold the lands under the zamindar and directed ascertainment of profits. The plaintiffs ob tained delivery of possession of the lands in the mean while on 23rd November, 1910. Against the remand order appeals were preferred to the High Court and the High Court decreed the appeals in these terms : "We set aside the portion of the decision of the Dis trict Judge which remands the cases to the original court to determine the conditions under which the patnidar is to hold the lands under the zamindar. Rest of the remand order will stand. That portion of the Munsif 's decree, which imposes on the appellant, as a condition of obtain ing khas possession, the payment of additional rent to the zamindar will be set aside. " Against these decrees appeals were preferred to His Majesty in Council by special leave. The Privy Council set aside the decrees of the High Court and observed as follows : "Their Lordships, therefore, see no reason for inter fering with the long series of authorities commencing as far back as the year 1900, which have established the right of the zamindar to have an additional rent fixed for such lands nor can their Lordships overlook the fact that in the cases already referred before this Board no exception was taken by the patnidar to the 789 fixing of such rents as a condition of being put into pos session. " On 8th December, 1922, the plaintiffs filed applications in these suits for ascertainment of mesne profits for the years 1906 to 1910. Objections were taken on behalf of the defendant on the 17th April, 1923, and it was contended that the plaintiffs may be allowed mesne profits to the extent of the amount that would be found due after deduction of the amount of rent to which the defendant was entitled in re spect of the lands in suit according to the judgment of the munsif. On the 28th May, 1927, another application was filed by the zamindar claiming deduction by way of equitable set off of the amounts due to him for rent from 1910 onwards and on account of subsequent payment made by him towards revenue and cesses. After a prolonged enquiry the munsif ultimately on the 18th December, 1937, decreed the plaintiff 's claim for mesne profits after allowing deduc tions for the amounts claimed by the defendant up to the date of delivery of possession. He held that the appellant was not entitled to get any amount by way of equitable set off in respect of sums of money spent by him in payment of revenue and cesses or for the amount of munafa or profits for the period subsequent to the date of delivery of posses sion. The District Judge on appeal by his judgment dated the 16th December, 1938, allowed the claim of equitable set off for the period subsequent to delivery of possession and directed that "from the plaintiffs dues, the dues of the defendant are to be deducted and if after these deduc tions any sum is due to the plaintiffs they will get a decree for that sum. If it is found on calculations in some cases that the dues of the defendant exceed the dues of the plaintiffs, in such cases the prayer of the plaintiffs for mesne profits must be dismissed. " Against this decision special appeals were preferred to the High Court and by the judgment under appeal the decision of the trial court was restored. Applications were then made for leave to appeal to His Majesty in Council and 790 those were allowed and a certificate was granted for pre ferring those appeals. Because of the abolition of the jurisdiction of the Privy Council those appeals are now before us for decision. The points for decision in all these appeals are the following : 1. Whether the appellant is entitled to deduct by way of equitable set off from the amount of mesne profits the amounts due to him on account of rent, revenue and cesses for the period subsequent to the dates of delivery of pos session. Whether interest should be allowed on the amount of mesne profits found due, and if so, at what rate. Whether the rent due to the appellant from the patnidar on those funds should be calculated on the basis of annual assets of the land (as in Radhacharan vs Maharaja Ranjit Singh (1), or on a fair and equitable basis. The claim for set off for the period for which mesne profits were claimed has been allowed and is not in these appeals. As regards the amounts due to the appellant by way of rent subsequent to the date of transfer of possession, the claim is unconnected with the subjectmatter of the different suits. It seems clear that a plea in the nature of equita ble set off is not available when the cross demands do not arise out of the same transaction. Mesne profits due to the plaintiff relate to the period during which the appellant was in wrongful possession of the lands and the amounts claimed by the defendant relate tO a period when he was no longer in possession and had ceased to be a trespasser. No mesne profits are claimable for that period. The right of the appellant to recover additional rents from the plaintiff arises out of a different cause of action and independently of the claim for mesne profits. If the patnidar after having entered into possession had defaulted in the payment of the (1) (1918)27 C.L J. 532, 791 additional rents due for any period, nothing stood in the way of the appellant from recovering the. in by appropriate legal proceedings. The prolongation of the enquiry for ascertainment of the mesne profits cannot support a claim for equitable set off for the period subsequent to the delivery of possession to the plaintiff. It is obvious that no claim for equitable set off against mesne profits during the pendency of the suits could be made for the sums deduction of which is now sought, as the amounts had not then accrued due and his right to them had not yet arisen. The learned District Judge was in error in holding that the appellant 's claim for equitable set off was in the nature of a cross demand arising out of the same transaction and connected in its nature and circumstances. He failed to appreciate that the transaction which led to plaintiff 's demand resulted from the defendant 's wrongful act as a trespasser, while the transaction giving rise to the appellant 's demand arises out of the relationship of landlord and tenant and the obligations resulting therefrom. A wrongdoer who has wrongfully withheld moneys belonging to another cannot invoke any principles of equity in his favour and seek to deduct therefrom the amounts that during this period have fallen due to him. There is nothing improper or unjust in telling the wrongdoer to undo his wrong, and not to take advantage of it. Such a person cannot be helped on any principles of equity to recover amounts for the recovery of which he could have taken action in due course of law and which for some unexplained reason he failed to take and which claim may have by now become barred by limitation. It was contended that it was only after the decree of the Privy Council that the appellant 's rights to the addi tional rent was finally established and till then no legal steps could be taken to enforce this demand. The contention is without force. The appellant 's right to additional rent had been established by the decree of the trial court in execution of which possession passed from him to the patni dar. The Privy 103 792 Council only affirmed this.decision. The patnidars under the decree were entitled to possession of the lands conditional on payment of the additional rent due for the period they had been out of possession. That condition having been fulfilled (by adjustment of the appellant 's claim against the mesne profits), the decree must be held to have been satisfied, thus completely settling the cross demands. The landlord 's demand for subsequent rents has to be enforced in the ordinary way in the civil court if any default has been committed in the payment of these rents. This claim cannot for ever remain linked with the demand for mesne profits for any anterior period. The result is that the decision of the High Court on this point is maintained. On the question of future interest payable on the decretal amount, the learned District Judge observed as follows : "I may state, however, at this stage that if I were to rule out the fact that I am allowing the claim of the appel lant for equitable set off, I would have allowed interest to the plaintiffs at the uniform rate of 4 per cent. per annum throughout, i.e., from the beginning of the Washilat period up to date. As I am allowing the prayer for equitable set off, I am of opinion, however, that interest at the usual rate at 6 per cent. per annum should be granted for the whole of this period. " The High Court disallowed equitable set off but yet maintained this decision. When the claim for equitable set off is being disallowed, there is no justification for allowing future interest at the rate of more than four per cent. for such a long period, particularly in a case where the plaintiff himself has not been prompt in getting, the amount of mesne profits ascertained. The plaintiff did not even ask for an enquiry into this question for a period of about twelve years. Taking into consideration all the circumstances of the case we think that future interest should not have been allowed to the plaintiff in the several suits at a higher rate than four per cent. on the amount decreed in the various Suits by way of mesne profits. 793 The appellant 's last contention that the munafa (rent) should not be calculated on the principle laid down in Radhacharan vs Maharaja Ranjit Singh (1) but should have been assessed on a fair share of the profits of the land has no substance because the claim was not made in the grounds of appeal to the Privy Council and was not even mentioned in the additional grounds of appeal. It was for the first time made before us at the hearing and we see no valid grounds for entertaining it at this late stage. Moreover, it seems to us that the claim has no substance in the absence of any evidence about the proportion the original patni rent bore to the revenue and cesses. For the reasons given above all these appeals fail except to the extent that the decree of the High Court is modified in that the amounts decreed by way of mesne profits in the various suits will bear interest at the rate of four per cent. instead of six per cent. The parties will bear their own costs in all these appeals. Appeals dismissed. Agent for the appellant in Civil Appeals No. 62 to 74 and 75 to 92: P.K. Bose. Agent for respondent No. 1 in Civil Appeals Nos. 68 to 74: Ganpat Rai. Agent for the respondents Nos. 1 to 3 in Civil Appeals Nos. 75 to 92: Sukumar Ghose.

Where a patnidar has obtained a decree against his zemindar for possession of resumed chaukidari chakran lands with mesne profits from the date on which the zemindar wrongfully took 783 possession of them, the zemindar is not entitled to deduct by way of equitable set off from the amount of mesne profits payable by him under the decree, the amounts due to him on account of rent, revenue and cesses for a period subsequent to the date of delivery of possession of the lands inasmuch as the two cross demands do not arise out of the same trans action. The transaction which led to the plaintiff 's demand for mesne profits resulted from the defendant 's wrongful act as trespasser, while the transaction which gave rise to the zemindar 's demand arose out of the relationship of landlord and tenant and the obligations resulting therefrom.

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vil Appeal Nos. 2780 81 of 1982 From the Judgment and Order dated 11.6. 1982 of the Karnataka High Court in Writ Petition No.3386 and 3387 of 1981 K.S. Cooper, Dr. Y.S. Chitale, Mrs. P.S. Shroff, S.S. Shroff and Mrs. Kiran Chaudhary for the Appellants. M. Veerappa, A.K. Sharma, K.N. Singh, S.S. JavaIi, G.P. Shivaprakash and B.P. Singh for the Respondents. The Judgment of the Court was delivered by CHINNAPPA REDDY, J. Bangalore was a beautiful city once. It was a city with magic and charm, with elegant avenues, gorgeous flowers, lovely gardens and plentiful spaces. Not now. That was before the invasion of concrete and steel, of soot and smoke, of high rise and the fast buck. Gone are the flowers, gone are the trees, gone are the avenues. gone are the spaces. We are now greeted with tail puffing 1062 chimneys and monstrous high rise buildings, both designed to hurt the eye, the environment and the man. But they are thought by many as symbols of progress and modernity. They have come to stay. Perhaps they are necessary. Nostalgic sentiments, we suppose, must yield to modern societal re quirements. Smoking Chimneys produce much needed goods. High rise buildings save much scarce space. They have a place in the scheme of things. But where, how, to what extent, at what cost, are the questions raised by some aggrieved citizens of Bangalore. They want congestion to be prevented, population density to be controlled, lung spaces to be provided where people can breath, existing recreation al facilities to be preserved and improved, pollution and health hazards to be removed, civic and social amenities to be provided etc. All these require a balanced use of avail able land. It is with that object that the Mysore Town and Country Planning Act was enacted in 1961 and it is with the interpretation of some of the provisions of that Act that we are concerned in these appeals. The problem and the pain have been well brought out by the Chairman of the Bangalore Urban Arts Commission (4th respondent before the High Court) in the Chairman 's response to an editorial in a local newspaper. It is extracted in the Additional Statement filed in the High Court by the Writ Petitioners. He says, "when we speak of saving Bangalore 's skyline and its cherished character, we are apt to be misun derstood even by some well meaning citizens. Vested inter ests and busybodies with an easy conscience would in any case rubber wall any consideration of argument because the present time, with the skyrocketing property value, is a great opportunity for them to "make hay". They would rather sell the city than dwell on its future. We are not speaking only of the central areas of the city even when we regard them, understandably enough as more precious than the rest of the city. Nor are we trying to guard the City 's supposed "colonial solitude" which, we know, vanished many decades ago. We are not afflicted with irrational nostalgia and have no fetish about bungalows and court yards. We are aware of the dynamics of a modern city. All that we want and it was ably summed up in your editori al is that we must prevent any more ugliness and haphazard ness, of which we have had more than what Bangalore can take if it is to stay as the City Beautiful, with its planned spaciousness and (still) largely unclustered skyline. We also want, without any further delay, a vigilant, clearly speltout and scrupulously honest system to ensure an orderly growth of the city, in "Keeping with the capacity of its services, like water supply, drainage and roads". 1063 I entirely agree that for new areas we must provide for more density of population if we are to get adequate mileage from per capital expenditure, and if we are to release sufficient lung spaces for recreational and community activ ities. In fact, we have long back suggested to City Planners to plan for self contained and self sufficient clusters of multiple storey blocks, with their own plazas, shopping and recreational centers, in carefully selected locations and in keeping with the available services. Again, there is no doubt that coverage per plot must be systematically reduced through imaginatively formulated bye laws, if we are to continue the garden city character of the City 's new areas. It is utterly mystifying however, that such obviously valid thoughts and suggestions should end with the plea for "concentrated growth" presumely in the central area of the city and preferably with high rise buildings. Such growth which is bound to obliterate what we have still left of this beautiful city and put further strains on its traffic, water supply and drainage, is cer tainly not going to help the proletarian office goer or house seeker. It will serve only the big time builder, the high spending rich and last but not least the fast buck chasing wheeler dealers and busybodies mentioned above. "Now that the State Government has announced a clear policy in this behalf, there is no reason why we should not expect the best. This Commission has made its own contribu tion to the formulation of a new set of building bye laws which aim at the much needed regulation on fully modern lines of this City 's future growth, and which leave minimum scope for corruption. We hope that these will be adopted soon. We look forward to a new approach and a new era free from the stench of corruption. We hope that these will be adopted soon. We look forward to a new approach and a new era free from the strench of corruption, innuendoes and loose talk of "motives", and characterised by future think ing. After all, we have the City Beautiful because of the future thinking and hard work of the planners and adminis trators." Raj Mahal Vilas Extension is a sparsely developed area of the city of Bangalore which the Bangalore Improvement Trust Board desired to develop under the provisions of the city of Bangalore Improvement Act, 1945. Land was acquired and plots were allotted to several people. A lay out was prepared and conditions were imposed for construction of houses on the sites. The present appellants as well as the petitioners before the High Court were all of them allottees 1064 from the Improvement Trust Board. One of the conditions of allotment was that the sites were not to be sub divided and not more than one dwelling house was to be constructed on each of the sites. Apparently multistoreyed, high rise buildings were not within the contemplation of either the Improvement Trust Borad or the allottees at the time of allotment. However, the petitioners before the High Court were dismayed to find such high rise buildings coming up in the Raj Mahal Vilas Extension. Apprehending that there was going to be an invasion of the privacy of the residents of the locality, a disturbance of the peace and tranquility of the residential area, an interference with basic civic amenities consequent on haphazard rise of high rise build ings, and exposing of the residents to all manners of health hazards and interference with their way of living, a number of residents of the locality submitted a memorandum to the Governor and the Chief Minister of the State to take appro priate action to prevent the construction of high rise buildings in a residential area such as the Raj Mahal Vilas Extension. There was no response from the authorities. In desperation, some of the persons who submitted the memoran dum resorted to 'Public Interest Litigation ' and filed the writ petitions out of which the present appeals arise. Their principal complaint was that the Outline Development Plan for Bangalore which had been published in the prescribed manner had been ignored by the authorities in granting permission to the appellants to construct the high rise buildings. The first of the grounds mentioned in the writ petitions was that permits had been granted to construct eight floor residential buildings going to a height of 80 feet whereas under the regulations the maximum permissible height of a building was only 55 feet. The inconveniences, discomforts and the hazards to which such a high rise build ing in a residential locality would expose the other resi dents of the locality were explained in the writ petition and writs were sought to quash the permits granted for construction and to restrain the present appellants from constructing the eight floor buildings and to direct them to demolish the structures already put up. There was also a prayer to require the Bangalore Urban Arts Commission to recommend to the State of Karnataka against the construction of high rise buildings in any of the existing extensions of Bangalore. Writ Petition No. 3386 of 1981 out of which arises Civil Appeal No. 2780 of 1982 and Writ Petition No. 3387 of 1981 out of which arises Civil Appeal No. 2781 of 1982 were filed on 25.2.81. In Writ Petition No. 3386 of 1981 an interim order was initially refused by a learned Single Judge but on appeal a Division Bench of the High Court granted an interim order restraining the appellants in Civil Appeal No. 2780 of 1982 from raising further construc tion. However, in the special leave petition filed by 1065 the appellants the order of the learned Single Judge was restored subject to an undertaking given by the appellants that in the event of the original writ petition being al lowed and the construction being required to be pulled down, the appellants will not raise any objection and will not plead the construction during the pendency of the writ petition as a defence to the pulling down of the construc tion. The order of the Supreme Court was made on 2.6.81. In W.P. No. 3387 of 1981 the High Court made an interim order on 24.7.81 permitting the appellants in Civil Appeal No. 2781 of 1982 to proceed with the construction subject to the appellants giving an undertaking similar to the undertaking given by the appellants in the other connected appeal. We find from the judgment of the High Court that in W.P. No. 3386 of 1981 only excavation work had been done by the time of the filing of the petition and that the work was complet ed only after the undertaking was given to the Supreme Court. In the other case the ground floor had been con structed and pillars had been put up for the next floor when the writ petition was filed. The work was completed after the undertaking was given to the Division Bench of the High Court. We may add that again in this Court when the appel lants sought interim orders to enable them to complete the construction during the pendency of the present appeals they gave an undertaking that they would complete the construc tion work of the 4th, 5th, 6th, 7th, and 8th floors at their own risk and cost and that they will raise no objection whatever to this Court passing an order for demolition of the said floors if the Court was ultimately inclined to pass such an order and that they would claim no compensation for demolition, if ordered. The present appellants contested the writ petitions. The writ petitions appeared to have been argued in the first instance before a learned single Judge who after hearing the petitions for some considerable time referred them for hearing by a Division Bench. The Division Bench commenced hearing the writ petitions on 16.3.82 and on 22.3.82 a further contention was raised by the appellants that the Outline Development Plan and the Regulations were never published, consequently they have never become effective and, therefore, there was no need for any compliance with the requirements of the plan and the regulations. As it turns out this is the only contention which was finally argued before the High Court and before us. The High Court overruled the contention and declared the licences granted for construction illegal and directed the Commissioner, Corporation of the City of Bangalore to modify the licences so as to bring them in conformity with the Outline Develop ment Plan and the Zonal Regulations appended thereto promul gated under Section 13(4) of the Karnataka 1066 Town and Country Planning Act and take all consequential action in accordance with law. Shri Cooper, learned counsel for the appellants urged that publication of the Outline Development Plan and the Regulations in the prescribed manner, that is, in the Offi cial Gazette was mandatory under Section 13(4) and that failure to so publish the Outline Development Plan and the Regulations rendered them ineffective. The licences already granted to the appellants could not be cancelled or directed to be modified so as to be in accord with the Outline Devel opment Plan and the Regulations. It was further urged that the Regulations were distinct from the Outline Development Plan and that in the case of the Regulations, there was no attempt whatever at publication. It was submitted that the High Court was in error in holding that Section 76J cured whatever defect there was in regard to the publication of the Plan and the Regulations. It was said that the High Court was also in error in holding that the Outline Develop ment Plan and the Regulations became effective as soon as they were approved by the Government under Section 13(3) of the Act irrespective of the date of publication under Sec tion 13(4). On the other hand, it was submitted by Shri Javali, learned counsel for the writ petitioners in the High Court that there was sufficient publication of the Plan and the Regulations, that the Plan and the Regulations were always kept available for inspection at the office of the concerned authorities and that it was not the case of the appellants originally that there was no publication and that they had no knowledge of the Plan and the Regulations. It was only after thought, put forward in the course of the arguments at the final stage of the hearing of the writ petitions. It was submitted that such defect as there was in the publication of the Plan and the Regulations was effec tively cured by Section 76J and the passage of time. It was also pointed out that the Regulations were an integral part of the Outline Development Plan. In order to appreciate the rival contentions of the parties, it is necessary to refer to the relevant statutory provisions. In 1961 the Bangalore Metropolitan Planning Board was formed. The Board prepared an Outline Development Plan (For short, O.D.P.). In February 1963 the Mysore Town and Country Planning Act, 1961 came into force with effect from January 15, 1965. Section 81 A(a) of the Act provides that the Outline Development Plan for the Bangalore Metropolitan Area prepared by the Bangalore Metropolitan Planning Board shall be deemed to be the Outline Develop 1067 ment Plan of the Planning Area comprising the City of Banga lore, prepared under the Act, by the Planning Authority of the Area. Section 81 (a) further provides that the said plan along with the particulars specified in clauses (ii), (iii), (iv) and (v) of Section 12(2) shall be published and submit ted to the State Government for provisional approval. Sec tion 81 A(b) provides that on receipt of the plan and particulars, the State Government shall after making such modifications as it deems fit, return the plan and the particulars to the Planning Authority, which shall thereupon take further action in accordance with the provisions of Section 13. Section 2(3) defines 'land use ' to mean the major use to which a plot of land is being used on any specified date. Section 2(4) defines 'notification ' to mean a notification published in the Official Gazette. 'Planning Area ' is de fined by Section 2(6) to mean the area declared to be a local planning area under the Act in the case of the local planning area comprising the city of Bangalore. 'Planning Authority ' is defined to mean the Planning Authority consti tuted under the Act. Section 2(9) defines 'prescribed ' to mean prescribed by rules made under the Act. Section 2(11) defines 'regulations ' to mean the Zonal Regulations govern ing land use made under the Act. Chapter III of the Act deals with Outline Development Plan (O.D.P.). Section 9(1) empowers the Planning Authority to prepare and publish in the prescribed manner an Outline Development Plan for the area within its jurisdiction and submit it to the State Government for provisional approval. Section 9(4) prescribes that a copy of the O.D.P. sent to the State Government under sub section(1) shall be kept open for inspection by the public at the head office of the Planning Authority before carrying out a survey for the purpose of preparing an O.D.P. for such an area. A Planning Authority is required by Section 10 to make a declaration of its intention to prepare such plan and to despatch a copy of the same to the State Government for publication in the Official Gazette and is also required to publish in the prescribed manner an invitation to the public to make sug gestions. All suggestions made in response to the invitation within the prescribed period are required to be considered by the Planning Authority before submitting the plan to the State Government. Section 12 deals with the contents of Outline Development Plan and we think it necessary to ex tract here the whole of the section. Section 13 deals with approval of the Outline Development Plan and we think that it is necessary to extract Section 13 also. Sections 12 and 13 are as follows: 1068 "section 12. Contents of Outline Development Plan (1) An Outline Development Plan shall generally indicate the manner in which the development and improvement of the entire planning area within the jurisdiction of the Planning Authority are to be carried out and regulated. In particular it shall include, (a) a general land use plan and zoning of land use for residential, commercial, indus trial, agricultural, recreational, educational and other public purposes; (b) proposals for roads and highways; (c) proposals for the reservation of land for the purposes of the Union, any State, any local authority or any other authority estab lished by law in India; (d) proposals for declaring certain areas as areas of special control, development in such areas being subject to such regulations as may be made in regard to building line, height of buildings, floor area ratio, architectural features and such other particulars as may be prescribed; (e) such other proposals for public or other purposes as may from time to time be approved by the Planning Authority or directed by the State Government in this behalf. Explanation 'building line ' means the line up to which the plinth of a building adjoining a street may lawfully extend and includes the lines prescribed, if any, in any scheme. (2) The following particulars shall be published and sent to the State Government through the Director along with the Outline Development Plan, namely: (i) a report of the surveys carried out by the Planning Authority before the preparation of such plan; (ii) a report explaining the provisions of such Plan; (iii) regulations in respect of each land use zone to enforce 1069 the provisions of such plan and explaining the manner in which necessary permission for developing any land can be obtained from the Planning Authority; (iv) a report of the stages by which it is proposed to meet the obligations imposed on the Planning Authority by such a plan; (v) an approximate estimate of the cost in volved in the acquisition of lands reserved for public purposes." "S.13. Approval of the Outline Development Plan (1) On receipt of the Outline Develop ment Plan with the particulars referred to in Section 12 from the Planning Authority under sub section (1) of Section 9, or after such plan and particulars are prepared and pub lished under subsection (2) of Section 9 the State Government after making such modifica tions as it deems fit or as may be advised by the Director, shall return through the Direc tor, the plan and the particulars to the Planning Authority, which shall thereupon pub lish, by notification, the plan and the par ticulars inviting public comments within one month of such publication. (2) If within one month of the publication under subsection (1) any member of the public communicates in writing to the Planning Au thority any comments on the plan and the regulations, the Planning Authority shall consider such comments and resubmit the plan and the regulations to the State Government, through the Director with recommendations for such modifications in the plan and regulations as it considers necessary in the light of the public comments made on the plan and regula tions. (3) The State Government, after receiving the plan and the regulations and the recommen dation for modifications from the Planning Authority, shall in consultation with the Director, give its final approval to the plan and the regulations with such modifications as the Director may advice in the light of the comments and the recommendations of the Plan ning Authority or otherwise. (4) The Planning Authority, shall then publish in the 1070 prescribed manner the Outline Development Plan and the Regulations as approved by the Govern ment. The plan and the particulars shall be permanently displayed in the offices of the Director and the Planning Authority and a copy shall be kept available for inspection of the public at the office of the Planning Authori ty. " Section 14 speaks of 'Enforcement of the Outline Devel opment Plan and the Regulations '. Section 14(1) prescribes that on and from the date on which a declaration of inten tion to prepare an outline is published under sub section (1) of Section 10, every land use, every change in land use and every development in the area shall conform to the provisions of the Act, the Outline Development Plan and the Regulations as finally approved by the State Government under subsection (3) of Section 13. The only other provision of the Act to which reference is necessary is, what we may call the, "Ganga" clause*, Section 76J which provides for 'Validation of acts and proceedings '. It is as follows: "76 J. Validation of acts and proceedings No act done or proceeding taken under this Act shall be questioned on the ground merely of, (a) the existence of any vacancy in, or any defect in the constitution of the Board or any Planning Authority; (b) any person having ceased to be a member; (c) any person associated with the Board or any planning authority under section 4F having voted in contravention of the said section; or (d) the failure to serve a notice on any person, where no substantial injustice has resulted from such failure; or (e) any omission, defect or irregularity not affecting the merits of the case. " We may also refer here to the rules relating to publica tion. Rule 32 provides for "publication of Outline Develop ment Plan under sub 1 ' According to Hindu tradition the waters of the Ganga purify, cleans the sins and remedy all insufficiencies. 1071 section (1) and sub section (2) of Section 9". It prescribes that the publication shall be made by making a copy of the Plan available for inspection and displaying a notice in Form II, (a) at the office of the Planning Authority and (b) at such other places as may be specified by the Planning Authority. The Planning Authority is also required to pub lish a notice in Form II in the Official Gazette and in one or more newspapers. The publication under Section 9(2) is also required to be made in the same manner except that reference to Planning Authority is to be construed as a reference to the Director. Rule 33 provides for 'Publication of Outline Development Plan and Regulations under Section 13(4) ' and stipulates that the Outline Development Plan and the Regulations as approved by the State Government under subsection (3) of Section 13 shall be published in the Official Gazette. Form 11 referred to in Rule 32 is as follows: FORM NO. II (Rule 32) NOTICE OF PUBLICATION OF OUTLINE DEVELOPMENT PLAN Notice is hereby given that an Outline Development Plan of . . . area has been prepared under the Mysore Town and Country Planning Act, 1961 (Mysore Act 11 of 1963) and a copy thereof is available for inspection at the office of the Planning Authority during office hours. If there be any objection or suggestion in respect of the Outline Development Plan, it should be lodged on or before the . . Every such objection or suggestion should either be presented in the office of the Planning Authority or sent by registered post to the Planning Authority. " We said earlier that the Outline Development Plan for the Bangalore Metropolitan Area was prepared by the Banga lore Metropolitan Planning Board and that under Section 81J of the Mysore Town and Country Planning Act, it was deemed to be the Outline Development Plan of the planning area comprising the city of Bangalore, prepared under the Act, by the Planning Authority of such 1072 area. A 'Notice of publication of Outline Development Plan ' was published in the Mysore Gazette on 21.12.1967 in Form II. It was as follows: "OFFICE OF THE PLANNING AUTHORITY BANGALORE CITY, PLANNING AREA, BAN GALORE 9 Notice of Publication of Outline Development Plan Notice is hereby given that an Outline Development Plan of Bagalore City Planning Area has been prepared under the Mysore Town and Country Planning Act, 1961 (Mysore Act 11 of 1963) and a copy thereof is available for inspection at the office of the Planning Authority in Seshadri Road, Bangalore City during office hours. If there be any objection or sugges tion in respect of the Outline Development Plan, it should be lodged on or before the 15th day of February, 1968. Every such objection or suggestion should either be presented in the office of the Planning Authority or sent by registered post to the Planning Authority. K. Balasubramanyam CHAIRMAN" After the State Government provisionally approved the Plan 'Notice of publication of Outline Development Plan ' was published in the Mysore Gazette dated 10.10.68 again in Form II. The Notification was in the following terms: "OFFICE OF THE CHAIRMAN, PLANNING AUTHORITY BANGALORE CITY PLANNING AREA, BANGALORE 9 Notice of Publication of Outline Development Plan. Notice is hereby given that an Out line Development Plan of Bangalore City Plan ning Area has been prepared under the Mysore Town and Country Planning Act, 1961 (Mysore Act 11 of 1963). The said Plan has been provi sion 1073 ally approved by the Government of Mysore as per Section 13(1) of the above Act. A copy of the above approved plan and the report are available for inspection at the office of the Planning Authority in Seshadri Road, Bangalore City during office hours. If there be any objection or sugges tion in respect of the Outline Development Plan it should be lodged within 30 days from the date of publication of this notice in the Gazette. Every such objection or suggestion should either be presented in the office of the Planning Authority or sent by registered post to the Planning Authority. CHAIRMAN PLAN NING AUTHORITY" It appears that in response to the invitation to file objec tions, as many as 600 representations and objections were received from individuals, institutions, associations, Chambers of Commerce etc. The Outline Development Plan was finally approved by the Government and a notification to that effect was published in the Mysore Gazette dated 13.7. 1972 in the following terms: "OFFICE OF THE CHAIRMAN, PLANNING AUTHORITY BANGALORE CITY PLANNING AREA, BANGALORE 9. Dated, 27th June 1972. Notice of Publication of Outline Development Plan. In pursuance of Rule 33 of the Mysore Planning Authority Rules 1965 Notice is hereby given that an Outline Development Plan of Bangalore City Planning Area has been prepared under the Mysore Town and Country Planning Act, 1961 (Mysore Act 11 of 1963). The said plan has been finally approved by the Govern ment of Mysore as per Section 13(3) of the above Act. A copy of the above approved plan and the report are available for inspection at the office of the Planning Authority in Sesha dri Road, Bangalore City, during office hours. 1074 M.S. Ramachandra Chairman Planning Authority. " It is seen that 'at every stage the public were informed by notices published in the Official Gazette that the Outline Development Plan was available for inspection at the office of the Planning Authority, though it is not disputed that the Plan and the Regulations themselves were never published as such in the Gazette. The question for consideration is whether the intimation to the public through the Official Gazette that the Outline Development Plan was available for inspection at the office of the Planning Authority is a sufficient compliance with the requirement of Section 13(4) regulating the publication of the approved Plan and Regula tions? There can be no doubt about the proposition that where a law, whether Parliamentary or subordinate, demands compli ance, those that are governed must be notified directly and reliably of the law and all changes and additions made to it by various processes. Whether law is viewed from the stand point of the 'conscientious good man ' seeking to abide by the law or from the standpoint of Justice Holmes 's 'Uncon scientious bad man ' seeking to avoid the law, law must be known, that is to say, it must be so made that it can be known. We know that delegated or subordinate legislation is all pervasive and that there is hardly any field of activity where governance by delegated or subordinate legislative powers is not as important if not more important, than governance by Parliamentary legislation. But unlike Parlia mentary Legislation which is publicly made, delegated or subordinate legislation is often made, unobtrusively in the chambers of a Minister, a Secretary to the Government or other official dignitary. It is, therefore, necessary that subordinate legislation, in order to take effect, must be published or promulgated in some suitable manner, whether such publication or promulgation is prescribed by the parent statute or not. It will then take effect from the date of such publication or promulgation. Where the parent statute prescribes the mode of publication or promulgation that mode must be followed. Where the parent statute is silent, but the subordinate legislation itself prescribes the manner of publication, such a mode of publication may be sufficient, if reasonable. If the subordinate legislation does not prescribe the mode of publication or if the subordinate legislation prescribes a plainly unreasonable mode of publi cation, it will take effect only when it is published through the customarily recognised official channel, namely, the Official Gazette or some other reasonable mode of publi cation. There may be subordinate legislation which is con cerned with a 1075 few individuals or is confined to small local areas. In such cases publication or promulgation by other means may be sufficient. * In the present case Section 13(4) has prescribed the mode of publication of the Outline Development Plan and the Regulations. It requires the Outline Development Plan and the Regulations to be published in the prescribed manner and the Plan and particulars to be permanently displayed in the offices of the Director and the Planning Authority and a copy to be kept available for the inspection of the public at the office of the Planning Authority. The particulars referred to, we presume, are the particulars mentioned in Section 12(2) of the Act consisting of various reports, including the Regulations. 'The prescribed manner ' is what is prescribed by Rule 33, that is, publication in the Offi cial Gazette. If we now turn to Section 9(1) and 9(2), we find that there too the the Outline Development Plan is required to be published in 'the prescribed manner '. The prescribed manner for the purposes of sub sections (1) and (2) of Section 9 is that prescribed by Rule 32. Rule 32 we have seen prescribes making a copy of the Plan available for inspection, publishing a notice in Form No. II in the Offi cial Gazette and in one or more newspapers and displaying a notice in Form No. II at the office of Planning Authority and at other specified places. It is true that Rule 33 speaks of publication of approved Outline Development Plan and Regulations in the Official Gazette, suggestive of a requirement that the Outline Development Plan and Regula tions should bodily be incorporated in the Official Gazette. But if the entire scheme of the Act and the rules is consid ered as an integral whole it becomes obvious that what Section 13(4) contemplates besides permanently displaying the plan and the particulars in the offices of Director and Planning Authority and keeping available a copy for the inspection of the public at the office of Planning Authority is a public notice to the general public that the Plan and Regulations are permanently displayed and are available for inspection by the public. Such public notice is required to be given by a publication in the Official Gazette, This is how it was understood by the authorities and everyone else concerned and this is how it was done in the present case. This appears to be a reasonable and a rational interpreta tion on Section 13(4) and Rule 33 in the setting and the scheme. We are of the view that there was compliance with the requirements of Section 13(4) and Rule 33. We have earlier mentioned that Section 13(1) requires the provision al Outline Development Plan * See Narayana Reddy, vs State of Andhra Pradesh = 1969 (1) Andhra Weekly Reporter 77. 1076 and particulars to be published by notification in the Official Gazette, with a view to invite comments from the public. What was published in the present case under Section 13(1) was also a notice in Form No. II and not the whole of the Plan and particulars. Such publication evoked considera ble public response. As many as 600 representations from individuals and institutions were received. That is why we said that everyone concerned, that is, the Government, the Director, the Planning Authority and the public, individual and institution alike, thought that publication of a notice in the Gazette inviting the attention of the public to the display and the availability for inspection of the Plan and particulars was all that was contemplated by the provisions providing for publication. We do not think that there is any reason or justification for us to adopt an interpretation which departs from common understanding of the Act and the Rules. Shri Cooper invited our attention to Shalagram Jhajharia vs National Co. Ltd. & Ors., and Firestone Tyre & Rubber Co. vs Synthetics & Chemicals Ltd. & Ors., [1971] 41 Company cases 377 to urge that offer of inspection cannot be a substitute for publication. We do not think that these two cases are of assistance to Shri Cooper. What was laid down in those cases was the mandatory require ment of a full and frank disclosure of the relevant facts, in the explanatory note attached to the notice convening a general meeting of the company cannot be circumvented by an offer of inspection. Another case to which Shri Cooper drew our attention was Municipal Board, Pushkar vs State Trans port Authority, Rajasthan & Ors., [1963] Suppl. 2 S.C.R. 373. In that case the question arose as to what was to be treated as the date of the order of the Regional Transport Authority. Was it the date of the resolution of the Regional Transport Authority or was it the date on which the resolu tion was brought into effect by publication of the notifica tion? The answer was that it was the date of the publication of the notification. In Joint Chief Controller of Imports & Exports, Madras vs M/s. Aminchand Mutha etc. ; , another case on which Shri Cooper relied, the Court held that there was no order prohibiting the import of fountain pens, since in fact no such order had been pub lished and no such order was brought to the notice of the Court. All that was available was an entry 'nil ' against fountain pens in the declaration of policy as to import. We are unable to see how these two cases can be of any help to Shri Cooper. Shri Cooper also invited our attention to cases drawing a distinction between mandatory and directory statu tory requirements but those cases again are of no avail to him in the view that we have taken. We also desire to state that the effect of the non perfor 1077 mance of a duty imposed by a statute in the manner pre scribed by the statute is not discovered by a simple answer to the question whether the statute is mandatory or directo ry. These are not simple chemical reactions. The question whether a statutory requirement is mandatory or directory cannot itself be answered easily as was pointed out more than a century ago in Liverpool Borough vs Turner, ; Many considerations must prevail and the object and the context are the most important. The High Court was of the view that such defect as there was in regard to publication of the Plan was cured by Sec tion 76J, ' the Omnibus Curative clause to which we earlier made a reference as the 'Ganga ' clause. Provisions similar to s.76J are found in several modern Acts and their object is to put beyond challenge defects of constitution of statu tory bodies and defects of procedure which have not led to any substantial prejudice. We are inclined to agree with the High Court that a defective publication which has otherwise served its purpose is not sufficient to render illegal what is published and that such defect is cured by Section 76J. The High Court relied on the two decisions of this Court Bangalore Woollon, Cotton & Silk Mills Co. Ltd. Bangalore vs Corporation of the City of Bangalore and Municipal Board, Sitapur vs Prayag Narain Saigal & Firm Moosaram Bhagwandas, ; In the first case objection was raised to the imposition of octroi duty on the ground that there was failure to notify the final resolution of the imposition of the tax in the Government Gazette as required by Section 98(2) of the City of Bangalore Municipal Corporation Act. A Constitution Bench of the Court held that the failure to publish the final resolution in the Official Gazette was cured by S.38(1)(b) of the Act which provided that no act done or proceeding taken under the Act shall be questioned merely on the ground of any defect or irregulari ty in such act or proceeding, not affecting the merits of the case. The Court said that the resolution had been pub lished in the newspapers and was communicated to those affected and failure to publish the resolution did not affect the merits of its imposition and failure to notify the resolution in the Gazette was not fatal to the legality of the imposition. In the second case it was held that the non publication of a special resolution imposing a tax was a mere irregularity, since the inhabitants had no fight to object to special resolutions and had otherwise clear notice of the imposition of the tax. It is true that both these cases relate to non publication of a resolution regarding imposition of a tax where the imposition of a tax was other wise well known to the public. In the present case the situation may not be the same but there certainly was an effort to bring the Plan 1078 and regulations to the notice of the public by giving notice of the Plan in the Official Gazette. Non publication of the Plan in the Official Gazette was therefore a curable defect capable of being cured by Section 76J. It is here that the failure of the appellants to plead want of publication or want to knowledge in the first instance assumes importance. In the answer to the Writ Petitions, the appellants took up the substantial plea that they had complied with the re quirements of the Outline Development Plan and the Regula tions but not that they had no knowledge of any such re quirement. It can safely be said that the defect or irregu larity did not affect the merits of the case. Finally, one last submission of Shri Cooper requires to be examined. Shri Cooper submitted that Section 13(1) used the words "the Plan and the particulars", Section 13(2) used the Words "the Plan and the Regulations," Section 13(3) used the words "the Plan and the Regulations" and Section 13(4) used the words, "the Outline Development Plan and the Regu lations" as well as the words, "the Plan and the Regula tions". This, according to Shri Cooper, signified that the particulars and the Regulations are not to be treated as part of the Plan but as creations distinct from the Plan. We do not think that we are entitled to split the unity and identity of the plan as suggested by the learned counsel. The Outline Development Plan and the Regulations are not distinct from each other. The regulations are born out of the Plan and the Plan thrives on the Regulations. The Plan is the basis for the Regulations and the Regulations are what make the plan effective. Without the Regulations, the plan virtually becomes a dead letter. The reference in the four clauses of Section 13, whenever the word 'Plan ' or the 'Outline Development Plan ' is used, is to the core plan, without the particulars and the Regulations and not the whole of the Outline Development Plan which must include the Regulations. What the different phraseology is meant to convey is to emphasise the different parts of the Plan which have to be forwarded to the Government, considered by the Government made available for inspection by the public, as the case may be and to the extent necessary. Merely because the words "and Regulations" are added to the word 'Plan ', the Regulations are not to be treated as not constituting part of the Plan even as when a building is sold along with the fixtures, it does not mean that the fixtures are not treated as part of the building. Shri Cooper drew the dis tinction between the Plan and the Regulations to suggest that in the notice published on 27.6.72, the Planning Au thority mentioned that the Plan was available for inspection at the office of the Planning Authority but made no refer ence to the Regulations and, therefore, it must be consid ered that the Regulations were not made 1079 available for inspection and so never published. We do not think that it is possible to reach the conclusion suggested by Shri Cooper from the absence of the reference to the Regulations in the notice. The Authorities justifiably always treated the Plan as including the Regulations and we are satisfied that what was kept for inspection was the Plan along with the Regulations. Shri Cooper argued that neither the Municipal Corpora tion nor any other civic authority appeared to be aware of the Outline Development Plan and the Regulations as was evident from the circumstance that in the years that passed since the approval of the Plan by the Government and before the writ petitions were filed, as many as 57 building li cences had admittedly been issued in contravention of the Regulations. It may be that notwithstanding the Regulations some building licences were granted in contravention of the Regulations but that only exposes the deplorable laxity of the concerned authorities and emphasises the need for great er public vigilance. The present Writ Petitions, we hope, are forerunners of such vigilance. In the result we find no merit in the appeals which are accordingly dismissed with costs. The judgment of the High Court will now be given effect by the authorities, taking note of the several undertakings given to the High Court and this Court at various stages. A.P.J. Appeals dismissed.

In 1961 the Bangalore Metropolitan Board was formed. The Board prepared an Outline Development Plan (O.D.P.). In February, 1963, the Mysore Town and Country Planning Act, 1961 came into force with effect from January 15, 1965. Section 81 A(a) of the Act provides that the Outline Devel opment Plan for the Bangalore Metropolitan Area prepared by the Bangalore Metropolitan Planning Board shall be deemed to be the Outline Development Plan of the Planning Area com prising the City of Bangalore, prepared under the Act, by the Planning Authority of the Area. Section 81 A(a) further provides 'that the said plan alongwith the particulars specified in clauses (ii), (iii), (iv) 1055 and (v) of section 12(2) shall be published and submitted to the State Government for provisional approval. Section 81 A(b) provides that on receipt of the plan and the particulars, the State Government shall after making such modifications as it deems fit, return the plan and the particulars to the Planning Authority for taking further action in accordance with the provisions of section 13. Section 13 deals with approval of the Outline Development Plan. Section 76J provides for "validation of acts and proceedings". Rule 32 of the Mysore Planning Authority Rules, 1965 provides for "publication of Outline Development Plan under sub.s.(1) and sub s.(2) of s.9. " It prescribes that the publication shall be made by making a copy of the Plan available for inspection and displaying a notice in Form II, (a) at the office of the Planning Authority and (b) at such other places as may be specified by the Planning Authority. The Planning Authority is also required to publish a notice in Form II in the Official Gazette and in one or more newspapers. The Publica tion under s.9(2) is also required to be made in the same manner. Rule 33 provides for 'Publication of Outline Devel opment Plan and Regulations under s.13(4), and stipulates that the Outline Development Plan and the Regulations as approved by the State Government under sub s.(3) ors.13 shall be published in the Official Gazette. A 'Notice of publication of Outline Development Plan ' was published in the Mysore Gazette dated 21.12.1967 in Form II. After the State Government provisionally approved the Plan, 'Notice of publication of Outline Development Plan ' was published in the Mysore Gazette dated 10.10.1968 again in Form II. In response to the invitation to file objec tions, as many as 600 representations and objections were received from individuals, institutions, associations, Chambers of Commerce etc. The Outline Development Plan was finally approved by the Government and a notification to that effect was published in the Mysore Gazette dated 13.7.72. The Bangalore Improvement Trust Board desired to develop Raj Mahal Vilas Extension under the provisions of the City of Bangalore Improvement Act, 1945. Land was acquired and plots were alloted to several people. A lay out plan was prepared and conditions were imposed for construction of houses on the sites. One of the conditions of allotment was that the sites were not to be sub divided and not more than one dwelling house was to be constructed on each of the sites. Apparently multistoreyed, high rise buildings were not within the contemplation of either the Improvement Trust Board or the allotees at the time of allotment. However, High buildings came up. A number of residents of the locali ty submitted a memorandum to the Governor and 1056 the Chief Minister to take an appropriate action to prevent construction of high rise buildings in residential area of Raj Mahal Vilas Extention. Since there was no response some persons resorted to 'Public Interest Litigation, by filing writ petitions alleging that the Outline Development Plan for Bangalore which had been published in the prescribed manner had been ignored by the authorities in granting permission to the appellants to construct the high rise buildings and that permits had been granted to construct eight floor residential buildings going to a height of 80 feet whereas under the regulations the maximum permissible height of a building was only 55 feet. Writs were sought to quash the permits granted for construction, to restrain the appellants from constructing the eight floor buildings, to direct them to demolish the structures already put up and to require the Bangalore Urban Area Commission to recommend to the State Government against the construction of highrise buildings in any of the existing extensions of Banglore. The High Court allowed the petitions and declared the licences granted for constructions illegal and directed the Commissioner, Corporation of the City of Bangalore to modify the licences os as to bring them in confirmity with the Outline Development Plan and the Zonal Regulations appended thereto promulgated under s.13(4) of the Karnataka Town and Country Planning Act and take all consequential actions in accordance with law. In the appeal to this Court, on behalf of the appellants it was contended: (1) that publication of the Outline Devel opment Plan and the Regulations in the prescribed manner, that is, in the Official Gazette was mandatory under section i3(4) and that failure to so publish the Outline Development Plan and the Regulations rendered them ineffective. The licences already granted to the appellants could not be cancelled or directed to be modified so as to be in accord with the Outline Development Plan and the Regulations; (2) that the Regulations were distinct from the Outline Develop ment Plan and that in the case of the Regulations, there was no attempt whatever at publication; (3) that the High Court was in error in holding that s.76 J cured whatever defect there was in regard to the publication of the Plan and the Regulations and that the Outline Development Plan and the Regulations became effective as soon as they were approved by the Government under section 13(3) of the Act irrespective of the date of publication under s.13(4); (4) that offer of inspection cannot be a substitute for publication; (5) that section 13(1) used the words "the Plan and the particulars", section 13(2) used the words "the Plan and the the Regulations". s.13(3) used the words "the Plan and the Regulations" and s.13(4) used the words "the Out 1057 line Development Plan and the Regulations" as well as the words "the Plan and the Regulations" and this signified that the particulars and the Regulations are not to be treated as part of the plan but as creations distinct from the Plan. In the notice published on 27.6.1972, the Planning Authority mentioned that the Plan was available for inspection at the office of the planning authority but made no reference to the Regulations and, therefore, it must be considered that the Regulations were not made available for inspection and so never published; and (6) that neither the Municipal Corporation nor any other Civic Authority appeared to be aware of the Outline Development Plan and the Regulations as was evident from the circumstances that in the years that passed since the approval of the Plan by the Government and before the writ petitions were filed, as many as 57 build ings licences had admittedly been issued in contravention of the Regulations. On behalf of the respondents it was contended: (1) that there was sufficient publication of the Plan and the Regula tions, that the Plan and Regulations were always kept avail able for inspection at the office of the concerned authori ties and that it was not the case of the appellants origi nally that there was no publication and that they had no knowledge of the Plan and the Regulations: (2) that the defect in the publication of the Plan and the Regulations was effectively cured by s.76J and the passage of time; and (3) that the Regulations were integral part of the Outline Development Plan. Dismissing the Appeal, HELD 1. There was compliance with the requirements of section 13(4) of the Mysore Town and Country Planning Act, 1961 and Rule 33 of the Mysore Planning Authority Rules, 1965. [1075G] 2. At every stage the public were informed by notices published in the Official Gazette that the Outline Develop ment Plan was available for inspection at the office of the Planning Authority. [1078H] 3. The Authorities justifiably always treated the Plan as including the Regulations and what was kept for inspec tion was the Plan alongwith the Regulations. [1079A B] 4.(i) Where a law, whether Parliamentary or subordinate, demands compliance, those that are governed must be notified directly and reliably of the law and all changes and addi tions made to it by various processes. Whether law is viewed from the standpoint of the 1058 'conscientious good man ' seeking to abide by law or from the standpoint of Justice Holmes 's 'unconscentious bad man ' seeking to avoid the law, law must be known, that is to say, it must be so made that it can be known. [1074C E] 4.(ii) Delegated or subordinate Legislation is all pervasive and there is hardly any field of activity where governance by delegated or subordinate legislative powers is not as important if not more important, than governance by Parliamentary legislation. But unlike Parliamentary Legisla tion which is publicly made, delegated or subordinate Legis lation, is often made unobtrusively in the chambers of a Minister, a Secretary to the Government or other official dignitary. It is, therefore, necessary that subordinate Legislation, in order to take effect, must be published or promulgated in some suitable manner, whether such publica tion or promulgation is prescribed by the parent statute or not. [1074E F] 4.(iii) Where the parent statute prescribes the mode of publication or promulgation that mode must be followed. Where the parent statute is silent, but the subordinate Legislation itself prescribes the manner of publication such a mode of publication may be sufficient, if reasonable. If the subordinate Legislation, does not prescribe the mode of publication or if the subordinate Legislation prescribes a plainly unreasonable mode of publication it will take effect only when it is published from the customarily recognised official channel, namely, the Official Gazette or some other reasonable mode of publication. There may be subordinate Legislation which is concerned with a few individuals or is confined to small local areas. In such cases publication or promulgation by other means may be sufficient. [1074F H; 1075A] 4.(iv) In the present case, s.13(4) has prescribed the mode of publication of Outline Development Plan and the Regulations. It requires the Outline Development Plan and the Regulations to be published in the prescribed manner and the Plan and particulars to be permanently displayed in the office of the Director and the Planning Authority and a copy to be kept available for the inspection of the public at the office of the Planning Authority. The particulars referred to presumably are the particulars mentioned in section 12(2) of the Act consisting of various reports, including the Regula tions. 'The prescribed manner ' is what is prescribed by Rule 33, that is, publication in the Official Gazette. [1075A C] 4.(v) Under s.9(1) and 9(2) also the Outline Development Plan is 1059 required to be published in 'the prescribed manner '. The prescribed manner for the purposes of sub s.(1) and (2) of s.9 is that prescribed by Rule 32. Rule 32 prescribes making a copy of the Plan available for inspection, publishing a notice in Form No. II in the Official Gazette and in one or more newspapers and displaying a notice in Form No.11 at the office of the Planning Authority and at other specified places. [1075C E] 4.(vi) Rule 33 speaks of publication of approved Outline Development Plan and Regulations in the Official Gazette suggestive of a requirement that the Outline Development Plan and Regulations should bodily be incorporated in the Official Gazette. But if the entire scheme of the Act and the rule is considered as an integral whole it becomes obvious that what section 13(4) contemplates besides permanently displaying the Plan and the particulars in the offices of Director and Planning Authority and keeping available a copy for the inspection of the public at the office of Planning Authority, is a.public notice to the general public that the Plan and Regulations are permanently displayed and are available for inspection by the public. Such public notice is required to be given by a publication in the Official Gazette. This is how it was understood by the authority and everyone else concerned and this is how it was done in the present case. This appears to be a reasonable and a rational interpretation of s.13(4) and Rule 33 in the setting and the scheme. [1075D H] 4.(vii) Section 13(1) requires the provisional Outline Development Plan and particulars to be published by notifi cation in the Official Gazette with a view to invite com ments from the public. What was published in the present case under s.13(1) was also a notice in Form No. II and not the whole of the Plan and particulars. Such publication evoked considerable public response. As many as 600 repre sentations from individuals and Institutions were received. Therefore everyone concerned, i.e., the Government, the Director, the Planning Authority and the public, individual and institution alike, thought that publication of a notice in the Gazette inviting the attention of the public to the display and availability for inspection of the Plan and particulars was all that was contemplated by the provisions providing for publication. There is no reason or justifica tion to adopt an interpretation which departs from common understanding of the Act and the Rules. [1075H; 1076A C] Shalagram Jhajharia vs National Co. Ltd. & Ors., , Firestone Tyre & Rubber Co. vs Syn thetics & Chemicals Ltd. & Ors., ,Municipal Board, Pushkar vs State Transport Authority, Rajasthan & Ors., [1963] Suppl. 2 1060 S.C.R. 373 and Joint Chief Controller of Imports & Exports, Madras vs M/s. Aminchand Mutha etc. ; , , distinguished. The effect of the non performance of a duty imposed by a statute in the manner prescribed by the statute is not discovered by a simple answer to the question whether the statute is mandatory or directory. These are not simple chemical reactions. The question whether a statutory re quirement is mandatory or directory cannot itself be an swered easily. Many considerations must prevail and the object and the context are the most important. [1077A B] Liverpool Borough vs Turner, ; , referred to. 6.(i) The High Court was of the view that such defect as there was in regard to publication of the Plan was cured by s.76J, the Omnibus Curative clause, called by this Court as the "Ganga" clause. Provisions similar to s.76J are found in several modern Acts and their object is to put beyond chal lenge defects of constitution of statutory bodies and de fects of procedure which have not led to any substantial prejudice. A defective publication which has otherwise served its purpose is not sufficient to render i1legal what is published and that such defect is cured by Section 76 J. [1077B D] Bangalore Woollen, Cotton & Silk Mills Co. Ltd. Banga lore vs Corporation of the City of Bangalore, and Municipal Board, 'Sitapur vs Prayag Narain Saigal & Firms Moosaram Bhagwandas, ; , followed. 6.(ii) In the present case, there certainly was an effort to bring the Plan and Regulations to the notice of the public by giving notice of the Plan in the Official Gazette. Non publication of the Plan in the Official Gazette was, therefore, a curable defect capable of being cured by s.76J. [1077H; 1078A B] 7. Failure of the appellants to plead want of publica tion or want of knowledge assumes importance. In the answer to the Writ Petitions, the appellants took up the substan tial plea that they had complied with the requirements of the Outline Development Plan and the Regulations but not that they had no knowledge of any such requirement. It can safely be said that the defect or irregularity did not effect the merits of the case. [1078B] 8. The Outline Development Plan and the Regulations are not 1061 distinct from each other. The Regulations are born out of the Plan and the Plan thrives on the Regulations. The Plan is the basis for the Regulations and the Regulations are what make the plan effective. Without the Regulations, the Plan virtually becomes a dead letter. The reference in the four clauses of s.13, where the word 'Plan ' or the 'Outline Development Plan ' is used, is to the core plan, without the particulars and the Regulations and not the whole of the Outline Development Plan which must include the Regulations. What the different phraseology is meant to convey is to emphasise tile different parts of the Plan which have to be forwarded to the Government, considered by the Government, made available for inspection by the public, as the case may be and to the extent necessary. Merely because the words "and Regulations" are added to the word 'Plan ', the Regula tions are not to be treated as not constituting part of the Plan even as when a building is sold along with the fix tures, it does not mean that the fixtures are not treated as part of the building. [1078D G] 9. Notwithstanding the Regulations some building li cences were granted in contravention of the Regulations but that only exposes the deplorable laxity of the concerned authorities and emphasises the need for greater public vigilance. The present Writ Petitions are forerunners of such vigilance. [1079C D]

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iminal Appeals Nos. 67, 136 and 172 of 1959 and 82 and 83 of 1962. Appeals by special leave from the judgment and order dated November 3, 1958 in Criminal Appeals Nos. 196, 256 and 363 of 1958. B. B. Tawakley and section C. Mazumdar, for the appellant (in Cr. A. No. 67159). section C. Mazumdar, for the appellant (in Cr. A. No. 136/59). T. section Venakataraman, for the appellant (in Cr. A. No. 172/59). 381 N. N. Keshwani, for the appellant (in Cr. A. No. 82/62). C. B. Agarwala, K. L. Misra, Advocate General, U. P. Mangala Prasad Baghari, Shanti Sarup Khanduja, Malik Arjun Das and Ganpat Rai, for the appellant (in Cr. A. No. 83/62). N. section Bindra, D. R. Prem and R. H. Dhebar, for the respondent in all the Appeals. March 18. The judgment of the Court was delivered by SUBBA RAO J. These appeals by special leave arise out of two judgments of the High Court of Bombay, one that of Vyas and Kotval JJ., dated March 31, 1958, and the other that of Shah and Shelat JJ., dated November 3, 1958, in what, for convenience of reference,, may be described as the Empire Conspiracy Case. At the outset it would be convenient to state briefly the case of the prosecution. One Lala Shankarlal, a political leader and Vice President of the Forward Bloc and a highly competent commercial magnate, and his nominees held the controlling block of shares of the Tropical Insurance Company Limited, hereinafter called the "Tropical", and he was the Chairman and Managing Director of the said company. He had also controlling voice in another company called the Delhi Swadeshi Cooperative Stores Ltd. The said Delhi Stores held a large number of shares of the Tropical. In or about the middle of 1948, Sardar Sardul Singh Caveeshar, who was controlling the People 's Insurance Co. Ltd. and other concerns in Lahore, and Kaul, a practising barrister, came to Delhi. During that year the former was the President of the Forward Bloc and Shankarlal was its Vice President. Shankerlal, 382 Caveeshar and Kaul conceived the idea of purchasing the controlling block of 63,000 shares of the Jupiter Insurance Company Ltd., hereinafter referred to as the " 'Jupiter", a prosperous company, in the name of the Tropical from the Khaitan Group which was holding the said Jupiter shares. But the financial position of the Tropical did not permit the said purchase and so they thought of a fraudulent device of purchasing the said Jupiter shares out of the funds of the Jupiter itself. Under an agreement entered into with the Khaitan Group, the out of the 63,000 shares of the Jupiter was fixed at Rs. 33,39,000/ , and the purchasers agreed to pay Rs. 5,00,000/ in advance as " 'black money" and the balance of Rs. 28,39,000/ , representing the actual price on paper, within January 20, 1949, i. e., after the purchasers got control of the Jupiter. After the purchase, Shankarlal Group took charge of the Jupiter as its Directors after following the necessary formalities, sold the securities of the Jupiter for the required amount,and paid the balance of the purchase money to the Khaitan Group within the prescribed time. In order to cover up this fraud various manipulations were made in the relevant account books of the Jupiter. There would be an audit before the end of the year and there was every likelihood of detection of their fraud. It, therefore, became necessary for them to evolve a scheme which would bring in money to cover the said fraud perpetuated by the Directors of the. Jupiter in the acquisition of its 63,000 controlling shares. For that purpose, Shankarlal and his group conceived the idea of purchasing the controlling interest in another insurance company so that the funds of that company might be utilized to cover up the Jupiter fraud. With that object, in or about September 1949, Shankarlal and 9 of his friends entered into a conspiracy to lift the funds of the Empire of India Life Assurance Company Ltd., hereinafter referred to as the "Empire", to cover up the Jupiter 383 fraud. This they intended to do by purchasing the controlling shares of the Empire, by some of them becoming its Directors and Secretary, and by utilizing the funds of the Empire to cover up the defalcations made in the Jupiter. The following were the members of the conspiracy : (1) Shankarlal, (2) Kaul, (3) Metha, (4) Jhaveri and (5) Doshi all Directors of the Jupiter and (6) Guha, the Secretary of the Jupiter, (7) Ramsharan, the Secretary of the Tropical, (8) Caveeshar, the Managing Director of the People 's Insurance Co., (9) Damodar Swarup, a political worker who was later on appointed as the Managing Director of the Empire. (10) Subhedar, another political worker, (11) Sayana, a businessman of Bombay, and (12) Bhagwan Swarup, the nephew of Shankarlal and a retired Assistant Commissioner of Income tax of the Patiala State. After forming the conspiracy, the controlling shares of the Empire were purchased in the name of Damodar Swarup for an approximate sum of Rs. 43,00,000/ . For that purpose securities of the Jupiter of the value of Rs. 48,75,000/ were withdrawn by the Directors of the Jupiter without a re solution of the Board of Directors to that effect and endorsed in the name of Damodar Swarup again without any resolution of the Board of Directors to that effect. Damodar Swarup deposited the said securities in the Punjab National Bank Ltd., and opened a Cash credit account in the said Bank in his own name. He also executed two promissory notes to the said Bank for a sum of Rs. 10,00,000/ and Rs. 43,00,000/ respectively. Having opened the said account, Damodar Swarup drew from the said account by means of cheques a sum of Rs. 43,00,000/ and paid the same towards the purchase of the said Empire shares. Out of the said shares of the Empire, qualifying shares of twenty were transferred in each of the names of Damodar Swarup, Subhedar and Sayana, and by necessary resolutions Damodar Swarup became the Managing 384 Director and Chairman of the Empire and the other two, its Directors, and Bhagwan Swarup was appointed its Secretary. The conspirators having thus taken control of the Empire through some of them, lifted large amounts of the Empire to the tune of Rs. 62,49,700/ by bogus sale and loans, and with the said amount they not only recouped the amounts paid out of the Jupiter for the purchase of its controlling shares and also the large amounts paid for the purchase of the controlling shares of the Empire. After the conspiracy was discovered, in due course the following ten of the said conspirators, i. e., all the conspirators excluding Shankarlal and another, who died pending the investigation, were brought to trial before the Court of the Sessions judge for Greater Bombay under section 120 B of the Indian Penal Code and also each one of them separately under section 409, read with section 109, of the said Code : (1) Kaul,(2) Metha, (3) Jhaveri, (4) Guha, (5) Ramsbaran,(6) Caveeshar, (7) Damodar Swarup, (8) Subhedar, (9) Sayana, and (10) Bhagwan Swarup. The gravemen of the charge against them was that they, along with Shankarlal and Doshi, both of them deceased, entered into a criminal conspiracy at Bombay and elsewhere between or about the period from September 20, 1950 to December 31, 1950 to commit or cause to be committed criminal breach of trust in respect of Government securities or proceeds thereof or the funds of the Empire of India Life Assurance Co. Ltd., Bombay, by acquiring its management and control and dominion over the said property in the way of business as Directors, Agents or Attorneys of the said Company. The details of the other charges need not be given as the accused were acquitted in respect thereof. Learned Sessions judge made an elaborate enquiry, considered the innumerable documents filed and the oral evidence adduced in the case and came to the conclusion that Accused 1, 2, 4, 5, 6 and 10 385 were guilty of the offence under section 120 B, read with section 409 of the Indian Penal Code and sentenced them to various term of imprisonment. Accused 6, i. e., Caveeshar, was sentenced to suffer rigorous imprisonment for 5 years, and accused 10, i. e., Bhagwan Swarup, to rigorous imprisonment for a period of 5 ears and also to pay a fine of Rs. 2,000/ and in default to suffer rigorous imprisonment for a further period of six months. He acquitted accused 3, 7, 8 and 9. The State preferred an appeal to the High Court against that part of the '. judgment of the learned Sessions judge acquitting some of the accused; and the convicted accused filed appeals against their convictions. The appeal filed by Caveeshar, Accused 6, was dismissed in limine by the High Court. The appeals filed by 'the other convicted accused against their convictions were dismissed and the appeal by the State against the acquittal of some of the accused was allowed by the High Court. Accused 7 was sentenced to 5 years ' rigorous imprisonment, accused 8 to 3 years ' rigorous imprisonment and accused 9 to 3 years rigorous imprisonment. Accused 6, 7, 8, 9 and 10 have, by special leave, preferred these appeals against their convictions and sentences. We are not concerned with the other accused as some of them died and others did not choose to file appeals. At the outset it may be stated that none of the learned counsel appearing for the accused questioned the factum of conspiracy; nor did they canvass the correctness of the findings of the Courts below that the funds of the Empire were utilized to cover up the fraud committed in the Jupiter, but on behalf of each of the appellants a serious attempt was made to exculpate him from the offence. But, as the defalcations made in the finances of the Jupiter and the 386 mode adopted to lift the funds of the Empire and transfer them to the coffers of the Jupiter will have some impact on the question of the culpability of the appellants, we shall briefly notice the modus operandi of the scheme of conspiracy and the financial adjustments made pursuant thereto. We have already referred to the fact that Shankarlal Group purchased the controlling shares of the Jupiter from Khaitan Group and that as a consideration for the said purchase the former agreed to pay the latter Rs. 5,00,000/ as "black money" and pay the balance of about Rs. 28,39,000/ on or before January ' IO, 1949. After Shankarlal Group became the Directors of the Jupiter, they paid the said amount from and out of the funds of the Jupiter. To cover up that fraud, on January 11, 1949, the Directors passed a resolution granting a loan of Rs. 25,15,000/ to Accused 6, on the basis of an application made by him, on equitable mortgage of his properties in Delhi : (see exhibit Z 22). They passed another resolution sanctioning the purchase of plots of the Delhi Stores, a concern of Shankarlal, for a sum of Rs. 2,60,000/ . It is in evidence that Accused 6 had no property in Delhi and that the said plots were not owned by the Delhi Stores. The said loan and the sale price of the plots covered by the said resolutions were really intended for drawing the money of the Jupiter for paying the Khaitan Group before January 20,194 9. But some shareholders got scent of the alleged fraud and issued notices; and the Directors were also afraid of detection of their fraud by the auditors during their inspection at the close of the year 1949. It, therefore, became necessary to show in the accounts of the Jupiter that the loan alleged to have been advanced to Accused 6 was paid off. For this purpose the Directors brought into existence the following four transanctions : (1) a loan of Rs. 5,00,000/ advanced to Raghavji on November 5, 1949; (2) a loan of 387 Rs. 5,30,000/ to Misri Devi on December 12, 1949; (3) a fresh loan of Rs. 5,30,000/ to Caveeshar, Accused 6 on November 5, 1949; and (4) a transactions of purchase of 54,000 shares of the Tropical for Rs. 14,00,000/ on May 25, 1949 and December 20, 1949. These four ficticious transa ction were brought about to show the discharge of the loan advanced to Caveeshar, Accused 6. Further manipulations were made in the accounts showing that parts of the loans due from Raghavji, Misri Devi and Caveeshar and also the price of the Tropical shares were paid by Caveeshar. These paper entries did not satisfy the auditors and they insisted upon further scrutiny. It is the case of the prosecution that Shankarlal and his co conspirators following their usual pattern conceived the idea of getting the controlling interest of the Empire, which had a reserve of Rs. 9 crores. Jupiter securities worth about Rs. 45,00,000/ were endorsed in favour of Accused 7, who in his turn endorsed them in favour of the Punjab National Bank Ltd., for the purpose of opening a cash credit account therein. On October 5, 1950, under exhibit Z 9, the controlling shares of the Empire were purchased from Ramsharan Group and the consideration therefor was paid from and out of the money raised on the Jupiter securities. The Directors of the Jupiter had to make good to the Company not only the amounts paid out of the jupiter funds to purchase the controlling shares of the Jupiter, in regard to which various manipulations were made in the Jupiter accounts, but also about Rs. 45,00,000/worth of securities transferred in the name of Damodar Swarup. Having purchased the controlling shares of the Empire, Shankarlal and his colleagues got their nominees. , namely, Accused 7, 8 and 9 as Directors and Accused 10 as the Secre tary of the Empire. On November 27, 1950, a resolution of the Directors of the Empire sanctioned the purchase of Rs. 20,00,000/ worth of Government 388 Securities alleged to belong to the Jupiter. Though the securities were not delivered, two bearer cheques dated October 26, 1950 and October 27, 1950 for Rs. 15,00,000/ and Rs. 5,00,000/ respectively were made out and cashed and the said moneys were utilized to cancel the loan alleged to have been advanced to Raghavji and for the purchase of the Tropical shares for Rs. 1,4,00,000/ . But the conspirators had still to make good the securities transferred in favour of Accused 7 and other amounts. The Directors again sanctioned 12 loans, the first six on November 27, 1950 totalling Rs. 28,20,000/ and the other six on December 18, 1950 totalling Rs. 42,80,000/ admittedly to fictitious loanees. 12 bearer cheques for an aggregate of Rs. 71,00,000/ were issued by Accused 10 between December 19 and 23, 1950. This amount was utilized for getting 5 drafts for different amounts in favour of Accused 1 and 2, the Directors of the Jupiter, Accused 4, its Secretary, and Accused 5, the Secretary of the Tropical (see exhibit Z 230). The said drafts were sent to Bombay and one of the said drafts was utilized for paying off the loan of Misri Devi and the other Drafts for Rs. 57,00,000/ were paid into the Jupiter account in the Punjab National Bank Ltd., Bombay. This amount was utilized to cover up the loss incurred by the Jupiter by reason of its securities worth about Rs. 45,00,000/ assigned in favour of Accused 7 and also by reason of the securities worth Rs. 20,00,000/ alleged to have been sold to the Empire on November 27, 1950. It is, therefore, manifest, and indeed it is not disputed before us now, that Shankarlal and his co conspirators, whoever they may be, had conspired together and lifted large amounts of the Empire and put them into the Jupiter coffers to cover up the loss caused to it by their fraud. Therefore in these appeals we proceed on the basis that there was a conspiracy as aforesaid and the only question for consideration is whether all or some of the appellants were parties to it. 389 Before dealing with the individual cases, as some argument was made in regard to the nature of the evidence that should be adduced to sustain the case of conspiracy, it will be convenient to make at this stage some observations thereon. Section 120 A of the Indian Penal Code defines the offence of criminal conspiracy thus "When two or more persons agree to do, or cause to be done an illegal act, or an act which is not illegal by illegal means, such an agreement is designated a criminal conspiracy. " The essence of conspiracy is, therefore, that there should be an agreement between persons to do one or other of the acts described in the section. The said agreement may be proved by direct evidence or may be inferred from acts and conduct of the parties. There is no difference between the mode of proof of the offence of conspiracy and that of any other offence : it can be established by direct evidence or by circumstantial evidence. But section 10 of the Evidence Act introduces the doctrine of agency and if the conditions laid down therein are satisfied, the acts done by one are admissible against the co conspirators. The said section reads : "Where there is reasonable ground to believe that two or more persons have conspired together to commit an offence or an actionable wrong, anything said, done or written by any one of such persons in reference to their common intention, after the time when such intention was first entertained by any one of them, is a relevant fact as against each of the persons believed to be so conspiring as well for the purpose of proving the existence of the conspiracy as for the purpose of showing that any such person was a party to it." This section, as the opening words indicate, will come into play only when the Court is satisfied that 390 there is reasonable ground to believe that two or more persons have conspired together to commit an offence or an actionable wrong, that is to say, there should be a prima facie evidence that a person was a party to the conspiracy before his acts can be used against his co conspirators. Once such a reasonable ground exists, anything said, done or written by one of the conspirators in reference to the common intention, after the said intention was entertained, is relevant against the others, not only for the purpose of proving the existence of the conspiracy but also for proving that the other person was a party to it. The evidentiary value of the said acts is limited by two circumstances, namely, that the acts shall be in reference to their common intention and in respect of a period after such intention was entertained by any one of them. The expression " 'in reference to their common intention" is very comprehensive and it appears to have been designedly used to give it a wider scope than the words "in furtherance of" in the English law ; with the result, anything said, done or written by a coconspirator, after the conspiracy was formed, will be evidence against the other before he entered the field of conspiracy or after he left it. Another important limitation implicit in the language is indicated by the expressed scope of its relevancy. Anything so said, done or written is a relevant fact only "as against each of the persons believed to be so conspiring as well for the purpose of proving the existence of the conspiracy as for the purpose of showing that any such person was a party to it. It can only be used for the purpose of proving the existence of the conspiracy or that the other person was a party to it. It cannot be used in favour of the other party or for the purpose of showing that such a person was not a party to the conspiracy. In short, the section can be analysed as follows : (1) There shall be a prima facie evidence affording a reasonable ground for a Court to believe that two or more persons are 391 members of a conspiracy ; (2) if the said condition is fulfilled, anything said, done or written by any one of them in reference to their common intention will be evidence against the other; (3) anything said, done or written by him should have been said, done or written by him after the intention was formed by any one of them ; (4) it would also be relevant for the said purpose against another who entered the conspiracy whether it was said, done or written before he entered the conspiracy or after he left it ; and (5) it can only be used against a co conspirator and not in his favour; With this background let us now take the evidence against each of the appellants and the contentions raised for or against him. But it must be stated that it is not possible to separate each of the accused in the matter of consideration of the evidence, for in a case of conspiracy necessarily there will be common evidence covering the acts of all the accused. We may, therefore, in dealing with some of the accused, consider also the evidence that will be germane against the other accused. We shall first take the case of Accused 6, Caveeshar, who is the appellant in Criminal Appeal No. 82 of 1962. So far as this appellant is concerned the learned Sessions judge found that he was a member of the conspiracy and the High Court confirmed that finding. It is the Practice,, of this Court not to interfere with concurrent findings of fact even in regular appeals and particularly so in appeals under article 136 of the Constitution. We would, therefore, approach the appeal of this accused from that perspective. Learned counsel for this appellant argued before us that the said accused was convicted by the Sessions judge for being a member of the conspiracy in the Jupiter case in respect of his acts pertaining 392 to that conspiracy and therefore he could not be convicted over again in the present case on the basis of the facts on which the earlier conviction was founded; in other words, it is said that he was convicted in the present trial for the same offence in respect of which he had already been convicted in the Jupiter case and such a conviction would infringe his fundamental right under article 20 (2) of the Constitution, and in support of this contention reference was made to certain decisions of the Supreme Court of the United States of America. The said Article reads : "No person shall be prosecuted and punished for the same offence more than once." The previous case in which this accused was convicted was in regard to a conspiracy to commit criminal breach of trust in respect of the funds of the Jupiter and that case was finally disposed of by this Court in Sardul Singh Caveeshar vs State of Bombay (1). Therein it was found that Caveeshar was a party to the conspiracy and also a party to the fraudulent transactions entered into by the Jupiter in his favour. The present case relates to a different conspiracy altogether. The conspiracy in question was to lift the funds of the Empire, though its object was to cover up the fraud committed in respect of the Jupiter. Therefore. , it may be that the defalcations made in Jupiter may afford a motive for the new conspiracy, but the two offences are distinct ones. Some accused may be common to both of them some of the facts proved to establish the Jupiter conspiracy may also have to be proved to support the motive for the second conspiracy. The question is whether that in itself would be sufficient to make the two conspiracies the one and the same offence. Learned counsel suggests that the question raised involves the interpretation of a provision of the Constitution and therefore the appeal of this accused (1) [1958] section C. R. 161. 393 will have to be referred to a Bench consisting of not less than 5 judges. Under article 145 (3) of the Constitution only a case involving a substantial question of law as to the interpretation of the Constitution shall be heard by a Bench comprising not less than 5 Judges. This Court held in State of Jammu & Kashmir vs Thakur Ganga Singh (1), that a substantial question of interpretation of a provision of the Constitution cannot arise when the law on the subject has been finally and effectively decided by this Court. Two decisions of this Court have construed the provisions of article 20 (2) of the Constitution in the context of the expression "same offence." In Leo Roy Frey vs The Superintendent, District Jail, Amritsar (2), proceedings were taken against certain persons in the first instance before the customs authorities under section 167 (8) of the Sea Customs Act and heavy personal penalties were imposed on them. thereafter, they were charged for an offence under section 120 B of the Indian Penal Code. This Court held that an offence under section 120 B is not the same offence as that under the Sea Customs Act. Das C. J., speaking for the Court, observed : "The offence of a conspiracy to commit a crime is a different offence from the crime that is the object of the conspiracy because the conspiracy precedes the commission of the crime and is complete before the crime is attempted or completed, equally the crime attempted or completed does not require the element of conspiracy as one of its ingredients. They are,therefore, quite separate offences." This Court again considered the scope of the words " 'same offence" in The State of Bombay vs ,section L. Apte (3). There the respondents were both convicted and sentenced by the Magistrate under section 409 of the Indian Penal Code and section 105 of the Insurance Act. Dealing with the argument that the (1) [1960] 2 S.C.R.346. (2) ; , 827, (3)[1961] 3.S.C.R.,107,114. 394 allegations of fact were the same, Rajagopala Ayyangar J., rejecting the contention, observed on behalf of the Court : "To operate as a bar the second prosecution and the consequential punishment thereunder, must be for `the e same offence '. The crucial requirement, therefore, for attracting the Article is that the offences arc the same i. e., they should be identical. If, however, the two offences are distinct, then notwithstanding that the allegations of fact in the two complaints might be substantially similar, the benefit of the ban cannot be invoked. It is, therefore, necessary to analyse and compare not the allegations in the two complaints but the ingredients of the two offences and see whether their identity is made out." This decision lays down that the test to ascertain whether two offences are the same is not the identity of the allegations but the identity of the ingredients of the offences. In view of the said decisions of this Court, the American decisions cited at the Bar do not call for consideration. As the question raised has already been decided by this Court, what remains is only the application of the principle laid down to the facts of the present case. cannot, therefore, hold that the question raised involves a substantial question of law as to the interpretation of the Constitution within the meaning of article 145 (3) of the Constitution. In the present case, applying the test laid down by this Court, the two conspiracies are not the same offence : the Jupiter conspiracy came to an ' end when its funds were misappropriated. The Empire conspiracy was hatched subsequently, though its 'Object had an intimate connection with the Jupiter in that the fraud of the Empire was concei. ved and executed to cover up the fraud of the 395 Jupiter. The two conspiracies are distinct offences. It cannot even be said that some of the ingredients of both the conspiracies are the same. The facts constituting the Jupiter conspiracy are not the ingredients of the offence of the Empire conspiracy,, but only afford a motive for the latter offence. Motive is not an ingredient of an offence. The proof of motive helps a Court in coming to a correct conclusion when there is no direct evidence. Where there is direct evidence for implicating an accused in an offence, the absence of proof of motive is not material. The ingredients of both the offences are totally different and they do not form the same offence within the meaning of article 20 (2) of the Constitution and, therefore, that Article has no relevance to the present case. The next question is whether this appellant was a party to the Empire conspiracy. He was a close associate of Shankarlal in the political field, he being the President of the Forward Bloc and Shankarlal being its Vice President. That is how they were drawn together. There is also evidence that out of the 63,000 shares of the Jupiter that were purchased in August, 1949 by Shankarlal Group, 4475 shares were allotted to this appellant. It is, therefore, clear that Accused 6 though ex facie he was neither a Director nor an office bearer in the Jupiter, had heavy stakes in it. We have already noticed that after the purchase of the said shares from and out of the Jupiter funds, a bogus loan in the name of Accused 6 for a sum of Rs. 25,15,000/ was shown in the Jupiter accounts and later on it was substituted by other manipulations. [His Lordship then proceeded to consider the evidence.] x x x x x x x x Both the Courts on the basis of the aforesaid evidence came to the conclusion that Accused 6 was 396 a member of the conspiracy and we cannot say that there is no evidence on which the Courts could have come to the conclusion to which they did. there are no permissible grounds for upsetting this finding under article 136 of the Constitution. As regards the sentence passed against this accused, the Sessions Judge sentenced him to undergo rigorous imprisonment for a period of 5 years, whereas he sentenced Accused 7, 8 and 9 to undergo rigorous imprisonment for a period of 3 years only. We do not see any justification for this distinction between the said accused in the matter of punishment. Accused6 had already been convicted and sentenced in the Jupiter case; and on the evidence it does not appear that he had taken a major part in the Empire conspiracy, though he was certainly in it. In the circumstances, we think that a sentence of 3 years ' rigorous imprisonment would equally suffice in his case. We, therefore, modify the sentence passed on him and sentence him to undergo rigorous imprisonment for 3 years. Subject to the aforesaid modification, the appeal preferred by Caveeshar, Accused 6, is dismissed. We shall now proceed to consider the appeal preferred by Damodar Swarup, Accused 7 i. e., Criminal Appeal No. 83 of 1962. Accused 7 was the Managing Director and Chairman of the Empire during the period of the conspiracy. On October 17, 1950 he was elected the Chairman of the Board of Directors of the Empire and appointed as Managing Director on a salary of Rs. 2,000/per month for a period of one year. He was removed from the post of Managing Director at the meeting of the Board of Directors held on March 12, 1951. The misappropriation of the funds of the Empire, which is the subject matter of the conspiracy, were committed during the period of his Managing Directorship i. e., between 397 September 20 and December 31, 1950. The prosecution case is that Accused 7 was a party to the conspiracy, whereas the defence version is that he was a benamidar for Shankarlal, that he took part in the proceedings of the Board of Directors bona fide, believing that there was nothing wrong, that the resolutions were implemented by Accused 10 under the directions of Shankarlal and that the moment he had a suspicion that there was some fraud, he took immediate and effective steps not only to prevent the rot but also to investigate and find out the real culprits. The question is which version is true. It would be useful to have a correct appreciation of the evidence to know the antecedents of Accused 7. [His Lordship then proceeded to consider the evidence.] x x x x x x Learned counsel for Accused 7 contends that the following two important circumstances in this case established that Accused 7 was a victim of circumstances and that he was innocent : (1) Two prominent publicmen of this country with whom the accused worked gave evidence that he was a man of integrity; and (2) the accused took active steps to unravel the fraud and to bring to book every guilty person; if he was a conspirator, the argument proceeds, it was incon ceivable that he would have taken such steps, for it would have certainly recoiled on him. We shall consider these two aspects now. [His Lordship then proceeded to consider the evidence.] x x x x The question is what is the evidentiary value of good character of an accused in a criminal case. The relevant provisions are section 53 and the Explanation to section 55 of the evidence Act. They read : Section 53. In criminal proceedings the fact 398 that the person accused is of a good character is relevant. Explaination to 8. In sections 52, 53, 54 and 55, the word "character" includes both reputation and disposition; but except as provided in section 54, evidence may be given only of general reputation and general disposition, and not of particular acts by which reputation, or disposition were shown. It is clear from the said provisions that the evidence of general reputation and general disposition is relevant in a criminal proceeding. Under the Indian Evidence Act, unlike in England, evidence can be given both of general character and general disposition. Disposition means the inherent qualities of a person; reputation means the general credit of the person amongst the public. There is a real distinc tion between reputation and disposition. A man may be reputed to be a good man, but in reality he may have a bad disposition. The value of evidence as regards disposition of a person depends not only upon the witness 's perspicacity but also on his opportunities to observe the person as well as the said person 's cleverness to hide his real traits. But a disposition of a man may be made up of many traits, some good and some bad, and only evidence in regard to a particular trait with which the witness is familiar would be of some use. Wigmore puts the proposition in the following manner : "Whether, when admitted, it should be given weight except in a doubtful case, or whether it may suffice of itself to create a doubt, is a mere question of the weight of evidence, with which the rules of admissibility have no concerned But, in any case, the character evidence is a very weak evidence : it cannot outweigh the positive 399 evidence in regard to the guilt of a person. It may be useful in doubtful cases to tilt the balance in favour of the accused or it may also afford a background for appreciating his reactions in a given situation. It must give place to acceptable positive evidence. The opinion expressed by the witnesses does credit to the accused, but, in our view, in the face of the positive evidence we have already considered, it cannot turn the scale in his favour. Learned counsel strongly relied upon the subsequent conduct of Accused 7 in support of his innocence. [His Lordship then proceeded to consider the evidence relating to subsequent Conduct and Considered as follows] x x x x x x x x We, therefore, hold that Accuscd 7 was a party to the conspiracy and that the High Court has rightly convicted him under section 120 B of the Indian Penal Code. As regards the sentence passed on Accused 7, having regard to the evidence in this case, we think that this accused must be given a comparatively less punishment than his co conspirators, for, though he took part in the conspiracy, at any rate from the end of December, 1950, for one reason or other, he took necessary proceedings to bring to light the fraud. We, therefore, think that it would meet the ends of justice if the accused was sentenced to rigorous imprisonment for a period of two years. We accordingly modify the sentence passed on him by the High Court and, subject to the aforesaid modification, we dismiss the appeal preferred by him. Next we come to Criminal Appeal No. 136 of 1959 preferred by Subhedar, Accused 8. The defence of this accused is that he acted throughout in good faith and under the guidance of Accused 7, the Managing Director of the Empire, and that he did not know that any fraud was perpetrated in the Empire. Before joining the Empire he was an 400 insurance agent and, therefore, it cannot be said that he was a stranger to the insurance business and he may be assumed to know how it would be conducted. On October 16, 1950 twenty qualifying shares of the Empire from among the shares purchased in the name of Accused 7 were transferred in his favour and thereafter at the meeting held on that day he was co opted as a Director. He is also, therefore, one of the persons brought in by Shankarlal and made a Director for his own purpose. [His Lordship then proceeded to consider the evidence] x x x x x x We have no doubt that the aforesaid circumstances lead to only one reasonable conclusion that this accused became a Director of the Empire as a member of the conspiracy and helped to put through all the transactions necessary to transfer funds from one Company to the other. He was rightly convicted by the High Court. We do not see any reason to interfere with the sentence passed against him. In the result Criminal Appeal No. 136 of 1959 is dismissed. Criminal Appeal No. 172 of 1959 is preferred by Sayana, Accused 9. He was a building contractor before he was appointed a Director of the Empire. His defence is also that he bona fide acted without knowledge of the conspiracy or the fraud. He was also one of the Directors inducted into the Company by the transfer of qualifying shares from and out of the shares purchased in the name of Accused 7. He was co opted as a Director on October 17, 1950 under exhibit Z 206C. Though he was not present at the meeting of November 27, 1950, he was present at the meeting of December 18, 1950 and, therefore, with the knowledge that six loans amounting to Rs. 28,80,000/ were advanced without scrutiny of the securities, he was a party in sanctioning another six loans totalling to Rs. 42,80,000/ . He as also a party to the resolution of January 30, 1951 401 sanctioning a bogus loan to the chief of Bagarian. He was a party to the resolution dated February 9, 1951 when the said loan was confirmed and to the resolution authorizing Accused 9 to operate singly the accounts of the Company. Evidence considered [omitted] x x x x It is, therefore, clear that he was a creature of Shankarlal, that he was a party to the diversion of the funds of the Empire to the Jupiter and that when Accused 7, for his own reasons, was taking steps to stop the rot, he, along with Accused 8, obstructed him from doing so and wholly supported Accused 10. The only reasonable hypothesis on the evidence is that he was a party to the conspiracy. It is said by learned counsel appearing for this accused that his subsequent conduct would not indicate any obstructive attitude on his part but would indicate only his desire to maintain the status quo till the matters improved. This is a lame explanation, for he, along with the other Directors, opposed every attempt of the scrutiny of the Company 's affairs and this can only be because they were conscious of their part in the fraud. In this context another argument of learned counsel for Accused 8 and 9 may be noticed. It is said that the High Court treated the Directors as trustees and proceeded to approach the case from that standpoint inferring criminality from their inaction. Even assuming that they were not trustees in the technical sense of the term, they certainly stood in a fiduciary relationship with the shareholders. The High Court 's finding is not based upon any technical relationship between the parties, but on the facts found. On the facts, including those relating to the conduct of the accused, the High Court drew a reasonable inference of guilt of the accused. There is sufficient evidence on which the High Court 402 could have reasonably convicted Accused 8 and 9 and in the circumstances, we do not see any case had been made out in an appeal under article 136 of the Constitution to merit our interference. In the result Criminal Appeal No. 172 of 1959 is dismissed. Finally we come to Criminal Appeal No. 67 of 1959 preferred by Bhagwan Swarup, Accused 10. The defence of this accused is that he acted throughout on the directions of Accused 7, 8 and 9, and that as Secretary of the Company, he was bound to follow their directions. This accused is the nephew of Shankarlal. He is an M. A., LL. B. He held the office of Assistant Commissioner of Income tax in Patiala State. He is the person who carried out the resolutions of the Board of Directors of the Empire through intricate channels to enable the large amounts misappropriated to reach the Jupiter Company. It is suggested that he was not well disposed of towards Shankarlal and therefore he could not have any knowledge of Shankarlal 's fraudulent motives behind the purchase of the controlling shares of the Empire. If Shankarlal did not like him lie would not have put him in the key position in the Empire. Indeed, the will of Shankarlal shows that this accused got the best legacy under it. He was the connecting thread passing through the web of conspiracy from beginning to end. Evidence Considered [omitted] x x x x x x x x Learned counsel appearing for this accused Could only argue that the accused was a subordinate of the Directors and that he had followed only loyally the directions given by the Managing Director without any knowledge of the conspiracy. This argument is an oversimplification of the part taken by Accused 10 in this huge fraud. Both the Courts below have 403 held, on the aforesaid circumstances and other evidence; that Accused 10 was an active participant in the conspiracy. In our view, there is ample material to justify it. In the result Criminal Appeal No. 67 of 1959 is dismissed. Cr. A. No. 82 of 1962 dismissed. Sentence modified. A. No. 83 of 1962 dismissed. Sentence modified. A. No. 136 of 1959 dismissed. Cr. A. No. 172 of 1959 dismissed. Cr. A. No. 67 of 1959 dismissed.

Double Jeopardy Applicability of rule Law finally and authoritatively decided by Supreme Court as to interpretation of the constitution If a substantial question of law Constitution of India, Arta. 20 (2), 145 (3). After the discovery of the conspiracy, ten conspirators including the appellants were put to trial before the Sessions judge under section 120 B of the Indian Penal Code and also each one of them separately under section 409 read with section 109 of the said Code. The charge was that they, alongwith one Shankar Lal and Doshi, both of them deceased entered into a criminal conspiracy at Bombay and elsewhere between or about the period from September 20, 1950 to December 31, 1950, to commit or cause to be committed criminal breach of trust in respect of Government securities or proceeds thereof or the funds of the Empire of India Life Assurance Co. Ltd., Bombay, acquiring its management and control and dominion over the said property in the way of business as Directors, Agents or attorneys of the said company. The learned Sessions Judge convicted six accused persons under section 120 B, read with section 409 of the Indian Penal Code and sentenced them to various terms of imprisonment. The rest four accused persons were acquitted. Against the acquittal State preferred an appeal to the High Court and the convicted accused persons also filed appeals against their convictions. Government appeal was allowed and the appeals of the convicted accused persons were dismissed by the High Court. These appeals by special leave have been preferred only by five accused persons against their conviction and sentences. In these appeals, the Court pro ceeded on the basis as it was manifest and indeed not disputed 379 that there was a conspiracy and the only question for con sideration was whether all or some of the appellants were parties to it. Held, that the essence of conspiracy is that there should be an agreement between persons to do one or other of the acts described in the section. The said agreement may be proved by direct evidence or may be inferred from acts and conduct of the parties. But section 10 of the Evidence Act intro. duces the doctrine of agency and if the conditions laid down therein are satisfied, the acts done by one are admissible against the co conspirators. The section can be analysed as follows : (1) There shall be a prima facie evidence affording a reasonable ground for a court to believe that two or more persons are members of a conspiracy; (2) if the said condition is fulfilled, anything said, done or written by any one of them in reference to their common intention will be evidence against the other; (3) anything said, done or written by him after the intention was formed by any one of them; (4) if it would also be relevant for the said purpose against another who entered the conspiracy whether it was said, done or written before he entered the conspiracy or after he left it; and (5) it can only be used against a co conspirator and not in his favour. Held, that so far as the appellant in criminal appeal No. 82/62 is concerned, applying the test laid down by this Court, the two conspiracies are not the same offence. The ingredients of both the offences are totally different and they do not form the same offence within the meaning of article 20 (2) of the Constitution and, therefore, that Article has no relevance to the present case. Further, there are no permissible grounds for upsetting the concurrent findings of both the courts below that the appellant was a member of the conspiracy. Leo Boy Prey vs The Superintendent, District Jail, Amritsar, ; and The State of Bombay vs section L. Apte, ; , relied on. Sardul Singh Caveeshar vs State of Bombay, [1958] S.C.R. 161, referred to. As the question raised regarding interpretation of article 20 (2) of the constitution has already been decided by this Court, it cannot be held that the question raised involves a substantial question of law as to the interpretation of the Constitution within the meaning of article 145 (3) of the Constitution. State of Jammu & Kashmir vs Thakur Ganga Singh, [1960] 2 section C. R. 346 relied on. 380 Held, that from the relevant provisions of section 53 and the Explanation to section 55 of the Evidence Act. , it is clear that the evidence of general reputation and general disposition is relevant in a criminal proceeding. Under the Indian Evidence Act, unlike in England, evidence can be given both of general character and general disposition. Disposition means the inherent qualities of a person; reputation means the general credit of the person amongst the public. There is a real distinction between reputation and disposition. A man may be reputed to be a good man, but in reality be may have a bad disposition. The value of evidence as regards disposition of a person depends not only upon the witness 's perspicacity but also on his opportunities to observe the person as well as the said person 's cleverness to hide his real traits. But a disposition of a man may be made up of many traits, some good and some bad, and only evidence in regard to a particular trait with which the witness is familiar would be of some use. But, in any case, the character evidence is a very week evidence; it cannot out weight the positive evidence in regard to the guilt of a person. It may be useful in doubtful cases to tilt the balance in favour of the accused or it may also afford a background for appreciating his reactions in a given situation. It must give place to acceptable positive evidence. The opinion expressed by the witnesses does credit to the accused, but, in the face of the positive evidence it cannot turn the scale in his favour.

1595.txt

eal No. XIII of 1950. Appeal from a judgment and decree of a Division Bench of the Madras High Court (Wadsworth and Rajamannar JJ.) dated 27th November, 1945, in Appeal No. 518 of 1941, reversing the judgment of the Subordinate Judge of Mayuram dated 10th July, 1944, in Original Suit No. 34 of 1943. B. Somayya (R. Ramamurti, with him) for the appel lant. 951 K.S. Krishnaswami Aiyangar (K. Narasimha Aiyangar, with him) for respondent No. 1. 1950. December 21. The Judgment of the Court was delivered by MUKHERJEA J. This appeal is directed against an appellate judgment of a Division Bench of the Madras High Court dated November 27, 1945, reversing the decision of the Subordinate Judge of ' Mayuram made in Original Suit No. 34 of 1943. There is no dispute about the material facts of the case which lie within a short compass and the controversy centers round one point only which turns upon the construction of a will left by one Kothandarama Ayyar to whom the properties in suit admittedly belonged. Kothandarama, who was a Hindu inhabitant of the District of Tanjore and owned considerable properties, died on 25th April 1905, leaving behind him as his near relations his adoptive mother Valu Ammal, his widow Parbari and two daughters Nagammal and Gnanambal, of whom Nagammal,who became a widow during the testator 's life time had an infant daughter named Alamelu Kothandarama executed his last will on 13th March, 1905, and by this will, the genuineness of which is not disputed in the present litigation, he gave an authority to his widow to adopt unto him a son of his second daughter Gnanambal, should she beget one before January., 1908, or in the alter native any of the sons of his two nephews, if the widow so chose. The suit, out of which the appeal arises, was commenced by Raju Ayyar, who was a son of the testator 's nephews and was taken in adoption by the widow in terms of the will; and it was for recovery of possession of certain properties, known as Kothangudi properties which formed part of the testator 's estate on the allegation that under the will mentioned above, these properties were given to Nagarnmal, the wid owed daughter of the testator for her life time, but as there was no disposition of the remaining interest after the death of the life tenant, the properties vested in the 952 plaintiff as the adopted son and heir of the deceased on the death of Nagammal which took place on 3rd of January, 1943. Gnanambal, the second daughter of the testator, was the first and main defendant in the suit, and she resisted the plaintiff 's claim primarily on the ground that there was no intestacy as regards the suit properties after the termina tion of the life interest of Nagammal, and that under the terms of the will itself she was entitled to get these properties in absolute right after the death of Nagammal, subject to payment of a sum of Rs. 5,000 to Alamelu, the daughter of Nagammal. Alamelu was made the second defendant in the suit and as she died when the suit was pending in the trial court, her heirs were impleaded as defendants 3 to 9. The first court accepted the contention of the defendant No. 1 and dismissed the plaintiff 's suit. On appeal to the High Court, the judgment was reversed and the plaintiff 's claim was allowed. The defendant No. 1 has now come up appeal to this court. To appreciate the contentions that have been raised by the parties to this appeal, it would be convenient first of all to refer briefly to the relevant provisions of the will: After cancelling his previous wills. the testator in the third paragraph of his will, gave his widow authority to adopt a son. She was to adopt the son of Gnanambal, if the latter got a son previous to January 1908, or she could adopt any of the sons of the testator 's nephews. Paragraph 4 provides that if the first course is followed, that is, if the son of Gnanambal is adopted by the widow, then all the properties, movable and immovable, belonging to the testator excepting the village of Kothangudi, the house at Injigudi and the other properties which were disposed of by the will would go to such adopted son. Paragraph 5, which is materi al for our present purposes runs as follows:. "The whole village of Kothangudi and the house at Injigudi, both of Nannilam Taluk, my daughter Nagammal, shall enjoy with life interest and after her the said property shall pass to my daughter Gnanambal and her chil dren on payment by the latter of Rs. 5,000 to Alamelu Nagam mal 's daughter. " 953 By the sixth paragraph the Nallathukudi and Pungavur villages together with certain house property at Mayavaram are given to the testaor 's adoptive mother and wife in equal shares to be enjoyed by both of them during their life time and after their death they are to pass on to the adopted son. Paragraph 7 gives a small h.use absolutely to Nagammal for her residence and paragraph 8 makes certain provisions for management of the properties. In paragraph 9 direction is given to collect the money due on the insurance policy on the life of the testator and to pay off his debts. Pragraph 10 mentions certain charities, the expenses of which are to be derrayed from the income of the Nallathukudi properties. Paragraph 11 then says that in the event of the widow adopt ing any of the nephew 's sons of the testator, such son shall inherit the entire property at Kokkur and also the lands of Nallathukudi after the death of the testator 's wife and mother. By paragraph 12, the village of Maruthanthanallur is given to Gnanambal and paragraph 13 provides that "the village of Kothangudi shall be enjoyed by Nagammal as stated in paragraph 5" By paragraphs 15 and 16 the remainder in the house at Mayavaram situated in the east row of Vellalar kovil Street is given to Gnanambal after the death of the testator 's wife and mother. Paragraph 18 provides for cer tain other charities. In paragraph 20 it is stated that if the wife of the testator should die before January, 1908, without making any adoption, then the eldest or any son of Gnanambal would be his adopted son without any formality and inherit all the properties subject to the conditions men tioned in the will. Paragraph 21, which is the penultimate paragraph in the will, further lays down that if all the three contingencies fail and no adoption is taken, the male child or children born to Gnanambal shall inherit as grand sons all the properties of the testator, subject to the conditions specified in the will. These, in brief, are the dispositions made in the will. The plaintiff founds him claim upon paragraph 13 of the will which, according to him, contains the enire disposition so far as the Kothangudi 954 property is concerned. That village is given to Nagarm mal for her life with no disposition of the remaining inter est. If the remainder has not been disposed of, there is no doubt that the plaintiff would be entitled to the property as the heir of the testator under the ordinary law of inher itance. The defendant No. 1. on the other hand, relies on para graph 5 of the will, which gives the Kothangudi village and the Injigudi house to Nagammal to he enjoyed by her so long as she lives and after her death they are to go to Gnanambal and her children subject to the payment of a sum of Rs. 5,000 to be paid to Alamelu, the daughter of Nagammal. The High Court on a construction of the will has found in favour of the plaintiff primarily on the ground that in the contingency which happened in the present case, viz., that the widow took in adoption a nephew 's son of the testa tor, paragraph 5 of the will did not come into operation at all. The disposition as regards Kothangudi property is, therefore, to be found exclusively in paragraph 13 of the will and the actual words employed by the testator in that paragraph do not indicate that apart from Nagammal 's taking a life estate in the Kothangudi village the rest of the provisions in regard to this property as laid down in para graph 5 would also be incorporated into paragraph 13. An Obvious difficulty, according to the learned Judges, in accepting the construction sought to be put upon the will by defendant No. 1 is that paragraph 5 speaks both of Kothan gudi and Injigudi properties, whereas paragraph 13 does not mention the Injigudi house at all, nor does it purport to give a life interest in the same to Nagammal. It could not be reasonably held on a construction of the will that the intention of the testator was that Gnanambal was to pay Rs. 5,000 to Alamelu for the Kothangudi property alone. The result was that the plaintiff 's claim was allowed. It is the propriety of this decision that has been challenged before us in this appeal. In course of the arguments, we have been referred by the learned Counsel on both sides to quite a large 955 number of decided authorities, both English and Indian, in support of their respective contentions. It is seldom prof itable to compare the words of one will with those of anoth er or to attempt to find out to which of the wills upon which decisions have been: given in reported cases, the will before us approximates closely. Cases are helpful only in so far as they purport to lay down certain general princi ples of construction and at the present day these general principles seem to be fairly well settled. The cardinal maxim to be observed by courts in constru ing a will is to endeavour to ascertain the intentions of the testator. This intention has to be gathered primarily from the language of the document which is to be read as a whole without indulging in any conjecture or speculation as to what the testator would have done if he had been better informed or better advised. In construing the language of the will as the Privy Council observed in Venkata Narasimha vs Parthasarathy (1), "the courts are entitled and bound to bear in mind other matters than merely the words used. They must consider the surrounding circumstances, the position of the testator, 'his family relationship, the probability that he would use words in a particular sense, and many other things which are often summed up in the somewhat picturesque figure 'The court is entitled to put itself into the testator 's armchair ' . But all this is solely as an aid to arriving at a right construction of the will, and to ascertain the meaning of its language when used by that particular testator in that document. So soon as the con struction is settled, the.duty of the court is to carry out the intentions as expressed, and none other. The court is in no case justified in adding to testamentary dispositions. In all cases it must loyally carry out the will as properly construed, and this duty is universal, and is true alike of wills of every nationality and every religion or rank of life." A question is sometimes raised as to whether in constru ing a will the court should lean against (1) 42 I.A. 51 at p.70. 956 intestacy. The desire to avoid intestacy was considered by the Privy Council in the case referred to above as a rule based on English necessity and English habits of thought which should not necessarily bind an Indian court. It seems that a presumption against intestacy may be raised if it is justified by the context of the document or the surrounding circumstances; "but it can be invoked only when there is undoubted ambiguity in acertainment of the intentions of the testator. As Lord Justice Romer observed in Re Edwards; Jones vs Jones (1), "it cannot be that merely with a view to avoiding intestacy you are to do otherwise than construe plain words according to their plain meaning". It is in the light of the above principles that we should proceed to examine the contents of the will before us. The present will, which is the last of four testamentary document executed by the testator, appears to have been prepared with a great deal of care and circumspection. The testator had clearly in mind the different situations that might arise in case his widow adopted either Gnanambal 's son or a son of one of the nephews of the testator. He envis aged also the possibility of the widow dying without making any adoption at all. Besides the son to be adopted, the only other relations who had natural claims upon the affection and bounty of the testator and for whom he desired to make provisions were his wife, his adoptive mother, the two datughters and the infant grand daughter. The interests given to his wife, the adoptive mother and the eldest daugh ter, who were all widows, were for their life time, except a small house property which was given absolutely for the residence of the eldest daughter. On the other hand., the bequests in favour of Gnanambal, who was a married daughter, and the adopted son of the testator, were absolute in their character. Besides these dispositions, there were certain gifts for charity which were to be met out of the income of the properties given to the wife and the adoptive mother for their lives. One singular feature (1) [1906]1 Ch. 570 at p. 574. 957 in the will is that the testator took scrupulous care to include in it every item of property that he owned. There are two provisions in the will relating Kothan gudi property to which the dispute in the present suit relates. One is in paragraph 5 which gives this property along with the house at Injigudi to Nagammal, the remainder being given to the appellant subject to the payment of a sum of Rs. 5, 000 to Alamelu, the daughter of Nagammal. The other is in paragraph 13, which merely says that Nagammal was to get it for life as stated in paragraph 5. The view taken by the High Court and which has been pressed for our acceptance here by the learned Counsel for the respondents is that paragraph 5 was meant to be operative only if Gna nambal 's son was adopted by the widow. As that was not done, paragraphs 4 to 8 of the will, it is urged, will go out of the picture alttgether and it is not permissible to refer to them except to the extent that they were impliedly incorporated in the subsequent paragraphs of the will. We do not think that this is the correct way of reading the document. The testator undoubtedly contemplated different contingencies; but a reading of the whole will does not show that he wanted to make separate and self contained provisions with regard to each of the contingencies that might arise and that each set of provisions were to be read as exclusive of the other set or sets. That does not appear to be the scheme of the will. The testator 's main desire undoubtedly was that his widow should adopt the son of his daughter Gnanambal, and in the first part his will after making provisions for his two daughters, his wife and adoptive mother and also for certain charities, he left the rest of his properties to the son of Gnanambal that was to be adopted by his widow. In the second part of the will, which is comprised in paragraphs 11 to 16, the testator sets out the modifications which he desires to make in the earli er dispositions in case a son of one of his nephews was adopted by the widow. It was not the intention of the testa tor that on the happening of the second contingency, all 958 the earlier provisions of the will would stand cancelled and the entire dispositions of the testator 's property would have to be found within the four corners of paragraphs 11 to 16 of the will. In our opinion, the provisions made for the two daughters, the widow and the adoptive mother as made in paragraphs 5, 6 and 7 of the will and also the provisions for charities and payment of debts contained in paragraphs 9 and 10 were meant to be applicable under all the three contingencies referred to above. This is clear from the fact that provisions of paragraphs 7, 9 and 10 have not been repeated or incorporated in paragraphs 11 to 16, although it cannot be suggested that they were not to take effect on the happening of the second contingency. Again in the third contingency contemplated by the testator, which is described in paragraph 20, it is expressly stated that if no adoption is made, the eldest or any son of Gnanambal would inher it the properties and he shall take the properties subject to the conditions mentioned in the will. The conditions spoken of here undoubtedly refer to the provi sions made for the mother, wife and the two daughters of the testator as well as in respect to payment of debts and carrying out of the charities specified in paragraph 10. The changes that are to take effect on the happening of the second event are in regard to the bequests in favour of the adopted son. Under paragraph 4 of the will, the adopted son was to get all the p. roperties of the testator with the exception of those given to the two daughters, the mother and the wife. Under paragraph 11, if the adoption is of a nephew 's son of the testator, the adopted son gets only the Kokkur properties and the reversionary interestin Nallathukudi village after the death of the testator 's wife and mother. The village Maruthanthanallur which would go to the adopted son under paragraph 4 is taken away under para graph 11 and is given to Gnanambal. She is also given the remaining interest in the Mayavaram house which was given to the adopted son under paragraph 6. Subject to the changes thus made, the provisions 959 of paragraphs 5, 6 and 7 would, in our opinion, still remain operative even if the person adopted was a nephew 's son of the testator. No change is made in paragraphs 11 to 16 with regard to the provision in paragraph 5 of the will. In paragraph 13 it is only stated that the village Kothangudi shall be enjoyed by Nagammal as stated in paragraph 5. It may be conceded that this statement by itself does not let in the entire provision of paragraph 5, but that is not material for our present purpose. It is enough that para graph 5 has not been changed or altered in any way. The statement in paragraph 13 may, after all, be a loose expres sion which the testator used only for the purpose of empha sising that the Kothangudi village would be enjoyed by Nagammal even if Gnanambal 's son was not adopted. This is not by way of making any new disposition, but only to affirm what has been already done. The affirmation of a portion of the provision which is perfectly superfluous cannot exclude the rest. It is somewhat difficult to say why the rest of the provisions in paragraph 5, particularly the benefit that was meant to be given to Alamelu, was not repeated in para graph 13. It may be that the testator did not consider it necessary or it may be that it was due to inadvertance. It is to be noted here that the testator did not mention any where in paragraphs 11 to 16 the small house that was given absolutely to Nagamreal under paragraph 7. It was certainly not the intention of the testator that Nagammal would not have that house on the happening of the second contingency. If paragraph 5 itself is held to be applicable and in our opinion it should be so held there is no question of adding to or altering any of the words made use of by the testator. It is not a question of making a new will for the testator or inventing a bequest for certain persons simply because the will shows that they were the objects of the testator 's affection. The provision is in the will itself and it is only a question of interpretation as to whether it is ap plicable in the circumstances which have happened in the present case. The position, therefore, seems 960 to be that the disposition made in paragraphs 5, 6 and 7, which were in favour of the mother, the wife and the two daughters of the testator were meant to take effect immedi ately on the testator 's death. They were not contingent gifts in the sense of being made dependent upon the adoption of Gnanambal 's son by the wife of the testator. Only the reversionary interest in the Mayavaram house, which was to vest in the adopted son under the provision of paragraph 6 after the death of the widow and the mother was taken away from the adopted son and given to Gnanambal in case the person adopted was not her own son. If the whole of para graph 5 remains operative the Injigudi house must also be deemed to have been given to Nagammal for her life and in fact the evidence is that she enjoyed it so long as she was alive. No difficulty also arises regarding the payment of Rs. 5,000 to Alamelu as has been stated by the High Court in its judgment. Having regard to the meticulous care with which the testator seems to have attempted to provide for the differ ent contingencies that might arise and the anxiety displayed by him in making an effective disposition of all the proper ties he owned, it is not probable that he would omit to make any provision regarding the future devolution of the Kothan gudi village if he really thought that such direction had to be repeated in the latter part of the will. The omission of the gift of Rs. 5,000 to Alamelu also cannot be explained on any other hypothesis. It is not necessary for the purpose of the present case to invoke any rule of presumption against. intestacy, but if the presumption exists at all, it certainly fortifies the conclusion which we have arrived at. The result is that the appeal is allowed, the judgment and decree of the of the High Court are set aside and those of the Subordinate Judge restored. The appellant will have costs of all the courts. Appeal allowed. Agent for respondent No. 1: M. section Krishnamoorthi Sastri.

The cardinal maxim to be observed by courts in constru ing a will is to endeavour to ascertain the infentions of the testator. This intention has to be gathered primarily from the language of the document which is to be read as a whole without indulging in any conjecture or speculation as to what the testator would have done if he had been better informed or better advised. The courts are however entitled and bound to bear in mind other matters than merely the words used. They must consider the surrounding circumstances, the position of the testator, his family relationship, the probability that he would use words in a particular sense, and many other things which are often summed up in the somewhat picturesque figure the court is entitled to put itself into the testator 's armchair '. But all this is solely as an aid to arriving at a right construetion of the will, and to ascertain the meaning of the language when used by that particular testator in that document. As soon as the construction is settled, the duty of the court is to carry out the intsentions as expressed. The court is in no case justified in adding to testamentary dispositions. In all cases it must loyally carry out the will as properly construed, and this duty is 950 universal, and is true alike of wills of every nationality and every religion or rank of life. A presumption against intestacy may be raised if it is justified by the context of the document or the surrounding circumstances; but it can be invoked only when there is undoubted ambignity in ascertainment of the intentions of the testator. It cannot be that merely with a view to avoiding intestacy you are to do otherwise than construe plain words according to their plain meaning. A Hindu died leaving a widow, a widowed daughter and a married daughter G, after he had made a will giving authori ty to his widow to adopt a son of G should she beget one, or in the alternative a son of one of his nephews. 4 of the will provided that if his widow adopted G 's son all his properties except the village of K and the house at I and other properties disposed of by the will shall pass to the adopted son; and para. 5 provided as follows: ' 'The whole of the village of K and the house a I, my daughter N shall enjoy with life interest and after her the said property shall pass to my daughter G and her children on payment by the latter of Rs. 5,000 to A, the daughter of N." Later on, amongst the provisions which he wished to make if a son of a nephew was adopted, there was a provision which ran as follows: "Para. 13. The village of K shall be enjoyed by N as stated in para. " A nephew 's son was adopted and he instituted a suit against G after N 's death for recovery of the village K contending that under para. 13 of the will there was no disposition of the village after the life interest of N and on her death the village vested in him as the testator 's heir: Held, on a construction of the will as a whole, that the teststor did not intend that in the contingency of the adoption of nephew 's son, the village K should pass, on N 's death, to the adopted son; on the other hand, the provisions of para. 5 of the will were intended to apply even in the case of such a contingency and the village passed to G on N 's death under para. 5 of the will. Judgment of the High Court of Madras reversed. Venkatanarasimha vs Parthasarathy (41 I.A. 51) and Re Edward; Jones vs Jones , referred to.

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In the matter of Petition for Special Leave to Appeal No. 230 of 1953. Rajinder Narain for the Respondents. N. C. Chatterjee (Sukumar Ghose with him) for the Appellants. April 5. The Order of the Court was delivered by MUKHERJEA C.J. This is an application by the respondents in Special Leave Petition No. 230 of 1953, praying for summons to the appellants to show cause why the special leave obtained by the latter should not be rescinded in accordance with the provision of Order XIII, rule 13 of the Supreme Court Rules. The appeal is directed against a judgment of a Division Bench of the Calcutta High Court affirming, on appeal, a decision of a single Judge sitting on the Original Side of that Court. The appellants, having been refused certificate by the High Court, presented before us an application under article 136 of the Constitution and special leave to appeal was granted to them by an order of this Court dated the 25th May 1954. By that order the appellants were required to furnish security for costs amounting to Rs. 2,500 within six weeks and the enforcement of the award, which was the subject matter of the appeal, was stayed on condition that the appellants deposited in Court a sum of Rs. 28,000 within four weeks from the date of the order. On the 15th of June 1954 the Registrar of this Court transmitted to the Original Side of the Calcutta High Court certified copies of the order granting special leave and also of the special leave petition with a request that these documents might be included in the printed records of the case. It is not disputed that in pursuance of the directions given 246 by this Court the appellants did deposit the amount required as security for costs and also the sum of Rs. 28,000 within the time mentioned in the order. On the 29th November 1954 the respondents ' Solicitors in Calcutta wrote a letter to the Registrar of the Original Side of the Calcutta High Court complaining of delay on the part of the appellants in prosecuting the appeal. It was stated inter alia that although six months had elapsed since special leave was granted by this Court, the respondents were not served with notice of the admission of the appeal and no steps were taken by the appellants to get the records printed or transmitted to this Court. In reply to this letter the Registrar informed the respondents ' Solicitors that according to the practice of the Calcutta High Court it was incumbent on the appellants to make a formal application to the Appellate Bench of the Court for declaring the appeal finally admitted, and this was to be done on notice to the other parties under Order XLV, rule 8 of the Civil Procedure Code and on filing in Court a copy of the order of the Supreme Court granting special leave to appeal as well as the application upon which such order was made. Unless and until an order was made by the High Court declaring the appeal to be admitted, no action could be taken by the office in the matter. Thereupon on the 11th of January 1955 an application was filed by the appellants praying that leave might be given to them to file the certified copy of the special leave petition and also that of the order passed upon it and that the appeal might be finally admitted. This application came up for hearing before the learned Chief Justice and Lahiri, J. of the Calcutta High Court and on the 20th of January 1955 the learned Judges made the following order: "In this matter special leave to appeal to the Supreme Court was granted by that Court on the 25th May 1954. On the 21st June following, the Appellant furnished the necessary security. It was then the duty of the Appellant to take the necessary steps for the final admission of the appeal in order that the preparation of the Paper Book might thereafter be 247 undertaken. Under the Rules and practice of this Court the step to be taken is that the Appellant to the Supreme Court should make an application for leave to file the certified copy of the petition for Special Leave and also a certified copy of the order granting Special Leave which have been filed along with the present application. . . . ." When the matter came up for hearing on the last occasion we enquired whether the Appellants had any explanation to give for the delay which bad occurred. It was said that the certified copy of the application for Special Leave had been obtained only recently. It was however not explained why when an application for a certified copy of the order was made a similar application for a certified copy of the petition also could not be made. In all the circumstances we consider it right that the disposal of the present application should stand over for a month in order that the respondents may take such steps as they desire to take before the Supreme Court". The above facts and order of the High Court were communicated to the Registrar of this Court by Shri Rajinder Narain, Advocate for the respondents, by his letters dated the 17th and 31st of January 1965 and on the basis of the facts stated above, he requested that action should be initiated by the Registrar against the appellants for non prosecution of the appeal. The Registrar told the learned Advocate that he had not received any report from the High Court regarding any laches on the part of the appellants and without any such report, it was not possible for him to take any action in the matter. The Advocate himself, it was said, was quite at liberty to make a formal application to the Court in such way as he considered proper. The views thus expressed by the Registrar of this Court were communicated by him to the Registrar of the High Court, Original Side, Calcutta. On the 4th March 1955 Shri Rajinder Narain filed a formal petition addressed to the Registrar alleging inordinate delay on the part of the ap pellants in filing in the High Court certified copies of 248 the Special Leave petition and the order made by this Court thereupon and praying that summons might be issued to the appellants to show cause why the appeal should not be dismissed for non prosecution. Before the Registrar could take any further steps in the matter, the application of the appellants for final admission of the appeal made in the High Court came up for further consideration before the Appellate Bench consisting of the Chief Justice and Mr. Justice Lahiri and on the 7th March, 1955 the learned Judges made an order directing, for the reasons given therein, adjournment of the application for admission of the appeal before them, sine die pending orders which this Court might pass on the application of the respondents. The application of the respondents which purports to have been made under Order XIII, rule 13 of the Supreme Court Rules was referred by the Registrar for orders to the Court and it has now come up for hearing before us. Shri Rajinder Narain appearing in support of the petition has Contended before us that the appellants were guilty of serious laches inasmuch as they did not file in the High Court, till 8 months after the special leave was granted, copies of the special leave petition as well as of the order passed upon it; nor did they make an application to the Appellate Bench for admission of the appeal without which no further steps could be taken in the matter of printing and transmission of the record. As the appellants could not give any satisfactory explanation for this inordinate delay on their part, the special leave, it is argued, should be rescinded. Mr. Chatterjee, who appeared for the appellants, has contended @n the other hand that in a case like the one before us where the appeal has come up to this Court by special leave and not by a certificate granted by the High Court, there was no duty cast upon the appellants to make a formal application in the High Court for final admission of the appeal or to file therein certified copies of the special leave petition and the order made thereupon. His argument is that under Order XXXII, rule 9 of the Original Side Rules of the Calcutta High Court, a 249 Supreme Court appeal must be deemed to have been admitted by the very order of this Court granting special leave and as soon as the appellants have carried out the directions of the Supreme Court regarding furnishing of security or making of other deposits as the case may be, it is incumbent upon the Registrar to issue a notice of the admission of the appeal for service upon the respondents. Such notice indeed has got to be served by the appellants ' attorney; but as no notice was at all issued by the Registrar in the present case as is contemplated by rule 9 of Order XXXII of the Original Side Rules of the Calcutta High Court, no blame could attach to the appellants for not taking further steps in the matter. The contention of Mr. Chatterjee appears to us to be wellfounded and as it seems to us that doubts have arisen at times regarding the precise procedure to be followed in cases where an appeal comes to this Court by special leave granted under article 136 of the Constitution, it is necessary to examine the provisions bearing upon it as are contained in the Rules of the Supreme Court or of the High Court concerned read along with the relevant provisions of the Civil Procedure Code. Ordinarily when a High Court grants a certificate giving leave to a party to appeal to this Court, it is ,that Court which retains full control and jurisdiction over the subsequent proceedings relating to the prosecution of the appeal till the appeal is finally admitted. It is for the High Court to see that its directions are carried out regarding the furnishing of security or the making of deposit and when these conditions are fulfilled, it has then to declare the appeal finally admitted under Order XLV,rule 8 of the Civil Procedure Code. The jurisdiction of the Supreme Court begins after the appeal is finally admitted. When however the appeal comes to this Court on the strength of a special leave ' granted by it, the position is different. In such cases the order of the Supreme Court granting special leave by itself operates as an admission of the appeal as soon as the conditions in the order relating to fur 250 nishing of security or making of a deposit are complied with. That this is the true position will be clear from the procedural provisions contained in the Rules of the Supreme Court as well as of the Original Side of the Calcutta High Court. Order XIII, rule 8 of the Supreme Court Rules lays down: "After the grant of special leave to appeal by the Court, the Registrar shall transmit a certified copy of the order to the court or tribunal appealed from". Rule 9 then says: "On receipt of the said order, the court or tribunal appealed from shall, in the absence of any special directions in the order, act in accordance with the provisions contained in Order XLV of the Code, so far as applicable". It is to be noted here that although this rule does refer to the provisions of the Order XLV of the Civil Procedure Code, these provisions are to be followed only so far as they are applicable. It is surely the duty of the High Court to see that security is furnished or a deposit is made in accordance with the directions of the Supreme Court and these directions are to be found in the order of the Supreme Court which the Registrar is bound to transmit to the High Court under Order XIII, rule 8 of our Rules. We do not think it is necessary for the appellants to file afresh a copy of the Supreme Court order or the petition upon which it was made in order that they may form part of the record of the Supreme Court appeal. They would come in the record as soon as they are transmitted by the Registrar in accordance with the rule of our Court mentioned above and would have to be included in the Paper Book when it is printed. The Registrar of the High Court undoubtedly took these orders as part of the record without the appellants ' filing them afresh, for he accepted the security and deposit of other moneys from the appellants on the basis of these orders. If there was any failure on the part of the appellants to furnish the security or to make the deposit in the way indicated in the order of the Supreme Court, it would have been the duty of the Registrar of the High Court to intimate these 251 facts to the Registrar of the Supreme Court and the latter thereupon could take steps for revoking the special leave as is contemplated by Order XIII, rule 12 of our Rules. In our opinion, it is also not necessary for the appellants to make a formal application for admission of the appeal in cases where special leave has been granted by the Supreme Court; and this appears clear from the provision of Order XXXII, rule 9 of the Original Side Rules of the Calcutta High Court which runs as follows: "9. On the admission of an appeal to the Supreme Court whether by the order of this Court under Order XLV, rule 8 of the Code, or by an order of the Supreme Court giving the appellant Special Leave to Appeal, but subject in the latter case to the carrying out of the directions of the Supreme Court as to the security and the deposit of the amount re quired by rule 5, notice of such admission shall be issued by the Registrar for service on the respondent on the record, whether be shall have appeared on the hearing of the application for a certificate under Order XLV, rule 3 of the Code, or not. Such notice shall be served by the attorney for the appellant and an affidavit of due service thereof shall be filed by such attorney immediately after such service". The opening words of this rule plainly indicate that there could be admission of appeal either by order of the High Court under Order XLV, rule 8 of the Civil Procedure Code or by the order of the Supreme Court itself giving special leave to appeal. (As the order granting special leave itself lays down the conditions to be fulfilled by the appellants, the admission will be regarded as final only when the directions are complied with and as soon as this is done it would be the duty of the Registrar to issue a notice of the admission of the appeal for service upon the respondents). This notice is to be served by the attorney for the appel lants and an affidavit of due service shall be filed by him immediately after the service is effected. In the present case the Registrar, Original Side of the, Calcutta High Court should have issued a notice of 252. the admission of the appeal to be served upon the respondents as soon as the security for costs and other deposits of money were made by the appellants. This was not done as the procedure to be followed was not correctly appreciated. It is true that the appellants remained idle for a considerable period of time even after they furnished security and did not take any steps towards printing of the record. But as there was an initial irregularity in the matter of issuing a notice under. Order XXXII, rule 9 of the Original Side Rules of the Calcutta High Court, we are unable to hold that the appellants were guilty of any laches for which the special leave deserves to be rescinded. The result is that the application of the respondents is dismissed. The Registrar, Original Side of the Calcutta High Court, will now issue a notice under Order XXXII, rule 9 of the Original Side Rules and prompt steps should be taken by the appellants towards printing and transmission of the record to this Court. We make no order as to costs of this application.

By an order dated May 25, 1954, the Supreme Court granted the petitioners in the case special leave to appeal against the judgment and order of the High Court at Calcutta. In accordance with the order, the petitioners furnished the security amounts directed to be deposited within the time specified in the order. The Registrar of the High Court did not issue any notice of admission of 'appeal to be served by the Appellant 's Solicitor on the Respondents as envisaged in rule 9 of Order XIII, S.C.R. Nor did the Appellant following the practice of the High Court, move that Court for It admission" of the appeal until January 11, 1955. The Respondents first moved the High Court complaining of default on the part of the appellants in due prosecution of the appeal and latter moved the Supreme Court for action under rule 13 of Order XIII of the Supreme Court Rules. The application in the High Court was therefore kept pending. Held: After the grant of special leave under article 136, the Registrar of the Supreme Court transmits, in accordance with the 244 provisions of rule 8 of Order XIII of the Supreme Court Rules, a certified copy of the Supreme Court 's order to the Court or tribunal appealed from, Rule 9 of Order XIII of the Supreme Court Rules enjoins upon the Court or tribunal appealed from to act, in the absence of any special directions in the order, in accordance with the provisions contained in Order XLV of the Civil Procedure Code, so far as they are applicable. Accordingly the Court or Tribunal to which the order is transmitted receives deposits on account of security for the Respondents ' costs, printing costs, and any other deposits if so ordered by the Supreme Court, and sets about preparing the record of the appeal for transmission to the Supreme Court. Therefore, action under rule 13 of Order XIII, S.C.R., for rescinding the order granting special leave cannot be initiated unless the Court or tribunal appealed from reports to the Supreme Court that the appellant has not been diligent in taking steps to enable that Court to carry out the directions, if any, contained in the order of the Supreme Court and to act in accordance with the provisions of Order XLV of the Civil Procedure Code so far as applicable to appeals under Article 136 of the Constitution. In view of rule 9 of Order XIII of the Supreme Court Rules, the application of Order XLV of the Code of Civil Procedure to appeals under Article 136 of the Constitution is restricted. The Court or tribunal appealed from, no doubt, has to carry out the directions contained in the order granting special leave, and to receive the security for the Respondents ' costs and other necessary deposits, but once the security is furnished and the other deposits are made, the formality of "admission" envisaged by rule 8 of Order XLV of the Civil Procedure Code is unnecessary, because in such cases the order .granting special leave by itself operates as an admission of the appeal as soon as the conditions in the order relating to the furnishing of security or making of deposits are complied with. Appeals under Article 136 thus stand on a different footing from appeals on grant of certificate by the High Court itself. In the letter case, the High Court has exclusive jurisdiction over the matter until it admits the appeal under rule 8 of Order XLV of the Civil Procedure Code. Rule 9 of Chapter 32 of the Original Side Rules of the Calcutta High Court envisages "admission" of appeals to the Supreme Court whether by an order of the Supreme Court or under Order XLV of the Civil Procedure Code. And when an appeal arising from an order made by the Supreme Court under Article 136 of the Constitution, has been so "admitted", the said rule enjoins upon the Registrar to issue notice of such admission for service by the appellant on the Respondents. In cases where special leave has been granted by the Supreme Court, it is not necessary for the appellant to move the High Court appealed from for the formal admission of his appeal. As the order granting special leave itself lays down the conditions to be fulfilled by the appellants, the admission will be regarded as final only when the directions are complied with and as 245 soon as this is done it would be the duty of the Registrar to issue a notice of the admission of the appeal for service upon the respondents. In default of the issue of such notice, the appellant cannot be held responsible for laches in the prosecution of his appeal with regard to the steps required to be taken after the admission of his appeal.

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Civil Appeal Nos. 545 and 546 of 1960. Appeals from the judgment and order dated August 13, 1954, of the Madras High Court in Writ Petitions Nos. 743 and 748 of 1954. K.N. Rajagopal Sastri and P. D. Menon, for the appellants. The respondent did not appear. January 17. The Judgment of the court was delivered by SHAH, J. These are two appeals with certificates of fitness granted by the High Court of Judicature at Madras against certain orders passed in Writ Petitions under article 226 of the Constitution. One Ramaswami Iyer father of the respondent was assessed to income tax in the status of a Hindu Undivided Family. Ramaswami Iyer died in 1949 and the respondent M.R. Vidyasagar became the manager of the family. The family was a partner through its manager in a firm styled "The Madura Knitting Company", and the share in the profits of the partnership which was registered under the Indian Income tax Act was the principal source of its assessable income. Under section 18A of the Indian Income tax Act, the Hindu undivided family was liable to pay advance tax for each of the assessment years 1946 47, 1947 48 and 1948 49. The Income tax Officer, Madura, issued notices under section 18A (1) of the Indian Income tax Act for payment of advance tax on the basis of the preceding year 's income. It was open to the assessee to submit a revised estimate of his income under section 18A (2) in respect of the year in question and Ramaswami Iyer who was at the material time the 615 manager availed himself of the option to submit a revised estimate and estimated the income for each of the assessment years 1946 47 and 1948 49 at Rs. 45,000/ . The assessments of these two years were completed respectively on November 28, 1950 and February 29, 1951, and the income received from the Madura Knitting Company was included in the assessments under section 23(5). The Income Tax Officer assessed the total income of the Hindu undivided family for the year 1946 47 at Rs. 1,01,335/ and for the year 1948 49 at Rs. 3,10,697/ . As the total income assessed far exceeded the estimate of Rs. 45,000/ , submitted by the manager of the assessee family, the Income Tax Officer in making the assessment ordered the respondent to pay Rs. 6,999/12/ and Rs. 36,687/ respectively for the assessment years 1946 47 and 1948 49 as interest. In appeals against the orders of assessment by the Madura Knitting Company, by order dated March 12, 1954 the Income tax Appellate Tribunal reduced the income of the firm, and on that basis reduced the share of the family in the income of the firm for the year 1946 47 to Rs. 83,335/ and for the year 1948 49 to Rs. 2,83,868/ . The Income tax Officer, Madura, in giving effect to the orders passed by the Appellate Tribunal under the 3rd proviso to section 18A (6) reduced the interest to Rs. 4,358/ for the year 1946 47 and to Rs. 32,714/10/ for the year 1948 49, and called upon the respondent to pay the arrears of tax inclusive of interest so adjusted. The respondent then called upon the Income Tax Officer not to levy interest under section 18A (6) submitting that the levy was illegal and unjustified, and in the alternative requested that the interest be waived under the powers vested under the 5th proviso to section 18A (6) which was added by section 13 of the Indian Income tax (Amendment) Act (25 of 1953). The Income tax Officer declined to accede to the request and the respondent 's application to the 616 Inspecting Assistant Commissioner for cancelling the levy of interest was also rejected. The respondent then moved two petitions (Nos. 743 and 748) under article 226 of the Constitution in the High Court of Judicature at Madras for writs cancelling the orders imposing liability for payment of interest, contending that the levy of penal interest was opposed to law and was prima facie, unjustified on the facts and circumstances of the case. The respondent submitted that the levy of interest under section 18A(6) was penal in character and could not be imposed upon the legal representative of the deceased manager who was not in any manner responsible for the original return filed by the firm of which the manager was a partner. He also contended that the levy was not warranted by the provisions of the Indian Income tax Act inasmuch as in respect of the assessment years in question the respondent was not the assessee, that the delay in completing the assessment was not attributable either to the then manager of the family, Ramaswami Iyer or to himself and therefore, no liability for payment of interest could be imposed, and that in any event refusal to cancel the levy of interest was arbitrary and not based on any judicial exercise of discretion vested in the Income tax Officer. A Division Bench of the Madras High Court held that the provision imposing liability to pay interest under sub section (6) of section 18A was not opposed to law and could be enforced against the legal representative of the deceased manager, who was a partner of the assessee firm. The High Court, however, was of the view that as the Income tax Officer and the Inspecting Assistant Commissioner had failed to consider whether in the circumstances of the case, the reduction or waiver of the interest was justified, it be ordered that the Income tax Officer to decide whether the petitioner had made out a case for the exercise of the discretion vested in the 617 Income tax Officer to waive or reduce the interest under the powers conferred on him by the 5th proviso of cl. (6) of section 18A. Against that order with certificates of fitness these appeals are preferred by the Commissioner of Income Tax. Section 18A which imposes liability upon the tax payer to make advance payment of tax was incorporated into the Indian Income tax Act by Act 11 of 1944. That section enables the Income tax Officer on or after the 1st day of April in any financial year, by order in writing, to require an assessee to pay to the Central Government in specified instalments income tax and super tax payable on so much of such income as is included in the assessee 's total income of the previous year in respect of which he had been assessed. Under sub section (2), if the assessee who is required to pay tax by an order under sub section (1) estimates at any time before the last instalment is due that the part of his income to which the sub section applies for the period which would be the previous year for an assessment for the year next following is less than the income on which he is required to pay tax and accordingly wishes to pay tax which is less than amount he is required to pay, he may send to the Income Tax Officer an estimate of the tax payable by him, and pay tax as accords with his statement. It is, however, provided by sub section (6) inter alia that where in any year the assessee had paid tax under sub s.(2) on the basis of his own estimate and the tax paid is less than 80% of the tax determined on the basis of his regular assessment (so far as such tax relates to income to which the provisions of section 18 do not apply) simple interest at the rate of 6% per annum from the 1st day of January in the financial year in which the tax was paid upto the date of the said regular assessment shall be payable by the assessee upon the amount by which the tax so paid falls short of the said 80%. As originally enacted the liability to pay interest upon 618 the amount by which the tax paid fell short of 80% of tax was absolute. The Income tax Officer had no discretion in the matter, and was bound to impose liability for payment of interest. But by section 13 of the Indian Income tax (Amendment) Act, 1953 (25 of 1953), an additional proviso was enacted to sub section (6) in the following form: "Provided further that in such cases and under such circumstances as may be prescribed, the Income tax Officer may reduce or waive the interest payable by the assessee". This proviso was given retrospective effect as from April 1, 1952. Thereafter in exercise of powers conferred by section 59 the Central Board of Revenue added Rule 48 to the following effect: "48. The Income tax Officer may reduce or waive the interest payable under section 18A in the cases and under the circumstances mentioned below, namely: (1) Where the relevant assessment is completed more than one year after the submission of the return, the delay in assessment not being attributable to the assessee. (2) Where a person is under section 43 deemed to be an agent of another person and is assessed upon the latter 's income. (3) Where the assessee has income from an unregistered firm to which the provisions of clause (b) of sub section (5) of section 23 are applied. (4) Where the "previous year" is the financial year or any year ending near about the close of the financial year and large profits are made after the 15th of March in circumstances which could not be foreseen. 619 (5) Any case in which the Inspecting Assistant Commissioner considers that the circumstances are such that a reduction or waiver of the interest payable under section 18A (6) is justified. The effect of the incorporation of the 5th proviso in section 18A (6) and of Rule 48 was manifestly to authorise the Income Tax Officer in exercise of his discretion to relieve against the rigour of the inflexible rule originally enacted in cl. (6) about payment of interest by the assessee when the tax paid by him on his estimate fell below 80% of the tax payable on regular assessment. The only question which falls to be determined in these appeals is whether the benefit of the fifth proviso to section 18A (6) could be claimed in respect of the assessments of the income of the respondent 's family which were completed by the Income tax Officer before April 1, 1952. The High Court was of the view that even if the assessment by the Income Tax Officer was completed before April 1, 1952, if the final adjustment pursuant to the order of the Appellate Tribunal was made after that date the Income Tax Officer was competent, in exercise of the powers with which he was invested by the fifth proviso to cl. (6) of section 18A to reduce or waive the interest payable by the assessee and the Income tax officer having failed to exercise his discretion a case was made out for the issue of a writ under article 226 of the Constitution directing that officer to consider whether in the circumstances of the case relief may be granted to the respondent. On behalf of the Commissioner of Income tax it is urged that the power conferred by the fifth proviso may undoubtedly be exercised in those cases where assessment is completed on or after April 1, 1952, but where the assessment was completed and liability to pay interest had crystallized under 620 sub s.(6) as it originally stood, the Income tax Officer has no power under the amended sub section to reduce or waive the interest ordered to be paid by the assessee even if the proceedings in assessment are pending in appeal before the Appellate Assistant Commissioner or the Appellate Tribunal. It was urged that the interest under section 18A(6) is payable upto the date of the regular assessment and if in the contingencies prescribed by section 18A(6), as originally enacted liability to pay interest crystallized, the Income tax Officer could not, in exercise of the power invested by the amending Act reopen the order, because the legislature had given to the amending statute only a partial retroactive operation and its retroactivity could not be enlarged; to do so, would be plainly to defeat the plain intendment of the Legislature. It is unnecessary for the purpose of these appeals to consider whether an assessment which has become final before the date on which the fifth proviso came into operation, and which is not subject to any pending appeal, can be reopened and the benefit of the power conferred by the fifth proviso be afforded to an assessee. The question which falls to be determined is whether in an assessment subject to an appeal which is pending, or which may be lawfully filed, the power to reduce or waive the interest can be exercised. There is, in our judgment, inherent evidence in the rule indicating that such a power can be exercised even if the regular assessment is completed by the Income tax Officer before April 1, 1952. The power vested in the Income tax Officer to reduce or waive interest payable by an assessee is exercisable "in such cases or such circumstances as may be prescribed" by the Rules. By Rule 48 the Income tax Officer is given the power to reduce or waive interest payable under section 18A(6) in the events specified therein. By the first clause of Rule 48 where the assessment is completed more than one year after the submission of the return the delay in assessment 621 not being attributable to the assessee the power of the Income tax Officer may be exercised There is nothing in the Rule which indicates that the power to grant relief may be exercised only before the regular assessment is completed by the Income tax Officer. The terms of clauses (1) and (5) of the Rule clearly support the view that the order reducing or waiving interest may be passed even after the order of assessment is made, and interest is included. Again, by making Act 25 of 1953 operative retrospectively from April 1, 1952, the Legislature has evinced an intention that to regular assessments made between April 1, 1952, and the date on which the Act was enacted, the fifth proviso to 18A(6) may apply. The argument that liability to pay interest crystallizes when the Income tax Officer incorporates the direction for payment of interest, because the order is not made appealable has no force. The order for payment of interest was liable to be modified if the assessment of income was varied by the Appellate Assistant Commissioner, or by the Tribunal. It is true that interest could be charged upto to the date of regular assessment by the Income tax Officer but that does not support the theory of crystallization of liability. If therefore the quantum of liability was capable of being altered even after the date of the regular assessment, the assumption that the power to give relief against a rigid statutory provision should be restricted to cases which are decided by the Income tax Officer only after April 1, 1952, is not warranted. The power of the Income tax Officer arose only after April 1, 1952, but there is nothing in the act to show that it was to be exercised only in respect of assessments made by the Income tax Officer after that date. In our judgment, the jurisdiction under the fifth proviso may be exercised by the Income tax Officer in all cases which are pending on April 1, 1952, before the Income tax Officer or any superior authority having under the Income tax Act power 622 to modify the assessment of income, or are commenced after that date. In the present case, the original assessments made by the Income tax Officer in both the years in question were modified in view of the orders passed by the Appellate Tribunal in the assessment of the Madura Knitting Co. The order of the Appellate Tribunal was passed on April 12, 1953, i.e. after the date on which Act 25 of 1953 came into operation. After that date the Income tax Officer was bound to give effect to the orders of the Appellate Tribunal and to adjust liability in computing the assessable income and the tax payable thereon. The Income tax Officer being bound to adjust liability to pay interest under cl. (6) of section 18A we see no reason why in adjusting that liability he may not exercise the powers with which he has been invested since April, 1952, if the circumstances of the case warrant such exercise. In our view the High Court was right in holding that the Income tax officer had the power in the case of the assessments in question to exercise the authority conferred by the fifth proviso to section 18A(6) and he having failed to exercise the discretion, a writ requiring him to consider whether a case is made out for the exercise of his discretion was properly issued. These appeals therefore fail and are dismissed. Appeals dismissed.

The Income tax Officer, Madura, issued notice under section 18A (1) of the Indian Income Tax Act, 1922, for payment of advance tax. R, the then manager of the Hindu Undivided family availed of the option to submit a revised estimate for the years 1946 47 and 1948 49. The assessment of these two years were completed respectively in November, 1950 and February, 1951, as the total income assessed far exceeded the estimate submitted by R, the Income tax Officer ordered the respondent, the legal representative of R, to pay the interest under section 18A (6) of the Act. On appeal, the Income tax Appellate Tribunal reduced the income and the Income tax Officer in giving effect to the said order reduced the interest and called upon the respondent to make payment. The respondent asked the Income tax Officer not to levy interest under section 18A (6), submitting that the levy was illegal and unjustified, alternatively he requested that the interest be waived by virtue of the powers vested on the Income tax Officer under proviso 5 to section 18A (6) which was added by section 13 of Act 25 of 1953, with retrospective effect from April 1952. The Income tax Officer and the Inspection Assistant Commissioner declined to accede to the request. The respondent then moved the High Court at Madras for a writ under article 226 cancelling the levy of interest on the ground among others that refusal by the Revenue authorities to cancel the levy was arbitrary and not based on any judicial exercise of the discretion vested by the Act. The High Court upheld the plea, ordered the Income tax Officer to decide whether the respondent had made out a case for the exercise of the discretion. The only question in the appeal before the Supreme Court was whether benefit of the said 5th proviso to section 18A (6) may be granted in respect of assessments of income which were completed by the Income tax officer before April 1952. 614 ^ Held, that the jurisdiction under 5th proviso of section 18A (6) of the Income tax Act may be exercised by the income tax Officer in all cases which were pending on April 1, 1952 before him or any superior authority having under the Act power to modify the assessment of income.

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ivil Appeal No. 3607 of 1989. From the Judgment and Order dated 25.4.88 of Central Administrative Tribunal Hyderabad in T.A. No. 1185/86. R. Venkataramani, V.G. Pragasam and S.M. Garg for the Appellant. Kapil Sibal, Additional Solicitor General, B. Datta, Mrs. Indra Sawhney, Ms. Sushma Suri, B. Rajeshwar Rao, Vimal Dave and C.V. Subba Rao for the Respondents. 446 The Judgment of the Court was delivered by KANIA, J. This is an appeal by special leave against a decision of the Central Administrative Tribunal, Hyderabad in Transfer Application No. 1185 of 1986 (W.P. NO. 8226 of 1985). All the relevant facts have been set out by the Tribunal in its judgment. As we are in agreement with the reasoning and conclusions of the Tribunal in the impugned judgment, we propose to set out only the brief facts necessary for the disposal Of the appeal. Under the relevant rules, the recruitment to the post of Superintending Mechanical Engineer was by promotion and failing that by direct recruitment. It may be mentioned that for direct recruitment to the said post, the qualifications of a degree in Mechanical or Automobile Engineering was prescribed as essential. For promotion to the post of Direc tor (M.E.) the requisite qualification was five years 01 ' service in the grade of Mechanical Engineer (Senior). The appellant became eligible for promotion in 1978, but he was not promoted as there were some senior persons in his grade, who were promoted to the said post. On January 31, 1984, a Notification was issued by respondent No. 1, amending the said Rules and the said Notification was duly published in the Gazette of India. By the said amendment, the said Rules were amended and it was prescribed that for promotion to the post of Director (M.E.) a degree in Engineering was a requi site qualification. The appellant challenges the validity of this Notification on the ground that it affected his chances of promotion or alternatively his right to be considered for promotion to the post of Director (M.E.). The appellant is a Mechanical Engineer (Senior) in the Geological Survey of India, Southern Region, Hyderabad. The appellant is a diplo ma holder and does not hold any degree in engineering. On April 27, 1964 he was appointed as Transport Officer (Class I Technical Grade, Gruop 'A '). This post was redesig nated and merged with the post of Mechanical Engineer (Junior) in March 1968. On November 28, 1969, the Geological Survey of India (Group 'A ' and Group 'B ' Posts) Recruitment Rules, 1967, made under Article 309 of the Constitution were brought into force. The appellant was promoted as a Mechani cal Engineer (Senior) with effect from March 17, 1973 and his conditions of service were governed by the aforesaid rules. These rules have been amended from time to time. It was submitted by learned counsel for the appellant that the said amendment purported to be carried out by the said Notification was bad in law as it adversely affected a condition of service relating to promotion. It was submitted 447 by learned counsel for the appellant that if the rule, requiring a degree qualification for promotion to the post of Director (M.E.), was applied as far as the appellant was concerned, it would amount to giving a retrospective effect to the operation of the said rule and no retrospective rule could be framed under Article 309 of the Constitution. This contention was rejected by the Tribunal which held that it was for the Government to prescribe such qualifications as it considered fit for the post of Director (M.E.) and the Tribunal could not go into the question whether that quali fication was necessary unless the prescribing of the re quirement could be said to be perverse. The Tribunal further took the view that the appellant had no vested right to promotion but had a mere chance of promotion and he was not entitled to challenge the rule merely on the ground that it affected his chance of promotion. The said appeal is direct ed against the said decision. The main argument of learned counsel for the appellant is that the Tribunal was in error in holding that the rule affected merely a chance of promotion which the appellant had. It was submitted by him that although the appellant could not claim any right to be promoted, he certainly had the right to be considered for promotion and the amendment to the rule carried out by the said Notification depriving of that right was bad in law. Strong reliance was placed by the learned counsel for the appellant on the decision of this Court in T.R. Kapur and Others vs State of Haryana and Others, [1986] Supl. SCC 584 at 595 where it was held that right to be considered for promotion is a condition of service. This decision is, however, of no assistance to the learned counsel in support of his argument because the Bench which rendered the said decision has stated (at paragraph 16, page 595 of the said report) as follows: "It is well settled that the power to frame. rules to regu late the conditions of service under the proviso to Article 309 of the Constitution carries with it the power to amend or alter the rules with a retrospective effect. It is equal ly well settled that any rule which affects the right of a person to be considered for promotion is a condition of service although mere chance of promotion may not be. " It was further held that: "an authority competent to lay down qualifications for 448 promotion, is also competent to change the qualifications. The rules defining qualifications and suitability for promo tion are conditions of service and they can be changed retrospectively" It was, however, clarified that: "unless it is specifically provided in the rules, the em ployees who are already promoted before the amendment of the rules, cannot be reverted and their promotions cannot be recalled. " It is only in this sense, that is, as set out in the immediately preceding paragraph that the view has been taken that the rules cannot be retrospective. The ratio of this decision is not applicable to the case before us as there is no question of reverting the appellant. Again, it has been held by a Bench comprising three learned Judges of this Court, in State of Maharashtra and Another vs Chandrakant Anant Kulkarni and Others, ; (at paragraph 16, page 141 of the said report), that mere chances of promotion are not conditions of service and the fact that there was reduction in the chances of promotion did not tantamount to a change in the condition of service. A right to be considered for promotion is a term of service, but mere chances of promotion are not. It was also held there that mere passing of the departmental examination conferred no right on the concerned S.T. Inspectors of Bombay, to promotion. They merely became eligible for promotion. They had to be brought on to a select list, not merely on the length of service but on the basis of merit cum seniority principle. In our opinion, n0 retrospective effect has been given to the said amended rule. It is not argued that the appel lant has been reverted from the post which he occupies on the ground of any lack of any qualification. The only effect is that his chances of promotion or his right to be consid ered for promotion to the higher post is adversely affected. This cannot be regarded as retrospective effect being given to the amendment of the rules carried out by the impugned Notification and the challenge to the said notification on that ground must fail. The next argument advanced before us by the learned counsel for the appellant is that employees in the drilling stream who might be diploma holders could move by promotion to the grade of Director (Drilling) which is equivalent to the post of Director (Mechanical Engineering) and would be further eligible to be considered for the 449 next higher post of Deputy Director General (Engineering Service) on the basis of a common seniority of Directors (Mechanical) and Directors (Drilling). It was submitted that, in this situation, the requirement of a degree for promotion to the post of Director (Mechanical) must be regarded as unreasonable and bad in law. This argument was rejected by the Tribunal on the ground that the fact that for the higher post of Deputy Director General (Engineering Service), it is not necessary to hold a graduate degree is no reason why a degree requirement for the post of Director (Mechanical) should be regarded as unreasonable or bad in law. It is for the Government to decide what qualification was required for the promotion to the post of Director (M.E.) and, unless that requirement was totally irrelevant or unreasonable, it could not be said to be bad in law. In this regard, we agree with the reasoning and conclusions or ' the Tribunal. In the result, the appeal fails and is dismissed. There will be no order as to costs. G.N. Appeal dis missed.

The appellant, a diploma holder, was, in 1964, appointed as Transport Officer (Class I Technical Grade, Group A), which post was later redesignated and merged with the post of Mechanical Engineer (Junior) in 1968. The Geological Survey of India (Group 'A ' and Group 'B ' posts) Recruitment Rules, 1967, framed under Article 309 of the Constitution were brought into force in 1969. The appellant was promoted as a Mechanical Engineer (Senior) in 1973 and his conditions of service were governed by the said Rules, which had been amended from time to time. One such amendment made in 1984 prescribed that for promotion to the post of Director (M.E.), a degree in Engineering was a requisite qualifica tion. The appellant challenged before the Central Adminis trative Tribunal, the validity of the said notification on the ground that it affected his chances of promotion or alternatively his right to be considered for promotion to the post of Director (M.E.). It was contended that applying the amended Rule, in so far as the appellant was concerned, would amount to giving retrospective effect to the operation of the rule, and no retrospective rule could be framed under Article 309 of the Constitution. The Tribunal rejected the contention and held that it was for the Government to pre scribe such qualifications as it considered fit, and the Tribunal could not interfere unless it was shown to be perverse. Aggrieved against the Tribunal 's order, the appellant has preferred this appeal by special leave. Dismissing the appeal, this Court, HELD: 1. Mere chance of promotion is not condition of serv ice 445 and the fact that there was reduction in the chances of promotion did not tantamount to a change in the conditions of service. A right to be considered for promotion is a term of service, but mere chances of promotion are not. [448D] state of Maharashtra and Anr. vs Chandrakant Anant Kulkarnt and Others, ; , relied on. T.R. Kapur and Others vs State of Harvana and Others, [1986] (Suppl.) SCC 584, referred to. 2. In the instant case, no retrospective effect has been given to the said amended rule. It is not the case that the appellant has been reverted from the post which he occupies on the ground of lack of any qualification. The only effect is that his chances of promotion to the higher post is adversely affected. Alteration of rules of eligibility cannot be invalidated on the ground that an employee 's claim to be eligible for promotion is adversely affected. This cannot be regarded as retrospective effect being given to the amendment of the rules carried out by the Notification and the challenge to the said notification on that ground must fail. [448F G] 3. The fact that for the higher post of Deputy Director General (Engineering Service), it is not necessary to hold a graduate degree is no reason why a degree requirement for the post of Director (Mechanical) should be regarded as unreasonable or bad in law. It is for the Government to decide what qualification was required for promotion to the post of Director (M.E.) and, unless that requirement was totally irrelevant or unreasonable, it could not be said to be bad in law. [419B C]

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Civil Appeal No. 1597 of 1972. Appeal from the Judgment and Order dated 25th January, 1972of the Allahabad High Court in Civil Misc. Writ No. 3788/70. S.T. Desai, Shri Narain, J. B. Dadachanji, Ravinder Narain, S Swarup and Talat Ansari for the Appellant. G. N. Dikshit, M. V. Goswami and O. P. Rana for RR 1 3 and 5. Girish Chandra for Respondent No. 4. 651 A. B. Dewan, Ravinder Narain, section Swarup and A. N. Haksar for the Intervener (M/s. Modi Rubber Ltd.). The Judgment of the Court was delivered by BHAGWATI, J. , This appeal by certificate raises a question of considerable importance in the field of public law. How far and to what extent is the State bound by the doctrine of promissory estoppel ? It is a doctrine of comparatively recent origin but it is potentially so fruitful and pregnant with such vast possibilities for growth that traditional lawyers are alarmed lest it might upset existing doctrines which are looked upon almost reverentially and which have held the field for a long number of years. The law in regard to promissory estoppel is not yet well settled though it has been the subject of considerable debate in England as well as the United States of America and it has also received consideration in some recent decisions in India and we, therefore, propose to discuss it in some detail with a view to defining its contours and demarcating its parameters. We will first state briefly the facts giving rise to this appeal. This is necessary because it is only where certain fact situations exist that promissory estoppel can be invoked and applied. The appellant is a limited company which is primarily engaged in the business of manufacture and sale of sugar and it has also a cold storage plant and a steel foundry. On 10th October, 1968 a news item appeared in the National Herald in which it was stated that the State of Uttar Pradesh had decided to give exemption from sales tax for a period of three years under section 4A of the U.P. Sales Tax Act to all new industrial units in the State with a view to enabling them "to come on firm footing in developing stage". This news item was based upon a statement made by Shri M. P. Chatterjee the then Secretary in the Industries Department of the Government. The appellant, on the basis of this announcement, addressed a letter dated 11th October, 1968 to the Director of Industries stating that in view of the sales tax holiday announced by the Government, the appellant intended to set up a Hydro genation Plant for manufacture of Vanaspati and sought for confirmation that this industrial unit, which it proposed to set up would be entitled to sales tax holiday for a period of three years from the date it commenced production. The Director of Industries replied by his letter dated 14th October, 1968 confirming that "there will be no sales tax for three years on the finished product of your proposed Vanaspati factory from the date it gets power connection for commencing production." The appellant thereupon started taking steps to contact various financiers for financing the project and also initiated negotiations with manufacturers for purchase of machinery for setting 652 up the Vanaspati factory. On 12th December, 1968 the appellant 's representative met the 4th respondent who was at that time the Chief Secretary to the Government as also Advisor to the Governor and intimated to him that the appellant was setting up the Vanaspati factory solely on the basis of the assurance given on behalf of the Government that the appellant would be entitled to exemption from sales tax for a period of three years from the date of commencement of commercial production at the factory and the 4th respondent reiterated the assurance that the appellant would be entitled to sales tax holiday in case the Vanaspati factory was put up by it. The appellant by its letter dated 13th December, 1968 placed on record what had transpired at the meeting on the previous day and requested the 4th respondent "to please confirm that we shall be allowed sales tax holiday for a period of three years on the sale of Vanaspati from the date we start production." On the same day the appellant entered into an agreement with M/s. De Smith (India) Pvt. Ltd., Bombay for supply of plant and machinery for the Vanaspati factory, providing clearly that the appellant would have the option to terminate the agreement, if within 10 weeks exemption from sales tax was not granted by the State Government. The 4th respondent replied on 22nd December, 1968 confirming that "the State Government will be willing to consider your request for grant of exemption from U.P. Sales Tax for a period of three years from the date of production" and asked the appellant to obtain the requisite application form and submit a formal application to the Secretary to the Government in the Industries Department and in the meanwhile to "go ahead with the arrangements for setting up the factory". The appellant had in the meantime submitted an application dated 21st December, 1968 for a formal order granting exemption from sales tax under section 4A of the Act. It appears that the letter of the 4th respondent dated 22nd December, 1968 was not regarded as sufficient by the financial institutions which were approached by the appellant for financing the project since it merely stated that the State Government would be willing to consider the request for grant of exemption and did not convey any decision of the State Government that the exemption would be granted. The appellant, therefore, addressed a letter dated 22nd January, 1969 to the 4th respondent pointing out that the financial institutions were of the view that the letter of the 4th respondent dated 22nd December, 1968 "did not purport to commit the Government for the concession mentioned" and it was, therefore, necessary to obtain a formal order of exemption in terms of the application submitted by it. The 4th respondent, however, stated categorically in his letter in reply dated 23rd January, 1969 that the proposed Vanaspati Factory of the appellant "will be 653 entitled to exemption from U.P. Sales Tax for a period of three years from the date of going into production and that this will apply to all Vanaspati sold during that period in Uttar Pradesh itself" and expressed his surprise that "a letter from the Chief Secretary to the State Government stating this fact in clear and unambiguous words should not carry conviction with the financial institutions. " In view of this unequivocal assurance given by the 4th respondent, who not only occupied the post of Chief Secretary to the Government but was also Advisor to the Governor functioning under the President 's rule, the appellant went ahead with the setting up of the Vanaspati Factory. The appellant by its letter dated 25th April, 1969 advised the 4th respondent that the U.P. Finance Corporation, being convinced by the clear and categorical assurance given by the 4th respondent that the Vanaspati Factory of the appellant would be entitled to exemption from sales tax for a period of three years from the date of commencement of production, had sanctioned financial assistance to the appellant and the appellant was going ahead with the project in full speed to enable it to start production at the earliest. The appellant made considerable progress in the setting up of the Vanaspati Factory but it seems that by the middle of May 1969 the State Government started having second thoughts on the question of exemption and a letter dated 16 May, 1969 was addressed by the 5th respondent who was Deputy Secretary to the Government in the Industries Department, intimating that a meeting has been called by the Chief Minister on 23rd May, 1969 "to discuss the question of giving concession in Sales Tax on Vanaspati products" and requesting the appellant to attend the meeting. The appellant immediately by its letter dated 19th May, 1969 pointed out to the 5th respondent that so far as the appellant was concerned, the State Government had already granted exemption from Sales Tax by the letter of the Chief Secretary dated 23rd January, 1969 but still, the appellant would be glad to send its representative to attend the meeting as desired by the 5th respondent. The proposed meeting was, however, postponed and the appellant was intimated by the 5th respondent by its letter dated 23rd May, 1969 that the meeting would now be held on 3rd June, 1969. The appellant 's representative attended the meeting on that day and reiterated that so far as the appellant was concerned, it had already been granted exemption from Sales Tax and the State Government stood committed to it. The appellant thereafter proceeded with the work of setting up the Vanaspati plant on the basis that in accordance with the assurance given by the 4th respondent on behalf of the State Government, the appellant would be exempt from payment of Sales Tax for a period of three years from the date of commencement of production. 654 The State Government however went back upon this assurance and a letter dated 20th January, 1970 was addressed by the 5th respondent intimating that the Government had taken a policy decision that new Vanaspati Units in the State which go into commercial production by 30th September, 1970 would be given partial concession in Sales Tax at the following rates for a period of three years: First year of production 31/2% Second year of production 3% Third year of production 21/2% The appellant by its letter dated 25th June, 1970 pointed out to the Secretary to the Government that the appellant proposed to start commercial production of Vanaspati with effect from 1st July, 1970, and stated that, as notified in the letter dated 20th January, 1970, the appellant would be availing of the exemption granted by the State Government and would be charging sales tax at the rate of 31/2% instead of 7% on the sales of Vanaspati manufactured by it for a period of one year commencing from 1st July, 1970. The factory of the appellant thereafter went into production from 2nd July, 1970 and the appellant informed the Secretary to the Government about the same by its letter dated 3rd July, 1970. The State Government however once again changed its decision and on 12th August, 1970 a news item appeared in the Northern India Patricia stating that the Government had decided to rescind the earlier decision i.e. the decision set out in the letter dated 20th January, 1970, to allow concession in the rates of Sales Tax to new Vanaspati Units. The appellant thereupon filed a writ petition in the High Court of Allahabad asking for a writ directing the State Government to exempt the sales of Vanaspati manufactured by the appellant from sales tax for a period of three years commencing from 2nd July, 1970 by issuing a notification under section 4A and not to collect or charge sales tax from the appellant for the said period of three years. It appears that in the writ petition as originally filed, there was no plea of promissory estoppel taken against the State Government and the writ petition was, therefore, amended by obtaining leave of the High Court with a view to introducing the plea of promissory estoppel. The appellant urged in the amended writ petition that the 4th respondent acting on behalf of the State Government had given an unequivocal assurance to the appellant that the appellant would be entitled to exemption from payment of sales tax for a period of three years from the date of commencement of the production and this assurance was given by the 4th respondent intending or knowing that it would be acted on by the appellant and in fact 655 the appellant, acting in reliance on it, established the Vanaspati factory by investing a large amount and the State Government was, therefore, bound to honour the assurance and exempt the Vanaspati manufactured and sold by the appellant from payment of sales tax for a period of three years from 2nd July, 1970. This plea based on the doctrine of promissory estoppel was, however rejected by the Division Bench of the High Court principally on the ground that the appellant had waived the exemption, if any, by accepting the concessional rates set out in the letter of the Deputy Secretary dated 20th January, 1970. The appellant thereupon preferred the present appeal after obtaining a certificate of fitness from the High Court. The principal argument advanced on behalf of the appellant in support of the appeal was that the 4th respondent had given a categorical assurance on behalf of the State Government that the appellant would be exempt from payment of sales tax for a period of three years from the date of commencement of production and such assurance was given intending or knowing that it would be acted on by the appellant and in fact the appellant, acting in reliance on it, altered its position and the State Government was, therefore, bound, on the principle of promissory estoppel, to honour the assurance and exempt the appellant from sales tax for a period of three years from 2nd July, 1970, being the date on which the factory of the appellant commenced production. The appellant assailed the view taken by the High Court that this claim of the appellant for exemption based on the doctrine of promissory estoppel was barred by waiver, because the appellant had by its letter dated 25th June, 1970 accepted that it would avail of the exemption granted under the letter of the 5th respondent dated 20th January, 1970 and charged sales tax at the concessional rate of 31/2% instead of 7% during the first year of its production. The appellant urged that waiver was a question of fact which was required to be pleaded and since no plea of waiver was raised in the affidavit filed on behalf of the State Government in opposition to the writ petition, it was not competent to the State Government to rely on the plea of waiver for the first time at the hearing of the writ petition. Even if the plea of waiver were allowed to be raised, notwithstanding that it did not find place in the pleadings, no waiver was made out, said the appellant, since there was nothing to show that were the circumstances in which the appellant had addressed the letter dated 25th June, 1970 stating that it would avail of the exemption granted under the letter dated 20th January, 1970 and it was not possible to say that the appellant, with full knowledge of its right to claim total exemption from payment of sales tax, waived that right and agreed to accept the concessional rates set out in the letter dated 20th January, 1970. The 656 State Government on the other hand strongly pressed the plea of waiver and submitted that the appellant had clearly waived its right to complete exemption from payment of Sales Tax by addressing the letter dated 25th June, 1970. The State Government also contended that, in any event, even if there was no waiver, the appellant was not entitled to enforce the assurance given by the 4th respondent, since such assurance was not binding on the State Government and more over, in the absence of notification under section 4A, the State Government could not be prevented from enforcing the liability to sales tax imposed on the appellant under the provisions of the Act. It was urged on behalf of the State Government that there could be no promissory estoppel against the State Government so as to inhibit it from formulating and implementing its policies in public interest. These were broadly the rival contentions urged on behalf of the parties and we shall now proceed to consider them. We shall first deal with the question of waiver since that can be disposed of in a few words. The High Court held that even if there was an assurance given by the 4th respondent on behalf of the State Government and such assurance was binding on the State Government on the principle of promissory estoppel, the appellant had waived its right under it by accepting the concessional rates of sales tax set out in the letter of the 5th respondent dated 20th January, 1970. We do not think this view taken by the High Court can be sustained. In the first place, it is elementary that waiver is a question of fact and it must be properly pleaded and proved. No plea of waiver can be allowed to be raised unless it is pleaded and the factual foundation for it is laid in the pleadings. Here it was common ground that the plea of waiver was not taken by the State Government in the affidavit filed on its behalf in reply to the writ petition, nor was it indicated even vaguely in such affidavit. It was raised for the first time at the hearing of the writ petition. That was clearly impermissible without an amendment of the affidavit in reply or a supplementary affidavit raising such plea. If waiver were properly pleaded in the affidavit in reply, the appellant would have had an opportunity of placing on record facts showing why and in what circumstances the appellant came to address the letter dated 25th June, 1970 and establishing that on these facts there was no waiver by the appellant of its right to exemption under the assurance given by the 4th respondent. But in the absence of such pleading in the affidavit in reply, this opportunity was denied to the appellant. It was, therefore, not right for the High Court to have allowed the plea of waiver to be raised against the appellant and that plea should have been rejected in limine. 657 Secondly, it is difficult to see how, on the facts, the plea of waiver could be said to have been made out by the State Government. Waiver means abandonment of a right and it may be either express or implied from conduct, but its basic requirement is that it must be "an intentional act with knowledge". Per Lord Chelmsford, L.C. in Earl of Darnley vs London, Chatham and Dover Rly. Co. There can be no waiver unless the person who is said to have waived is fully informed as to his right and with full knowledge of such right, he intentionally abandons it. It is pointed out in Halsbury 's Laws of England (4 d) Volume 16 in paragraph 1472 at page 994 that for a "waiver to be effectual it is essential that the person granting it should be fully informed as to his rights" and Isaacs, J, delivering the judgment of the High Court of Australia in Craine vs Colonial Mutual Fire Insurance Co. Ltd. has also emphasised that waiver "must be with knowledge, an essential supported by many authorities". Now in the present case there is nothing to show that at the date when the appellant addressed the letter dated 25th June, 1970, it had full knowledge of its right to exemption under the assurance given by the 4th respondent and that it intentionally abandoned such right. It is difficult to speculate what was the reason why the appellant addressed the letter dated 25th June, 1970 stating that it would avail of the concessional rates of sales tax granted under the letter dated 20th January, 1970. It is possible that the appellant might have thought that since no notification exempting the appellant from sales tax had been issued by the State Government under section 4A, the appellant was legally not entitled to exemption and that is why the appellant might have chosen to accept whatever concession was being granted by the State Government. The claim of the appellant to exemption could be sustained only on the doctrine of promissory estoppel and this doctrine could not be said to be so well defined in its scope and ambit and so free from uncertainty in its application that we should be compelled to hold that the appellant must have had knowledge of its right to exemption on the basis of promissory estoppel at the time when it addressed the letter dated 25th June, 1970. In fact, in the petition as originally filed, the right to claim total exemption from sales tax was not based on the plea of promissory estoppel which was introduced only by way of amendment. Moreover, it must be remembered that there is no presumption that every person knows the law. It is often said that every one is presumed to know the law, but that is not a correct statement: there is no such maxim known to the law. Over a hundred and thirty years ago, Maule, J., pointed out in Martindala vs Faulkner(3): "There is no presumption in this country 658 that every person knows the law: it would be contrary to common sense and reason if it were so". Scrutton, also once said: "It is impossible to know all the statutory law, and not very possible to know all the common law." But it was Lord Atkin who, as in so many other spheres, put the point in its proper context when he said in Evans vs Bartlem(1)"_____the fact is that there is not and never has been a presumption that every one knows the law. There is the rule that ignorance of the law does not excuse, a maxim of very different scope and application. " It is, therefore, not possible to presume, in the absence of any material placed before the Court, that the appellant had full knowledge of its right to exemption so as to warrant an inference that the appellant waived such right by addressing the letter dated 25th June, 1970. We accordingly reject the plea of waiver raised on behalf of the State Government. That takes us to the question whether the assurance given by the 4th respondent on behalf of the State Government that the appellant would be exempt from sales tax for a period of three years from the date of commencement of production could be enforced against the State Government by invoking the doctrine of promissory estoppel. Though the origin of the doctrine of promissory estoppel may be found in Hughes vs Metropolitan Railway Co.(2) and Birmingham & District Land Co. vs London & North Western Rail Co.(3) authorities of old standing decided about a century ago by the House of Lords, it was only recently in 1947 that it was rediscovered by Mr. Justice Denning, as he then was, in his celebrated judgment in Central London Property Trust Ltd. vs High Trees House Ltd.(4) This doctrine has been variously called 'promissory estoppel ', 'equitable estoppel ', 'quasi estoppel ' and 'new estoppel '. It is a principle evolved by equity to avoid injustice and though commonly named 'promissory estoppel, it is, as we shall presently point out, neither in the realm of contract nor in the realm of estoppel. It is interesting to trace the evolution of this doctrine in England and to refer to some of the English decisions in order to appreciate the true scope and ambit of the doctrine particularly because it has been the subject of considerable recent development and is steadily expanding. The basis of this doctrine is the inter position of equity. Equity has always, true to form, stepped into mitigate the rigours of strict law. The early cases did not speak of this doctrine as estoppel. They spoke of it as 'raising an equity '. Lord Cairns stated 659 the doctrine in its earliest form it has undergone considerable development since then in the following words in Hughes vs Metropolitan Railway Company (supra): "It is the first principle upon which all Courts of Equity proceed, that if parties who have entered into definite and distinct terms involving certain legal results. afterwards by their own act or with their own consent enter upon a course of negotiation which has the effect of leading one of the parties to suppose that the strict rights arising under the contract will not be enforced, or will be kept in suspense, or held in abeyance, the person who otherwise might have enforced those rights will not be allowed to enforce them where it would be inequitable having regard to the dealings which have thus taken place between the parties. " This principle of equity laid down by Lord Cairns made sporadic appearances in stray cases now and then but it was only in 1947 that it was disinterred and restated as a recognised doctrine by Mr. Justice Denning, as he then was, in the High Trees ' case (supra). The facts in that case were as follows: The plaintiffs leased to the defendents, a subsidiary of the plaintiffs, in 1937 a block of flats for 99 years at a rent of & 2500/ a year. Early in 1940 and because of the war, the defendants were unable to find sub tenants for the flats and unable in consequence to pay the rent. The plaintiffs agreed at the request of the defendants to reduce the rent to &. 1250/ from the beginning of the term. By the beginning of 1945 the conditions had improved and tenants had been found for all the flats and the plaintiffs, therefore, claimed the full rent of the premises from the middle of that year. The claim was allowed because the court took the view that the period for which the full rent was claimed fell out side the representation, but Mr. Justice Denning, as he then was, considered Obiter whether the plaintiffs could have recovered the covenanted rent for the whole period of the lease and observed that in equity the plaintiffs could not have been allowed to act inconsistently with their promise on which the defendants had acted. It was pressed upon the Court that according to the well settled law as laid down in Jorden y. Money(1), no estoppel could be raised against plaintiffs since the doctrine of estoppel by representation is applicable only to representations as to some state of facts alleged to be at the time actually in existence and not to promises de futuro which, if binding at all, must be binding only as contracts and here there was no representa 660 tion of an existing state of facts by the plaintiffs but it was merely a promise or representation of intention to act in a particular manner in the future. Mr. Justice Denning, however, pointed out: "The law has not been standing still since Jorden vs Money. There has been a series of decisions over the last fifty years which, although they are said to be cases of estoppel are not really such. They are cases in which a promise was made which was intended to create legal relations and which, to the knowledge of the person making the promise, was going to be acted on by the person to whom it was made, and which was in fact so acted on. In such cases the courts have said that the promise must be honoured. " The principle formulated by Mr. Justice Denning was, to quote his own words, "that a promise intended to be binding, intended to be acted on and in fact acted on, is binding so far as its terms properly apply". Now Hughes vs Metropolitan Railway Co. (supra) and Birmingham and District Land Co. vs London & North Western Rail Co. (supra), the two decisions from which Mr. Justice Denning drew inspiration for evolving this new equitable principle, were clearly cases where the principle was applied as between parties who were already bound contractually one to the other. In Hughes vs Metropolitan Railway Co. (supra) the plaintiff and the defendant were already bound in contract and the general principle stated by Lord Cairns, L.C. was: "If parties who have entered into definite and distinct terms involving certain legal results afterwards enter upon a course of negotiations". Ten years later Bowen, L. J. also used the same terminology in Birmingham and District Land Co. vs London and North Western Rail Co. (supra) that: "If persons who have contractual rights against others induce by their conduct those against whom they have such rights to believe ". These two decisions might, therefore, seem to suggest that the doctrine of promissory estoppel is limited in its operation to cases where the parties are already contractually bound and one of the parties induces the other to believe that the strict rights under the contract would not be enforced. But we do not think any such limitation can justifiably be introduced to curtail the width and amplitude of this doctrine. We fail 661 to see why it should be necessary to the applicability of this doctrine that there should be some contractual relationship between the parties. In fact Donaldson, J. pointed out in Durham Fancy Goods Ltd. vs Michael Jackson (Fancy Goods) Ltd. (1) : "Lord Cairns in his enunciation of the principle assumed a pre existing contractual relationship between the parties, but this does not seem to me to be essential, provided that there is a pre existing legal relationship which could in certain circumstances give rise to liabilities and penalties." But even this limitation suggested by Donaldson, J. that there should be a pre existing legal relationship which could in certain circumstances give rise to liabilities and penalties is not warranted and it is significant that the statement of the doctrine by Mr. Justice Denning in the High Trees ' case does not contain any such limitation. The learned Judge has consistently refused to introduce any such limitation in the doctrine and while sitting in the Court of Appeal, he said in so many terms, in Evenden vs Guildford City Association Football Club Ltd.(2) "Counsel for the appellant referred us, however, to the second edition of Spencer Bower 's book on Estoppel by Representation[(1966) pp. 340 342] by Sir Alexander Turner, a judge of the New Zealand Court of Appeal. He suggests the promissory estoppel is limited to cases where parties are already bound contractually one to the other. I do not think it is so limited : see Durham Fancy Goods Ltd. vs Michael Jackson (Fancy Goods) Ltd. It applies whenever a representation is made, whether of fact or law, present or future, which is intended to be binding, intended to induce a person to act on it and he does act on it. " This observation of Lord Denning clearly suggest that the parties need not be in any kind of legal relationship before the transaction from which the promissory estoppel takes its origin. The doctrine would seem to apply even where there is no pre existing legal relationship between the parties, but the promise is intended to create legal relations or affect a legal relationship which will arise in future. Vide Halsbury 's Laws of England, 4th ed. 16 p. 1018, Note 2 para 1514. Of course it must be pointed out in fairness to Lord Denning that he made it clear 662 in the High Trees ' case that the doctrine of promissory estoppel cannot found a cause of action in itself, since it can never do away with the necessity of consideration in the formation of a contract, but he totally repudiated in Evenden 's case the necessity of a pre existing relationship between the parties and pointed out in Crabb vs Arun District Council(1) that equity will in a given case where justice and fairness demand, prevent a person from insisting on strict legal rights even where they arise, not under any contract, but on his own title deeds or under statue. The true principle of promissory estoppel, therefore seems to be that where one party has by his words or conduct made to the other a clear and unequivocal promise which is intended to create legal relations or affect a legal relationship to arise in the future, knowing or intending that it would be acted upon by the other party to whom the promise is made and it is in fact so acted upon by the other party, the promise would be binding on the party making it and he would not be entitled to go back upon it, if it would be inequitable to allow him to do so having regard to the dealings which have taken place between the parties, and this would be so irrespective whether there is any preexisting relationship between the parties or not. It may be pointed out that in England the law has been well settled for a long time, though there is some indication of a contrary trend to be found in recent juristic thinking in that country, that promissory estoppel cannot itself be the basis of an action. It cannot found a cause of action : it can only be a shield and not a sword. This narrow approach to a doctrine which is otherwise full of great potentialities is largely the result of an assumption, encouraged by it rather misleading nomenclature, that the doctrine is a branch of the law of estoppel. Since estoppel has always been traditionally a principle invoked by way of defence, the doctrine of promissory estoppel has also come to be identified as a measure of defence. The ghost of traditional estoppel continues to haunt this new doctrine and that is why we find that while boldly formulating and applying this new equity in the High Trees ' case, Lord Denning added a qualification that though in the circumstances set out, the promise would undoubtedly be held by the courts to be binding on the party making it, notwithstanding that under the old common law it might be difficult to find any consideration for it. "the courts have not gone so far as to give a cause of action in damages for the breach of such a promise, but they have refused to allow the party making it to act inconsistently with it". Lord Denning also pointed out in Combe vs 663 Combe(2) that "Much as I am inclined to favour the principles stated in the High Trees ' case, it is important that it should not be stretched too far, lest it should be endangered. That principle does not create new causes of action where none existed before. It only prevents a party from insisting upon his strict legal rights, when it would be unjust to allow him to enforce them, having regard to the dealings which have taken place between the parties. " So also said Buckley, J., in the more recent case of Beesly vs Hallwood Estates Ltd.(1) "The doctrine may afford a defence against the enforcement or otherwise of enforceable rights : it cannot create a cause of action. " It is, however, necessary to make it clear that though this doctrine has been called in various judgments and text books as promissory estoppel and it has been variously described as `equitable estoppel ', `quasi estoppel ' and `new estoppel ', it is not really based on the principle of estoppel, but it is a doctrine evolved by equity in order to prevent injustice where a promise is made by a person knowing that it would be acted on by the person to whom it is made and in fact it is so acted on and it is inequitable to allow the party making the promise to go back upon it. Lord Denning himself observed in the High Trees ' case, expressly making a distinction between ordinary estoppel and promissory estoppel that cases like the one before him were" not cases of estoppel in the strict sense. They are really promises, promises intended to be binding, intended to be acted upon and in fact acted upon". Jenkins, C.J. also pointed out in Municipal Corporation of Bombay vs Secretary of State (2) that the "doctrine is often treated as one of estoppel but I doubt whether this is correct, though it may be a convenient name to apply". The doctrine of promissory estoppel need not, therefore, be inhibited by the same limitation as estoppel in the strict sense of the term. It is an equitable principle evolved by the courts for doing justice and there is no reason why it should be given only a limited application by way of defence. It may be noted that even Lord Denning recognised in Crabb vs Arun Distric Council (supra) that "there are estoppels and estoppels. Some do give rise to a cause of action. Some don 't" and added that "in the species of estoppel called `proprietary estoppel ', it does give rise to a cause of action" The learned Law Lord, after quoting what he had said in Moorgate Mercantile Co. Ltd. vs Twitchings,(3) namely that the effect of estoppel on the true owner may be that : 664 "his own title to the property, be it land or goods, has been held to be limited or extinguished, and new rights and interests have been created therein. And this operates by reason of his conduct what he has led the other to believe even though he never intended it. " Proceeded to observe that "the new rights and interests, so created by estoppel, in or over land, will be protected by the courts and in this way give rise to a cause of action". The Court of Appeal in this case allowed Crabb a declaration of "a right of access at point over the verge on to Mill Park Road and a right of way along that road to Hook Lane" on the basis of an equity arising out of the conduct of the Arun District Council. Of course, Spencer Bower and Turner, in their Treatise on `The Law Relating to Estoppel by Representation ' have explained this decision on the basis that it is an instance of the application of the doctrine of estoppel by encouragement or acquiescence or what has now come to be known as proprietary estoppel which, according to the learned authors, forms an exception to the rule that estoppel cannot found a cause of action. But if we look at the judgments of Lord Denning and Scarman, L.J., it is apparent that they did not base their decision on any distinctive feature of proprietary estoppel but proceeded on the assumption that there was no distinction between promissory and proprietary estoppel so far as the problem before them was concerned. Both the learned Law Lord and the learned Lord Justice applied the principle of promissory estoppel in giving relief to Crabb. Lord Denning, referring to what Lord Cairns had said in Hughes vs Metropolitan Railway Co.,(1) a decision from which inspiration was drawn by him for evolving the doctrine of promissory estoppel in the High Tree 's case, observed that " it is the first principle on which all courts of equity proceed. that it will prevent person from insisting on his strict legal rights whether arising under a contract, or on his title deeds, or by statute when it would be inequitable for him to do so having regard to the dealings which have taken place between the parties". The decision in the High Trees ' case was also referred to the learned Law Lord and so also other cases supporting the doctrine of promissory estoppel. Scarman, L.J. also observed that in pursuing the inquiry as to whether there was an equity in favour of Crabb, he did not find helpful "the distinction between promissory and proprietary estoppel". He added that this "distinction may indeed be valuable to those who have to teach or expound the law, but I do not think that, in solving the particular problem raised by a particular case, putting the law into categories is of the slightest assistance". It does appear to us that this was a case deci 665 ded on the principle of promissory estoppel. The representative of the Arun District Council clearly gave assurance to Crabb that they would give him access to the new road at point B to serve the southern portion of his land and the Arun District Council in fact constructed a gate at point B, and in the belief induced by this representation that he would have right of access to the new road at point B, Crabb agreed to sell the northern portion of his land without reserving for himself as owner of the southern portion any right of way over the northern portion for the purpose of access to the new road. This was the reason why the Court raised an equity in favour of Crabb and held that the equity would be satisfied by giving Crabb "the right of access at point B free of charge without paying anything for it". Arun District Council was held bound by its promise to provide Crabb access to the new road at point B and this promise was enforced against Arun District Council at the instance of Crabb. The case was one which fell within the category of promissory estoppel and it may be regarded as supporting the view that promissory estoppel can be the basis of a cause of action. It is possible that the case also came within the rule of proprietary estoppel enunciated by Lord Kingsdown in Ramsden vs Dyson(1) : "The rule of law applicable to the case appears to me to be this : If a man, under a verbal agreement with a landlord for a certain interest in land, or what amounts to the same thing, under an expectation, created or encouraged by the landlord that he shall have a certain interest, takes possession of such land, with the consent of the landlord, and upon the faith of such promise or expectation, with the knowledge of the land lord, and without objection by him, lays out money upon the land, a Court of equity will compel the landlord to give effect to such promise or expectation." and Spencer Bower and Turner may be right in observing that that was perhaps the reason why it was held that the promise made by Arun District Council gave rise to a cause of action in favour of Crabb. But, on what principle, one may ask, is the distinction to be sustained between promissory estoppel and proprietary estoppel in the matter of enforcement by action. If proprietary estoppel can furnish a cause of action, why should promissory estoppel not ? There is no qualitative difference between the two. Both are the off springs of equity and if equity is flexible enough to permit proprietary estoppel to be used as a cause of action, there is no reason in logic or principle why promissory estoppel should also not be available as a cause of action, if necessary to satisfy the equity. 666 But perhaps the main reason why the English Courts have been reluctant to allow promissory estoppel to found a cause of action seems to be the apprehension that the doctrine of consideration would other wise be completely displaced. There can be no doubt that the decision of Lord Denning in the High Trees ' case represented a bold attempt to escape from the limitation imposed by the House of Lords in Jorden vs Money (supra) and it rediscovered an equity which was long embedded beneath the crust of the old decisions in Hughes vs Metropolitan Railway Co. (supra) and Birmingham and District Land Co. vs London and North Western Rail Co. (supra), and brought about a remarkable development in the law with a view to ensuring its approximation with justice, an ideal for which the law has been constantly striving. But it is interesting to note the Lord Denning was not prepared to go further, as he thought that having regard to the doctrine of consideration which was so deeply entrenched in the jurisprudence of the country, it might be unwise to extend promissory estoppel so as to found a cause of action and that is why he uttered a word of caution in Combe vs Combe (supra) that the principle of promissory estoppel "should not be stretched too far, lest it should be endangered". The learned Law Lord proceeded to add "seeing that the principle never stands alone as giving a cause of action in itself, it can never do away with the necessity of consideration when that is an essential part of the cause of action. The doctrine of consideration is too firmly fixed to be overthrown by a side wind. " Spencer Bower and Turner also point out at page 384 of their Treatise (3rd ed) that it is difficult to see how in a case of promissory estoppel a promise can be used to found a cause of action without according to it operative contractual force and it is for this reason that "a contention that a promissory estoppel may be used to found a cause of action must be regarded as an attack on the doctrine of consideration." The learned authors have also observed at page 387 that "to give a plaintiff a cause of action on a promissory estoppel must be little less than to allow an action in contract where consideration is not shown" and that cannot be done because consideration "still remains a cardinal necessity of the formation of a contract. " It can hardly be disputed that over the last three or four centuries the doctrine of consideration has come to occupy such a predominant position in the law of contract that under the English law it is impossible to think of a contract without consideration and, therefore, it is understandable that the English courts should have hesitated to push the doctrine of promissory estoppel to its logical conclusion and stopped short at allowing it to be used merely as a weapon of defence, though, as we shall point out, there are, quite a few cases where this doctrine has been used 667 not as founding a cause of action in itself but as a part of a cause of a action. The modern attitude towards the doctrine of consideration is, however, changing fast and there is considerable body of juristic thought which believes that this doctrine is "something of an anchronism". Prof. Holdsworth pointed out long ago in his History of English Law that "the requirements of consideration in its present shape prevent the enforcement of many contracts, which ought to be enforced, if the law really wishes to give effect to the lawful intentions of the parties to them; and it would prevent the enforcement of many others, if the judges had not used their ingenuity to invest considerations. But the invention of considerations, by reasoning which is both devious and technical, adds to the difficulties of the doctrine". Lord Wright remarked in an article published in that the doctrine of consideration in its present form serves no practical purpose and ought to be abolished. Sir Federick Pollock also said in his well known work of `Ganius of Common Law ', p. 91 that the application of the doctrine of consideration" to various unusual but not unknown cases has been made subtle and obscured by excessive dialectic refinement". Equally strong is the condemnation of this doctrine in judicial pronouncements. Lord Duned observed in the well known case of Dunlop Pneumatic Tyre Co. vs Selfridge and Co. Ltd.(1) "I confess that this case is to my mind apt to nip any budding affection which one might have had for the doctrine of consideration. For the effect of that doctrine in the present case is to make it possible for a person to snap his fingers at a bargain deliberately made, a bargain not in itself unfair, and which the person seeking to enforce it has a legitimate interest to enforce. " The doctrine of consideration has also received severe criticism at the hands of Dean Roscoe Pound in the United States. The reason is that promise as a social and economic institution becomes of the first importance in a commercial and industrial society and it is an expression of the moral sentiment of a civilised society that a man 's word should be `as good as his bond ' and his fellow men should be able to rely on the one equally with the other. That is why the Law Revision Committee in England in its Sixth Report made as far back as 1937 accepted Prof. Holdsworth 's view and advocated that a contract should exist if it was intended to create or affect legal relations and either consideration was present or the contract was reduced to writing. This recommendation, however, did not fructify into law with the result that the present position remains what it was. But having regard to the general opprobrium to which the doctrine of consideration has been subjected 668 by eminent jurists, we need not be unduly anxious to project this doctrine against assault or erosion nor allow it to dwarf or stultify the full development of the equity of promissory estoppel or inhibit or curtail its operational efficacy as a justice device for preventing injustice. It may be pointed out that the Law Commission of India in its 13th Report adopted the same approach and recommended that, by way of exception to section 25 of the Indian Contract Act, 1925, a promise, express or implied, which the promisor knows or reasonably should know, will be relied upon by the promisee, should be enforceable, if the promisee has altered his position to his detriment in reliance on the promise. We do not see any valid reason why promissory estoppel should not be allowed to found a cause of action where, in order to satisfy the equity, it is necessary to do so. We may point out that even in England where the judges apprehending that if a cause of action is allowed to be founded on promissory estoppel it would considerably erode, if not completely overthrow, the doctrine of consideration, have been fearful to allow promissory estoppel to be used as a weapon of offence, it is interesting to find that promissory estoppel has not been confined to a purely defensive role. Lord Denning himself said in Combe vs Combe (supra) that promissory estoppel "may be a part of a cause of action", though "not a cause of action itself". In fact there have been several cases where promissory estoppel has been successfully invoked by a party to support his cause of action, without actually founding his cause of action exclusively upon it. Two such cases are : Robertson vs Minister of Pensions(1) and Evenden vs Guildford City Association Football Club Ltd.(2) The English courts have thus gone a step forward from the original position when promissory estoppel was regarded merely as a passive equity and allowed it to be used as a weapon of offence to a limited extent as a part of the cause of action, but still the doctrine of consideration continues to inhibit the judicial mind and that has thwarted the full development of this new equitable principle and the realisation of its vast potential as a juristic technique for doing justice. It is true that to allow promissory estoppel to found a cause of action would seriously dilute the principle which requires consideration to support a contractual obligation, but that is no reason why this new principle, which is a child of equity brought into the world with a view to promoting honesty and good faith and bringing law closer to justice should be held in fetters and not allowed to operate in all the activist magnitude, so that it may fulfil the purpose for which it was conceived and born. It must be remembered that law is not a mausoleum. It is not an antique to be taken 669 down, dusted, admired and put back on the shelf. It is rather like an old vigorous tree, having its roots in history, yet continuously taking new grafts and putting out new sprouts and occasionally dropping dead wood. It is essentially a social process, the end product of which is justice and hence it must keep on growing and developing with changing social concepts and values. Otherwise, there will be estrangement between law and justice and law will cease to have legitimacy. It is true as pointed out by Mr. Justice Holmes, that continuity with the past is a historical necessity but it must also be remembered at the same time, as pointed out by Mr. Justice Cardozo that "conformity is not to be turned into a "fetish". We would do well to recall the famous words uttered by Mr. Justice Cardozo while closing his first lecture on "Paradoxes of Legal Science"; "The disparity between precedent and ethos may so lengthen with the years that only covin and chicenery would be disappointed if the separation were to end. There are many intermediate stages, mores, if inadequate to obliterate the past, may fix direction for the future. The evil precedent may live, but so sterilized and truncated as to have small capacity for harm. It will be prudently ignored when invoked as an apposite analogy in novel situations, though the novel element be small. There will be brought forward other analogies, less precise, it may be, but more apposite to the needs of morals. The weights are constantly shifted to restore the equilibrium between precedent and justice. " Was it not Lord Denning who exhorted judges not to be timorous sours but to be bold spirits, ready to allow a new cause of action if justice so required. (Candler vs Crane Christmas & Co.(1) We may profitably consider at this stage what the American law on the subject is because in the United States the law has always shown a greater capacity for adjustment and growth than elsewhere. The doctrine of promissory estoppel has displayed remarkable vigour and vitality in the hands of American Judges and it is still rapidly developing and expanding in the United States. It may be pointed out that this development does not derive its origin in any way from the decision of Lord Denning in the High Trees ' case but ante dates this decision by a number of years; perhaps it is possible that it may have helped to inspire that decision. It was long before the decision in the High Trees 'case that the American Law Institute 's Restatement of the Law of Contract 's came out with the following proposition in Article 90 : 670 "A promise which the promisor should reasonably expect to induce action or forbearance of a definite and substantial character on the part of the promisee, and which does induce such action or forbearance, is binding if injustice can be avoided only by enforcement of the promise. " This proposition was explained and elucidated by several illustrations given in the article and one of such illustrations was as follows : "A promises B to pay him an annuity during B 's life. B thereupon resigns a profitable employment, as A expected that he might. B receives the annuity for some years, in the meantime becoming disqualified from again obtaining good employment. A 's promise is binding. " It is true that the Restatement has not the same weight, as a source of law, as actual decisions of courts of high standing, yet the principle set out in Article 90 has in fact formed the basis of a number of decisions in various states and it is now becoming increasingly clear that a promise may in the United States derive contractual enforceability if it has been made by the promisor intending that it would be acted on and the promisee has altered his position in reliance on it, notwithstanding that there is no consideration in the sense in which that word is used in English and Commonwealth jurisprudence. Of course the basic requirement for invoking this principle must be present namely, that the fact situation should be such that "injustice can be avoided only by enforcement of the promise". There are numerous examples of the application of this principle to be found in recent American decisions. There is, for instance, the long line of cases in which a promise to give a charitable subscription has been consistently held to be enforceable at the suit of the charity. Though attempts have been made to justify these decisions by reasoning that the charity by commencing or continuing its charitable work after receiving promise has given good consideration for it, we do not think that, on closer scrutiny, the enforceability of the promise in these cases can be supported by spelling out the presence of some form of consideration and the true principle on which they are really based is the principle of promissory estoppel. This is also the view expressed in the following statement at page 657 of vol. 19 of American Jurisprudence : "A number of courts have upheld the validity of charitable subscriptions on the theory of promissory estoppel holding that while a mere promise to contribute is unenforceable for want of consideration, if money has been expended or liabilities have been incurred in reliance on the promise so 671 that non fulfillment will cause injury to the payee, the donor is estopped to assert the lack of consideration, and the promise will be enforced." Chief Justice Cardozo, presiding over the Court of Appeals of the State of New York, explained the ratio of these decisions in the same terms in Alleghany College vs National Chauteuque County Bank(1): "The half truths of one generation tend at times to perpetuate themselves in the law as the whole truths of another, when constant repetition brings it about that qualifications, taken once for granted, are disregarded or forgotten. The doctrine of consideration has not escaped the common lot. As far back as 1881, Judge Holmes in his lectures on the Common Law (p. 292) separated the detriment which is merely a consequence of the promise from the detriment, which is in truth the motive or inducement, and yet added that the courts 'have gone far in obliterating this distinction '. The tendency toward effacement has not lessened with the years. On the contrary there has grown up of recent days a doctrine that a substitute for consideration or an exception to its ordinary requirements can be found in what is styled a 'promissory estoppel '. Williston, Contract, Ss. 139, 116. Whether the exception has made its way in this State to such an extent as to permit us to say that the general law of consideration has been modified accordingly, we do not now attempt to say. Cases such as and be signposts on the road. Certain at least it is that we have adopted the doctrine of promissory estoppel as the equivalent of consideration in connection with our law of charitable subscriptions. So long as those decisions stand, the question is not merely whether the enforcement of a charitable subscription can be squared with the doctrine of consideration in all its ancient rigor. The question may also be whether it can be squared with the doctrine of consideration as qualified by the doctrine of promissory estoppel". We have said that the cases in this State have recognized this exception, if exception it is thought to be. Thus, in the subscription was made without request, express or implied that the church do anything on the faith of it. Later, the church did incur expense to the knowledge of the promisor, and in the reasonable belief that the promise would be kept. We held the promise binding, though 672 consideration there was none except upon the theory of a promissory estoppel. In a situation substantially the same became the basis for a like ruling. So in 103 N.Y. 600 and the moulds of consideration as fixed by the old doctrine were subject to a like expansion. Very likely, conceptions of public policy have shaped, more or less subconsciously, the rulings thus made. Judges have been affected by the thought that 'defences of that character ' are 'breaches of faith towards the public, and especially towards those engaged in the same enterprise, and an unwarrantable disappointment of the reasonable expectations of those interested '. W. F. Allen J. in 12 N.Y. 18 and of and cases there cited. The result speaks for itself irrespective of the motive. Decisions which have stood so long, and which are supported by so many considerations of public policy and reason, will not be over ruled to save the symmetry of a concept which itself came into our law, not so much from any reasoned conviction of its justice, as from historical accidents of practice and procedure. (8 Holdsworth, History of English Law, 7 et. The concept survives as one of the distinctive features of our legal system. We have no thought to suggest that it is obsolete or on the way to be abandoned. As in the case of other concepts, however, the pressure of exceptions has led to irregularities of form. " It is also interesting to note that the doctrine of promissory estoppel has been widely used in the United States in diverse other situations as founding a cause of action. The most notable instances are to be found in what may be called the "sub contractor bid cases" in which a contractor about to tender for a contract, invites a sub contractor to submit a bid for a sub contract and after receiving his bid the contractor submits a tender. In such cases, the sub contractor has been held unable to retract his bid and be liable in damages if he does so. It is not possible to say that any detriment which the contractor may be able to show in these cases would amount to consideration in its strict sense and these decisions have plainly been reached on an application of the doctrine of promissory estoppel. One of such cases was Drennan vs Star Paving Company(1) where Traynor, J. explicitly adopted as good law the text of Article 90 of the Restatement of the law of Contracts quoted above and stated in so many words that "the absence of consideration is not fatal to the enforcement of such a promise". There are also numerous cases where the doctrine of promissory estoppel has been applied against the Government where 673 the interest of justice, morality and common fairness clearly dictated such a course. We shall refer to these cases when we discuss the applicability of the doctrine of equitable estoppel against the Government. Suffice it to state for the present that the doctrine of promissory estoppel has been taken much further in the United States than in English and Commonwealth jurisdictions and in some States at least, it has been used to reduce, if not to destroy, the prestige of consideration as an essential of valid contract. Vide Spencer Bower and Turner 's Estoppel by Representation (2d) page 358. We now go on to consider whether and if so to what extent is the doctrine of promissory estoppel applicable against the Government. So far as the law in English is concerned, the position cannot be said to be very clear. Rowlett J., in an early decision in Rederiaktiebolaget Amphitrite vs The King(1) held that an undertaking given by the British Government to certain neutral ship owners during the First World War that if the shipowners sent a particular ship to the United Kingdom with a specified cargo, she shall not be detained, was not enforceable against the British Government in a court of law and observed that his main reason for taking this view was that: " it is not competent for the Government to fetter its future executive action, which must necessarily be determined by the needs of the community when the question arises. It cannot by contract hamper its freedom of action in matters which concern the welfare of the State. " This observation has however not been regarded by jurists as laying down the correct law on the subject since it is "very wide and it is difficult to determine its proper scope". Anson 's English Law of Contract, 22d. The doctrine of executive necessity propounded by Rowlatt, J., was in fact disapproved by Denning, J., as he then was, in Roberston vs Minister of Pensions (supra) where the learned Judge said: The Crown cannot escape by saying that estoppels do not bind the Crown for that doctrine has long been exploded. Nor can the Crown escape by praying in aid the doctrine of executive necessity, that is, the doctrine that the Crown cannot bind itself so as to fetter its future executive action. That doctrine was propounded by Rowlatt, J., in Rederiak tiebolaget Amphitrite vs The King but it was unnecessary for the decision because the statement there was not a promise which was intended to be binding but only an expression of intention. Rowlatt, J., seems to have been influenced by 674 the cases on the right of the Crown to dismiss its servants at pleasure, but those cases must now all be read in the light of the judgment of Lord Atkin in Reily vs The King (1954) A.C. 176, 176). In my opinion the defence of executive necessity is of limited scope. It only avails the Crown where there is an implied term to that effect or that is the true meaning of the contract. " It is true that the decision of Denning J., in this case was overruled by the House of Lords in Howell vs Falmouth Boat Construction Co. Ltd. (1) but that was on the ground that the doctrine of promissory estoppel cannot be invoked to "bar the Crown from enforcing a statutory prohibition or entitle the subject to maintain that there has been no breach of it". The decision of the House of Lords did not express any disapproval of the applicability of the doctrine of promissory estoppel against the Crown nor did it overrule the view taken by Denning J., that the Crown cannot escape its obligation under the doctrine of promissory estoppel by "praying in aid the doctrine of executive necessity. " The statement of the law by Denning, J., may, therefore, still be regarded as holding the field and it may be taken to be a judicially favoured view that the Crown is not immune from liability under the doctrine of promissory estoppel. The courts in America for a long time took the view that the doctrine of promissory estoppel does not apply to the Government but more recently the courts have started retreating from that position to a sounder one, namely, that the doctrine of promissory estoppel may apply to the Government when justice so requires. The second edition of American Jurisprudence brought out in 1966 in paragraph 123 points out that "equitable estoppel will be invoked against the State when justified by the facts", though it does warn that this doctrine "should not be lightly invoked against the State. " Later in the same paragraph it is stated that "as a general rule, the doctrine of estoppel will not be applied against the State in its governmental, public or sovereign capacity", but a qualification is introduced that promissory estoppel may be applied against the State even in its governmental, public or sovereign capacity if "its application is necessary to prevent fraud or manifest injustice". Since 1966 there is an increasing trend towards applying the doctrine of promissory estoppel against the State and the old law that promissory estoppel does not apply against the government is definitely declining. There have been numerous cases in the State courts where it has been held that promissory estoppel may be applied even against the Govern 675 ment in its governmental capacity where the accommodation of the needs of justice to the needs of effective government so requires. The protagonists of the view that promissory estoppel cannot apply against the Government or a public authority seek to draw inspiration from the majority decision of the United States Supreme Court in Federal Crop Insurance Corporation vs Merrill.(1) But we do not think that decision can be read as laying down the proposition that the doctrine of promissory estoppel can never be invoked against the Government. There the County Committee acting as the agent of the Federal Crop Insurance Corporation which was a wholly Government owned corporation constituted under the Federal Crop Insurance Act, advised the respondents that their entire 460 acres of spring wheat crop which included spring wheat reseeded. On winter wheat acreage was insurable and acting upon it, the respondents made an application for insurance which was forwarded by the County Committee to the Denver office of the Corporation with a recommendation for acceptance. The application did not mention that any part of the insured crop was reseeded and it was accepted by the Denver office of the Corporation. There were at this time wheat crop insurance regulations framed by the Corporation and published in the Federal Register which prohibited insurance of spring wheat reseeded on winter wheat acreage but neither the respondents nor the County Committees which was acting as the agent of the Corporation was aware of them. A few months later, most of the respondent 's crop was destroyed by drought and on a claim being made by the respondents under the policy of insurance, the Corporation refused to pay the loss on the ground that the wheat crop insurance regulations expressly prohibited insurance of reseeded wheat. The refusal was upheld by the Supreme Court by a majority of five to four. The majority observed: "It is too late in the day to urge that the Government is just another private litigant, for purposes of charging it with liability, whenever it takes over a business theretofore conducted by private enterprises or engages in competitions with private ventures. Whatever the form in which the Government functions, anyone entering into an arrangement with the Government takes the risk of having accurately ascertained that be who purports to act for the Government stays within the bounds of his authority And this is so even though as here, the agent himself may have been unaware of the limitations upon his autho 676 rity. "Man must turn square corners when they deal with the Government", does not reflect a callous outlook. It merely expresses the duty of all courts to observe the conditions defined by Congress for charging the public treasury. " It will be seen that the Corporation was held entitled to repudiate its liability because the wheat crop insurance regulations prohibited insurance of reseeded wheat and the assurance given by the County Committee as the agent of the Corporation that the reseeded wheat was insurable being contrary to the wheat crop insurance regulations, could not be held binding on the Corporation. It was not within the authority of the County Committee to give such assurance contrary to the wheat crop insurance regulations and hence no promissory estoppel against the Corporation could be founded upon it. This decision did not say that even if an assurance given by an agent is within the scope of his authority and is not prohibited by law, it could still not create promissory estoppel against the Government. But, it may be pointed out, even this limited holding has come in for considerable criticism at the hands of jurists in the United States. See Davis on Administrative Law (3rd d.) pages 344 345. Referring to the observation of the majority that "Men must turn square corners when they deal with the Government", Maguire and Zimet have poetically responded by saying: "It is hard to see why the Government should not be held to a like standard of rectangular rectitude when dealing with its citizens." (Maguire and Zimet, Hobson 's Choice and Similar Practices in Federal Taxation, 48 Harv. L. Rev. 1287 at 1299). There has so far not been any decision of the Supreme Court of the United States taking the view that the doctrine of promissory estoppel cannot be invoked against the Government. The trend in the State courts, of late, has been strongly in favour of the application of the doctrine of promissory estoppel against the Government and public bodies "where interests of justice, morality and common fairness clearly dictate that course. " It is being increasingly felt that "that the Government ought to set a high standard in its dealings and relationships with citizens and the word of a duly authorised Government agent, acting within the scope of his authority ought to be as good as a Government bond". Of course, as pointed out by the United States Court of Appeals, Third Circuit in Valsonavich vs United States, (1) the Government would not be estopped "by the acts of its officers and agents who without authority enter into 677 agreements to do what the law does not sanction or permit" and "those dealing with an agent of the Government must be held to have notice of limitations of his authority" as held in Merrill 's case. This is precisely what the House of Lords also held in England in Howell vs Falmouth Boat Construction Co. Ltd. (supra) where Lord Simonds stated the law to be: "The illegality of an act is the same whether or not the actor has been misled by an assumption of authority on the part of a Government officer however high or low in the hierachy. The question is whether the character of an act done in face of a statutory prohibition is affected by the fact that it has been induced by a misleading assumption of authority. In my opinion the answer is clearly No." But if the acts or omissions of the officers of the Government are within the scope of their authority and are not otherwise impermissible under the law, they "will work estoppel against the Government. " When we turn to the Indian law on the subject it is heartening to find that in India not only has the doctrine of promissory estoppel been adopted in its fullness but it has been recognized as affording a cause of action to the person to whom the promise is made. The requirement of consideration has not been allowed to stand in the way of enforcement of such promise. The doctrine of promissory estoppel has also been applied against the Government and the defence based on executive necessity has been categorically negatived. It is remarkable that as far back as 1880, long before the doctrine of promissory estoppel was formulated by Denning, J., in England, A Division Bench of two English Judges in the Calcutta High Court applied the doctrine of promissory estoppel and recognised a cause of action founded upon it in the Ganges Manufacturing Co. vs Surajmuli and other(1). The doctrine of promissory estoppel was also applied against the Government in a case subsequently decided by the Bombay High Court in Municipal Corporation of Bombay vs The Secretary of State.(2) The facts of this last mentioned case in Municipal Corporation of Bombay vs The Secretary of State (supra) are a little interesting and it would be profitable to refer to them. The Government of Bombay, with a view to constructing an arterial road, requested the Municipal Commissioner to remove certain fish and vegetable 678 markets which obstructed the construction of the proposed road. The Municipal Commissioner replied that the markets were vested in the Corporation of Justices but that he was willing to vacate certain municipal stables which occupied a portion of the proposed site if the Government would rent other land mentioned in his letter, to the Municipality at a nominal rent, the Municipality undertaking to bear the expenses of levelling the same and permit the Municipality to erect on such land "stables of wood and iron with nobble foundation to be removed at six months ' notice on other suitable ground being provided by Government". The Government accepted the suggestion of the Municipal Commissioner and sanctioned the application of the Municipal Commissioner for a site for stabling on the terms set out above and the Municipal Commissioner thereafter entered into possession of the land and constructed stables, workshops and chawls on the same at considerable expense. Twenty four years later the Government served a notice on the Municipal Commissioner determining the tenancy and requesting the Municipal Commissioner to deliver possession of the land within six months and in the mean time to pay rent at the rate of Rs.12,000/ per month. The Municipal Corporation declined to hand over possession of the land or to pay the higher rent and the Secretary of State for India thereupon filed a suit against the Municipal Corporation for a declaration that the tenancy of the Municipality stood determined and for an order directing the municipality to pay rent at the rate of Rs. 12,000/ per month. The suit was resisted by the Municipal Corporation on the ground then the events which had transpired had created an equity in favour of the Municipality which afforded an answer to the claim of the Government to eject the Municipality. This defence was upheld by a Division Bench of the High Court and Jenkins C.J., speaking on behalf of the Division Bench, pointed out that, in view of the following facts, namely: " the Municipality gave up the old stables, levelled the ground, and erected the moveable staibles in 1866 in the belief that they had against the Government an absolute right not to be turned out until not only the expiration of six months notice, but also other suitable ground was furnished: that this belief is referable to an expectation created by the Government that their enjoyment of the land would be in accordance with this belief: and that the Government knew that the Municipality were acting in this belief so created:" 679 an equity was created in favour of the Municipality which entitled it "to appeal to the Court for its aid in assisting them to resist the Secretary of State 's claim that they shall be ejected from the ground". The learned Chief Justice pointed out that the doctrine which he was applying took its origin "from the jurisdiction assumed by Courts of Equity to intervene in the case of or to prevent fraud" and after referring to Ramsden vs Dyson(1) observed that the Crown also came within the range of this equity. This decision of the Bombay High Court is a clear authority for the proposition that it is open to a party who has acted on a representation made by the Government to claim that the Government shall be bound to carry out the promise made by it, even though the promise is not recorded in the form of a formal contract as required by the Constitution. That is how this decision has in fact been interpreted by this court in Union of India vs Indo Afghan Agencies:(2) We don 't find any decision of importance thereafter on the subject of promissory estoppel until we come to the decision of this Court in Collector of Bombay vs Municipal Corporation of the City of Bombay & Ors.(3). The facts giving rise to this case were that in 1865 the Government of Bombay called upon the predecessor in title of the Municipal Corporation of Bombay to remove old markets from a certain site and vacate it and on the application of the Municipal Commissioner, the Government passed a resolution approving and authorizing the grant of another site to the Municipality. The resolution stated further that "the Government do not consider that any rent should be charged to the Municipality as the markets will be like other public buildings, for the benefit of the whole community". The Municipal Corporation gave up the site on which the old markets were situated and spent a sum of Rs. 17 lakhs in erecting and maintaining markets on the new site. In 1940 the Collector of Bombay assessed the new site to land revenue and the Municipal Corporation there upon filed a suit for a declaration that the order of assessment was ultra vires and it was entitled to hold the land for ever without payment of any assessment. The High Court of Bombay held that the Government had lost its right to assess the land in question by reason of the equity arising on the facts of the case in favour of the Municipal Corporation and there was thus a limitation on the right of the Government to assess under section 8 of the Bom 680 bay City Land Revenue Act. On appeal by the Collector to this Court, the majority Judges held that the Government was not, under the circumstances of the case, entitled to assess land revenue on the land in question because the Municipal Corporation had taken possession of the land in terms of the Government resolution and had continued in such possession openly, uninterruptedly and of right for over seventy years and thereby acquired the limited title it had been prescribing for during the period, that is to say, the right to hold the land in perpetuity free of rent. Chandrasekhra Aiyar, J., agreed with the conclusion reached by the majority but rested his decision on the doctrine of promissory estoppel. He pointed out that the Government could not be allowed to go back on the representation made by it and stressed the point in the form of an interrogation by asking: "if we do so, would it not amount to our countenancing the perpetration of what can be compendiously described as legal fraud which a court of equity must prevent being committed?" He observed that even if the resolution of the Government amounted merely to "the holding out of a promise that no rent will be charged in the future, the Government must be deemed in the circumstances of this case to have bound themselves to fulfil it. Whether it is the equity recognised in Ramsden 's case (supra) or it is some other form of equity, is not of much importance. Courts must do justice by the promotion of honesty and good faith, as far as it lies in their power. " This was of course the solitary view of Chandrasekhara Aiyer, J., but it was approved by this Court in no uncertain terms in Indo Afghan Agencies case (supra). Then we come to the celebrated decision of this Court in the Indo Afghan Agencies case (supra). It was in this case that the doctrine of promissory estoppel found its most eloquent exposition. We may briefly state the facts in order to appreciate the ratio of the decision. Indo Afghan Agencies Ltd. who were the respondents before the Court, acting in reliance on the Export Promotion Scheme issued by the Central Government, exported woollen goods to Afghanistan and on the basis of their exports claimed to be entitled to obtain from the Textile Commissioner import entitlement certificate for the full F.O.B. value of the goods exported as provided in the scheme. The Scheme was not a statutory Scheme having the force of law but it provided that an export of woollen goods would be entitled to import raw material of the total amount equal to 100% of the F.O.B. value of his exports. The respondents contended that, relying on the promise contained in the Scheme, they had exported woollen goods to Afghanistan and were,. therefore, entitled to enforce the promise against the Government and to obtain import entitlement 681 certificate for the full F.O.B. value of the goods exported on the principle of promissory estoppel. This contention was sought to be answered on behalf of the Government by pleading the doctrine of executive necessity and the argument of the Government based on this doctrine was that it is not competent for the Government to fetter its future executive action which must necessarily be determined by the needs of the community when the question arises and no promise or undertaking can be held to be binding on the Government so as to hamper its freedom of executive action. Certain observations of Rowlatt, J., in Rederiektiabolaget Amphitrite vs The King (supra) were sought to be pressed into service on behalf of the Government in support of this argument. We have already referred to these observations earlier and we need not reproduce them over again. These observation undoubtedly supported the contention of the Government but it was pointed out by this Court that these observations were disapproved by Denning J., in Robertson vs Minister of Pensions (supra) where the learned Judge said that "the Crown cannot escape by praying in aid the doctrine of executive necessity, that is the doctrine that the Crown cannot bind itself so as to fetter its future executive action. The defence of executive necessity is of limited scope. It only avails the Crown where there is an implied term to that effect or that is the true meaning of the contract" and this statement of Denning, J., was to be preferred as laying down the correct law of the subject. Shah, J., speaking on behalf of the Court, observed at p. 376: "We are unable to accede to the contention that the executive necessity releases the Government from honouring its solemn promises relying on which citizens have acted to their detriment. Under our constitutional set up no person may be deprived of his right or liberty except in due course of and by authority of law; of a member of the Executive seeks to deprive a citizen of his right or liberty otherwise than in exercise of power derived from the law common or statute the Courts will be competent to and indeed would be bound to, protect the rights of the aggrieved citizen. " The defence of executive necessity was thus clearly negatived by this Court and it was pointed out that it did not release the Government from its obligation to honour the promise made by it, if the citizen, acting in reliance on the promise, had altered his position. The doctrine of promissory estoppel was in such a case applicable against the Government and it could not be deteated by invoking the defence of executive necessity. 682 It was also contended on behalf of the Government that if the Government were held bound by every representation made by it regarding its intention, when the exporters have acted in the manner they were invited to act, the result would be that the Government would be bound by a contractual obligation even though no formal contract in the manner required by Article 299 was executed. But this contention was negatived and it was pointed out by this Court that the respondents "are not seeking to enforce any contractual right: they are seeking to enforce compliance with the obligation which is laid upon the Textile Commissioner by the terms of the Scheme, and we are of the view that even if the Scheme is executive in character, the respondents who were aggrieved because of the failure to carry out the terms of the Scheme were entitled to seek resort to the Court and claim that the obligation imposed upon the Textile Commissioner by the Scheme be ordered to be carried out". It was thus laid down that a party who has, acting in reliance on a promise made by the Government, altered his position, is entitled to enforce the promise against the Government, even though the promise is not in the form of a formal contract as required by Article 299 and that Article does not militate against the applicability of the doctrine of promissory estoppel against the Government. This Court finally, after referring to the decision in the Ganges Manufacturing Co. vs Surujmull (supra). The Municipal Corporation of the City of Bombay vs The Secretary of State for India (supra) and Collector of Bombay vs Municipal Corporation of the City of Bombay & Ors. (supra), summed up the position as follows: "Under our jurisprudence the Government is not exempt from liability to carry out the representation made by it as to its future conduct and it cannot on some undefined and undisclosed ground of necessity or expediency fail to carry out the promise solemnly made by it, nor claim to be the Judge of its own obligation to the citizen on an ex parte appraisement of the circumstances in which the obligation has arisen." The law may, therefore, now be taken to be settled as a result of this decision that where the Government makes a promise knowing or intending that it would be acted on by the promises and, in fact, the promisee, acting in reliance on it, alters his position, the Government would be held bound by the promise and the promise would be enforceable against the Government at the instance of the promises, notwithstanding that there is no consideration for the promise and the promise is not recorded in the form of a formal contract 683 as required by Article 299 of the Constitution. It is elementary that in a Republic governed by the rule of law, no one, howsoever high or low, is above the law. Every one is subject to the law as fully and completely as any other and the Government is no exception. It is indeed the pride of constitutional democracy and rule of law that the Government stands on the same footing as a private individual so far as the obligation of the law is concerned: the former is equally bound as the latter. It is indeed difficult to see on what principle can a Government, committed to the rule of law, claim immunity from the doctrine of promissory estoppel. Can the Government say that it is under no obligation to act in a manner that is fair and just or that it is not bound by considerations of "honesty and good faith"? Why should the Government not be held to a high "standard of rectangular rectitude while dealing with its citizens"? There was a time when the doctrine of executive necessity was regarded as sufficient justification for the Government to repudiate even its contractual obligations, but let it be said to the eternal glory of this Court, this doctrine was emphatically negatived in the Indo Afghan Agencies case and the supremacy of the rule of law was established. It was laid down by this Court that the Government cannot claim to be immune from the applicability of the rule of promissory estoppel and repudiate a promise made by it on the ground that such promise may fetter its future executive action. If the Government does not want its freedom of executive action to be hampered or restricted, the Government need not make a promise knowing or intending that it would be acted on by the promisee and the promisee would alter his position relying upon it. But if the Government makes such a promise and the promises acts in reliance upon it and alters his position, there is no reason why the Government should not be compelled to make good such promise like any other private individual. The law cannot acquire legitimacy and gain social acceptance unless it accords with the moral values of the society and the constant endeavor of the Courts and the legislatures must, therefore, be to close the gap between law and morality and bring about as near an approximation between the two as possible. The doctrine of promissory estoppel is a significant judicial contribution in that direction. But it is necessary to point out that since the doctrine of promissory estoppel is an equitable doctrine, it must yield when the equity so requires. If it can be shown by the Government that having regard to the facts as they have transpired, it would be inequitable to hold the Government to the promise made by it, the Court would not raise an equity in favour of the promisee and enforce the promise against the 684 Government. The doctrine of promissory estoppel would be displaced in such a case because, on the facts, equity would not require that the Government should be held bound by the promise made by it. When the Government is able to show that in view of the facts as have transpired, public interest would be prejudiced if the Government were required to carry out the promise, the Court would have to balance the public interest in the Government carrying out a promise made to a citizen which has induced the citizen to act upon it and after this position and the public interest likely to suffer if the promise were required to be carried out by the Government and determine which way the equity lies. It would not be enough for the Government just to say that public interest requires that the Government should not be compelled to carry out the promise or that the public interest would suffer if the Government were required to honour it. The Government cannot, as Shah, J., pointed out in the Indo Afghan Agencies case, claim to be exempt from the liability to carry out the promise "on some indefinite and undisclosed ground of necessity or expediency", nor can the Government claim to be the sole judge of its liability and repudiate it "on an ex parte appraisement of the circumstances". If the Government wants to resist the liability, it will have to disclose to the Court what are the facts and circumstances on account of which the Government claims to be exempt from the liability and it would be for the Court to decide whether these facts and circumstances are such as to render it inequitable to enforce the liability against the Government. Mere claim of change of policy would not be sufficient to exonerate the Government from the liability: the Government would have to show what precisely is the changed policy and also its reason and justification so that the Court can judge for itself which way the public interest lies and what the equity of the case demands. It is only if the Court is satisfied, on proper and adequate material placed by the Government, the over riding public interest requires that the Government should not be held bound by the promise but should be free to act unfettered by it, that the Court would refuse to enforce the promise against the Government. The Court would not act on the mere ipse dixit of the Government, for it is the Court which has to decide and not the Government whether the Government should be held exempt from liability. This is the essence of the rule of law. The burden would be upon the Government to show that the public interest in the Government acting otherwise than in accordance with the promise is so overwhelming that it would be inequitable to hold the Government bound by the promise and the Court would insist on a highly rigorous standard of proof in the discharge of this burden. But even where there is no such over riding public interest, it may still be competent to 685 the Government to resile from the promise "on giving reasonable notice which need not be a formal notice, giving the promisee a reasonable opportunity of resuming his position" provided of course it is possible for the promisee to restore status quo ante. If however, the promisee cannot resume his position, the promise would become final and irrevocable. Vide Emmanuel Ayodeji Ajayi vs Briscoe.(1) The doctrine of promissory estoppel was also held applicable against a public authority like a Municipal Council in Century Spinning & Manufacturing Co. Ltd. & Anr. vs The Ulhasuagar Municipal Council & Anr.(2) The question which arose in this case was whether the Ulhas Nagar Municipal Council could be compelled to carry out a promise made by its predecessor municipality that the factories in the industrial area within its jurisdiction would be exempt from payment of octroi for seven years from the date of the levy. The appellant company, in the belief induced by the assurance and undertaking given by the predecessor municipality that its factory would be exempt from octroi for a period of seven years, expanded its activities, but when the municipal council came into being and took over the administration of the former municipality, it sight to levy octroi duty on appellant company. The appellant company thereupon filed a writ petition under Article 226 of the Constitution in the High Court of Bombay to restrain the municipal council from enforcing the levy of octroi duty in breach of the promise made by the predecessor municipality. The High Court dismissed the petition in limine but, on appeal, this Court took the view that this was a case which required consideration and should have been admitted by the High Court. Shah, J., speaking on behalf of the Court, pointed out "Public bodies are as much bound as private individuals to carry out representations of facts and promises made by them, relying on which other persons have altered their position to their prejudice. The obligation arising against an individual out of his representation amounting to a promise may be enforced ex contracted by a person who acts upon the promise: when the law requires that a contract enforceable at law against a public body shall be in certain from or be executed in the manner prescribed by statute, the obligation may be if the contract be not in that form be enforced against it in appropriate cases in equity." The learned Judge then referred to the decision in the Indo Afghan Agencies case and observed that in that case it was laid down by this 686 Court that "the Government is not exempt from the equity arising out of the acts done by citizens to their prejudice relying upon the representations as to its future conduct made by the Government". It was also pointed out by the learned Judge that in the Indo Afghan Agencies case this Court approved of the observations made by Denning, J. in Robertson vs Minister of Pensions (supra) rejecting the doctrine of executive necessity and held them to be applicable in India. The learned Judge concluded by saying in words pregnant in the hope and meaning for democracy: "If our nascent democracy is to thrive different standards of conduct for the people and the public bodies cannot ordinarily be permitted. A public body is, in our judgment, not exempt from liability to carry out its obligation arising out of representations made by it relying upon which a citizen has altered his position to his prejudice." This Court refused to make a distinction between a private individual and a public body so far as the doctrine of promissory estoppel is concerned. We then come to another important decision of this Court in Turner Morrison & Co. Ltd. vs Hungerford Investment Trust Ltd. (1) where the doctrine of promissory estoppel was once again affirmed by this Court. Hegde, J, speaking on behalf of the Court, pointed out: "Estoppel" is a rule of equity. "That rule has gained new dimensions in recent years. A new class of estoppel i.e. promissory estoppel has come to be recognised by the courts in this Country as well as in England. The full implication of 'promissory estoppel ' is yet to be spelled out." The learned Judge, after referring to the decisions in High Trees case, Robertson vs Minister of Pensions (supra) and the Indo Afghan Agencies case, pointed out that "the rule laid down in these decisions undoubtedly advanced the cause of justice and hence we have no hesitation in accepting it. We must also refer to the decision of this Court in M. Ramanatha Pillai vs The State of Kerala & Anr.(1) because that was a decision strongly relied upon on behalf of the State for negativing the applicability of the doctrine of estoppel against the Government. This was a case where the appellant was appointed to a temporary post and on the post being abolished, the service of the appellant was terminated. The appellant challenged the validity of termination of service, inter alia, on 687 the ground that the Government was precluded from abolishing the post and terminating the service on the principle of promissory estoppel. This ground based on the doctrine of promissory estoppel was negatived and it was pointed out by the Court that the appellant knew that the post was temporary, suggesting clearly that the appellant could not possibly be led into the belief that the post would not be abolished. If the post was temporary to the knowledge of the appellant, it is obvious that the appellant knew that the post would be liable to be abolished at any time and if that be so, there could be no factual basis for invoking the doctrine of promissory estoppel for the purpose of precluding the Government from abolishing the post. This view taken by the Court was sufficient to dispose of the contention based on promissory estoppel and it was not necessary to say anything more about it, but the Court proceeded to cite a passage from American Jurisprudence, Vol. 28 (2d) at 783, paragraph 123 and observed that the High Court rightly held "that the courts exclude the operation of the doctrine of estoppel, when it is found that the authority against whom estoppel is pleaded has owed a duty to the public against whom the estoppel cannot fairly operate. " It was this observation which was heavily relied upon on behalf of the State but we fail to see how it can assist the contention of the State. In the first place, this observation was clearly obiter, since, as pointed out by us, there was on the facts of the present case no scope for the applicability of the doctrine of promissory estoppel. Secondly, this observation was based upon a quotation from the passage in paragraph 123 at page 783 of Volume 28 of American Jurisprudence (2 d), but unfortunately this quotation was incomplete and it overlooked, perhaps inadvertently, the following two important sentences at the commencement of the paragraph which clearly show that even in the United States the doctrine of promissory estoppel is applied against the State "when justified by the facts": "There is considerable dispute as to the application of estoppel with respect to the State. While it is said that equitable estoppel will be invoked against the State when justified by the facts, clearly the doctrine of estoppel should not be lightly invoked against the State" (emphasis supplied). Even the truncated passage quoted by the Court recognised in the last sentence that though, as a general rule, the doctrine of promissory estoppel would not be applied against the State in its governmental, public or sovereign capacity, the Court would unhesitatingly allow the doctrine to be invoked in cases where it is necessary in order "to prevent fraud or manifest injustice". This passage leaves no doubt that the 688 doctrine of promissory estoppel may be applied against the State even in its governmental, public or sovereign capacity where it is necessary to prevent fraud or manifest injustice. It is difficult to imagine that the Court citing this passage with approval could have possibly intended to lay down that in no case can the doctrine of promissory estoppel be invoked against the Government. Lastly, a proper reading of the observation of the Court clearly shows that what the Court intended to say was that where the Government owes a duty to the public to act differently, promissory estoppel cannot be invoked to prevent the Government from doing so. This proposition is unexceptionable, because where the Government owes a duty to the public to act in a particular manner, and here obviously duty means a course of conduct enjoined by law, the doctrine of promissory estoppel cannot be invoked for preventing the Government from acting in discharge of its duty under the law. The doctrine of promissory estoppel cannot be applied in teeth of an obligation or liability imposed by law. We may then refer to the decision of this Court in Assistant Custodian vs Brij Kishore Agarwala & Ors.(1) It is not necessary to reproduce the facts of this case, because the only purpose for which this decision was relied upon on behalf of the State was to show that the view taken by the House of Lords in Howell vs Falmouth Boat Construction Co. Ltd. (Supra) was preferred by this Court to that taken by Lord Denning in Robertson vs Minister of Pension (supra). It is true that in this case the Court expressed the opinion "that the view taken by the House of Lords is the correct one and not the one taken by Lord Denning" but we fail to see how that can possibly help the argument of the State. The House of Lords did not in Howell 's case negative the applicability of the doctrine of promissory estoppel against the Government. What it laid down was merely this, namely, that no representation or promise made by an officer can preclude the Government from enforcing a statutory prohibition. The doctrine of promissory estoppel cannot be availed to permit or condone a breach of the law. The ratio of the decision was succinctly put by Lord Normand when he said" neither a minister nor any subordinate officer of the Crown can by any conduct or representation bar the Crown from enforcing a statutory prohibition or entitle the subject to maintain that there has been no breach of it". It may also be noted that promissory estoppel cannot be invoked to compel the Government or even a private party to do an act prohibited by law. There can also be no promissory estoppel against the exercise of legislative power. The Legislature can never be precluded 689 from exercising its legislative function by resort to the doctrine of promissory estoppel. Vide State of Kerala vs Gwalior Rayon Silk Manufacturing Co. Ltd.(1) The next decision to which we must refer is that in Excise Commissioner, U.P. Allahabad vs Ram Kumar.(2) This was also a decision on which strong reliance was placed on behalf of the State. It is true that, in this case, the Court observed that "it is now well settled by a catena of decisions that there can be no question of estoppel against the Government in the exercise of its legislative, sovereign or executive powers," but for reasons which we shall presently state, we do not think this observation can persuade us to take a different view of the law than that enunciated in the Indo Afghan Agencies ' case. In the first place, it is clear that in this case there was factually no foundation for invoking the doctrine of promissory estoppel. When the State auctioned the licence for retail sale of country liquor and the respondents being the highest bidders were granted such licence, there was in force a Notification dated 6th April, 1959, issued under section 4 of the U.P. Sales Tax Act, 1948, exempting sale of country liquor from payment of sales tax. No announcement was made at the time of the auction whether the exemption from sales tax under this Notification dated 6th April, 1959 was or was not likely to be withdrawn. However, on the day following the commencement of the licence granted to the respondents, the Government of U.P. issued a Notification dated 2nd April, 1969 superseding the earlier Notification dated 6th April, 1959 and imposing sales tax on the turnover in respect of country spirit with immediate effect. This notification dated 2nd April, 1969 was challenged by the respondents by filing a writ petition and amongst the several grounds of challenge taken in the writ petition, one was that "since the State Government did not announce at the time of the aforesaid auction that the Notification dated 6th April, 1959 was likely to be withdrawn and the sales of country liquor were likely to be subjected to the levy of sales tax during the excise year and in reply to the query made by them at the time of the auction they were told by the authorities that there was no sales tax on the sale of country liquor, the appellants herein were estopped from making the demand in respect of sales tax and recovering the same from them". It was in the context of this ground of challenge that the Court came to make the observation relied upon on behalf of the State. Now, it is clear that, even taking the case of the respondents at its highest, there was no representation or promise made by the Government that they would continue the exemp 690 tion from sales tax granted under the Notification dated 6th April, 1959 and would not withdraw it, and the Notification dated 2nd April, 1969 could not, therefore, be assailed as being in breach of any such representation or promise. There was accordingly, no factual basis for making good the plea of promissory estoppel and the observation made by the court in regard to the applicability of the doctrine of promissory estoppel against the Government was clear obiter. That perhaps was the reason why the Court did not consider it necessary to refer to the earlier decisions in Century Spinning & manufacturing Co. 's case and Turner Morrison 's case and particularly the decision in the Indo Afghan Agencies case where the court in so many terms applied the doctrine of promissory estoppel against the Government in the exercise of its executive power. It is not possible to believe that the Court was oblivious of these earlier decisions, particularly when one of these decisions in the Indo Afghan Agencies case was an epoch making decision which marked a definite advance in the field of administrative law. Moreover, it may be noted that though, standing by itself, the observation made by the Court that "there can be no question of estoppel against the Government in exercise of its legislative, sovereign or executive powers" may appear to be wide and unqualified, it is not so, if read in its proper context. This observation was made on the basis of certain decisions which the Court proceeded to discuss in the succeeding paragraphs of the judgment. The Court first relied on the statement of the law contained in paragraph 123 at page 783, Volume 28 of the American Jurisprudence (2d), but it omitted to mention the two important sentences at the commencement of the paragraph and the words "unless its application is necessary to prevent fraud or manifest injustice" at the end, which clearly show that even according to the American Jurisprudence, the doctrine of promissory estoppel is not wholly inapplicable against the Government in its governmental, public or sovereign capacity, but it can be invoked against the Government "when justified by the facts" as for example where it is necessary to prevent fraud or injustice. In fact, as already pointed out above, there are numerous cases in the United States where the doctrine of promissory estoppel has been applied against the Government in the exercise of its governmental, public or executive powers. The Court then relied upon the decision in the Gwalior Rayon Silk Manufacturing Co. 's case, but that decision was confined to a case where legislation was sought to be precluded by relying on the doctrine of promissory estoppel and it was held, and in our opinion rightly, that there can be no promissory estoppel against the legislature in the exercise of its legislative function. That decision does not negative the applicability of the 691 doctrine of promissory estoppel against the Government in the exercise of its governmental, public or executive powers. The decision in Howell 's case was, thereafter, relied upon by the Court, but that decision merely says that the Government cannot be debarred by promissory estoppel from enforcing a statutory prohibition. It does not countenance an absolute proposition that promissory estoppel can never be invoked against the government. The Court also cited a passage from the judgment of the High Court of Jammu & Kashmir in Malhotra & Sons & Ors. vs Union of India & Ors. ,(1) but this passage itself makes it clear that the courts will bind the Government by its promise where it is necessary to do so in order to prevent manifest injustice or fraud. The last decision on which the Court relied was Federal Crop Insurance Corporation vs Morrill (supra) but this decision also does not support the view contended for on behalf of the State. We have already referred to this decision earlier and pointed out that the Federal Crop Insurance Corporation in this case was held not liable on the policy of insurance, because the regulations made by the Corporation prohibited insurance of reseeded wheat. The principle of this decision was that promissory estoppel cannot be invoked to compel the Government or a public authority to carry out a representation or promise which is contrary to law. It will thus be seen from the decisions relied upon in the judgment that the Court could not possibly have intended to lay down an absolute proposition that there can be no promissory estoppel against the Government in the exercise of its governmental, public or executive powers. That would have been in complete contradiction of the decisions of this Court in the Indo Afghan Agencies Case, Century Spinning and Manufacturing Co. 's case and Turner Morrison 's case and we find it difficult to believe that the Court could have ever intended to lay down any such proposition without expressly referring to these earlier decisions and over ruling them. We are, therefore, of the opinion that the observation made by the Court in Ram Kumar 's case does not militate against the view we are taking on the basis of the decisions in the Indo Afghan Agencies ' case, Century Spinning & Manufacturing Co. 's case and Turner Morrison 's case in regard to the applicability of the doctrine of promissory estoppel against the Government. We may then refer to the decision of this Court in Bihar Eastern Gangetic Fishermen Co operative Society Ltd. vs Sipahi Singh & Ors.(2) It was held in this case in paragraph 12 of the judgment that the respondent could not invoke the doctrine of promissory estoppel because he was unable to show that, relying on the representation of the Govern 692 ment, he had altered his position by investing moneys and the allegations made by him in that behalf were "much too vague and general" and there was accordingly no factual foundation for establishing the plea of promissory estoppel. On this view, it was unnecessary to consider whether the doctrine of promissory estoppel was applicable against the Government, but the Court proceeded to reiterate, without any further discussion, the observation in Ram Kumar 's case that "there cannot be any estoppel against the Government in the exercise of its sovereign, legislative and executive functions". This was clearly in the nature of obiter and it cannot prevail as against the statement of law laid down in the Indo Afghan Agencies case. Moreover, it is clear from paragraph 14 of the judgment that this Court did not intend to lay down any proposition of law different from that enunciated in the Indo Afghan Agencies case because it approved of the decision in the Indo Afghan Agencies case and distinguished it on the ground that in that case there was not enforcement of contractual right but the claim was founded upon equity arising from the Scheme, while in the case before the Court, a contractual right was sought to be enforced. There is, therefore, nothing in this decision which should compel us to take a view different from the one we are otherwise inclined to accept. We may point out that in the latest decision on the subject in Radha Krishna Agarwal vs State of Bihar & Ors.(1) this Court approved of the decisions in the Indo Afghan Agencies case and Century Spinning and Manufacturing Co 's case and pointed out that these were cases where it could be held that public bodies or the State are as much bound as private individuals are to carry out obligations incurred by them because parties seeking to bind the authorities have altered their position to their disadvantage or have acted to their detriment on the strength of the representations made by these authorities". It would, therefore, be seen that there is no authoritative decision of the Supreme Court which has departed from the law laid down in the celebrated decisions in the Indo Afghan Agencies case and the Century Spinning & Manufacturing Co 's case. The law laid down in these decisions as elaborated and expounded by us continues to hold the field. We may now turn to examine the facts in the light of the law discussed by us. It is clear from the letter of the 4th respondent dated 23rd January, 1969 that a categorical representation was made by the 4th respondent on behalf of the Government that the proposed vanaspati factory of the appellant would be entitled to exemption from sales tax 693 in respect of sales of vanaspati effected in Uttar Pradesh for a period of three years from the date of commencement of production. This representation was made by way of clarification in view of the suggestion in the appellant 's letter dated 22nd January, 1969 that the financial institutions were not prepared to regard the earlier letter of the 4th respondent dated 22nd December, 1968 as a definite commitment on the part of the Government to grant exemption from sales tax. Now the letter dated 23rd January, 1969 clearly shows that the 4th respondent made this representation in his capacity as the Chief Secretary of the Government, and it was, therefore, a representation on behalf of the government. It was faintly contended before us on behalf of the State that this representation was not binding on the Government, but we cannot countenance this argument, because, in the first place, the averment in the writ petition that the 4th respondent made this representation on behalf of the government was not denied by the State in the affidavit in reply filed on its behalf, and secondly, it is difficult to accept the contention that the 4th respondent, who was at the material time the Chief Secretary to the government and also advisor to the Governor who was discharging the functions of the Government. We must, therefore, proceed on the basis that this representation made by the 4th respondent was a representation within the scope of his authority and was binding on the Government. Now, there can be no doubt that this representation was made by the Government knowing or intending that it would be acted on by the appellant, because the appellant had made it clear that it was only on account of the exemption from sales tax promised by the Government that the appellant had decided to set up the factory for manufacture of vanaspati at Kanpur. The appellant, in fact, relying on this representation of the Government, borrowed moneys from various financial institutions, purchased plant and machinery from M/s. De Smith (India) Pvt. Ltd., Bombay and set up a vanaspati factory at Kanpur. The facts necessary for invoking the doctrine of promissory estoppel were, therefore, clearly present and the Government was bound to carry out the representation and exempt the appellant from sales tax in respect out the representation and exempt the appellant from sales tax in respect of sales of vanaspati effected by it in Uttar Pradesh for a period of three years from the date of commencement of the production. The State, however, contended that the doctrine of promissory estoppel had no application in the present case because the appellant did not suffer any detriment by acting on the representation made by the Government : the vanaspati factory set up by the appellant was quite a profitable concern and there was no prejudice caused to the 694 appellant. This contention of the State is clearly unsustainable and must be rejected. We do not think it is necessary, in order to attract the applicability of the doctrine of promissory estoppel, that the promisee acting in reliance of the promise, should suffer any detriment. What is necessary is only that the promisees should have altered his position in reliance on the promise. This position was implied accepted by Denning, J., in the High Trees ' case when the learned Judge pointed out that the promise must be one "which was intended to create legal relations and which, to the knowledge of the person making the promise, was going to be acted on by the person to whom it was made and which was in fact acted an" (emphasis supplied). If a promise is "acted on", "such action, in law as in physics, must necessarily result in an alteration of position. " This was again reiterated by Lord Denning in W.J. Alan & Co. Ltd. x. El. Nasr Export and Import Co.(1) where the learned Law Lord made it clear that alteration of position "only means that he (the promise) must have been led to act differently from what he would otherwise have done. And if you study the cases in which the doctrine has been applied, you will see that all that is required is that the one should have acted on the belief induced by the other party." Viscount Simonds also observed in Tool Metal Manufacturing Co. Ltd vs Tungsten Electric Co. Ltd. (2) that "the gist of the equity lies in the fact that one party has by his conduct led the other to alter his position". The judgment of Lord Tucker in the same case would be found to depend likewise on a fundamental finding of alteration of position, and the same may be said of that of Lord Coheb. Then again in Emmanuel Avodeji vs Briscoe (supra) Lord Hodson said: "This equity,is however, subject to the qualification (1) that the other party has altered his position". The same requirement was also emphasised by Lord Diplock in Kaminins Ballrooms Ltd. vs Zenith Investments (Torquay) Ltd. (3) What is necessary, therefore, is no more than that there should be alteration of position on the part of the promisee. The alteration of position need not involve any detriment to the promises. If detriment were a necessary element, there would be no need for the doctrine of promissory estoppel because in that event, in quite a few cases, the detriment would form the consideration and the promise could be binding as a contract. There is in fact not a single case in England where detriment is insisted upon as a necessary ingredient 695 of promissory estoppel. In fact, in W. J. Alan & Co. Ltd. vs El Nasar Export and Import Co. (supra), Lord Denning expressly rejected detriment as an essential ingredient of promissory estoppel, saying: "A seller may accept a less sum for his goods than the contracted price, thus inducing (his buyer) to believe that he will not enforce payment of the balance; see Central London Property Trust Ltd. vs High Trees House Ltd. and D. & C. Builders Ltd. vs Rees In none of these cases does the party who acts on the belief suffer any detriment. It is not a detriment, but a benefit to him to have an extension of time or to pay less, or as the case may be. Nevertheless, he has conducted his affairs on the basis that he has had that benefit and it would not be equitable now to deprive him of it. " We do not think that in order to invoke the doctrine of promissory estoppel it is necessary for the promise to show that he suffered detriment as a result of acting in reliance on the promise. But we may make it clear that if by detriment we mean injustice to the promisee which could result if the promisor were to recede from his promise then detriment would certainly come in as a necessary ingredient. The detriment in such a case is not some prejudice suffered by the promisee by acting on the promise, but the prejudice which would be caused to the promisee, if the promisor were allowed to go back on the promise. The classic exposition of detriment in this sense is to be found in the following passage from the judgment of Dixon, J in the Australian case of Grundt vs The Great Boulder Pty. Gold Mines Ltd. (1): " It is often said simply that the party asserting the estoppel must have been induced to act to his detriment. Although substantially such a statement is correct and leads to no misunderstanding, it does not bring out clearly the basal purpose of the doctrine. That purpose is to avoid or prevent a detriment to the party asserting the estoppel by compelling the opposite party to adhere to the assumption upon which the former acted or abstained from acting. This means that the real detriment or harm from which the law seeks to give protection is that which would flow from the change of position if the assumption were deserted that led to it. So long as the assumption is adhered to, the party who altered his situation upon the 696 faith of it cannot complain. His complaint is that when afterwards the other party makes a different state of affairs the basis of an assertion of right against him then, if it is allowed, his own original change of position will operate as a detriment. His action or inaction must be such that, if the assumption upon which he proceeded were shown to be wrong, and an inconsistent state of affairs were accepted as the foundation of the rights and duties of himself and the opposite party, the consequence would be to make his original act or failure to act or source of prejudice. " If this is the kind of detriment contemplated, it would necessarily be present in every case of promissory estoppel because it is on account of such detriment which the promisee would suffer if the promisor were to act differently from his promise, that the Court would consider it inequitable to allow the promisor to go back upon his promise. It would, therefore, be correct to say that in order to invoke the doctrine of promissory estoppel it is enough to show that the promisee has acting in reliance of the promise, altered his position and it is not necessary for him to further show that he has acted to his detriment. Here, the appellant clearly altered its position by borrowing moneys from various financial institutions, purchasing plant and machinery from M/s. De Smet (India) Pvt. Ltd., Bombay and setting up a vanaspati plant, in the belief induced by the representation of the Government that sales tax exemption would be granted for a period of three years from the date of commencement of the production. The Government was, therefore bound on the principle of promissory estoppel to make good the representation made by it. Of course, it may be pointed out that if the U.P. Sales Tax Act, 1948 did not contain a provision enabling the Government to grant exemption, it would not be possible to enforce the representation against the Government because the Government cannot be compelled to act contrary to the statute, but since section 4 of the U.P.Sales Tax Act, 1948 confers power on the Government to grant exemption from sales tax, the Government can legitimately be held bound by its promise to exempt the appellant from payment of sales tax. It is true that taxation is a sovereign or governmental function, but, for reasons which we have already discussed, no distinction can be made between the exercise of a sovereign or governmental function and a trading or business activity of the Government so far as the doctrine of promissory estoppel is concerned. Whatever be the nature of the function which the Government is discharging, the Government is subject to the rule of promissory estoppel and if the 697 essential ingredients of this rule are satisfied, the Government can be compelled to carry out the promise made by it. We are, therefore, of the view that in the present case the Government was bound to exempt the appellant from payment of sales tax in respect of sales of vanaspati effected by it in the State of Uttar Pradesh for a period of three years from the date of commencement of the production and was not entitled to recover such sales tax from the appellant. Now, for the assessment year 1970 71, that is, 2nd July, 1970 to 31st March, 1971, the appellant collected from its customers sales tax amounting to Rs. 6,81,178.95 calculated at the rate of 3 1/2% on the sale price. But when the assessment was made by the Sales Tax Authorities, sales tax was levied on the appellant at the rate of 7% and the appellant was required to pay up a further sum of Rs. 6,80,969.42. The appellant had prayed for an interim order in the present appeal staying further proceedings, but this Court, by an order dated 3rd April, 1974, granted interim stay only on the appellant paying up the amount of sales tax due for the assessment year 1970 71 before 31st July, 1974 and so far as the assessment years 1971 72, 1972 73 and 1973 74 were concerned, the Court directed that the assessments for those years may proceed, but only the final order shall not be passed. The result was that the appellant had to pay up the further sum of Rs. 6,80,949.42 for the assessment year 1970 71. The appellant collected from the customers for the assessment year 1971 72 an aggregate sum of Rs. 9,91,206.17 by way of sales tax at the rate of 3 1/2% for the period 1st April, 1971 to 1st July, 1971, 4% for the period 2nd July, 1971 to 24th January, 1972 and 7% for the period 25th January, 1972 to 31st March, 1972 and deposited this amount in the Treasury. Similarly, for the assessment year 1972 73, the appellant collected from its customers an aggregate sum of Rs. 19,36,597.23 as and by way of sales tax at the rate of 7% of the sale price and this amount was deposited by the appellant in the Treasury, and so also for the first quarter of the assessment year 1973 74 upto the end of which the exemption from sales tax was to continue, the appellant collected and paid an aggregate sum of Rs. 4,84,884.05 at the rate of 7% of the sale price. It appears that surcharge amounting to Rs. 2,83,008.09 for the period of the exemption was also paid by the appellant into the Treasury. The assessments for the assessment years 1971 72, 1972 73 and 1973 74 were, however, not completed in view of the stay order granted by this Court. Now, obviously since the Government is bound to exempt the appellant from payment of sales tax for a period of three years from 2nd July, 1970, being the date of commencement of the production, the appellant would not be liable to 698 pay any sales tax to the State in respect of sales of vanaspati effected during that period and hence the State would have to refund to the appellant the amount of sales tax paid for the period 2nd July, 1970 to 31st March, 1971, subject to any claim which the State may have to retain any part of such amount under any provision of law. If the State has any such claim, it must be intimated to the appellant within one month from today and it must be adjudicated upon within a further period of one month after giving proper opportunity to be heard to the appellant. If no such claim is made, or, if made, not adjudicated upon within the time specified, the State will refund the amount of sales tax to the appellant with interest thereon at the rate of 6% per annum from the date when such refund becomes due and if such claim is made and adjudicated upon within the specified time and it is found that a part of this amount is liable to be retained by the State under some provision of law, the State will refund the balance to the appellant with interest at the like rate. So far as the assessment years 1971 72, 1972 73 and 1973 74 are concerned, the Sales Tax Authorities will proceed to complete the Assessments for those assessment years in the light of the law laid down in this judgment and the amounts of sales tax deposited by the appellant will be refunded to the appellant to the extent to which they are not found due and payable as a result of the assessments, subject to any claim which the State may have to retain those amounts under any provision of law. We accordingly allow the appeal, set aside the judgment of the High Court and issue a writ, order or direction to the above effect against the respondents. The State will pay the costs of the appellant throughout. S.R. Appeal allowed.

The appellant is a limited company which is primarily engaged in the business of manufacture and sale of sugar and it has a cold storage plant and a steel foundry. With reference to a news item dated 10th October 1968 in the National Herald in which it was stated that the State of Uttar Pradesh had decided to give exemption from sales tax for a period of three years under section 4A of the U.P. Sales Tax Act to all new industrial units in the State with a view to enabling them "to come on firm footing in developing stage", the appellant addressed a letter dated 11th October 1968 to the Director of Industries stating that in view of the sales tax holiday announced by the Government the appellant intended to set up a Hydrogenation plant for manufacture of Vanaspati and sought for confirmation that this industrial unit which it proposed to set up, would be entitled to sales tax holiday ' for a period of three years from the date it commenced production. The Director of Industries by his letter dated 14th October 1968, confirmed that "there will be no sales tax for three years on the finished product of your proposed Vanaspati factory from the date it gets power connection for commencing production". Thereafter when the appellant 's representative met the 4th respondent, who was at that time the Chief Secretary to the Government as also Advisor to the Governor and apprised the latter that the appellant was setting up the Vanaspati factory solely on the basis of the assurance given on behalf of the Government that the appellant would be entitled to exemption from sales tax for a period of three years from the date of commencement of commercial production at the factory, the 4th respondent reiterated the assurance made. Again the appellant, by its letter dated 13th December 1968, requested the 4th respondent "to please confirm that we shall be allowed sales tax holiday for a period of three years on the sale of Vanaspati from the date we start production". The 4th respondent replied on 22nd December 1968 that "the State Government will be willing to consider your request for grant of exemption from U.P. Sales Tax for a period of three years from the date of 642 production" and asked the appellant to obtain the requisite application form and submit a formal application to the Secretary to the Government in the Industries department, and in the meanwhile "to go ahead with the arrangements for setting up the factory". The appellant in the meantime had submitted an application dated 21st December 1968 for a formal order granting exemption from sales tax under section 4A of the U.P. Sales Tax Act. The appellant was also subsequently informed by the letter dated 23rd January 1969 of the 4th respondent categorically that the proposed Vanaspati factory of the appellant "will be entitled to exemption from U.P. Sales Tax for a period of three years from the date of going into production and that this will apply to all Vanaspati sold during that period in Uttar Pradesh itself". The appellant, on the basis of these unequivocal assurances, went ahead with the setting of the Vanaspati factory and made much progress. By the middle of May 1969, the State Government started having second thoughts on the question of exemption and the appellant was requested to attend a meeting "to discuss the question of giving concession in Sales Tax on Vanaspati products". The appellant immediately by its letter dated 19th May 1969 pointed out to the 5th respondent that so far as the appellant was concerned, the State Government had already granted exemption from sales tax by the letter of the Chief Secretary dated 23rd January, 1969, but still, the appellant would be glad to send its representative to attend the meeting. The appellant 's representative did attend the meeting held on 3rd June 69 and reiterated that so far as the appellant was concerned, it had already been granted exemption from sales tax and the State Government stood committed to it The State Government, however, went back upon the assurance and a letter dated 20th January 1970 was addressed by the 5th respondent intimating that the Government had taken a policy decision that new Vanaspati units in the State which go into commercial production by 30th September 1970, would be given only partial concession in Sales Tax at different rates on each year of production. The appellant, by its letter dated 25th June 1970, pointed out to the Secretary to the Government that the appellant proposed to start commercial production of Vanaspati with effect from 1st July 1970 and stated that, as notified in the letter of 20th January 1970, the appellant would be availing of the exemption granted by the State Government and would be charging Sales Tax at the rate of 3 1/2% instead of 7% on the sales of Vanaspati manufactured by it for the period of one year commencing from 1st July 1970. The factory of the appellant thereafter went into production from 2nd July 1970 and the appellant informed the Secretary to the Government about the same by its letter dated 3rd July 1970. The State Government, however, once again changed its decision and on 12th August 1970, a news item appeared in the 'Northern Indian Patrika ' stating that the Government had decided to rescind the earlier decision i.e. the decision set out in the letter dated 20th January 1970, to allow concession in the rates of Sales Tax to new Vanaspati Units. The appellant thereupon filed a writ petition in the High Court of Allahabad asking for a writ directing the State Government to exempt the sales of Vanaspati manufactured by the appellant from Sales Tax for a period of three years commencing from 2nd January 1970 by issuing a notification under section 4A of the U.P. Sales Tax Act from the appellant for the said period of three years. The plea based on the 643 doctrine of promissory estoppel was, however rejected by the Division Bench of the High Court principally on the ground that the appellant had waived the exemption, if any, by accepting the concessional rates set out in the letter of the respondent dated 20th January 1970. Allowing the appeal by certificate, the Court, ^ HELD: 1. The view taken by the High Court, namely, that even if there was an assurance given by the 4th respondent on behalf of the State Government and such assurance was binding on the State Government on the principle of promissory estoppel, the appellant had waived its right under it by a accepting the concessional rates of sales tax set out in the letter of the 5th respondent dated 20th January, 1970 is not correct. [656 D E] 2. Waiver is a question of fact and it must be properly pleaded and proved. No plea of waiver can be allowed to be raised unless it is pleaded and the factual foundation for it is laid in the pleadings. [656 E F] In the instant case: (a) the plea of waiver was not taken by the State Government in the affidavit filed on its behalf in reply to the writ petition, nor was it indicated even vaguely in such affidavit. It was raised for the first time at the hearing of the writ petition. That was clearly impermissible without an amendment of the affidavit in reply or a supplementary affidavit raising such plea. [656 F] (b) It was not right for the High Court to have allowed the plea of waiver to be raised against the appellant and that plea should have been rejected in limine. If waiver were properly pleaded in the affidavit in reply, the appellant would have had an opportunity of placing on record facts showing why and in what circumstances the appellant came to address the letter dated 25th June 1970 and establishing that on those facts there was no waiver by the appellant of its right to exemption under the assurance given by the 4th respondent. But in the absence of such pleading in the affidavit in reply, this opportunity was denied to the appellant [656F H] 3. Waiver means abandonment of a right and it may be either express or implied from conduct, but its basic requirement is that it must be "an intentional act with knowledge". There can be no waiver unless the person who is said to have waived is fully informed as to his right and with full knowledge of such right, he intentionally abandons it. [657A, B] In the instant case, on the facts, the plea of waiver could not be said to have been made out by the State Government: There was nothing to state that at the date when the appellant addressed the letter dated 25th June 1970, it had full knowledge of its right to exemption under the assurance given by the 4th respondent and that it intentionally abandoned such right. It is not possible to presume in the absence of any material placed before the Court, that the appellant had full knowledge of its right to exemption so as to warrant an inference that the appellant waived such right by addressing the letter dated 25th June 1970. It is difficult to speculate what was the reason why the appellant addressed the letter 25th June 1970 stating that it would avail of the concessional rates of sales tax granted under the letter dated 20th January 1970. [657 D E] 644 Earl of Darnley vs London, Chathan and Dover Rly. Co. (Proprietors etc.), @ 57 Craine vs Colonial Mutual Fire Insurance Co. Ltd. ; ; Martindala vs Faulkner ; quoted with approval. The doctrine called 'promissory estoppel ', 'equitable estoppel ', 'quasi estoppel ', and 'new estoppel ' is a principle evolved by equity to avoid injustice where a promise is made by a person knowing that it would be acted on and it is person to whom it is made and in fact it is so acted on and it is inequitable to allow the party making the promise to go back upon it. Though commonly named promissory estoppel it is neither in the realm of contract nor in the realm of estoppel. The basis of the doctrine is the inter position of equity, which has always true to its form stepped in to mitigate the rigours of strict law. [658 E G] 5. The true principle of promissory estoppel is that where one party has by his words or conduct made to the other a clear and unequivocal promise which is intended to create legal relationship effect a legal relationship to arise in the future, knowing or intending that it would be acted upon by the other party to whom the promise is made and it is infact so acted upon by the other party, the promise would be binding on the party making it and he would not be entitled to go back upon it, if it would be inequitable to allow him to do so having regard to the dealings which have taken place between the parties, and this would be so irrespective whether there is any pre existing relationship between the parties or not. Equity will in a given case where justice and fairness demand, prevent a person from insisting on strict legal rights even where they arise, not under any contract, but on his own title deeds or under statute. [662 B D] To the applicability of the doctrine of promissory estoppel it is not necessary that there should be some contractual relationship between the parties. Nor can any such limitation, namely, that the doctrine of promissory estoppel is limited in its operation to cases where the parties are already contractually bound and one of the parties induces the other to believe that the strict rights under the contract would not be enforced be justifiably introduced to curtail the width and amplitude of the doctrine. The parties need not be in any kind of legal relationship before the transaction from which the promissory estoppel take its origin. The doctrine would apply even where there is no pre existing legal relationship between the parties, but the promise is intended to create legal relations or affect a legal relationship whish will arise in future. [660 G H, 661 A, F G]. Jorden V. Money, , Hughes vs Metropolitan Railway Co., , Birmingam & District Land Co. vs London and North Western Rail Co., ]1888] ; discussed and questioned. Central London Property Trust Ltd. vs High Trees House Ltd., [1947] K.B. p. 130:: ; explained. Evenden vs Guildford City Association Football Club Ltd., @ 272 :: @ 255; Crabb vs Arun District Council. @ 875:: @ 858 CA; quoted with approval. 645 6. The doctrine of promissory estoppel cannot be inhibited by the same limitation estoppel in the strict sense of the term. It is an equitable principle evolved by the Courts for doing justice and there is no reason why it should be given only a limited application by way of defence and it should only be a shield and not a sword to found a cause of action. It can be the basis of a cause of action. [662 D E, 663 E F]. There is no qualitative difference between 'proprietary estoppel ' and 'promissory estoppel '. Both are the off springs of equity and if equity is flexible enough to permit proprietary estoppel to be used as a cause of action, there is no reason in logic or principle why promissory estoppel should also not be available as cause of action, if necessary to satisfy the equity. [665 G H] Central London Property Trust Ltd. vs High Trees House Ltd . [1947]1 K.B.P. 130: ; Combe vs Combe ; ; Beesly vs Hallwood Estate Ltd. ; Municipal Corporation of Bombay.v Secty. of State I.L.R. @ 607; Mooregate Mercantile Co. Ltd. vs Twichings,s ; referred to. Crabb vs Arun District Council @ 875 explained. Ramsden vs Dysen,[1866] L.R H.L. 129; Dunlop Pneuntafic Tyre Co. vs Saifridge & Co. Ltd. ; discussed. Law is not a mausoleum. It is not an antique to be taken down, dusted admired and put back on the shelf. It is rather like an old but vigorous tree having its roots in history, yet continuously taking new grafts and putting out new sprouts and occasionally dropping dead wood. It is essentially a social process, the end product of which is justice and hence it must keep on growing and developing with changing social concepts and values. Otherwise, there will be estrangement between law and justice and law will cease to have legitimacy Though 'continuity with the past is a historical necessity ', 'conformity is not to be turned into a fetish '. [668 H, 669 A B]. Therefore, despite the fact that allowing promissory estoppel to found a cause of action would seriously dilute the principle which requires consideration to support a contractual obligation, this new principle, which is a child of equity brought into the world with a view to promoting honesty and good faith and bringing, law closer to justice should not be held in fetters but allowed to operate in all its activist magnitude. so that it may fulfil the purpose for which was conceived and born. [668 F G]. Robertson v Minister of Pensions. Evenden Guldford city Association Football Club Ltd. [1975] 3 All. E.R. p. 269. Candler vs Crane Christmas & Co. @ 178; quoted with approval. A promise may, in the United States, derive contractual enforceability if it has been made by the promisor knowing or intending that it would be acted on and the promisee has altered his position in reliance on it, notwithstanding that there is no consideration in the sense in which that word is used in English 646 and Commonwealth jurisprudence. However, the basic requirement for invoking this principle must be present namely that the fact situation should be such that injustice can be avoided only by enforcement of the promise. The doctrine of promissory estoppel has been used in the United States to reduce, if not to destroy, the prestige of consideration as an essential of valid contract and also used in diverse other situations as founding a cause of action: [670 D E, 673 B]. Alleghany College vs National Chauteaque Country Bank 57 Am L. R. 980; Drennan vs Stat Paving Company [1958] 31 California 2nd 409; referred. Under the English law, the judicially formed view is that the crown is not immune from liability under the doctrine of promissory estoppel and the view taken by Denning J., in that the crown cannot escape its obligation under the doctrine of promissory estoppel by "praying in aid the doctrine of executive necessity" still holds the field. [674 D]. Robretson vs Minister of Pensions [1949] 1 K. B. 227; quoted with approval: Rederiaktiebolaget Amphitrities. vs The King ; referred to. Howell vs Falmouth Boat Construction Co. Ltd. ; explained 10. Even in the United States, the trend in the State Courts, of late, has been strongly in favour of the application of the doctrine of promissory estoppel against the Government and public bodies "where interests of justice, morality and common fairness clearly dictate that course". It is being increasingly felt that "the Government ought to set a high standard in its dealings and relationships with citizens and the word of a duly authorised Government agent, acting within the scope of his authority, ought to be as good as a Government bond". The Government would not be estopped "by the acts of its officers and agents who without authority enter into agreements to do what the law does not sanction or permit" and "these dealing with an agent of the Government must be held to have notice of limitations of his authority". But if the acts of omissions of officers of the Government are within the scope of their authority and are not otherwise impermissible under the law, they "will work estoppel against Government". [676 F H, 677 A D] Federal Crop Insurance Corporarion vs Maroill ; 92 L. ed. discussed and explained. Valsonavich vs United States p. 96; quoted With approval. Where the Government makes a promise knowing or intending that it would be acted on by the promisee and, in fact, the promisee, acting in reliance on it, alters his position, the Government would be held bound by the promise and the promise would be enforceable against the Government at the instance of the promisee notwithstanding that there is no consideration for the promise and the promise is not recorded in the form of a formal contract as required by Article 299 of the Constitution. [682 G H, 683 A]. 647 It is elementary that in a Republic governed by the rule of law, no one, a however high or low is above the law. Every one is subject to the law as fully and completely as any other and the Government is no exception. It is indeed the pride of constitutional democracy and rule of law that the Government stands on the same footing as a private individual so far as the obligation of the law is concerned; the former is equally bound as the latter. On no principle can a Government committed to the rule of law, claim immunity from the doctrine of promissory estoppel. The Government cannot be heard to say that it is under no obligation to act in a manner that is fair and just or that it is not bound by considerations of 'honesty and good faith '. In fact the Government should be held to a high "standard of rectangular rectitude while dealing with its citizens". [683 A C]. Gangaes Manufacturing co vs Surajmull and Ors., I.L.R. ; Municipal Corporation of Bombay vs The Secretary of State, I,L.R. 29 Bomb. 588; approved. Collector of Bombay vs Municipal Corporoaton of rlle City of Bombay and Ors. ; ; Union of India vs Indo Afghan Agencies, ; ; followed. Ransden vs Dyson,[1866] L.R. 1HL 170; referred to. Robertson vs Minister of Pensions, [1949] 1 K. B. 227; quoted with approval as the correct law. The doctrine of executive necessity, regarded as sufficient Justification for the Government to repudiate even its contractual obligations was emphatically negatived in the Indo Afghan Agencies case and the supremacy of the laws was established, [683 C D]. Therefore, it is not open to Government to claim immunity from the applicability of the rule of promissory estopped and thereby repudiate a promise made by it on the ground that such promise may fetter its future executive action. If the Government wants to preserve its freedom of executive action from being hampered or restricted, the Government should not make a promise knowing or intending that it would be acted on by the promisee and the promisee would alter his position relying upon it. But, if the Government makes such a promise and the promisee acts in reliance upon it and alters his position the Government would be compelled to make good such promise like any other private individual. [683 D F]. The law cannot acquire legitimacy and gain social acceptance unless it accords with the moral values of the society. It should be the constant endeavor of the Courts and the legislatures to close the gap between law and morality and bring about as near an approximation between the two as possible. The doctrine of promissory estopped is a significant judicial contribution in that direction.[683 F G]. Since the doctrine of promissory estoppel is an equitable doctrine, it must yield when the equity so requires. If it could be shown the by Government that having regard to the facts as they have transpired, it would be inequitable to hold the Government to the promise made by it, the Court would not raise an equity in favour of the promisee and enforce the promise against the Government. 648 The doctrine of promissory estoppel would be displaced in such a case because on the facts, equity would not require that the Government should be held bound by the promise made by it. [683 G H, 684 A] When the Government is able to show that in view of the facts, as they have transpired public interest would be prejudiced if the Government were required to carry out the promise, the Court would have to balance, the public interest in the Government carrying out a promise made to a citizen which has induced the citizen to act upon it and alter his position and the public interest likely to suffer if the promise were required to be carried out by the Government and determine which way the equity lies. It would not be enough for the Government just to say that public interest requires that the Government should not be compelled to carry out the promise or that the public interest would suffer if the Government were required to honour it. The Government cannot claim to be exempt from the liability to carry out the promise 'on some indefinite and undisclosed ground of necessity or expediency ', nor can the Government claim to be the sole judge of its liability and repudiate it 'on an exparte appraisement of the circumstances. [684 A D] In order to resist its liability, the Government should disclose to the Court the various events necessitating its claim to be exempt from the liability and it would be for the Court to decide whether those events are such as to render it inequitable to enforce the liability against the Government. [684 D E]. Mere claim of change of policy would not be sufficient to exonerate the Government from the liability: the Government would have to show precisely the changed policy with the reason and justification therefor, to enable the Court to judge for "itself which way the public interest lies and what equity of the case demands. It is only if the Court is satisfied, on proper and adequate material placed by the Government, that over riding public interest requires that the Government should not be held bound by the promise but should be free to act unfettered by it that the Court would refuse to enforce the promise against the Government. [684 E F] The essence of the rule of law is that the Court would not act on the mere ipse dixit of the Government, for it is the Court which has to decide and not the Government, whether the Government should be held exempt from liability.[684 F G] The burden would be upon the Government to show that the public interest in the Government acting otherwise than in accordance with the promise is so overwhelming that it would be inequitable to hold the Government bound by the promise and the Court would insist on a highly rigorous standard of proof in the discharge of this burden. But even where there is no such over riding public interest, it may still be competent to the Government to resile from the promise 'on giving reasonable notice, which need not be a formal notice, giving the promisee a reasonable opportunity of resuming his position ' provided of course it is possible for the promisee to restore status quo ante. If, however, the promisee cannot resume his position, the promise would become final and irrevocable. [684 G H, 685 A]. Emmanuel Ayodeji Ajayi vs R. T. Briscoe, [1964] 3 All. E.R. 556; referred to 649 14. So far as the doctrine of promissory estoppel is concerned, no distinction can be made between a private individual and a public body. This doctrine is also applicable against a public body like a municipal council. However, this doctrine cannot be applied in teeth of an obligation or liability imposed by law. It cannot be invoked to compel the Government or even a private party to do an act prohibited by law. There can also be no promissory estoppel against the exercise of legislative power. The Legislature can never be precluded from exercising its legislative function by resort to the doctrine of pro missory estoppel. [688C, G H 689 A]. Century Spinng and Manufacturing Co. Ltd. & Anr. vs The Ulhasnagr Municipal Council and Anr. [1970] 3 SCR 854; Turner Mossison and Co. Ltd. vs Hunngerfard Investmetn Trust Ltd.[1972] 3 S.C.R. 711; discussed & followed. M. Ramanatha Pillai vs The Stare of Kerala & Anr. 5 @ 526; Assistant Cusrodian vs Brij Kishore Agarwala & Ors. ; , explained and held inapplicable. Sate of Kerala vs Gwalior Rayon Silk Manufacturing Co. Ltd. ; @ 688; reiterated. Malhortra and Sons & Ors. vs Union of India and Ors. A.I.R. 1976 J & K p. 41 approved. Excise Commissioner U.P. Allahabad vs Ram Kumar ; Bihar Eastern Gangetic Fishermen Cooperative Society Ltd. vs Sipali Sangil and Ors. [1978] 1 S R 375; ; ; Radha Krishan Agarwal vs State of Bihar and Ors. ; ;: ; ; explained. In order to attract the applicability of the doctrine of promissory estoppel, it is not necessary that the promisee, acting in reliance on the promise, should suffer any deteriment. What is necessary is no more than that there should be alteration of his position in reliance on the promise. If detriment were a necessary element, there would be no need for the doctrine of promissory estoppel because, in that event in quite a few cases, the detriment would form the consideration and the promise would be binding, as a contract. If by deteriment is meant injustice to the promisee which would result if the promisor were to resile from his promisee, then detriment would certainly come in as a necessary ingredient. The detriment in such a case is not some prejudice sneered by the promisee acting on the promise, put the prejudice which would be caused to the promisee, if the promisor were allowed to back on the promise. It is not necessary for the promisee to show that he has acted to his detriment. All that he has to show is that he has acted to reliance on the promise and altered his position. [694 A B, F G, 695 E, 694 D]. Central London Property Trust Ltd. V. High Trees House, [1947] K.B. p. 130:: [1956] 1 All. E.R. 256, W. J. Alan & Co. Ltd. vs El Nasar Export and Import Co. [1972] 2 All. E.R. p. 127, @ p. 140, Tool Metal Manufacturing Co. Ltd. vs Tunosten Electric Co. Ltd. [1955] All. E. R. 657; [1975] 1 W. L. R. 761 Emmaulel Ayodeji 650 Ajya V. R. T. Briscoe Karnmins Ballrooms Ltd. vs Zenith Investments (Torquay) Ltd. , Grurldt vs the Boulder Pty. Gold Mines Ltd. ; ; quoted with approval. In the instant case. The facts necessary for involving the doctrine of promissory estoppel were clearly resent and the Government was bound to carry out the representation and exempt the appellant from sales tax in respect of sales of Vanaspati effected by it in Uttar Pradesh for a period of three years from the date of commencement of the production. [693 F G] (a) The letter dated 23rd January 1969 was a representation on behalf of the Government, the representation having been made by the 4th respondent in his capacity as the Chief Secretary of the Government categorically to the effect that the appellant would be entitled to exemption from sales tax in respect of the sale of vanaspati effected in Uttar Pradesh for a period of three years from the date of commencement of production. This representation was made by way of clarification in view of the suggestion in the appellant letter dated 2 nd January 1969 that the financial institutions were not prep ed to regard the earlier letter of the 4th respondent dated 22nd December 1968 as a definite commitment on the part of the Government to grant exemption from sales tax. [692 H, 693 A B] (b) The representation made by the 4th respondent was a representation within the scope of his authority and was binding on the Government in as much as the 4th respondent, who was at the material time the Chief Secretary to the Government and also Adviser to the Governor discharging the functions of the Government during the President 's Rule had authority to bind the Governor. Moreover the averment to this effect in the Writ Petition was not denied by the State in the affidavit in reply filed on its behalf [693 C D]. (c) This representation was made by the Government knowing or intending that it would be acted on by the appellant because the appellant made it clear that it was only on account of the exemption from sales tax promised by the Government that the appellant had decided to set up the factory for manufacture of Vanaspati. In fact the appellant relying on this representation of the Government, borrowed moneys from various financial institutions, purchased plant and machinery from M/s. De Smith (India) Pvt. Ltd., Bombay and set up a Vanaspati factory at Kanpur. [693 E F]

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l Appeal No. 133 1963. Appeal from the judgment and decree dated November 17, 1960, of the Orissa High Court in First Appeal No. 45 of 1955. M. C. Setalvad, R. K. Garg, M. K. Ramamurthi, D. P. Singh and section C. Agarwala, for the appellant. section V. Gupte, Additional Solicitor General of India, Gana pathy Iyer and R. H. Dhebar, for the respondents. March 9, 1964. The judgment of the Court was delivered by GAJENDRAGADKAR, C.J. The principal point of law, which arises in this appeal is whether the Sanad issued in favour of the appellant, Rajkumar Narsingh Pratap Singh Deo, by his elder brother, the Ruler of Dhenkanal State, on March 1, 1931, is existing law within the meaning of article 372 of the Constitution read with cl. 4(b) of Order No. 31 of 1948 issued by the respondent State of Orissa on January 1, 1948. This question arises in this way. The State of Dhenkanal which was an independent State prior to 1947 merged with the Province of Orissa in pursuance of a Merger Agreement entered into between the Ruler of Dhenkanal and the Dominion of India on December 15, 1947. This Agreement came into force as from January 1, 1948. In consequence of this Agreement the entire administration of the State of Dhenkanal was taken over by the State of Orissa pursuant to the authority conferred on it by the Central Government under section 3(2) of the Extra (No. 47 of 1947). After the Sanad in question was issued in favour of the appellant, be was getting a monthly allowance of Rs. 5001 from the Dhenkanal District Treasury on the authority of a permanent Pay Order which had been issued in his favour by the Ruler of Dhenkanal on the basis of the said Sanad. This payment was discontinued by the respondent from 1st of May, 1949 and the several representations made by the appellant to the various authorities of the respondent to reconsider the matter failed. That is why lie filed the present suit on September 26, 1951 in the Court of the subordinate Judge, Dhenkanal, alleging that the act of discontinuing the appellant 's pension was illegal, and asking for appropriate reliefs in that behalf. It is from this suit that the present appeal arises. 114 The appellant 's case is that in the family of the appellant, it has been recognised as a customary right of the junior members of the family to receive adequate maintenance consistently with the status of the family. Indeed, the appellant 's allegation is that this custom was recognised in Dhenkanal and enforced as customary law in the State. The grants made to the members of the Royal Family for their maintenance consisted of lands and cash allowances. These latter were described as Kharposh allowances and they were charged and paid out of the revenue of the former State of Dhenkanal. It was in accordance with this customary law that the Sanad in question was issued by the Ruler of Dhenkanal in favour of the appellant. By this Sanad, certain lands were granted to the appellant and a cash allowance of Rs. 5001 per month was directed to be paid to him for life. The appellant 's grievance is that this , rant of Rs. 5001 allowance has been discontinued by the respondent and that, according to the appellant, is an illegal and unconstitutional act. In support of his plea that the respondent was bound to continue the payment of the cash allowance, the appellant urged in his suit that the grant was a law within the meaning of article 372 and as such, it had to be continued. He also alleged that after the merger of Dhenkanal with Orissa, his right to receive the grant was recognised by the respondent and acted upon; and that is another reason why he claimed an appropriate relief in, the form of an injunction against the respondent. Several other pleas were also taken by the appellant in support of his claim, but it is not necessary to refer to them for the purpose of the present appeal. The respondent denied the appellant 's claim and urged that having regard to the nature of the grant on which the appellant has rested his case, it was competent to the respondent to discontinue the grant. The grant in question is not law under article 372 and just as it could be made by the Ruler in 1931 by an executive act, it can be discontinued by the respondent by a similar executive act since the respondent is the successor of the Ruler. It was also urged by the respondent that the appellant 's allegation that the respondent had recognised and agreed to act upon the grant of cash allowance, was not well founded. Both the learned trial Judge who tried the appellant 's case, and the High Court of Orissa before which the appellant took his case in appeal, have, in the main, rejected the appellant 's contention, with the result that the appellant 's suit has been dismissed. The appellant then applied for and obtained a certificate from the High Court and it is with the certificate thus granted to him that he has come to this Court in appeal. The first and the main point which Mr. Setalvad for the appellant has urged before us is that the Sanad on which the appellant 's claim is founded, is law. At the time when the 115 Senad was granted, the Ruler of Dhenkanal was an absolute monarch and in him. vested full sovereignty; as such absolute sovereign, he was endowed with. legislative, judicial and executive powers and authority and whatever order tie passed amounted to law. In the case of an absolute monarch whose ' word is literally law, it would be idle, says Mr. Setalvad, to distinguish between binding orders issued by him which are legislative from other binding orders which are executive or administrative. All binding orders issued by such a Ruler are, on the ultimate analysis, law, and the Sanad in question falls under the category of such law. In support of this argument, Mr. Setalvad has referred Lis to the definition of the words "existing law" prescribed by article 366(10) of the Constitution. article 366(10) provides that "existing law" means any law, ordinance, order, bye law, rule or regulation passed or made before the commencement of this Constitution by any Legislature, authority or person having power to make such a, law, ordinance, order, bye law, rule or regulation. Basing himself on this definition, Mr. Setalvad also relies on the provisions of article 372(1) which provides for the continuance in force of existing laws; this continuance is, of course, subject to the other provisions of the Constitution and it applies to such laws as were in force in the territory of India immediately before the commencement of the Constitution, until they are altered, repealed or amended by a, competent Legislature or other competent authority. These provisions are invoked by Mr. Setalvad primarily by virtue of cl. 4(b) of Order 31 of 1948 issued by the respon dent on the 1st of January, 1948. It is well known that by s.3(1) of the Extra , the Central Government was given very wide powers to exercise extra provincial jurisdiction in such manner as it thought fit. Section 3(2) provided that the Central Government may delegate any such jurisdiction as aforesaid to any officer or authority in such manner and to such extent as it thinks fit. The width of the powers conferred on the Central Government can be properly appreciated if the provisions of section 4 are taken into account. Under section 4(1), the, Central Government was authorised by notification in the Official Gazette to make such orders as may seem to it expedient for the effective exercise of the extraforeign jurisdiction of the Central Government. Section 4(2) indicates by cls. (a) to (d) the categories of orders which can be passed by the Central Government in exercise of its jurisdiction. The sweep of these powers is very wide and they had to be exercised in the interests of the proper governance of the areas to which the said Act applied. Under section 3(2), the Central Government bad delegated its powers to the Province of Orissa in respect of States which had merged with it, and it was in exercise of its powers as such delegated that Order 31 of 1948 116 was issued by the Province of Orissa (now the respondent). 4 of the Order dealt with the question of the laws to be applied to the merging areas. 4(a) referred to the enactments specified in the first column of the Schedule annexed to the Order and made them applicable as indicated in it. 4(b) provided that as respects those matters which are not covered by the enactments applied to the Orissa States under sub para (a), all laws in force in any of the Orissa States prior to the commencement of this Order, whether substantive or procedural and whether based on custom and usage, or statutes, shall, subject to the provisions of this Order, continue to remain in force until altered or amended by an Order under the Extra, Provincial Jurisdiction Act, 1947. There is a proviso to this sub clause to which it is unnecessary to refer. The argu ment is that by virtue of cl. 4(b) of this Order, the customary law prevailing in the State of Dhenkanal prior to its merger continued to operate as law in the territory of Dhenkanal and that is how it is operative even now, because it has not been repealed or amended. Since the Sanad issued in favour of the appellant is, according to the appellant 's case, law, there would be no authority in the respondent to cancel the payment of cash allowance to the appellant merely by an executive order. If the respondent wants to terminate the payment of the cash allowance to the appellant, the only way which the respondent can legitimately adopt is to make a law in that behalf, or issue an order under cl. 4(b) of the Order. That, broadly stated, is the argument which has been pressed before us by Mr. Setalvad. We do not think that the basic assumption made by Mr. Setalvad in presenting this argument is sound. It would be noticed that the basic assumption on which the argument is based is that in the case of an absolute monarch, there can be no distinction between executive and legislative orders. In other words, it is assumed that all orders which are passed by an absolute monarch, are binding, and it is idle to enquire whether they are executive or legislative in character, because no such distinction can be made in regard to orders issued by an absolute monarch. It is true that the legislative, executive and judicial powers are all vested in an absolute monarch; he is the source or fountain of all these powers and any order made by him would be binding within the territory under his rule without examining the question as to whether it is legislative, executive or judicial; but though all the three powers are vested in the same individual, that does not obliterate the difference in the character of those powers. The jurisprudential distinction between the legislative and the executive powers still remains, though for practical purposes, an examination about the character of these orders may serve no useful purpose. It is not as if where absolute monarchs have sway in 117 their kingdoms, the basic principles of jurisprudence which distinguish between the three categories of powers are inapplicable. A careful examination of the orders passed by an absolute monarch would disclose to a jurist whether the power exercised in a given case by issuing a given order is judicial, legislative, or executive, and the conclusion reached on jurisprudential grounds about the nature of the order and the source of power on which it is based would nevertheless be true and correct. That, indeed, is the approach which must be adopted in considering the question as to whether the grant in the present case is law within the meaning of article 372 as well as cl. 4(b) of Order 31 of 1948; and so, prima facie, it does not seem sound to suggest that in the case of an absolute monarch, that branch of jurisprudence which makes a distinction between three kinds of power is entirely inapplicable. In dealing with this aspect of the matter, it is hardly necessary to examine and decide what distinguishes a law from an executive order. A theoretical or academic discussion of this problem would not be necessary for our present purpose, because all that we are considering at this stage is whether or not it would be possible to consider by reference to the character of the order, its provisions, its context and its general setting whether it is a legislative order or an executive order. Though theorists may not find it easy to define a law as distinguished from executive orders, the main features and characteristics of law are well recognised. Stated broadly, a law generally is a body of rules which have been laid down for determining legal rights and legal obligations which are recognised by courts. In that sense, a law can be distinguished from a grant, because in the case of a grant, the grantor and the grantee both agree about the making and the acceptance of the grant; not so in the case of law. Law in the case of an absolute monarch is his command which has to be obeyed by the citizens whether they agree with it or not. Therefore, we are inclined to hold that Mr. Setalvad is not right in making the unqualified contention that while we are dealing with a grant made by absolute monarch, it is irrelevant to enquire whether the grant is the result of an executive action, or a legislative action. On Mr. Setalvad 's contention, every act of the absolute monarch and every order passed by him would become law though the act or order may have relation exclusively to his personal matters and may have no impact on the public at large. That is why it is unsound to suggest that the jurisprudential distinction between orders which are judicial, executive or legislative or in relation to purely individual and personal matters should be treated as irrelevant in dealing with Acts or orders passed even by an absolute monarch. Realising the difficulty in his way, Mr. Setalvad has strongly relied on certain decisions of this Court which, according to him, support the broad point which he has raised before 118 us. It is, therefore, necessary to examine these decisions. The first case on which Mr. Setalvad relies is that of Ameer unNissa Begum vs Mahboob Begum(1). In that case, this Court was called upon to consider the validity 'of the Firman issued by the Nizam of Hyderabad on the 19th February, 1939, by which a Special Commission had been constituted to investigate and submit a report to him in the case of succession to a deceased Nawab which was transferred to the commission from the file of Darul Quaza Court. Dealing with the question as to whether the Firman in question was passed by the Nizam in exercise of his legislative power or judicial power, Mukherjea, C.J., speaking for the Court, observed that the Nizam was the supreme legislature, the supreme judiciary and the supreme head of the executive and there were no constitutional limitations upon his authority to act in any 'of these capacities. He also observed that the Firmans were expressions of the sovereign will of the Nizam and they were binding in the same way as any other law; therefore so long as a particular firman held the field, that alone would govern or regulate the rights of the parties concerned, though it could be annulled or modified by a later Firman at any time that the Nizam willed. It appears, however, that the learned counsel appearing in that case did not argue this point, and so, the question as to whether it would be possible or useful to draw a line of demarcation between a Firman which is legislative and that which is executive, was neither debated before the Court, nor has it been examined and decided as a general proposition of law. In The Director of Endowments, Government of Hyderabad vs Akram Ali(2), similar observations were repeated by Bose, J., who spoke for the Court on that occasion. Dealing with the Firman issued by the Nizam on the 30th December, 1920, which directed the Department to supervise the Dargah until the rights of the parties were enquired into and decided by the Civil Court, it was 'observed that the Nizam was an absolute sovereign regarding all domestic matters at the time when the Firman was issued and his word was law. That is bow the validity of the Firman was not questioned and it was held that its effect was to deprive the respondent before the Court and all other claimants of all rights to possession pending enquiry of the case. In this case again, as in the case of Ameer un Nissa Begum(1), the point does not appear to have been argued and the observations are, therefore, not intender to lay down a broad or general proposition as contended by Mr. Setalvad. That takes us to the decision in the case of Madhaorao Phalke vs The State of Madhya Bharat(3). On this occasion, This Court was called upon to consider the question as to (1) A.I.R. 1955 S.C. 352. (2) A.I.R. 1956 S.C. 60 (3) ; 119 whether the relevant Kalambandis issued by the Ruler of Gwalior constituted law, 'or amounted merely to executive orders. In the course of the judgment, the passages in the two cases to which we have just referred were, no doubt, quoted; but the ultimate decision was based not so much on any general ground as suggested by Mr. Setalvad, as on the examination of the character of the Kalambandis themselves and other ' relevant factors. If Mr. Setalvad 's argument be well founded and the Kalambandis had to be treated as law on the broad , round that they were orders issued by an absolute monarch, it would have been hardly necessary to consider the scope and effect of the Kalambandis, the manner in which they were passed, and the object and effect of their scheme. In fact, these matters were considered in the judgment and it was ultimately held that "having regard to the contents of the two orders and the character of the provisions made by them in such a detailed manner, it is difficult to distinguish them from statutes or laws; in any event, they must be treated as rules or regulations having the force of law". That was the finding made by the High Court and the said finding was affirmed by this Court. Therefore, though this judgment repeated the general observations made by this Court on two earlier occasions, it would be noticed that the decision was based not so much on the said observations, as on a careful examination of the provisions contained in the Kalambandis themselves. In Promod Chandra Deb vs The State of Orissa(1), this Court has held that the grant with which the Court was concerned, read in the light of Order 31 of the Rules, Regulations and Privileges of Khanjadars and Khorposhdars, was law. In discussing the question, Sinha, C.J., has referred to Order 31 of the Rules and Regulations and has observed that like the Kalambandis in the case of Phalke(2), the said Rules has the force of law and would be existing jaw within the meaning of article 372 of the Constitution. This case does not carry the position any further except that the same general observations are reproduced. In the case of Tilkayat Shri Govindlalji Maharaj vs State of Rajasthan(3), while dealing with the question as to whether the Firman issued by the Udaipur Darbar in 1934 was law or not, this Court examined the scheme of the said Firman, considered its provisions, their scope and effect and came to the conclusion that it was law. Having thus reached the conclusion that the Firman, considered as a whole, was law, the general observations on which Mr. Setalvad relies were reproduced. But as in the case of Phalke (2), so in this case, the decision does not appear to be based on any general or a priori consideration, but it is based more particularly on the examination of the scheme of the Firman and its provisions. (1) [1962] Supp. 1 S.C.R. 405,410. (2) ; (3) [1964] 1 section C. R. 561. 120 In the case of Maharaja Shree Umaid Mills Ltd. vs Union of India(1), a similar question arose for the decision of this Court in regard to an agreement made on the 17th of April, 1941. The point urged before the Court was that the said agreement was law, and reliance was placed on the several general observations to which we have already referred. section K. Das. J. who spoke for the Court examined the said observations and the context in which they were made and rejected the plea that the said observations were intended to lay down a general proposition that in the case of an absolute monarch, no distinction can be made between his legislative and his executive acts. In the result, the agreement in question was held to be no more than a contract which was an executive act and not a law within the meaning of article 372. The same view has been recently expressed by Hidayatullah, Shah and Ayyangar, JJ. in the judgments respectively delivered by them in The State of Gujarat vs Vora Fiddali Badruddin Mithibarwala(2). Therefore, a close examination of the decisions on which Mr. Setalvad relies does not support his argument that this Court has laid down a general proposition about the irrele vance or inapplicability of the well recognised distinction between legislative and executive acts in regard to the orders issued by absolute monarchs like the Raja of Dhenkanal in the present case. The true legal position is that whenever a dispute arises as to whether an order passed by an absolute monarch represents a legislative act and continues to remain operative by virtue of cl. 4(b) of the Order, all relevant factors must be considered before the question is answered; the nature of the 'order, the scope and effect of its provisions, its general setting and context, the method adopted by the Ruler in promulgating legislative as distinguished from executive orders, these and other allied matters will have to be examined before the character of the order is judicially determined, and so, we are satisfied that Mr. Setalvad is not right in placing his argument as high as to say that the Sanad issued in favour of the appellant by the Raja of Dhenkanal must be field to be law without considering the nature of the rant contained in it and other relevant circumstances and facts. We must, therefore. proceed to examine these relevant facts. Let us then examine the Sanad. It consists of three clauses. The first clause refers to the practice in the State of Dhenkanal under which the Rajas made grants in hereditary rights to their relatives, and it adds that there exists a patent necessity for making an adequate provision for the grantee. (1) ; (2) ; 121 the appellant, to enable him to maintain his dignity as a Rajkumar of the State and to maintain himself, his family, his heirs and descendants in a manner befitting his and their position. 'That is why out of love and affection for him, the grantor made the khanja grant in the shape of a monthly cash allowance of Rs. 500/ for his life time and also an assignment of land measuring 6942 71 5 acres specified in the Schedule attached to the Sanad. The grant of the said land has been made heritable and the grantee has been authorised to enjoy it from generation to generation. The extent of the grant is also clarified by additional clauses which it is unnecessary to mention. Clause 2 of the Sanad imposes the condition of loyalty on the grantee and his heirs; and by cl. 3 the State undertook to bear all costs for reclaiming the land covered by the grant with a view to render it fit for cultivation, Now, it is plain that there is no legislative element in any of the provisions of this grant. It does not contain any command which has to be obeyed by the citizens of the State; it is a gift pure and simple made by the Ruler in recognition of the fact that under the custom of the family and the customary law of the State, he was bound to maintain his junior brother. The grant, therefore, represents purely an executive act on the part of the Ruler intended to discharge his obligations to his ,junior brother under the personal law of the family and the customary law of the State. It would, we think be idle to suggest that such a grant amounts to law. It is true that partly it is based on the requirement of personal and customary law , but no action taken by the Ruler in discharging his obligations under such personal or customary law can be assimilated to an order issued by him in exercise of his legislative authority. 'Therefore, we have no difficulty in holding that the Sanad in question is a purely executive act and cannot be regarded as law as contended by Mr. Setalvad. It was then faintly argued by Mr. Setalvad that the obli gation undertaken by the Ruler was recognised by the respon dent, and so, it could not be cancelled by the respondent merely by an executive act. In our opinion, there is no substance in this argument. If the act by which the grant was made was a purely executive act on the part of the then Ruler of the State of Dhenkanal, we do not see how it can be legitimately urged that the terms of the grant cannot either be modified, or the grant cannot be cancelled altogether by an executive act of the respondent which is the successor of the Ruler. As we have just indicated, the customary law which required the Ruler to provide maintenance for his junior brother, can be said to have been continued by cl. 4(b) of the Order of 1948 and article 372 of the Constitution; but to say that the customary law in that behalf is continued is very different from saying that the amount of maintenance fixed by the grant cannot be 122 varied or altered. What the respondent has done is to stop the payment of cash allowance of Rs. 5001 per month an a does not mean alteration of the law. It is common ground that the grant of the land covered by the Sanad has not been disturbed, and so, all that the impugned action of the respondent amounts to is to reduce the total maintenance allowance granted to the appellant by the Ruler in 19 3 1. It is plain that though the customary law requiring provision to be made for the maintenance of the appellant is in force, the respondent has the right to determine what would be adequate and appropriate maintenance, and this part of the right is purely executive in character. It would, we think, be unreasonable to suggest that though the Sanad is not law, the amount granted by the Sanad cannot be modified by an executive act of the respondent, and that the respondent must file a suit for that purpose. All that the customary law requires is the making of a suitable provision for the maintenance of the junior members of the family. But what is adequate provision in that behalf will always be a question of fact which has to be determined in the light of several relevant factors , the number of persons entitled to receive maintenance, the requirements of the status of the members of the family, the total income derived by the family, and other commitments, may all have to be weighed in deciding the quantum of maintenance which should be awarded to anyone of the junior members. In fact, both the Courts below have agreed in holding that having regard to the relevant facts, the grant of the land made by the Sanad would be adequate and appropriate for the maintenance of the appellant. But apart from this aspect of the matter, we do not see how the appellant can seriously quarrel with the validity of the respondent 's action in discontinuing the payment of cash allowance to him. The plea that payment was made for some time after the merger can hardly avail the appellant. in contending that the discontinuance is invalid. In the very nature of things, the respondent could not have decided whether the cash allowance should be continued to the appellant or not without examining the merits of the case, and since a large number of such cases had to be examined after merger, if the payment continued to be made in the meantime, that cannot give any valid ground to the appellant to challenge the legality of the ultimate decision of the respondent to discontinue the payment of the said allowance. The result is, we confirm the decision of the High Court, though on somewhat different grounds. The appeal according ly fails and is dismissed. There would be no order as to costs.

The Ruler of Dhenkanal State granted a sanad by way of Khorposh allowance to his younger brother, the appellant giving certain lands and a maintenance allowance, under the customary law of the State. After the merger of that State to the Dominion of India which became effective on January 1, 1948, the Government of Orissa took over the administration of the State and discontinued the cash allowance. The appellant challenged the validity of the order of discontinuance by a suit in the Court of Subordinate Judge. The suit was dismissed. On appeal to this Court it was urged on behalf of the appellant that the sanad issued by an absolute monarch was law, and was continued by articles 366(10), 372(1) of the Constitution and cl. 4(b) of the Order 31 of 1948 issued by the Orissa Government in exercise of the power delegated to it by the Central Government under section 3(2) of the Extra . Held: (i) It was not correct to say that in dealing with a grant made by an absolute monarch any enquiry as to whether the grant was the result of an executive or legislative act was altogether irrelevant. This Court did not lay down any inflexible rule that the well recognised jurisprudential distinction between legislative and executive acts was wholly irrelevant or inapplicable to such a case. Ameer un Nissa Begum vs Mahboob Begum, A.I.R. 1955 S.C. 352, Director of Endowments, Government of Hyderabad vs Akram Ali, A.T.R. , Madhaorao Phalke vs State of Madhya Bharat, ; , Promode Chandra Deb vs State of Orissa, [1962] Supp. 1 S.C.R. 405, Tilkayat Shri Govindlalji Maharaj vs State of Rajasthan, [1964] 1 S.C.R. 561, Maharaja Shree Umaid Mills Ltd. vs Union of India, ; and State of Gujarat vs Vora Fiddali Badruddin Nithibarwala, ; , considered. In such an enquiry it was necessary to consider such rele vant factors as the nature of the order, its scope and effect, general setting and context and the method adopted by the Ruler in promulgating it. So judged, the Sanad in question had no legislative element in any of its provisions and was a gift pure and simple made in pursuance of the custom of the family and customary law of the State. The gift therefore, was an executive act of the Ruler and did not amount to law although the Ruler was discharging by it his obligation under personal or customary law. 113 The gift being an executive act of the Ruler could be modified or cancelled by an executive act of the successor to the Ruler. The discontinuance of the cash allowance could not affect the continuance of the customary law under cl. 4(b) of the Order of 1948 and article 372 of the Constitution. Nor could the plea of payment of such allowance even after the merger invalidate the discontinuance.

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Civil Appeal No. 2419 of 1968. From the Judgment and Order dated 25 9 67 of the Punjab and Haryana High Court in Civil Writ No. 1630/62. 1280 section K. Mehta, P. N. Puri, K. R. Nagaraja and G. Lal for the Appellants. K. L. Narula, District Attorney, Haryana, R. B. Datar and Girish Chandra for Respondent No.1. E. C. Agarwala for Respondent No. 14 (Rest of the Respondents Ex parte) The Judgment of the Court was delivered by JASWANT SINGH, J. The litigation culminating in the present appeal (by certificate under Article 133(1)(b) of the Constitution) which is directed against the judgment and order dated September 25, 1967, of the Punjab and Haryana High Court in C.W.N. 1630 of 1962 setting aside the allotment dated May 23, 1960 made by Naib Tehsildar cum Managing Officer, Fatehabad, District Hissar in favour of Madan Mohan and others, and orders dated April 18, 1962 and July 21, 1962 of the Assistant Settlement Commissioner and Chief Settlement Commissioner respectively on the finding that "no part of the holding which formed part of the land allotted to respondent No. 14, Mehta Lal Chand, (hereinafter referred to as 'the respondent ') could, during the subsistence of such allotment and without its cancellation, be allotted to any one else" has had a very chequered career extending over well nigh two decades. It appears that the respondent who is a displaced person from Pakistan was found entitled to an allotment of 113 standard acres and 3 units of land in lieu of 120 acres of land held by him as owner in Bhawalpur (Pakistan). Against the aforesaid entitlement, the respondent was allotted 90 standard acres and 6 units of evacuee land between 1953 and 1958 in different villages of Tehsil Fatehabad, District Hissar including two areas measuring (1) 13 standard acres and 3 1/2 units and (2) 13 standard acres and 13 1/2 units in village Bahmniwala allotment of which was made on March 1, 1957 and October 10, 1958 respectively. Pursuant to the above allotment of 13 standard acres and 3 1/2 units made in his favour in village Bahmniwala vide Sanad dated March 6, 1957 (Annexure 'C ' to the writ petition), the respondent was given possession of the plots of land comprised in khasra Nos. 1411 min, 1412 min, 1472 min, 1241 min, 1242, 1243, 1244, 1245, 1246, 1247, 1621, 1622 to 1635 (14 khasras), 1642, 1644, 1645 on June 17, 1957. The respondent continued to remain in possession of the aforesaid plots of land till Rabi 1960 when consolidation of holdings were undertaken in village Bahmniwala. Without caring to look into the revenue record, the Consolidation Officer instead of showing the aforesaid allotted area in Bahmniwala in the name 1281 of the respondent included the same in the kurrah (area) of the Custodian. On coming to know about this irregularity, the respondent filed objections before the Consolidation Officer and requested him to rectify the mistake. The Consolidation Officer by his order dated March 23, 1960 consigned the objection petition of the respondent to the record room observing that in the absence of the relevant record which, as per the report of the Wasal Baqi Nawis is has been despatched to Jullundur for checking purposes, the factum of allotment cannot be verified and as it is necessary to take proceedings under section 21(2) of the Consolidation of Holdings Act in village Bahmniwala in this very month, the record cannot be awaied any further. The Consolidation Officer further observed that since it appeared from a perusal of the copy of the Sanad (allotment) that the entire kurrah consisted of almost evacuee land bearing khasra numbers mentioned in the Sanad of allotment, the respondent could, on the receipt of the record, get the area at the place where, according to him, the evacuee land mentioned by him in his application was situate. By his order dated May 23, 1960, the Naib Tehsildar cum Managing Officer, Fatehabad, however, made the following allotments out of an area of 58 standard acres and 7 units situate in Bahmniwala which included the khasra numbers already allotted to the respondent but which according to the Fard Fazla (statement of surplus area) prepared by the concerned Patwari appeared to be available for allotment: In favour of Bagga Singh, S/o Pokhar Singh: 5 1/2 units " " " Inder Singh, S/o Mit Singh : 7 Standard acres 1 1/2unit " " " M. dan Mohan Singh, S/o Puran Singh, " " " Odin Singh and Harduman Singh, 20 Standerd acres 2 units Sons of Madan Mohan Singh, Predecessor in interest of the appellants Aggrieved by this order of the Naib Tehsildar cum Managing Officer which adversely affected the allotment already made in his favour, the respondent preferred an appeal to the Assistant Settlement Commissioner (with powers of Settlement Commissioner), Punjab, Jullundur contending that 13 standard acres and 3 1/2 units of land in Bahmniwala allotted to him in 1957 had been erroneously included in the 'kurrah ' of the Custodian at the time of the Consolidation operations and that the same had now been erroneously allotted without his knowledge to Bagga Singh, Inder Singh, Madan 1282 Mohan Singh and his sons. Curiously enough, the Assistant Settlement Commissioner (with powers of Settlement Commissioner) while conceding that the aforesaid 13 standard acres and 3 1/2 units and 13 standard acres and 13 1/2 units in village Bahmniwala were allotted in favour of the respondent on June 17, 1957 and October 10, 1958 respectively and that there was no cancellation order in respect thereof and that the consolidation authorities should not have withdrawn the area from the name of the respondent who had through no fault of his been put to a lot of difficulty and that it was just and proper that the matter of allotment to which he was entitled be settled once for all in such a way that whole of the area is given to him permanently in one village, rejected the appeal by his order dated April 18, 1962 observing that there was no good ground for interfering with the allotment of the appellants and that it would be open to the respondent to apply to the Naib Tehsildar cum Managing Officer to make up the shortfall in his area by allotment of some other land which may be available in that village. Dissatisfied with the order of the Assistant Settlement Commissioner, the respondent took the matter in revision to the Deputy Secretary (Rehabilitation) exercising the powers of the Chief Settlement Commissioner who also after paying lip sympathy dismissed the revision on the ground that it was time barred. Aggieved by these orders, the respondent moved the High Court of Punjab and Haryana by means of the aforesaid petition under Articles 226 and 227 of the Constitution. The High Court by its judgment and order dated September 25, 1962 set side the aforesaid thee impugned orders holding that they were wholly without jurisdiction and the Tehsildar cum Managing Officer was not authorised to allot to the appellants the land which was already comprised in a subsisting valid allotment of the respondent. It is against this judgment and order of the High Court that the present appeal is directed. On the appeal coming up before us on July 19, 1978, we heard counsel for the parties at considerable length and felt it necessary for clarification of certain points which had been left vague the courts below to have before us the entire record relating to the allotment made in favour of the respondent. Accordingly, with the consent of counsel for the parties, we adjourned the hearing of the case and directed the Union of Indian to instruct the Chief settlement Commissioner, State of Haryana, either to appear himself before us with all the relevant record relating not only to the allotment originally made in favour of the respondent vide Sanad No. HS4/ 1957/11202 dated March 1, 1957 but also with the record pertaining to all the subsequent allotments made in his favour upto date or 1283 cause the appearance of a responsible officer with the aforesaid record. To obviate delay in disposal of the case, we also directed the Chief Settlement Commissioner to have in readiness a factual statement showing the net area in terms of standard acres to which the respondent was entitled as a displaced person, the particulars of the field initially allotted in his favour including the survey numbers and the extent of the area thereof, particulars of the survey numbers of the fields taken out of the respondent 's allotment vide Naib Tehsildar cum Managing Officer, Tehsil Fatehabad 's order dated May 23, 1960 and particulars of all the subsequent allotments made upto date in the respondent 's favour in different villages of District Hissar including village Bahmniwala as also the extent of the allotted area which is at present held by him. Accordingly, the Chief Settlement Commissioner has caused the attendance of K. L. Narula, Deputy District Attorney, Rehabilitation Department, Haryana, Chandigarh who has also filed an affidavit relating to the points on which information was required by us. We have perused the entire material and have again heard counsel for all the sides. Two questions arise for determination in this case (1) whether the respondent acquired any enforceable right as a result of the allotment made in his favour on March 1, 1957 and delivery in pursuance thereof to him of possession of the aforesaid khasra numbers on June 17, 1957 and (2) whether the parcels of land which already stood allotted in favour of the respondent vide allotment order dated March 1, 1957 could be allotted by the Naib Tehsildar cum Managing Officer, Fatehabad in favour of Madan Mohan Singh and others without notice to the respondent and without affording him in opportunity of being heard. The first question has to be considered in the light of the judgment of this Court in Amar Singh vs Custodian Evacuee Property, Punjab where the whole history of the legislative measures devised from time to time in the erstwhile State of Punjab to combat the gigantic problems created as a result of the mass migration of non Muslim land holders to East Punjab is traced. A perusal of the judgment reveals that in exercise of the rule making power vested in it under clauses (f) and (ff) of sub section (2) of section 22 of the East Punjab Evacuees ' (Administration of Property) Act, 1947 (E. P. Act No. XIV of 1947) as amended in 1948, the Punjab Government issued Notification Nos. 4891 S and 4892 S on July 8, 1949 1284 setting out the conditions regulating allotment by the Custodian of the land which vested in him. The first incident of allotment deducible from the notification is hereditability of the rights of the allottee which constitute quasi permanent allotment. The statement of conditions published under Notification Nos. 4891 S and 4892 S of July 8, 1949 was continued in force as the Administration of Evacuee Property (Rural) Rules framed by the Provincial Government under sub section (2) of section 53 of the Central Ordinance No. XXVII of 1949 under delegation from the Central Government under Notification No. 3094 A/Cus/49 dated December 2, 1949 subject to certain modifications and amendments. On repeal of the Central Ordinance by Central Act XXXI of 1950, the aforesaid rules were continued by virtue of section 58 of the Act as though made under that Act. Later in exercise of the delegated rule making power vested in the Provincial Government under section 55 of the Central Act, the Punjab Government framed rules dated August 29, 1951 entitled "Instructions for review and revision of land allotment" which affected the rules of July 8, 1949 only to the extent that they were inconsistent with the earlier rules. A reference to the earlier and subsequent rules would show that the later rules do not concern any of the matters provided by the earlier rules of 1949 (and 1950) excepting as regards resumption which virtually is cancellation of allotment. The position that emerges from the foregoing is that the rules of July, 1949 continued in force except to the extent of inconsistency. (The next set of rules are those made under Central Act XXXI of 1950). Then came the rules dated August 29, 1951 made by the Punjab Government in exercise of the powers delegated to it by the Central Government under section 55(1) of the Central Act XXXI of 1950. It will be seen that the rules of August 29, 1951 are substantially the same as those enumerated in clause (6) of July 8, 1949 notification as regards resumption and only supplement the notification of July 8, 1949 as regards eviction in certain contingencies. The rights and incidents enjoyed by the allottees under the quasi permanent scheme introduced by the aforesaid notification of July 8, 1949 are catalouged at page 823 of the aforesaid judgment of this Court in Amar Singh vs Custodian, Evacuee Property, Punjab (supra). They are: "1. The allottee is entitled to right of use and occupation of the property until such time as the property remains vested in the Custodian. [Clause 3(1). The benefit of such right will ensure to his heirs and successors. (Definition of 'allottee '). His enjoyment of the property is on the basis of paying land revenue thereupon and ceases for the time being. 1285 Additional rent may be fixed thereupon by the Custodian. If and when he does so, the allottee is bound to pay the same. [Clause 3(3). He is entitled to quiet and undisturbed enjoyment of the property during that period. (Clause 8). He is entitled to make improvements on the land with the assent of the Custodian and is entitled to compensation in the manner provided in the Punjab Tenancy Act. (Clause 7). He is entiled to exchange the whole or any part of the land for other evacuee land with the consent of the Custodian. (Clause 5). He is entitled to lease the land for a period not exceeding three years without the permission of the Custodian and for longer period with his consent. But he is not entitled to transfer his rights by way of sale, gift, will, mortgage or other private contract. [Clause 4(c).] 8. His rights in the allotment are subject to the fairly extensive powers of cancellation under the Act and rules as then in force prior to July 22, 1952, on varied administrative considerations and actions such as the following (Clause 6 and subsequent rules of 1951): (a) That the allotment is contrary to the orders of the Punjab Government or the instructions of the Financial Commissioner, Relief and Rehabilitation, or of the Custodian, Evacuee Property, Punjab; (b) That the claims of other parties with respect to the land have been established or accepted by the Custodian or the Rehabilitation Authority; (c) That it is necessary or expedient to cancel or vary the terms of an allotment for the implementation of resettlement schemes and/or rules framed by the State Government; or for such distribution amongst displaced persons as appears to the Custodian to be equitable and proper; 1286 (d) That it is necessary or expedient to cancel or vary the terms of an allotment for the preservation, or the proper administration, or the management of such property or in the interests of proper rehabilitation of displaced persons. Then came the two Notifications Nos. SRO 129 dt. July 22, 1952 and SRO 351 dated Feb. 13, 1953 amending and recasting sub rule (6) of Rule 14 of the Central Rules of 1950 as under: "(6) Notwithstanding anything contained in this rule, the Custodian of Evacuee Property in each of the States of Punjab and Patiala and East Punjab States Union shall not exercise the power of cancelling any allotment of rural Evacuee property on a quasi permanent basis, or varying the terms of any such allotment, except in the following circumstances: (i) where the allotment was made although the allottee owned no agricultural land in Pakistan; (ii) where the allottee has obtained land in excess of the area to which he was entitled under the scheme of allotment of land prevailing at the time of allotment; (iii)where the allotment is to be cancelled or varied (a) in accordance with an order made by a competent authority under section 8 of the East Punjab Refugees (Registration of Land Claims) Act, 1948; (b) on account of the failure of the allottee to take possession of the allotted evacuee property within six months of the date of allotment; (c) in consequence of a voluntary surrender of the allotted evacuee property, or a voluntary exchange with other available rural evacuee property, or a mutual exchange with such other available property; (d) in accordance with any general or special order of the Central Government; Provided that where an allotment is cancelled or varied under clause (ii), the allottee shall be entitled to retain such portion of the land to which he would have been entitled under the scheme of quasi permanent allotment of land; Provided further that nothing in this sub rule shall apply to any application for revision, made under section 26 or 1287 section 27 of the Act, within the prescribed time, against an order passed by a lower authority on or before 22nd July, 1952. " Thus the power of resumption or cancellation of quasi permanent allotment was restricted and reduced. The next legislative measure is the (Act No. XLIV of 1954), important provisions whereof which may be useful in dealing with the first question may be noticed. Section 4 provides for the time, the manner and the form of making an application for payment of compensation. Section 10 of the Act inter alia lays down that where any immovable property has been leased or allotted to a displaced person by the Custodian under conditions published by the Notification of the Government of Punjab No. 4891 S or 4892 S dated July 8, 1949 and such property is acquired under the provisions of the Act and forms part of the compensation pool, the displaced person shall so long as the property remains vested in the Central Government, continue in possession of such property on the same conditions on which he held the property immediately before the date of the acquisition. It further provides that the Central Government may for the purpose of payment of compensation to such displaced persons transfer to him such property on such forms and conditions as may be prescribed. Section 12 provides: "12.(1) If the Central Government is of opinion that it is necessary to acquire any evacuee property for a public purpose, being a purpose connected with the relief and rehabilitation of displaced persons, including payment of compensation to such persons, the Central Government may at any time acquire such evacuee property by publishing in the official gazette a notification to the effect that the Central Government has decided to acquire such evacuee property in pursuance of this section. (2) On the publication of a notification under sub section (1), the right, title and interest of any evacuee in the evacuee property specified in the notification shall, on and from the beginning of the date on which the notification is so published be extinguished and the evacuee pro 1288 perty shall vest absolutely in the Central Government free from all encumbrances. (3) . . . . . " It may be noted that by virtue of Central Government Notification No. S.R.O. 697 dated March 24, 1955, under sub section (1) of this section 12, all evacuee property allotted under the Punjab Government Notification dated July 8, 1949 was acquired by the Central Government excepting certain specified categories in respect of which proceedings were pending. Section 13 which deals with compensation for evacuee property acquired says: "13. There shall be paid to an evacuee compensation in respect of his property acquired under section 12 in accordance with such principles and in such manner as may be agreed upon between the Governments of India and Pakistan. " Section 14 which provides for the constitution of compensation pool runs thus: "14. (1) For the purpose of payment of compensation and rehabilitation grants to displaced persons, there shall be constituted a compensation pool which shall cosist of: (a) all evacuee property acquired under section 12, including the sale proceeds of any such property and all profits and income accruing from such property; (b) such cash balances lying with the Custodian as may, by order of the Central Government, be transferred to the compensation pool; (c) such contributions, in any form whatsoever, as may be made to the compensation pool by the Central Government or any State Government; (d) such other assets as may be prescribed. (2) The compensation pool shall vest in the Central Government free from all encumbrances and shall be utilised in accordance with the provisions of this Act and the rules made thereunder. " Section 16 authorised the Central Government to appoint Managing Officers or constitute Managing Corporations for the custody, management and disposal of compensation pool so that it may be effectively used in accordance with the provisions of the Act. 1289 Section 40 enables the Central Government by notification in the official gazette to make rules. Whereas sub section (1) of the section confers general power on the Central Government to make rules to carry out the purposes of the Act, sub section (2) of the Section particularities the subjects on which rules may be made by the Central Government without prejudice to the general power contained in sub section (1). In exercise of this power, the Central Government made rules called the Displaced Persons (Compensation and Rehabilitation) Rules, 1955 and published the same vide Notification dated May 21, 1955. Rule 3 lays down that an application for compensation may be made by a displaced person having a verified claim or if such displaced person is dead, by his successor in interest. Rule 4 prescribes the from of application for compensation. Rule 16 says that compensation shall be payable in accordance with the scale specified in Appendices VIII or IX as the case may be. Rule 49 as originally made ran thus: "49. Compensation normally to be paid in the form of land. Except as otherwise provided in this chapter, a displaced person having verified claim in respect of agricultural land shall, as far as possible, be paid compensation by allotment of agricultural land. Provided that where any such person wishes to have his claim satisfied against property other than agricultural land, he may purchase such property by bidding for it at an open auction or by tendering for it and in such a case the purchase price of the property shall be adjusted against the compensation due on this verified claim for agricultural land which shall be converted into cash at the rate specified in Rule 56." In 1960, the following explanation was added to the above rule: "Explanation: In this rule and in the other rules of this chapter, the expression 'agricultural land ' shall mean the agricultural land situated in a rural area. " Rule 51 lays down that the scale for the allotment of land as compensation in respect of a verified claim for agricultural land shall be 1290 the same as in the quasi permanent land Allotment Scheme in the States of Punjab and Patiala and the East Punjab States Union as set out in Appendix XIV. Rule 67AA provides: "67A. Compensation to displaced persons from West Punjab, etc., in respect of agricultural land. Notwithstanding anything contained in this Chapter, a displaced person from West Punjab or a displaced person who was originally domiciled in the undivided Punjab, but who before the partition of India had settled in North West Frontier Province, Baluchistan, Bhawalpur or Sind, whose verified claim in respect of agricultural land has not been satisfied or has been satisfied only partially by the allotment of evacuee land under the relevant notification specified in section 10 of the Act shall not be paid compensation in any form other than the transfer of acquired evacuee agricultural land and rural houses and sites in the State of Punjab or Patiala and East Punjab States Union in accordance with the scales specified in the quasi permanent allotment scheme operating in those States: Provided that if any person has been allotted land in a State other than Punjab and his land claim has not been satisfied fully, he may, for the remaining claim, either be allotted land due to him in that State or issued a Statement of Account which he may utilise for purchase of property forming part of the compensation pool or for adjustment of public dues. " Rule 68 is to the following effect: "68. Grant of Sanad for transfer of agricultural land Where any agricultural land is transferred to any person under these rules, the transferee shall be granted a Sanad in the form specified in Appendix XV (with such modifications as may be necessary in the circumstances of any particular case), or the transfer may be effected in any other manner in conformity with the provisions of any local or special law relating to transfer of agricultural land in force in the area where such agricultural land is situated. " Rule 71 casts an obligation on every person to whom any immoveable property has been allotted by the Custodian under any of the notifications specified in section 10 of the Act to file a declara 1291 tion in the form specified in Appendix XVI in the office of the Settlement Officer or before the authorised officer in the village concerned on the date and place notified under sub rule (4). Rule 72(1) provides for an enquiry where the allottee has no verified claim. Rule 72(2) lays down that if the Settlement Officer is satisfied that the allotment is in accordance with the quasi permanent scheme, he may pass an order transferring the land allotted to the allottee in permanent ownership as compensation and shall also issue to him a sand in the form specified in Appendix XVII or XVIII, as the case may be with such modifications as may be necessary in the circumstances of any particular case granting him such right. After the foregoing conspectus of the various legislative and delegated legislative measures, let us see whether the respondent had any right the enforcement of which he could have sought by means of the above mentioned writ petition. From the material on the record it is abundantly clear that the respondent migrated to India from West Punjab in the wake of the partition of the Sub Continent in 1947 and that the settlement and rehabilitation authorities satisfied themselves that he was entitled to an allotment of 113 Standard acres and 3 units of land in lieu of the land left behind by him in Bhawalpur. Since the respondent migrated from Bhawalpur where he had indisputably settled before the partition of the Sub Continent and his verified claim in respect of agricultural land had been only partially satisfied, he could not according to rule 67A of the Displaced Persons (Compensation and Rehabilitation) Rules, 1955, be paid compensation in any form other than by transfer of acquired evacuee agricultural land in accordance with the scale specified in the quasi permanent allotment scheme. Consequently, it was the duty of the Settlement officer under Rule 72(2) of the Displaced Persons (Compensation and Rehabilitation) Rules, 1955 to pass an order transferring the land allotted to the respondent in permanent ownership as compensation and had to issue him a Sanad in the prescribed form. It also appears that by virtue of Notification No. 697 dated March 24, 1955 issued under sub section (1) of section 12 of the , all evacuee property allotted under the Punjab Government Notification dated July 8, 1947 (excepting certain specified categories in respect of which proceedings were pending) was acquired by the Central Government. It is in view of this unchallengable position that we 1292 find from the record particularly the copy of Dharam Chand Patwari 's statement dated April 6, 1962 made before the Assistant Settlement Commissioner (Annexure 'A ' to the petition at pages 24 and 25 of the printed Paper Book) that allotment on permanent proprietary basis of 13 standard acres and 3 1/2 units of land situate in village Bahmniwala was made in favour of the respondent on March 1, 1957 that Sanad evidencing allotment of the aforesaid 28 kila numbers was issued in favour of the respondent on the same date; that possession of the aforesaid area of 13 standard acres and 3 1/2 units was handed over to the respondent on June 17, 1957; that entry regarding delivery of possession of the aforesaid 28 kila numbers was made by the Patwari in the Roznamcha Waqaati on June 17, 1957; that entries exist in khasra girdawaries of village Bahmniwala regarding the respondent 's possession of the aforesaid fields from June 17, 1957 upto Rabi 1960 when due to carelessness on the part of the Consolidation Officer, Ratia, Rectangle No. 133 (kila Nos. 4min, 5min, 6min, 7min, 14min, 15, 16, 17min, 24 and 25) and Rectangle No. 134 (kila Nos. 8min, 9min, 18min, 19min, 20, 21min and 22min) which were allotted in exchange of the aforesaid 28 kila numbers were entered not in the name of the respondent but in the kurrah of the Custodian and subsequently due to the carelessness on the part of the Naib Tehsildar cum Managing Officer were allotted to Madan Mohan Singh and others. In view of the foregoing, we are of the opinion that the respondent has succeeded in establishing that permanent proprietary allotment of the aforesaid 28 kila numbers of village Bahmniwala was validily made in his favour vide aforesaid allotment order dated March 1, 1957. Accordingly, we have no hesitation in holding that the respondent had an enforceable right in respect of the aforesaid 28 kila numbers of village Bahmniwala. In view of our aforesaid finding that permanent proprietary allotment of the aforesaid 28 kila numbers was validly made in favour of the respondent which conferred an enforceable right on him, the answer to the second question cannot but be in the negative. The view that we have formed is reinforced by the provisions of section 19 of the and Rule 102 of the Displaced Persons (Compensation and Rehabilitation) Rules, 1955 which provide as under: "19. Powers to vary or cancel allotment of any property acquired under this Act. (1) Notwithstanding anything contained in any contract or any other law for the 1293 time being in force but subject to any rules that may be made under this Act, the managing officer or managing corporation may cancel any allotment or amend the terms of any allotment under which any evacuee property acquired under this Act is held or occupied by a person, whether such allotment was granted before or after the commencement of this Act. " 102. Cancellation of allotments : "A managing officer or a managing corporation may in respect of the property in the compensation pool entrusted to him or to it, cancel an allotment or vary the terms of any such allotment if the allottee (a) has sublet or parted with the possession of the whole or any part of the property allotted to him without the permission of a competent authority, or (b) has used or is using such property for a purpose other than that for which it was allotted to him without the permission of a competent authority, or (c) has committed any act which is destructive of or permanently injurious to the property, or (d) for any other sufficient reason to be recorded in writing. Provided that no action shall be taken under this rule unless the allottee has been given a reasonable opportunity of being heard." Though in view of the above quoted provisions, it may, in certain contingencies, be open to the Managing Officer or Managing Corporation to cancel the allotment under the aforesaid section 19 of the read with Rule 102 of the Displaced Persons (Compensation and Rehabilitation) Rules, 1955, it cannot be done unless an allottee is given a reasonable opportunity of being heard. In the present case, it is clear from the record that no action for cancellation of allotment was taken under the aforesaid provisions of the Act and the Rules. It is not understood how without complying with the aforesaid provisions, the Naib Tehsildar cum Managing Officer allotted the aforesaid parcel of land which already stood allotted in the name of the respondent to the appellants. The action on the part of the Naib Tehsildar cum Managing Officer was evidently in flagrant violation of the clear and unequivocal provisions of law. Accordingly, 1294 we agree with the High Court that the impugned orders are manifestly illegal, arbitrary, unjust and cannot be sustained. However, taking into consideration all the facts and circumstances of the case particularly the fact that the appellants appear to have purchased the area in question from Madan Mohan Singh for a huge sum of Rs. 40,000/ and invested a considerable amount on the construction of a house, we think that it will be eminently just and fair if the appellants are allowed to retain Rectangle No. 134 comprising kila Nos. 8min, 9min, 10min, 11, 12, 13min, 18min, 19min, 20, 21min and 22min on which their house also stands and Rectangle No. 133 comprising kila Nos. 4min, 5min, 6min, 7min, 14min, 15, 16, 17min, 24 and 25 is given over to the respondent. The learned counsel for the parties also agree to this course being adopted in the interest of justice. The respondent shall be at liberty to approach the settlement authorities for allotment of some other suitable land in lieu of Rectangle No. 134 comprising kila Nos. 8min, 9min, 10min, 11, 12, 13min, 18min, 19min, 20, 21min and 22min to make up the deficiency, if any, in the land to which he may be entitled and if the latter i.e. the settlement authorities find that the area already held by the respondent if added to the area now ordered to be given to him still falls short of his entitlement, they will be free to allot him an area which will make up his unsatisfied claim provided he is found otherwise authorised to hold the said area on allotment or occupy the same under any other law in force in the State. The allotment of the area to which the respondent may be found entitled to shall, as far as possible, be made in the vicinity of the area already held by him. Subject this modification, the rest of the judgment and order of the High Court will stand. The appeal is disposed of accordingly.

The respondent, who was a displaced person from West Pakistan, was allotted certain land in India and was given its possession. At the time of consolidation of holdings in 1960 the Consolidation Officer included a part of this land comprising 13 odd acres in the area of the Custodian. The respondent 's representations protesting against the action of the Consolidation Officer having failed at the different levels, the respondent moved the High Court under article 226 of the Constitution. The High Court set aside the impugned orders of the Consolidation Officer on the ground that they were wholly without jurisdiction and that the concerned officer was not authorised to allot to the appellant the land which was already comprised in a subsisting valid allotment made to the respondent. On the question whether the land in dispute which had already stood allotted in favour of the respondent could be allotted in favour of others without notice to the respondent and without affording an opportunity of being heard. ^ HELD: The respondent had succeeded in establishing that permanent proprietary allotment of the land in dispute was validly made in his favour. Therefore the respondent had enforceable right in respect of the land and it could not be allotted in favour of others. [1292F G] Although in certain contingencies it would be open to the Managing Officer or the Managing Corporation to cancel the allotment under section 19 of the read with Rule 102 of the Displaced Persons (Compensation and Rehabilitation) Rules 1955, it can not be done unless the allottee is given a reasonable opportunity of being heard. [1293F] In the instant case no action for cancellation of allotment was taken under the provisions of the Act and the Rules. The action of the Naib Tehsildar cum Managing Officer in allotting to the appellant the land which had already stood in the name of the respondent without complying with the relevant provisions of the Act was in flagrant violation of the provisions of the law. Therefore, the impugned orders were manifestly illegal, arbitrary and unjust and could not be sustained. [1293H]

3869.txt

Civil Appeal No. 1825 of 1970. From the Judgment an order dated the 28th August, 1969 of the Rajasthan High Court in D. B. Civil Writ No. 365 of 1962. S.N. Kacker, K. K. Jain, P. Dayal & section K. Gupta for the Appellant. Badri Das Sharma for the Respondent. The Judgment of the Court was delivered by MISRA, J. The present appeal by certificate granted under Article 133 (1) (a) of the Constitution is directed against the judgment of the High Court of Rajasthan dated 28th of August, 1969 dismissing writ petition No. 365 of 1962. Thakur Sangram Singh, the father of the appellant was a jagirdar of Thikana Diggi in the erstwhile State of Jaipur. His jagir was resumed on Ist of July, 1954 under section 21 of the Rajasthan Land Reforms and Resumption of Jagirs Act, 1952, hereinafter referred to as 'the Jagirs Act, 1952 '. The Jagirdar became entitled to compensation on the date of resumption of his jagir under section 26 of the Jagirs Act. The compensation was to be determined according to the principles laid down in the second schedule attached to that Act. He filed his claim for compensation in August, 1954. He claimed compensation on the basis of rent rates which were in force on the date of resumption. It appears that settlement operations were going on under the Jaipur State Grants Land Tenures Act, 1947. The rent rates proposed by the Settlement Officer were published in the Rajasthan Gazette dated 23rd of August, 1952. The final proposals of the Settlement Officer were sanctioned by the Government on 25th of November, 1953. The rent rates fixed were made applicable with effect from 1st of July, 1953. Obviously, therefore, on the date of resumption, namely, Ist of July, 1954, rent rates assessed by the Settlement Officer and approved by the Government on 25th November, 1953 were in force. Sangram Singh, however, challenged the validity of the rent rates fixed under the settlement by means of writ petition No. 308 of 477 1953, which was allowed by the High Court on 23rd of November, 1954, quashing the rent rates as they were in flagrant violation of section 82 (1) (a) and (b) of the Jaipur State Grants Land Tenures Act, 1947. The High Court gave a direction for fresh rates to be proposed in accordance with the said provisions. Pursuant to the order of the High Court dated 23rd November, 1954 the rent rates were revised and fresh rent rates were fixed by the Settlement Officer on 6th of June, 1955 and they were applied retrospectively from 1st of July, 1953. The revised rent rates were substantially lower than the rent rates assessed in 1953. According to the rent rates of 1953 the total rental income from the jagir was Rs.131,657.48 while according to the revised rent rates the rental income was reduced to Rs. 82,501.50. The jagirder again filed a writ petition No. 135 of 1955 for a direction to the State Government not to apply the rent rates assessed in 1955 retrospectively with effect from 1st of July, 1953. The High Court, however, held that it was open to the Settlement Officer to apply rent rates retrospectively under section 86 of the Jaipur State Grants Land Tenures Act, 1947. But the High Court specifically left open the question whether or not the rent rates assessed in 1955 and applied retrospectively from 1st July, 1953 could form the basis for determining compensation payable to the jagirdar under the Act. When the jagirdar filed his claim for compensation in August, 1954 his writ petition challenging the rent rates enforced by the Government order dated 25th of November, 1953 was pending. The jagirdar, therefore, based his claim for compensation alternatively under sections 6 and 7 respectively of the Jagirs Act. As pointed out earlier, on the basis of the settlement of 1953 the rental income from the jagir came to Rs. 1,31,657.48. If on the other hand the jagir was taken to be unsettled, he was entitled to compensation on the basis of actual rental income for three years which came to about Rs. 3 lakhs. The Jagir Commissioner by his order dated 25th of November, 1960 granted compensation on the basis of rent rates assessed in 1955. The jagirdar preferred an appeal before the Board of Revenue but the same was dismissed. Sangram Singh died in December 1961 and the order of the Board of Revenue was challenged by his son the petitioner appellant in the High Court of Rajasthan. Two alternative contentions were 478 raised before the High Court on behalf of the petitioner: (1) that the compensation should have been assessed on the basis of rent rates determined in 1953 as they were the rent rates assessed on the jagir lands as entered in the revenue records of the village within the meaning of section 6 (3) (a) (i) read with the definition of 'settled village ' contained in section 2 (n) as it stood on the date of resumption; (2) that in the absence of a valid settlement on the date of resumption the jagir should be treated as not being a 'settled village ' and compensation should be assessed on the actual income from rents during the three agricultural years; 1949 50, 1950 51 and 1951 52, as provided in section 7 of the Act. The High Court declined to accept either of the contentions. The first contention was rejected by the High Court on the ground that the petitioner was estopped from taking up the position by his own conduct inasmuch as his father had challenged the rent rates assessed in 1953 by means of a writ petition which was allowed and the rent rates assessed in 1953 were quashed, and secondly because the rent rates assessed in 1953 were a nullity and in the eyes of law there were no valid rent rates assessed and entered in the revenue records on the basis of which compensation could have been determined. The second contention was also negatived on the ground that fresh rent rates in accordance with the directions of the High Court were assessed in 1955 and were applied retrospectively with effect from 1st July, 1953 and, therefore, the jagir could not be taken to be an unsettled village. The petitioner has now come to challenge the order of the High Court by the present appeal. It may be pointed out that if the jagir was a settled one the compensation would be assessed on the basis of the rent rates as settled in settlement operations, which were prevalent on the date of resumption and as entered in the revenue records of the village within the meaning of section 6 (3) (a) (i) read with the definition of 'settled village ' contained in section 2 (n). If on the other hand, the jagir was an unsettled one the compensation would have to be assessed on the actual income from the rents during the three agricultural years: 1949 50, 1950 51 and 1951 52 as provided in section 7 of the Act. Shri S.N. Kacker has contended on behalf of the appellant that the rent rates settled in 1953 having been quashed by the High 479 Court, the jagir would be deemed to be an unsettled village and, therefore, the compensation should be determined in accordance with the provisions of section 7 of the Act and not in accordance with the rent rates determined in 1953. From the observations made by the High Court itself it is evident that the rent rates notified in 1953 were quashed as invalid. After the quashing of rent rates determined in 1953 it can by no stretch of imagination be said that the settlement made in 1953 still stood for the purpose of determining the compensation for the jagir in question. Shri Badri Das Sharma appearing for the State on the other hand has contended that it is true that the determination of rent rates in 1953 had been quashed, but the High Court had directed re determination of the rent rates in accordance with the provisions of section 82 and, therefore, the direction of the High Court was for rectifying the mistake that had cropped in the determination of the rent rates of 1953 and if this be so, the rent rates determined in 1953 were still there and the compensation could be determined on that basis. Having given our anxious consideration to the contentions raised on behalf of the parties we are of the positive view that after the quashing of the settlement made in 1953 it cannot be said that the settlement of the jagir still existed. It is to be noted at this stage that the settlement of 1953 was quashed by the High Court on the ground that the procedure laid down in the statute had not been followed. The quashing of such an order only means tabula rasa (clean slate) as if there was no determination of rent rates in 1953. In this view of the matter the jagir would be taken to be an unsettled village on the date of resumption. Shri Badri Das Sharma, however, contended that pursuant to the direction of the High Court in Writ No. 308 of 1953 fresh rent rates were assessed in 1955 which were made applicable with retrospective effect from 1st of July, 1953 and that, therefore, the rent rates assessed in 1955 will be taken to be the rent rates prevalent on the date of resumption and as such the Board of Revenue as well as the High Court were fully justified in taking the view that compensation was to be determined on the basis of the rent rates assessed in 1955. In support of his contention Shri Sharma referred to the definition of the 'settled village ' in section 2 (n), which reads: 480 "(n) 'Settled ' when used with reference to a village or any other area, means the village or other area to which the rent rates determined during settlement operations have been made applicable whether prospectively or retrospectively, and the whole of such village or other area shall be deemed, for the purposes of this Act and the rules and orders made thereunder, to be so settled if such rates have been made so applicable to not less than three fourths of such village or other area. " On the strength of this definition it is sought to be contended that the jagir in question would be deemed to be a settled village as it is open to the authorities to apply the settlement either prospectively or retrospectively, and it was made applicable by the Settlement Officer retrospectively. We are afraid, the argument cannot be accepted. The criterion to determine whether a particular jagir is a settled one or not is to see whether the rent rates determined in settlement operations have been made applicable. It is only from the date of effectuation of a valid settlement of rent rates in respect of a particular jagir which makes the jagir a settled one. Reliance was also placed on section 86 of the Jaipur State Grants Land Tenures Act, 1947, which runs thus: "86. Any rent fixed by order of the Settlement Officer under this Act shall be payable from the first day of July next following the date of such order, unless the Settlement Officer thinks fit, for any reason to direct that it shall be payable from some earlier date. " A plain reading of this section indicates that the rent fixed by the Settlement Officer shall normally be payable from 1st of July next following the date of such order. The section, however, further authorises the Settlement Officer to direct that the same shall be payable from some earlier date. The realisation of rent from a retrospective date will not make the jagir in question a settled one as from that date. The settlement of rent rates is one thing and the realisation of rent on the basis of the settlement is quite another. In case of a settled village the compensation would be determined on the basis of the rent rates settled during a settlement operation recorded in the revenue papers on the date of resumption. Thus, it is the applicability of the rent rates determined during a settlement made prior to the date of resumption which would make the village a settled village as on that date. 481 There is yet another aspect from which the matter can be looked into. The jagirdar became entitled to compensation on the date of resumption and, therefore, we have to examine the position as it stood on the date of resumption. If the village was an unsettled village on the date of resumption he would be entitled to compensation on the basis of the village being unsettled. The right of compensation vested in the jagirdar on the date of resumption and he could not be deprived of his right by a subsequent amendment unless the amendment in law specifically or by necessary implication provided or depriving the jagirdar of his vested right. We do not find anything in the definition of the term 'settled ' under section 2 (n) of the Act or in section 86 of the Jaipur State Grants Land Tenures Act to indicate that the legislature intended to affect the vested right. In this view of the legal position, the jagir Commissioner was not justified in assessing the compensation on the basis of the assessment of rent rates in 1955. The only correct basis will be to treat the jagir in question as an unsettled one and determine the compensation in accordance with section 7 of the Act. In the result the appeal is allowed with costs. The orders of the High Court, the Board of Revenue and that of the Jagir Commissioner are set aside and the case is sent back to the Jagir Commissioner to determine the compensation afresh treating the jagir in question to be unsettled one and in accordance with the provisions of section 7 of the Act. The appellant will also be entitled to interest at the rate of ten per cent per annum on the amount of compensation so determined, from the date of resumption till the date of payment of the compensation. S.R. Appeal allowed.

Thakur Sangram Singh, the father of the appellant was a jagirdar of Thikana Diggi in the erstwhile State of Jaipur. His jagir was resumed on 1st of July, 1954 under section 21 of the Rajasthan Land Reforms and Resumption of Jagirs Act, 1952 entitling him to compensation on the date of resumption of his jagir under section 26 of the Jagirs Act. The compensation was to be determined according to the principles laid down in the Second Schedule attached to the Act. If the jagir was a settled one the compensation would be assessed on the basis of the rent rates as settled in settlement operation which were prevalent on the date of resumption and as entered in the Revenue records of the village within the meaning of section 6(3) (a)(i) read with the definition of "settled village" contained in section 2(n). If on the other hand, the jagir was an unsettled one the compensation would have to be assessed on the actual income from the rents during the three agricultural years: 1949 50, 1950 51 and 1951 52 as provided in section 7 of the Act. Prior to the date of resumption settlement operation were going on under the Jaipur State Grants Land Tenures Act, 1947 in respect of the jagir. The rent rates proposed by the Settlement Officer were published in the Rajasthan Gazette dated 23rd of August, 1952. The rent rates fixed were made applicable with effect from Ist of July 1953 and, therefore, on the date of resumption, namely, on Ist July, 1955, rent rates assessed by the Settlement Officer and approved by the Government were in force, for the purpose of payment of compensation under the Jagirs Act. Sangram Singh challenged the validity of the rent rates fixed under the settlement operation by means of a writ petition No. 308 of 1953. The High Court quashed the order settling the rent rates being in flagrant violations of sec. 82 (1) (a) and (b) of the Jaipur State Grants Land Tenures Act, 1947 with a direction to settle fresh rent rates in accordance with the said provision. Pursuant to the order of the High Court fresh rent rates were settled by the Settlement Officer on 6th of June, 1955 with retrospective operation from Ist July, 1953. According to the new settlement the total rental income from the jagir was reduced from Rs. 1,31,657.48 to Rs. 82,501 50. 475 The Jagir Commissioner by his order dated 25th November, 1960 granted compensation on the basis of the rent rates assessed in 1955. The Jagirdar unsuccessfully preferred an appeal before the Board of Revenue. Sangram Singh died in the mean time so his son the appellant challenged the order of the Board of Revenue on two grounds: (1) that the compensation should have been assessed on the basis of rent rates determined in 1953 as it stood on the date of resumption. (2) or in the absence of a valid settlement on the basis of actual income from rents during the three agricultural years. Treating the Jagir as unsettled, the High Court rejected both the grounds. Hence the appeal by certificate under Article 133 (1) (a) of the Constitution. Allowing the appeal and remanding the case, the Court ^ HELD: 1. As a result of the quashing of the order of Settlement of rent rates of 1953 by the High Court, the jagir would be taken as an unsettled one on the date of resumption. The quashing of the order of Settlement only means tabula rasa (clean slate) as if there was no determination of rent rates in 1953. [479 E F] 2. The criterion to determine whether a particular jagir is a settled one or not is to see whether the rent rates determined in settlement operations have been made applicable. It is only from the date of effectuation of a valid settlement of rent rates in respect of a particular jagir which makes the jagir a settled one. [480 C D] 3. Section 86 of the Jaipur State Grants Land Tenures Act, 1947 clearly indicates that the rent fixed by the Settlement Officer shall normally be payable from the first of July next following the date of such order and further authorises the Settlement Officer to make the same shall be payable from some earlier date. The realisation of rent from a retrospective date will not make the jagir in question a settled one as from that date. The settlement of rent rates is one thing and the realisation of rent on the basis of the settlement is quite another. In the case of a settled village the compensation would be determined on the basis of the rent rates settled during the settlement operation recorded in the Revenue Papers on the date of resumption. Thus it is the effectuation of the rent rates determined during the settlement made prior to the date of resumption which would make the village a settled village as on that date. [480 F H] In the instant case, the jagirdar became entitled to compensation on the date of resumption. If the village was an unsettled village on the date of resumption he would be entitled to compensation on the basis of the village being unsettled. The right of compensation vested in the jagirdar on the date of resumption and he could not be deprived of his right by a subsequent amendment unless the amendment in law specifically or by necessary implication provided for depriving the jagirdar of his vested right. There is nothing in the definition of the term "settled" under sec 2 (n) of the Act or in sec. 86 of the Jaipur State Grants Land Tenures Act to indicate that the Legislature intended to affect the vested right. [481 A D]

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minal Appeal No. 131 of 1967. Appeal from the judgment and order dated January 9, 1967 of the Judicial Commissioner 's Court Tripura, Agartala in Criminal Appeal Case No. 8 of 1963. M. K. Ramamurthi, J. Ramamurthi and Vineet Kumar, for the appellant. H. R. Khanna and R. N. Sachthey, for the respondent. The Judgment of the Court was delivered by Dua, J. Pursuant to a complaint by Shri Joy Shanker Bhattacharyya, the appellant Sushil Kumar Gupta was tried in the court of Assistant Sessions Judge, Tripura on the following charges "(1) That you in between the month of September, 1958 and July, 1959 at Agarwala P. section Kotwali being a servant viz. Secretary in the employment of the Tripura Central Marketing Co operative Society Ltd., and in such capacity entrusted with certain property to wit a total sum of Rs. 18,200 being the fund of the Society committed criminal breach of trust in respect of the said property and thereby committed an offence punishable under section 408 of the Indian Penal Code and within the cognizance of this Court. Secondly : that you in between the period of September, 1958 and July, 1959 at the same place being a Secretary in the employment of the Tripura Central Marketing Co operative Society Ltd., wilfully and with intent to defaud, falsified certain books and other relevant papers to wit cash book etc., which belonged to the said society, your employer and thereby committed an offence punishable under section 477 A of the Indian Penal Code and within the cognizance of this Court. " As the appellant was tried jointly along with five others who have been acquitted and as if was argued on behalf of the appellant that in view of the acquittal of his co accused the appellant 772 also should have been acquitted, the charges against them may also be reproduced : "That Sushil Kumar Gupta, Secretary of the Tripura Central Marketing Co operative Society Ltd., in between the period of September, 1958 and July, 1959 at Agartala p.s. Kotwali committed the offence of criminal breach of trust in respect of Rs. 18, 200 and that you the aforesaid persons at the same place and time abetted the said Shri. Sushil Kumar Gupta in the commission of the same offence of criminal breach of trust in respect of the said amount which was committed in consequence of your abetment and that you have thereby committed an offence punishable under section 109, I.P.C. read with section 408, I.P.C. and within my cognizance. Secondly : that Shri Sushil Kumar Gupta, Secretary of the Tripura Central Marketing Co operative Society Ltd. in between the period of September, 1958 and July, 1959 at Agartala p.s. Kotwali committed the offence of falsification of accounts and that you the aforesaid persons at the same place and time abetted the said Shri Sushil Kumar Gupta in the commission of the same offence of falsification of account which was committed in consequence of your abetment and that you have thereby committed an offence punishable u/s 109, I.P.C. read with section 477 A of the I.P.C. and within my cognizance. " The trial court acquitted all the six accused persons. An appeal against the acquittal of all of them was preferred under section 417 (3), Cr. P.C. in the court of the Judicial Commissioner, Tripura. That court allowed the appeal against section K. Gupta only and dismissed it as against the others. section K. Gupta was held guilty of the offence of criminal breach of trust under section 408, I.P.C. and also of the offence of falsification of accounts under section 477 A, I.P.C. regarding the sum of Rs. 18,200. He was sentenced under each count to undergo rigorous imprisonment for one year, the sentences to be concurrent. The convict section K. Gupta has appealed to this Court on certificate granted under article 134(1)(c) of the Constitution. 'Me order granting the certificate does not disclose on its face what exactly the difficulty of the court of the Judicial Commissioner is and precisely what question of outstanding difficulty this Court is desired to settle. On behalf of the appellant his learned advocate Shri Ramamurthy, however, addressed elaborate arguments questioning the order of the learned Judicial Commissioner allowing 773 the appeal against the appellant section K. Gupta 's acquittal. His, challenge was based on three main contentions. The fourth point that the learned Judicial Commissioner erred in law in considering exhibit P 59 to be admissible in evidence, in disagreement with the trial court, according to which it was hit by section 24, Indian Evidence Act, was not allowed to be argued in this Court because this ground was not taken in the grounds of appeal. The first contention seriously pressed on behalf of the appellant is that in view of the acquittal of his co accused who were tried along with him the court of the Judicial Commissioner was wrong in law in holding that there was falsification of accounts and embezzlement of the funds of the Tripura Central Marketing Co operative Society. This submission is unacceptable. The acquittal of the other co accused as affirmed by the learned Judicial Commissioner is not based on the finding that there was no falsification of accounts and no embezzlement of the funds of the Society. section K. Gupta, appellant, it may be pointed out was the Secretary of the Society since April 13, 1957 when the first general meeting of the Society was held and was in that capacity entrusted with its funds. He worked as such till August 10, 1960. He was accordingly responsible for the cash and maintenance of current accounts of the Society during the period in question. Turning to the Bye laws of the Society, bye law No. 41 prescribes the duties of the Secretary. According to this bye law the Secretary has inter alia : "(3) To make disbursement and to obtain vouchers and to receive payments and pass receipts, under the general or special orders of the Board of Directors on this behalf from time to time. (4) To keep all accounts and registers required by the rules. (13) To countersign cash book in token of the balance being correct and to produce the cash balance. whenever called upon to do so by the Chairman or any person authorised to do so. In the absence of the Secretary the Board of Directors may authorise the Manager to perform the duties of the Secretary. The Board of Directors may also authorise the Manager to perform any of the duties of the Secretary to facilitate, the working of the Society. Receipts passed on behalf of the Society shall be, signed by the Secretary. Share certificates and other 774 documents shall be signed by the Secretary and one member of Board of Directors jointly. " Byelaw 42 contains directions I regarding advances against proof goods and clause (1) of this byelaw provides : "(1) The Board of Directors shall, at the beginning of the session, fix the amount of advance, indicating the percentage of the market price of produce or goods pledged with the society, that may be granted to a member. Such limits may be fixed for different com modities and varied from time to time according to fluctuation in markets or otherwise. It shall also be competent for the Board of Directors to call on a borrower at any time before the due date to repay a portion of the loan or advance issued or to produce additional security for the outstanding loan or advance within a time fixed by them, if in their opinion, there is fall or likely to be a fall in the market value of the produce or goods pledged. " Under byelaw 44 loans may be granted to members in suitable cases on such terms and conditions as regards individual and maximum limits, repayment of loan,, rate of interest thereon etc., as may be fixed by the Board of Directors from time to time. According to the learned judicial Commissioner "the overall picture" emerging .from the evidence on the record, to quote his own words, it "(1) A sum of Rs. 18,200/ was said to have been disbursed in 1958 and 1959. (2) It was said to have been repaid in the last week of June, 1959 towards the end of the co operative year of 1959 and long after the maximum period of 6 months allowed by rule 42 (4) of the byelaws. (3) The same amount was again said to have been ,disbursed in a few days in the first week of July commencing with the next cooperative year (1959 60). (4) Except the 2nd and 4th respondents, the others were not members of the Co operative Society and in this regard the 1st respondent disregarded sub rule (1) ,of r. 42 of the byelaws. (5) The 1st respondent did not obtain any general or special orders of the Board of Directors to make the disbursements and violated sub rule (1) of r. 42 of Ext. P 41. 775 (6) Ext. P 56 and P 59 show that the alleged collections of the monies in June 1959 was false and that the accounts were got up. (7) The fact that a discount of Rs. 10/ was paid to cash a cheque on 29 6 1959 shows that the society had no funds on that day. (8) None of the alleged loanees was a Jute grower and no jute was deposited in the godowns of the society before the advances were made and in this regard the mandatory provisions of sub r. (2) of r. 42 were also disregarded by the 1st respondent. (9) A number of adjustments were made in the Accounts to show that the sum of Rs. 18,200/ was disbursed. (10) The three persons to whom ultimately the amounts were said to have been disbursed are interested in the 1st respondent. The 4th respondent C. C. Das Gupta is a relation of the 1st respondent and proved by P. Ws 1, 6 and 8 and as admitted by the 4th respondent himself in Ext. The 3rd respondent Sudhir Ranjan Roy is a servant of D.W. I who is a co Director of the Match Factory and friend of the 1st respondent. The 3rd respondent Haradhan Deb was appointed by the 1st respondent in the C.M.S. The 3rd respondent was also an employee of the C.T.S. of which the 1st respondent was a Director. " On the basis of these observations the appellant was held to ,have committed criminal breach of trust and to have either misappropriated or misapplied the funds of the Society dishonestly to benefit himself of his relations and friends. Counsel failed to point out any legal infirmity in the final conclusion drawn in the impugned order from the overall picture. Indeed, counsel, after a faint attempt to find fault with this conclusion felt constrained to admit that the money had been advanced against the rules of the Society and also to the persons not entitled to it, his only contention in support of the appeal being that it did not constitute a criminal offence and that in any event the Board of Directors of the Society having ratified the advances, the foundation for the criminal charge must be deemed to have disappeared. We are unable to agree. The offence of criminal breach of trust is committed when a person who is entrusted in any manner with property or With dominion over it, dishonestly misappropriates it, or converts it to his own use, or dishonestly uses it or disposes it of in violation 776 of any direction of law prescribing the mode in which the trust is to be discharged, or of any lawful contract, express or implied, made by him touching such discharge, or wilfully suffers any other person so to do. The appellant 's manner of dealing with the money entrusted to his custody clearly constitutes criminal breach of trust. Counsel was not able to point out any provision which empowers the Directors to prescribe the mode of making advances, which violates or is in breach of, or contrary to the Byelaws. If the Directors, possess no authority to give any directions contrary to the byelaws they can scarcely claim or assume power to ratify violation of the Byelaws in the matter of dealing with the trust money. Our attention was not drawn to any over riding provision conferring power on the Board of Directors to ratify use of the trust money contrary to the directions contained in the Byelaws. Exhibit P 27, the resolution of the Board of Directors dated January 10, 1960, on which reliance in support of ' the argument was placed, merely states "investments made by the Secretary uptodate are hereby approved" without pointing out the provisions under which such approval could validate breaches of the Byelaws. Incidentally it may be mentioned that the learned Judicial Commissioner also entertained some suspicion about the manner in which the meeting, in which this resolution was passed, was held. This contention of the counsel must, therefore, be repelled. In the last submission the counsel made a grievance against the joint trial of several accused persons on several items of embezzlement. According to him there was a misjoinder of charges which vitiated the trial. In our opinion, charges under section 408 and section 477 A, Indian Penal Code, could, in the circumstances of this case, be tried together and the joint trial of all the accused was proper and lawful. Our attention was not drawn to any provision of law against the legality of the joint trial. In any event no failure of justice in consequence of the joinder of charges was pointed out, with the result that the question of misjoinder of charges must be held to be of little consequence at the stage of appeal. Before closing we may point out, as has repeatedly been said by this Court, that there is normally no right of appeal to this Court in criminal matters except in cases provided :by article 134 ( 1 ) (a) and (b) of the Constitution. Clause (c) of this Article empowers the High Court to certify cases to be fit for appeal to this Court. The word "certify" is a strong word; it postulates exercise of judicial discretion by the High Court and the certificate should ordinarily show on the face of it that the discretion was invoked and properly exercised. This Court should be in a position to know that the High Court has not acted mechanically 777 but has applied its mind. A certificate under this clause is impermissible on questions of fact and when a case does not disclose a substantial question of law or principle then the certificate granted by the High Court is liable to be revoked by this Court, though such prima facie non disclosure would not by itself automatically invalidate the certificate. In the case in hand no substantial question of law or principle was made out at the bar and the certificate was clearly misconceived though it vaguely states that several questions of law are involved. The appeal fails and is dismissed. V.P.S. Appeal dismissed.

The appellant, who was the Secretary of a Cooperative Society and was responsible for the cash and maintenance, of the accounts of the Society, was charged with the offenses of criminal breach of trust and falsification of accounts under sections 408 and 477 A, I.P.C. He was tried along with 5 others who were charged with the offence of abetment of the offenses. The, trial court acquitted all of them, but the appellate court (the Court of Judicial Commissioner) convicted the appellant and acquitted the. others. The appellate Court held that the appellant had advanced money against the rules of the Society and also to various persons not entitled to it, that the appellant had thereby committed criminal breach of trust and either misappropriated or misapplied the funds of the Society dishonestly to benefit himself or his relations and friends. The 'appellate Court certified that the case was a fit one for appeal to this Court under article 134(1) (c), but, the order granting the certificate did not disclose on its face what exactly was the difficulty of the appellate Court and what question of outstanding difficulty this Court was to settle. In appeal to this Court, HELD : (1) The acquittal of the co accused was not based on the finding that there was no falsification of accounts or embezzlement. Therefore, the appellant could not contend that no offence was committed because of the acquittal of the co accused. [773 G D] (2) On the finding of the appellate court, it was not a mere civil liability of the appellant. The appellant 's manner of dealing with the money entrusted to his custody constituted criminal breach of trust. The Directors had no authority under the bye laws to give any directions contrary to the bye laws and so, could not ratify the violation of the bye laws. Any resolution ratifying the use of trust money contrary to the directions contained in the bye laws would not validate the breach of the bye laws. [775G; 776 A C] (3) There was no misjoinder of charges and no prejudice was caused to the appellant. [776 F] (4) The appellate Court should not have granted the certificate, under article 134(1)(c) in the present case. The word 'certify ' in the Article 771 postulates the exercise. of judicial discretion by the appellate Court and the certificate should ordinarily show on the face of it that the discretion was invoked and properly exercised. This Court should be in a position to know that the appellate Court has not acted mechanically but has applied its mind. A certificate under this clause is impermissible on questions of fact. When the case does not disclose a substantial question of law or principle the certificate. granted by the appellate Court is liable to be revoked by this Court, though such_ prima facie non disclosure would not by itself automatically invalidate the certificate [777 A C]

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Appeal No. 17 19 or 67. Appeal from the judgment and decree dated May 23, 1961 of e Punjab High Court, Circuit Bench at Delhi in Regular Second appeal No. 43 D of 1956. N. N. Keswani, for the appellant. V. A. Seyid Muhammad and section P. Nayar, for the respondent. According to the allegations in the plaint the appellant was appointed by the Governor General in July 1942 as Supervisor, Army Ordnance Corps which, according to him, was a civil post under the Crown in India. In the months of September and October, 1950 the appellant was served with chargesheets by the Ordnance Officer, Administration, Shakurbasti, Delhi State, where he was posted at that time calling upon him to submit his defence to the charges of making serious false allegations against his superior officer Maj. H. section Dhillon. The appellant asked for grant of time for submitting his defence and be also demanded copies of certain documents etc to prove his case. On May 26, 1951 while this inquiry was pending he was served with an order by the Ordnance Officer, Administration, Shakur basti, Delhi which was as follows "Under instructions received from Army Head quarters you are hereby given one month 's notice of discharge with immediate effect, services being no longer required. Your services will be terminated on 25th June, 1951". The appellant challenged the legality of the above order principally on the ground that it had been passed by an officer who was subordinate to the authority who appointed him and that no inquiry "as required by Fundamental Rules and under the provisions of the Constitution of India" had been held in the matter of allegations against him and that no adequate opportunity had been afforded to him of defending himself or of show 910 ing cause against the action proposed to be taken. He all raised the question of the order being vitiated by mala fid In the written statement filed by the Union of India it was stat that the appellant had been appointed as a Labour Supervisor he Extra Temporary Establishment by the COO/Ordnan Officer Incharge, Ammunition Depot, Kasubegu under t authority of Financial Regulations, India, Part 1, Volume and not by the Governor General. It was pleaded, inter all that it was decided by the Government of India vide Army Headquarter 's letter dated May, 25, 1951 to terminate the services by serving one month 's notice. Consequently a notice of discharge from the service was given to him by the Ordnance Officer, Administration, who was competent to serve the notice on him under the authority of the Army Order No. 1202/1943 read in conjunction with 'Financial Regulations referred to before. The sole material issue which was framed was whether the order dated May 26, 1951 removing the appellant from service was illegal, wrong, void, ultra vires and inoperative. The trial judge held that article 311 of the Constitution was applicable to the case of the appellant and that his removal had not been ordered by the appointing authority. The suit was decreed. respondent preferred an appeal which was decided by the Additional District Judge, Delhi. It :Was held by him that article 311 was not applicable to the appellant as he held a post connected with defence. According to the learned judge the appellant 's services were terminated under Rule 5 of the Civilians in Defence (Temporary Services) Rules, 1949, hereinafter called the 'Rules '. It was found that the order terminating the services had been passed by the proper authority. The appeal was allowed and the suit was dismissed. The appellant appealed to the High Court which was dismissed. His appeal was heard along with certain other appeals in which similar points were involved. It was found that the salary of the appellant was paid out of the estimates of the Mnistry of Defence and he was intimately connected with the defence of the country not as a combatant but as a person holding a post the object of which was exclusively to serve the Military Department. In the opinion of the High ' Court Articles 309 and 310 were applicable to the case of the appellant but Article 311 was inapplicable. On the question whether the services of the appellant were terminated without complying with the rules the High Court expressed the view that the breach of such rules did not give the aggrieved party a right to go to the court Reliance in that connection was placed on the decision of the Privy Council in R. Venkatarao vs 911 Secretary of State(1) and certain other cases in which that decision was followed. In the case of the appellant the only other point which appears to have appear to have been argued on his behalf and which was decided by the High Court related to the allegation of mala fides. The decision went against him on that, point. The question whether the case of the appellant was governed by article 311 of the Constitution stands concluded by two decisions of this court. In Jagatrai Mahinchand Ajwani vs Union of India(2) it was held that an Engineer in the Military Service who was drawing these salary from the Defence Estimates could not claim the protection of article 311(2) of the Constitution. In that case also the appellant was found to have held a post connected with Defence as in the present case. This decision was followed in section P. Bell vs Union of India (3). Both these decisions fully cover the case of the appellant so far as the applicability of article 3 1 1 is concerned. Learned counsel for the appellant sought to argue that since the appellant was admittedly governed by the rules which framed under section 241(2) 'of the Government of India Act 1935 he was entitled to the protection of section 240 of that Act. Chapter I of Part 10 of that Act related to the Defence Services. According to sections 239, 235, 236 and 237 were applicable to persons who not being members of His Majest 's Forces held or had held posts in India connected with the equipment or administration of those forces or otherwise connected with Defence as they applied in relation to persons who were or had been members of those forces. Section 240, to the extent it is material was in the following terms: "240(1) Except as expressly provided by this Act, every person who is a member of a civil service of the Crown in India, or holds any civil post under the Crown in India, holds office during His Majesty 's pleasure. (2) No such ' person as aforesaid shall be dismissed from the service of His Majesty by any authority subordinate to that by which he was appointed. (3) No such person as aforesaid shall be dismissed or reduced in rank until he has been given a reason able opportunity or showing cause against the action proposed to be taken in regard to him : (1) A.I.R. (1937) P.C. 31. (3) C, A 1918 of 1966 dt. 8 3 68. 14 L1100sup. CI/72 (2) C. A. 1185 of 1965 dt. 6 2 67. 912 Provided. . . Section 241 provided for recruitment and conditions of service. On behalf of the appellant it was contended that since his conditions of service were governed by the rules which were framed under the above section, s.240 was clearly applicable and his services could not have been terminated in terms of subs. (2) of that section by any authority subordinate to that by which he was appointed nor could he be dismissed or reduced in rank until he had been given a reasonable opportunity of showing cause against the action proposed to be taken in regard to him. At no stage of the proceedings in the courts below the appellant relied on section 240 of the Government of India Act and rightly so because the order of his discharge or termination of service was made after the Constitution had come into force. It was apparently for that reason. that protection was sought from Art 311 and not section 240 of the Government of India Act 1935. We see no reason or justification in the present case for determining whether a person holding a civilian post which is connected with the defence and for which he is paid salary and emoluments from the Defence Estimates would be governed by the provisions of section 240 of the Government of India Act if the provisions of that Act were not applicable to the case of such a servant. The next question is whether rule 5 of the Rules was applique able and whether the appellant could claim the benefit of that rule. It provided, inter alia, that the service of a temporary government servant who is not in quasi permanent service shall be liable to termination at any time by notice in writing given either by the", government servant to the appointing authority or by the appointing authority to the government servant. The view of the High Court that the rules were not justifiable cannot be sustained as the decision of the Privy Council in Venkatarao 's case (supra) and the other cases following that view have not been accepted as laying down the law correctly by this court. It has been held that the breach of a statutory rule in relation to the conditions of service would entitle the government servant to have recourse to the court for redress; vide The State of Uttar Pradesh & Others vs Ajodhya Prasad(1) and State of Mysore vs M. R. Bellary(1). Now Exhibit P. 3 which is a letter dated May 26, 1951 and which was produced by the appellant himself shows that one months notice of discharge was given by the ordnance Officer, Administration, under instructions received from the Army Headquarters. A copy of another letter Exht. P 2 dated May 27, 1951 was produced according to which it had been decided by the Government (1) [1951] 2 S.C.R.671. (2) [1964] 7 S.C.R.471. 913 of India that the services of the appellant be terminated by giving him one month 's notice. It is true that the origin of that letter was not produced although it had been summoned by the appellant It is at least clear that the. Ordnance Officer, Administration, had served the notice of discharge under instructions from the Army Headquarters. In this view of the matter there is no substance in the contention raised on behalf of the appellant that the order of discharge had not been made by the appointing authority. At any rate before the High Court there was no challenge to the finding of the learned District Judge on the point and a question of fact cannot be allowed to be reopened at this stage. The learned counsel for the appellant attempted to reopen the finding on the question of mala fides and also invoked the rule of natural Justice in so far as the appellant had not been afforded any opportunity of showing cause against his discharge or termination of services. In the appeal before this Court the finding on the point of mala fides must be accepted as final and the appellant cannot be allowed to reagitate that matter. As regards the applicability of the rule of natural justice it has not been shown to us how under the general law of master and servant, in the absence of any protection conferred by Article 311 of the Constitution such a rule can be invoked. The appeal fails and it is dismissed but in view of the cir cumstances we leave the parties to bear their own costs in this Court. R.K.P.S. Appeal dismissed.

The appellant was appointed in 1942 as Labour Supervisor, Army Ordnance Corps. In 1951, pending inquiry into certain charges against him his service was terminated by giving him one month 's notice under rule 5 of the Civilians in Defence Services (Temporary Service) Rules, 1949. He challenged the legality of the order of termination on the grounds that it had been passed by an officer subordinate to the authority who appointed him and that no adequate opportunity had been afforded to him of defending himself. He also alleged that the Order was vitiated by mala fides. In the appellant 's appeal against the dismissal of his suit the High Court held that Article 311 of the Constitution was inapplicable, that breach of the Rules did not give an aggrieved party a right to go to the Court and that the Order was not vitiated by mala fides. Dismissing the appeal to this Court. HELD : The appellant, holding a post connected with Defence cannot claim the protection of Article 311 of the Constitution. Jugatrai Mahinchand Ajwani vs Union of India C.A. 1185 of 1965 dt. 6 2 67 and section P. Bahl vs Union of India C.A. 1918 of 1966 dt. 8 3 68: followed. (ii)The view of the High Court that the rules are not justifiable cannot be sustained. Breach of statutory rules in relation to conditions ,of service would entitle the aggrieved government servant to have recourse to the court for redress. R. Venkataro vs Secretary of State, A.I.R. 1937 P.C. 31, The State ,of Uttar Pradesh & Others vs Ajodhya Prasad, and State of Mysore vs M. H. Bellary, ; , referred to. In the present case the order of discharge has been passed by the ,appointing authority as required by rule 5. (iii)In the appeal before this Court the finding on the point of mala fides must be accepted as final and the appellant cannot be allowed to re agitate that matters. (iv)As regards the applicability of the rule of natural justice it has not been shown how under the general law of master and servant, in the absence of any protection conferred by Article 311 of the Constitution such a rule can be invoked.

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Civil Appeal Nos. 840 to 860 of 1975. From the Judgments and orders dated 7 5 74, 27 8 74, 2 9 74 and 10 9 74 of the Punjab and Haryana High Court in Civil Writ Nos. 1133, 1118, 1180, 1208, 1225, 1226, 1231, 1238, 1277, 1251,1352/74 and 1188, 1198, 1221/74 and L.P.As. Nos. 395 and 399 of 1974 respectively and Writ Petitions 1309 1318 and 1371 1373/75 (Under Article 32 of the Constitution of India) M. C. Bhandare, (In Case 844 860/75) and L. N. Singhvi (In all Writ Petitions) and R. N. Sachthey for the Appellant and Respondents. 691 section Gopal Singh and P. Keshwa Pillai for the Petitioners in W.P. 1371 73/75. Harbans Singh Marwah for the Petitioners in W.P. 1371 73/75. A. K. Sen, Kapil Sibbal, section K. Jain and section section Khanduja for the Respondents excepting C.As. 852, 853 and 855/75. Naunit Lal for the Intervener in C.A. 845/75 Ch. Dhyan Singh etc. The Judgment of the Court was delivered by BEG, J. The seventeen appeals before us by the State and by the Director of Industries of Haryana, after certification under Article 133 (1) (a) (b) of the constitution, are directed against a Judgment of the High Court of Punjab and Haryana on Writ Petition of owners of lands and lessees of mineral rights in land seeking reliefs in the nature of Mandamus to enforce fundamental rights conferred by Article 31 (2) and to restrain the Government of Haryana from taking any action to implement two notifications void: (i) No. 1217 2 1 B II 74/7622 dated the 20th February, 1974, and, (ii) No. GIG/SP/Auc/ 1173/3075 C, dated the 22nd February, 1974, after declaring the Haryana Minerals (Vesting of Rights) Act, 1973 (hereinafter referred to as 'the Haryana Act '). Under the notification of 20th February, 1974, the State Government purported to acquire rights to Saltpetre, a minor mineral in the land described in a schedule appended to the notification issued in exercise of power conferred by Section 3, sub. section (i) of the Haryana Act. By the notification of 22nd February, 1974, the State Government announced to the general public that certain saltpetre bearing areas in the State of Haryana, mentioned therein, would be auctioned on the dates given there. The notifications have not been placed before us. But, from the averments in the statements on behalf of the State and on behalf of some of the respondents in the affidavits supporting their respective cases in proceedings for a stay of the operation of the High Court 's judgment, it appears that the intention of the State was to acquire Saltpetre deposits in lands whose owners had granted mining leases claimed by petitioners in the High Court to be subsisting. The auctions advertised were probably of fresh lessee rights. Whether the auctions were to be of ownership or lessee rights in lands, the result was that one owner or one lessee was to be substituted by another in each case as a result of acquisition and sale. The State was to get the difference between the price of acquisition and amount realised on sale of each part sold. The apparent effect of mere change of owners or lessees was that the State of Haryana would benefit financially from the acquisitions and sales, although the object of the Haryana Act was said to include conservation as well as "scientific exploitation" of mineral resources. The case of the appellant State also seemed to be that the owners of lands had "haphazardly" created lessee rights in contravention of the Punjab Minor Minerals Concession Rules, 1954, made under the provisions of the Mines and Minerals (Regulation of Development) Act 67 of 1957 (hereinafter 692 referred to as the Central Act '). Learned Counsel for the appellant State contended that the Haryana Act was only meant to supplement and not supplant the Central Act. The State claimed to be dealing with lessee rights under the Central Act and not under the Haryana Act at all. The case of the petitioners in the High Court was: Firstly, that the Haryana Act was beyond the competence of the State Legislature inasmuch as the field in which this Act operated was necessarily occupied already by the provisions of the Central Act enacted under entry No. 54 of the Union List (List I) of the Seventh Schedule to the Constitution which reads as follows: "54, Regulation of mines and mineral development to the extent to which such regulation and development under the control of the Union is declared by Parliament by law to be expedient in the public interest". Secondly, that the purported acquisition under the Haryana Act offended the provisions of Article 31(2) inasmuch as it was neither for a public purpose nor for adequate compensation, the provision for compensation in the Act being, according to the petitioners, illusory. A Division Bench of the High Court allowed the Writ Petitions and quashed the impugned notifications after declaring the Act to be ultra vires. It also held that the Haryana Act violated Article 31(2). It found the compensation provided by the Haryana Act to be grossly low and illusory, although its view was that, judging from the statement of reasons and objects of the Haryana Act, a public purpose was made out. The stated reasons and objects of the Haryana Act showed that the acquisition was to be made to protect the mineral potentialities of the land and to ensure their proper development and exploitation on scientific lines. If this was the actual purpose behind the Haryana Act it did not materially differ from that which could be said to lie behind the Central Act. The real question, however, was not whether any of the purposes of the two Acts were common but whether the provisions of the Central Act so operated as necessarily to exclude, in carrying out their objects, the operation of the State Act. The High Court had held that, in view of the declaration contained in Section 2 of the Central Act, and decisions of this Court in the Hingir Rampur Coal Co. Ltd. & Ors. vs The State of Orissa & Ors., State of West Bengal vs Union of India, State of Orissa vs M. A. Tulloch & Co., and Baijnath Kedia vs The State of Bihar, the field covered by the impugned Act was already fully occupied by the Central Legislation so that the State Act had to be held to be inoperative and void for repugnancy. Section 2 of the Central Act lays down: "It is hereby declared that it is expedient in the public interest that the Union should take under its control the 693 regulation of mines and the development of minerals to the extent hereinafter provided". Section 3(a) of this Act says: " 'minerals ' includes all minerals except mineral oils;" Section 3(c) reads: " 'mining lease ' means a lease granted for the purpose of undertaking mining operations, and includes a sub lease granted for such purpose"; Section 3(d) enacts: " 'mining operations ' means any operations undertaken for the purpose of mining any mineral;" Section 3(e) elucidates: " 'Minor minerals ' means building stones, gravel ordinary clay, ordinary sand other than sand used for prescribed purposes, and any other mineral which the Central Government may, by notification in the official Gazette, declare to be a minor mineral"; Section 3 (g) indicates: " 'prospecting licence ' means a licence granted for the purpose of undertaking prospecting operations;" Section 3(h) enacts: " 'prospecting operations ' means any operations under taken for the purpose of exploring locating or proving mineral deposits;" Section 3(i) lays down: "the expressions, 'mine ' and 'owner ', have the meanings assigned to them in the ". Sections 4 to 9 of the Central Act deal with General Restrictions on Prospecting and Mining operations. Section 4 indicates that all prospecting and mining operations will be governed by the Central Act. But, Section 4A, introduced by Section 2 of the Central Act 56 of 1972, lays down: "4A(1) Where the Central Government after consultation with the State Government, is of opinion that it is expedient in the interest of regulation of mines and mineral development so to do, it may request the State Government to make a premature termination of a mining lease in respect of any mineral, other than a minor mineral, and, on receipt of such request, the State Government shall make an order making a premature termination of such mining lease and granting a fresh mining lease in favour of such Government company or corporation owned or controlled by Government as it may think fit". 694 Section 5 concerns restrictions on the grant of prospecting licences or mining leases. It shows that these will be granted by the State Government and the Central Government was to give its approval in certain specified cases only. Section 6 indicates areas for which a prospecting licence or mining lease or more than one licence or lease may be granted in any one State. The Central Government could make exceptions to this rule. Section 7 limits duration of a prospecting licence, which is evidently to be granted by the State Government, to one year for mica and two years for other minerals, subject to renewal, and, in the case of scheduled minerals, subject to approval by Central Government for each grant or renewal. Similarly, Section 8 provides periods of grant and renewal of leases by the State Government. Section 9 deals with Royalties in respect of mining leases. Section 9A is concerned with the Dead rent to be paid by the lessee to the State Government subject to the regulation of it by the Central Government. Sections 10 to 12 of the Central Act contain procedure for obtaining prospecting licences or mining leases in land in which mineral rights vest in the Government. It is true that it is not specified here in which Government rights to minerals in any land vest. But, the machinery provided for applications and for maintaining the registers of applications for prospecting licences and mining leases shows that it is the State Government which will be concerned with this matter subject to the provisions of Sections 10 to 12 of the Act. Rules for regulating the grant of prospecting licences and mining leases are to be made by the Central Government according to the detailed provisions of Section 13 and Section 13A. Section 14, however, lays down: "14. The provisions of Sections 4 to 13 (inclusive) shall not apply to quarry leases, mining leases, or other mineral concessions in respect of minor minerals". Section 15 makes it clear that it is the State Government which has the power to make rules for regulating the grant of quarry leases, mining leases, or other mineral concessions in respect of "minor minerals" and for purposes connected therewith. Section 16(1) of the Central Act enacts: "16(1)(a) All mining leases granted before the commencement of the Mines and Minerals (Regulation and Development) Amendment Act, 1972, if in force at such commencement, shall be brought into conformity with the provisions of this Act, and the rules made thereunder, within six months from such commencement, or such further time as the Central Government may, by general or special order, specify in this behalf (b) Where the rights under any mining lease, granted by the proprietor of an estate or tenure before the commencement of the Mines and Minerals (Regulation and Development) Amendment Act, 1972, have vested, on or 695 after the 25th day of October, 1949, in the State Government in pursuance of the provisions of any Act of any Provincial or State Legislature which provides for the acquisition of estates or tenures or provides for agrarian reform, such mining lease shall be brought into conformity with the provisions of this Act and the rules made thereunder within six months from the commencement of the Mines and Minerals (Regulation and Development) Amendment Act, 1972, or within such further time as the Central Government may, by general or special order, specify in this behalf". Section 16(2) provides for rules to be made by the Central Government to carry out the purposes of Section 16(1). Special powers of Central Government in respect of mining operations in certain lands are provided for in Section 17. Clause (1) of this Section reads: "17(1) The provisions of this Section shall apply in respect of land in which the minerals vest in the Government of a State or any other person". Clause (2) of Section 17 provides for undertakings by the Central Government, in consultation with the State Government, of prospecting or mining operations "in any area not already held under any prospecting licence or mining lease. ". Section 17(3) makes the Central Government liable in such cases to pay the State Government prospecting fee, royalty, surface rent, or dead rent, as the case may be, at the same rate at which it would have been payable under this Act, if such prospecting or mining operations had been undertaken by a private person under a prospecting licence or mining lease. Section 17(4) contains powers of the Central Government, in consultation with the State Government, to prohibit grant of prospecting or mining leases in any area specified in a notification. Section 18, dealing with the development of minerals enacts: "18(1) It shall be the duty of the Central Government to take all such steps as may be necessary for the conservation and development of minerals in India, and for that purpose the Central Government may, by notification in the Official Gazette, make such rules as it thinks fit. (2) In particular, and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters, namely: (a) the opening of new mines and the regulation of mining operations in any area; (b) the regulation of the excavation or collection of minerals from any mine; (c) the measures to be taken by owners of mines for the purpose of beneficiation of ores, including the provision of suitable contrivances for such purpose; 696 (d) the development of mineral resources in any area; (e) the notification of all new borings and shaft sinkings and the preservation of bore hole records, and specimens of cores of all new bore holes; (f) the regulation of the arrangements for the storage of minerals and the stocks thereof that may be kept by any person; (g) the submission of samples of minerals from any mine by the owner thereof and the manner in which and the authority to which such samples shall be submitted; and the taking of samples of any minerals from any mine by the State Government or any authority specified by it in that behalf; and (h) the submission by owners of mines of such special or periodical returns and reports as may be specified, and the form in which and the authority to which such returns and reports shall be submitted. (3) All rules made under this section shall be binding on the Government". It should be noted that Section 18 set out above empowers the Central Government to make rules for the "conservation and development of minerals in any part of India". The State Government is not even entitled under Central Act to be consulted about this subject, but it is bound by the rules made on it by the Central Government. The term "Government", according to Section 3(23) of the General Clauses Act, includes both the Central Government and a State Government. Section 18A, sub section (1) inserted by Section 11 of the Act of 56 of 1972, does, however, require consultation with the State Government on one matter. It says: "18.A(1) Where the Central Government is of opinion that for the conservation and development of minerals in India, it is necessary to collect as precise information as possible with regard to any mineral available in or under any land in relation to which any prospecting licence or mining lease has been granted, whether by the State Government or by any other person, the Central Government may authority or the Geological Survey of India, or such other authority or agency as it may specify in this behalf, to carry out such detailed investigations for the purpose of obtaining such information as may be necessary: Provided that in the cases of prospecting licences or mining leases granted by a State Government, no such authorisation shall be made except after consultation with the State Government". 697 The remaining clauses (2) to (6) of Section 18A deal with the consequences of the authorisation of investigation by the Central Government and matters connected therewith. The proviso to clause (6) dealing with the costs of investigation enacts: "Provided that where the State Government or other person in whom the minerals are vested or the holder of any prospecting licence or mining lease applies to the Central Government to furnish to it or him a copy of the report submitted under sub section (5), that State Government or other person or the holder of a prospecting licence or mining lease, as the case may be, shall bear such reasonable part of the costs of investigation as the Central Government may specify in this behalf and shall, on payment of such part of the costs of investigation, be entitled to receive from the Central Government a true copy of the report submitted to it under sub section (5)". Miscellaneous provisions are contained in Sections 19 to 33 of the Central Act. Here, Section 19 lays down: "19. Any prospecting licence or mining lease granted renewed or acquired in contravention of the provisions of this Act or any rules or orders made thereunder shall be void and of no effect". Section 20 enacts: "20. The provisions of this Act and the rules made thereunder shall apply in relation to the renewal after the commencement of this Act of any prospecting licence or mining lease granted before such commencement as they apply in relation to the renewal of a prospecting licence or mining lease granted after such commencement". Section 21 provides for penalties for anyone who contravenes the provisions of Section 4(1) of the Act. Among these miscellaneous provisions is Section 25 recast by Section 14 of Act 56 of 1972. It lays down that: "Any rent, royalty, tax, fee or other sum due to the Government under this Act or the rules made thereunder or under the terms and conditions of any prospecting licence or mining lease may, on a certificate of such officer as may be specified by the State Government in this behalf by general or special order, be recovered in the same manner as an arrear of land revenue". Section 25, sub section (2) shows that these dues are to be specified either by the Act or by the Rules made thereunder or under the terms and conditions of any prospective licence or mining lease. The control however, is of officers appointed by the State Government. Section 26 provides for delegation of the powers of the Central Government by notification in the official Gazette to either the State Government or any officer or authority either subordinate to the 698 Central Government or the State Government. Section 30 shows that the orders made by the State Government or other authority in exercise of powers by or under the Central Act are revisable by the Central Government. Hence, the provisions of the Central Act show that, subject to the overall supervision of the Central Government, the State Government has a sphere of its own powers and can take legally specified actions under the Central Act and rules made thereunder. Thus, the whole field of control and regulation under the provisions of the Central Act 67 of 1957 cannot be said to be reserved for the Central Government. As indicated above, there have been some very significant changes by the Central Act 56 of 1972. These seem to us to make it necessary to reconsider the effect of the declaration contained in Section 2 of the Central Act as interpreted by the decisions of this Court so far. Before outlining the provisions of Haryana Act, we may indicate the position resulting from the four decisions mentioned above relied upon by Punjab & Haryana High Court. In Hingir Rampur Coal Co 's case (supra), the validity of the Orissa Mining Areas Development Fund Act, 1952, was questioned on the ground that it authorised the State of Orissa to impose a cess on the valuation of the minerals. The State of Orissa had relied upon entries 23 and 66 of the State List (List II) of the Seventh Schedule. Entry 23 of List II is: "Regulation of mines and mineral development subject to the provisions of List I with respect to regulation and development under the control of the Union". And entry 66 of List II is: "Fees in respect of any of the matters in this list, but not including fees taken in any court". The petitioning Coal Co. had relied on entry 84 of List I of the Seventh Schedule empowering the Parliament alone to impose excise duty on tobacco and other manufactured goods with the exception of Alcoholic liquor, opium, Indian hemp, and other narcotics. It had also cited, in support of its case, entry 52 of List I of "Industries, the control of which by the Union is declared by Parliament by law to be expedient in the public interest". Furthermore, the Coal Company relied on entry 54 of List I relating to Mines and mineral development, already set out above. This Court held that the imposition of the cess under the State enactment was really a fee falling within entries 23 and 66 of List II of the Seventh Schedule. It held that the State Act was neither hit by entry 54, read with Mines and Minerals Development Act 3 of 1948, nor by entry 52 of List I. The decision in that case turned on an interpretation of Article 372 of the Constitution. It was held that a declaration in the Act of 1948 could not be equated with a declaration made by the Parliament in a post Constitution enactment in terms of entry 54 of List I. It was, therefore, not really a decision on the effect of Section 2 of the Central Act 67 of 1957. 699 The State of West Bengal vs Union of India (supra) was the case of a suit filed by the State of West Bengal against the Union. It was contended, on behalf of West Bengal State, that the Coal Bearing Areas (Acquisition and Development) Act, 1957, enacted by Parliament, proposing to acquire certain coal bearing areas in the State, did not apply to areas owned by the State itself, and, in the alternative, that, even if it did so apply to areas owned by the State of West Bengal, it was beyond the legislative competence of Parliament because entry 42 in the Concurrent List (List III) did not authorise an acquisition of property already vested in the State although this entry in the Concurrent List merely reads: "acquisition and requisitioning of property". It was urged there that, without a constitutional amendment, Parliament could not acquire the property of the State of West Bengal under the provisions of the impugned Act. It was held there (at p. 417): ". the power of the Union to legislate in respect of property situate in the States even if the States are regarded qua the union as Sovereign, remains unrestricted, and the State property is not immune from its operation. Exercising powers under the diverse entries which have been referred to earlier, the Union Parliament could legislate so as to trench upon the rights of the State in the property vested in them. If exclusion of State property from the purview of Union legislation is regarded as implicit in those entries in List I, it would be difficult if not impossible for the Union Government to carry out its obligations in respect of matters of national importance". Learned Counsel for the appellant State before us has relied upon the case of State of West Bengal (supra) for contending that the powers of the State of Haryana to acquire land are not impaired by the declaration contained in the Central Act. He cited the rule of construction stated there as follows (at p. 393): "Unless a law expressly or by necessary implication so provides, a State is not bound thereby. This well recognised rule applies to the interpretation of the Constitution. There fore, in the absence of any provision express or necessarily implying that the property of the State could be acquired by the Union, the rights claimed by the Union to legislate for acquisition of State property must be negatived. " Applying this rule, he contends that the powers of the State Government to acquire land are left intact by the Central Act 67 of 1957. Learned Counsel for the respondent, however, relied on another passage in the State of West Bengal 's case (supra) to submit that legislative power for acquisition of minerals for their development and conservation must be deemed to be vested in Parliament now even if the mineral resources are situated in the State. He quoted (at p. 436): "By making the requisite declarations under Entries 54 of List I, the Union Parliament assumed power to regulate 700 mines and minerals and thereby to deny to all agencies not under the control of the Union, authority to work the mines. It could scarcely be imagined that the Constitution makers while intending to confer an exclusive power to work mines and minerals under the control of the Union, still prevented effective exercise of that power by making it impossible compulsorily to acquire the land vested in the States containing minerals. The effective exercise of the power would depend if such an argument is accepted not upon the exercise of the power to undertake regulation and control by issuing a notification under Entry 54, but upon the will of the State in the territory of which mineral bearing land is situate. Power to legislate for regulation and development of mines and minerals under the control of the Union, would by necessary implication include the power to acquire mines and minerals. Power to legislate for acquisition of property vested in the States cannot therefore be denied to the Parliament if it be exercised consistently with the protection afforded by article 31. " In the two cases discussed above no provision of the Central Act 67 of 1957 was under consideration by this Court. Moreover, power to acquire for purposes of development and regulation has not been exercised by Act 67 of 1957. The existence of power of Parliament to legislate on this topic as an incident of exercise of legislative power on another subject is one thing. Its actual exercise is another. It is difficult to see how the field of acquisition could become occupied by a Central Act in the same way as it had been in the West Bengal 's case (supra) even before Parliament legislates to acquire land in a State. Atleast until Parliament has so legislated as it was shewn to have done by the statute considered by this Court in the case from West Bengal, the field is free foe State legislation falling under the express provisions of entry 42 of List III. In State of Orissa vs M. A. Tulloch & Co. (supra) the provisions of the Central Act 67 of 1957 were considered by this Court directly. In this case, the legality of certain demands as fee under the Orissa Act 27 of 1952, the validity of which had been upheld by this Court in Hingir Rampur Coal Co. 's case (supra), came up for consideration again in the light of the provisions of the Central Act 67 of 1957. It was contended on behalf of the State of Orissa that the objects and purposes of the Orissa Act and of the Central Act were entirely distinct and different so that they could validly co exist since neither trespassed into the field of the other. It was pointed out there that this Court had indicated, in the Hingir Rampur Coal Co. 's case (supra) that, if the declaration in the 1948 Act relied upon by the petitioner in that case had been made after our Constitution became operative, the position would have been different. Reliance was placed upon the provisions of Section 18 of the Central Act to hold (at p. 477): "Repugnancy arises when two enactments both within the competence of the two Legislatures collide and when the 701 Constitution expressly or by necessary implication provides that the enactment of one Legislature has superiority over the other than to the extent of the repugnancy the one supersedes the other. But two enactments may be repugnant to each other even though obedience to each of them is possible without disobeying the other. The test of two legislations containing contradictory provisions is not, however, the only criterion of repugnancy, for if a competent legislature with a superior efficacy expressly or impliedly evinces by its legislation an intention to cover the whole field, the enactments of the other legislature whether passed before or after would be overborne on the ground of repugnance. Where such is the position, the inconsistency is demonstrated not by a detailed comparison of provisions of the two statutes but by the mere existence of the two pieces of legislation. In the present case, having regard to the terms of section 18(1) it appears clear to us that the intention of Parliament was to cover the entire field and thus to leave no scope for the argument that until rules were framed, there was no inconsistency and no supersession of the State Act". It was also held there (at p. 478): "If by reason of the declaration by Parliament the entire subject matter of conservation and development of minerals ' has been taken over for being dealt with by Parliament, thus depriving the State of the power which it therefore possessed, it would follow that the 'matter ' in the State List is to the extent of the declaration, subtracted from the scope and ambit of Entry 23 of the State List. There would, therefore, after the Central Act of 1957 be 'no matter in the List ' to which the fee could be related in order to render it valid". In Baijnath Kedia 's case (supra), the proviso (2) to Section 10(2) of the Bihar Land Reforms (Amendment) Act, 1964 (Bihar Act 4 of 1965) and a sub rule of Rule 20, added on December 10, 1964, by a notification of the Governor to the Bihar Minor Mineral Rules, 1961, came up for consideration. Under the Bihar Land Reforms Act, 1950, the former landlords had ceased to have any interest from the date of vesting so that their rights as lessors under the mining leases granted by them in their "estates" became vested in the State of Bihar under Section 19(1) of the Land Reforms Act; and, by Section 10(2) of that Act, the terms on which the lands were held on leases between the original lessors and lessees became binding on the State Government under the impugned proviso to Section 10(2), amounting to alteration of the terms of the leases executed by the original lessors, the former landlords, additional demands were made upon lessees. The State Government had also relied upon a sub rule added to Rule 20 framed under Section 15 of the Central Act 67 of 1957. This Court, after examining the relevant provisions of the 702 Central Act, held, relying on Hingir Rampur Coal Co. 's case (supra) and M. A. Tulloch Co. 's case (supra), as follows (at p. 113): "The declaration is contained in section 2 of Act 67 of 1957 and speaks of the taking and the control of the Central Government the regulation of mines and development of minerals to the extent provided in the Act itself. We have thus not to look outside Act 67 of 1957, to determine what is left within the competence of the State Legislature but have to work it out from the terms of that Act". After referring to what was decided in the earlier cases, this Court said (at p. 114): "These two cases bind us and apply here. Since the Bihar State Legislature amended the Land Reforms Act after the coming into force of Act 67 of 1957, the declaration in the latter Act would carve out a field to the extent provided in that Act and to that extent entry 23 would stand cut down. To sustain the amendment the State must show that the matter is not covered by the Central Act. The other side must, of course, show that the matter is already covered and there is no room for legislation". It added (at p. 114 115): "We have already analysed Act 67 of 1957. The Act takes over the control of regulation of mines and development of minerals to the Union; of course, to the extent provided. It deals with minor minerals separately from the other minerals. In respect of minor minerals it provides in section 14 that sections 4 13 of the Act do not apply to prospecting licences and mining leases. It goes on to state in section 15 that the State Government may, by notification in the official Gazette, make rules for regulating the grant of prospecting licences and mining leases in respect of minor minerals and for purposes connected therewith, and that until rules are made, any rules made by the State Government regulating the grant of prospecting licences and mining leases in respect of minor minerals which were in force immediately before the commencement of the Act would continue in force. It is admitted that no such rules were made by the State Government. It follows that the subject of legislation is covered in respect of minor minerals by the express words of section 15(1). Parliament has undertaken legislation and laid down that regulation of the grant of prospecting licences and mining leases in respect of minor minerals and for purposes connected therewith must be by rules made by the State Government. Whether the rules are made or not the topic is covered by Parliamentary legislation and to that extent the powers of State Legislature are wanting. Therefore, there is no room for State Legislation". 703 In Baijnath Kedia 's case (supra), this Court also said (at p. 116): "We have already held that the whole of the legislative field was covered by the Parliamentary declaration read with provisions of Act 67 of 1957, particularly section 15 We have also held that entry 23 of List II was to that extent cut down by entry 54 of List I. The whole of the topic of minor minerals became a Union subject. The Union Parliament allowed rules to be made but that did not recreate a scope for legislation at the State level. Therefore, if the old leases were to be modified a legislative enactment by Parliament on the lines of section 16 of Act 67 of 1957 was necessary. The place of such a law could not be taken by legislation by the State Legislature as it purported to do by enacting the second Proviso to section 10 of the Land Reforms Act. It will further be seen that Parliament in section 4 of the Act 67 of 1957 created an express bar although section 4 was not applicable to minor minerals. Whether section 4 was intended to apply to minor minerals as well or any part of it applies to minor minerals are questions we cannot consider in view of the clear declaration in section 14 of Act 67 of 1957 that the provisions of sections 4 13 (inclusive) do not apply. Therefore, there does not exist any prohibition such as is to be found in section 4(1) Proviso in respect of minor minerals. Although section 16 applies to minor minerals it only permits modification of mining leases granted before October 25, 1949. In regard to leases of minor minerals executed between this date and December 1964 when Rule 20(1) was enacted, there is no provision of law which enables the terms of existing leases to be altered. A mere rule is not sufficient". Again, referring to the earlier decisions it said (at p. 117): "On the basis of those rulings we have held that the entire legislative field in relation to minor minerals had been withdrawn from the State Legislature. We have also held that vested rights could only be taken away by law made by a competent legislature. Mere rule making power of the State Government was not able to reach them. The authority to do so must, therefore, have emanated from Parliament. The existing provision related to regulation of leases and matters connected therewith to be granted in future and not for alteration of the terms of leases which were in existence before Act 67 of 1957. For that special legislative provision was necessary. As no such parliamentary law had been passed by the second sub rule to Rule 20 was ineffective. It could not derive sustenance from the second Proviso to section 10(2) of the Land Reforms Act since that proviso was not validly enacted. " The question which arises before us now is whether, possibly as a result of the decision of this Court in Baijnath Kedia 's case (supra), the Parliament had not amended the law, as we find it in the present 704 Section 16 of the Act 67 of 1957, as amended by Act 56 of 1972, so as to undo its effect. If that amendment is in response to the need pointed out in Baijnath Kedia 's case (supra) would it not cover the provisions of the Haryana Act now before us ? The preamble to the Haryana Act states that it is: "An Act to vest the mineral rights in the State Govt. and to provide for payment of amount to the owners of minerals and for other matters connected therewith. " The crucial section is section 3 of the Haryana Act which runs as follows: "section 3 Vesting of minerals in State Government. (1) The State Government may, from time to time, by notification, acquire the right to any minerals in any land and the right to the minerals specified in the notification shall, from the date of its publication, vest in the State Government. (2) Notwithstanding anything contained in any law for the time being in force, on the publication of the notification under sub section (1), the right to the minerals in the land specified in the notification shall vest absolutely in the State Government and the State Government shall, subject to the provisions of the , have all the powers necessary for the proper enjoyment or disposal of such right. (3) The right to the minerals in the land includes the right of access to land for the purpose of prospecting and working mines and for the purposes subsidiary thereto including the sinking of pits and shafts, erection of plants and machinery, construction of roads, stacking of minerals and deposits of refuse, quarrying and obtaining building and road materials, using water and taking timber and any other purpose which the State Government may declare to be subsidiary to mining. (4) If the State Government has assigned to any person its right over any minerals, and if for the proper enjoyment of such right, it is necessary that all or any of the powers specified in subsection (2) and (3) should be exercised, the Collector may, by an order in writing subject to such conditions and reservations as he may specify, delegate such powers to the person to whom the right has been assigned". Other provisions of the Haryana Act are not material. Section 1 merely gives the Act its title and Section 2 deals with definitions. Section 4 relates to compensation. Section 5 provides for references or disputes about compensation to Civil Courts. Section 6 applies Civil procedure to compensation proceedings. Section 7 provides for appeals. Section 8 contains the necessary powers of the State Government to frame rules. These provisions exhaust the Act. 705 Saltpetre was declared a minor mineral by notification No. 1(31) 65 MII on 21st January, 1967. Its deposits are said to have been found in 638 villages of Haryana. It appears that the State of Haryana considered itself to be the owner of these deposits on the strength of entries in the records of rights (Wajib ul arz) of these villages and used to auction them in accordance with the Punjab Minor Minerals Concession Rules, 1964. But, on 25th May, 1971, the Punjab & Haryana High Court held on a Writ Petition (C.W. No. 1221 of 1971), that unless the mineral deposits are specifically mentioned in the Wajib ul arz of a village as having vested in the State, their ownership would still remain vested in the former proprietors mentioned as owners of their lands in a Wajib ul arz. As a result of this decision, the right to Saltpetre deposits was found to be vested in individual proprietors of their estates and Gram Panchayats in about 600 out of 638 villages. It is stated that, in order to meet this situation, the Haryana Act No. 48 of 1973 was framed and passed. The President of India gave his assent to it on 6th December, 1973. It was thus a logical corollary of land reforms. Apparently, there was no conflict between the State and the Union Government on the policy underlying the Act. The arguments advanced on behalf of the appellant State were: Firstly, that the Central Act does not purport to cover or operate upon the power to acquire ownership in minerals which are part of "land". The relevant entry for exercise of legislative power to acquire property is entry 42 in the Concurrent List (List III) of the Seventh Schedule. The Central Act purports to have been made in exercise of the power under entry 54 of List I for regulation and development of mines, whereas the Haryana Act operates in the distinct and separate field of acquisition of property. Secondly, minerals being part of "land" in the State, within the competence of the State Legislature to legislate upon, under entry 18 of the State List (List II), legislation falling substantially under this head, read with entry 23 of the State List and entry 42 of the Concurrent List (List III), should not be invalidated unless we are compelled to do so. Thirdly, entry 54 of List I, set out above would naturally cover only those parts of the field of acquisition, in accordance with rules of interpretation indicated in State of West Bengal 's case (supra), which are expressly excluded from this special field by the Central Act. Particularly, as acquisition belongs to a different head in the concurrent field, on which there is neither a Central Act for acquiring ownership of mineral deposits nor any express provision for it in Act 67 of 1957, there could be no question of the exclusion of the power of the State Legislature to pass the impugned Act. There was thus no unavoidable conflict between it and the State Act. Fourthly, the impugned Act is protected from any challenge on the ground of inadequacy of compensation or the unreasonableness of the principles contained in Section 4(1) of the Haryana Act, as the 706 acquisition of parts of estates of former proprietors of land falls under Article 31A. On the other hand, the learned Counsel for the respondents has urged that the cases before us are covered completely by the decisions of this Court discussed above, and, in particular by those in Tulloch Co 'section, case (supra) and Baijnath Kedia 's case (supra). It is urged that, when acquisition is only a means of conservation or development of mineral resources, even this field must be held to be necessarily excluded by the declaration in Section 2 and other provisions of Central Act 67 of 1957 which will become unworkable if the provisions of the Haryana Act were permitted to operate. It seems difficult to sustain the case that the provisions of the Central Act would be really unworkable by mere change of ownership of land in which mineral deposits are found. We have to judge the character of the Haryana Act by the substance and effect of its provisions and not merely by the purpose given in the statement of reasons and objects behind it. Such statements of reasons are relevant when the object or purpose of an enactment is in dispute or uncertain. They can never override the effect which follows logically from the explicit and unmistakable language of its substantive provisions. Such effect is the best evidence of intention. A statement of objects and reasons is not a part of the statute, and, therefore, not even relevant in a case in which the language of the operative parts of the Act leaves no room whatsoever, as it does not in the Haryana Act, to doubt what was meant by the legislators. It is not disputed here that the object and effect of the Haryana Act was to acquire proprietary right to mineral deposits ' in "land". Its provisions, however, do not mention leasehold or licensee rights. Obviously, this is so because these rights are governed by the Central Act 67 of 1957. As we found nothing in the judgment under appeal or in the arguments advanced by either side to indicate that the effect of Act 56 of 1972 which had amended Act 67 of 1957 had been specifically noticed, we considered it necessary to hear further arguments with a view to giving parties an opportunity of showing us how earlier decisions, when the provisions introduced by Act 56 of 1972 were not there, could be at all helpful in deciding the question now before us. One of the objections taken before us, at the further hearing given to the parties, was that we should not allow a new point to be argued. We do not think that any new question was allowed by us to be raised simply because we have permitted parties to place their points of view on the same question after taking into account some changes in the Central Act. Indeed, we are bound to take judicial notice of the law as it exists after its amendment. We can only apply the law as it exists and not the law as it once was. No party could justifiably complain that it was given an additional opportunity to meet what follows from the amended law even if the effect of the amendment was not noticed earlier. We are particularly impressed by the provisions of Sections 16 and 17 as they now stand. A glance at section 16(1)(b) shows that the 707 Central Act 67 of 1957 itself contemplates vesting of lands, which had belonged to any proprietor of an estate or tenure holder either on or after 25th October, 1949, in a State Government under a State enactment providing for the acquisition of estates or tenures in land or for agrarian reforms. The provisions lay down that mining leases granted in such land must be brought into conformity with the amended law introduced by Act 56 of 1972. It seems to us that this clearly means that Parliament itself contemplated State legislation for vesting of lands containing mineral deposits in the State Govt. It only required that rights to mining granted in such land should be regulated by the provisions of Act 67 of 1957 as amended. This feature could only be explained on the assumption that Parliament did not intend to trench upon powers of State Legislatures under entry 18 of List II, read with entry 42 of List III. Again, Section 17 of the Central Act 67 of 1957 shows that there was no intention to interfere with vesting of lands in the States by the provisions of the Central Act. The only answer given on behalf of the respondents to this contention is that such vesting as it contemplated by Section 16(1)(b) of the Central Act, as it now stands, must be of "estates" of proprietors or lands of tenure holders under some legislation for agrarian reform. We are unable to find any force in this contention. Article 31 A of the Constitution is not confined to legislation for agrarian reform. Agrarian reform is only one of the possible or alternative objects of such acquisition. It need not be the exclusive or only purpose of State legislation contemplated by Section 16(1) (b) of the Central Act. And, power to legislate for the acquisition of the whole of an estate or "tenure" would include the power to legislate for any part of it. Writ Petition Nos. 1309 to 1318 and 1371 to 1373 of 1975, directed against the provisions of this Act, have also been placed before us for arguments and appropriate orders. The petitioners in these cases assert rights as holders of mining leases granted by persons who had been entered as proprietors of estates in the records of rights in various villages. The rights of persons so entered (in a "Wajib ul arz") to mineral deposits in their former lands have been acquired by the State under the Haryana Act. According to the Haryana State, the Act was passed so as to, inter alia, change the law as declared by the Punjab & Haryana High Court in the case reported in AIR 1972 P&H p. 50. According to the view of the High Court, rights in such lands had continued to vest in former owners of estates despite acquisitions of other parts of their "estate". The effect of the Haryana Act was, it was urged, only to change the ownership without interfering with the regulation of leasehold or licensee rights in minerals under the provisions of the Central Act 67 of 1957. The Haryana Act expressly states that it operates subject to the overriding provisions of Act 67 of 1957. Dr. L. M. Singhvi, appearing on behalf of the State of Haryana, in the Writ Petitions under Article 32, submits: Firstly, that the legislative competence of the State Legislature, under entry 23 of List II is subjected to entry No. 54 of List I only "to the extent to which" 708 Parliament chooses to take upon itself the regulation of mines and minerals and no more. Secondly, in arriving at a decision on the extent to which Parliament has removed regulation and development of mines from State control, strict construction ought to be adopted so that, without a specific and clear declaration by Parliament, ousting the power of State Legislature to deal with vesting of land in the State Government, it should not be assumed that the legislative power of the State to acquire what is "land" had been taken away. Thirdly, Parliament having legislated specifically only in order to regulate the grant of mining leases and concessions, irrespective of the ownership of the lands in which mining leases and concessions are granted, the clear legislative intent of Parliament, gathered from the Central Act 67 of 1957 itself, also was to exclude the topic of acquisition of ownership and other rights in land, apart from those of holders of mining leases and licences, from its purview. Fourthly, the majority view in the State of West Bengal 's case (supra) should be read in the context of the particular Act considered there under which the Union Govt. had been given powers of acquiring lands belonging to the State of West Bengal. No such Central Act is before us for interpretation. Even if the power was vested in the Parliament to acquire land as an incident of regulation and development of minerals, that power not having been exercised at all by Act is of 1957, it was not permissible to assume any conflict between the Central Act 67 of 1957 and the Haryana Act. Fifthly, D. M. Collieries & Industries Ltd. vs Commissioner Burdwan Division, following 66 C.W.N. p. 304=AIR , could be relied upon to urge that States had not lost their legislative competence altogether to acquire lands in which mineral rights could be granted. Examples of such acquisitions were: section 10 of the Bihar Land Reforms Act, 1950, Section 5(2) of the West Bengal Estate Acquisition Act, 1953 (as amended by Act 22 of 1964) Coal Bearing Areas (Acquisition and Development) Act, 1957: , and . In any case, until Parliament legislates to acquire ownership of mineral deposits in a State, this field cannot be said to be occupied merely because of the declaration in Act 67 of 1957 which contains nothing whatsoever about the ownership of minerals. Sixthly, the provisions of Act 67 of 1957 also show that the power of granting leases and concessions in respect of mineral deposits is left largely to State Government. There is, however, one argument advanced on behalf of holders of leases or licences of mining rights which must be upheld. It is that lessee and licensee rights, governed by the provisions of Act 67 of 1957 or rules made thereunder, are not covered by the Haryana Act. It is clear from Section 3(2) of the Haryana Act itself that the provisions of this Act are to be read subject to the provisions made by or under the Central Act. Moreover, the Haryana Act does not and cannot ipso facto terminate either lessee or licensee rights which were subsisting on the date when the Haryana Act came into force. On the other hand, section 9 of the Central Act 709 56 of 1972, which amended section 16 of the Principal Act (Central Act 67 of 1957), made it imperative for such lessee rights as existed in estates, (which had vested in a State Government) to be brought into conformity with the Central Act. Obviously, therefore, if there are any lessee or licensee rights of mining in minor minerals on land which were actually regulated by the provisions of the Central Act 67 of 1957, they will continue. Although, this is a legally correct contention, it was not shewn to us how the notification of auctions of mining rights affected any subsisting rights of any alleged lessee or licensee. The facts of no individual case were placed before us. We do not know which respondent in the appeal or which petitioner in Writ Petitions before us has any subsisting rights governed by any of the provisions of the Central Act or rules made thereunder. It has also not been shewn to us that any lessee or licensee asked the State Government to carry out any statutory or contractual obligation before he invoked the Writ jurisdiction of the High Court or of this Court. Thus, essential averments to disclose subsisting rights or the locus standi of the petitioners are wanting here. In Writ Petitions No. 1309 1318 and 1371 1373 of 1975, the petitioners only assert that they are lessees of minor minerals holding rights under registered leases executed by the owners of minor minerals. But, they do not state whether their leases are governed by or have been brought into conformity with the provisions of the Central Act. Annexure 'A ' is the notification, dated 10th April, 1974, assailed by petitioner in this Court. Its purpose is stated in the following terms: "In exercise of powers conferred by sub section (1) of Section 3 of the Haryana Mineral (Vesting of Rights) Act, 1973, the Governor of Haryana hereby acquires the right to the minerals, mentioned in column 6 of the schedule given below in the land specified in column 5 thereof". The schedule contains a large number of khasra numbers of plots in various villages covered by the notification Another notification of 11th September, 1975, challenged by the petitioners in this Court says: 'It is hereby notified for the general public that Minor Mineral quarries of Gurgaon District, as per particulars given below, will be put to auction on 1 10 1975 in the office of Senior District Industries Officer, Faridabad, at 10 A.M.". Thereafter, follows the names of 139 villages in Tehsil Gurgaon under the heading "Name of Quarry". Under the next heading. "Name of the Minor Mineral", occur the words "Road metal and stone. " 710 The notification then proceeds to say: "The terms and conditions of the auction are given below : (i) Each bidder shall be required to deposit a sum of Rs. 200 in cash as earnest money, with the Presiding Officer before participating in the auction. (ii) The period of contract shall commence from the date of execution of the agreement to the 21st March, 1977. (iii)Other terms and conditions of auction shall be the same as contained in the Punjab Minor Mineral Concession Rules, 1964, as adopted by Haryana Government. (iv) The highest bidder shall be entitled to obtain short term permits from the date of auction till the date of acceptance of his bid by the competent authority. Therefore, he will not have any right to revoke his officer. Any other information he had from the Senior District Industries Officer. Faridabad. (B. L. MITTAL) Director of Industries, Haryana". Some of the numbers given in the first notification correspond with the number of plots in respect of which the petitioners allege to be lease holders. A perusal of the petitions and the counter affidavits filed in reply on behalf of the State of Haryana shows that the only dispute between the parties relates to the vesting of ownership rights in a minor mineral in these plots. But, the petitioners have come before us as lessees and not as owners. Rights of former owners have been validity terminated by the Haryana Act. We are unable to make out, from these petitions how any lessee rights acquired by the petitioners themselves, under any law subsist or are affected by the notifications mentioned above. We proceed to record our conclusions as follows: 1. The Haryana Minerals (Vesting of Rights) Act, 1973, is valid, as it is not, in any way, repugnant to the provisions of the Mines and Minerals (Regulation of Development) Act 67 of 1957, made by Parliament. Ownership rights could be and have been validity acquired by the Haryana Govt. under the Haryana Act. No rights are shewn by any petitioner before us to have been conferred upon him under any lease or licence executed or brought in accordance with the provision of the Central Act 67 of 1957, but, any petitioner, either before the High Court or in this Court, now before us, who can establish any such right governed by the provisions of the Central Act 67 of 1957 may take such proceedings before an appropriate Court, if so advised, as may still be open to him under the law, against any such action or Govt. notification as 711 is alleged to infringe that right. We are unable to find any such right in any writ petition, as framed, now before us. Any petitioner who applies for a writ or order in the nature of a mandamus should, in compliance with a well known rule of practice, ordinarily, first call upon the authority concerned to discharge its legal obligation and show that it has refused or neglected to carry it out within a reasonable time before applying to a Court for such an order even where the alleged obligation is established. Accordingly, subject to the observations made above, we allow Civil Appeals Nos. 844 860 of 1975, and set aside the judgment and orders of the High Court of Punjab and Haryana and dismiss the Writ petitions. We also dismiss the Writ Petitions Nos. 1309 1318 and 1371 1373 of 1975, subject to the observations made above, filed in this Court. Parties will bear their own costs. P.B.R. Appeal allowed & Petitions dismissed.

On the strength of entries in the (wajib ul arz) (village administration papers) of some villages the State Government considered itself to be the owner of saltpetre deposits. By a notification it declared saltpetre as a minor mineral and auctioned the mines in accordance with the Punjab Minor Minerals Con Cessions Rules, 1964 made under the provisions of the Mines and Minerals (Regulation and Development) Act 67 of 1957. In a writ petition the High Court held that, unless the mineral deposits were specifically mentioned in the Wajib ul arz of a village, as having vested in the State, their ownership would still remain vested in the former proprietors according to the record of rights. To meet this situation, the State legislature passed the Haryana Minerals (Vesting of Rights) Act, 1973. Since the owners of the lands had haphazardly created lessee rights in contravention of the Punjab Rules, 1964, two notifications were issued with the object of the conservation as well as of scientific exploitation of mineral resources. By one notification the State Government purported to acquire rights to saltpetre in the lands and by the second it announced that certain saltpetre bearing areas would be auctioned. In a writ petition under article 226, the High Court held (i) that in view of the declaration contained in section 2 of the Central Act the field covered by the impugned Act was already fully occupied by the Central legislation so that the State Act was inoperative and void for repugnancy and quashed the two notifications; and (ii) that rights in such lands had continued to vest in the former owners of estates despite acquisitions of other parts of their estates. The respondents in the appeals containded that the declaration in section 2 of the Central Act that it was expedient in the public interest that the Union should take under its control the regulation of mines and the development of minerals would become unworkable if the provisions of the State Act were permitted to operate. While the appeals were pending writ petitions were filed in this Court under Article 32. The petitioners in the first batch of writ petitions have asserted rights as holders of mining lesses granted by persons who had been entered as proprietors of estates in the record of rights and that the State under the State Act had wrongly acquired the right to mineral deposits in their former lands. It was contended that the effect of the State Act was only to change the ownership without interfering with the regulation of leasehold or licensee rights in minerals under the Central Act. Allowing the appeals of the State and dismissing the writ petitions, ^ HELD: (i) The Haryana Minerals (Vesting of Rights) Act. 1973, is valid, as it is not, in any way, repugnant to the provisions of the Mines and 689 Minerals (Regulation of Development) Act 67 of 1957, made by Parliament. Ownership rights could be and have been validly acquired by the State Government under the State Act. [710G] (ii) No rights are shown by any petitioner to have been conferred upon him under any lease or licence executed in accordance with the provisions of the Central Act, but, any petitioner, either before the High Court or in this Court, who can establish any such right governed by the provisions of the Central Act 67 of 1957 may take such proceedings before an appropriate court, as may still be open to him under the law, against any such action or Government notification as is alleged to infringe that right. [710H] (iii) Any petitioner who applied for a writ or order in the nature of a mandamus should, in compliance with a well known rule of practice, ordinarily, first call upon the authority concerned to discharge its legal obligation and show that it had refused or neglected to carry it out within a reasonable time before applying to a court for such an order even where the alleged obligation is established. [711B] 1. (a) It is difficult to sustain the respondents ' contention that the provisions of the Central Act would be really unworkable by mere change of ownership of land in which mineral deposits were found. The character of the State Act has to be judged by the substance and effect of its provisions and not merely by the purpose given in the Statement of Objects and Reasons. [706C] (b) The provisions of the Central Act show that subject to the overall supervision of the Central Government the State Government has a sphere of its own powers and can take legally specified actions under the Central Act and rules. Thus, the whole field of control and regulation under the provisions of the Central Act cannot be said to be reserved for the Central Government. [698B] (c) The stated objects and reasons of the State Act showed that the acquisition was to be made to protect the mineral potentialities of the land and to ensure their proper development and exploitation on scientific lines. If this was the actual purpose behind the Act it did not materially differ from that which could be said to lie behind the Central Act. [692E] (d) The provisions contained in section 16(1)(b) show that Parliament itself contemplated state legislation for vesting of lands containing mineral deposits in the State Government. It only required that rights to mining granted in such land should be regulated by the provisions of Act 67 of 1957 as amended in 1972. This feature could only be explained on the assumption that Parliament did not intend to trench upon powers of State legislatures under entry 18 of List II read with entry 42 of List III. Again, section 17 of the Central Act shows that there was no intention to interfere with vesting of lands in the States by the provisions of the Central Act. [707B C] (e) There is no force in the contention of the respondents that the vesting contemplated by section 16(1)(b) as it now stands must be of "estates" of proprietors or lands of tenureholders under some legislation for agrarian reform. Agrarian 31A of the Constitution is not confined to legislation for agrarian reform. Agrarian reform is only one of the possible or alternative objects of such acquisition. It need not be the exclusive or only purpose of State legislation contemplated by section 16(1)(b) of the Central Act. Power to legislate for the acquisition of the whole of an estate or 'tenure ' would include the power to legislate for any part of it. [707 D E] Hingir Rampur Coal Co. Ltd. & Ors. vs The State of Orissa & Ors.,[1961] 2 S.C.R. 537; State of West Bengal vs Union of India,[1964] 1 S.C.R. 371; State of Orissa vs M. A. Tulloch & Co.; , & Baijnath Kedia vs The State of Bihar,[1970] 2 S.C.R. 100, held inapplicable. (2) The lessee and licensee rights governed by the Central Act or rules are not covered by the State Act. It is clear from section 3(2) of the State Act that the provisions of this Act were to be read subject to the provisions made by or under the Central Act. The State Act did not and could not upso facto 690 terminate either lessee or licensee rights which were subsisting on the date when the State Act came into force. On the other hand. section 9 of the Central Act 56 of 1972, which amended section 16 of the principal Act, made it imperative for such lessee rights as existed in estates (which had vested in a State Government) to be brought into conformity with the Central Act. Therefore, if there were no lessee or licensee rights of mining in minor minerals on land which were actually regulated by the provisions of the Central Act they would continue. [708H] In the instant case, however. it was not shown how the notification of auctions of mining rights affected any subsisting rights of any alleged lessee or licensee. It has not been shown that any lessee or licensee asked the State Government to carry out any statutory or contractual obligation before he invoked the writ jurisdiction of the High Court or this Court. The essential averments to disclose subsisting rights or the locus standi of the petitioners were wanting in these petitions. [709A] (3) In the second batch of petitions, the only dispute between the parties related to the vesting of ownership rights in minor minerals in those plots. The petitioners have come to this Court as lessees and not as owners. Rights of former owners have been validly terminated by the State Act. It is difficult to make out from these petitions how any lessee rights acquired by the petitioners themselves under any law subsisted or were affected by the notifications. [710E F] (4) The statement of objects and reasons is relevant when the object or purpose of an enactment is in dispute or uncertain. It can never override the effect which follows logically from the explicit and unmistakable language of its substantive provisions. Such effect is the best evidence of intention. A statement of objects and reasons is not a part of the statute, and, therefore, it is not even relevant in a case in which the language of the operative parts of the Act leaves no room whatsoever, to doubt what was meant by the legislators. [706D E] In the instant case it is not disputed that the object and effect of the State Act was to acquire proprietary rights to mineral deposits in "land". Its provisions however, do not mention leasehold or licensee rights. This is so because these rights were governed by the Central Act 67 of 1957. (5) It is not correct to say that any new question was allowed to be raised simply because the parties were permitted to place their points of view on the same question after taking into account the changes brought about in Act 67 of 1957 by Act 56 of 1972 and how earlier decisions of this Court, which were given before the amendments came into force, could be at all helpful in deciding the questions. The Court is bound to take judicial notice of the law as it exists and not the law as it once was. [706G]

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Special Leave Petition (Civil) No. 5383 of 1990. From the Judgment and Order dated 9.3.1990 of the Bombay High Court in Appeal No. 231 of 1990 in W.P. No. 3016 of 1989. 747 K.K. Venugopal, G.L. Sanghi, Sudhir Shah and P.N. Misra for the Petitioners. K.K. Singhavi, N.B. Shetye, D.N. Mishra and A.S. Bhasme for the Respondents. The Judgment of the Court was delivered by KASLIWAL, J. This petition under Article 136 the Constitution of India is directed against the order of Bombay High Court dated 9th March, 1990. Facts necessary and shorn of details are given as under. Pratibha Cooperative Housing Society Ltd. (hereinafter referred to as `the Housing Society ') made some unauthorised constructions in a 36 storeyed building in a posh and important locality of the city of Bombay. The Bombay Municipal Corporation issued a showcause notice dated 7th August, 1984 calling upon the Housing Society to showcause within 7 days as to why the upper right floors of the building should not be demolished so as to limit the development to the permissible Floor Space Index (F.S.I.). In the notice it was gained by the Housing Society and that the construction work had already reached 36 floors and that on the basis of the actual area of the building, the upper eight floors were beyond the permissible F.S.I. limit and as such were required to be removed. The Housing Society submitted a reply to the showcause notice by their letter 13th August, 1984. The Administrator of the Bombay Municipal Corporation made an order on 21st September, 1984 requiring the Housing Society to demolish 24,000 sq. on the eight upper floors of the building on the basis of 3000 Sq. on each floor. The Housing Society made a representation but the same was dismissed by the Administrator by order dated 31st October, 1984. An appeal submitted by the Housing Society was also dismissed by the State Government on 7th October, 1985. The Housing Society then filed a writ petition No. 4500 of 1985 in the High Court. A Division Bench of the High Court dismissed the writ petition on 28th October, 1985. However, the High Court while dismissing the writ petition also observed as under: "It would, however, be fair and just in the circumstances of the case to give a choice to the society to reduce the construction up to permissible limit or whatever other method they can think of. It is of course for the society to come 748 forward with a proposal in that behalf. We therefore direct that in case the society comes with any such alternative proposal within the four corners of the rules and regulations within one month from today the Municipality may consider. " The case of the Housing Society is that in pursuance to the said order it submitted application to the Municipal Corporation giving several alternative proposals on 21st November, 1985. It may be noted at this stage that the Housing Society had preferred a special leave petition No. 17351 of 1985 before this Court against the judgment of the High Court dated 28th October, 1985 and the said special leave petition was dismissed by this Court on 17th january, 1986. Further allegation of the Housing Society was that it submitted another proposal to the Municipal Corporation on 17th February, 1986 and thereafter wrote to the Municipal Council on 14th August, 1986 to consider their alternative proposals. A similar letter was also written to the Chief Minister of Maharashtra. On 29th August, 1986 the Municipal Commissioner fixed up a meeting for hearing the alternative proposals of the Housing Society. It has been alleged that in the said meeting the Housing Society had put forward its case in support of the new proposals and the Municipal commissioner had thereafter informed the Housing Society that he would consider the said proposals and take decision. However, no decision was taken till the filing of the present special leave petition before this Court. it has been further alleged that on 27th December, 1988 the Housing Society wrote a letter to the Municipal Commissioner to consider the alternative proposals mainly of vertical demolition of the building instead of demolishing the eight upper floors. It had been alleged that a meeting took place between the architects of the Housing Society as well as the officers of the Municipal Corporation in January, 1989 wherein the officers of the Corporation agreed that instead of demolishing eight upper floors, demolition can be made vertically so as to bring the entire construction within the permissible F.S.I. It has been further alleged that immediately thereafter the Housing Society was informed that henceforth it should contact the Municipal Commissioner directly and not any officers of the Corporation. It has been further alleged that the Corporation without considering the proposals of the Housing Society entrusted the work of demolition of the upper eight floors of the building to a company. In these circumstances the Housing Society filed writ petition No. 3016 of 1989 in the High Court. Learned Single Judge dismissed the writ petition by order dated 19th December, 1989 and the appeal preferred against the said order was dismissed by the Division Bench of the High 749 Court by order dated 9th March, 1990. In view of the fact that the main grievance of the Housing Society was that its alternative proposal of demolishing the building vertically instead of eight upper floors was not considered on merits by the Corporation, a serious effort was made by this Court to get the feasibility of such proposal examined by the Corporation. Orders in this regard were passed by this Court on several occasions but ultimately no agreeable solution could fructify. The proposal was got examined at the highest level by the Municipal Corporation and ultimately the Commissioner rejected the proposal on 13th November, 1990 and submitted a detailed report in writing for the perusal of this Court. In the above report it has been stated that in pursuance to the order of this Court dated 22nd October, 1990, the proposals submitted by the Housing Society on 27th October, 1990 and 29th October, 1990 in supersession of all alternative proposals, to demolish vertically one bedroom and servant quarters on all the floors to bring the building in tune with the F.S.I. was considered but on the grounds stated in the report the proposal submitted by the Housing Society cannot be approved. In the circumstances mentioned above on the request of learned counsel for both the parties to decide the case on merits, we heard the arguments in detail on 23.4.1991. Thereafter, in order to clarify some points we directed the Chief Engineer cum Architect and the Municipal Commissioner to remain present on the next date namely, 1.5.1991 and to keep the record of the case also ready for our perusal. We have heard learned counsel for the parties at great length and have thoroughly perused the record. It may be noted that the Housing Society had made illegal constructions in violation of F.S.I. to the extent of more than 24,000 sq. and as such an order for demolition or eight floors was passed by the Administrator, Municipal Council as back as 21st September, 1984. The writ petition filed against the said order was dismissed by the High Court on 28th October, 1985 and special leave petition against the said order of the High Court was also dismissed by this Court. The High Court in its order dated 28th October, 1985 had granted an indulgence to the Housing Society for submitting an alternative proposal within the four corners of the rules and regulations within one month and the municipality to consider the same. The proposal was submitted on 21st November, 1985 but in the said proposal there was no mention of any vertical demolition of the building. The proposal with regard to the demolition vertically of one 750 bedroom and servant quarters on all the floors was submitted for the first time on 27th December, 1988. During the pendency of the special leave petition before this Court, this proposal was got examined by the Municipal corporation. The Municipal commissioner submitted a report on 13th November, 1990 giving detailed reasons for rejecting such proposal. It is well settled that the High Court under Article 226 of the Constitution is not an Appellate Court on the administrative decisions taken by the authorities. It cannot be said that the decision taken by the Municipal Commissioner suffers from any want of jurisdiction or is violative of any law or rules. The proposal submitted by the Housing Society was got examined by the architects and engineers and thereafter the order was passed by the Municipal Commissioner. It cannot be said that the action of the Municipal Corporation is tainted with mala fides. It was submitted by the learned counsel for the Corporation that the Corporation has entrusted the matter for investigation by the CBI and suitable action is being processed against the guilty officers of the Corporation with whose connivance these illegal constructions were made by the Housing Society. It is an admitted position that six floors have been completely demolished and a part of seventh floor has also been demolished. It was pointed out by Mr. K.K. Sighvi, learned counsel for the Corporation that the tendency of raising unlawful constructions by the builders in violation of the rules and regulations of the Corporation was rampant in the city of Bombay and the Municipal Corporation with its limited sources was finding it difficult to curb such activities. We are also of the view that the tendency of raising unlawful constructions and unauthorised encroachments is increasing in the entire country and such activities are required to be dealt with by firm hands. Such unlawful constructions are against public interest and hazardous to the safety of occupiers and residents of multistoreyed buildings. The violation of F.S.I. in the present case was not a minor one but was to an extent of more than 24,000 sq. Such unlawful construction was made by the Housing Society in clear and flagrant violation and disregard of F.S.I. and the order for demolition of eight floors had attained finality right upto this Court. The order for demolition of eight floors has been substantially carried out and we find no justification to interfere in the order passed by the High Court as well as in the order passed by the Municipal Commissioner dated 13th November, 1990. In the result we find no force in the petition and the same is dismissed with no order as to costs. Before parting with the case we would like to observe that this case should be a pointer to all the 751 builders that making of unauthorised constructions never pays and is against the interest of the society at large. The rules, regulations and bylaws and made by the Corporations or development authorities taking in view the larger public interest of the society and it is the bounden duty of the Citizens to obey and follow such rules which are made for their own benefits. S.B. Petition dismissed.

The appellant Co operative Housing Society Ltd. made some unauthorised constructions in a 36 storeyed building. The Bombay Municipal Corporation issued a show cause notice calling upon the society to show cause as to why the upper eight floors of the building should not be demolished so as to limit the development to the permissible Floor Space Index (F.S.I.) since the additional Floor Space Index to the extent of 2773 sq. was gained by the appellant. The appellants submitted a reply to the show cause notice. The Administrator of the Municipal Corporation made an order on 21st Septmber, 1984 requiring the appellant to demolish 24,000 sq. on the eight upper floors of the building on the basis of 3000 sq. on each floor. The Administrator as well as the State Government dismissed the representation and appeal by the appellant. So the appellant filed a writ petition in the High Court which also dismissed with the observation that the appellant be given a choice to reduce the construction upto permissible limit by any alternative proposal within the four corners of the rules and regulations within one month from 28th October 1985 the Municipality may consider. The appellant made application to the Municipal Corporation giving several alternative proposals on 21st November 1985. But it also preferred a special leave petition before this court against the High Court Judgment. The special leave petition leave petition was dismissed on January 17, 1986. The appellants alleged that they submitted another proposal to the Municipal Corporation on 17th February, 1986 and a meeting for hearing alternative proposals was fixed up by the Municipal commissioner and put forward its case in support of the new proposals and the Municipal Commissioner said he would consider the proposals and take decision. On 27th December 1988 the appellant wrote a letter to the Municipal Commissioner to consider the alternative proposal i.e. of 746 vertical demolition of the building instead of demolishing the eight upper floors. In January, 1989 the officers of the corporation agreed that demolition can be made vertically so as to bring the entire construction within the permissible Floor Space Index where as the work of demolition of upper eight floors of the building were entrusted to a company by the Municipal Commissioner. So the appellant again filed a writ in the High Court. It was dismissed by the Single Judge as well as by the Division Bench dated 5th March, 1990. The appellants came by Special Leave Petition in this Court; The main grievance of the appellant being that vertical demolition proposal was not considered. Inspite of orders of this Court in this regard to the Municipal Corporation no agreeable solution could fructify. The proposal was examined by the Municipal Commissioner but rejected on 13th November, 1990 and submitted the detailed report to this Court. Dismissing the petition the Court HELD: The appellant had made illegal constructions in violation of Floor Space Index to the extent of more than 24000 sq. The decision taken by the Municipal Commissioner does not suffer from any want of jurisdiction nor is violative of any law or rules. It is well settled that the High Court under Article 226 of the Constitution is not an appellate Court on the administrative decision taken by the authorities. Since the tendency of raising unlawful constructions and unauthorised encroachments is increasing in the entire country and such activities are required to be dealt with by firm hands. Such unlawful constructions are against public interest and hazardous to the safety of occupiers and residents of the multistoreyed buildings. [749F, 750B, E F] This case should be a pointer to all the builders that making of unauthorised construction never pays and is against the interest of the society at large. The rules, regulations and by laws are made by the corporations or development authorities taking in view the larger public interest of the society and it is the bounden duty of the citizens of obey and follow such rules which are made for their own benefits. [750H 715B]

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eview Petition No. 16 of 1960. 519 Petition for Review of this court 's Judgment and order dated April 26, 1960, in Civil Appeal No. 64 of 1956. A. V. Viswanatha Sastri, R. Ganapathy Iyer and Gopalkrishnan, for the petitioners. K. N. Rajagopala Sastri, and P. D. Menon, for respondent. November 23. Das, J., delivered his own Judgment. The Judgment of Kapur and Hidayatullah, JJ. was delivered by Hidayatullah, J. section K. DAS, J. I had taken a view different from that of my learned brethren when this appeal was heard along with Pringle Industries Ltd., Secunderabad vs The Commissioner of Income tax, Hyderabad (1), and that view was expressed in a very short judgment dated April 26, 1960. Now, we have had the advantage of hearing a very full argument with regard to the facts of the appeal, and I for myself have had the further advantage and privilege of reading the judgment which my learned brother Hidayatullah, J., is proposing to deliver in this appeal. I have very carefully considered the question again with reference to the facts relating thereto and, much to my regret, have come to the conclusion that I must adhere to the opinion which I expressed earlier. My view is that the facts of this case are indistinguishable from the facts on which the decision of the Privy Council in Mohanlal Hargovind vs Commissioner of Income tax, C.P. and Berar(2) was rendered, and on the principles laid down by this court in Assam Bengal cement Co., Ltd. vs The Commissioner of Income tax, West Bengal (3), it must be held that the expenditure of Rs. 6111/ in this case was on revenue account and the respondent firm was entitled to the allowance which it claimed. 520 The short facts are these. The respondent firm carried on a business in the purchase and sale of conch shells (called chanks). It used to acquire the stock of conch shells (1)by purchase from the Fisheries purchase from the Fisheries Department of the Government of Madras and (3) by fishing for and gathering such shells from the sea. It disposed of the stock so acquired at Calcutta, the different between the cost price and selling price less expenses being its profit made in business. On November 9 1945 it took on lease from the Director of Industries and Commerce, Madras, the exclusive right. liberty and authority to fish for, take and carry away "chank" shells in the sea off the coast line of the South Arcot District including the French Kuppama of Pondicherry. The boundary of the area within which the right could be exercised was given in a schedule to the lease. The lease was for a period of three years from July 1, 1944 to June 30 1947 on a consideration of an yearly rent of section 6111/ to be paid in advance. Clause 3 of the lease contained the material terms there of and may be set out in full. The lesser hereby convenants with the lesson as follows: (i) To pay the rent on the day and in manner aforesaid. (ii) To deliver to the Assistant Director of Pearl and Chank Fisheries, Tuticorn all Velampuri shells that may be obtained by the lessee upon payment of their value as determined by the Assistant Director. (iii) To collect chanks caught in nets and by means of diving as well. In the process of such collection of shells not to fish chank shells less than 2/1/4 inches in diameter and if any chank shells less than 2/1/4 inches in 521 diameter be brought inadvertently to shore, to return at once alive to the sea all such undersized shells. (iv) Not at any time hereafter to transfer or underlet or part with possession of this grant or the rights and privileges hereby granted or any part thereof without the written consent of the lessor. (v) At the end or sooner determination of the term hereby created peaceably and quietly to yield to the lesson the rights and privileges hereby granted, and (vi) To report to the Assistant Director of Pearl and Chank Fisheries (South), Tuticorn the actual number of shells kept unsold in different stations after the expiry of the lease period. For the assessment year 1946 47, the respondent firm submitted a return of its income to the Income tax Officer, Karaikudi Circle, showing its income from sale of chanks purchased from divers at Rs. 7194/ by sale of chanks purchased from Government Department at Rs. 23, 588/ and Rs. 2819/ by sale of chanks gathered by themselves (through divers) after deducting Rs. 6111/ being the rent paid to Government under the contract referred to above. It sought to deduct Rs. 6111/ from its profits from business on the ground that this was an expenditure not of a capital nature but wholly and exclusively laid out for the purpose of business under section 10(2)(xv) of the Income tax Act. This claim was disallowed by the Income tax Officer and on appeal by the Appellate Assistant Commissioner. On further appeal to the Appellate Tribunal the respondent firm contended that the 522 decision of the Privy Council in Mohanlal Hargovind vs Commissioner of Income tax(1)applied to this case inasmuch as the payment was to secure the stockin trade for its business. The Appellate Tribunal was of the opinion that the Privy Council decision covered the case, but felt itself bound by the decision of the Full Bench of the Madras High Court in K. T. M. T. M. Abdul Kayum Hussain Sahib vs Commissioner of Income tax, Madras (2). The Tribunal acceded to the demand for a reference to the High Court, and accordingly referred the following question to the High Court for its decision. "Whether on the facts and circumstances of the case the payment of the sum of Rs. 6111/ made by the assessee under the terms of the agreement entered into with the Director of Industries and Commerce, Madras on 9th November, 1945 was not an item of revenue expenditure incurred in the course of carrying on the business of the assessee and, therefore, allowable under the provisions of section 10 of the Indian Income tax Act?" The reference first came before a Division Bench and was then referred to a Full Bench. By its judgment dated April 2, 1953 the Full Bench answered the question in favour of the respondent firm. On a certificate of fitness granted by the High Court the Commissioner of Income tax, Madras, brought the present appeal to this Court. In Assam Bengal Cement Co., Ltd. vs The Commissioner of Income tax (3), this Court referred to the decision in Benarsidas Jagannath. In re.(4) and accepted the following broad principles for the purpose of discriminating between a capital and a revenue expenditure. 523 (1) The outlay is deemed to be capital when it is made for the initiation of a business, for extension of a business, or for a substantial replacement of equipment [See Commissioners of Inland Revenue vs Granite City Steamship Company Ltd.(1)]. Such expenditure is regarded as on capital account, for it is incurred not in earning profits but in setting the profit earning machinery in motion. In my opinion this test does not apply in the present case where no profit earning machinery was set in motion. (2) Expenditure may be treated as properly attributable to capital when it is made not only once and for all, but with a view to bringing into existence an asset or an advantage for the enduring benefit of a trade. [See Atherton vs British Insulated and Helsby Cables Ltd. (2)]. In elucidation of this principle it has been laid down in several decisions that by "enduring" is meant "enduring in the way that fixed capital endures" and it does not connote a benefit that endures in the sense that for a good number of years it relieves the assessee of a revenue payment. In Robert Addie & Sons Collieries Ltd. vs Commissioners of Inland Revenue (3) Lord Clyde formulated the same test in these words: "What is 'money wholly and exclusively laid out for the purposes of the trade ' in a question which must be determined upon the principles of ordinary commercial trading. It is necessary accordingly to attend to the true nature of the expenditure, and to ask one 's self the question, is it a part of the Company 's working expenses? is it expenditure laid out as part of the process of profit earning? or, on the other hand, is it a capital outlay? is it expenditure necessary for the acquisition of property or of rights of a permanent character, 524 the possession of which is a condition of carryin on its trade at all?" This test was adverted to by the Privy Council in Tata Hydro Electric Agencies Ltd. vs Commissioner of Income tax(1).In my opinion the application of this test makes it at once clear that the sum of Rs. 6111/ which the respondent firm spent was expenditure laid out as part of the process of profit earning; it was not a capital outlay, that is, expenditure necessary for the acquisition of property or of rights of a permanent character, the possession of which was a condition of carrying on its trade. Under the contract in question the respondent firm did not acquire any right to immovable property. It acquired no right in the bed of the sea or in the sea. The only right conferred on the respondent firm was the right to fish for, gather and carry away conch shells (in motion under the surface of the sea) of a specified type and size. The respondent firm was under an obligation to return to the sea conch shells less than 2 1/2 inches in diameter. The business of the respondent firm consisted in buying and selling conch shells. No manufacturing process was involved in it. Therefore, the stock in trade of the respondent firm was conch shells. It secured this stock in trade in many different ways, by purchase from divers, by purchase from Government and private parties, and also by gathering conch shells under the contract in question. In my opinion, the contract into which the respondent firm entered was merely for securing its stock in trade. It is indeed true that in considering whether an item of expenditure is of a capital or a revenue nature, one must consider the nature of the concern, the ordinary course of business usually adopted in that concern, and the object with which the expense is incurred. The true nature of the transaction must be collected from the entire 525 document with reference to all the relevant facts and circumstances. Having regard to the nature of the respondent firm 's business and the course adopted by it for carrying it on, it appears to me to be rather far fetched to hold that by the contract in question the respondent firm acquired property or right of a permanent character, the possession of which was a condition of carrying on its trade. To me it seems that the better view, in a business sense, is that the respondent firm merely acquired by means of the contract its stock in trade, rather than a source or enduring asset for producing the stock in trade. It was argued before us, as it was argued in the High Court, that what was acquired in the present case was the means of obtaining the stock in trade for the business rather than the stock in trade itself. I am unable to accept this argument as correct. The contract entered into by the respondent firm was wholly and exclusively for the purpose of obtaining conch shells, which were its stock in trade. As I have stated earlier, the contract granted no interest in the sea, sea bed, or sea water etc. It was simply a contract giving the grantee the right to pick and carry away conch shells of a specified type and size which of course implied the right to appropriate them as its own property. In my opinion, in a case of this nature no distinction can be drawn in a business sense between the right of picking and carrying away conch shells and the actual buying of them. It is not unusual for businessmen to secure, by means of a contract, a supply of raw materials or of goods which form their stock in trade, extending over several years for the payment of a lump sum down. Even if the conch shells were stored in a godown and the respondent firm was given a right to go and fetch them and so reduce them into its ownership, it could scarcely have been 526 suggested that the price paid was capital expenditure. I may explain what I have in mind by giving a simple illustration. Take the case of a fisher may who sells fish. Fish is his stock in trade. He man buy the fish he requires from other persons; or he may obtain the supply of fish he requires by catching the fish of a specified size and type in particular water over a short period under a contract entered into by him and take them away. I do not think that in a business sense any distinction can be made between the two means of obtaining the stock in trade. Both really amount to securing the stock in trade rather than acquiring an enduring asset or a permanent right for producing the stock in trade. And a business man, like the fisher man in the illustration given above, would indeed be surprised to learn that buying of fish for his business is revenue expenditure whereas catching fish in particular water under a contract entered into by him for the purpose of obtaining his stock in trade on payment of a lump sum down, is capital expenditure. (3) The test whether for the purpose of the expenditure, any capital was withdrawn, or, in other words, whether the object of incurring the expenditure was to employ what was taken in as capital of the business does not arise in the present case and need not be considered. No different principles were laid down by my learned brethren in their decision in Pringle Industries Ltd. vs Commissioner of Income tax(1) and so far as that case is concerned, their decision must hold the field. The difficulty and difference of opinion that arise now relate to the application of those principles to the facts of the present case. One is reminded in this case of what Lord Macmillan said in Tata Hydro Electric Agencies Ltd. vs Commissioner of Income tax(2) at page 209: 527 "Their Lordships recognise and the decided cases show how difficult it is to discriminate between expenditure which is and expenditure which is not, incurred solely for the purpose of earning profits or gains. " Lord Greene (Master of the Rolls) expressed himself more strongly and adverting to the distinction between capital and income, said: "There have been many cases where this matter of capital or income has been debated. There have been many cases which fall upon the borderline: indeed, in many cases it is almost true to say that the spin of a coin would decide the matter almost as satisfactorily as an attempt to find reasons." [Vide Commissioners of Inland Revenue vs British Salmson Aero Engines Ltd.(1)]. Perhaps, the case before us is not as bad as the cases which the Master of the Rolls had in mind when he made the above observations. It is, however, a truism that each case must turn upon its own facts. Nevertheless the decisions are useful as illustrations of some relevant general principles. The nearest illustration that we can get is the decision of the Privy Council in Mohanlal Hargovind vs Commissioner of Income tax(2). That decision was binding on the Indian Courts at the time when it was given and as I think that it is still good law and is indistinguishable from the present case, I offer no apology for referring to it in great detail. The facts of that case were these. The assessees there carried on a business at several places as manufacturers and vendors of country made cigarettes known as bidis. These cigarettes were composed of tobacoo rolled in leaves of a tree known as tendu leaves, which were obtained by the assessees by entering into a number of 528 short term contracts with the Government and other owners of forests. Under the contracts, in consideration of a certain sum payable by instalments, the assessees were granted the exclusive right to pick and carry away the tendu leaves from the forest area described. The assesees were allowed to coppice small tendu plants a few months in advance to obtain good leaves and to pollard tendu trees a few months in advance to obtain better and bigger leaves. The picking of the leaves however had to start at once or practically at once and to proceed continuously. On these essential facts, the Privy Council held that the contracts were entered into by the assessees wholly and exclusively for the purpose of supplying themselves with one of the raw materials of their business, that they granted no interest in land, or in the trees or plants, that under them it was the tendu leaves and nothing but the tendu leaves that were acquired, that the right to pick the leaves or to go on to the land for the purpose was merely ancillary to the real purpose of the contracts and if not expressed would be implied by law in the sale of a growing crop, and that therefore the expenditure incurred in acquiring the raw material was in a business sense an expenditure on revenue account and not on capital, just as much as if the tendu leaves had been bought in a shop. I can find no distinction which would make any difference between the facts of that case and the facts of the present case. Let me compare the essential facts of these two cases and see whether there is any difference. (1) Two of the contracts were taken as typical of the rest by the Privy Council. One contract was for the period from September 5, 1939 to June 30, 1941 and the other was for the period from October 1, 1938 to June 30, 1941. Thus one of the contracts was for a period of about two years and the other contract for a period of about three years. 529 In the case under our consideration the period of the contract is three years. Indeed, there is no vital difference between the periods in the two cases. (2) In the case before us the contract area is described in a schedule. In the two contracts which were under consideration by the Privy Council the contract area was also indicated in a schedule. The boundaries of the forests in which tendu leaves could be plucked were delimited by the schedule. Same is the case with the contract before us. The contract area in which conch shells of a specified type and size can be picked and gathered is described in a schedule. Such description does not mean that the assessee gets any right other than the right to gather conch shells. In the Privy Council case the assessees were granted no interest in land or in the trees or plants; it was the tendu leaves and nothing but the tendu leaves that were acquired. In the case before us no interest was given in the sea bed or in the sea water or in any of the products thereof. Conch shells of a specified type and size and nothing but such conch shells were acquired by the contract. I do not think that the reference to the coast line off the South Arcot District makes any difference between the present case and the case on which the decision in Mohanlal Hargovind vs Commissioner of Income tax (1) was rendered. If in the matter of plucking of tendu leaves the expenditure under the contract was, in a business sense, expenditure on revenue account, I fail to see why a similar expenditure for gathering conch shells in motion under the surface of the sea near the coast line should not, in a business sense, be considered as expenditure on revenue account. This aspect of the case was emphasised by their Lordships in the following paragraph: 530 "It appears to their Lordships that there has been some misapprehension as to the true nature of these agreements and they wish to state at once what in their opinion is and what is not the effect of them. They are merely examples of many similar contracts entered into by the appellants wholly and exclusively for the purpose of their business, that purpose being to supply themselves with one of the raw materials of that business. 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 a appropriate them as their own property. " In the case under our consideration the only right granted to the respondent firm was to take and carry away conch shells of a specified type and size, which of course, implies the right to appropriate them as the respondent firm 's own property. The right to go into the sea and cast nets etc. was merely ancillary to the real purpose of the contract. Nor do I think that the circumstance that the contracts conferred an exclusive privilege or right is a matter of any significance. In Mohanlal Hargovind vs Commissioner of Income tax (1) the contracts were exclusive and their Lordships stated: "It is true that the rights under the contracts are exclusive but in such a case as this that is a matter which appears to their Lordships to be of no significance. These observations are as apt in their application to the present case as they were in the case before their Lordships of the Privy Council. (3) The Privy Council draw a distinction between cases relating to the purchase or leasing of 531 mines, quarries, deposits of brick earth, land with standing timber etc. On one side and the case under its consideration on the other. It referred to the decision in Alianza Co. vs Bell(1) and said: ". the present case resembles much more closely the case described and distinguished by Channell, J. at page 673 of the report in Alianza Co. vs Bell of the cost of material worked up in a manufactory. That side the learned Judge, is a current expenditure and does not become `a capital expenditure merely because the material is provided by something like a forward contract, under which a person for the payment of a lump sum down secures a supply of the raw material for a period extending over several years '. " In Kauri Timber Co. Ltd. vs Commissioner of Taxes(2) the company 's business consisted in cutting and disposing of timber. It acquired in some cases timber bearing lands, in other cases it purchased the standing timber. The leases were for 99 years. So far as the cases where the land was acquired were concerned there could have been no doubt that the expenditure made in acquiring it was capital expenditure. In the case of the purchase of the standing timber what was acquired was an interest in land. The purchasers bought the trees which they could allow to remain standing as long as they liked. It was pointed out that so long as the timber at the option of the company remained upon the soil, it derived its sustenance and nutriment from it. The additional growths became ipso jure the property of the company. In these circumstances it was held that the expenditure was capital expenditure. In the case before us some reliance was placed by the appellant on the term that shells less than 2 1/4 inches in diameter brought inadvertently to shore had to be returned at once alive to the sea. 532 The argument was that such shells might later grow in size by receiving sustenance and nutriment from sea water and could be later gathered by the respondent firm when they reached the size of 2 1/4 inches in diameter or more. This, it was argued, brought the present case nearer the decision in Kauri Timber case (1). I am unable to agree. It is to be remembered that live shells move under the surface of the sea and they do not remain at the same place, as trees do. A shell less than 2 1/4 inches in diameter returned alive to the sea may move away from the contract area and may never be gathered by the respondent firm. In these circumstances the appellant is not entitled to call to his aid the test of "further vegetation" or "sustenance and nutriment" referred to in the Kauri Timber case (1). From whatever point of view we may look at the case, it seems to me that the facts of the present case are indistinguishable from those of the case in Mohanlal Hargovind vs Commissioner of Income tax(2) In Mohanlal Hargovind 's case (2) the right was to pluck tendu leaves; in our case the right was to gather conch shells of specified type and size. This distinction, it is obvious, makes no difference. In the High Court it was contended on behalf of the appellant that Mohanlal Hargovind 's case (2) related to the acquisition of raw materials whereas the present case relates to the acquisition of "chanks" by a dealer who sells them without subjecting them to any manufacturing process, and this distinction, it was contended, made the decision in Mohanlal Hargovind 's case (2) inapplicable to the present case. The High Court rejected this contention and in my opinion rightly. I agree with the High Court that on principle and in a business sense, there is no distinction between acquiring raw materials for a manufacturing business and acquiring or purchasing goods by a dealer for the purpose of sale, particularly when there is no question of any excavation 533 etc., in order to win the goods and make such goods parts of the stock in trade, a point which weighed with the Court of Appeal in Stow Bardolph Cravel Co. Ltd. vs Poole (1) and with my learned brethren in Pingle Industries Ltd. V. Commissioner of Income tax (2). No such point is present in this case. I have been unable to find any other distinction between the two cases which would make a difference in the application of the principles for discriminating between capital expenditure and revenue expenditure. To adopt again the language of Lord Green, I see no ground in principle or reason for differentiating the present case from the case in Mohanlal Hargovind vs Commissioner of Income tax (3). On behalf of the respondent firm a further question was agitated, namely, whether an allowance for the cost of gathering the conch shells by nets etc., should not be given, even though the rent paid under the contract was not allowable, under section 10 (2) (xv) of the Income tax Act and a reference was made in this connection to the decision in Hood Barrs vs Commissioners of Inland Revenue (4). I do not think that we are concerned with that matter in the present appeal. The only question which arises for decision is the one referred to the High Court. I have held that the High Court correctly answered the question which related to the payment of the sum of Rs. 6111/ only. The question having been correctly answered by the High Court, the appeal fails and must be dismissed with cost. HIDAYATULLAH, J. This appeal was heard with Pingle Industries, Ltd., Secunderabad vs The Commissioner of Income tax (5), in which judgment was delivered by us on April 26 1960. In accordance with the decision in Pingle Industries case (1), 534 this appeal was allowed. Later, a review petition of (No. 16 of 1960) was filed on the ground that this appeal was not governed by the decision in Pingle Industries case (1), and that as it was not fully argued, it should be reheard. It is unnecessary to go into the reasons why the rehearing was granted, except to say that there was perhaps a misunderstanding about the concessions made by counsel. We were, therefore, satisfied that we should grant the rehearing, and have since heard full arguments in this appeal. K. T. M. T. M. Abdul Kayoom and Hussain Sahib (respondent) is a registered firm, and carries on business in conch shells locally known as "chanks", which are found on the bed of the sea all along the coast line abutting on the South Arcot District. The respondent took on lease from the Director of Industries and Commerce, Madras "the exclusive right, liberty and authority to take and carry away all chanks founnd in the sea" for a period of three years ending on June 30, 1947. The consideration was Rs. 6, 111/ per year payable in advance. For the year of assessment, 1946 47 (the year of account ending June 30, 1945) the respondent in showing its profits from business sought to deduct Rs. 6,111/ on the ground that this was an expenditure not of a capital nature but wholly and exclusively laid out for the purpose of business under section 10 (2) (XV) of the Income tax Act. This claim was disallowed by the Income tax Officer, and on appeal, by the Appellate Assistant Commissioner. On further appeal to the Appellate Tribunal, the respondent contended that the ruling of the Privy Council in Mohanlal Hargovind 's case (2) applied to the case, inasmuch as the payment was to secure the stock in trade for its business. The Appellate Tribunal, though it was of opinion that the Privy Council case applied, felt itself bound by the earlier Full Bench decision of the Madras High 535 Court in K.T.M.T.M. Abdul Kayoom Hussain Sahib vs Commissioner of Income tax, Madras (1) relating to this respondent, and dismissed the appeal. The Tribunal, however, acceded to a demand for a case, and referred the following question to the High Court for its decision : "Whether on the facts and circumstances of the case the payment of the sum of Rs. 6,111 made by the assessee under the terms of the agreement entered into with the Director of Industries and Commerce, Madras, on 9th November 1945 was not an item of revenue expenditure incurred in the course of carrying on the business of the assessee and, "therefore, allowable under the provisions of section 10 of the Indian Income tax Act". The reference went before a Divisional Bench, which referred the case for decision of a Full Bench. The Full Bench held that the case was covered by the Privy Council case above referred to, observing: "In our opinion, the facts in the case before the Judicial Committee are indistinguishable from the facts of the present case. In one case, the leaves had to be picked from trees by going upon the land, while in the other case the chanks had to be collected and gathered by dividing into the sea. It is impossible to construe the documents in the present case as conferring any interest in that portion of the sea from which the exclusive right of winning the chanks was conferred upon the assessee. " The High Court also did not see any difference between raw materials acquired for a manufacturing business and the acquisition of chanks in the present case, and held that the chanks were acquired as the stock in trade of the respondent and the transaction was tantamount to purchase of goods, 536 The High Court, however, certified the case as fit for appeal, and the Commissioner of Income tax has filed this appeal. The material terms of the agreement in the case are as follows : "1. The lessor hereby grants unto the lessees the full free and exclusive right, liberty and authority to fish or take and carry away all chank shells in the sea off the coast line of the South Arcot District including the French Kuppams of Pondicherry more particularly described in the schedule hereto to hold the premises to the lessees from the first day of July 1944 for a period of three years ending 30th June 1947 paying therefor the yearly rent of Rs. 6, 111 (rupees six thousand one hundred and eleven only) to be paid yearly in advance, the first payment to be made within fifteen days from the date of intimation of acceptance and the second and third payments to be made on or before the 15th June 1945 and 1946, respectively at the Government Treasury at Tuticorin or Madras. x x x 3. The lossee hereby covenants with the lessor as follows : x x x (ii) To deliver to the Assistant Director of Pearl and Chank Fisheries, Tuticorin all Velampuri shells that may be obtained by the lessees upon payment of their value as determined by the Assistant Director. (iii) To collect Chanks in nets and by means of diving as well. In the process of such collection of shell not to fish chank shells less than 2 1/4 inches in diameter if any chank shells less than 2 1/4 inches in diameter 537 be brought inadvertently to shore, to return at once alive to the sea all such undersized shells. (iv) Not at any time hereafter to transfer or underlet or part with possession of this grant or the rights and privileges hereby granted or any part thereof without the written consent of the lessor. x x x (vi) To report to the Assistant Director of Pearl and Chank Fisheries (South), Tuticorin the actual number of shells kept unsold in different stations after the expiry of the lease period. " An analysis of the agreement shows that the respondent obtained an exclusive right to fish for "chanks" by the method of diving and nets and to appropriate them except those below 2 inches in diameter, which had to be returned alive to the sea and Velampuri shells which had to be sold compulsorily to Government. The respondent had also to report to its lessors at the end of the term, the number of shells not sold. The right was exclusive, but was not capable of being transferred or underlet, and it was for a fairly long period. The coast line involved was also fairly long. There is no doubt that the payment of Rs. 6,111/ was an expenditure wholly and exclusively for the purpose of the business of selling shells, just as the payment to the divers and other sundry expenses were. But an expenditure for the purpose of the business may be of a capital nature, and if it is so, it cannot be claimed as a deduction. The question is whether this payment was of a capital nature. What is attributable to capital and what, to revenue has led to a long string of cases here and 538 in the English Courts. The decisions of this Court reported in Assam Bengal Cement Co., Ltd. vs Commissioner of Income tax and Pingle Industries case (1) have considered all the leading cases, and have also indicated the tests, which are usually applied in such cases. It is not necessary for us to cover the same ground again. Further, none of the tests is either exhaustive or universal. Each case depends on its own facts, and a close similarity between one case and another is not enough, because even a single significant detail may alter the entire aspect. In deciding such cases, one should avoid the temptation to decide cases (as said by Cordozo * by matching the colour of one case against the colour of another. To decide, therefore, on which side of the line a case falls, its broad resemblance to another case is not at all decisive. What is decisive is the nature of the business, the nature of the expenditure, the nature of the light acquired, and their relation inter se, and this is the only key to resolve the issue in the light of the general principles, which are followed in such cases. A trader may spend money to acquire his raw materials, or his stock in trade, and the payment may often be on revenue account but not necessarily. A person selling goods by retail may be said to be acquiring his stock in trade when he buys such goods from a wholesaler. But the same cannot be said of another retailer who buys a monopoly right over a long period from a producer of those goods. The amount, he pays to secure the monopoly, through a part of the expenditure to secure his stock in trade is not of the same character as the price he pays in the first illustration. By that payment, he secures an enduring advantage and an asset which is a capital asset of his business. In the same way, if a manufacturer buys his raw materials he makes a revenue expenditure, but when he acquires a source from which he would derive his 539 raw materials for the enduring benefit of his business, he spends on the capital side. Thus, a manufacturer of wollen goods buys his wool buys his raw materials, but when he buys a sheep farm, he buys a capital asset. There is then no difference between purchase of a factory and the purchase of the sheep farm, because both are capital asset of enduring nature. The respondent in this case has tried to distinguish Pingle Industries case (1) and to bring its case within the ruling of the Privy Council in Mohanlal Hargovind 's case (2). When the former case was argued, the attempt was to bring it also within the rule of the Privy Council, but now, the differences between the two cases are recognised and Pingle Industries case (1) is said to be entirely different. In deciding the present appeal, it is hardly necessary to do more than analyses once again the facts and circumstances of these two cases to show why those two cases were differently decided, and the present case will then be easily disposed of, not on its similarity to another but on its own facts. We shall begin with the Privy Council. Mohanlal Hargovind and Co., was a firm of bidi manufacturers, which needs tendu leaves in which tobacco is wrapped to make bidis. Tendu leaves were thus the raw material of the business. Tendu leaves can be bought from dealers who sell tendu leaves in a large way. Now, what did the firm do ? It took leaves of forests with a right to pick the leaves. This right carried with it the right to coppice small tendu plants and to pollard the tendu trees. There was, however, no right in the trees or the land and the right to go over the land was merely ancillary. Looked at from the point of view of business, there was no more than a purchase of the leaves, and the leaves were needed as raw materials of the business. In deciding the case, the Judicial Committee discounted the right to 540 coppice small tendu plants and to pollard the tendu trees as a very insignificant right of cultivation necessary to improve the quality of the leaves, but which right ranked no higher than the right to spray a fruit tree. The right of entry upon the land was also considered ancillary to the main purpose of the contract, which was acquisition of tendu leaves and tendu leaves alone, and it was observed that even if this right of going on the land and plucking the leaves was not expressed in the contract, it would have been implied by law. Their Lordships then observed that the High Court diverted its view from these points, and attached too much importance to cases decided upon quite different facts. They then observed that "cases relating to the purchase or leasing of mines, quarries, deposits of brick earth, land with standing timber. " were of no assistance, and concluded: "If the tendu leaves had been stored in a merchant 's godown and the appellants had bought the right to go and fetch them and so reduce them into their possession and ownership it could scarcely have been suggested that the purchase price was capital expenditure. Their Lordships see no ground in principle or reason for differentiating the present case from that supposed." (p. 478) That case thus involved no right in land or trees; the licence to be on the land was merely an accessory right; the right of cultivation was insignificant. The term was short, and the collection of leaves was seasonal. Leaves once collected, the operation pro tempore was over till the fresh crop came. There was thus no acquisition of an enduring asset in the way capital endures; it was more a purchase of crops of two or three successive years shewered on an agreement to ensure the supply of raw materials, 541 Contrast this with the facts of Pingle Industries case (1). The business of the assessee there, was selling stone slabe called flag stones. These stones were first won from the quarries and then dressed and shaped and then sold. Now, what did the assessee do ? It took leases of stone quarries in a large number of villages for twelve years. Primarily, this was done to obtain stones for its business. It could have been a contract by which it would have been entitled to so many cubic feet of stones to be extracted in a particular period. It took long term leases of vast areas in several villages to ensure supplies for a considerable time. The leases were not limited by quantity, nor did they refer to any stones in particular. It could take all or it could take none; but it could not have carried away all the stones, if the supply outran its efforts. The stones were embedded in earth, layer upon layer, and had to be systematically extracted. Till the stones at the top were removed, it could not remove those at the bottom, and there were still more layers further below. In there circumstances, no specific quantity having been bought or sold either expressly or impliedly, the stones being immovable property or a part thereof and the contract being long teem contracts, Mohahlal Rargovind 's case (2) was held inapplicable, and it was held that the assessee in Pingle Industries case (1) had acquired an enduring asset and the expenditure was on capital account. These cases between them show adequately the dividing line, which exists between capital expenditure and revenue expenditure. To determine on which side of the line the particular expenditure falls, one may often put himself the question posed by Lord Clyde in Robert Addie and Sons Collieries Ltd. vs Commissioners Inland Revenue (3) 542 "It it part of the Company 's working expenses, is it expenditure laid out as part of the process of profit earning ? or, on the other hand, is it capital outlay, is it expenditure necessary for the acquisition of property or of rights of a permanent character, the possession of which is a condition of carrying on its trade at all?" The same question was again posed by the Judicial Committee in Tata Hydro Electric Agencies, Ltd. vs Commissioner of Income tax (1). The answer to this question in each of the two case of Mohanlal Hargovind (2) and Pingle Industries (3) is entirely different. The difference can be noticed easily, if we were to read here what Channell, J. said in Alianza Co. Ltd. vs Bell (4): "In the ordinary case, the cost of the material worked up in a manufactory is not a capital expenditure, it is a current expenditure and does not become a capital expenditure merely because the material is provided by something like a forward contract, under which a person for the payment of a lump sum secures a supply of the raw material for a period extending over several years. .If it is merely a manufacturing business, then the procuring of the raw material would not be a capital expenditure. But if it is like the working of a particular mine, or bed of brick earth and converting the stuff into a marketable commodity, then, the money paid for the prime cost of the stuff so dealt with is just as much capital the money sunk in machinery or buildings. " The first part of the observation is applicable to Mohanlal Hargovind 's case (2) and the latter part, to Pingle Industries case (3). What is said of a manufacturing concern is equally applicable to a non manufacturing business. It is the quality of the payment taken with what is obtained, that is decisive of the character of the payment. 543 We may now pass on to the facts of the case before us. The respondent carried on the business of selling chanks. It obtained its supplies from divers, from whom it purchased the chanks, and having got them, perhaps cheap, it resold them at a profit. This is one mode in which it carried on its business. In this business, it was directly buying its stock in trade for resale. The other method was to acquire exclusive right to fish for chanks by employing divers and nets. The business then changed to something different. The sale was now of the product of another business, in which divers and equipment were first employed to get the shells. It thus took leases of extensive coastline with all the right to fish for chanks for some years. The shells were not the subject of the bargain at all, as were the tendu leaves; but the bargain was about the right to fisht. There can be no doubt that what it paid the divers when it bought chanks from them with the view of reselling them was expenditure laid out wholly and exclusively for the purpose of its business, which was not of a capital nature. That business was buying goods and reselling them at a profit. But a different kind of business was involved when it went in for fishing for chanks. To be able to fish for chanks in reserved waters it had to obtain the right first. It, therefore took lease of that right. To Mohanlal Hargovind, the leaves were raw materials, and that firm preferred to buy a number of crops over years rather than buy them as it went along. Hence the remark that the leaves were bought, as if they were in a shop. Under the lease which the respondent obtained, it had a right to take only chanks of particular dimensions and shape, but it had to fish for them and obtain them first. The rest of the chanks were not its property. The smaller chanks had to be returned alive to the sea, and Velampuri chanks had to be compulsorily sold to the state. Of Course, the smaller chanks put back into the sea 544 would grow, and if fished later, be its property to take, but till they grow, it had not claim. The chanks were on the bed of the sea. Their exact existence was not known, till the divers found them, or they got netted. Chanks which were there one day might have been washed back into the deep sea, and might never be washed back into a place where they would be within reach. Similarly, other chanks not there one day might come within reach on another day. All these matters make the case entirely different from the case of a purchase from the divers. In obtaining the lease, the respondent obtained a speculative right to fish for chanks which it hoped to obtain and which might be in large quantities or small, according to its luck. The respondent changed the nature of its business to fishing for chanks instead of buying them. To be able to fish, it had to arrange for an area to fish, and that arrangement had to be of some duration to be effective. This is not a case of so much clay or so much salt petre or a dump of tailings or leaves on the trees in a forest. The two modes in which the respondent did the business furnish adequate distinguishing characteristics. Here is an agreement to reserve a source, where the respondent hoped to find shells which, when found, became its stock in trade but which, insitu, were no more the firm 's than a shell in the deepest part of the ocean beyond the reach of its divers and nets. The expenses of fishing shells were its current expenses as also the expenses incurred over the purchase of shells from the divers. But to say that the payment of lease money for reserving an exclusive right to fish for chanks was on a par with payments of the other character is to err. It was possible to say of the former, as it was possible to say of the tendu leaves in Mohanlal Hargovind 's case (1), that the chanks were bought because the money paid was the price of the chanks. But it would be a straining of the imagination to say that the amount paid 545 for reserving the coastline for future fishing was the price of chanks, with which the respondent did its business. That amount was paid to obtain an enduring asset in the shape of an exclusive right to fish, and the payment was not related to the chanks, which it might or might not have brought to the surface in this speculative business. The rights were not trasferable, but if they were and the firm had sold them, the gain, if any, would have been on the capital side and not a realising of the chanks as stock in trade, because none had been bought by the firm, and none would have been sold by it. In our opinion, the decision of the High Court, with all due respect, was, therefore, erroneous, and the earlier decision of the Full Bench of the same High Court was right in the circumstances of the case. In the result, the appeal is allowed; but there will be no order about cost. BY COURT. In accordance with the majority judgment of the Court, the appeal is allowed, but there will be no order about costs.

The assessee firm carried on the business in purchase and sale of conch shells. It obtained a lease for 3 years for gathering specified types of shells from the sea along the coastline abutting on the South Arcot District. It sought to deduct the amount paid as lease money from its profits from business on the ground that this was an expenditure not of a capital nature but wholly and exclusively laid out for the purpose of business. under section 10(2)(xy) of the Income Tax Act. ^ Held, (per kapur and Hidayatullah, JJ., Das, J. dissenting) that the expenditure was capital expenditure and could not be deducted from the profits. The business of the assessee was buying and selling shells but when it took the lease it went in for a new speculative business of fishing for shells. The amount paid for reserving the vast coastline for future fishing was not price paid for obtaining the stock in trade i.e. shells with which assessee did his business. The amount was paid to obtain an enduring asset in the shape of an exclusive right to fish and the payment was not related to the shells. Mohanlal Hargovind vs Commissioner of Income tax, C. P. & Berar, , distinguished Pringle Industries Ltd., Secunderabad vs Commissioner of Income tax, Hyderabad, [1960] 3 section C. R. 681, applied. Per Das, J. The expenditure was not capital expenditure and was deductible from the profits. It was not an expenditure for the acquisition of property or of rights of a permanent character, the possession of which was necessary for carrying on of the assessee 's trade By this lease the assessee acquired its stocks in trade rather than a source or enduring asset for producing the stock in trade. Mohanlal Hargovind vs Commissioner of Income tax, C. P. & Berar , applied. Pringle Industries Ltd., Secunderabad vs Commissioner of Income tax, Hyderabad, , distinguished.

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Civil Appeal No. 2329 of 1977. Appeal by Special Leave from the Judgment and Order dated 30 11 1976 of the Karnataka High Court in W.P. No 2307/71. CIVIL APPEAL NOS. 2330 2350/77 Appeals by Special Leave from the Judgment and Order dated 30 11 1976 of the Karnataka High Court in W.P. Nos. 2307/71, 796/72, and 462 467, 553 560, 943, 944, 1033, 1027 and 1032/73; and CIVIL APPEAL NOS. 2351 2370/77 Appeals by Special Leave from the Judgment and Order dated 30 11 1976 of the Karnataka High Court in W.P. Nos. 462 467, 553 560, 796, 943,944, 1027, 1033/73. P. Ram Reddy and section section Javali for the Appellant in CA 2329/77. F. section Nariman, B. P. Singh and A. K. Srivastava for the Appellants in C.A. Nos. 2351 2370/77. L. N. Sinha and Narayan Nettar for the Appellants in C.A. 2330 to 2370/77. A. K. Sen, Muralidhar Rao and P. R. Ramasesh for RR. 2,3,5, and 7 in C.A. 2329/77. P. R. Ramasesh for RR/Promotees in CA 2330 2350/77 and RR in C.A. 2352 2370/77. 941 Y. section Chitale, M. Muralidhar Rao, P. R. Ramasesh and section section khanduja, for the RR in C.A. 2351/77. The Judgment of the Court was delivered by KOSHAL, J. By this judgment we shall dispose of 42 appeals by special leave, namely, Civil Appeals Nos. 2329 to 2370 of 1977, all of which are directed against a judgment dated the 30th November, 1976 of a Division Bench of the High Court of Karnataka. Civil Appeals Nos. 2329 and 2351 to 2370 of 1977 have been filed by different persons who were appointed Assistant Engineers in the Karnataka State on 31st October, 1961, by way of direct recruitment while the other 21 appeals have been filed by that State. The facts giving rise to the impugned judgment may be set down in some detail. A new State came into existence on the 1st of November, 1956 as a result of integration of the areas which formed part of the erstwhile States of Mysore, Madras, Coorg, Bombay and Hyderabad (hereinafter referred to as the Merged States). It was then given the name of one of its constituents, namely, the State of Mysore, which was later changed to that of the Karnataka State. In the Public Works Departments of the Merged States there was a class of non gazetted officers ranking below Assistant Engineers. The class was designated as Graduate Supervisors in the Merged State of Mysore, as Junior Engineers in the Merged State of Madras and as Supervisors in the Merged States of Hyderabad and Bombay. The Graduate Supervisors were paid a fixed salary of Rs. 225/ per mensem which was lower by Rs. 25/ per mensem as compared to the starting salary of Assistant Engineers, who, in the normal course, were expected to head sub divisions. To the post of Assistant Engineer a Graduate Supervisor was appointed only on promotion. Prior to the 1st of November, 1956, quite a few Graduate Supervisors were given charge of sub divisions and designated as Sub Divisional Officers in order to meet the exigencies of service and they continued to act as such after the merger when they claimed equation of their posts with those of Assistant Engineers in the matter of integration of services. To begin with their claim was turned down by the Central Government who equated the posts of Graduate Supervisors with the posts of Junior Engineers of the Merged State of Madras and the posts of Supervisors of the Merged States of Hyderabad and Bombay. By a notification dated the 6th of February, 1958, the Government of Karnataka (then known as the Government of Mysore) 942 promulgated the Mysore Government Servants (Probation) Rules, 1957 (hereinafter called the Probation Rules) and on the next day came into force the Mysore Government Servants (Seniority) Rules, 1957 (hereinafter referred to as the Seniority Rules), both having been framed under Article 309 of the Constitution of India. On the 1st of October, 1958, the Karnataka Public Service Commission invited applications from candidates for appointment to the posts of Assistant Engineers by direct recruitment. In the meantime Graduate Supervisors and Government employees holding equivalent posts had continued to press their claim for the equation of their posts with the posts of Assistant Engineers and they succeeded partially when, on the 15th of November, 1958, the Karnataka Government promoted 167 of them (including 107 Graduate Supervisors who had been working as such in the Merged State of Mysore) as officiating Assistant Engineers with immediate effect. The promotion was notified in the State Gazette dated the 20th of November, 1958 (Exhibit A) the relevant portion whereof may be reproduced for facility of reference: ". . The following supervisors of Public Works Department are promoted as officiating Assistant Engineers with immediate effect and until further orders against the existing vacancies subject to review after the finalisation of the Inter Se Seniority List of Supervisors and the Cadre and Recruitment Rules of Public Works Department. The promotion of officers from Sl. No. 74 to 167 against existing vacancies will be purely on a temporary basis pending filling up of the vacancies by Direct Recruitment as per rules. The Seniority inter se of the Promotees will be provisional according to the order given below : . . ". 299 more persons of the same class were promoted to the posts of Assistant Engineers by eight notifications published during the period from 22nd of December, 1958 to the 13th of October, 1960. On the 21st (31st?) of August, 1960, the State Government passed an order in regard to the 107 Graduate Supervisors from the Merged State of Mysore and mentioned above, directing that they be treated as Assistant Engineers and be paid the pre revision scale of pay of Rs. 250 25 450 from the 1st of November, 1956 to the 31st of December, 1956 and the revised scale of pay of Rs. 250 25 450 30 600 from the 1st of January, 1957 onwards. The order further directed that the said 107 officers shall be placed in the inter se seniority list below the Assistant Engineers. 943 On the 3rd of December, 1960, the Karnataka Government promulgated the Mysore Public Works Engineering Department Services (Recruitment) Rules, 1960 (hereinafter referred to as the Recruitment Rules) under Article 309 of the Constitution of India, which envisaged appointment of Assistant Engineers in the Public Works Department by direct recruitment to the extent of 40 per cent and by promotion for the rest, viz., 50 per cent from the cadre of Junior Engineers and 10 per cent from the cadre of Supervisors. The cadre of Assistant Engineers was stated in the Rules to consist of 344 permanent and 345 temporary posts. On the 23rd of October, 1961, the Recruitment Rules were amended so as to be operative retrospectively i.e., with effect from the 1st of March, 1958. On the 31st of October, 1961, 88 candidates were appointed as Probationary Assistant Engineers by direct recruitment. Two notifications were issued by the State Government on the 27th of February, 1962. By each one of them 231 Junior Engineers were given "regular promotions" as Assistant Engineers with effect from specified dates falling within the period 15th of November, 1958 to the 10th of November, 1960. The first of these notifications stated inter alia: ". . However, the promotions are subject to review after finalisation of the interse Seniority List of Junior Engineers. ." The second of the notifications issued on the 27th of February. 1962, mentioned that the officers named therein would be deemed to be temporarily promoted and permitted to continue to officiate as Assistant Engineers on a provisional basis and until further orders. The case of the said 107 officers received further consideration at the hands of the State Government, who, on the 6th of October, 1962, issued another order (Exhibit D) superseding the one dated the 31st of August, 1960, and promoting them as Assistant Engineers with effect from the 1st of November, 1956. By the 24th of September, 1966, the number of Probationary Assistant Engineers appointed through direct recruitment (hereinafter called direct recruits) had fallen to 85 for reasons which need not be stated. On that day the State Government passed an order that they had all completed their period of probation satisfactorily and stood absorbed against substantive vacancies with effect from the 1st of November, 1962. 944 In 1971 various orders were passed promoting some of the direct recruits to the posts of Executive Engineers and those orders were challenged in a writ petition dated the 15th of September, 1971, by the promotees to the posts of Assistant Engineers (hereinafter referred to as the promotees). On the 28th of September, 1972, a list (Exhibit G) of Assistant Engineers indicating their seniority inter se as on the 1st of November, 1959, was prepared by the State Government. In that list the promotees were accorded seniority to their satisfaction. However, that list was superseded by another list dated the 4th of September, 1973, in which the seniority inter se of all Assistant Engineers functioning in the State Public Works Department as on 1st of January, 1973 was declared. The new list purported to have been framed in accordance with the Recruitment Rules. Objections to the list were invited and were submitted by various officers. During the year 1973 more writ petitions challenging the promotion of direct recruits to the posts of Executive Engineers were instituted by the promotees on whose behalf two claims were made before the High Court, namely: (1) that they had been regularly promoted as Assistant Engineers against substantive vacancies with retrospective effect and rightly so; and (2) that in the case of those of them whose promotion was made effective from a date prior to the 1st of March, 1958, the Recruitment Rules, especially the quota rule, could not affect them adversely. Both these claims were accepted by the High Court, the first on the basis of the decision of this Court in Ram Prakash Khanna & others vs section A. F. Abbas(1) coupled with the pleadings of the parties and the various orders issued by the State Government and mentioned above, and the second on the authority of another decision of this Court in V. B. Badami & others vs State of Mysore & others(2). The High Court accordingly held that the quota rule would not be attracted to the case of those promotees who had been appointed to the posts of Assistant Engineers with effect from a date prior to the 1st of March, 1958. By way of a 'clarification ' the High Court further ruled that the promotion of the 107 officers working in the Merged State of 945 Mysore was made to substantive posts of Assistant Engineers with effect from the 1st of November, 1956, and that the State Government or the direct recruits could not be allowed to urge to the contrary. According to the High Court such promotion was subject to review only if the course was warranted and necessitated by the final inter se seniority list of Junior Engineers, the right to review having been reserved by the Government in its orders dated the 27th of February, 1962. In relation to the direct recruits the High Court made a reference to the judgment of this Court in B. N. Nagarajan vs State of Mysore & others(1) wherein it was held that their appointments, although made after the Recruitment Rules had come into force, were valid, as the process of direct recruitment had been set in motion by the State Government in exercise of its executive powers under article 162 of the Constitution of India well before the Recruitment Rules were promulgated and that those appointments were therefore "outside the Recruitment Rules". The High Court consequently held that the direct recruits were also not subject to the quota rule which could not, according to it, affect them adversely. Summing up, the High Court gave the following directions: (1) Promotees other than those covered by direction (2) and direct recruits would not be governed by the quota system as envisaged in the Recruitment Rules. (2) Promotees who were appointed to posts of Assistant Engineers with effect from the 1st of March, 1958, or later dates, would be governed by the quota system as envisaged in the Recruitment Rules. (3) Promotees appointed Assistant Engineers prior to the 31st of October, 1961, would rank senior to the direct recruits whose appointments were made on that date. (4) The claim of each of the promotees to the next higher post shall be considered with effect from a day prior to that on which any officer found junior to him was promoted. The first contention we would like to deal with is one raised by Mr. F. section Nariman appearing for the direct recruits. He argued that the scope of the writ petitions instituted by the promotees was limited to the question of promotion of Assistant Engineers as Executive Engineers and that no challenge to the seniority list dated the 4th of September, 1973 could be entertained. In this connection 946 reference was made to the prayer clause appearing in Writ Petition No. 462 of 1973 which is in the following terms: "In this writ petition, it is prayed that this Court may be pleased to: (1) quash the promotion of respondents 2 to 31 to the cadre of Executive Engineers made as per order dated 3 2 1973; (2) direct the respondent 1 to consider the case of the petitioner for promotion to the cadre of Executive Engineers with effect from 3 2 1973 on which date respondents 2 to 31 were promoted; and (3) pass an interim order, restraining the respondent 1 from making further promotion to the cadre of Executive Engineers without considering the case of the petitioner for such promotion, pending disposal of this writ petition." (It was assumed at the hearing of the appeals that the prayer made in the other writ petitions is to a similar effect). It is true that no prayer has been made by the promotees to quash or rectify the seniority list dated the 4th of September, 1973, but then their whole case is based on the contention that they had been promoted to the posts of Assistant Engineers in a substantive capacity prior to the appointment of the direct recruits, that they would take precedence over direct recruits in the matter of seniority and regular absorption in the cadre of Assistant Engineers and that it was on that account that the promotion of direct recruits to the posts of Executive Engineers without consideration of the case of the promotees for such promotion was illegal. The attack on the said seniority list therefore is inherent in the case set up by the promotees, of which it forms an integral part. In this view of the matter we cannot agree with Mr. Nariman that the scope of the writ petitions is limited as stated by him. No exception is or can be taken on behalf of the promotees to the finding arrived at by the High Court that the appointment of direct recruits to the posts of Assistant Engineers was in order, in view of the judgment of this Court in B. N. Nagarajan vs State of Mysore(supra). Nor can it be urged with any plausibility on behalf of direct recruits that the appointment of the promotees as Assistant 947 Engineers prior to the enforcement of the Recruitment Rules lay outside the powers of the Government or was otherwise illegal. The real dispute between the direct recruits and the promotees revolves round the quality of the tenure held by the latter immediately prior to the enforcement of the Recruitment Rules and that is so because of the language employed in rule 2 of the Seniority Rules. The relevant portion of that rule is extracted below: "2. Subject to the provisions hereinafter contained, the seniority of a person in a particular cadre of service or class of post shall be determined as follows: (a) Officers appointed substantively in clear vacancies shall be senior to all persons appointed on officiating or any other basis in the same cadre of service or class of post; (b) The seniority inter se of officers who are confirmed shall be determined according to dates of confirmation, but where the date of confirmation of any two officers is the same, their relative seniority will be determined by their seniority inter se while officiating in the same post and if not, by their seniority inter se in the lower cadre; (c) Seniority inter se of persons appointed on temporary basis will be determined by the dates of their continuous officiation in that grade and where the period of officiation is the same the seniority inter se in the lower grade shall prevail. Explanation. . . . . . . (d). . " Now in so far as the direct recruits, are concerned they were appointed as Probationary Assistant Engineers,i.e., Assistant Enginers "appointed on probation" which term is defined in rule 2 of the Probation Rules. That rule states" "2. For the purpose of these rules : (1) "Appointed on Probation" means appointed on trial in or against a substantive vacancy. (2) "Probationer" means a Government servant appointed on probation. A Government servant so appointed (and continuing in service) remain a probationer until he is confirmed. " 948 In view of these definitions it cannot be gainsaid that the direct recruits were appointed Assistant Engineers "substantively in clear vacancies" as envisaged by clause (a) of rule 2 of the Seniority Rules. If any of the promotees also satisfied that requirement at any time earlier to the 31st of october, 1961, he would be bracketed with the direct recruits under that clause and his seniority vis a vis those recruits would the be governed by clause (b) of the rule, i.e., on the basis of his and their respective dates of confirmation. If, on the other hand, none of the promotees can be said to have been appointed substantively in a clear vacancy, clause (a) aforesaid would have no application to them and all direct recruits would rank senior to them; and it is in the ligrht of the said clauses (a) and (b) therefore that learned counsel for the State and the direct recruits have challenged the finding of the High Court that the promotion of the 107 officers working in the Merged State of Mysore was made to substantive posts of Assistant Engineers with effect form the 1st of November, 1956 and that the State Government or the direct recruits could not be allowed to urge to the contrary. The controversy has to be resolved in the light of the orders passed by the State Government from time to time in relation to those officers and others similarly situated. The first order appointing promotees as Assistant Engineers is dated the 15th of November, 1958 (Exhibit A). That order made, it clear that all the promotees covered by it were appointed officiating Assistant Engineers and were to hold office until further orders. The promotion was also made subject to review after the finalisation of the inter se seniority list of Supervisors and the Recruitment Rules. The notification went on to state that in the case of 94 of the officers promoted under it, their appointment as Assistant Engineers was being made on a purely temporary basis inasmuch as they would have to vacate the posts against which they were being fitted, as soon as candidates were available through a process of direct recruitment. The language employed leaves no doubt that the promotion of the 167 officers was not substantively made, the tenure being specifically stated to be either "officiating" or "purely temporary" which expressions clearly militate against a substantive appointment. Orders made by the State Government later on and right upto the 31st of October, 1961 when the direct recruits were appointed Assistant Engineers did not improve the position of any of the promotees in any manner. Those orders were either silent on the point of the nature of the tenure of the promotees as Assistant Engineers, or stated 949 in no uncertain terms that the promotees would hold the posts of Assistant Engineers on a temporary or officiating basis. That is why Dr. Chitaley and Mr. Sen, learned counsel for the promotees, mainly placed their reliance on the two notifications dated the 27th of February, 1962, and order exhibit D dated the 6th of october, 1962, the combined effect of which was to promote the said 107 officers as Assistant Engineers with effect from the 1st of November, 1956 "on a regular basis". It was argued that the regularisation of the promotion gave it the colour of permanence and the appointments of the promotees as Assistant Engineers must therefore be deemed to have been made substantively right from the 1st of November, 1956. The argument however is unacceptable to us for two reasons. Firstly the words "regular" or "regularisation" do not connote permanence. They are terms calculated to condone any procedural irregularities and are meant to cure only such defects as are attributable to the methodology followed in making the appointments. They cannot be construed so as to convey an idea of the nature of tenure of the appointments. In this connection reference may with advantage be made to State of Mysore and Another vs section V. Narayanappa(1) and R. N. Nanjundappa vs T. Thimmiah and Another(2). In the former this Court observed: "Before we proceed to consider the construction placed by the High Court on the provisions of the said order we may mention that in the High Court both the parties appear to have proceeded on an assumption that regularisation meant permanence. Consequently it was never contended before the High Court that the effect of the application of the said order would mean only regularising the appointment and no more and that regularisation would not mean that the appointment would have to be considered to be permanent as an appointment to be permanent would still require confirmation. It seems that on account of this assumption on the part of both the parties the High Court equated regularisation with permanence." In Nanjundappa 's case also the question of regularisation of an appointment arose and this Court dealt with it thus: ". . Counsel on behalf of the respondent contended that regularisation would mean conferring the quality of permanence on the appointment whereas counsel on behalf 950 of the State contended that regularisation did not mean permanence but that it was a case of regularisation of the rules under Article 309. Both the contentions are fallacious. It the appointment itself is in infraction of the rules or if it is in violation of the provisions of the Constitution illegality cannot be regularised. Ratification or regularisation is possible of an act which is within the power and province of the authority but there has been some non compliance with procedure or manner which does not to to the root of the appointment. Regularisation cannot be said to be a mode of recruitment. To accede to such proposition would be to introduce a new head of appointment in defiance of rules or it may have the effect of setting at naught the rules. " Apart from repelling the contention that regularisation connotes permanence, these observations furnish the second reason for rejection of the argument advanced on behalf of the promotees and that reason is that when rules framed under article 309 of the Constitution of India are in force, no regularisation is permissible in exercise of the executive powers of the Government under article 162 thereof in contravention of the rules. The regularisation order was made long after the Probation Rules, the Seniority Rules and the Recruitment Rules were promulgated and could not therefore direct something which would do violence to any of the provisions thereof. Regulaisation in the present case, if it meant permanence operative from the 1st of November, 1956, would have the effect of giving seniority to promotees over the direct recruits who, in the absence of such regularisation, would rank senior to the former because of the Seniority Rules read with the Probation Rules and may in consequence also confer on the promotees a right of priority in the matter of sharing the quota under the Recruitment Rules. In other words, the regularisation order, in colouring the appointments of promotees as Assistant Engineers with permanence would run counter to the rules framed under article 309 of the Constitution of India. What could not be done under the three sets of Rules as they stood, would thus be achieved by an executive fiat. And such a course is not permissible because an act done in the exercise of the executive power of the Government as already stated, cannot override rules framed under Article 309 of the Constitution. The case has, for both the above reasons, to be decided on the footing that all though the relevant period the promotees held appointments as Assistant Engineers in a non substantive capacity, i.e. either on an officiating or a temporary basis. This being the position, 951 they would all rank junior to the direct recruits who, from the very start, held appointments made "substantively in clear vacancies. We may here make it clear that this order does not cover such officers as were holding the posts of Assistant Engineers on a substantive basis prior to the 1st of November, 1956 when the new State of Mysore now known as Karnataka came into being. Nor would it adversely affect the case of any Assistant Engineer who acquired a substantive status prior to the promulgation of the Recruitment Rules and the appointment of the direct recruits. Persons falling within these two categories will first have to be accommodated in the clear vacancies available and only the remaining vacancies will have to be utilised for fitting in the direct recruits and the Assistant Engineers who have disputed their claim in these proceedings. It may also be mentioned that the quota rule will not stand in the way of the Government giving effect to this arrangement which has been taken care of in the amendment (promulgated on the 23rd of October, 1961) to the Recruitment Rules. The relevant portion of that amendment is contained in item 3 thereof which is reproduced below: "3. To rule 2 of the following proviso shall be added and shall be deemed always to have been added, namely "Provided that in respect of direct recruitment of Assistant Engineers for the first time under these rules the percentages relating to direct recruitment and recruitment by promotion specified in column 2 of the Schedule shall not be applicable and the minimum qualifications and the period of production shall be the following, namely "Qualifications :. . . . " It is common ground between the parties that the posts comprised in the cadre of Assistant Engineers constituted by the Recruitment Rules have yet to be filled in for the first time. The proviso extracted above therefore will apply fully to the utilization of those vacancies as stated above. It goes without saying that all questions of seniority shall be decided in accordance with the Seniority Rules and that the Recruitment Rules, as amended from time to time, shall be fully implemented as from the date of their enforcement, i.e., 1st of March, 1958. In the result we accept the appeals, set aside the judgment of the High Court and decide the dispute between the parties in accordance with the observations made in paragraphs 5 and 6 hereof. V.D.K. Appeals allowed.

In the new State of Mysore (Now Karnatake) which came into existence on 1 11 56 as a result of integration of the areas which formed part of erstwhile States of Mysore, Madras, Coorg, Bombay and Hyderabad, the Government on 6 2 58, 7 2 58 and 2 12 60 respectively promulgated the following Rules (all framed under Article 309 of the Constitution) namely, "The Mysore Government Servants (Probation) Rules 1957, "The Mysore Government Servants (Seniority) Rules 1957 and "The Mysore Public Works Engineering Department Services (Recruitment) Rules, 1960" The recruitment Rules envisaged appointment of Assistant Engineers in the Public Works Department by direct recruitment to the extent of 40% and by promotion for the rest viz. 50% from the cadre of Junior Engineers and 10% from the cadre of supervisors. The cadre of Assistant Engineers was to consist of 344 permanent and 345 temporary posts. Prior to 1 11 56 in the merged States, there was a non gazetted class designated as graduate supervisors in Mysore State, as Junior Engineers in the Madras State and as supevisors in the States of Bombay and Hyderabad. The claim of the graduate supervisors who were given charge of sub divisions prior to 1 11 56 and continued to hold the same even thereafter, for equation of their posts with those of Assistant Engineers, was rejected by the Central Government. However, on 15 11 58, 167 of them (including 107 graduate supervisors from Mysore) and between the period 2nd Dec. 1958 and 13th October '60, 299 more persons of the same class were promoted as officiating Assistant Engineers. With reference to three notifications of the Mysore Public Service Commission dt. 1 10 58, 4 5 59 and 1 4 61, eighty eight candidates were appointed on 31st Oct. ' 61, i.e. 8 days after the amendement of the Recruitment Rules giving them retrospective effect from 1st March 1958, as Probationary Assistant Engineers by direct recruitment. The challenge to their appointment was ultimately rejected by this Court in B. N. Nagarajan vs State of Mysore & Ors., [1966] 3 S.C.R. p. 682 holding that their appointment although made after the Recruitment Rules had come into force, were valid, as the process of direct recruitment had been set in motion by the State Government in exercise of its executive power under Article 162 of the Constitution of India well before the Recruitment Rules were promulgated and that these appointments were therefore, "outside the Recruitment Rules". In the year 1971 various orders were passed promoting some of the direct recruits to the posts of Executive Engineers and those orders were challenged by 938 the promotees on the ground that they had been given promotions "on regular basis" which amounted to substantive appointments and that therefore they should rank senior to the direct recruits. Subsequent to the issue on 4 9 73 of a revised seniority list snperseding the list (G) prepared on 28 9 72 further writ petitions were filed by the promotees. All the petitions were heard together by the High Court and allowed with the following directions: (i) Promotees other than those covered by direction (ii) and direct recruits, would not be governed by the quota system as envisaged in the Recruitment Rules. (ii) Promotees who were appointed to posts of Assistant Engineers with effect from 1st of March 1958, or later dates, would be governed by the quota system as envisaged in the Recruitment Rules. (iii) Promotees appointed as Assistant Engineers prior to 31st October 1961 would rank senior to the direct recruits whose appointments were made on that date. (iv) The claim of each of the promotees to the next higher post shall be con sidered with effect from a day prior to that on which any officer found junior to him was promoted. Allowing the appeals by special leave, the Court ^ HELD: 1. The scope of the writ petition was not limited to thq question of preme tion of Assistant Engineers as Executive Engineers. The attack on the seaiority list dated 4th Sept. 1973 was inherent in the case set up by the promotees, of which it formed an integral part. Though no prayer had been made by the promotees to quash or rectify the seniority list dated 4th September 1973, their whole case was based on the contention that they had been promoted to the posts of Assistant Engineers in a substantive capacity prior to the appointment of direct recruits, that they would take precedence over direct recruits in the matter of seniority and regular absorption in the cadre of Assistant Engineers and that it was on that account that the promoion of direct recruits to the posts of Executive Engineers without consideration of the case of the promotees for such promotion was illegal. [946E G] 2. No exception is or can be taken on behalf of the promotees to the finding arrived at by the High Court that the appointment of direct recruits to the posts of Assistant Engineers was in order, in view of the judgment of this Court in B. N. Nagarajan vs State of Mysore, [1966] 3 SCR p. 682. Nor can it be urged with any plausibility on behalf of direct recruits that the appointment of the promotees as Assistant Engineers prior to the enforcement of the Recruitment Rules lay outside the powers of the Government or was otherwise illegal. [946G H, 947A] V. B. Badami and Ors. vs State of Mysore and Ors. , [1976] 1 SCR 815 and B. N. Nagarajan vs State of Mysore and Ors., ; followed. A combined reading of Rule 2 of the Seniority Rules and the definition of the words "appointed on probation" and "Probationer" in Rule 2 of the Probation Rules, makes it clear that the direct recruits were appointed as Assistant 939 Engineers, "substantively in clear vacancies" as envisaged by clause (a) of rule 2 of the Seniority Rules. If any of the promotees also satisfied that requirement at any time earlier to the 31st of October 1961, he would be bracketed with the direct recruits under that clause and his seniority vis a vis those recruits would then be govened by clause (b) of the rule i.e., on the basis of his and their respective dates of confirmation. If, on the other hand, none of the promotees can be said to have been appointed substantively in a clear vacancy, clause (a) aforesaid would have no application to them and all direct recruits would rank senior to them. [947G H, 948A B] 4. In the instant case, all through the relevant period the promotees held appointments as Assistant Engineers in non substantive capacity, i.e., either on an officiating or a temporary basis. This being the position, they would all rank junior to the direct recruits who, from the very start, held appointments made "substantively in clear vacancies". [950H, 951A] (a) The language employed in the first order dated 15th November 1958 (exhibit A) appointing promotees as Assistant Engineers makes it clear that the promotion of the 167 officers was not substantively made, the tenure being specifically stated to be either "officiating" or "purely temporary" and "subject to review after the finalisation of the inter se seniority list of supervisors and the Recruitment Rules", which expressions clearly militate against a substantive appointment. [948E G] (b) Orders made by the State Government later on right upto the 31st October, 1961 when the direct recruits were appointed as Assistant Engineers did not improve the position of any of the promotees in any manner. These orders were either silent on the point of the nature of the tenure of the promotees as Assistant Engineers, or stoted in no uncertain terms that the promotees would hold the posts of Assistant Engineers on a temporary or officiating basis. [948G H. 949A] (c) The two Notifications dated 27th February 1962, and order Exhibit (D). dated 6th October 1962 the combined effect of which was to promote the said 107 officers as Assistant Engineers with effect from 1st of November 1956 "on a regulaur basis" do not give it the colour of permanence to the appointments of the promotees as Assistant Engineers which cannot therefore be deemed to have been made substantively right from the 1st of November 1956 for two reasons; Firstly, the words "regular" or "regularisation" do not connote permanence. They are terms calculated to condone any procedural irregularities and are meant to cure only such defects as are attributable to the methodology followed in making the appointments. Secondly, when rules framed under Article 309 of the Constitution of India are in force, no regularisation is permissible in exercise of the executive powers of the Government under Article 162 thereof in contravention of the Rules. The regularisation order was made long after the Probation Rules. the Seniority Rules and the Recruitment Rules were promulgated and could not therefore direct something which would do violence to any of the provisions thereof. Regularisation in the present case, if it meant permanence operative from the 1st of November, 1956 would have the effect of giving seniority to promotees over the direct recruits who, in the absence of such regularisation. would rank senior to the former because of the Seniority Rules read with the Probation Rules and may in consequence also confer on the promotees a right of priority in the matter of sharing the quota under the Recruitment Rules. In 940 other words, the regularisation order, in colouring the appointments of promotees as Assistant Engineers with permanence would run counter to the rules framed under Article 309 of the Constitution of India. What could not be done under the three sets of Rules as they stood, would thus be achieved by an executive fiat. And such a course is not permissible because an act done in the exercise of the executive power of the Government, cannot override rules framed under Article 309 of the Constitution. [949B D, 950D G] State of Mysore and Anr. vs section V. Naraynaswami, [1967] 1 SCR 128 and R. N. Nanjundappa vs T. Thimmiah, ; ; applied. The Court made it clear (a) "that this order does not cover such officers as were holding the posts of Assistant Engineers on a substantive basis prior to the 1st of November, 1956 when the new State of Mysore now known as Karnataka came into being, and the case of any Assistant Engineer who acquired a substantive status prior to the promulgation of the Recruitment Rules and the appointment of the direct recruits; (b) that persons falling within these two categories will first have to be accommodated in the clear vacancies available and only the remaining vacancies will have to be utilised for fitting in the direct recruits and the Assistant Engineers who have disputed their claim in these proccedings; and (c) that the quota rule will not stand in the way of the Government giving effect to this arrangement which has been taken care of in the anemendment (promulgated on the 23rd of October 1961) to the Recruitment Rules"].

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Civil Appeal No. 2206 of 1987. From the Judgment and order dated 4.2.1987 of the High Court of Punjab and Haryana in Civil Revisions No. 2371 of 1986. A.S. Sohal, R.K. Talwar and P.N. Puri for the Appellant. S.M. Sarin and R.C. Misra for the Respondent. The Judgment of the Court was delivered by RAY, J. This is an appeal by special leave against the judgment and order passed in Civil Revision No. 2371 of 1986 dismissing the revision petition and upholding the order of eviction of the tenant appellant from the house in question. The landlord, Kartar Singh filed an application in the court of Rent Controller, Kapurthala under Section 13 A of the East Punjab Urban Rent Restriction (Amendment) Act, 1985, stating inter alia that Dr. D.N. Malhotra is a tenant in respect of his house No. 694 A within Kapurthala Municipality; that he was in arrears of rent since 22nd December, 1984; that the landlord retired from the service of Government of India, Ministry of Defence on 20th May, 1949 'and his service was thereafter transferred to the Ministry of Rehabilitation from where he was discharged on 30th November, 1965 on the abolition of the Ministry; that he had no other house within the Municipality and that he wanted the house in question to reside and prayed for ejectment of the tenant appellant. The tenant appellant on receiving the summons filed an affidavit seeking leave of the Court to contest the application stating inter alia that he was inducted as a tenant in the premises in question in the year 1968; that the petitioner had been letting out the premises in question 836 at different intervals to other tenants; that the present application filed by the petitioner landlord is mala fide and the defendant is entitled to the leave to contest the application on the ground that Section 13 A of the said Act does not entitle the petitioner to maintain the present petition. The Rent Controller granted leave to the tenant to contest R the petition on the following ground: Whether the petitioner is a specified landlord as defined in Section 2(hh) of the East Punjab Urban Rent Restriction (Amendment) Act, 1985. The petitioner landlord examined himself and he also filed a certificate issued to him by Regional Settlement Commissioner who was his appointing authority. This certificate was marked as Exhibit A 1 in the case. The tenant respondent examined himself and stated that the petitioner could not get the benefit of Section 13 A of the said Act as he was not the landlord of the said house either before or on the date of his retirement from service or the Union i.e. in 1965, the house being let out to him in 1968. The Rent Controller negatived the contentions of the tenant respondent and allowed the application directing the tenant respondent to vacate the premises within one month from the date of the order. The tenant appellant preferred an application being Civil Revision No. 2371 of 1986 under Section 18A of the said Act. The revision case was dismissed by the High Court of Punjab and Haryana holding inter alia that the respondent being a specified landlord at the relevant time i.e. within one year of the date of commencement of the East Punjab Urban Rent Restriction (Amendment) Act, 1985 (to be hereinafter referred to in short as the said Act) was entitled to get an order of eviction of the tenant from his house. The order of the Rent Controller was upheld. It was further held that the decisions cited at the bar in support of the contention that the respondent was not the landlord qua the tenant appellant on or before his retirement from service, were not applicable to this case as the provisions of the Acts dealt with in those decisions were different from provisions of Section 13 A of the said Act. It is against this judgment and order the instant appeal on special leave has been filed. It is convenient to quote the relevant provisions of the said Act 837 before proceeding to determine the questions in controversy between A the parties. Sec.2(hh): 'Specified landlord means a person who is entitled to receive rent in respect of a building on his own account and who is holding or has held an appointment in a public service or post in connection with the affairs of the Union or of a State. 13 A Where a specified landlord at any time, within one year prior to or within one year after the date of his retirement or after his retirement but within one year of the date of commencement of the East Punjab Urban Rent Restriction (Amendment) Act, 1985, whichever is later, applies to the Controller along with a certificate from the authority competent to remove him from service indicating the date of his retirement and his affidavit to the effect that he does not own and possess any other suitable accommodation in the local area in which he intends D to reside to recover possession of his residential building or scheduled building as the case may be, for his own occupation there shall accrue, on and from the date of such application to such specified landlord, notwithstanding anything contained elsewhere in this Act or in any other law for the time being in force or in any con tract (whether expressed or implied) custom or usage to the contrary, a right to recover immediately the possession of such residential building or scheduled building or any part or parts of such building if it is let out in part or parts . " Sec.18 A "(1) Every application under Section 13 A shall be dealt with in accordance with the procedure specified in this section. . . . . . . . (8) No appeal or second appeal shall lie against an order for the recovery of possession of any residential building or scheduled building made by the Controller in accordance with the procedure specified in this Section. 838 Provided that the High Court may, for the purpose of satisfying itself that an order made by the Controller under this Section is according to law, call for the re cords of the case and pass such order in respect thereto as it thinks fit. " In Sohan Singh vs Dhan Raj Sharma, [1983] 2 R.L.R. 465, the question was whether the ex servicemen landlord, Sohan Singh fell within the category of landlord as envisaged in Section 13(3A) of Haryana Urban (Control of Rent and Eviction) Act, 1973 in order to have an order of eviction of the tenant in a summary way. Landlord, Sohan Singh retired from Air Force on 3rd March, 1976 and on 17th November, 1978 he purchased the shop bearing No. 2454 in Block No. II, Patel Road, Ambala. On 2nd February, 1979 an application was made by him for ejectment of the respondent tenant from the said shop on the ground that he required the same for his personal use of setting up his own business therein, under Section 13(3A) of the Act. Section 13(3A) provides that "in the case of a non residential building, a landlord who stands retired or discharged from the armed force of the Union of India" may apply within a period of three years from the date of his retirement or discharge from service for an order directing the tenant to put the landlord in possession. It was held that the expression landlord would mean a landlord who was a landlord as such qua the tenant and the premises on the date of his retirement. Sohan Singh who pruchased the disputed shop after his retirement was not landlord of the shop on the date of his retirement. The application for ejectment of tenant was, therefore, dismissed. In Bhanu Aththayya vs Comdr. Kaushal & Ors., , respondent No. 1 who was in Navy retired from service in February, 1968. Respondent Nos. 1 and 2 who are husband and wife owned the flat in question in a building of the Shankar Mahal Cooperative Housing Society Ltd. Bombay. On 17th July, 1972 respondent No. 2, wife of respondent No. 1 both on her behalf as well as on behalf of her husband gave the flat on leave and licence basis to the petitioner. On 19th November, 1975, the respondent No. 1 secured a certificate from Vice Admiral Flag officer, Commanding in Chief, Western Naval Command, under the provisions of Section 13 Al. On 24th November, 1975, respondent Nos. 1 and 2 served a notice on the petitioner to quit and vacate. As the petitioner did not vacate, the respondent No. 1 made an application under Section 13 Al of Bombay Rents, Hotel and Lodging House Rates Control Act, (57 of 1947) as amended for an order of his ejectment and for giving him possession of 839 the said flat. The application was ultimately dismissed by the High Court of Bombay on the ground that petitioner was not a landlord qua the tenant and the premises at the time of his retirement from Navy and as such he could not get an order of eviction of the petitioner tenant from the suit premises under Section 13 Al. The question whether a retired army officer who acquired a building after his retirement can be deemed to be a landlord within the meaning Section 13 Al of Bombay Rents, Hotel and Lodging House Rates Control Act (57 of 1947) came up for consideration before this Court in the case of Mrs. Winifred Ross and Anr. vs Mrs. Ivy Fonseca and ors., A.I.R. In this case one Lt. Col. T.E. Ross who was a member of the Indian Army retired from Military service in 1967. The property of which the suit building forms a part originally belongs to his mother in law, Mrs. Arcene Parera. She gifted the said property in favour of her daughter Mrs. Winifred Ross, the wife of the plaintiff, on November 9, 1976. The property consisted of some outhouses and the defendant is a tenant in one of those out houses for a number of years. The said premises consisted of two rooms and a verandah. On June 6, 1977, Mrs. Winifred Ross made a gift of the portion occupied by the defendant as a tenant in favour of the plaintiff. The plaintiff thereafter, made an application for eviction of the defendant and for possession of the said premises under section 13 Al of the said Act, which was introduced by an amendment made in 1975. It was held by this Court that the plaintiff could not avail of the provisions of Section 13 Al to recover from the tenant possession of the building which he acquired after his retirement. The word landlord used in Section 13 Al refers to an officer of the armed forces of the Union, who was a landlord either before or on the date of his retirement from the defence service of the Union. It has been further held that Section 13 Al can not be liberally interpreted to cover all retired members of the armed forces irrespective of the fact whether they were landlords while they were in service or not. Such a liberal interpretation of Section 13 Al is likely to expose it to a successful challenge on the basis of Article 14 of the Constitution In the instant case Section 13 of the East Punjab Urban Rent Restriction (Amendment) Act No. 2 of 1985 which was published in the Pubjab Gazette Extra ordinary dated 16th November, 1985 conferred right on the specified landlord to make application at any time within one year prior to or within one year after the date of his retirement or after his retirement but within one year of the date of commencement of the East Punjab Urban Rent Restriction (Amendment) , whichever is later. to the Controller along with a Certificate from the Authority competent to remove him from service for directing the tenant to give him possession of the premises. This Section thus confers right on the ex serviceman who is a specified landlord under Section 2(hh) of the said Act to apply after retirement within one year of the commencement of the said Act under Section 13 A of the said Act for eviction of the tenant. The respondent landlord who retired from the service of the Union is the owner of the house and he is the landlord at the relevant time i.e. after his retirement within one year of the date of commencement of the said Act i.e. 16th November, 1985 qua the tenant and the premises and the application to the Rent Con troller was made for an order directing the tenant appellant to give possession of the suit house to him to reside therein as he had no other house within the Municipality. The respondent in order to come within the definition of specified landlord has to satisfy two things: (a) he shall be a person who is entitled to receive rent in respect of the house in question from the tenant appellant at his own account. and (b) he is holding or has held an appointment in a public service or post in connection with the affairs of the Union or of State. The petitioner retired from the post of S.D.O. which post he held in the Rehabilitation Department, Government of India. The petitioner as appears from the statements made in the affidavit of the appellant and also from the certificate Exhibit lA filed by the landlord that he retired from service in 1963 and the appellant has been inducted as a tenant in respect of the said house in 1968. This clearly evinces that the respondent was not a specified landlord within the meaning of Section 2(hh) of the said Act as the appellant was inducted as a tenant after his retirement from the service of the Union. Section 13 A of East Punjab Urban Rent Restriction (Amendment) Act, 1985 in clear terms enjoins that "Where a specified landlord at any time, within one year prior to or within one year after the date of his retirement or after his retirement but within one year of the date of commencement of the said Act makes an application to recover possession of the building or scheduled building, the Controller will direct the tenant to deliver possession of the house to him". Therefore to be entitled to have the benefit of Section 13 A of the Act the landlord respondent will have to fulfil the first qualification i.e. he must be a specified landlord in respect of the house in question on the date of his retirement from the service of the Union i.e. in 1963. The landlord, as it appears, has not 841 fulfilled this requirement in as after his retirement from service of the Union he has let out the premises to the tenant appellant. It has been urged before us on behalf of the respondent that at the relevant time i.e. after retirement of the respondent from service within one year of the date of commencement of the said Act he is the landlord of the appellant and as such he falls within the definition of Section 2(hh) of the said Act and he becomes a specified landlord. This submission, in our view, cannot be sustained in as much as the words "specified landlord" as used in section 2(hh) refer to the person in service of the Union who is a landlord at the time of his retirement from the public service or post in connection with the affairs of the Union or of State. It cannot in any manner include an ex serviceman who was not a specified landlord qua the tenant and the premises on or before the date of his retirement from the service of the Union. This has been very succinctly held by this Court in the case of Mrs. Winifred Ross and Anr. vs Mrs. Ivy Fonseca and Ors. (supra) which has been referred to hereinbefore. On a conspectus of the decisions referred to hereinbefore more particularly the decision rendered by this Court in the case of Mrs. Winifred Ross & Anr. vs Mrs. Ivy Fonseca and ors. (supra) it is well settled that in order to get the benefit of eviction of the tenant in a summary way the ex serviceman must be a landlord qua the premises as well as the tenant at the time of his retirement from service. The ex serviceman is not competent to make an application to the Rent Controller to get possession of his house by evicting the tenant in a summary way unless and until he satisfies the test that he is a landlord qua the premises and the tenant at the time of his retirement or discharge from service. In the instant case the Rent Controller has not at all considered this question but he simply held that the petitioner was discharged from service on the abolition of the Department of Rehabilitation and so he was covered under the definition of specified landlord as given under section 2(hh) of the Act. The learned Single Judge of the Punjab and Haryana High Court though noticed the decision in the case of Bhanu Aththayya vs Comdr. Kaushal and ors. and also in Sohan Singh vs Dhan Raj but without properly considering the provisions of Section 2(hh) of the Act held that the application under section 13 A of the Act by a specified landlord seeking ejectment of a tenant was competent within one year of the commencement of the amended Act even if there existed no relationship of landlord and tenant on the date of retirement of the specified landlord. The learned Single Judge also 842 observed that as there was no provision for a specified landlord after his retirement to make an application for ejectment of his tenant within one year after commencement of the amended Act as occurs in the Punjab Act the ratio of the decision in those cases cited before the Court would not apply. This view of the learned Single Judge in our considered opinion is on the face of it erroneous. We have stated hereinbefore that to get the benefit of the summary procedure provided in Section 13 A of the said Act, the ex serviceman must be a specified landlord at the time of his retirement from service of the Union as provided in Section 2(hh) of the said Act. The respondent did not satisfy this basic requirement of Section 2(hh) of the Act and so he was not competent to maintain an application under Section 13 A of the said Act. It is obvious that the respondent landlord retired from the service of the Union in 1965 and the house in question was let out to the tenant appellant in 1968. The respondent was not a landlord qua the premises and the tenant on the date of his discharge from service entitling him to avail of the benefit of the provisions of Section 13 A of the Punjab Act. For the reasons aforesaid we allow the appeal and set aside the judgment and orders of the courts below. In the facts and circumstances of the case, there will be no order as to costs. N.V.K. Appeal allowed.

% The respondent landlord filed an application in the Court of the Rent Controller under Section 13 A of the East Punjab Rent Restriction (Amendment) Act, 1985, seeking eviction of the appellant tenant on the ground of arrears of rent and for his own use and occupation. It was contended that the respondent retired from the service of the Government of India, Ministry of Defence on 20th May, 1949 and that his service was thereafter transferred to the Ministry of Rehabilitation from where he was discharged on 30th November, 1965 on the abolition of the Ministry, and that as he had no other house within the municipality he wanted the house in question for residence. On receiving the summons of the eviction petition the appellant tenant sought leave to contest the application on the ground that he was inducted as a tenant in the premises in the year 1968, and that Section 13 A of the Act did not entitle the landlord to maintain the eviction petition. The Rent Controller after recording the evidence of the parties negatived the contention of the tenant, allowed the application, and directed the tenant to vacate the premises within one month from the date of the order. The appellant preferred a revision application under Section 18 A of the Act, but the High Court holding that the respondent being a 'specified landlord ' at the relevant time i.e. within one year of the date of commencement of the East Punjab Urban Rent Restriction (Amendment) Act, 1985 was entitled to get an order of eviction of the tenant from his house, upheld the eviction order of the Rent Controller and dismissed the revision petition. The tenant appealed to this Court by special leave. 834 Allowing the appeal, ^ HELD: 1. The respondent landlord did not satisfy the basic requirement of section 2(hh) of the East Punjab Urban Rent Restriction (Amendment) Act, 1985 and so he was not competent to maintain the application under section 13 A of the said Act. [842C] 2. Section 13 A of the East Punjab Urban Rent Restriction (Amendment) Act, 1985 in clear terms enjoins that: "Where a specified landlord at any time within one year prior to or within one year after the date of his retirement or after his retirement but within one year of the date of commencement of the said Act makes an application to recover the possession of the building or scheduled building, the Controller will direct the tenant to deliver possession of the said house to him". Therefore to be entitled to have the benefit of Section 13 A of the Act the landlord respondent will have to fulfil the first qualification i.e. he must be a specified landlord in respect of the house in question on the date of his retirement from the service of the Union i.e. in 1963. [840F H] 3. To get the benefit of the summary procedure provided in Section 13 A the ex servicemen must be a specified landlord at the time of his retirement from service of the Union as provided in Section 2(hh). [842B] 4. The respondent landlord in the instant case, retired from the service of the Union in 1965, and the house in question was let out to the appellant tenant in 1968. The respondent was thus not a landlord qua the premises and the tenant, on the date of his discharge from service entitling him to avail of the benefit of the provisions of Section 13 A of the East Punjab Act. [842C D] 5. The Rent Controller has not at all considered the question whether the landlord is a specified landlord, but simply held that the landlord was discharged from service on the abolition of the Department of Rehabilitation and so he was covered under the definition of specified landlord as given under section 2(hh) of the Act. The Single Judge of the High Court without considering the provisions of Section 2(hh) of the Act held that the application under Section 13 A by a specified landlord seeking ejectment of a tenant was competent within one year of the commencement of the amended Act even if there existed no relationship of the landlord and tenant on the date of the retirement of the specified landlord. This view is on the face of it erroneous. The 835 judgments and orders of the Courts below are set aside. [841F H; 842A B, D] A Sohan Singh vs Dhan Raj Sharma, [l983] 2 R.L.R. 465 and Bhanu Aththayya vs Comdr. Kaushal & Ors., [1979] 2 R.C.J. 338, approved. Mrs. Winifred Ross and Anr. vs Mrs. Ivy Fonseca and Ors., A.I.R. 1984 SC 458, distinguished.

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Appeal No. 2555 of 1966. Appeal from the judgment 'and order dated March 16, 1966 of the Calcutta High Court in Income Tax Reference No. 76 of 1962. section C. Manchanda. G. C. Sharma, R. N. Sachthey and B. D. Sharma, for the appellant. A. K. Sen, T. A. Ramachandran and D. N. Gupta, for the respondent. 775 The Judgment of the Court was delivered by Shah, J. The respondent Company appointed one Harvey its Managing Director. Under the terms of agreement, Harvey was to retire on attaining the age of 55 years. The Company arranged to provide a pension to Harvey on retirement, and executed a deed of trust on September 16, 1948 appointing three trustees to carry out that object. The respondent Company set apart in 1948 Rs. 1,09,643/ and in each of the six subsequent years Rs. 4,364/ , and delivered the various amounts to the trustees who were authorised to take out a deferred annuity policy to secure an annuity of pound 720 per annum payable to Harvey for life. from the date he attained the age of 55 years, and in the event of his death before that date an annuity of pound 611.12 annually to his widow. In its return for the assessment year 1949 50 the Company claimed that in the computation of its taxable income Rs. 1,09,643/ paid in 1948 to the trustees under the deed of trust were allowable as an amount wholly and exclusively,expended for the purpose of its business. In the subsequent years of assessment the Company claimed allowance of the annual payment of Rs. 4,364/ . The Income tax Officer disallowed the claim. The Company disputed the decision and carried it to the Income tax Appellate Tribunal. The Tribunal submitted a statement of case to the High Court of Calcutta on the question whether the payments . 'constituted 'expenditure ' within the meaning of that word in section 10(2)(xv) of the Indian Income tax Act, 1922, in respect of which a claim for deduction can be made subject to the other conditions mentioned in that clause being satisfied". The High Court answered the question in the negative. The view taken by the High Court was confirmed by this Court in appeal: Indian Molasses Co. (P) Ltd. vs Commissioner of Income tax, West Bengal(1). This Court held that the expenditure deductible for income tax purposes is one towards a liability actually existing at the time, but a sum of money set apart which may be deemed appropriated to a purpose for which it was intended on the happening of a future event was not expended within the meaning of section 10(2)(xv) of the Act, until the event occurs, and since the Company had dominion through the trustees over the funds and there was a possibility of a trust resulting in its favour, by setting apart. the funds no "expenditure" within the meaning of section 10(2)(xv) of the Indian Income tax Act, 1922, may be deemed incurred. During the pendency of those proceedings the Company ar ranged to give an "enhanced pension" to Harvey and executed a supplementary deed of trust on October 29, 1954 and set apart an additional sum of Rs. 47,607/ to enable the trustees to take out an annuity policy in the names of the trustees in favour of Harvey (1) , 776 and his wife to cover the "enhanced pension". The terms of the original trust deed were made applicable to the supplementary deed. Harvey died in May 1955 (before he was due to retire) and in the return of its taxable income for the assessment year 1956 57 the Company claimed that Rs. 1,83,434/ being the total amount paid by the Company to the trustees in terms of the original trust deed dated September 'I 6, 1 94 8 and the supplementary deed dated October 29, 1954, be allowed as a permissible expenditure in the computation of the Company 's business profits in the previous year ending December 31, 1955. The Income tax Officer disallowed the claim without assigning any reasons. In appeal the Appellate Assistant Commissioner confirmed the order observing that the amount paid long before the commencement of the previous year were not admissible under section 10(2)(xv) of the Income tax Act, 1922. The Income tax Appellate Tribunal in appeal reversed the order and allowed the claim of the Company holding that the amount of Rs. 1,83,434/ was "effectively disbursed during the accounting year" and was on that account an admissible allowance in the computation of the Company 's business profits. At the instance of the Commissioner of Income tax, the Tri bunal submitted a statement of the case to the High Court of Calcutta on the following two questions : "(1) Whether on the facts and in the circumstances of the case, the sum of Rs. 1,83,434/ was an expenditure effectively laid out or expended during the accounting year 1955 within the meaning of section 10(2)(xv) of the Income tax Act ? (2) If the answer to Question No. (1) is in the affirmative, then whether the said expenditure of Rs. 1,83,434/ represented a revenue expenditure ?" The High Court of Calcutta recorded answers in the affirmative on both the questions. With certificate granted by the High Court under section 66A(2) of the Indian Income tax Act, 1922, this appeal is preferred by the Commissioner of Income tax. Answer recorded by the, High Court on the first question was, in our judgment, correct. This Court had in the earlier decision Indian Molasses Co. (Private) Ltd. vs The Commissioner of Income tax( ') held that the Company had not parted with control over the amounts set apart between the years 1948 and 1954 for securing the 'pension benefit to Harvey, and on that account no amount was appropriated to make it expenditure within the meaning of section 10(2)(xv) of the Act. At the date when different sums of money were set apart there was no existing liability and the sums (1) 777 of money set apart to meet an obligation which may or may not arise on the happening of a future event, the Company did not lay out or expend the sums within the meaning of section 10(2)(xv). The amounts set apart became subject to the obligation to pay the pension arranged to be given only when Harvey died, and must be deemed expended then within the meaning of section 10(2)(xv) of the Indian Income tax Act, 1922. But on the materials before us we are unable to answer the second question, for the Tribunal has found no facts on which the admissibility of the allowance may be determined, and the High Court has declined to allow the argument to be raised by the Commissioner that in the circumstances of the case the amounts expended were not admissible under section 10(2)(xv) of the Act. Sections 10(1) and 10(2)(xv) of the Act, insofar as they are relevant, provide : 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." section 10(2) "Such profits or gains shall be computed after making the following allowances, namely (xv) any expenditure (not being an allowance of the nature described in any of the clauses (i) to (xiv) inclusive, and not being in the nature of capital expenditure or personal expenses of the assessee) laid out or expended wholly and exclusively for the purpose of such business, profession or vocation. " Sub section (4A) of section IO which was added by the Finance Act of 1956 with effect from April 1, 1956, may also be read : "Nothing in sub section (2) shall, in the computation of the profits and gains of a Company be deemed to authorise the making of (a) any allowance in respect of any expenditure which results directly or indirectly in the provision of any remuneration or benefit or amenity to a director or a person who has a substantial interest in the company within the meaning of sub clause (iii) of clause (6C) of section, 2, or (b) any allowance in respect of any assets of the company used by any person referred to in 778 clause (a) either wholly or partly for his own purposes or benefit. if in the opinion of the Income tax Officer any such allowance is excessive or unreasonable having regard to the legitimate business needs of, the company and the benefit derived by or accruing to it therefrom. Explanation. The provisions of this sub section shall apply notwithstanding that any amount disallowed under this sub section is included in the total income of any person referred to in clause ( a)." An amount proved to be expended by a tax payer carrying on business is (subject to sub section (4A) of section 10), a permissible allowance in the computation of taxable income of the business, if it be established that the allowance claimed is (a) expenditure which is not of the nature described in cls. (i) to (xiv) of section 10(2); (b) that it is not of the nature of capital expenditure or personal expenses of the assessee; and (c) that the expenditure was laid out or expended wholly and exclusively for the purpose of such business, profession or vocation. The expenditure incurred by the Company is not allowance of the nature described in any of the clauses (i) to (xiv) inclusive of section 10(2), nor is it of the nature of capital expenditure or personal expenses of I the assessee. In our judgment, the argument advanced before the High Court that the expenditure resulting from the setting apart of the money for securing an annuity to provide pensionary benefit to Harvey and his wife was of a capital expenditure was rightly negatived by the High Court. To attract the exemption under section 10(2) (xv)it had still to beestablished that the amount set apart was laid out or expended wholly and exclusively for the purpose of the business of the Company. On this part of the case there is no discussion in the orders of the taxing authorities and the Tribunal. To recall, the Income tax Officer recorded no reasons for, disallowing the expenditure. The Appellate Assistant Commissioner disallowed it on the, ground that it was not debited in the profit and loss account of the Company in the previous year. The Tribunal assumed, and in our judgment erroneously, that this Court had in the earlier judgment pronounced upon the applicability of all the conditions of section 10(2)(xv) of the Act to the amount set apart when it became expenditure. This Court did not express any opinion on that question. , The language in which the question was framed in the earlier case clearly indicated that the enquiry contemplated was only whether the amounts set apart were expended and no other. 779 The judgment of this Court also does not imply that in the view of the Court if the setting apart of the amount was expenditure, the other conditions for the expenditure to be a permissible allowance under section 10(2) (xv) were satisfied. It cannot be, assumed that because on the death of Harvey the amounts previously set apart were deemed expended, the outgoing was admissible as expenditure under section 10(2)(xv) read with section 10(4A). The Tribunal considered two questions only : (1) whether the setting apart of the amounts amounted to expenditure within the meaning of section 10(2) (xv); and (2) if it was expenditure, whether it could be regarded as capital expenditure and not revenue expenditure. On both the contentions the Tribunal decided in favour of the Company. But before section 10(2)(xv) could be called in aid to support the claim of the company it had to be established that it represented expenditure laid out or expended wholly and exclusively for the purpose of the business, and that it was authorised under section 10(4A). The High Court was of the view that because before the Tri bunal the question was not expressly raised that "the other conditions inviting the application of section 10(2)(xv) were not satisfied, the allowance was not admissible", the Commissioner was incompetent to urge that plea before the High Court. In support of that view they relied upon the judgment of this Court in Commissioner of Income tax, Bombay vs Scindia Steam Navigation Co. Ltd(1). The High Court observed that before the Tribunal the plea that the expenditure was not laid out or expended wholly and exclu sively for the purpose of the business of the Company was not argued, and since the question raised and referred "was not wide enough to include that submission", the Commissioner could not urge it before them. 'We are unable to hold that the decision in Scindia Steam Navigation Company 's case( ') supports the opinion of the High Court. The plea that the amount claimed to have been expended was not admissible as an allowance was raised by the Department. The Appellate Assistant Commissioner had decided in favour of the Department and the order was sought to be supported before the Tribunal by the Departmental representative. Granting that an aspect of the question was not argued before the Tribunal, the question was on that account not one which did not ,arise out of the order of the Tribunal. In our judgment, the expression "question of law arising out of such order" in section 66(1) is not restricted to take in only those questions which have been expressly argued and decided by the Tribunal. If a question of law is raised before the Tribunal, even if an 'aspect of that question is not raised, in our judgment, that aspect may be urged before the High Court. The judgment of this Court in Scindia Steam Naviga tion Co. Ltd. 's case( ') does not only not lend any assistance to the (1) ; 780 view taken by the High Court, but negatives that view. In that case certain steamships belonging to the assessee Company were lost during the World War 11 by enemy action. The Government of India paid to the Company compensation which exceeded the written down value of the steamships. The Department sought to charge the excess amount to tax under the fourth proviso of section 10(2)(vii) of the Income tax Act, 1922 inserted by the Income tax (Amendment) Act, 1946, which came into force in the yea of assessment. The Income tax Officer held that the material date for the purpose of the fourth proviso to section 10(2)(vii) was the date when the compensation was in fact received and therefore the ' amount was assessable in the assessment year 1946 47. At the instance of the Company the Tribunal referred the question whether the difference between the written down value and compensation was properly included in the total income for the assessment year 194647. Before the High Court the Company for the first time raised the contention that the fourth proviso to section 10(2)(vii) did not apply to the assessment as it was not in force on April 1, 1946 and the liability of the Company had to be determined as on April 1, 1946, when the Finance Act, 1946 was brought into force. The Commissioner of Income tax contended that the question did not arise out of the order of the Tribunal within ' the meaning of section 66 as it was not raised before nor dealt with by the Tribunal, and it was not referred to the Court. The High Court overruled the objection. This Court held that the High Court had jurisdiction to entertain the Company 's contention raised for the first time before it, that the fourth proviso to section 10(2)(vii) did not apply to the as sessment as the contention was within the scone of the question as framed by the Appellate Tribunal and was really implicit therein. The Court in that case held that the question as framed was comprehensive enough to cover the question of the applicability. of the fourth proviso to section 10(2)(vii) of the Income tax Act. Venkatarama Aiyar, J., observed at p. 612 " Section 66 (I ) speaks of a question of law that arises out of the order of the Tribunal. Now a question of law might be a simple one, having its impact at one point, or it may be a complex one. trenching over an area with approaches leading to different points therein. Such a question might involve more than one aspect, requiring to be tackled from different standpoints. All that section 66(1) requires is that the question of law which is referred to the Court for decision and which the Court is to decide must be the question which was in issue before the Tribunal. Where the question itself was under issue, there is no further limitation imposed by the section that the reference should be limited to those aspects (1) ; 781 of the question which had been argued before the Tribunal. it will be an over refinement of the position to hold that each aspect of a question is itself a distinct question for the purpose of section 66 (1) of the Act. " The second question raised in the present case, in our judg ment, permits an enquiry whether the amount claimed is an admissible allowance under section 10(2)(xv). We are unable to hold that it is restricted to an enquiry whether the expenditure is of a capital nature. The Tribunal did not consider whether the amount was laid out or expended wholly and exclusively for the purpose of the business of the Company. Expenditure is admissible as an allowance under section 10(2)(xv). if all the conditions prescribed thereby are satisfied and is authorised by section 10(4A). We are unable to hold that the question framed and referred excluded an enquiry Whether the expenditure was wholly and exclusively laid out or expended for the purpose of the business of the Company. Nor are we able to hold that because before the Tribunal stress was not pointedly laid upon the ingredients which enable an expenditure to be claimed and allowed, the question does not arise out of the order of the Tribunal. The matter in dispute before the Tribunal was whether the Company was entitled to the allowance under section 10(2)(xv) ,of the Indian Income tax Act 1922. The Tribunal considered whether the amount claimed to have been laid out or expended became expenditure within the meaning of section 10(2)(xv) on the death of Harvey, and whether it was capital expenditure. They did not consider whether the expenditure was laid out or expended wholly and exclusively for the purpose of the business of the Company. Since the Tribunal gave no finding on this part of the case, we are unable to answer the question on the materials placed before US. The High Court was, in our judgment, in error in refusing to allow the argument to be raised that the requirements of section 10(2)(xv) were not satisfied, and the expenditure on that account was inadmissible. Two courses are now open to us : to call for a supplementary statement of the case from the Tribunal; or to decline to answer the question raised by the Tribunal and to leave the Tribunal to take appropriate steps to adjust its decision under section 66(5) in the light of the answer of this Court. If we direct the Tribunal to submit a supplementary statement of the case, the Tribunal will, according to the decisions of this Court, (New Jehangir Vakil Mills Ltd. vs Commissioner of Income tax, Bombay North, Kutch and Saurashtra( '); Petlad Turkey Red Dye Works Co, Ltd. vs Com missioner of Income tax( '); and Keshav Mills Co. Ltd. vs Commissioner of Income tax, Bombay North, Ahmedabad( '), be res (1) (3) 782 tricted to the evidence on the record and may not be entitled to take additional evidence. That may result in injustice. In the circumstances we think it appropriate to decline to answer the question on the ground that the Tribunal has failed to consider and decide the question whether the expenditure was laid out or expended wholly and exclusively for the purpose of the business of the Company and has not considered all appropriate provisions of the statute applicable thereto. It will be open to the Tribunal to dispose of the appeal under section 66(5) of the Income tax Act, 1922, in light of the observations made by this Court after determining the questions which ought to have been decided. There will be no order as to costs in this appeal.

The respondent company appointed a managing director who was to retire at the age of 55. The company arranged to provide a pension to him on retirement, or a pension to his widow if he died before attaining the age of 55. It executed a trust deed on September 16, 1948, and paid to the trustees certain amounts to enable the trustees to take out an annuity policy to cover the pension. On October 29, 1954, the company arranged to give enhanced pension to the director or his wife and set apart an ,additional sum on the same terms. The director died in 1955 before attaining the age of 55, and the company claimed, in the return of its taxable income for the assessment year 1956 57, the total amount paid by it to the trustees as a permissible expenditure in the computation of the company 's business profits in the previous year. The Appellate Tribunal, held; (i) that the setting apart of the funds amounted to expenditure Within the meaning of s.10(2)(xv), and (ii) that it amounted to revenue expenditure and not capital expenditure. The Tribunal did not however consider whether the outgoing represented expen diture laid out or expended wholly and exclusively for the purpose of the business and whether it was authorised under s.10(4A). The Tribunal referred to the High Court two questions, namely : (1) whether the amounts constituted expenditure during the relevant accounting year 1955 within the meaning of the section and (2) whether it represented a revenue expenditure. The High Court held in favour of the company. When the Department sought to urge the plea that before the section could be called in aid, it had also to be established that the expenditure was wholly and exclusively for the purpose of the business and that it was authorised by s.10(4A), the High Court did not permit the plea to be raised as it was not expressly raised before the Tribunal. In appeal to this Court, HELD : (1) The amounts set apart became subject to the obligation to pay the pension arranged to be given, only when the director died, and since he died in May 1955, they must be deemed to have been expended only then, that is during the accounting year 1955. [776 H; 777 A B] 774 Indian Molasses Co. (P) Ltd. vs Commissioner of Income tax, West Bengal, , referred to. I I (2) An amount proved to be expended by a tax payer carrying on business is a permissible allowance under s.10(2) (iv) in the computation of the taxable income of the business if it is established; (i) that the allowance claimed is expenditure which, is not of the nature described in cls. (i) to (xiv) of section 10(2); (ii) that it is not of the nature of capital expenditure or personal expenses of the assessee; (iii) that the expenditure was laid out or expended wholly and exclusively for the purposes of such business; and (iv) that it was authorised under section 10 (4A). [778 C F] (3) The expression 'question of law arising out of such order ' in s.66(1), is not restricted to take in only those questions which have been expressly argued before and decided by the Tribunal. If a question of law is raised before the Tribunal, even if an aspect of the question was not raised, that aspect may be urged before the High Court. In the present case, the second question as framed and referred, does not exclude an enquirY whether the expenditure was wholly and exclusively laid out or expended for the purpose of the business of the company. It cannot be held that, because before the Tribunal, stress was not pointedly laid upon the ingredients which enable an expenditure to be claimed and allowed, the question did not arise out of the order of the Tribunal. Therefore the High Court was in error in refusing to allow the argument to be raised that the requirements of section 10(2) (xv) were not satisfied. [779 H; 780 A; 781 B F] Commissioner of Income tax, Bombay vs Scindia Steam Navigation Co. Ltd. ; , explained and followed. (4) Since the Tribunal gave no finding on that part of the case, a supplementary statement could be called from it, but such a supplementary statement would be restricted to the evidence on record and may result in injustice to the parties. [781 F] New Jahangir Vakil Mills Ltd. vs Commissioner of Income tax, 'Bombay North, Kutch & Saurashtra, Petlad Turkey Red Dye Works Co. Ltd. vs Commissioner of Income tax and Keshav Mills Co. Ltd. vs Commissioner of Income tax, Bombay North. Ahmedabad, , referred to. (5) Therefore. it is appropriate to decline to answer the second question on the ground that the Tribunal bad failed to consider and decide the question whether the expenditure was laid out or expended wholly and exclusively for the purpose of the business of the company and that it had not considered all appropriate statutory provisions. and to leave it to the Tribunal to dispose of the appeal under section 66(5) of the Act [782 A C]

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Civil Appeal No. 1137 of 1976. Appeal by Special Leave from the Judgment and Order dated the 14 8 75 of the Punjab and Haryana High Court in C.W. No. 3995 of 1975. J. Ramamurthi for the Appellants. Janendra Lal and B. R. Agarwala for Respondents 2 and 3 The Judgment of the Court was delivered by KRISHNA IYER, J. This appeal, by special leave, lends itself to a quick burial in view of the brief facts set out below. The appellant has been an employee of the second respondent. A notice was issued to him to show cause why disciplinary action should not be taken against him for certain items of misconduct imputed to him. The then Secretary of the bank, Shri Daljit Singh, enquired into the allegations. Thereafter, on April 1, 1975 the Secretary issued a notice to the appellant to show cause why his next increment should not be stopped by way of punishment; A reply was sent by the appellant by way of explanation and the Secretary accepting the explanation dropped the proceedings by order dated April 9, 1975 686 (Annexure III). Thereafter, the Managing Director taking the view that Shri Daljit Singh, Secretary, had no power to inflict punishment on the employees of the bank and that therefore the proceedings culminating in the exoneration of the appellant were invalid issued a fresh memorandum which concluded thus: "After considering the said enquiry report along with other relevant documents, I am provisionally of the view to impose upon you a penalty of dismissal from bank services. Before doing so, you are asked to show cause within 21 days from the receipt of this memorandum, why on account of findings of the said Enquiry Officer, into the charges, you should not be dismissed from the bank services. In case no reply is received within the prescribed period, it will be presumed that you have no reply in this behalf and the proposed punishment will be imposed. " The appellant was also suspended on the same date, viz., 7th July 1975. Thereupon, a writ petition under articles 226/227 was moved by the appellant challenging the revival of the proceedings against him as illegal and opposed to natural justice. The first point raised in objection by the second respondent is that the writ petition is premature since no action has been taken finally against the appellant, the disciplinary proceedings are still pending and the explanation of the appellant is under consideration. It is only in the event of the appellant being punished that any grievance can arise for him to be agitated in the proper forum. Other obstacles in the way of granting the appellant relief were also urged before the High Court and before us, but we are not inclined to investigate them for the short reason that the writ petition was in any case premature. No punitive action has yet been taken. It is difficult to state, apart from speculation, what the outcome of the proceedings will be. In case the appellant is punished, it is certainly open to him either to file an appeal as provided in the relevant rules or to take other action that he may be advised to resort to. It is not for us, at the moment, to consider whether a writ petition will lie or whether an industrial dispute should be raised or whether an appeal to the competent authority under the rules is the proper remedy, although these are issues which merit serious consideration. We are satisfied that, enough unto the day being the evil thereof, we need not dwell on problems which do not arise in the light of the 687 view we take that there is no present grievance of punitive action which can be ventilated in court. After all, even the question of jurisdiction to re open what is claimed to be a closed enquiry will, and must, be considered by the Managing Director. On this score, we dismiss the appeal but, in the circumstances, without costs. Before parting with this case, we would like to make it clear that counsel for the co operative bank has not been able to show any power to suspend an employee pending an enquiry. If that be so, the suspension of the appellant is plainly without the pale of law and he would be entitled to his salary during the period till final orders are passed. Since the matter has been pending long enough, we are assured by counsel for the respondent that final orders may be passed within one month from to day. M.R. Appeal dismissed.

Misconduct was imputed to the appellant by his employer, the second respondent. The then Secretary of the bank enquired into the allegations and, after issuing a notice to the appellant for showing cause against punishment, accepted his explanation and dropped the proceedings. Thereafter, the Managing Director of the Bank opined that the said Secretary was not empowered to punish a bank employee, and therefore, the proceedings culminating in the exoneration of the appellant were invalid. The proceedings were revived, and the appellant was suspended. His writ petition under articles 226 and 227 was dismissed by the High Court. On appeal by special leave, the appellant challenged the revival of the proceedings against him, as illegal and opposed to natural justice. Dismissing the appeal, the Court. ^ HELD: (1) There is no present grievance of punitive action which can be ventilated in court. The writ petition is premature since no action has been taken finally, against the appellant. [687A] (2) The co operative bank has not been able to show any power to suspend an employee pending an enquiry. If that be so, the suspension of the appellant is plainly without the pale of law. [687B]

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Appeal No. 991/76. (Appeal by Special Leave from the Judgment and Order dated the 21.1.1976 of the Madhya Pradesh High Court in Second Appeal No. 415 of 1971) section Choudhury, D.N. Mishra, O.C. Mathur and Shri Narain for the appellant. G.L. Sanghi, V.K. Sanghi, R.K. Sanghi and S.N. Khanduja for the respondent. The Judgment of the Court was delivered by KRISHNA IYER, J. A suit for eviction of an accommodation from the tenant to whom it had been let for residential and non residential 768 purposes resulted in dismissal by the trial Judge. But in an appeal, the final court of fact took the view that the landlord (respondent) was entitled to eviction. The tenant challenged the appellate decree before the High Court in Second Appeal without success and has therefore come up to this Court with this appeal by special leave. A short point has been raised which deserves only a short answer. Since we agree with the High Court which in turn has agreed with the first appellate court, our judgment can afford to be brief. A statement of necessary facts may now be given. The landlord had let out the premises, which is a storeyed building, to be tenant as per exhibit P 1 of 1955. The signif icant clause in the lease deed runs thus: "1 XXX 2. I take your house for my own use i.e. for opening a cloth shop and for residential purposes and I will not sublet your house to anybody. XXX XXX XXX XXX. " The tenant has thus put the building to busi ness and residential purposes. The landlord, who is an M. Sc., claimed the building back on the score that he wanted to run a medical store on the ground floor a non residential purpose and stay on the first floor with his wife a residential purpose. Thus the acommo dation was let out for dual purposes, was being used presumably for these requirements and was being claimed back by the landlord for the twin purposes mentioned above. The final court of fact has held that the landlord needs the building for his chemist 's shop and for his residential use. The High Court in Second Appeal has upheld this finding and added that "the finding as to his bonafide requirement was rightly not challenged before me . The conclusion that the courts have reached is the only conclusion possible on the evidence on record in the light of the circumstances appearing. " This statement by the High Court that the bonafide requirement of the landlord was not challenged before it has not been questioned in the memorandum of appeal to this Court. It must therefore be taken that the bonafide need of the landlord is validly made out. The short point that survives is as to whether the composite purposes of the lease would put it out of the ground set out for eviction under section 2 of the Madhya Pradesh Accommodation Control Act, 1961. The said Act defines 'accommodation ' thus: " 'accommodation ' means any building or part of a building, whether residential or non residential and includes, XX XXX XXX. " 769 It follows that an accommodation can be resi dential, non residential or both. section 12 bars an action of eviction of a tenant from any accommodation except on one or more of the grounds set out therein. section 12(1) (e) and (f), bearing on the present case, may be appropriately extracted here: "12. Restriction on eviction of tenents (1) (a) to (d) x x x x x (e) that the accommodation let for residential purposes is required bona fide by the landlord for occupation as a residence for himself or for any member of his family, if he is the owner thereof, or for any person for whose benefit the accommodation is held. and that the landlord or such person has no other reasonably suitable residential accommoda tion of his own in the occupation in the city or town concerned; (f) that the accommodation let for non residential purposes is required bona fide by the landlord for the purpose of continuing or starting his business or that of any of his major sons or unmarried daughters if he is the owner thereof or for any person for whose benefit the accommodation is held and that the landlord or such person has no other reasona bly suitable non residential accommodation of his own in his occupation in the city or town concerned;. XXX XXX XXX. " The residential portion is a part of the building and is an accommodation by defini tion. The non residential portion is also a part of the building and is an accommoda tion by definition. The lease has been given for residential as well as non residential purposes. The landlord is entitled to evic tion of the residential portion if he makes out a bonafide residential requirement. Likewise he is entitled to eviction of the non residential portion which is an accommoda tion if he makes out a non residential requirement. We have already found that the final court of fact, affirmed by the High Court, has found in favour of the landlord regarding his residential as well as non residential requirements. Therefore, nothing more can be done in defence of the tenant in the light of the present law. Counsel contended that in a decision of this Court, viz, section Sanyal vs Gian Chand,(1) it has been held that it is not permissible for the court to split up a contract in an eviction proceeding. We agree. There is no question of splitting up of the contract in the present case, as is abundantly plain from what we: have stated. The contract was integral but had dual purposes. The landlord has put forward dual requirements which neatly fit into section 12(1)(e) and (f). The conse quence is inevitable that the eviction order has to be upheld. (1) ; 770 It is seep, that the tenant has been doing a thriving cloth business, with goodwill attached to it, for well knigh 30 years. It is therefore but fair that the. tenant is given sometime to rehabilitate himself by securing an alter native but suitable accommodation. In our towns where scarcity of accommodation is the rule it is not that easy to secure alternative premises. Taking due note of this reali ty, we direct that while dismissing the appeal the eviction order shall not be put into execution before 1st January, 1978. Parties will bear their respective costs. S.R. Appeal dismissed.

Under sub clauses (e) and (f) of section 12(1) of the Madhya Pradesh Accommodation Control Act, 1961, a landlord can evict a tenant, if the residential and the non residential accommodation respectively let out to the latter is required bona fide by him for occupation as a residence and for the purpose of continuing or starting his business. Accommoda tion under the Act means any building or part of a building, whether residential or non residential. The appellant tenant was inducted in by the respondent in 1955 for the dual purposes of residential and non resi dential purpose of running a cloth shop. The landlord, bona fide required the building for his residence and also for starting his business of running a Chemist shop. The Evic tion Suit filed by him was dismissed by the trial court, but the appellant and the High Court ,,ranted him the eviction decree. Discussing the appeal by special leave, the Court. HELD: The residential portion as well as a non residen tial portion are parts of the building and each is an accom modation by definition. The landlord is entitled to evic tion of the "accommodation" if he makes out a bona fide residential and non residential requirement of the portions. In the instant case the contract was integral but had dual purpose. The landlord has put forward dual requirements which neatly fit into section 12(1)(e) and (f) of the Madhya Pradesh Accommodation Control Act, 1961. The findings of the appellate Court regarding the bona fide requirement of the landlord, not having been challenged in the High Court and in this Court in the memorandum of Appeal, the conse quence viz. eviction is inevitable. [769 E G] section Sanyal vs Gianchand ; , distinguished. [The Court, however granted time to the appellants for vacating the building till 1 1 1978, in terms of equity].

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Appeal No. 399 of 1957. Appeal from the judgment and decree dated July 27, 1954 of the High Court of Judicature at Hyderabad in Civil Appeals Nos. I and 2 of 1954 55. 619 section T. Desai, C. Krishna Reddi, T. Ramachandra Rao and M. section K. Sastri, for the appellants. Sadashiv Rao, J. B. Dadachanji and section N. Andley, for the respondent. March 28. The Judgment of the Court was delivered by WANCHOO, J. This is an appeal on a certificate granted by the former High Court of Hyderabad. A suit was brought by the respondent in 1920 with respect to village Timmapet. The case of the respondent was that the village had been granted to his ancestor Harinarayan alias Raja Nemiwant Bahadur by the Nizam in 1787. On the death of Raja Harinarayan, the village was conferred by another sanad on his son Raja Govind Narayan in 1811. Ever since then the village had continued in the possession of the descendants of Raja Govind Narayan. In 1817, Raja Govind Narayan granted this village on Tahud (i.e., lease) to Raja Rama Krishna Rao, ancestor of the defendants. Inam inquiries with respect to this village started in 1901 and then an objection was made on behalf of the appellants that the village had been granted to their ancestors by the Nizam and the respondent was only entitled to the pan mukta of the village and no more. Pan mukta means a fixed sum which is payable in perpetuity for any land granted by the Ruler or the jagirdar to any person. The respondent 's case further was that the lease money was being regularly paid, though some time before the suit there was some default. The respondent had to file a suit to recover the lease money which was decreed and the decretal amount was recovered. In 1917 disputes arose between the parties and consequently in 1918 the respondent asked the appellants to vacate the village. They, however, refused to do so. Thereupon the present suit was filed in 1920 and the respondent 's case was that the lease granted to the appellants was not a permanent lease and could only enure for the lifetime of the grantor and therefore the respondent was entitled to possession of the 620 village, particularly as the appellants had begun to assert a title adverse to the respondent. The suit was resisted by the appellants, and their main defence was that the village had been granted as bilmakta with a fixed pan makta in their favour by the Nizam and therefore the respondent was only entitled to the fixed pan makta per year and could not claim to dispossess them from the village. As an alternative, defence of limitation was also pleaded, though the written statement did not make it clear whether the bar of limitation was under article 142 or article 144 of the Limitation Act. There were other defenses also with which we are however not concerned in the present appeal. The trial court framed a large number of issues, which were answered in favour of the respondent and the suit was decreed and the plaintiff was held entitled to obtain possession of the village as well as to recover mesne profits at the rate of Rs. 931 12 0 0. section per year. On the two main defenses, the trial court held that the village had not been granted by the Nizam to the appellants as claimed by them and the appellants were liable to ejectment as they could not claim the rights of a permanent losses under the lease granted to their ancestor by the respondent 's ances tor. Further on the question of limitation, the trial court held that the suit was not barred by article 142. It does not appear that the case of adverse possession was put forward in the trial court. There were two appeals to the High Court; one of them was by the appellants and the other by the respondent. The respondent 's appeal was confined only to the rate of mesne profits while the appellants reiterated their two main contentions as to the nature of their right and limitation. The appeals were heard by a Division Bench of the High Court, the Judges composing Which however differed. Schri Ran, J., agreed with the trial court as to the nature of the rights of the 'respondent as well as on the question of limitation and was of the opinion that the appeal of the appellants should be dismissed. It appears that in the High Court a plea 621 of adverse possession was also raised in the matter of limitation; but that plea was also negatived by Schripat Rau, J. Further Schripat Rau, J., was of the View that the appeal of the respondent should be allowed and the amount of mesne profits per year should be _ raised to Rs. 4,381 12 11. The other learned Judge, Khalilulzaman Siddiqu, J., seems Lo have held in favour of the appellants both on the questions of title and adverse possession and was of the view that the suit should be dismissed in toto. There was then a reference to a third learned Judge, Ansari, J. He agreed with Schripat Rau, J., on the questions of title and limitation; but as by the time he came to deliver judgment the Hyderabad (Abolition of Jagirs) Regulation, No. LXIX of 1358 F had come into force from 1951 and possession could not be granted to the respondent, Ansari, J., held that the respondent would be entitled to the compensation payable on the abolition of jagirs. As Ansari, J., had per force to differ from Schripat Rau, J., as to the part of the relief to be granted to the respondent because of the abolition of jagirs, the case was referred to a Full Bench of three Judges in view of section 8 of the Hyderabad High Court Act. The Full Bench held that as Ansari and Schripat Rau, JJ., were in agreement on the questions of title and limitation these matters did riot fall to be decided before them and would be concluded by the judgment of Ansari, J. But on the nature of relief on which Ansari, J., per force had to differ from the view of Schripat Rau, J., the Full Bench upheld the view of Ansari, J. Thereafter the appellants applied for a certificate for leave to appeal to this Court, which was granted; and that is how the matter has come up before us. Learned counsel for the appellants has urged only two points before us. In the first place, lie submits that on the evidence it has been proved that the Nizam granted a bilmakta sanad to the appellants which included this village also and therefore the appellants were entitled to the possession of the village permanently subject only to the payment of pan 622 makta to the respondent. In the second place, he submits that even if it be held that the Nizam did not grant a bilmakta sanad including this village, the appellants had perfected their title by adverse possession to the limited right of being permanent lessees under the respondent subject to payment of a fixed amount of rent per year. The first question therefore that arises is whether the appellants ' case that this village is included in the bilmakta sanad granted to them by the Nizam and therefore by virtue of that sanad they are entitled to hold this village permanently subject only to the payment of a certain sum annually to the respondent, is proved. It is now no longer in dispute that the village was granted in jagir to the ancestors of the respondent. It is also not in dispute that in 1817 Raja Govind Narayan granted a kowl in favour of the appellants ' ancestor. Under the terms of that kowl the village was granted on Tahud (lease) for the fixed sum of Rs. 1027 10 0 per year to the appellants ' ancestor. No term is mentioned in the kowl as to its duration; but after reciting that the village had been granted on Tahud for a certain fixed amount annually, the kowl goes on to say that the grantee should with entire confidence rehabilitate old and new riots and pay the amount of Tabud annually as per fixed installments, in every crop season. As one reads the kowl, on its plain terms it cannot be read to confer on the appellants ' ancestor a permanent lease on a fixed sum which was not liable to be varied at all. But the appellants claim that they had been in uninterrupted possession since 1817 for over 100 years. on the same rent when the suit was filed and this shows that the village must have been granted to them as a permanent lease. We cannot accept this contention and the fact that the appellants and their ancestors have continued in possession over 100 years on the same rent would not make the kowl of 1817 a permanent, lease in the face of its plain terms. The courts below were therefore right in the view that the kowl does not show a grant of a permanent lease on a fixed annual payment to the appellants. 623 The appellants however relied on what happened soon after the kowl was granted to them. It appears that soon after 1817 the appellants ' ancestor made a vajab ul arz (i.e., application to the Nizam) with various prayers. One of the prayers was for grant of bilmakta sanad. This was obviously with respect to certain Government lands, which the ancestors of the appellants held. In para 6 of the vajab ul arz it is said that "in these days your devotee has regularly paid Government dues and expects that he should receive sanads of bilmakta with the seal of Diwani". In para 3 it is said that "from out of the Government Talukas whichever is entrusted on Tahud, your petitioner will pay the Tahud amount and will look after and improve the Taluka". On a fair reading of the vajabul arz there can be little doubt that the ancestor of the appellants was praying that he should be granted a bilmakta sanad of lands held by him from the Government. To this vajab ul arz was appended a list of villages which apparently the ancestor of the appellants hold. This list contained 88 villages. There is no difficulty about 85 of these villages which were apparently field by the ancestor of the appellants from the Government; but about three villages there was a special mention in the list. These were:(1) Timmapet, Jagir Raja Nemivant, Makta of Zamindar of Sugur. It may be mentioned that the ancestor of the appellants was the Zamindar of Sugur and that is how he prayed for a sanad of bilmakta; (2) the village Korotkal, attached to Jagir Bahrami, makta Zamindar Sugur; and (3) Palmur, including hamlet Gattalpalli. These three villages were obviously not of the same kind as the other 85 villages. Village Timmapet was in the jagir of the ancestor of the respondent and Could not therefore ordinarily be granted to the ancestor of the appellants. Village Korotkal was an attached jagir which has handed over to one Bakhshi Ismail Khan while village Palmur had been granted to the ancestor of the appellants. Village himself in lieu of seri. Strictly speaking these three villages which stood apart should not have been included in the list of villages for which bilmakta 624 sanad was prayed for. Anyhow the order of the Government on this vajab ul arz was that a sanad with seal of Niabat Diwani be granted. The actual sanad which was granted by virtue of this order has not been strictly proved, though a copy of it appears in a judgment copy of which has been filed. We do not therefore propose to refer to this copy. It appears however that in 1880 a bilmkta sanad was again granted by the Nizam himself to the ancestor of the appellants on the death of the previous holder. The amount of bilmakta (i.e., fixed annual payment) was fixed at Rs. 1,05,412. This amount is made up of the revenue of 85 villages out of the 88 villages which were included in the list along with the vajab ul arz. The remaining three villages which we have mentioned above, were also shown in the schedule to this sanad under the heading "Deduct 3 villages of separate Jagir". The three villages under this heading are Timmapet, Korotkal and Palmur. It is the meaning of these words under the heading of which these villages appear which; required interpretation in the present suit. The contention of the respondent was that the heading showed that the bilmakta sanad granted by the Nizam excluded these villages, for the revenue of these villages amounting to Rs. 2,101 was not included in the bilmakta amount of Rs. 1,05,412. It is further contended on behalf of the respondent that the, reason why these three villages were mentioned in this manner in the schedule attached to the bilmakta sanad was that the appellants ' ancestor had wrongly included these ' villages in his list filed with the vajab ul arz and ever, since then these villages were included in the schedule to the sanads but were always shown as deducted from the bilmakta. We are of opinion that this contention of the respondent is correct and the courts below were right in accepting the respondent 's contention in this behalf. The very fact that the revenue of these villages is not included in the bilmakta amount of Rs. 1,05,412 shows that they could not be part of the bilmakta grant by the Nizam. We cannot accept the argument on behalf of the appellants that the revenue of these villages was 625 not included because the ancestor of the appellants had to pay the amount of this revenue in the case of Timmapet and Korotkal to the jagirdars and the revenue of Palmur was given to him free in seri. The very fact that these three villages appear under the heading " 'deduct three villages of separate jagir" along with the fact that their revenue is not included in the bilmakta grant of Rs. 1,05,412 shows that they were not part of the bilmakta sanad. It is true that they have been mentioned in the schedule, and strictly speaking they should not have been so mentioned there; but the reason for that in our opinion is that the appellants ' ancestor had included them in his list and they seem to have been put down in the schedule to the sanad from that list. But the way in which they were put in the schedule to the sanad shows that they were not part of the sanad granted by the Nizam. Our attention was also drawn to the Avarja said to have been prepared in 1836 in which also these three villages are included. But Avarja is merely a paper in which a note of the sanads issued each day is mentioned. The fact therefore that these; three villages were mentioned in the Avarja can be easily explained by the fact that they were mentioned in the sanads which were prepared from the list of villages supplied by the appellants ' ancestor along with his vajab ul arz. The presence of these three villages in the Avarja would not establish that the villages were granted as bilmakta by the Nizam to the appellants ' ancestor, unless the sanads granted by the Nizam establish it. We have already examined the sanad of 1880 which is on the record and have no difficulty in agreeing with the courts below that the bilmakta sanad excluded these villages and was only confined to the remaining villages for which the appellants ' ancestor paid Rs. 1,05,412 to the Nizam as the fixed annual amount. It was urged on behalf of the appellants that the Nizam was an absolute Ruler and it Was open to him to take away any land from a jagirdar and grant it to any other person. That is undoubtedly so; but even where an absolute Ruler takes away some land from 79 626 a jagirdar and gives it to another person, it seems to us clear that he would inform the jagirdar that he had taken away in whole or in part what he had granted to him and would also make it clear by proper words in the sanad granted to the other person that he was giving him the land taken away from the jagirdar. In any case where the land was granted earlier to the jagirdar, there must be a clear indication in the sanad to another person that what had been granted to the jagirdar had been taken away and was being granted to this other person. As we read the sanad of 1880 we find no clear indication in it that the village of Timmapet which was granted along with other villages as jagir to the respondent 's ancestor was being taken away at any rate in part and that in future the respondent 's ancestor would only be entitled to a fixed sum from the appellants ' ancestor with respect to this village and no more. On the other hand, in the recital of the sanad unfortunately there is nothing clear for the words "etc. " appear therein in more than one place as to the land granted. We have therefore to turn to the schedule for whatever help we can get from it. The schedule shows that these three villages were under the heading "deduct three villages of separate jagir". From that the only inference can be that these three villages were not being included in the bilmakta sanad. In any case we cannot infer from that the Nizam was intending to take away a part of the rights of the respondent 's ancestor in village Timmapet and confer them on the appellants ' ancestor. Further there is nothing to show that the respondent 's ancestors were ever informed that the Nizam had taken away part of their rights in village Timmapet. If anything, as late as 1918 village Timmapet along with others was conferred perpetually in favour of the respondent as zat jagir subject to the payment of 2 per centum of haq malkana. At that time the appellants ' ancestor had raised some dispute about his right as bilmaktadar of Timmapet but that was left undecided. On a review therefore of the evidence in this case the conclusion is inescapable that the appellants ' ancestor was never granted bilmakata sanad by the Nizam which 627 included the village of Timmapet. Their rights in this village therefore depend entirely on the kowl of 1817, which, as we have already pointed out, did not confer a permanent lease. The case of the appellants therefore based on their title on the sanads granted to them by the Nizam must fail. We now turn to the question of limitation. The case put forward before us in that connection is that the appellants have prescribed for the limited right of being permanent lessees of this land by adverse possession and the genesis of this is traced to what happened in 1875. It appears that there was trouble between the then ancestors of the parties about this village about that time. The ancestor of the respondent appears to have made an application to the Government and the Revenue Member had issued orders for delivery of possession of this village to him. Thereupon the ancestor of the appellants made a representation to the Prime Minister against that order in which it was said that the ancestor of the respondent had conferred the said village on the ancestor of the appellants by way of bilmakta (i.e., on a fixed amount) more than eighty years ago and the ancestor of the appellants had been in possession all along and had been regularly paying the amount due; the ancestor of the appellants therefore prayed that the order of delivery of possession of the land to the respondent 's ancestor be set aside. It is remarkable that in this representation the case put forward was that the village had been granted bilmakta,by the ancestor of the respondent to the appellants ' ancestor and not by the Nizam or the Government to the appellants ' ancestor. However that may be, the Prime Minister ordered that as the ancestor of the appellants had been in possession for a long time, no order could be passed dispossessing him. The ancestor of the res pondent then tried to get this order of the Prime Minister changed but failed and in consequence the appellants ' ancestor remained in possession thereof. It is urged that this shows that the ancestor of the appellants asserted that he was entitled to possession as a permanent lessee against the respondent 's ancestor and this claim was resisted by the respondents 628 ancestor and the resistance failed. Therefore it must be held that adverse possession of this limited kind was asserted to the knowledge of the respondent 's ancestor and in consequence twelve years after 1875 the adverse title would be perfected and article 144 would bar the present suit for ejectment. There is no doubt that there can be adverse possession of a limited interest in property as well as of the full title as owner: see Sankaran vs Periasami(1); Thakore Fatehsingji Dipsangji vs Bamanji Ardeshir Dalal (2); and Shrimat Daivasikhamani Ponnambala Desikar vs Periayanan Chetti (9). The present however is a case where the original kowl was granted by a jagirdar and the question arises whether in the case of a jagir there can be adverse possession of a limited interest in the nature of a permanent lease. In that connection one has to look to the incidents of a jagir, and the first incident of a jagir is that it must be taken Prima facie as an estate granted, for life: Gulabdas Jugjivandas vs The Collector of Surat. (4) In the present. case also the indication is that the jagir that was granted to Raja Harinarayan in 1787, was for life, for we find that on the death of Raja Harinarayan a fresh sanad was granted to his son Raja Govind Narayan in 181 1. Similar conclusion can be drawn from the fact that as late as 1880 a bilmakta sanad was granted to Raja Rameshwar Rao, an ancestor of the appellants on the death of his father in spite of certain sanads in favour of previous holders of bilmakta. But the appellants contend that after 1811 no fresh sanads were granted to the descendants of Raja Govind Narayan and therefore it must be held that the jagir became hereditary and was not merely for the lifetime of the grantee after Raja Govind Narayan 's death. There is no doubt that there are no sanads on the record which might have been granted to the descendants of Raja Govind Narayan; but there is equally no evidence on behalf of the appellants that no such sanads were in fact granted to the descendants of Raja Govind Nara yan, due to change in State Policy. Reliance has been (1) Mad. 467. (2) Bom. (3) (1936) L.R. 63 I.A. Mad. (4) (1878) L.R. 6 1.A. 54. 629 placed on behalf of the appellants on a publication of the Government of Hyderabad called "Jagir Administration", Vol. I, at P. 3, where the following passage appears. "Zaot or personal grants were originally tenable for lifetime only. If, however, the Sanad conferring such grant contains any words indicative of permanency the grant was treated as one in perpetuity. Formerly on the death of the grantee, the Jagir was attached and re issued in favour of his eldest son by another Sanad. " It is urged on the basis of this that the system of attachment of jagir and reissue of new sanads in favour of the eldest son fell into disuse in Hyderabad and therefore jagirs became hereditary. In the first place this passage does not show when the system of attachment of jagir and re issue of another sanad came to an end. In the second place, even this passage shows that jagirs were tenable only for life unless there was something in the terms of jagir grant to show that it was perpetual. The jagir grant of Raja Govind Narayan is on the record and there is nothing in it to show that it was granted perpetually, Therefore, it must be held to be a grant for life time only; at any rate it is clear that the system of granting sanads on each succession was certainly in force when Raja Govind Narayan succeeded, for he was granted a fresh sanad. In his case it must therefore be held that the jagir was granted to him only for life. Reliance was also placed on Raje Vinaykrao Nemiwant Brahmin vs Raje Shriniwasrao Nemiwant Brahmin (1) where a letter of 1877 from the Government of India, Foreign Department,, is quoted as saying that "The Governor General in Council also accepts the view that these inams are held in accordance with the custom of the Hyderabad State, which permits the continuance of such jagheers to posterity, notwithstanding the absence of specific provision on the point, but at the same time reserves to the State the right of resuming such grants at pleasure. " (1) I.L.R. 630 But even this letter shows that the State has got the right to resume the grant at pleasure and if that is so it cannot be said that the jagirs granted in Hyderabad were permanent and hereditary, though it may be that a son was allowed to succeed to " 'the father in the normal course. The State however had always the right to resume the grant at pleasure. The nature of jagirs in Hyderabad came to be considered by a bench of five judges of the former High Court of Hyderabad in Ahmad un Nissa Begum vs State ( '). Ansari, J., after referring to two cases of the Privy Council of the former State of Hyderabad as it was before 1947 and certain firmans of the Ruler observed as follows as to the nature of jagirs in Hyderabad: "The cumulative effect of the authorities referred to above is that the jagir tenures in this State consisted of usufructuary rights in lands which were terminable on the death of each grantee, were inalienable during his life, the heirs of the deceased holder got the estate as fresh grantees and the right to confer the estate was vested in the Ruler and exercisable in his absolute discretion. Nevertheless, the Jagirdars had during their lives valuable rights of managing their estates, enjoying the usufructs and other important privileges which conferred considerable monetary benefits on them." This view of Ansari, J., as to the nature of jagirdari tenure was accepted by the other learned Judges composing the Bench. Therefore the mere fact that sanads granted to the successors of Raja Govind Narayan have not been produced in this case or even the fact that no such sanads were granted lo them would make no difference to the nature of the jagirdari tenure in Hyderabad. It is only in 1918 for the first time that we know that this village along with other villages was conferred in perpetuity on the respon dent. There is nothing to show that before that the respondent 's ancestors had permanent hereditary rights in the jagir. The initial presumption therefore that jagirs are only for the lifetime of the grantee must prevail in the present case till we come to the sanad of 1918. Therefore upto that time it must be (1) A.I.R. 1952 Hyd. 163, 167. 631 held that the jagirs were held by various ancestors of the respondent only for their lives. In such a case where a grant is continued in a family from generation to generation and each grantee holds it for his life the limitation against any one grantee starts to run from the date his title arose. This was recognized by the Privy Council in Jagdish Narayan vs Nawab Saeed Ahmed Khan (1), where it was observed that where each grantee holds an estate for his lifetime the limitation would start to run against an heir from the date when his title accrued on the death of the previous heir. From the very fact that the grant of a jagir is only for the life time of the grantee and that his son when he gets the jagir gets a fresh grant, it follows that it was not open to a jagirdar to make an alienation which would enure beyond his lifetime and thus a jagirdar could not grant a permanent lease, unless he was specifically entitled to do so, under the sanad or the law of the State. Similarly in such cases limitation would only run against an heir from the date when his title accrued on the death of the previous heir. Consequently the appellants cannot take advantage of what happened in 1875 in the time of Raja Ramarao as the starting point of adverse possession against the respondent. So far as the respondent is concerned, he apparently succeeded to the jagir in 1910 and in his case limitation would start from 1910. The present suit was brought in 1920 and therefore so far as the respondent is concerned, there is no question of perfecting even the limited title by adverse possession as against him. ' Learned counsel for the appellant drew our attention in this connection to the case of Daivasikhamani (2), where the Privy Council held that the suits were barred under article 144 of the Limitation Act. That was however a case where a permanent kowl of temple lands was granted by a manager. It was held in view of certain facts proved in that case that the lessee had acquired permanent rights by adverse pos session, even though the manager of a temple has no authority, except in certain circumstances, to grant a permanent lease. That case is in our opinion clearly (1) A.I.R. 1946 P.C. 59. (2) (1935)) 1 [I.L. R 632 distinguishable from the facts of the present case. It is true that the manager of a temple has generally speaking no authority except in certain circumstances to grant a permanent lease of temple property; there fore a permanent lease granted by the manager of a temple may be voidable but is not void ab initio and so unless it is avoided by the succeeding manager, it may not be rendered inoperative. Further the temple in that case was the owner of the property and there was no question of any succession from father to son. In the case of a jagir on the other hand, the holder for the time being is not the owner of the property; his son when he succeeds holds the property as a fresh grantee and not on the basis of hereditary succession. A jagirdar has no right to make a permanent alienation of any part of the jagir granted to him; if he makes a permanent alienation even by way of permanent lease the same may be good in his lifetime, but it is void and inoperative after his death; the succeeding jagirdar need not avoid it; he can just ignore it as void. Therefore, while it may be possible in the case of a permanent lease granted by a manager of a temple which is the owner of the property to prescribe for a limited permanent interest by adverse possession it would be impossible to do so in the case of a jagir, for the limitation in such a case would start to run against the heir from the date when his title accrues on the death of the previous heir and no advantage can be taken of any running of time against the previous holder of the jagir. Besides, in the case of such temple grants, long lapse of time may sometimes give rise to the inference that the alienation was in such circumstances as would justify a permanent lease. No such inference is however possible in the case of permanent leases granted by jagirdars. In this view therefore the case of the appellants that they have prescribed for the limited interest of a permanent lessee against the respondent must fail. The appeal therefore. fails and is hereby dismissed with costs. Appeal dismissed.

Although title to a limited interest in property can be acquired by adverse possession, no limited interest in the nature of a permanent lease can be ordinarily acquired in a jagir which must initially be presumed to enure for the life time of the grantee unless the grant itself shows otherwise. Sankaran vs Periasami, Mad. 467, Thakore Fatehsingji Dipsangji vs Bamanji Ardeshir Dalal, Bom. 5I5, Shrimat Daivasikhamani Ponnambala Desikar vs Periayanan Chetti, (1936) L.R. 63 I.A. 261 and Gulabdas,Jugjivandas vs The Collector of Surat, (1878) L.R. 6 I A 54, referred to. Although in the former State of Hyderabad a son might in normal course be allowed to succeed to the father 's jagir, it could not be said that jagirs granted by the State were therefore permanent and hereditary in character, for the State generally .had the right to resume the grant. Raje Vinaykrao Nemiwant Brahmin vs Raje Shriniwasrao Nemiwant Brahmin, I.L.R. and Ahmad un Nissa Begum vs State, A.I.R. 1952 Hyd. 163, referred to. Where, therefore, a grant was continued in a family from generation to generation, each grantee must be taken to hold it for his life and limitation against each must start from the date of his title. Since a jagirdar could not grant a lease beyond his lifetime unless specifically empowered by the sanad or the law of the State, the period of adverse possession against one jagirdar could not be tacked to that against another for the purpose of article I44 Of the Indian Limitation Act. In this respect a jagirdar stood on a different footing from that of the manager of a temple. Jagdish Narayan vs Nawab Saeed Ahmed Khan, A.I.R. 1946 P.C. 59, referred to. Shrimat Daivasikhamani Ponnambala Desikay vs Periyannan Chetti, (1936) L.R. 63 I.A. 26i, distinguished.

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Appeal No. 299 of 1964. Appeal from the judgment and order dated September 26, 1961 of the Allahabad High Court in Second Appeal No. 620 of 1957. J. P. Goyal, for the appellants. B. C. Misra, for the respondent No. 1. April 15, 1964. The judgment of the Court was delivered by HIDAYATULLAH, J. In this appeal by certificate from the High Court of Judicature at Allahabad the appellants are the four original defendants in a suit for pre emption filed by the first respondent. Kaiseri Begam (respondent No. 2) sold a plot and two houses in mohalla Gher Abdul Rahman Khan, 757 Qasba Milak, Tehsil Milak, District Rampur, to the appel lants on December 4, 1953. The first respondent Labh Singh owned the adjacent house and he claimed pre emption on the ground of vicinage after making the usual demands. The suit was filed by Labh Singh in the court of Munsif, Rampur who by his judgment dated September 25, 1955 held that there was a general custom of pre emption in the town of Milak. He also held that Labh Singh was entitled to preempt and had performed the Talabs. He, however, dismissed the suit because the sale did not include a strip of land 3 feet 6 inches wide between Labh Singh 's house and the property sold. He made no order about costs. There was an appeal by Labh Singh and the present appellants objected. The District Judge, Rampur allowed the appeal and dismissed the cross objections. The appellants then filed a second appeal in the High Court of Allahabad. Mr. Justice V. D. Bhargava, who heard the appeal, referred the following question to a Division Bench: "Whether after coming into operation of the right of pre emption is contrary to the provisions of article 19(1)(f) read with article 13 of the Constitution, or is it saved by clause (5) of article 19? " The Divisional Bench held that the law relation to pre emp tion on the ground of vicinage was saved by clause (5) of article 19 and was not void under article 13 of the Constitution. In view of this answer, the second appeal was dismissed. The High Court, however, certified the case and the present appeal has been filed. The question which was posed by Mr. Justice V. D. Bhargava was considered by this Court in connection with s.10 of the Rewa State Pre emption Act, 1946 in Bhau Ram vs B. Baijnath Singh (1). This Court held by majority that the law of pre emption on the ground of vicinage imposed unreasonable restrictions on the right to acquire, hold and to dispose of property guaranteed by article 19(1)(f) of the Constitution and was void. It was pointed out that it placed restrictions both on the vendor and on the vendee and there was no advantage to the general public and. that the only reason given in support of it, that it prevented persons belonging to different religions, races or castes from acquiring property in any area peopled by persons of other religious, races or castes, could not be considered reasonable in view of article 15 of the Constitution. If this ruling applies the present appeal must succeed. Mr. B. C. Misra, who appears for Labh Singh attempts to distinguish Bhau Ram 's case(1). He contends that the earlier case was concerned with a legislative measure whereas the. (1) [1962] Supp. 3 S.C.R. 724. 758 present case of pre emption arises from custom. He refers to the decision in Digambar Singh vs Ahmad Said Khan(1) where the Judicial Committee of the Privy Council has given the early history of the law of pre emption in village com munities in India and points out that the law of pre emption had its origin in the Mohammedan Law and was the result, some times, of a contract between the sharers in a village. Mr. Misra contends that articles 14 and 15 are addressed to the State as defined in article 12 and are not applicable to custom or contract as neither, according to him, amounts to law within the definition given in article 13(3)(b) 'of the Consti tution. He submits that the ruling of this Court does not cover the present case and that it is necessary to consider the question of the validity of the customary law of pre emption based on vicinage. It is hardly necessary to go into ancient law to discover the sources of the law of pre emption whether customary or the result of contract or statute. In so far as statute law is concerned Bhau Ram 's case(2 ) decides that a law of pre emption based on vicinage is void. The reasons given by this Court to hold statute law void apply equally to a custom. The only question thus is whether custom as such is affected by Part III dealing with fundamental rights and particularly article 19(1)(f). Mr. Misra ingeniously points out in this connection that article 13(1) deals with "all laws in force" and custom is not included in the definition of the phrase "laws in force" in clause (3)(b) of article 13. It is convenient to read article 13 at this stage: "13.(1) All laws in force in the territory of India immediately before the commencement of this Constitution, in so far as they are inconsistent with the provisions of this Part, shall, to the extent of such inconsistency, be void. (2) The State shall not make any law which takes away or abridges the rights conferred by this Part and any law made in contravention of this clause shall, to the extent of the contravention, be void. (3) In this article, unless the context otherwise re requires, (a) "law" includes any Ordinance, order, bye law, rule, regulation, notification, custom or usage having in the territory of India the force of law; (b) "law in force" includes laws passed or made by a Legislative or other competent authority in the territory of India before the commencement of this Constitution and not previously (2) [1962] Supp. 3 S.C.R. 724. (1) L.R. 42 I.A. 10, 18. 759 repealed, notwithstanding that any such law or any part thereof may not be then in operation either at all or in particular areas. " The argument of Mr. Misra is that the definition of "law" in article 13(3)(a) cannot be used for purposes of the first clause, because it is intended to define the word "law" in the second clause. According to him, the phrase "laws in force" which is used in clause (1) is defined in (3)(b) and that definition alone governs the first clause, and as that definition takes no account of customs or usage, the law of pre emption based on custom is unaffected by article 19(1)(f). In our judgment, the definition of the term "law" must be read with the first clause. If the definition of the phrase "laws in force" had not been given, it is quite clear that the definition of the word "law" would have been read with the first clause. The question is whether by defining the composite phrase "laws in force" the intention is to exclude the first definition. The definition of the phrase "laws in force" is an inclusive definition and is intended to include laws passed or made by a Legislature or other competent authority before the commencement of the Constitution irrespective of the fact that the law or any part thereof was not in operation in particular areas or at all. in other words, laws, which were not in operation, though on the statute book, were included in the phrase "laws in force". But the second definition does not in any way restrict the ambit of the word "law" in the first clause as extended by the definition of that word. It merely seeks to amplify it by including something which, but for the second definition, would not be included by the first definition. There are two compelling reasons why custom and usage having in the territory of India the force of the law must be held to be contemplated by the expression "all laws in force". Firstly, to hold otherwise, would restrict the operation of the first clause in such ways that none of the things mentioned in the, first definition would be affected by the fundamental rights. Secondly, it is to be seen that the second clause speaks of "laws" made by the State and custom or usage is not made by the State. If the first definition governs only cl. (2) then the words "custom or usage", would apply neither to cl. (1) nor to cl. (2) and this could hardly have been intended. It is obvious that both the definitions control the meaning of the first clause of the Article. The argument cannot, therefore, be accepted. It follows that respondent No. 1 cannot now sustain the decree in view of the prescriptions of the Constitution and the determination of this Court in Bhau Ram 's case(1). The appeal will be allowed but in the circumstances of the case parties will bear their costs throughout. Appeal allowed.

In a suit filed by the respondent, the Munsif though holding that there was a general custom of pre emption in the locality and that the respondent had a right to pre empt, under that custom, dismissed the suit because the sale did not include a strip of land 3 feet 6 inches wide between the respondent 's house and the property sold. The respondent 's appeal was allowed by the District Judge. The appellants appealed to the High Court which was unsuccessful because of the answer of the Division Bench to which the question was referred. The Division Bench held that the law relating to pre emption on the ground of vicinage was saved by article 19(5) and was not void under article 13 of the Constitution. The appellant relied on the decision of this Court in Bhau Ram vs Baijnath and claimed that pre emption on the ground of vicinage could not be claimed. The respondents in reply contended (a) that Bhau Ram 's case was concerned with a legislative measure whereas the present case arose from custom and was thus distinguishable and (b) that article 13(1) dealt with "all laws in force" and custom was not included in the definition of the phrase "laws in force" in cl. (3)(b) of article 13. Held: (i) In so far as statute law is concerned Bhau Ram 's case decides that a law of pre emption based on vicinage is void. The reasons given by this Court to hold statute law void apply equally to a custom. Bhau Ram vs B. Baijnath Singh, [1962] Supp. 3 S.C.R. 724, followed. Digambar Singh vs Ahmad Said Khan, L.R. 42 I.A. 10, referred to. (ii) Custom and usage having in the territory of India the force of law are included in the expression "all laws in force".

1802.txt

Appeal No. 164 of 1952. Appeal from the Judgment and Decree dated the 12th August, 1949, of the High Court of Judicature at Bombay in Appeals Nos. 63 and 148 of 1947, from Original Decree, arising out of the Decree dated the 31st July, 1946, of the Court of the Civil Judge, Senior Division, Bijapur, at Bijapur in Special Civil Suit No. 28 of 1945. J. B. Dadachanjiand Naunit Lal for the appellant. section B. Jathar and Ratnaparkhi Anant Govind for the respondents. March 23. The Judgment of the Court was delivered by VENICATARAMA AYYAR J. 3 VENKATARAMA AYYAR J. This appeal arises out of a suit for partition instituted by the appellant in the Court of the Civil Judge Senior Division, Bijapur. The relationship of the parties will appear from the following genealogical table: Ramchandra : : : : : : Siddopant Krishnarao alias Sadashiv (d. 1897) (d.1899) m. Rukmini : (D 6) : : Gundo m. Laxmibai (D 5) : : : : : I Shrinivas Devji m. Akkubai (D 4) (adopted son) (adopted) plaintiff d. 6 9 1935. : : : : : Narayan Raghavendra Gundo D 1 D 2 D 3 Siddopant and Krishnarao were members of a joint undivided family. Krishnarao died in 1897 leaving behind a widow, Rukminibai, who is the sixth defendant in the suit. Siddopant died in 1899 leaving him surviving his son, Gundo, who died in 1901 leaving behind a widow, Lakahmibai, who is the fifth defendant. On 16th December, 1901, Lakshmibai adopted Devji, who died on 6th May, 1935, leaving three sons, defendants Nos. 1 to 3, and a widow, Akkubai, the fourth defendant. On 26th April, 1944, Rukminibai adopted the plaintiff, and on 29th June, 1944, he instituted the present suit for partition claiming a half share in the family properties. Siddopant and Krishnarao represented one branch of a Kulkarni family and were entitled for their share of the Watan lands, to the whole of section No. 138 and a half share in section Nos. 133 and 136 in the village of Ukamnal and a half share in section Nos. 163, 164 and 168 in the village of Katakanhalli. The other branch was represented by Swamirao, who was entitled for his half share 4 of the Watan lands, to the whole of section No. 137 and to a half share in S.Nos. 133 and 136 in the village of Ukamnal and to a half share in section Nos. 163, 164 and 168 in the village of Katakanhalli. Siddopint purchased a house under Exhibit D 36 and lands under Exhibits D 61 and D 64, and constructed two substantial houses. His grandson, Devji, also built a house. All these properties are set out in Schedules A and B to the plaint, A Schedule consisting of houses and house sites and B Schedule of lands. It is the plaintiff 's case that these properties were either ancestral, or were acquired with the aid of joint family funds. He accordingly claims a half share in them as representing Krishnarao. Swainirao died about 1903 issueless, and on the death of his widow shortly thereafter, his properties devolved on Devji as his nearest agnate, and they are set out in Schedule C to the plaint. The plaintiff claims that by reason of his adoption he has become a preferential heir entitled to divest Devji of those properties, and sues to recover them from his sons. In the alternative, he claims a half share in them on the ground that they had been blended with the admitted Joint family properties. The defendants denied the truth and validity of the plaintiff 's adoption. They further contended that the only ancestral properties belonging to the family were the Watan lands in the villages of Ukamnal and Katakanhalli, that the purchases made by Siddopant were his self acquisitions, that the suit houses were also built with his separate funds, and that the plaintiff was not entitled to a share therein. With reference to the properties in Schedule C, they pleaded that the. plaintiff could not by reason of his adoption divest Devji of the properties which had devolved on him as heir. They denied that those properties had been blended with the joint family properties. Both the Courts below have held that the adoption of the plaintiff is true and valid, and that question is no longer in dispute before us. They have also held that the purchases made by Siddopant and the houses built by him were his self acquisitions, as was also the house built by Devji. The trial Court held that the 5 plaintiff was entitled to a half share in section Nos. 639 and 640 in Schedule A on the ground that they belonged to the family as ancestral properties; but the High Court held that that had not been established. As regards the properties set out in Schedule C, while the trial Court decided that the appellant was entitled to them exclusively under the decision of the Privy Council in Anant Bhikappa Patil (Minor) vs Shankar Ramchandra Patil(1), the High Court held following a Full Bench decision of that Court in Jivaji Annaji vs Hanmant Ramchandra(2), that they belonged exclusively to Devji, and that the plaintiff could lay no claim to them. Both the Courts a reed in negativing the contention of the plaintiff that there had been a blending of these properties with the joint family properties. In the result, the High Court granted a decree in favour of the plaintiff for partition of the admitted Watan ,lands, and otherwise dismissed the suit. The present appeal is preferred against this decision. The first contention that has been urged on behalf of the appellant is that the finding of the Courts below that the properties purchased by Siddopant and the houses constructed by him and Devji were self acquisitions, is erroneous, firstly because the burden was wrongly cast on the plaintiff of proving that they were made with the aid of joint family funds, and secondly because certain documents which had been tendered in evidence by the plaintiff had been wrongly rejected as inadmissible. On the first question, the argument of the appellant is that as the family admittedly possessed income producing nucleus in the ancestral Watan lands of the extent of 56 acres, it must be presumed that the acquisitions standing in the name of Siddopant were made with the aid of joint family funds, that the burden lay on the defendants who claimed that they were self acquisitions to establish that they were made without the aid of joint family funds, that the evidence adduced by them fell far short of it, and that the presumption in favour of the plaintiff stood unrebutted. For deciding whether this contention is well founded, it is necessary to see (1)70 I.A. 232. (2) I.L.R. 6 what the findings of the Courts below are regarding the extent of the ancestral properties, the income they were yielding, the amounts that were invested by Siddopant in the purchases and house constructions, and the other resources that were available to him. On the question of the nucleus, the only properties which were proved to belong to the joint family were the Watan lands of the extent of about 56 acres, bearing an annual assessment of Rs. 49. There is no satisfactory evidence about the income which these lands were yielding at the material period. Rukminibai, P.W. 6, and Akkubai, D.W. 1, gave conflicting evidence on the point. But neither of them could have had much of first hand knowledge, as both of them came into the family by marriage long after the nineties, and were then very young. The lessee who cultivated the lands of Swamirao, who owned, a share in the Watan lands equal to ' that of Siddopant and Krishnarao, deposed that the net income was Rs. 30 per annum. On a consideration of the entire evidence, the trial Court put the annual income at Rs. 150. On appeal, the learned Judges of the High Court were also of the opinion that the income from the lands could not have been considerable. They characterised the oral evidence of P.W. 6 and D.W. I on the point as worthless. They observed that the assessment of less than a rupee per acre was an indication that the lands were of poor quality. They referred to the fact that both the brothers were obliged to go to the State of Hyderabad for earning their livelihood, and that Krishnarao had been obliged to borrow under Exhibits D 89 and D 90 even petty amounts like Rs. 26 and Rs. 10 on onerous terms, and they accordingly concluded that the income from the lands could not have beep sufficient even for maintenance. Coming next to the acquisitions, on 21st May, 1871, Siddopant purchased under Exhibit D 36 a house for Rs.200 from his mother in law. On 11th May,1885, he purchased under Exhibit D 61 section No. 23 Ukamnal village for a sum of Rs. 475. On 23rd July, 1890, he purchased under Exhibit D 64 lands bearing section Nos. 2025 and 2140 for Rs. 2,400. In this suit, we are concerned 7 only with section No. 2025. Apart from these purchases, he constructed two houses, one on section Nos. 639, 640 and 641, and another on S.Nos. 634 and 635. 2 and 3 have deposed that these constructions would have cost between Rs. 20,000 and Rs. 25,000, and both the Courts have accepted this evidence. It was argued for the appellant that these witnesses had no first hand knowledge of the constructions, and that their evidence could not be accepted as accurate. But making all allowances for inexactitude, there cannot be any doubt that the buildings are of a substantial character. After 1901, Devji built a house on section Nos. 642, 644 and 645 at a cost estimated between Rs. 2,000 and 4,000. Thus, sums amounting to about Rs. 30,000 had been invested in the acquisition of these properties and construction of the houses. Where did this money come from ? The evidence is that Siddopant was a Tahsildar in the State of Hyderabad, and was in service for a period of 40 years before he retired on pension. Though there is no precise evidence as to what salary he was drawing, it could not have been negligible, and salary is the least of the income which Tahsildars generally make. The lower Courts came to the conclusion that having regard to the smallness of the income from the ancestral lands and the magnitude of the acquisitions made, the former could not be held to be the Foundation for the latter, and on the authority of the decision of the Privy Council in Appalaswami vs Suryanarayanamurti (1) held that the initial burden which lay on the plaintiff of establishing that the properties of which a division was claimed were joint family properties had not been discharged. The law was thus stated in that case: " The Hindu law upon this aspect of the case is well settled. Proof of the existence of a joint family does not lead to the presumption that property held by any member of the family is joint, and the burden rests upon anyone asserting that any item of property was joint to establish the fact. But where it is established that the family possessed some joint property which from its nature and relative value may have formed the nucleus from which the property in question may (1) I.L.R. at 447, 448 8 have been acquired, the burden shifts to the party alleging self acquisition to establish affirmatively that the property was acquired without the aid of the joint family property: See Babubhai Girdharlal vs Ujamlal Hargovandas (1), Venkataramayya vs Seshamma(2) Vythianatha vs Vdradaraja (3). " It is argued for the appellant that in that case the father had obtained under the partition deed, Exhibit A, properties of the value of Rs. 7,220, that he acquired properties of the value of Rs. 55,000, and that never theless, it was observed by the Privy Council that " the acquisition by the appellant of the property under Exhibit A, which as between him and his sons was joint family property, cast upon the appellant (the father) the burden of proving that the property which he possessed at the time of the plaint was his self acquired property "; and that therefore on proof that there existed ancestral lands of the extent of 56 acres, the burden was shifted on to the defendants to establish self acquisition. Whether the evidence adduced by the p plaintiff was sufficient to shift the burden which initially rested on ,him of establishing that there was adequate nucleus out of which the acquisitions could have been made is one of fact depending on the nature and the extent of the nucleus. The important thing to consider is the income which the nucleus yields. A building in the occupation of the members of a family and yielding no income could not be a nucleus out of which acquisitions ' could be made, even though it might be of considerable value. On the other hand, a running business in which the capital invested is comparatively small might conceivably product substantial income, which may well form the foundation of the subsequent acquisitions. These are not abstract questions of law, but questions of fact to be determined on the evidence in the case. In Appalaswami vs Suryanarayanamurti (4), the nucleus of Rs. 7,220 included 6/16th share in a rice mill and outstandings of the value of Rs. 3,500, and as the acquisitions in question were made during a period of (1) I.L.R. (2) I.L.R. , (3) I.L.R. (4) I.L.R. 9 16 years it was possible that the joint family income might have contributed therefor. But in the present case, the finding of the Courts is that the income from the lands was not sufficient even for the maintenance of the members, and on that they were right in holding that the plaintiff had not discharged the initial burden which lay on 'him. But even if we are to accept the contention of the appellant that on proof of the existence of the Watan lands the burden had shifted on to the defendants to prove that the acquisitions were made without the aid of joint family funds, we must hold on the facts that that burden had been discharged. In Appalaswami vs Suryanarayanamurti (1), in holding that the father had discharged the burden of proving that the acquisitions were his own, the Privy Council observed: "The evidence establishes that the property acquired by the appellant under Exhibit A is substantially intact, and has been kept distinct. The income derived from the property and the small sum derived from the sale of part of it have been properly applied towards the expenses of the family, and there is no evidence from which it can be held that the nucleus of joint family property assisted the appellant in the acquisition of the properties specified in the schedule, to the written statement. " Likewise, in the present case all the ancestral Watan lands are intact, and are available for partition, and the small income derived from them must have been utilised for the maintenance of the members of the family. Whether we hold, as did the learned Judges of the High Court, that the plaintiff had failed to discharge the burden which lay on him of establishing sufficient nucleus, or that the defendants had discharged the burden of establishing that the acquisitions were made without the aid of joint family funds, the result is the same. The contention of the appellant that the findings of the Courts below are based on a mistaken view as to burden of proof and are in consequence erroneous, must fail. (1) I.L.R. 10 It was, next contended that certain documents which were tendered in evidence had been wrongly rejected by the Courts below, and that the finding of self acquisition reached without reference to those documents should not be accepted. These documents are judgments in two suits for maintenance instituted by Rukminibai in the Sub Court, Bijapur, C.S. No. 445 of 1903 and C.S. No. 177 of 1941 and in appeals therefrom, C.A. No. 5 of 1905 and C.A. No. 39 of 1942 respectively in the District Court, Bijapur. These documents, were produced before the, trial Court on 17th July, 1946, along with 28 other documents when the hearing was about to commence and were rejected. On appeal, dealing with the complaint of the plaintiff that these documents had been wrongly rejected, the High, Court observed : " Apart from the fact that these documents were produced at a very late stage of the case. . these judgments could have been admitted in evidence only if they could be shown to be relevant under any of the sections 40 to 44 of the Indian Evidence Act. None of these sections applied in this case. The trial Judge was, therefore, right in not admitting them in evidence." The argument of the appellant is that these judgments are admissible under section 13 of the Evidence Act as instances in which there was an assertion that the suit properties belonged to the joint family. For the respondents, it is contended that the dispute between the parties in those litigations was only about the quantum of maintenance to be awarded, that no question of title to the properties was directly involved, and that section 13 was inapplicable. We are unable to accept this contention. The amount of maintenance to be a warded would depend on the extent of the joint family properties, and an issue was actually frame d on that question. Moreover, there was a prayer that the maintenance should be charged on the family properties, and the same was granted. We are of opinion that the judgments are admissible under section 13 of the Evidence Act as assertions of Rukminibai that the properties now in. dispute belonged to the joint family. 11 But there is another difficulty in the way of the reception of this evidence. It was contended by the respondents on the basis of the observations in the judgment of the High Court already extracted that the real ground of rejection was that the documents were produced late. The order of the trial Court rejecting the document has not been produced before us. But there, is on the record a petition filed by the plaintiff on 25th July, 1946, after the evidence was closed and before arguments were addressed, for the admission of the 32 documents rejected on 17th July, 1946, and therein it is stated that "they have been rejected on the ground of late production." The defendants endorsed on this petition that if the documents were to be admitted at that stage, an opportunity would have to be given to them to adduce evidence and the trial would have to be re commenced; and the prayer for admission of these documents was accordingly opposed. The Court dismissed the petition. The rejection of the documents was therefore clearly made under Order XIII, rule 2, and there are no grounds for now setting aside that order and reopening the whole case. This ground of objection must therefore fail. Apart from the Watan lands which are admittedly ancestral, and apart from the purchases made under Exhibits. D 36, D 61 and D 64 and the houses which we have held to be self acquisitions, there are certain plots mentioned in Schedule A in which the plaintiff claims a half share. These are the sites on which the houses have been constructed. ' The contention of the plaintiff is that they are ancestral properties. The trial Court held that in the absence of a title deed showing that the sites were acquired by members of the family they must be held to be ancestral, and on that ground, decreed to the plaintiff a half share in section Nos. 639 and 640. The High Court reversed this decision observing generally that the evidence relating to the house sites was not clear, "when they were acquired or by whom", and that in the absence of evidence showing that they formed part of the joint family properties, they must be held to be self acquisitions. With respect, we are unable to agree with this view. While it is not 12 unusual for a family to hold properties for generations without a title deed, an acquisition by a member would ordinarily be evidenced by a deed. When, therefore, a property is found to have been in the possession of a family from time immemorial, it is not unreasonable to presume that it is ancestral and to throw the burden on the party pleading self acquisition to establish it. It is necessary in this view to examine the evidence relating to the several plots for which no title deeds have been produced. section Nos. 634 and 635 form one block, on which one of the houses has been constructed. The sanads relating to them are Exhibits D 45 and D 46, and they merely recite that the grantee was in occupation of the plots, and that was confirmed. There is reference in them to a previous patta granted by the Government. Exhibits 52 to 55 are pattas showing that the properties comprised therein had been acquired from the Government. If the identity of section Nos. 634 and 635 with the properties comprised in these documents had been established, the plea that they are not ancestral would have been made out. But that has not been done, and the presumption in favour of their being ancestral property stands unrebutted. The claim of the plaintiff to a half share therein must be allowed. section Nos. 639, 640 and 641 form one block, on which there is another house standing. There is no title deed for section No. 639. Exhibit D 47 is the sanad for section No. 640, and it merely recognises the previous occupation by the grantee, and that is consistent with its character as ancestray property. Exhibit D 48 is the sanad for section No. 641 and is in the same terms as Exhibits D 45 and D 46. The claim of the plaintiff with reference to all these items must be upheld. We have next section Nos. 642, 644 and 645, on which Devji constructed a house. The relative sanads are respectively Exhibits D 49, D 50 and D 51. Their contents are similar to those of Exhibits D 45 and D 46, and for the same reasons, these plots must be held to belong to the joint family. We have next section No. 622 on which there stands a house. It is clear from Exhibit D 43 that this was purchased by Devji at a Government auction in the year 1909. The plaintiff can lay no claim to it. Then there is 13 section No. 643. The oral evidence relating to this is that a family temple stands on it. It cannot be partitioned. In the result, it must be held that the plots, section Nos. 634 and 635, section Nos. 639, 640 and 641 and section Nos. 642, 644 and 645 are ancestral properties, and that the plaintiff is entitled to a half share therein. As substantial superstructures have been put thereon, the appropriate relief to be granted to the plaintiff is that he be given half the value of those plots as on the date of the suit. It remains to deal with the claim of the plaintiff for possession of C Schedule properties on the ground that by adoption he became the preferential heir of Swamirao and is consequently entitled to divest Devji and his successors of these properties. The contention of the appellant based on the decision of the Privy Council in Anant Bhikappa Patil (Minor) vs Shankar Ramchandra Patil (1) is that on adoption the adopted son acquires all the rights of an aurasa son, that these rights relate back to the date of the death of the adoptive father, and that in consequence his right to share in the joint family properties and to inherit from the collaterals should both be worked out as from that date. The contention of the respondents based on Jivaji Annaji vs Hanmant Ramchandra (2) is that the doctrine of relation back does not extend to properties which are inherited from a collateral. The question thus raised is one of considerable importance, and involves a decision as to the correctness of the law as laid down in Anant Bhikappa Patil (Minor) vs Shankar Ramchandra Patil (1). Considering the question on principle, the ground on which an adopted son is held entitled to take in defeasance of the rights acquired prior to his adoption is that in the eye of law his adoption relates back, by a legal fiction, to the date of the death of his adoptive father, he being put in the position of a posthumous son. As observed by Ameer Ali J. in Pratapsing Shivsing vs Agarsingji Raisingji (3), (1) 70 I.A. 232. (2) I.L.R. (3) 46 I.A. 97 at 107. 14 Again it is to be remembered that an adopted son is the continuator of his adoptive father 's line exactly as an aurasa son, and that an adoption, so far as the continuity of the line is concerned, has a retrospective effect; whenever the adoption may be made there is no hiatus in the continuity of the line. In fact, as West and Buhler point out in their learned treatise on Hindu Law, the Hindu lawyers do not regard the male line to be extinct or a Hindu to have died without male issue until the death of the widow renders the continuation of the line by adoption impossible. " It is on this principle that when a widow succeeds to her husband 's estate as heir and then makes an adoption, the adopted son is held entitled, as preferential heir, to divest her of the estate. It is on the same principle that when a son dies unmarried and his mother succeeds to his estate as his heir, and then makes an adoption to h er husband, that adopted son is held entitled to divest her of the estate. (Vide Vellanki Venkata vs Venkatarama(1) and Verabhai vs Bhai Hiraba(2). The application of this principle when the adoption was made to a deceased coparcener raised questions of some difficulty. If a joint family consisted of two brothers A and B, and A died leaving a widow and the properties were taken by survivorship by B, and then W took a boy X in adoption, the question was whether the adopted son could claim a half share in the estate to which A was entitled. It was answered in the affirmative on the ground that his adoption related back to the date of the death of A. But suppose before W makes an adoption, B dies leaving no son but a widow C and the estate devolves on her, can W thereafter make an adoption so as to confer any rights on X to the estate in the hands of C ? It was held in Chandra vs Gojarabai(3) that the power to make an adoption so as to confer a right on the adopted son could be exercised only so long as the coparcenary of which the adoptive father was a member subsisted, and that when the last of the coparceners died and the properties thereafter devolved on his (1) 4 I.A. Bom. (2) 30 I.A. 234. 15 heir, the coparcenary had ceased to exist, and that therefore W could not adopt so as to divest the estate which had vested in the heir of the last coparcener. In view of the pronouncements of the Judicial Committee in Pratapsing Shivsing vs Agarsingji Raisingji(1) and Amarendra Mansingh vs Sanatan Singh(2) that the validity of an adoption did not depend on whether the adopted son could divest an estate which had devolved by inheritance or not, a Fall Bench of the Bombay High Court held in Balu Sakharam vs Lahoo Sambhaji(3) that in such cases the adoption would be valid, but that the estate which had devolved upon the heir could not be divested. In Anant Bhikappa Patil (Minor) vs Shankar Ramchandra Patil(4), the Privy Council dissented from this view, and held that the coparcenary must be held to subsist so long as there was in existence a widow of a coparcerier capable of bringing a son into existence by adoption, and if she made an adoption, the rights of the adopted son would be the same as if he had been in existence at the time when his adoptive father died, and that his title as coparcener would prevail as against the title of any person claiming as heir of the last coparcener. In substance, the estate in the hands of such heir was treated as impressed with the character of coparcenary property so long as there was a widow alive who could make an adoption. This principle was re affirmed in Neelangouda Limbangouda vs Ujjan Gouda(5). Thus far, the scope of the principle of relation back is clear. It applies only when the claim made by the adopted son relates to the estate of his adoptive father. This estate may be definite and ascertained as when he is the 'sole and absolute owner of the properties, or it may be fluctuating as when he is a member of a joint Hindu family, in which the interest of the coparceners is liable to increase by death or decrease by birth. In either case, it is the interest of the adoptive father which the adopted son is declared entitled to take as on the date of his death. The point for (1) 46 I.A. 97. (4) 70 I.A. 232. (2) 6o I.A. 242. (5) (3) I.L.R. 16 determination now is whether this doctrine of relation back can be applied when the claim made by the adopted son relates not to the estate of his adoptive father but of a collateral. The theory on which this doctrine is based is that there should be no hiatus in, the continuity of the line of the adoptive father. That, by its very nature, can apply only to him and not to his collaterals. In the Oxford Dictionary the word "collateral" is defined as meaning "descended from the same stock but not in the same line. " The reason behind the rule that there should be continuity in line does not warrant its extension to collaterals. Nor is there any authority until we come to the decision in Anant Bhikappa Patil (Minor) vs Shankar Ramchandra Patil(1), which applied the theory of relation back to the properties inherited from collaterals. With reference to them, the governing principle was that inheritance can never be in abeyance, and that once it devolves on a person who is the nearest heir under the law, it is thereafter not liable to be divested. The law is thus stated in Mulla 's Hindu Law, 11th Edition, at pages 20 and 21 : "On the death of a Hindu, the person who is then his nearest heir becomes entitled at once to the property left by him. The right of succession vests in him immediately on the death of the owner of the property. It cannot under any circumstances remain in abeyance in expectation of the birth of a preferential heir where such heir was not conceived at the time of the owner 's death. "Where the estate of a Hindu has vested in a person who is his nearest heir at the time of his death, it cannot be divested except either by the birth of a preferable heir such as a son or a daughter, who was conceived at the time of his death, or by adoption in certain cases of a son to the deceased." ' In Bhubaneswari Debi vs Nilkomul Lahiri(2), the facts were that Chandmoni, the widow of one Rammohun, died on 15th June, 1867, and the estate ,devolved on his nephew, Nilkomul as reversioner. Subsequently, Bhubaneswari Debi, the widow of a (1) 70 I.A. 232. (2) 12 I.A.137. 17 brother of Rammohun called Sibnath, took a boy, Jotindra, in adoption, and the suit was by him for half a share in the estate. If his adoption could relate back to the date of death of Sibnath, which was on 28th May, 1861, Jotindra would be entitled to share the inheritance equally with Nilkomul. That was the argument put forward in support of his claim. (Vide page 139). , In negativing this contention, Sir Barnes Peacock observed: "According to the law as laid down in the decided cases, an adoption after the death of a collateral does not entitle the adopted son to come in as heir of the collateral. It is true that reference is also made to the fact that the boy adopted was not actually in existence on the date of the death of Chandmoni ; but that, however, would make no difference in the legal position, if the principle of relation back was applicable. One of the cases which the Privy Council had in mind was Kally Prosonno Ghose vs Gocool Chunder Mitter(1), which was relied on in the High Court. Vide Nilkomul Lahuri vs Jotendro Mohan Lahuri(2). There, it was hold that an adopted son could not claim the estate of his adoptive father 's paternal uncle, which had devolved by inheritance prior to his adoption. In 1888 Golapchandra Sarkar Sastri observed in his Tagore Law Lectures on the Law of Adoption: "As regards collateral succession opening before, adoption, it has been held that an adoption cannot relate back to the death of the adoptive father so as to entitle the adopted son to claim the estate of a collateral relation, succession to which opened before his adoption." (Vide pages 413 and 414). The law was thus well settled that when succession to the properties of a person other than an adoptive father was involved, ,the principle applicable was not the rule of relation back but the rule that inheritance once vested could not be divested. Before examining the decision in Anant Bhikappa Patil (Minor) vs Shankar Ramchandra Patil(3), it is (1) I.I. R. (2) I.L.R. (3) 70 I.A. 232. 3 18 necessary, to refer to the earlier pronouncements of the PrivY Council on the question, which formed the basis of that decision. In Pratap Sing Shivsing vs Agarsinqit Raisingji(1) the question related to a jivai grant of the village of Piperia which had been made by the Ruler of Gamph to a junior member on condition, that in default of male descendants it should revert to the thakur. The last incumbent, Kaliansing, died issueless in October, 1903, leaving him surviving his widow, Bai Devla. On 12th March, 1904, she adopted Pratapsing Shivsing. The thakur then sued to recover possession of the village on the ground that the adopted son was not a descendant contemplated by the grant, and that the adoption was invalid, as it would divest him of the village which had vested in him in October, 1903. With reference to the first contention, the Judicial Committee observed that under the Hindu Law an adopted son was as much a descendant as an aurasa son. On the second contention, they held that the principles laid down in Raghunandha vs Brozo Kishoro(2) and Bachoo Hurkisondas. Mankorebai(3) as to divesting of joint family properties which had vested in other persons were applicable, and that having regard to the interval between the date of the death of Kaliansing and the date of the adoption Pratapsing could be treated as a posthumous son. It will be noticed that the thakur did not claim to succeed to the village on the death of Kaliansing as his heir but on the ground of reverter under the terms of the grant, and no question of relation back of title with reference to the succession of a collateral 's estate was involved. In Amarendra Mansingh vs Sanalan Singh(1), the question arose with reference to an impartible zamindari known as Dompara Rai in Orissa. The last of its holder, Raja Bibhudendra, died on 10th December, 1922, unmarried, and by reason of a family custom which excluded females from succeeding to the Raj, a collateral Banamalai succeeded to it. On 18th December, 1922, Indumati, the mother of Bibhudendra, adopted Amarendra to her husband, Brajendra. The question (1) 46 I.A. 97. (3) 34 I.A. 107. (2) 3 I.A. 154. (4) 60 1,A, 242, 19 was whether by his adoption Amarendra could divest BanamaIai of the estate. It was held by the Privy Council that the validity of an adoption did not depend on whether an estate could be divested or not, and that the point to be considered was whether the power to adopt had come to an end by there having come into existence a son, who had attained the full legal capacity to continue the line. Applying these principles, the Judicial Committee decided that the adoption was valid, and that Amarendra took the estate as the preferential heir. It will be seen that in this case no claim of the adopted son to succeed to a collateral was involved, and no question arose as to how far the theory of relation back could be invoked in support of such a claim. The estate claimed was that of his adoptive father, Brajendra, and if the adoption was at all valid, it related back to the date of Brajendra 's death, and enabled Amarendra to divest Banamalai. The point for determination actually was whether by reason of Bibhudendra having lived for about 20 years, the power of his mother to adopt to her husband had come to an end. It may be noted that but for the special custom which excluded women from inheriting, Indumati would have succeeded Bibhudendra as mother, and an adoption by her would divest her of the estate and vest it in Amarendra, and the case would be governed by the decisions in Vellanki Venkata vs Venkatarama(1) and Verabhai vs Bhai Hiraba(2). The only difference between these cases and Amarendra Mansingh vs Sanatan Singh(3) was that on the death of Bibhudendra his heir was not Indumati but Banamalai. This decision might be taken at the most to be an authority for the position that when an adoption is made to A, the adopted son is entitled to recover the estate of A not merely when it has vested in his widow who makes the adoption but also in any other heir of his. It is no authority for the contention that he is entitled to recover the estate of B which had vested in his heir prior to his adoption to A. Vijaysingji Chhatrasingji vs Shipsangji Bhim,,sangji(4) is a case similar to the one in Amarendra Mansingh vs Sanatan Singh(3). The property concerned was (1) 4 I. A. T. (3) 60 I.A. 242. (2) 30 I.A. 234. (4) 62 I.A. 161, 20 an impartible estate. Chandrasangji who was one of the holders of the estate died, and was succeeded by his son, Chhatrasingji. Chhatrasingji was then given away in adoption, and thereafter Bhimsa@gji, the. brother of Chhatrasingji, succeed ed to the estate. Then the widow of Chhatrasingji made an adoption, and the question was whether the adopted son could divest the estate in the bands of Bhimsangji. It was held that he could. Here again, there was no question of collateral succession, the point for decision being precisely the same as in Amarendra Mansingh vs Sanatan Singh(1). We next come to the decision in Anant Bhikappa Patil (Minor) vs Shankar Ramchandra Patil(2). The facts of that case were that one Bhikappa died in 1905, leaving him surviving his widow, Gangabai, and an undivided son Keshav. In 1908 Narayan, the divided brother of Bhikappa died, and Keshav succeeded to his properties as heir. In 1917 Keshav died unmarried, and as the properties were Watan lands, they devolved on a collateral, Shankar. In 1930 Gangabai adopted Anant, and he sued Shankar to recover possession of the properties as the adopted son of Bhikappa. The High Court had held that as the joint family ceased to exist in 1917 when Keshav died, and as the properties had devolved on Shankar as his heir, the adoption, though valid, could not divest him of those properties. The Privy Council held that the coparcenary must be taken to continue so long as there was alive a widow of the deceased coparcener, and that GaDgabai 's adoption had the effect of vesting the family estate in Anant, even though it had descended on Shankar as the heir of Keshav. The decision so far as it relates to joint family properties calls for no comment. When once it is held that the coparcenary subsists so long as there is a widow of a coparcener alive, the conclusion must follow that the adoption of Anant by Gangabai was valid and operated to vest in him the joint family properties which had devolved on Shankar. Then, there were the properties 'which Keshav had inherited from Narayan , which had also devolved on Shankar as his (1) 60 I A, 242. (2) 701 I.A. 232, 21 heir. With reference to them, the Privy Council observed : " If the effect of an adoption by the mother of the last male owner is to take his estate out of the hands of a collateral of his who is more remote than a natural brother would have been, and to constitute the adopted person the next heir of the last male owner, no distinction can in this respect be drawn between pro perty which had come to the last male owner from his father and any other property which he may have acquired." On this reasoning, it was held that Anant was entitled also to the properties inherited by Keshav from Narayan. Anant Bhikappa Patil (Minor) vs Shankar Ram Chandra Patil(1) must, in our opinion, be taken to decide that the doctrine of relation back will apply not only as regards what was joint family estate but also properties which had devolved by inheritance from a collateral. Otherwise, it is impossible to justify the conclusion that the personal properties of Keshav which had vested in Shankar in 1917 would re vest in Anant even though he was adopted only in 1930. The question arise how this decision is to be reconciled with the principle laid down in Bhubaneswari Debi vs Nilkomul Lahiri (2) that an adoption made subsequent to the death of a collateral do es not divest the inheritance which had vested prior to that date. That that principle was not intended to be departed from is clear from the following observations of Sir George Raiikin: " Neither the present case nor Amarendra 's case(3) brings into 'question the rule of law considered in Bhuba neswari Debi vs Nilkomul Lahiri(3) (of Kalidas Das vs Krishnachandra Das(4)). . Their Lordships say nothing as to these decisions which appear to apply only to cases of inheritance ' " Nor does the discussion in Anant Bhikappa Patil (Minor) vs Shankar Ramchandra Patil(1) throw much light on this matter. Considerable emphasis is laid on the fact that a ooparcener has only a fluctuating interest in the joint family properties, that it may increase by death and decrease by birth, and that such a qualified (1) 70 I.A.232. (3) 60 I. A. 242. (2) 12 I.A. 137. (4) 2 B.L.R. 103 F.B. 22 interest as that must carry with it the liability to be divested by the introduction of a new coparcener by adoption. This reasoning, however, is wholly inapplicable to property which is not held in coparcenary, such as the estate of a collateral devolving by inheritance. The judgment then refers to the decisions of the Board in Amarendra Mansingh vs Sanatan Singh(1) and Vijaysingji Chhatrasingji vs Shivsangji Bhimsangji(2), and it is observed that the impartible estates which were concerned therein were treated as separate property and not as joint family property, a conclusion which does not settle the question, because even on the footing that the estates were separate properties, no question of collateral succession was involved in them, the claim under litigation being ' in respect of the estate of the adoptive father and covered by the principle already established in Vellanki Venkata vs Venkatarama (3) and Verabhai vs Bhai Hiraba (4). Then follows the conclusion already quoted that no distinction can be drawn between properties which come from the father and properties which come from others. This is to ignore the principle that the doctrine of relation back based on the notion of continuity of line can apply and had been applied, only to the estate of the adoptive father and not of collaterals. We may now turn to Jivaji Annaji vs Hanmant Ram. Chandra (5) wherein the scope of the decision in Anant Bhikappa Patil (Minor) vs Shankar Ramchandra Patil (6) came up for consideration. There, the material facts were that Keshav and Annappa who were members of a joint family effected a partition, and thereafter, Annappa died in 1901, leaving behind a widow, Tungabai. Keshav died leaving behind a son, Vishnu, who died in 1918 without male issue, and the property being Watan lands devolved on a collateral called Hanmant as his heir. In 1922 Tungabai adopted Jivaji. The question was whether he was entitled to divest the properties which had become vested in Hanmant as the preferential heir of Vishnu, and the decision was that he was not. It will be noticed that (1)60 I.A. 242. (4) 30 I.A. 234. (2) 62 I.A. Bom. (3) 4 I.A. 1. (6) 70 I.A. 232. 23 Annappa to whom the adoption was made had at the time of his death become divided from his brother, and the principles applicable to adoption by a widow of a deceased coparcener had therefore no application. It was a case in which the adopted son laid a claim to properties, not on the ground that they belonged to the joint family into which he had been adopted but that they belonged to a collateral to whom he was entitled to succeed as a preferential heir, and it was sought to divest Hanmant of the properties which had vested in him in 1918 on the strength of the decision in Anant Bhikappa Patil (Minor) vs Shankar Ramchandra Patil (1) The contention was that if Anant could as adopted son divest the personal properties of Keshav which had devolved on Shankar as his preferential heir, Jivaji could also divest the properties which had devolved on Hanmant as the preferential heir of Vishnu. The learned Judges made no secret of the fact that this contention received support from the decision in Anant Bhikappa Patil (Minor) vs Shankar Ramchandra Patil (1); but they were impressed by the fact that the statement of the law in Bhubaneswari Debi vs Nilkomul Lahiri (2) as to the rights of an adopted son quoad the estate of a collateral had been reaffirmed, and they accordingly held that the decision in Anant Bhikappa Patil (Minor) vs Shankar Ramchandra Patil (1) did not intend to alter the previous law that an adopted son could not divest properties which had been inherited from a collateral prior to the date of adoption. They distinguished the actual decision on the ground that as Keshav had vested in him both the ancestral properties as well as the properties inherited from Narayan, and as admittedly there was a relation back of the rights of Anant in respect of the ancestral properties, there should likewise be a relation back in respect of the separate properties. But it is difficult to follow this distinction. If under the law the rights of an adopted son differ according as they relate to the estate of his adoptive father or to property inherited from collaterals, the fact that both classes of properties are held by the same person can make no difference in the quality of those rights. The position will (1) 70 I.A. 232. (2) 12 1 A. 137. 24 be analogous to that of a coparcener who has also self acquisitions, in which case, the devolution by survivorship of joint family properties does not affect the devolution by inheritance of the separate properties. The fact is, as frankly conceded by the learned Judges, they were puzzled by the decision in Anant Bhikappa Patil (Minor) vs Shankar Ramchandra Patil (1), and as it was an authority binding on the Indian Courts, they could not refuse to follow it, and were obliged to discover a distinction. This Court, however, is not hampered by any such limitation, and is free to consider the question on its own merits. In deciding that an adopted son is entitled to divest the estate of a collateral, which had devolved by inheritance prior to his adoption, Anant Bhikappa Patil (Minor) vs Shankar Ramchandra Patil (1) went far beyond what had been previously understood to be the law. It is not in consonance with the principle well established in Indian jurisprudence that an inheritance could not be in abeyance, and that the relation back of the right of an adopted son is only quoad the estate of the adoptive father. Moreover, the law as laid down therein leads to results which are highly inconvenient. When an adoption is made by a widow of either a coparcener or a separated member, then the right of the adopted son to claim properties as on the date of the death of the adoptive father by reason of the theory of relation back is subject to the limitation that alienations made prior to the date of adoption are binding on him, if they were for purposes binding on the estate. Thus, transferees from limited owners, whether they be widows or coparceners in a joint family, are amply protected. But no such safeguard exists in respect of property inherited from a collateral, because if the adopted son is entitled on the theory of relation back to divest that property, the position of the mesne holder would be that of an owner possessing a title defeasible on adoption, and the result of such adoption must be to extinguish that title and that of all persons claiming under him. The alienees from him would have no protection, as there could be no question of supporting the alienations on the ground of necessity (1) 70 I.A. 232. 25 or benefit. And if the adoption takes place long after the succession to the collateral had opened in this case it was 41 years thereafter and the property might have meanwhile changed hands several times, the title of the purchasers would be liable to be disturbed quite a long time after the alienations. We must hesitate to subscribe to a view of the law which leads to consequences so inconvenient. The claim of the appellant to divest a vested estate rests on a legal fiction, and legal fictions should not be extended so as to lead to unjust results. We are of opinion that the decision in Anant Bhikappa Patil (Minor) vs Shankar Ramchandra Patil(1) in so far as it relates to properties inherited from collaterals is not sound, and that in respect of such properties the adopted son can lay no claim on the ground of relation back. The decision of the High Court in respect of C, Schedule properties must therefore be affirmed. It was I finally contended that the defendants had blended C Schedule properties along with the admitted ancestral properties so as to impress them with the character of joint family properties. The burden of proving blending is heavily on the plaintiff. He has to establish that the defendants had so dealt with the properties. as to show an intention I to abandon their separate claim over it. This is a question of fact on which the Courts below have concurrently found against the appellant, and there are no grounds for differing from them. In the result, the decree of the lower Court will be modified by granting the plaintiff a decree for half the value of the plots, section Nos. 634 and 635, section Nos. 639, 640 and 641 'and section Nos. 642, 644 and 645 as on the date of the suit. Subject to this modification, the decree of the lower Court is confirmed, and; the appeal is dismissed. In the circumstances, the parties will bear their own costs in this appeal. Appeal dismissed. (1) 70 I.A. 232.

It is well settled that proof of the existence of a Hindu joint family does not lead to the presumption that property held by any member of the family is joint and the burden rests upon any one asserting that any item of property was joint to establish the fact. But where it is established that the family possessed some joint property which from its nature and relative value may have formed the nucleus from which the property in question may have been acquired the burden shifts to the party alleging self acquisition to establish affirmatively that the property was acquired without. the aid of the joint family property. Held, that on the facts the nucleus was not sufficient to discharge the initial burden which lay on the plaintiff of proving that the acquisitions were made with the aid of joint family properties. Held, further, that even if the burden shifted on the defendants of establishing self acquisitions that had been discharged by proof and the ancestral lands were intact and the income derived therefrom must have been utilized for the maintenance of the members of the family. While it is not unusual for a family to hold properties for generations without a title deed, an acquisition by a member would ordinarily be evidenced by a dead. When, therefore, a property is found to have been in the possession of a family from time immemorial, it is not unreasonable to presume that it is ancestral and to throw the burden on the party pleading self acquisition to establish it. On adoption by the Hindu widow, the adopted son acquires all the rights of an aurasa son and those rights relate back to the date of the death of the adoptive father. The ground on which an adopted son is held entitled to take in defeasance of the rights acquired prior to his adoption is that in 2 the eye of law his adoption relates back, by a legal fiction, to the date of the death of his adoptive father, he being put in the position of a posthumous son. These principles, however, apply only when the claim of the adopted son relates to the estate of the adoptive father. But where succession to the properties of a person other than an adoptive father is involved the principle applicable is not the rule of relation back but the rule that inheritance once vested could not be divested. The decision to the contrary in Anant Bhikappa Patil (Minor) vs Shankar Ramchandra Patil (70 I.A. 232) dissented from. Appalaswami vs Suryanarayanamurti (I.L.R. at 447, 448); Babubhai Girdharal vs Ujamlal Hargovandas (I.L.R. ; Venka taramayya vs Seshamma (I.L.R. 1937 Madras 1012); Vythianatha vs Varadaraja (I.L.R 1938 Madras 696); Pratapsing Shivsing vs Agarsingii Raisingji (46 I.A. 97 at 107); Vellanki Venkata vs Venkatarama (4 I.A. 1); Verabhai vs Bhai Hiraba (30 I.A. 234) Chandra vs Goiarbai (I.L.R. ; Amarendra Mansingh vs Sanatan Singh (60 I.A. 242) ; Balu Sakharam vs Lehoo Sambhaji (I.L. R. ; Neelangouda Limbangouda vs Ujjan Gowda (A.I.R. 1948 P.C. 165; ; Bhubaneswari Debi vs Nilkomul Lahiri (12 I.A. 137): Kally Prosonno Ghose vs Gocool Chunder Mitter (I.L.R. ; Nilkomul Lahuri vs Jotendro Mohan Lahuri (I.L.R. ; Raghunandha vs Brozo Kishoro. (3 I. A. 154); Bachoo Hurkisondas vs Mankorebai (34 I.A. 107); Vijaysingji Chhatrasingji vs Shivasangji Bhimasangji (62 I.A. 161); Kalidas vs Krishnachandra Das (2 B.L.R. 103 F.B.) referred to. Tivaji Annaji vs Hanmant Ramchandra (I.L.R. 1950 Bombay 510) approved.

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32 of 1959. Petition under article 32 of the Constitution of India for enforcement of Fundamental Rights. V. A. Seyid Muhamad, for the petitioner. N. section Bindra, R. H. Dhebar and T. M. Sen, for the respondents. March 22. The Judgment of the Court was delivered by section K. DAS, J. This is a writ petition under article 32 of the Constitution. The relevant facts lie within a narrow compass, and the short point for decision is whether in the circumstances of this case the petitioner can complain of an infringement of the fundamental rights guaranteed to her under articles 19(1)(f) and 31 of the Constitution. The relevant facts are these. The petitioner 's husband Kunhi Moosa Haji, it is alleged, carried on a hotel business in Karachi which is now in Pakistan. The petitioner stated that her husband had been carrying on the said business since 1936. It is not in dispute, however, that in the relevant year, that is, 1947, when the separate dominion of Pakistan was set up, the petitioner 's husband was in Karachi. The petitioner stated that at the end of August, 1949, her husband returned to Malabar, in India. On behalf of ' respondent No. 1, the Ministry of Rehabilitation, Government of India, it is averred that the petitioner 's 507 husband surreptitiously returned to India without a valid passport in 1953 and was arrested for an alleged infringement of the provisions of the Foreigners Act. On December 7, 1953, Kunhi Moosa Haji transferred in favour of his wife his right., title and interest in seven plots of land, details whereof are not necessary for our purpose. On December 8, 1954, about a year after the transfer, a notice was issued to both the petitioner and her husband to show cause why Kunhi Moosa Haji should not be declared an evacuee and his property as evacuee property under the provisions of the , (hereinafter called the Act). The petitioner 's husband did not appear to contest the notice, but the petitioner entered appearance through her advocate. By an order dated January 29, 1955, the Assistant Custodian of Evacuee Property, Tellicherry, declared that Kunhi Moosa Haji was an evacuee under the provisions of section 2(d)(1) of the Act and the plots in question were evacuee property within the meaning of section 2(f) of the Act. From this decision the petitioner unsuccessfully carried an appeal to the Deputy Custodian of Evacuee Property, Malabar, who affirmed the decision of the Assistant Custodian, Tellicherry, by his order dated July 11, 1955. The petitioner then moved the Deputy Custodian of Evacuee Property, Malabar, for a review of his order under section 26(2) of the Act. This petition also failed. Then the petitioner moved the Custodian General of Evacuee Property, New Delhi, in revision against the order of the Deputy Custodian. This revision petition was dismissed by the Custodian General by his order dated April 9, 1956. The petitioner then made an application to the Ministry of Rehabilitation for an order of restoration of the property in her favour under the provisions of section 16(1) of the Act. This application was also rejected. The petitioner then moved the High Court of Kerala by means of a writ petition under article 226 of the Constitution. This petition was, however, withdrawn by the petitioner on the ground that the Kerala High Court had held in an earlier decision reported in 508 Arthur Import & Export Company, Bombay vs Colletor of Customs, Cochin (1) that when an order of an inferior tribunal is carried up in appeal or revision to a superior tribunal outside the court 's jurisdiction and the superior tribunal passes an order confirming, modifying or reversing the order, the High Court cannot issue a writ to an authority outside its territorial jurisdiction. Then, on March 5, 1959, the petitioner filed the present writ petition and the basis of her contentions is that the fundamental rights guaranteed to her under articles 19(1)(f) and 31 of the Constitution have been infringed and she is entitled to an appropriate writ or order from this Court for the restoration of the property transferred to her by her husband. In her petition, the petitioner has contested the validity of the notice issued on December 8, 1954, on the ground of noncompliance with certain rules. She has also contested on merits the correctness of the findings arrived at by the relevant authorities that Kunhi Moosa Haji was an evacuee and the property in question was evacuee property. Learned Counsel for the petitioner tried to argue that the invalidity of the notice issued under section 7 of the Act went to the root of jurisdiction of the subsequent orders. We do not, however, think that any question of lack of jurisdic tion is involved in this case. The petitioner appeared in response to the notice and raised no point of jurisdiction. In subsequent proceedings before the Deputy Custodian and the Custodian General she contested the correctness of the orders passed on merits: no question of jurisdiction was canvassed at any stage and we do not think that the notice suffered from any such defect as would attract the question of jurisdiction. We need only add that no question of the constitutionality of any law is raised by the, petitioner. In the view which we have taken, this petition is concluded by the decision of this Court in Sahibzada Saiye d Muhammed Amirabbas Abbasi vs The State of Madhya Bharat (2) and it is not necessary to consider on merits the contentions urged on behalf of the petitioner. The position as we see it is this. This Court (1) (1958) 18 k. L.J. 198. (2) ; 509 can exercise jurisdiction under article 32 of the Constitution only in enforcement of the fundamental rights guaranteed by Part III of the Constitution. In the present,case, the appropriate authorities of competent jurisdiction under the Act have determined the two questions which fell for their decision, namely, (1) that Kunhi Moosa Haji was an evacuee within the meaning of section 2(d) of the Act and (2) that his property was evacuee property. It was open to the petitioner to challenge the decision of the Custodian General, New Delhi, by moving the appropriate High Court in respect thereof; it was also open to the petitioner to move this Court by way of special leave against the decision of the Custodian General or of the other appropriate authorities under the Act. The petitioner did not, however ', choose to do so. The result, therefore, is that the order of the custodian General has become final. Under section 28 of the Act the order cannot be called in question in any court by way of an appeal or revision or in any original suit, application or execution proceeding. It is, indeed, true that section 28 of the Act cannot affect the power of the High Court under articles 226 and 227 of the Constitution or of this Court under articles 136 and 32 of the Constitution. Where, however, on account of the decision of an authority of competent jurisdiction the right alleged by the peti tioner has been found not to exist, it is difficult to see bow any question of the infringement of that right can arise as a ground for a petition under article 32 of the Constitution, unless the decision of the authority of competent jurisdiction on the right alleged by the petitioner is held to be a nullity or can be otherwise got rid of As long as that decision stands, the petitioner cannot complain of any infringement of a fundamental right. The alleged fundamental right of the petitioner is really dependent on whether Kunhi Moosa Haji was an evacuee and whether his property is evacuee property. If the decision of the appropriate authorities of competent jurisdiction on these questions has become final and cannot be treated as a nullity or cannot be otherwise got rid of, the petitioner cannot complain of any infringement of her 510 fundamental right under articles 19(1)(f) and 31 of the It is worthy of note that the relevant provisions of the Act have not been challenged before us as unconstitutional, nor can it be seriously contended before us that the orders of the appropriate authorities under the Act can be treated as null and void for want of jurisdiction. What is contended before us is that the orders were incorrect on merits. That is a point which the petitioner should have agitated in an appropriate proceeding either by way of an appeal from the order of the Custodian General with special leave of this Court or by an appropriate proceeding in the High Court having jurisdiction over the Custodian General. The petitioner did not take either of these steps, and we do not think that she can be permitted now to challenge the correctness on merits of the orders of the appropriate authorities under the Act on a writ petition under article 32 of the Constitution on the basis that her fundamental right has been infringed. In Sahibzada Saiyed Muhammed vs The State of Madhya Bharat (1) the facts were these. The petitioner who had migrated to West Pakistan applied to the High Court of Madhya Bharat for a writ of habeas corpus for directions to produce petitioners 2 and 3, his minor children, before the court on the allegation that they were wrongfully confined and, upon the dismissal of the said application, be applied to the District Judge of Ratlam under the Guardian and Wards Act for his appointment as guardian of the person and property of the said minors; the District Judge rejected the application and appointed another person as guardian; the petitioner then appealed to the High Court against the order of the District Judge and that appeal was dismissed. He applied for special leave to appeal to this Court and that application was also rejected. Thereafter be moved an application under article 32 of the Constitution and it wag held that where on account of the decision of a court of competent jurisdiction, the right alleged by the petitioner does not exist and, therefore, its infringement cannot arise, (1) ; 511 this Court cannot entertain a petition under article 32 for protection of the alleged right. We are of the opinion that the principle of this decision also applies to the present case. The circumstance that in Sahibzada Saiyed Muhammed vs the State of Madhya Bharat (1) an application for special leave was made and rejected makes no difference to the application of the principle. So far as the principle is concerned, the position is the same when an application is made and rejected and when no application is made. The re sult in both cases is that the decision becomes final and binding on the parties thereto. We must make it clear that we are not basing our decision on the circumstance that the High Court of Kerala rejected the application of the petitioner on the ground that it had no territorial jurisdiction. We are basing our decision on the ground that the competent authorities under the Act had come to a certain decision, which decision has now become final the petitioner not having moved against that decision in an appropriate court by an appropriate proceeding. As long as that decision stands, the petitioner cannot complain of the infringement of a fundamental right, for she has no ,such right. We would, accordingly, dismiss the petition with costs. Petition dismissed.

The petitioner 's husband transferred certain property to the petitioner. A notice under section 7, , was issued to the petitioner and to her husband and the husband was declared an evacuee and the property was declared as evacuee property by the Assistant Custodian. An appeal to the Deputy Custodian and thereafter a revision petition to the Custodian General by the petitioner were dismissed. The petitioner applied to the Supreme Court under article 32 of the Constitution contending that her fundamental rights under 64 506 articles 19(1)(f) and 31 were infringed by the order of the Assistant Custodian and prayed for the restoration of the property. Held, that the petition under article 32 was incompetent as no question of violation of any fundamental right arose in the case. The decision of an authority of competent jurisdiction had negatived the existence of the right alleged by the petitioner and unless that decision was held to be a nullity or could be otherwise got rid of, the petitioner could not complain of any infringement of a fundamental right. The alleged fundamental right of the petitioner was dependent on whether her husband was an evacuee and whether his property was evacuee property. The decision on that question had become final and no question of lack of jurisdiction was involved. Sahibzada Saiyed Muhammed Amirabbas Abbasi vs The State of Madhya Bharat, ; , applied.

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ION: Civil Appeal No. 864 of 1987. From the Judgment and Order dated 23.5.1986 of the Allahabad High Court in C.M.W.P. No. 13975 of 1985. M.K. Ramamurthi and A.K. Sangal for the Appellant. Anil Dev Singh, G.B. Pai, O.P. Sharma, Mrs. Shobha Dikshit, R.C. Gubrela, K.R. Gupta and R.K. Sharma for the Respondents. The Judgment of the Court was delivered by VENKATARAMIAH, J. The appellant has questioned in this appeal by special leave the constitutional validity of sub section (4) of section 6 of the U.P. (hereinafter referred to as 'the Act ') and also the validity of the Order dated December 5, 1984 passed by the Government of Uttar Pradesh remitting an award passed by the Labour Court, Meerut for reconsideration by it. The appellant was an employee of the Management, M/s. Electra (India) Ltd., Meerut Respondent No. 5 in the above appeal. The services of the appellant were terminated by the Management by its Order dated April 4, 1977 and the said termination led to an industrial dispute. The State Government by its Order dated May 5, 1979 made under section 4 K of the Act referred the said dispute for adjudication to the Labour Court, Meerut. The question which was referred to the Labour Court read as follows: "Whether the termination/removal from work of the employee Shri B.P. Rajwanshi by the employers by their Order dated 4.4.1977 is justified and/or legal? If not, to 474 what benefits/damages is the concerned employee entitled to and with what other details?" On the basis of the pleadings filed by the parties, the following issues were framed by the Labour Court: 1. Was Shri B.B. Rajwanshi not a workman as defined in the U.P. ? If so has this court jurisdiction to try this case? 2. Did Shri B.B. Rajwanshi not make efforts to minimise the losses due to unemployment? 3. To what relief, if any, is Shri B.B. Rajwanshi entitled? 4. Has Shri B.B. Rajwanshi been retrenched? If so, how does it affect the case? After recording the evidence adduced by the parties and hearing the arguments the Labour Court held, (i) that the appellant was a workman as defined in the Act, (ii) that the termination of the services of the appellant was illegal and (iii) that the appellant was entitled to be reinstated in his post with continuity of service and also to the payment of backwages and other benefits. The Labour Court accordingly passed an award on August 2, 1984 and forwarded it to the State Government.

% In this appeal, the appellant questioned the constitutional validity of sub section (4) of section 6 of the U.P. ( 'The Act ') and also the validity of the order passed by the Govt. remitting the award passed by the Labour Court for reconsideration by it. The appellant was an employee of respondent No. 5. M/s. Electric (India) Ltd., Meerut. The services of the appellant were terminated by the Management of the said respondent. The termination of services led to an industrial dispute. The State Government of Uttar Pradesh under section 4 K of the Act referred the said dispute for adjudication of the Labour Court, Meerut. The Labour Court passed an award and forwarded it to the State Government. Instead of publishing the award in the Official Gazette, as required by sub Section (3) of section 6 of the Act, the State Government passed an order under section 6(4) of the Act, remitting the award for reconsideration. The appellant submitted before the Labour Court that he did not want any re consideration of the award. On 7.2.1985, the Management filed an application saying that the case might be fixed for hearing after two months. The appellant opposed the application. The case was adjourned to 11.3.85 and on 11.3.85 to 26.3.85 at the further request of the management. In the meanwhile, the management moved the State Government to transfer the case from the Labour Court, Meerut, to another Labour Court or the Industrial Tribunal. The State Government passed an order transferring the case to the Industrial Tribunal Meerut. Aggrieved by the order, remitting the award to the Labour Court and the subsequent order, transferring the case to the Industrial Tribunal, the appellant filed a writ petition in the High Court, challenging the above said two orders. The High Court dismissed the writ petition in respect of the order made under section 6(4) of the Act, but set aside the order of transfer. Aggrieved by the judgment of the High Court, upholding the 470 order passed under section 6(4) of the Act, the appellant filed this appeal in this Court for relief by special leave. Allowing the appeal, the Court, ^ HELD: By leave of the Court, the appellant raised an additional ground before the Court, questioning the constitutional validity of sub section (4) of section 6 of the Act itself, and the Court first took up for consideration the question relating to the constitutional validity of sub section (4) of section 6 of the Act. [476B C] The questions raised before the Labour Court were very simple ones. They had no effect on the national economy. They did not in any way interfere with the principles of social justice. No grave consequences would have ensued if the award had been published in the Official Gazette and the parties, allowed to question its validity before the High Court under Article 226 of the Constitution of India or before the Supreme Court under Article 136 of the Constitution. The parties had not been given notice by the State Government to show cause why the award should not be remitted to the Labour Court for a fresh consideration. The order of the State Government also did not state why and on what points the State Government was not satisfied with the award and the questions on which the Labour Court was required to reconsider its award. [479G H; 480A B] When once a decision is given by a quasi judicial authority, it would not be safe to confer on any executive authority the power of review or remission in respect of the said decision without imposing any limitation on the exercise of such power, Even when a Court is conferred the power of review, such power can be exercised ordinarily under the well known limitations as are found in Order 17 of the Code of Civil Procedure. Similarly, under section 16 of the , the power to remit an award to the Arbitrator can be exercised by a Civil Court only under the circumstances specified in that connection. Sub section (4) of section 6 of the act imposes no such limitations. [482C D] The argument of the State Government that it was open to the State Government to seek necessary guidance from the object and contents of the Act, and that the State Government could remit the award to the Labour Court only for a reason which was germane to the statute in question, was not of any assistance to the State Government in this case because even though the reason for remitting the award may be a 471 reason connected with industry or labour, it can still be used arbitrarily to favour one party or the other. The ground for remitting the award should be one corresponding to a ground mentioned in section 16 of the ; otherwise the power is capable of serious mischief. The facts in this case themselves serve as a good illustration of the above proposition. There were only two main issues for consideration before the Labour Court: (1) whether the appellant was a workman, and (2) whether his services had been validly terminated. The Labour Court had recorded its findings on both the issues in favour of the appellant. From the prayers made before the Labour Court after the case had been remitted to it, it is seen that the Management wanted to adduce additional evidence before the Labour Court in support of its case. It was not the case of the Management that the Labour Court had unreasonably refused permission to the Management to adduce all its evidence before the award was passed. It was not even a case where industrial peace was likely to be disturbed if the award had been implemented as it was. The award would not have also affected prejudicially either national economy or social justice. In the above circumstances, it would not certainly be proper for the State Government to make an order remitting the award. The State Government in this case could do so because it had been entrusted with such unguided power under section 6(4) of the Act. [482E H; 483A C] It was urged by counsel for the State Government that sub section 4 of section 6 of the Act needed not to be struck down but the Court might direct that the State Government should give a hearing to the parties before an order was passed under section 6(4), remitting the award, and also require the State Government to give reasons in support of its order. The Court did not think that this was an appropriate case where the impugned provision could be upheld by reading into it the requirement of issuing notice to the parties and the requirement of giving reasons for its orders. The provisions could not be upheld in the absence of necessary statutory guidelines for the exercise of the power conferred by it, having regard to the fact that the proceeding before the Labour Court or the Industrial Tribunal is in the nature of quasijudicial proceeding where parties have adequate opportunity to state their respective cases, to lead evidence and make all their submissions. It is significant that the corresponding Act which is in force in the other parts of India, i.e., the Industrial Dispute Act, 1947 (Central) Act XIV of 1947) does not contain any provision corresponding to section 6(4) of the Act, and the absence of such a provision in the Central Act has not led to any serious inconvenience to the general public. [483D F] 472 The Management could not derive much assistance from the decision of this Court in the Sirsilk Ltd. & Ors vs Government of Andhra Pradesh & Anr.[1964] 2 SCR 448 as in this case there was no settlement arrived at between the appellant and the Management, which made the publication of the award unnecessary. [484H; 485F] There was one other good reason for taking the view that without any guidelines it will not be appropriate to confer power on the State Government to nullify virtually the effect of an award by exercising its power under section 6(4) of the Act. applies not merely to disputes arising between private management and labour unions and the workmen employed by them but also to industries owned by the State Government and their workmen. In the cases where the Government is the owner of the industry, it would be inappropriate to confer uncontrolled and unguided power on the State Government itself to remit the award passed on the industrial disputes arising in such industries for there is every chance of the power being exercised arbitrarily in such cases. The danger of entrusting unguided and uncontrolled power to remit an award for reconsideration of the Labour Court or Industrial Tribunal can very well be perceived, particularly where the award has gone against the State Government in a dispute arising out of an industry owned by it. The sub section (4) of section 6 of the Act, which is so widely worded is, therefore, likely to result in grave injustice to a party in whose favour an award is made as the said provisions can be used to reopen the whole case. The Court did not agree with the view expressed by the High Court of Allahabad in V.E. Thamas & Ors. vs State of Uttar Pradesh & Ors. , , in which the validity of sub section (4) of section 6 of the Act had been upheld. [485F H; 486G H; 487C D] Taking into consideration all the aspects of the case, including the object with which the Act was enacted, the Court felt that sub section (4) of section 6 of the Act was violative of Article 14 of the Constitution of India as it conferred unguided and uncontrolled powers on the State Government. The Court declared sub section (4) of section 6 of the Act as unconstitutional and struck it down. It followed that the order passed by the State Government, remitting the case for reconsideration by the Labour Court was also liable to be set aside. The State Government was directed to publish the award under section 6(3) of the Act. On publication of the award, it was open to any of the parties aggrieved by the award to resort to such remedies as might be available to it in law. [487H; 488A C] 473 Messrs. Dwarka Prasad Laxmi Narain vs The State of Uttar Pradesh and two others; , ; State of Bihar vs D.N. Ganguly & Ors., ; ; Sirsilk Ltd. 448; P. Sambamurthy & Ors. vs State of Andhra Pradesh & Anr. , ; and Star Paper Mills Mazdoor Sangh & Ors. vs Star Paper Mills Ltd., Saharanpur & Ors., , referred to. V.E. Thamas & Ors. vs State of Uttar Pradesh and Ors., , disapproved.

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iminal Appeal No. 103 of 1956. H. J. Umrigar and R. H. Dhebar, for the appellant. The sole question arising for determination is whether on the facts and circumstances of the case the High Court was correct in holding that the act of the respondent complained of constituted an offence under section 228 of the Indian Penal Code, and the jurisdiction of the High Court was, therefore, ousted by reason of the provision of section 3(2) of the . The High Court in coming to this conclusion appears to have relied on two decisions of the Supreme Court [1952] S.C.R. 425 and The facts in the two Supreme Court cases were quite different and they do not, in any way justify the view taken by the High Court. It will be my submission that the allegations made in the so called transfer application as also the affidavit are of such a serious nature that they are not a mere personal insult to the Magistrate, but go far beyond; they scandalise the Court in such a manner as to create distrust in the minds of the public, and pollute the stream of justice, and in such cases the jurisdiction of the High Court is not ousted (Reads out portions of the transfer application and the affidavit in support). From a perusal of the extracts which have been read, it will be seen that the aspersions made against the Magistrate are of a very serious nature alleging criminal conspiracy, and also that he had taken a bribe of Rs. 500 from the opposite side. So far as the offence under section 228 of the Indian Penal Code is concerned, the first essential ingredient is that there must be an " intention " to insult. In the affidavit filed in the High Court in reply to the 1370 show cause notice the respondent had stated that there was no intention to insult or show disrespect to the Magistrate. [Imam J. I cannot agree with that, the language used in the application and affidavit is such that intention to insult was clearly there.] That may be true, but there are several earlier decisions of the Allahabad High Court which have been referred to in the case relied upon by the High Court Narotam Das vs The Emperor, A.I.R 1943 All. 97, wherein it was held that where scandalous allegations were incorporated in a transfer application, there was not necessarily an intention to insult, as the primary object was to seek a transfer and not to insult the Court. So far as the decisions are concerned, they support my contention that when scandalous allegations are made against a Magistrate in a transfer application they would not necessarily constitute an offence under section 228 of the Indian Penal Code and could be punished by the High Court. In I.L.R. 1941 Nagpur 304, the Judge, who was seized of the case, made a complaint to the High Court about a letter sent to him by one of the parties, and it was there held that the sender of the letter could be punished for Contempt of Court by the High Court. It is true that there is no discussion about. 228 of the Indian Penal Code but in the course of the judgment the case of Emperor vs Jagnath Prasad Swadhiry, I.L.R. 1938 All. 548, was mentioned. In the Allahabad case a person during the pendency of a suit sent communications by post to the Judge containing scandalous allegations. It appears that it was urged that section 228 of the Indian Penal Code would bar the jurisdiction of the High Court under section 3(2) of the Contempt of Courts Act, 1926, but this contention was repelled and the High Court stated that its jurisdiction to punish for contempt was not ousted. [Reference was also made to I.L.R. 12 Patna I and I.L.R. 12 Patna 172]. I submit that where the allegations made go beyond 1371 mere personal insult and tend to bring the whole administration of justice, into disrepute, then the juris diction of the High Court would not be ousted by section 3(2) of the Act. In a case where there is only an insult to the Judge by using vulgar abuse such as " rogue or rascal " and this abuse was made " ex facie curiae ", then it may be said that the jurisdiction of the High Court is ousted as the offence falls within the purview of section 228 of the Indian Penal Code. [Das J. Also if the abuse relates to the private life of the Judge, such as, calling him a drunkard or imputing some immorality to him, unconnected with his judicial duties.] I agree. In the instant case the Magistrate must have been fully conscious of the powers possessed by him under section 228 of the Indian Penal Code as also the relevant provisions in the Criminal Procedure Code which permit him to punish for Contempt of Court, yet he presumably must have felt that the aspersions made in the present case were so grave as to transcend mere personal insult and as such it was a fit case to be referred to the High Court for taking necessary action. In conclusion, it is submitted that the view taken by the High Court is much too narrow. and cannot be supported either in principle or by the, authorities cited. J. B. Dadachanji and section N. Andley, for the respondent. The view taken by the High Court is correct and is in accordance with the judgments of the Supreme Court in the cases reported in [1952] S.C.R. and [1953] S.C.R. If the act complained of intentionally offers a personal insult to the Magistrate concerned, it may tend to undermine the administration of justice thereby, but it will nevertheless amount to an offence under section 228 of the Indian Penal Code and as such the jurisdiction of the High Court will be ousted by section 3(2) of the Act. It is unsound to say that there are two kinds of contempt, and the lesser kind of contempt will come under section 228 of the Indian Penal Code and the grosser kind will not come under section 228 ; every insult to a Court, whatever its nature, is contempt and punishable under section 228 of the Indian Penal Code. 1372 [Kapur J. Every insult to a Judge will not necessarily be a contempt. A libel attacking the integrity of a Judge may not, in the circumstances of a particular case, amount to a contempt at all, although it may be the subject matter of a libel proceeding.] [Das J. It appears that there is a further difficulty in your way, that is, whether the Magistrate was sitting in any stage of a judicial proceeding when the application and the affidavit were filed; if he was not, then one of the essential ingredients of section 228 of the Indian Penal Code was not satisfied.] The High Court has assumed that the Magistrate was sitting as a Court at that time and this was also borne out by the facts stated in the petition for special leave to appeal filed by the appellant wherein it is stated " the application having been presented during the sitting of the Court was clearly calculated to lower the dignity of the Court in the public mind ". Section 480 of the Code of Criminal Procedure specifically mentions section 228 of the Indian Penal Code and treats it as a form of contempt, therefore, it will be an offence of contempt punishable under the Indian Penal Code and as such the jurisdiction of the High Court would be ousted under section 3(2) of the Act. I submit that the view taken by the High Court is the correct view and is supported by the two decisions of the Supreme Court as also the judgment of the Bombay High Court in Bom. Umrigar in reply. During the course of discussion, doubts have arisen whether there was any intention to insult, or whether what was said was an insult, or whether the insult was offered in any stage of a judicial proceeding. If any one of these three essentials is lacking, then, obviously, there is no offence under section 228 of the Indian Penal Code. Where there is so much doubt as to whether an offence under section 228 of the Indian Penal Code has been committed or not, and there is no doubt that " prima facie " a Contempt of Court apart from the provisions of section 228 has been committed, it is wrong to say that the jurisdiction of the High Court is ousted. 1373 I submit that the case relied upon by the High Court, Narotam Das vs Emperor, A. 1. R. 1943 All. 97, correctly lays down the law so far as the question of intention " is concerned. September 24. The Judgment of the Court was delivered by section K. DAS, J. This is an appeal by special leave from the judgment and order of the then Madhya Bharat High Court, dated February 9, 1955, in Criminal Miscellaneous Application No. 2 of 1954. Originally, the appeal was filed on behalf of the State of Madhya Bharat, now substituted by the State of Madhya Pradesh. The appeal raises an important question with regard to the interpretation of section 3(2) of the (XXXII of 1952), hereinafter referred to as the Act, which repealed the earlier Contempt of Courts Act, 1926 (XII of 1926), as also the Indore Contempt of Courts Act (V of 1930) which was earlier in force in the State of Madhya Bharat. The facts so far as they are relevant to this appeal are these. One Ganga Ram, stated to be the landlord of the respondent Revashankar, instituted a suit, which was numbered as 1383 of 1952 in the court of the Additional City Civil Judge, Indore, for ejectment and arrears of rent against Revashankar. It was stated that the suit was filed in the name of Ganga Ram and his wife Chandra Mukhi Bai. It was further alleged that one Mr. Uma Shankar Chaturvedi, a lawyer acting on behalf of Ganga Ram, advised the latter to sign the name of his wife Chandra Mukhi Bai though Chandra Mukhi Bai herself did not sign the plaint or the vakalatnama. In this suit Chandra Mukhi Bai filed an application for permission to prosecute her husband for forgery. Another application was filed by certain other persons said to be other tenants of Ganga Ram in which some allegations were made against Revashankar. On June 29, 1953, Revashankar filed a complaint against five persons for an alleged offence under section 500, Indian Penal Code. This complaint was verified on July 13, 1953, and was registered as Criminal Case No. 637 of 1953 in the court of one 1374 Mr. N. K. Acharya, Additional District Magistrate, Indore. In that case one Mr. Kulkarni appeared on behalf of the complainant Revashankar. The accused persons appeared on August 8, 1953, through Messrs. Mohan Singh and Uma Shankar Chaturvedi. An objection was raised on behalf of the accused persons to the appearance of Mr. Kulkarni as the latter 's name appeared in the list of witnesses. This was followed by a spate of applications and counter applications and on October 12, 1953, the learned Additional District Magistrate passed an order to the effect that the copies of the applications as well as of the affidavits filed by both parties should be sent to the District Judge for necessary action against the lawyers concerned. In the meantime a criminal case was started against Revashankar in the court of the Additional City Magistrate, Circle No. 2, for an alleged offence under section 497, Indian Penal Code. The case was started on the complaint of Ganga Ram. That case was numbered as 644 of 1953. We then come to the crucial date, namely, December 17, 1953. On that date Revashankar filed an application in the court of the Additional District Magistrate who was in seizin of Criminal Case No. 637 of 1953. The application purported to be one under section 528, Code of Criminal Procedure. This application contained some serious aspersions against the Magistrate, Mr. N. K. Acharya. The aspersions were summarised by the learned Judges of the High Court under the following four categories. The first aspersion was that from the order dated October 12, 1953 it appeared that Mr. N. K. Acharya wanted to favour Mr. Uma Shankar Chaturvedi. The second aspersion was that from certain opinions expressed by the Magistrate, Revashankar asserted that he was sure that he would not get impartial and legal justice from the Magistrate. The third aspersion was of a more serious character and it was that the Magistrate had a hand in a conspiracy hatched by Messrs. Mohan Singh and Uma Shankar Chaturvedi regarding certain ornaments of Chandra Mukhi Bai with the object of involving, Revashankar and his brother Sushil Kumar in a false case of theft of ornaments. The fourth aspersion was that Mr. Uma 1375 Shankar Chaturvedi had declared that he had paid Rs. 500 to the Magistrate through Ganga Ram. These aspersions were later repeated in an affidavit on December 21, 1953. On January 11, 1954, the learned Magistrate reported the aforesaid facts to the Registrar of the Madhya Bharat High Court, and prayed for necessary action against Revashankar for contempt of court. On this report the High Court directed the issue of notice to Revashankar to show cause why action should not be taken against him under the and Criminal Miscellaneous Application No. 2 of 1954 was accordingly started against Revashankar. On March 3, 1954, Revashankar showed cause. The case was then heard by a Division Bench consisting of V. R. Newaskar and section M. Samvatsar, JJ. and by an order dated February 9, 1955, the learned Judges held that by reason of the provisions in section 3(2) of the Act the jurisdiction of the High Court was ousted inasmuch as the act complained of constituted an offence under section 228 of the Indian Penal Code. The question for consideration in the present appeal is if the aforesaid view of the High Court is correct. Mr. H. J. Umrigar, who has appeared on behalf of the appellant, has very strongly submitted before us that the High Court has erred in holding that the act of the respondent complained of constituted an offence under section 228, Indian Penal Code, and the jurisdiction of the High Court was, therefore, ousted by reason of the provisions in section 3(2) of the Act. It is necessary to read first section :3(2) of the Act. We may state here that the corresponding section in the earlier Contempt of Courts Act, 1926 was section 2(3) and in the judgment under consideration there is some confusion as to the correct number of the sub section. Section 3(2) of the Act is in these terms : " No High Court shall take cognizance of a contempt alleged to have been committed in respect of a Court subordinate to it where such contempt is an offence punishable under the Indian Penal Code (Act XLV of 1860). " 175 1376 The sub section was considered in two decisions of this Court, Bathina Ramakrishna Reddy vs The State of Madras (1) and Brahma Prakash Sharma vs The State of Uttar Pradesh (2). In the earlier case of Ramakrishna Reddy (1) the appellant was the publisher and managing editor of a Telugu Weekly known as " Praja Rajyam ". In an issue of the said paper dated February 10, 1949, an article appeared which contained defamatory statements about the stationary sub Magistrate, Kovvur, and the point for consideration was if the jurisdiction of the High Court to take cognisance of such a case was expressly barred under section 2(3) of the earlier Contempt of Courts Act, when the allegations made in the article in question constituted an offence under section 499, Indian Penal Code. On behalf of the appellant it was argued that what the subsection meant was that if the act by which the party was alleged to have committed contempt of a s subordinate court constituted offence of any description whatsoever punishable under the Indian Penal Code, the High Court was precluded from taking cognizance of it. This argument was repelled and this Court said (at page 429): " In our opinion, the sub section referred to above excludes the jurisdiction of High Court only in cases where the acts alleged to constitute contempt of a subordinate court are punishable as contempt under specific provisions of the Indian Penal Code but not where these acts merely amount to offences of other description for which punishment has been provided for in the Indian Penal Code. This would be clear from the language of the sub section which uses the words " where such contempt is an offence " and does not say " where the act alleged to constitute such contempt is an offence ". On an examination of the decisions of several High Courts in India it was laid down that the High Court had the right to protect subordinate courts against contempt but subject to this restriction, that cases of contempt which have already been provided for in the Indian Penal Code should not be taken cognizance of (1) ; (2) 1377 by the High Court. This, it was stated, was the principle underlying section 2(3) of the Contempt of Courts Act, 1926. This Court then observed that it was not necessary to determine exhaustively what were the cases of contempt which had been already provided for in the Indian Penal Code; it was pointed out, however, that some light was thrown on the matter by the provision of section 480 of the Code of Criminal Procedure which empowers any civil, criminal or revenue court to punish summarily a person who is found guilty of committing any offence under sections 175, 178, 179, 180 or section 228 of the Indian Penal Code in the view or presence of the court. The later decision of Brahma Prakash Sharma (1) explained the true object of contempt proceedings. Mukherjea J. who delivered the judgment of the Court said (at page 1 176) : " It would be only repeating what has been said so often by various Judges that the object of contempt proceedings is not to afford protection to Judges personally from imputations to which they may be exposed as individuals; it is intended to be a protection to the public whose interests would be very much affected if by the act or conduct of any party, the authority of the court is lowered and the sense of confidence which people have in the administration of justice by it is weakened ". It was also pointed out that there were innumerable ways by which attempts could be made to hinder or obstruct the due administration of justice in courts and one type of such interference was found in cases where there was an act which amounted to " scandalising the court itself ": this scandalising might manifest itself in various ways but in substance it was an attack on individual Judges or the court as a whole with or without reference to particular cases, causing unwarranted and defamatory aspersions upon the character and ability of the Judges. Such conduct is punished as contempt for the reason that it tends to create distrust in the popular mind and impair the confidence of the people in the courts which are of prime importance to the litigants in the protection of their rights and liberties. (1) 1378 Bearing the aforesaid principles in mind, let us now examine the case under consideration. The High Court expressed the view that the act of the respondent complained of merely amounted to an offence under section 228, Indian Penal Code. Nevaskar J. said: " It appears to me that the application, though it was stated to be an application for transfer, was intended to offend and insult the Magistrate. A man 's intention can be judged by the nature of the act he commits. The application directly and in face attributes partiality and corruption to the Magistrate. It was not an application made bona fide to a court having jurisdiction to transfer the case from that Court to some other Court. It was an application thrown in the face of the Magistrate himself. The action is no better than telling the Magistrate in face that he was partial and corrupt. The allegations in the application no doubt are insulting to the Magistrate and he felt them to be so and at the time the application was submitted on 17th December, 1953, when he was sitting as a Court and dealing with the case of the opponent." " Thus, since I hold that the opponent intended to offer insult to the Magistrate concerned there is no doubt that the act would fall within the purview of section 228, Indian Penal Code, and this Court will be precluded from taking action for the contempt committed before the Court of the Magistrate by reason of section 2(3) of the Contempt of Courts Act ". The other learned Judge also expressed the same view in the following words: " The subordinate Courts can sufficiently vindicate their dignity by proceeding against the offenders under the provisions of criminal law in such cases. Legislature has deemed it proper to exclude such cases from the jurisdiction of the High Court under section 2(3) of the Contempt of Courts Act. This, however, does not mean that High Court 's jurisdiction is excluded even in cases where the act complained of, which is alleged to constitute contempt, is otherwise an offence under the Indian Penal Code." "The question to be considered in this case is 1379 whether the act complained of is punishable as contempt under any one of the specific provisions of the Indian Penal Code. In other words whether it falls under any one of the sections 175, 178, 179, 180 or 228 of the Indian Penal Code." " If the act complained of constitutes an offence under any of these sections, it can be dealt with by the subordinate Court itself under section 480 of the Criminal Procedure Code and the High Court will have no power to take cognizance of it under the Contempt of Courts Act. " We are of the opinion that the learned Judges were wrong in their view that prima facie the act complained of amounted to an offence under section 228, Indian Penal Code, and no more. We are advisedly saying prima facie, because the High Court did not go into the merits and we have no desire to make any final pronouncement at this stage on the merits of the case. Section 228, Indian Penal Code, is in these terms: " Whoever intentionally offers any insult, or causes any interruption to any public servant, while such public servant is sitting in any stage of a judicial proceeding, shall be punished with simple imprisonment for a term which may extend to six months, or with fine which may extend to one thousand rupees, or with both." The essential ingredients of the offence are (1) intention, (2) insult or interruption to a public servant and (3) the public servant insulted or interrupted must be sitting in any stage of a judicial proceeding. In the present case there is an initial difficulty which has been pointed out to us. The respondent was sought to be proceeded against by reason of the aspersions he made in the application dated December 17, 1953, and the affidavit dated December 21, 1953. It is not very clear from the record if the learned Magistrate was sitting in any stage of a judicial proceeding when the application and the affidavit were filed. The High Court no doubt says that the Magistrate was sitting as a court at the time; but there is no reference to the particular work, judicial or otherwise, which the 1380 Magistrate was doing at the time. The practice as to the filing of applications and affidavits varies from court to court and in some courts applications and affidavits are filed within stated hours before the reader or the bench clerk; they are so filed even when the Judge or Magistrate is in chamber or preoccupied with some administrative duties. So far as the present case is concerned, it is not at all clear, from the record as placed before us, as to what was the judicial work which the learned Magistrate was doing when the application and affidavit were filed. If he was not doing any judicial work at the relevant time, then the third essential ingredient mentioned above was not fulfilled and the act complained of would not amount to an offence under section 228, Indian Penal Code. We are not, however, basing our decision on the mere absence of materials to show what particular judicial work the learned Magistrate was doing when the application dated December 17, 1953, and the affidavit dated December 21, 1953, were filed. If that were the only infirmity, the proper order would be to ask for a finding on the question. Our decision is based on a more fundamental ground. Learned counsel for the parties have taken us through the applica tion dated December 17, 1953, and the affidavit dated December 21, 1953. The aspersions made therein prima facie showed that they were much more than a mere insult to the learned Magistrate ; in effect, they scandalised the Court in such a way as to create distrust in the popular mind and impair the confidence of people in Courts. Two of the aspersions made, taken at their face value, were (1) that the learned Magistrate had joined in a conspiracy to implicate the respondent in a false case of theft. In the affidavit it was stated that the learned Magistrate had sent for the respondent and his brother and had asked them to make a false report to the police that the ornaments of Chandra Mukhi Bai had been stolen. The learned Magistrate characterised the aspersion as totally false and said that he neither knew the respondent nor his brother and had no acquaintance with them. Another aspersion was that the Magistrate had taken a bribe 1381 of Rs. 500. This aspersion was also stoutly denied. We must make it clear here that at this stage we are expressing no opinion on merits, nor on the correctness or otherwise of the aspersions made. All that we are saying is that the aspersions taken at their face value amounted to what is called scandalising the court itself, manifesting itself in such an attack on the Magistrate as tended to create distrust in the popular mind and impair the confidence of the people in the courts. We are aware that confidence in courts cannot be created by stifling criticism, but there are criticisms and criticisms. " The path of criticism ", said Lord Atkin in Ambard vs Attorney General for Trinidad and Tobago (1), " is a public way: The wrongheaded are permitted to err therein: provided that members of the public abstain from imputing improper motives to those taking part in the administration of justice, and are genuinely exercising a right of criticism, and not acting in malice or attempting to impair the administration of justice, they are immune ". If, therefore, the respondent had merely criticised the Magistrate, no notice need have been taken of such criticism as contempt of court whatever action it might have been open to the Magistrate to take as an aggrieved individual; but if the respondent acted in malice and attempted to impair the administration of justice, the offence committed would be something more than an offence under section 228, Indian Penal Code. Learned counsel for the respondent has contended before us that as soon as there is an element of insult in the act complained of, section 228, Indian Penal Code, is attracted and the jurisdiction of the High Court to take cognizance of the contempt is ousted. We are unable to accept this contention as correct. Section 228 deals with an intentional insult to a public servant in certain circumstances. The punishment for the offence is simple imprisonment for a term which may extend to six months or with fine which may extend to one thousand rupees or with both. Our attention has been drawn to the circumstance that under section 4 of (1) [1936] A. C.322, 335. 1382 the Act the sentence for contempt of court is more or less the same, namely, simple imprisonment for a term which may extend to six months. The fine is a little more and may extend to two thousand rupees. Section 4 of the Act contains a proviso that the accused person may be discharged or the punishment awarded may be remitted on apology being made to the satisfaction of the court. We do not, however, think that a similarity of the sentence in the two sections referred to above is a real test. The true test is: is the act complained of an offence under section 228, Indian Penal Code, or is it something more than that ? If in its true nature and effect, the act complained of is really " scandalising the court " rather than a mere insult, then it is clear that on the ratio of our decision in Ramakrishna Reddy 's case(1) the jurisdiction of the High Court is not ousted by reason of the provision in section 3(2) of the Act. Mr. Umrigar has urged a further point in this connection and has contended that for an offence under section 228, Indian Penal Code, the insult must be an intentional insult. The first essential requirement of the offence, according to him, is that the insult must be offered intentionally. He has pointed out that the application which the respondent filed purported to be an application under section 528, Criminal Procedure Code, and though it is difficult to see how that section applied in the present case, the intention of the respondent was not to insult the Magistrate, but merely to state the 'Circumstances in which the respondent was praying for a transfer of the case. Mr. Umrigar has pointed out that in the reply which the repondent gave to the notice issued from the High Court, he said that he had no intention to insult or show disrespect to the learned Magistrate. Mr. Umrigar has further submitted that the decision in Narotam Das vs Emperor (2) (on which the learned Judges of the High Court relied) where in somewhat similiar circumstances it was held that section 228, Indian Penal Code, applied, does not correctly lay down the law. In that case Yorke J. observed that it would be a matter for (1) ; (2) A.I.R. 1943 All. 97. 1383 consideration in each individual case how, insulting the expressions used were and whether there was any necessity for the applicant to make use of those expressions in the application which he was actually making to the court. While we agree that the question of intention must depend on the facts and circumstances of each case, we are unable to accept as correct the other tests laid down by the learned Judge as finally determinative of the question of intention. In two earlier decisions of the same High Court, in Queen Empress vs Abdullah Khan(1) and Emperor vs Murli Dhar (2), it was held that where an accused person made an application for transfer of the case pending against him and inserted in such application assertions of a defamatory nature concerning the Magistrate who was trying the case, there was no intention on the part of the applicant to insult the court, but the intention was merely to procure a transfer of the case. We do not think that any hard and fast rule can be laid down with regard to this matter. Whether there is an intention to offer insult to the Magistrate trying the case or not must depend on the facts and circumstances of each case and we do not consider it necessary, nor advisable, to lay down any inflexible rule thereto. Taking the aspersions made by the respondent in the application dated December 17, 1953, and the affidavit dated December 21, 1953, at their face value, we have already expressed the view that they amounted to something more than a mere intentional, personal insult to the Magistrate; they scandalised the court itself and impaired the administration of justice. In that view of the matter section 3(2) of the Act did not stand in the way and the learned Judges of the High Court were wrong in their view that the jurisdiction of the High Court was ousted. We accordingly allow the appeal and set aside the order of the High Court dated February 9, 1955. In our view, the High Court had jurisdiction to take cognizance of the act complained of and the case must (1) 176 (2) (1916) 38 All. 1384 now be decided by the High Court on merits in accordance with law. It is only necessary to add that the act complained of was committed as far back as 1953 and it is desirable that the case should be dealt with as expeditiously as possible. Appeal allowed.

The respondent, who had filed a complaint in respect of an alleged offence under section 500 of the Indian Penal Code in the Court of the Additional District Magistrate of Indore, made a number of aspersions against the Magistrate in an application I74 1368 made to him under section 528 of the Code of Criminal Procedure, two of which were of a serious character. It was alleged that the Magistrate was a party to a conspiracy with certain others the object of which was two implicate the complainant in a false case of theft and that a lawyer appearing for the accused persons, to whom the Magistrate was favourably inclined, had declared that he had paid a sum of Rs. 500 to the Magistrate. Those allegations were later on repeated in an affidavit. The Magistrate reported the matter to the Registrar of the High Court for necessary action. The High Court called upon the respondent to show cause why he should not be proceeded against in contempt under the . The judges of the Division Bench who heard the matter, without going into the merits of the case, held that, Prima facie, the offence was one of intentional insult under section 228 of the lndian Penal Code and, consequently, the jurisdiction of the High Court was ousted under section 3(2) Of the . Held, that the High Court had taken an erroneous view of the matter and its order must be set aside. The mere existence of an element of insult in the alleged act of contempt was not conclusive as to the applicability of section 228 Of the Indian Penal Code so as to oust the jurisdiction of the High Court under section 3(2) of the . While Judges and Courts are not beyond criticism, and there are well recognised limits to such criticism, and contempt proceedings are not meant to shield judges from personal insults, there can be no question that where defamatory aspersions are cast upon the character and ability of individual judges or of Courts in general, which in substance scandalise the Court itself and have the effect of undermining the confidence of the public in it and thus hinder due administration of justice, the contempt is of a kind which exceeds the limits of section 228 of the Indian Penal Code. The true test, therefore, is: is the act complained of an offence under section 228 of the Indian Penal Code, or something more than that ? If it is something more, the jurisdiction of the High Court is not ousted by section 3(2) Of the . So judged, there could be no doubt that the aspersions cast in the present case amounted to scandalising the court itself, and were no mere personal insults, and the High Court had jurisdiction to take cognizance of the same. Bathina Ramkrishna Reddy vs The State of Madras, [1952] section C. R. 425 and Brahma Prakash Shayma vs The State of Uttar Pradesh, , relied on. Ambard vs Attorney Geneyal for Trinidad and Tobago, , referred to. 1369 The question whether an insult offered to a public servant is intentional so as to attract section 228 of the Indian Penal Code has to be decided on the facts of each particular case and it is neither necessary nor advisable to Jay down any hard and fast rule. Narotam Das vs Emperor, A.I.R. 1943 All. 97, Queen Empress vs Abdullah Khan, and Emperor vs Murli Dhar, All. 284, considered.

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ivil Appeal No. 859 of 1987. Shankar Ghosh and L.P.Aggarwal for the Appellants From the Judgment and order dated 8.8. 1985 of the Calcutta High Court in Appeal No. 329 of 1982. V.C. Mahajan, B. Parthasarhti and C.V. Subba Rao for the Respondents. The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J. This appeal by special leave is confined solely to the question of interest. In other words, the entitlement of interest on the amount awarded by Arbi trator for the requisition of the premises under the Requi sitioning and Acquisition of Immovable Property Act 1952 is the issue. The principles upon which the compensation on this aspect is payable are by now well settled. In Satinder Singh & Ors. vs Amrao Singh & Ors., ; this Court reiterated the principles at page 694 of the report as follows: "In Inglewood Pulp and Paper Co. Ltd. vs New Burnswick Electric Power Commission it was held by the Privy Council that "upon the expropriation of land under statuto ry power, whether for the purpose of private gain or of good to the public at large, the owner is entitled to interest upon the princi pal sum awarded from the date when possession was taken, unless the statute clearly shows a contrary intention. ": Dealing with the argu ment that the expropriation with which the Privy Council was concerned was not effected for private gain, but for the good of the public at large, it observed "but for all that, the owner is 1047 deprived of his property in this case as much as in the other, and the rule has long been accepted in the interpretation of statutes that they are not to be held to deprive indi viduals of property without compensation unless the intention to do so is made quite clear. The right to receive the interest takes the place of the right to retain posses sion and is within the rule". It would thus be noticed that the claim for interest proceeds on the assumption that when the owner of immovable property loses possession of it, he is entitled to claim interest in place of right to retain possession. The question which we have to consider is whether the application of this rule is intended to be excluded by the Act of 1948, and as we have already observed, the mere fact that section 5(3) of the Act makes section 23(1) of the Land Acquisition Act, 1894 applicable we cannot reasonably infer that the Act intends to exclude the applica tion of this general rule in the matter of the payment of interest. That is the view which the Punjab High Court has taken in Surjan Singh vs The East Punjab Government, (AIR 1957 Punj. 265) and we think rightly. " The same principle was reaffirmed not in the context of Acquisition of Immovable Property, which Mr. Mahajan, learned counsel for the respondents tried to make a point before us, was highlighted in National Insurance Co. Ltd. Calcutta vs Life Insurance Corporation of India, [1963] Supp. 2 SCR 971. at 992 where speaking for the court Mr. Justice Hidayatullah, as learned Chief Justice of India then was observed: "The reason of the rule was stated a long time ago by Lord St. Leonard L.C. Birch vs Joy, [1852] III H.L.C. 565:10 E.R. 222 as follows: "The parties change characters, the property remains at law just where it was, the purchas er has the money in his pocket, and the seller still has the estate vested in him; but they exchange characters in a Court of Equity, the seller becomes the owner of the money and the purchaser becomes the owner of the estate." On entering possession the purchaser becomes entitled to the rents but if he has not paid the price, interest in equity is deemed pay able by him on the purchase price which 1048 belongs to the seller. This principle was applied by the House of Lords in cases of compulsory purchases. In Swift & Co. vs Board of Trade, Viscount Cave L.C. gave the reason that the practice rests upon the principle that the taking of possession is an implied agreement to pay interest which was stated by Sir William Grant M.R. in Fludyer vs Cocker; , This principle was further extended by the Privy Council to the compulsory taking over of a business as a going concern in International Railway Co. vs Niagara Parks Commission, [1944] A.C. 328. It was noted by Justice Hidayatullah that this principle has also been accepted by this Court in Satinder Singh vs Amrao Singh (supra). The principle stated was followed in Hirachand Kothari (dead) through Lrs. vs State of Rajasthan & Anr., [1985] Suppl. 1 SCR 644 where this court noted the principle at page 655 of the report. In the light of the aforesaid decision we are of the opinion that the appellants herein are entitled to the interest for the period from March 1975 to 31st July, 1987 when principal amount of compensation had been paid and or when the premises in question had been de requisitioned and handed back to the owner, on the amount awarded. As to how the interest would vary, but the right of interest was well avered and also should have been considered in the light of the observations of Privy Council in Inglewood Pulp and Paper Co. Ltd. vs New Burnswick Electric Power Commission, AIR 1928 Privy Council 287. We are of the opinion that from the period from March 7, 1975 to February 28, 1985 being the date on which the judgment of the High Court was pronounced in this case the appellants are entitled to the interest on the amount awarded at the rate of 6% per annum and from the period from August 87 1985 to July 31, 1987 and for that period only at the rate of 12% per annum. Interest will be payable only on the balance amount which remained to be payable to the appellants i.e. the amount due minus what has been paid from the respective dates. The appellants are entitled to the costs of this appeal. The amount is directed to be paid within three months from this date by the respondents. In case, there is any difficulty in calculating the amount, the parties will be at liberty to apply to the High Court of Calcutta. The appel lants are entitled to costs of this appeal. The appeal is thus disposed of. S.L. Appeal dis posed of.

This appeal by special leave was confined solely to the question of entitlement of interest on the amount awarded by the Arbitrator for the requisition of the premises under the . Disposing of the appeal, the Court, HELD: The principles upon which the compensation on this aspect is payable are by now well settled. This Court reit erated the principles in Satinder Singh and Ors. vs Amrao Singh and Ors., ; at 694; National Insurance Co. Ltd. Calcutta vs Life Insurance Corporation of India [1963] Supp. 2 SCR 971 at 992 and Hirachand Kothari (dead) through Lrs. vs State of Rajasthan & Anr., [1985] Suppl.1 SCR 644 at 655. [1046F; 1048C] In the light of the aforesaid decisions, the Court was of the opinion that the appellants herein were entitled to the interest for the period from March 1975 to the 31st July, 1987, when the principal amount of compensation had been paid and/or when the premises in question had been de requisitioned and handed back to the owner, on the amount awarded. The Court was of the opinion that for the period from March 7, 1975 to February 28, 1985 being the date on which the judgment of the High Court was pronounced in this case, the appellants were entitled to the interest on the amount awarded at the rate of 6 per cent per annum, and for the period from August 8, 1985 to July 31, 1987 for that period only at the rate of 12 per cent per annum. The interest would be payable only on the balance amount which remained to be paid to the appellants i.e. the amount due minus what had been paid from the respective dates. The Court directed that the amount be paid by the respondents within three months from the date of this judgment, and that in case there was any difficulty in calculating the amount, the 1046 parties would be at liberty to apply to the High Court. [1048C H] Satinder Singh & Ors. vs Amrao Singh & Ors., ; ; National Insurance Co. Ltd. Calcutta vs Life Insurance Corporation of India, [1963] Supp. 2 S.C.R. 971 at 992; Hirachand Kothari (dead) through Lrs. vs State of Rajasthan & Ors., [1985] Supp. 1 S.C.R. 644 and Inglewood Pulp and Paper Co. Ltd. vs New Burnswick Electric Power Commission, A.I.R. 1928 Privy Council 287, referred tO.

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ivil Appeal No. 501 of 1976. Appeal by Special Leave from the Judgment and Order dated the 28th April, 1975 of the Delhi High Court in Civil Revision No. 186 of 1975. Hardayal Hardy, S.K. Bagga, (Mrs.) section Bagga, (Miss) Yesh Bagga and K.K. Mittal for the Appellant. Bikramjit Nayar, B.P. Maheshwari and Suresh Sethi for Respondent. The Judgment of the Court was delivered by BHAGWATI, J. This is an unfortunate litigation where a widow has been kept out of her monies for over six years by reason of wrong application of law by the courts. Much of the travail of the widow could have been avoided if the courts had taken a common~ sense view of the law instead of adopting a rather technical and unimaginative approach. The facts giving rise to this litigation are few and may be briefly stated as follows. The respondent is the owner of a residential quarter bearing No. 1/20 situate at Old Rajendra Nagar, New Delhi. He wanted a loan for the purpose of repaying an earlier debt and he, therefore, approached the appellant and as a result of negotiations between them, an agreement dated 27th September, 1967 was entered into 184 between the parties. This agreement recited that a sum of Rs. 7500/was lent and advanced by the appellant to the respondent and it provided that in lieu of interest on his amount of Rs. 7500/ , the respondent would give to the appellant a portion of his residential quarter (hereinafter referred to as the premises) for temporary residence. The agreement went on to say, and we are setting out the precise terms of the agreement since they are material for the decision of the controversy between the parties: "On, the expiry of two years as stated above the second party shall give one month 's notice in writing to the first party for the said room. If after the expiry of two years fixed period, the first party wants to pay the amount he shall give one month 's notice in writing to the second party. When the first party repays the above stated loan to the second party, then the second party shall vacate the room etc. under temporary residence and give it to the first party. If the first party pays the amount of Rs. 7500/ and the second party does not give possession of the room etc. under her use, then the second party shall be liable to pay Rs. 110/ per month as damages. If the first party does not pay the amount of Rs. 7500/ to the second party on the expiry of the two years period, the first party will not be entitled to recover damages of Rs. 110/ per month from the second party and the second party shall be entitled to take legal proceedings against the first party and also if the first party pays the amount of Rs. 7500/ and the second party does not give possession, the first party shall be entitled to take the legal proceedings regarding vacation of the room etc. under the use of the second party. " Pursuant to the agreement, the respondent handed over pos session of the premises to the appellant and the appellant started occupying the same against interest on the loan of Rs. 7500/ advanced by her to the respondent. The period of the agreement expired on 27th September, 1969 and according to the terms of the agreement, the. respondent could thereafter repay the loan of Rs. 7500/ to the appellant and claim back possession of the premises from her. The case of the respondent was that he addressed a notice dated 26th August, 1969 to the appellant and tendered a ;sum of Rs. 7500/ to her in repayment of the loan, but the appellant refused to accept the same. The 'respondent also addressed another notice dated 4th May, 1970 to the appellant but this notice also had no effect on her. The respondent thereupon filed Suit No. 123 of 1973 in the Court of Sub Judge, 1st Class, Delhi seeking to recover possession of the premises from the appellant. The appellant did not appear to contest the suit and it was decreed ex parte by a judgment dated 22nd May, 1973. The learned subJudge passed a decree for possession of the premises in favour of the respondent but added the following rider: 185 "The plaintiff is ordered to tender the amount of Rs. 7500/ to the defendant within a period of 30 days from today in cash. If the defendant refuses to accept the money, it should be deposited in the Court with notice to the defendant within the aforesaid period. " Now, it appears that prior to the filing of this suit by the respondent, the appellant had filed a suit against the respondent for recovery of the loan of Rs. 7500/ advanced by her to the respondent. The respondent had filed his defence to the suit and various grounds were taken by him, one of which was that the claim was barred by limitation. This suit was pending on 22nd May, 1973 when the ex parte decree was passed against the appellant. The respondent had obviously no desire and perhaps not even capacity to repay the loan of Rs. 7500/ to the appel lant and he, therefore, preferred an application for review under Order XLVII, Rule 1 of the Code of Civil Procedure seeking deletion of the direction given by the learned Sub Judge requiring him to deposit the sum of Rs. 7500/ . The respondent contended that since the appellant has already filed a suit against him for recovery of the amount of Rs. 7500/ ' and he was resisting the suit inter alia on the ground of limitation, it was not competent to the learned Sub Judge to. give such a direction for deposit of the amount of Rs. 7500/ and the giving of such direction was clearly an error of law apparent on the face of the record. The respondent also claimed review on the ground of discov ery of new and important matter in the shape of Suit No. 123 of 1973 filed by the appellant against him. The learned Sub Judge, by a judgment dated 3rd August, 1973 allowed the review application and held that the direction for deposit ing the amount of Rs. 7500/in court should be deleted from the ex parte decree passed against the appellant. The result was that the respondent became entitled to recover possession of the premises from the appellant without paying to the appellant or .depositing in court the amount of Rs. 7500/ in repayment of the loan. Now, unfortunately this order allowing the review appli cation was made by the learned Sub Judge without issuing notice to the appellant. That was obviously bad and, there fore, on the application of the appellant, the learned Sub Judge had to set aside the order and reheat the review application. The same order was, however, once again made by the learned Sub Judge after hearing the appellant and the direction requiring the respondent to deposit the sum of Rs. 7500/ in court was deleted on the ground that such direc tion nullified the effect of the ex parte decree for posses sion and forced the respondent to admit the claim of the appellant for repayment of the sum of Rs. 7500/ , which, according to the respondent, was time barred. The appellant being aggrieved by the order allowing the review application, preferred a revision application to the High Court of Delhi under section 115 of the Code of Civil Procedure. Mr. Justice Avadh Behari, who heard the revision application, took the view that the order allowing the review application was appealable and 'hence the revision application was not competent, but on the alternative view that the revision application lay before the High Court, 186 he proceeded to consider whether the review had been rightly granted and held that the respondent having brought a simple suit for possession, the learned Sub Judge had no jurisdiction to impose a condition requiring him to deposit the sum of Rs. 7500/ , particularly when the appellant 's suit for recovery of the same was pending in that very court and that under the terms of the agreement, all that he was required to do was to tender the sum of Rs. 7500/ and since that was done by him and the appellant had refused to accept the same, he was entitled to a decree for possession. The learned Judge accordingly dismissed the revision applica tion. That led to the filing of the present appeal with special leave obtained from this Court. When the hearing of 'the appeal commenced a contention of a preliminary nature was advanced on behalf of the re spondent and it was that since the order of the learned Sub Judge impugned in revision before the High Court was an order allowing the review application, it was appealable under XLIII, rule 1. (s) of the. Code of Civil Procedure and hence no revision was competent to the High Court under section 115 of the Code of Civil Procedure and the High Court was right in rejecting the revision application. Now, there can be no doubt that under section 115 of the Code of Civil Procedure a revision application can lie before the High Court from an order made by a subordinate court only if no appeal lies from that order to the High Court. The words of limitation used ' in section 115 are "in which no appeal lies thereto" and these. words clearly mean that no appeal must lie to the High Court from the order sought to be revised, because an appeal is a much larger remedy than a revision application and if an appeal lies, that would afford sufficient relief and there would be no reason or justification for invoking the revisional jurisdiction. The question, therefore, here is whether an appeal against the order made by the learned Sub Judge allowing the review application lay to the High Court. If it did, the. revision application would be clearly incompetent. Now Order XLIII, Rule 1. cI. (s) undoubtedly provides an appeal against an order allowing a review application, but the order allowing the review application in the present case was made by the learned SubJudge, and hence an appeal against it lay to the District Court and ' not to the High Court, and, obviously, since no appeal lay against the order of the learned Sub Judge to the High Court, the revision application could not be rejected as incompetent. The preliminary contention must. in the circumstances, be decid ed against the respondent. That takes us to the merits of the appeal and the ques tion which arises for consideration on merits is whether the direction requiring the respondent to deposit the sum of Rs. 7500/ in court as a condition of recovery of possession of the premises from the appellant was erroneous in law so as to justly its deletion on review. determination of this question turns on the true interpretation of the agree ment between the parties. If we turn to the agreement it is clear that the loan of Rs. 7500/ was advanced by the appel lant to the respondent for a period of two years and in lieu of interest on 187 the amount of the loan, the respondent handed over the possession of the premises to the appellant and the appel lant was entitled to occupy the same free of rent. We have already set out the relevant portions of the agreement and it appears clearly from those provisions that the re spondent was not entitled to repay the amount of the loan and demand recovery of possession of the premises from the appellant before the expiry of the period of two years. It was only of the expiration of the period of two ' years that the respondent was entitled to repay the amount of the loan and if he wanted to do so, he was required to give one month 's notice in writing to the appellant and on such repayment, the appellant was bound to hand over vacant possession of the premises to him. If, despite the repay ment of the amount of the loan by the respondent, the appel lant failed to hand over vacant possession of the premises to the respondent, she was liable to pay damages at the rate, of Rs. 110/ per month. But if for any reason the respondent failed to repay the amount of the loan on the expiry of the period of two years, he could not claim to recover any damages from the appellant. Clearly the obliga tion of the appellant to hand over vacant possession of the premises to the respondent was concurrent with the obliga tion of the respondent to repay the amount of loan to the appellant and the respondent could not claim possession of the premises from the appellant without making repayment of the amount of the loan. It the respondent tendered a sum of Rs. 7500/ to the appellant in repayment of the amount of the loan and yet the appellant refused to accept the same, the appellant might incur liability to pay to the respondent damages for wrongful use and occupation of the premises, but the respondent could not say that he was exonerated from the obligation to repay the amount of the loan and was entitled to recover possession of the premises without making repay ment of the amount of the loan. The respondent could seek to recover possession of the premises from the appellant only ion condition of making repayment of the loan, because the two obligations were mutual and concurrent and were required to be simultaneously performed and one could not get delinked from the other by reason of any refusal on the part of the appellant to accept the tender of Rs. 7500/ from the respondent. We may in this connection refer to the following passage from the judgment in Dixon vs Clark(1) when it said: "In action of debt and assumpsit, the principle of the plea of tender, in our apprehension is, that the defendant has been always ready (toujoure prist) to perform entirely the contract on which the action is rounded; and that he did perform it, as far as he was able, by tendering the requisite money; the plaintiff himself precluded a complete performances, by refusing to receive it. And, as in ordinary cases, the debt is not discharged by such tender and refusal, the plea must not only go on to. allege that the defendant is still ready (incore prist) but must be accompanied by a profort in curiem of the money tendered. If the defendant can maintain this plea, although he ,will not thereby (1) 188 bar the debt (for that would be inconsistent with uncore prist and profort in curiem) yet he will answer the action. in the sense that he will recover judgment for his costs of defence against the plaintiff in which respect the plea of tender is essentially different from that of payment of money into court. And, as the plea is thus to constitute an answer to the action, it must, we conceive, be dificient in none of the requisite qualities of a good plea in bar. This decision has been quoted with approval in Leaks on Contracts, 8th Ed. at page 663 and it establishes beyond disputation that merely because the plaintiff or the defend ant has tendered the amount due and payable by him and such tender has been wrongly refused by the other party, it does not absolve the first named party from its obligation to make payment of the amount and where the obligation to make payment of the amount is concurrent with the obligation to hand over possession, the claim for recovery of possession must be accompanied by payment or deposit of the amount. The respondent was, therefore, clearly bound to pay or deposit the amount of loan as a condition of recovery of possession of the premises from the appellant. We may point out that in fact, in the present case, there was no valid tender of the sum of Rs. 7500/ by the respondent to the appellant. The case of the respondent was that he tendered the sum of Rs. 7500/ in cash to the appel lant on 26th August, 1969 but the appellant refused to accept the sum. Now ', we will assume for the purpose of argument that this case of the respondent is factually correct and that he did tender the sum of Rs. 7500/ in cash to the appellant on 26th August, 1969, but this was obvious ly not a valid tender, because under the terms of the agree ment the respondent could repay the amount of the loan to. the appellant only on the expiry of the period of two years and the date of the agreement being 27th September, 1967, the period of two years expired on 26th September, 1969. The respondent could not validly tender the sum of Rs. 7500/ to the appellant in repayment of the amount of the loan until 27th September, 1969 and the tender made by him on 26th August, 1969 was clearly invalid. It may be noted that it was not the case of the respondent that he made any fresh tender to the appellant on or after 27th September, 1969 and hence the conclusion must inevitably follow that the respondent did not at any time make a valid tender to the appellant of the sum of Rs. 7500/ . Now, if the re spondent did not at any time validly tender payment of the sum of Rs. 7500/ to the appellant, the appellant obviously did not become liable to hand over possession of the prem ises to the respondent and a fortjori no claim for damages for wrongful use and occupation of the premises could be sustained by 'the respondent against the appellant. It was pointed out to us on behalf of the respondent that he had already filled. suits against the appellant for damages or compensation for wrongful use and occupation of the premises and one of the suits, namely Suit No. 800 of 1975 had been decreed by the Sub Judge, 1st Class and Civil Appeal No. 9 of 1975 preferred by the appellant against it had been dismissed by the 189 Additional District Judge, Delhi on the basis that the respondent had made a valid tender of the sum of Rs. 7500/ to the appellant and since the appellant had refused to accept the same, she was in wrongful use and occupation of the premises from the date of the tender and was, therefore, liable to pay compensation to the respondent from that date. This is true, but it cannot preclude us from laying down what we think to be the correct legal position on a proper interpretation of the agreement between the parties. More over, this decision is under appeal before the High Court. But, apart from that, we do not think this decision is correct, because, on the view we have taken, the respondent was not entitled to tender the sum of Rs. 7500/ to the appellant before 27th September, 1969 and even if a tender was made by him on 26th August, 1969 as alleged by him, the appellant was entitled to refuse to accept the same and she did not become liable to hand over vacant possession of the premises to the respondent or to pay compensation to the respondent in respect of her occupation of the premises. It is only if the respondent made a valid tender of the sum of Rs. 7500/ to the appellant on or after 27th September, 1969 that the appellant would be liable to hand over vacant possession of the premises to the respondent and since that did not happen in the present case, there was no obligation on the appellant to deliver possession of the premises to the respondent. The respondent was not entitled to claim possession of the premises from the appellant unless he paid or deposited the sum of Rs. 7500/ in court in repayment of the amount of the loan. The High Court as well as the learned Sub Judge were, therefore, in error in allowing the review application and ordering that the direction requiring the respondent to pay to the appellant or to deposit in court a sum of Rs. 7500/ in repayment of the amount of the loan should be deleted. It was a correct and valid direc tion and it was rightly introduced in the original ex parte decree passed by the learned Sub Judge. We accordingly allow the appeal, set aside the order allowing the review application passed by the learned Sub Judge as also the order of the High Court rejecting the revision application. The original ex parte decree for possession together with the direction requiring the re spondent to pay or deposit the sum of Rs. 7500/ in court will stand, but since possession of the premises has already been taken over by the respondent in pursuance of the ex parte decree for possession, we direct that the respondent do pay to the appellant the sum of Rs. 7500/together with interest thereon at the rate of 9 per cent per annum from the date when possession of the premises was taken by the respondent up to the date of payment. The respondent will pay to the appellant costs of the appeal as also costs of the review application before the Sub Judge and the revision application before the High Court. P.B.R. Appeal allowed.

The appellant and the respondent entered into an agreement by which the appellant advanced money to the respondent and the respondent in lieu of interest thereon gave a portion of his house for residence to the appellant for a period of two years. The other terms were that if after the expiry of the two year period, the respondent wished to repay the amount, he should give one month 's notice in writing; that if after the payment of the sum, the appellant would not vacate the house, she would be liable to pay damages and that if the respondent did not repay the amount on the expiry of the two year period, he would not be entitled to recover dam ages. The respondent alleged that before the expiry of the two year period on September 27, 1969, he addressed a notice to the appellant and tendered repayment of the loan which she refused to accept. The respondent 's suit for recovery of possession of the premises was decreed ex parte with an order that he should tender payment to the appellant and that if she refused to accept the money, it should be depos ited in the court. The appellant, on the other hand, filed a suit for recovery of the loan in which the respondent contended that the claim was barred by limitation. The respondent filed a review application before the Subjective contending that the order directing deposit of money in the court was clearly an error apparent on the face of the record. Allowing the review application, the Sub Judge or dered the deletion of the direction for depositing the money in court. The appellant filed a revision application in the High Court against the order can the review application. The High Court held that since the order allowing the review application was appealable, the revision application was not competent, but on the alternative view that the revision application lay before the High Court, it held (a) that the Sub Judge had no jurisdiction to impose a condition requir ing deposit of the loan money. particularly when the suit for recovery of the money was pending before the same court and (b) since the respondent tendered the money to the appellant, but it was refused, he was entitled to a decree for possession. Allowing the appeal, HELD: (1) Order XLIII r. 1(s) of the Code of Civil Procedure, provides an appeal against an order allowing a review application. Since the order allowing the review application was made by a Sub Judge, the appeal against it lay to the District Court and not to the High Court and since no appeal lay against the order of the Sub Judge to the High CoUrt: the revision application could not be re jected as incompetent. [186F] Under section 115 C.P.C. a revision application cart lie before the High Court from an order made by a subordinate court only if no appeal lies from that order to the High Court. The words of limitation used in that section, name ly, "in which no appeal lies thereto" clearly mean that no appeal must lie to the High Court from the order sought to be revised because an appeal is a much larger remedy than a revision application and if an appeal lies that would afford 183 sufficient relief and there would be no reason or justifica tion for invoking the revisional jurisdiction. [186D E] (2) The High Court and the Sub Judge were in error in allowing the review application. The direction requiring the respondent to pay the loan to the appellant or to depos it it in the court was a correct and valid direction and was rightly introduced in the original ex parte decree. The courts below were in error in ordering its deletion. [189 E] (3) Merely because one party has tendered the amount due and payable by him and such tender has been wrongly refused by the other party. does not absolve the first party from its obligation to make payment and where the obligation to make payment is concurrent with the obligation to hand over possession, the claim for recovery of possession must be accompanied by payment or deposit of the amount. [188C] Dixon vs Clark E.R. 919, referred to. In the instant case, the respondent could not validly tender the amount to the appellant ha repayment of the loan until September 27, 1969 and the tender made on August 26, 1969 was clearly invalid. If the respondent did not at any time validly tender payment to the appellant, she was not liable to hand over possession of the premises and no claim for damages for wrongful use could be sustained against her. The respondent was not entitled to possession unless he paid or deposited the money in court in repayment of the loan. The respondent could seek to recover possession of the premises only on condition of making repayment of the loan because the two obligations were mutual and concurrent and were required to be simultaneously performed and one could not get delinked from the reason of the refusal on the appellant 's part to accept the tender of money. [188E H]

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Appeals Nos. 702 and 768 of 1964. Appeals by certificate/special leave from the judgment and decree dated June 7, 1962 of the Jammu and Kashmir High Court in Civil First Appeals Nos. I of 1957 and 15 of 1961 respectively. Naunit Lal, for the appellant (in both appeals). K. R. Chaudhuri, for the respondent (in C. A. No. 768/64). 793 The Judgment of the Court was delivered by Wanchoo J. These are two connected appeals on certificates granted by the Jammu and Kashmir High Court and raise a common question of law. We shall therefore give the facts of one appeal (No. 702) in order to appreciate the question of law which calls for decision. Sultan Mohd. Matawali Khan (hereinafter referred to as Sultan Mohd.), Ilaqadar of Kathai was the predecessor in interest of the respondents. He had borrowed a sum of Rs. 40,000/ from the apperant bank on the basis of a promissory note on November 5, 1941. Before the bank advanced the loan, the Government of the then State of Jammu and Kashmir was approached and it was arranged that the debt would be liquidated through Government. For that purpose, an order was issued by the Government that land revenue of certain villages from the jagir of Sultan Mohd. amounting to Rs. 5076/9/6 would be collected by Government and the amount credited in the treasury to the credit of the bank tin the sum of Rs. 40,000/ along with interest due thereon was liquidated. It was in consequence of this arrangement that the bank advanced the sum of Rs. 40,000/ to Sultan Mohd. After the loan had been taken and the pro note executed the bank opened an account in the name of Sultan Mohd. which started with a debit of Rs. 40,000 on November 5, 1941. Thereafter whatever sum became due to the bank as interest and incidental charges was debited to the account of Sultan Mohd. and the amount received from Government was credited to the account. This went on till 1953 when the jagir of Sultan Mohd. was resumed. The account of Sultan Mohd. with the bank showed a debit of Rs. 2,995/12/ on June 3, 1953. On June 4, 1953, the bank filed the suit out of which this appeal has arisen against the respondents as legal representatives of Sultan Mohd. for a sum of Rs. 31,025/1 1/ . To "plain the large discrepancy between the amount shown due in the account and the amount for which the suit was filed, the bank stated that a sum of Rs. 28,029/15/ had been erroneously credited to the account of Sultan Mohd. Consequently the erroneous entries with respect to this credit were corrected and after such correction the amount due came to be Rs. 31,025/1 I/ , for which the suit was filed. The suit was resisted by the respondents on various grounds, but in the present appeals we are concerned only with one ground, namely, that it was not open to the bank to reverse the credit entries in the account of Sultan Mohd. after they had been made in the manner in which it was done at the instance of the Accountant General of the State of Jammu and Kashmir. Therefore, the bank would be only entitled to recover Rs. 2,995/12/ , which was the amount shown as due from Sultan Mohd. in the account on June 3, 1953. Sup C.I./66 6 794 The main question that arose in the trial court therefore was whether the bank was entitled to reverse the entries with respect to Rs. 28,029/15/ in the manner in which that was done. The facts with respect to what happened in connection with this sum are not now in dispute and may be briefly narrated. The procedure which was followed, after money was realised by Government from the villages mentioned in the Council Order of October 28, 1941, was that after deducting the collection charges, the amount used to be credited in the State 's accounts and thereafter transferred by Government to the bank for credit to the account of Sultan Mohd. The transfer used to be made by hundis or treasury bills and on receipt of necessary hundis or treasury bills the bank used to credit the amount shown in them to the account of Sultan Mohd. It appears however that for about five years what happened was that hundis or treasury bills used to be sent to the bank both by the treasury and by the Accountant General with the result that for this period double the amount realised by Government was credited to the account of Sultan Mohd. on the basis of the hundis or treasury bills sent to the bank. In consequence, there was an over payment by Government to the bank to the tune of Rs. 28,029/15/ and this over payment was credited to the account of Sultan Mohd. in the bank. This mistake was realised by the Accountant General after about five years and thereupon the Accountant General asked the bank to reverse the entry and debit this amount to the account of Sultan Mohd. Apparently, the bank was unwilling to do so and it appears that the bank was then threatened that if the bank did not do so the amount would be realised from the subsidy given to the bank by Government. The bank thereupon reversed the entries and debited this amount to the account of Sultan Mohd., with the result that the figure of Rs. 2,995/12/ shown as debit balance against Sultan Mohd. was increased by this sum. The trial court held that the amount was paid twice over by mistake and therefore the bank was entitled to reverse the entries at the instance of the Accountant General without reference to Sultan Mohd. It therefore decreed the suit in full. The respondents then went in appeal to the High Court and contended that the entries could not be reversed in this manner by the bank without the consent of Sultan Mohd. The High Court accepted this contention and rejected the argument on behalf of the appellant that the bank was justified under section 72 of the Indian Contract Act, No. 9 of 1872, to reverse the entries. The High Court therefore allowed the appeal and disallowed the claim of the bank for Rs. 28,029/15/ and decreed the suit for the balance (namely, Rs. 2,995/12/ ). Thereupon the appellant obtained certificates from the High Court in both cases, and that is how the matter has come before us. 796 of the third person, who is a constituent of the bank, the money becomes the money of the constituent, and it is not open to the bank in such circumstances to reverse the entry of credit made in the account of the constituent and in effect pay back the money to the person who had deposited it even though might if have been deposited by mistake. As soon as the money is credited into the account of the constituent, even though the person paying in may have paid it by mistake, it becomes the money of the constituent, and the bank cannot pay it back to the person who paid it to the account of the constituent on his representation that it was paid by mistake, without obtaining the consent of the constituent. As we have already said the legal position is that for the purpose of payment, Government was the agent of Sultan Mohd. and whatever money was paid to be credited to the account of Sultan Mohd even though it was paid through Government, became his money and it could not be paid out of his account which is in substance the effect of reversing the entries without his consent. Section 72 could certainty have been availed of by Government against Sultan Mohd and the Government could have sued Sultan Mohd for return of the money which had been paid by mistake into his account. But the Government could not ask the bank to reverse the entries and thus in effect ask it to pay out the money from the account of Sultan Mohd into which it had been deposited and the bank could not do so without taking the consent of Sultan Mohd. Further though Government was the agent of Sultan Mohd for the purpose of payment of the money for liquidating the debt, the Government had no further authority on his behalf to ask the bank to pay back any sum once it had been credited into his account by Government. That could only be done on the authority of Sultan Mohd. and there was no authority in this case for paying back the sum paid in by mistake to Government, for the reversal of the entries in substance amounted to this. It has been urged that on this view the bank would not be able to correct any mistake in the account of any constituent. 'Mat is not so. If, for example, a bank credits a cheque in favour of A by mistake into the account of B, the bank can always correct that mistake, for it had received the money on behalf of A. Similarly if the bank receives (say Rs. 5,000/ on behalf of A from some person, but by mistake enters Rs. 50,000/ in as account, the bank can always correct that entry and mention the correct sum received. But the present case is very different from corrections of such mistakes. Here the bank had received certain moneys on behalf of Sultan Mohd. through treasury bills or hundis. There is no dispute that money was received for credit to the account of Sultan Mohd. and was correctly credited to that account. There was therefore nothing which the bank could correct, for the bank had 795 The only question in these circumstances is whether the bank was justified in reversing the entries and debiting the account of Sultan Mohd with this sum. Now the legal position so far as this payment is concerned was this. The bank had advanced the money to Sultan Mohd. and an account was opened in his name on November 5, 1941 with a debit entry of Rs. 40,000/ . Into this account the bank went on debiting interest and incidental charges due to it from Sultan Mohd. It also credited this account with the amounts received from Government through hundis or treasury bills. Clearly therefore though the amounts to be credited to the account of Sultan Mohd. used to come by treasury bills or hundis from Government they were amounts received by the bank on behalf of Sultan Mohd. to be credited to his account, and the Government was agent of Sultan Mohd. for the purpose of depositing the income from villages, management of which was taken over by Government under the Council Order, in order to liquidate the loan taken by Sultan Mohd. from the bank. The bank when it reversed the entries made no reference to Sultan Mohd. and did not take his consent thereto. In these circumstances the contention of the respondents is that it was not open to the bank to reverse the entries and thus saddle Sultan Mohd. with the liability for this sum after it had been credited into his account on the basis of hundis or treasury bills received by the bank from Government. We are of opinion that this contention of the respondents is correct, and the High Court was right in the view it took of the legal position. It is true that on the facts shown there was double payment for a certain period due to mistake on the part of Government. The question however is whether it was open to the bank to reverse the entries in the manner it did without reference to Sultan Mohd. It has not been and cannot be disputed that it is not open to the bank to debit the account of a constituent like Sultan Mohd. with any sum without the, authority of the constituent. What is however contended on behalf of the appellant is that Govern ment paid the sum twice over by mistake and it was entitled to ask the bank to return the money paid by mistake and reliance in this connection is placed on section 72 of the Contract Act. There is no, doubt that section 72 of the Contract Act provides that a person to whom money has been paid or anything delivered by mistake or under coercion must repay or return it. That section in our opinion will only apply when we are dealing with a case of two persons one paying the money and the other receiving the money on behalf of the person paying it. In such a case if the payment is made by mistake the person receiving the money must return it. But section 72 in our opinion has no application to a case where money is paid by a person to a bank with instructions that it should be deposited in the account of a third person who is a constituent of the bank. 'As soon as the money is so deposited in the account 797 made no mistake in making the entries. The bank in our opinion in not concerned with any mistake made by the Accountant General or the treasury in sending the amounts to the bank for the credit of the same to the account of Sultan Mohd. If the Accountant General or the treasury had made any such mistake it was open to them to recover the amount paid in by mistake from Sultan Mohd. But the bank could not reverse the entries and thus pay out money from the account of Sultan Mohd. without his authority. It is obvious that the bank hesitated to reverse the entries and only did it on the threat that the amount would be deducted from the subsidy paid to the bank by the Government. We have no doubt that the High Court was right that in such circumstances where the amount had been paid even though by mistake into the account of a constituent of the bank it was not open to the bank to reverse the entries at the instance of the person paying in the money into the constituent 's account on the ground that the payer had made a mistake. We agree with the High Court that section 72 has no application to the facts of this case. Learned counsel 'for the appellant has referred us to Imperial Bank of Canada vs Bank of Hamilton (1) in this connection. We are of opinion that that case has no application to the present cases, for the facts therein were different. The payment had been made by one bank to another bank by mistake; there is nothing to show that the money had been paid into a constituent 's account and thereafter any entry had been reversed in that case. We are therefore of opinion that the appeals must fail. They are hereby dismissed. As the respondents in C.A. 702 did not appear, we pass no order as to costs in that appeal.

S took a loan from the appellant bank on the strength of an arrange merit whereby the State Government of Jammu and Kashmir would repay it in instalments out of the land revenue to be collected by it from S 's lands. Such payments on behalf of the Government were mistakenly made each year both by the Accountant General and by the Treasury so that the amount credited by the bank in S 's account represented an over payment by the State. When the Accountant General realised the mistake he asked the bank to reverse the relevant entries in S 's account so as to cancel the over payment, which the bank after initial objection, did. Thereafter, on the basis of the reversed entries the bank filed a suit for the recovery of its debt. It was objected by the respondents (successors in interest to S) that it was not open to the bank to reverse the credit entries in the account of S after they had been made in the manner it was done. The trial Court held that the amount was paid twice over by mistake and therefore the bank was entitled to reverse the entries at the instance of the Ac countant General without reference to section The High Court however, in appeal, rejected the argument on behalf of the bank that section 72 of the Indian Contract Act allowed it to reverse the entries. In appeal to this Court, HELD : Section 72 of the Indian Contract Act will only apply when it is a case of two persons one paying the money and the other receiving the money on behalf of the person paying it. The section has no application where money is paid by a person to a bank with instructions that it should be deposited in the account of a third person who is a constituent of the bank. [795 G] In the present case, for the purpose of payment, Government was the agent of S and whatever money was paid to be credited to the account of S,, even though it was paid through Government, became his money and it could not be paid out of his account which was in substance the effect of reversing the entries, without his consent. [796 C] Imperial Bank of Canada vs Bank of Hamilton, , distinguished.

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: Criminal Appeal No.134 of 1973. Appeal by special leave from the Judgment and Order dated the 13th November, 1972 of the Rajasthan High Court in S.P. Criminal Appeal Nos. 580 and 581 of 1972. B.D. Sharma for the Appellant. 55 D. Mookerjee and Dr. B.S. Chauhan for Respondents 1 to 4. R.K. Garg, A.K. Panda and Sunil Kumar Jain for Respondents 2 and 3. The Judgment of the Court was delivered by CHANDRACHUD, C.J. The respondents were convicted by the learned Sessions Judge, Bharatpur, under section 395 of the Penal Code and were sentenced to rigorous imprisonment for three years. By its judgement dated November 13, 1972, the High Court of Rajasthan has set aside that judgment and has acquitted the respondents. The State of Rajasthan has filed this appeal by special leave against the judgment of the High Court. The State Bank of Bikaner and Jaipur had a branch at Bayana in the district of Bharatpur. At about 1.30 p.m., on March 17, 1971, seven or eight persons looted the Bank. Jugal Kishore Paliwal, the Agent of the Bank, was working in his chamber, while Bhagwan Dass Goyal, Head Cashier, and Suresh Chand Goyal, Assistant Cashier, were in the cash cabin at that time. The decoits, who were armed with country made pistols, knives and a hand grenade, ordered these Bank employees to stand up and raise their hands. Three dacoits entered the Agent 's room, beat him up and opened the safe and the almirahs. They could not find any money therein. They then took the agent to the cash cabin, where they tore open the lid of an iron cash box and took away currency notes of Rs. 15,253 from it. They snatched a black coloured confidential box lying on a nearby table, threw away the papers which were in that box and put the money in it. They carried away the black box, got into a blue Ambassador car and drove away. The first Information Report of the occurrence was lodged by the Head Cashier, Bhagwan Dass Goyal, within about half an hour i.e. at 2.00 p.m., at Police Station Bayana. The Police Officer there sent wireless messages to the surrounding police stations as also to police outposts. On receipt of the message, the Head Constable in charge of the police station at Weir, posted police personnel to block the car on the road. Soon thereafter, an Ambassador car bearing No. DLJ 7458, in which seven persons were seated, arrived from the direction of Bayana. Driven in panic, the car dashed against an oil barrel in front of a shop and was damaged. The occupants of the car were forced by that circumstance to come out of the car, whereupon they were surrounded by the police and the members of the 56 public. The occupants fired from their pistols and tried to escape under cover of fire but the police and the public gave them a hot chase for over a mile and succeeded in surrounding them once again. The occupants of the car opened fire causing injuries to some members of the public. Ultimately, they were over powered and caught. Babu Lal, Station House Officer of the Bayana Police Station, arrived on the scene and arrested the respondents. It transpired during the investigation that the Ambassador car which the respondents had used was stolen from New Delhi a day before the occurrence. The case of the prosecution is that the respondents before us were the very persons who looted the Bank, escaped in the car and were chased and arrested. The respondents admitted that they were arrested near Weir but they denied that they had any hand in the loot of the Bank. Each of them furnished a different explanation as regards his presence at Weir at the time of their arrest. They also examined four witnesses to show, principally, the reason of their presence at the place of arrest. It would appear from the judgment of the learned Single Judge of the High Court of Rajasthan that three points were argued on behalf of the respondents: (1) There is no evidence regarding the identification of the respondents; (2) There is no trustworthy evidence regarding the recovery of the stolen property from their possession; and (3) There is no evidence to show that they had escaped in the particular Ambassador car and had come out of the car after it met with an accident. On the question of identification of the respondents, the High Court has rejected the evidence of the Agent of the Bank Jugal Kishore Paliwal (PW 4), Head Clerk Radhey Charan Bhargava (PW 5), Head Cashier Bhagwan Dass Goyal (PW 6), Agricultural Asst. Murari Lal (PW 7), Daftaries Radhey Shyam Sharma (PW 8) and Amba Prasad (PW 9), and Asst. Cashier Suresh Goyal (PW 10), on the ground that though some of these witnesses had identified the dacoits in the jail, they had failed to identify them before the trial court. It appears that these witnesses had wrongly identified some of the accused in the committing court as also before the trial Court. According to the High Court "The only irresistible conclusion which can be drawn from their statements is that their evidence regarding identification is not convincing. " 57 On the question of recovery of the stolen property from the possession of the respondents the case of the prosecution is that each of the respondents was carrying a bundle of hundred currency notes of Rs. 10 each. It is further alleged that the black box lying in the Ambassador car was found to contain currency notes of the value of Rs. 6,800 belonging to the Bank. In addition; live cartridges and knives are also alleged to have been recovered from the possession of some of the respondents. The High Court has rejected the whole of this evidence on the ground that the recovery memos "cannot be said to be genuine" and were prepared subsequently, that the knives and live cartridges were not produced before the Court, that the story that each of the respondents was carrying currency notes worth Rs. 1000, while running away is unnatural and that, it is not likely that the respondents would leave the sum of Rs. 6,800 in the black box in the car and would each carry a sum of Rs.1,000, as if to create evidence against themselves. On the third question regarding the allegation that the respondents has escaped in the Ambassador car and had come out of that car after it met with an accident, the High Court has rejected the evidence that the respondents had fled away in the particular car on the ground that in the entry Exhibit D 40, in the General Diary of the Police Station, relating to the First Information Report the number of the car was not mentioned. If two views of the evidence were reasonably possible, we would not have substituted our own assessment of the evidence for that of the High Court in this appeal against acquittal. But, we are of the opinion that it is impossible on any hypothesis to accept the conclusion of the High Court that the prosecution has failed to establish its case. With respect, we regard the judgment of the High Court as severally laboured and unrealistic. Evidence which is incontrovertible has been rejected by the High Court on suspicion and surmises. Witnesses who had no axe to grind and had no personal motive to implicate the accused on a false charge, have been disbelieved on feeble considerations. And the recovery of incriminating articles has been bypassed and disbelieved by characterising it as unnatural and incredible. Different crimes have different patterns and the offenders improvise their strategy according to the exigencies of the occasion. The High Court has rejected the prosecution story as not fitting in with the common course of events on the supposition and insistence that a crime of the present nature had to conform to a pattern of the kind which the High Court harboured in its mind. 58 On the first question, that is to say the question of identification, the High Court gave an exaggerated importance to the infirmities attaching to the ability of the witnesses to identify the respondents. It was overlooked, and when an argument in that behalf was made it was rejected, that the respondents were arrested red handed and, in a manner of speaking, on the spot. There was no dispute that the incident of the kind alleged by the prosecution had taken place in the premises of the Bank. And it requires no strong persuasion to hold that after the Bank was looted, the offenders, whosoever they may be, would try to escape. The lodging of the First Information Report within half an hour of the incident, the prompt flashing of the wireless message to the police stations and police outposts in the vicinity, the posting of police guards on the road to stop the car bearing a particular description if it was detected, the accident which the car met with, the emergence from the car of six or seven persons, the pursuit which the police and the public gave them, the shots fired by those persons, the beating given by members of the public to them and the fact that they were ultimately over powered, caught and arrested, are all matters which are proved by the most clear and cogent evidence. Respondents are the persons who got down from the car after it met with an accident and they are the very persons who bear telltale marks of the rather severe drubbing given by the public. We are unable to understand how, in these circumstances, the High Court could have held that since the accused were not arrested on the spot, the evidence regarding their identity must assume importance. The incident which took place in the Bank, the attempt made by the offenders to escape and their pursuit by the police and the public, are but links in the same chain of causation. They are parts of one and the same transaction. This, therefore, is a case in which the offenders were caught red handed near the place of offence while they were trying to escape. They fired while fleeing and caused injuries to those who were bravely trying to surround them but eventually, the police and the public got the better of them. No further question survives but, since the High Court has given great importance to some other aspects of the case, we must advert to them. Equally significant is the circumstance that an office box (Article 3) containing Rs. 6,800 was seized from the Ambassador car from which the respondents came out after the accident. The Memo of Seizure is at Exhibit P 22. The bundles of currency notes found in the box bore chits in the name of the Bank of Bikaner and 59 Jaipur, Bayana Branch. The box also contained certain documents belonging to the Bank, including a passbook of Head Clerk Radhe Shyam Bhargava (PW 5). Some of the witnesses examined by the prosecution turned hostile, which only shows what terror a lawless group of dacoits can strike in the minds of men. But the evidence of Babu Lal, the Station House Officer, Bayana, who was examined as a Court witness by the High Court itself, shows that the black box containing the money and the other articles was seized from the Ambassador car. The High Court has rejected this evidence with a broad and unfounded observation that the recovery memo was prepared subsequently. We are unable to share that view. The High Court says that "It is not easily believable that the accused would leave Rs. 6,800 in the box lying in the car and each would run away with a thousand rupees". The story that a sum of Rs. 1,000 was found on the person of each of the respondents may or may not be accepted. But there is no infirmity attaching to the evidence of Babu Lal regarding the recovery of the black box from the car. Shri R.K. Garg, who appears on behalf of the respondents, urged that the box could have been easily planted by the police after the respondents were arrested. This submission is wholly unjustified. The box containing the currency notes, which were a part of the loot, was not left in the car as a matter of sweet volition. The respondents had no option save to abandon it in the car in which they were travelling, when the car met with an accident and they were surrounded by the police and the public. What is natural by the test of common experience is that a biggish article containing the loot would be left by the thieves where it lies. They would not take it with them, while running away in order to escape from the clutches of the people who were chasing them. The High Court has dwelt copiously on the question as to whether the number of the Ambassador car was disclosed in the first Information Report. The number of the car may or may not have been mentioned to the police by Goyal who gave the F.I.R. But we consider that to be a petty matter in the midst of a large mass of good evidence connecting the respondents with the crime. The fact that the respondents escaped in an Ambassador car is specifically mentioned in the F.I.R., Exhibit P 1. In fact, the F.I.R. mentions that the Ambassador car bore the number DLJ 7458 but the High Court considered it as an interpolation since, the entry, Exhibit D 40 in the General Diary of the Police Station relating to the F.I.R., does not mention the number of the car. The inference drawn by the High Court that the F.I.R. was prepared later is unsustainable. The entry 60 D 40 is after all a summary and summaries are not intended to be exhaustive. Then they would cease to be summaries. It is difficult in an incident of this kind to have evidence as strong and clinching as we have before us. The only conclusion which one can come to upon that evidence is that the charge has been brought home to the accused. Accordingly, we allow the appeal, set aside the judgment of the High Court and restore the order of conviction recorded by the learned Sessions Judge against the respondents under section 395 of the Penal Code. The learned Judge had sentenced each of the respondents to rigorous imprisonment for three years. The judgment of the High Court is already a decade old. (We are beholden that we are not yet faced with cases in their Silver jubilee year). Respondents have been on bail after undergoing a substantial part of the imprisonment. We understand that some of them are not working as Veterinary doctors or Assistants and have settled down as married men with children. Taking these factors into account, we sentence each of the respondents to rigorous imprisonment for the period already undergone by them. We, however, impose upon each one of them a fine of rupees three thousand, which they shall pay within three months from to day. Failing such payment, the respondents shall each undergo rigorous imprisonment for a period of six months. H.L.C. Appeal allowed.

Seven or eight armed dacoits entered a bank at Bayana, terrorised and beat up its employees, looted currency notes worth Rs. 15, 253/ , put the same in a black box and drove away with the booty in an Ambassador car. The F.I.R. was lodged within half an hour of the dacoity and wireless messages were sent out for interception of the car. Soon thereafter, an Ambassador car having seven persons seated in it and being driven in panic arrived near Weir from the direction of Bayana and met with an accident. The police and the public surrounded the occupants of the car when they came out but they tried to escape by firing from their pistols. They were chased and arrested but not before some members of the public received injuries on account of the firing. The prosecution case was that it was the respondents who looted the bank, escaped in the car and were chased and arrested; that each of them was carrying a bundle of hundred currency notes of Rs. 10/ each; that the black box found in the car contained currency notes of the value of Rs. 6,800 belonging to the looted bank; and that live cartridges and knives had been recovered from the possession of some of the respondents. At the trial, the respondents admitted that they had been arrested near Weir but denied any hand in the dacoity. The Sessions Judge rejected their plea and convicted them under section 395, I.P.C. The High Court acquitted the respondents on three grounds: (i) that the evidence regarding identification of the respondents was not convincing as some of the witnesses who had identified the dacoits in jail had failed to identify them before the trial court; (ii) that the evidence regarding recovery of stolen property was not acceptable as the recovery memos were not genuine, the knives and cartridges had not been produced before the court, and the story that each of the respondents was carrying currency notes worth Rs. 1000 while running away after leaving a sum of Rs. 6,800 in the black box was unnatural; and (iii) that the allegation that the respondents had escaped in the Ambassador car and had come out of that car after it met with an accident was not acceptable in the absence of an entry relating to the number of the car in the General Diary of the Police. Allowing the appeal, ^ HELD: If two views of the evidence were reasonably possible in this appeal by special leave against acquittal, the court would not have substituted 54 its own assessment of the evidence for that of the High Court. But it is impossible on any hypothesis to accept the conclusion of the High Court. It is difficult in an incident of this kind to have evidence as strong and clinching as it is before the Court. The only conclusion which one can come to upon that evidence is that the charge has been brought home to the accused. [57 E F; 60 B] (b) The judgment of the High Court is severely laboured and unrealistic. Evidence which is incontrovertible has been rejected on suspicion and surmises. Witnesses who had no axe to grind and had no personal motive to implicate the accused on a false charge have been disbelieved on feeble considerations. And the recovery of incriminating articles has been by passed and disbelieved by characterising it as unnatural and incredible. Different crimes have different patterns and the offenders improvise their strategy according to the exigencies of the occasion. The prosecution story has been rejected as not fitting in with the common course of events on the supposition and insistence that a crime of the present nature had to conform to a pattern of the kind which the High Court harboured in its mind. [57 F H] (i) The High Court gave exaggerated importance to the infirmities attaching to the ability of the witnesses to identify the respondents and overlooked the fact that they had been arrested red handed and on the spot. The incident which took place in the bank, the attempt made by the offenders to escape and their pursuit by the police and the public, which had all been proved by the most clear and cogent evidence, were but links in the same chain of causation and were parts of one and the same transaction. [58 A B & F] (ii) There was no infirmity attaching to the evidence of the Station House Officer, Bayana who was examined as a court witness by the High Court itself, regarding the recovery of the black box from the car and the High Court was not justified in rejecting his evidence. The submission that the box could have been easily planted by the police after the respondents were arrested is wholly unjustified. The box was not left in the car as a matter of sweet volition. The respondents had no option save to abandon it in the car when they were surrounded by the police and the public. What is natural by the test of common experience is that thieves, while running away in order to escape from those who are chasing them, would leave a biggish article containing the loot where it lies. [59 D E] (iii) The circumstance that the number of the car was not mentioned in the police diary was a petty matter in the midst of a large mass of good evidence connecting the respondents with the crime. [59 G]

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No. 205 of 1971. Petition under article 32 of the Constitution of India for a writ in the nature of habeas corpus. 518 V. Mayakrishnan, for the petitioner. section P. Mitra, G. section Chatterjee for Sukumar Basu, for the respondent. The impugned order states that the District Magistrate was satisfied that it was necessary that the petitioner should be detained with a view to prevent him from acting in any manner prejudicial to the security of the State or the maintenance of public order as provided by section 3(1) of the Act. According to the affidavit in reply of the District Magistrate, he reported under section 3 (4) of the Act to the State Government On March 3, 1971 regarding the fact of his having passed the order of detention together with the grounds of detention and all other. particulars having a bearing on the name. It is further stated that the. petitioner was arrested on March 5, 1971 and was served on the same day with the order of detention together with the, grounds for passing the order of detention. The petitioner was also informed that he is entitled to make a representation to the State Government against the order of detention and that such representation is to be addressed to the Assistant Secretary Home (Special) DEpartment, Government of West Bengal and forwarded through the Superintendent of Jail. He was further informed that his case will be placed under section 10 of the Act before, the Advisory Board within 30 days from the date of the order of detention. He was also informed that under section 11 of the Act, the; Advisory Board shall, if so desired by him, hear him in person and that the petitioner must intimate the said desire to be heard in the representations that he may make to the State Government. The State Government considered the report of the District Magistrate together with other materials placed before it and approved, on March 11, 1971 as required by section 3 (4) of the Act, the order of detention passed by the District Magistrate. On the same day, as required,by section 3(5) the State Government sent the necessary report to the Central Government. The State Government on April 3, 1971 placed the case of the petitioner before the Advisory Board. 519 The petitioner sent two representations dated March 17, and April 19, 1971 denying the allegations made in the grounds for passing the order of detention and pleaded that he was innocent. He has admitted in these representations that he was arrested on March 5, 1971. In neither of these representations did the petitioner make a request that he should be provided an opportunity of being heard in person by the Advisory Board. The State Government rejected the representations of the petitioner, but forwarded them to the Advisory Board for being considered. The Advisory Board after considering the, materials placed before it relating to the detention of the petitioner including the represen tations made by him on March 17, 1971 and April 19, 1971, submitted its report on May 11, 1971 to the State Government stating that it is of opinion that there is sufficient cause for the detention of the petitioner. The State Government passed an order on July 12, 1971 under section 12(1) of the Act confirming the order: of detention dated March 2, 1971 passed by the District Magistrate and directed that the petitioner 's detention shall be continued till the expiration of twelve months from the date of his detention. The petitioner has challenged the order of detention on the ground that he has never committed any offence nor has he been involved in any illegal activities as alleged in the grounds of detention. He has further stated that the various allegations mentioned against him are false and that he never participated in any of the incidents referred to in the grounds of detention. The petitioner has further stated that he is innocent and that he has been illegally detained. It Will be noted from his averments in the writ petition that except denying that the allegations are false and that he has never participated in any of those incidents referred to in the grounds of detention, he has not alleged any mala fides nor challenged the jurisdiction of the officer who, passed the order of detention or the various proceedings connected therewith. Under section 3 (1) of the Act, *hat is required is the satisfaction of the State Government or the relevant District Magistrate, as the case may be, of the necessity to detain a person with a view to prevent him from acting in a manner prejudicial to the security of the State or the maintenance of public order. In the order of detention dated March 2, 1971, the District Magistrate has stated that he was satisfied that with a view to prevent the petitioner from acting in any manner prejudicial to the security of the State or the maintenance of public order, it is necessary to detain the petitioner and that the order was being passed in exercise of the powers conferred on the District Magistrate by sub section (1) read with subsection (3) of section 3 of the Act. In the grounds of detention 520 . furnished to the petitioner on March 5, 1971 along with the order dated March 2, 1971 the following particulars have been given: "(1) That, on 26 1 71 between 11.00 and 12.31 hours, you along with your associates being armed with bombs, ballasts, pipe guns, lathis etc., assembled at Piali Railway Station and created terror among the passengers by charging bombs and showering ballasts indiscriminately and also moving from compartment to compartment of train Nos. SC 193 UP and SC 195 UP in search of your rivals, shouting that "if I get the Rascal, I will kill them" and in doing so you caused injury to some innocent passengers and broke the glass panes of driver 's cab of SC 195 Up. You created disturbance of the public order thereby. (2)That, on 2 2 71 at about 17.39 hours, you along with your associates, being armed with bombs, daggers etc., attacked and assaulted the guard of train No. SC 199 Up at Champahati Railway Station and also created terror among the passengers by charging a bomb. You created disturbance of the public order thereby. (3) That on 9 2 71 at about 13.15 hours you and your associates charged bombs and ballasts on duty Police party at Jadavpur Railway Station as they seized 10 bags of rice weighing about 3 quintals from SC 195 Up, while you were taking the said stock to Calcutta rationing area illegally by train. Your attack grew so violent that the Police party had to open fire upon you in self defence. Your violent activities created serious panic in the Station area and the public order was disturbed thereby. " In the two representations dated March 17 and April 19, 1971 made to the State Government, the petitioner after referring to the fact that he was arrested on March 5, 1971 has denied that he was involved in any of the types of violent activities referred to in the grounds for detention. He has further stated that he is leading a very honest life doing the work of mason and that the allegations made against him are false. As we have already mentioned, the petitioner did not ask for an opportunity of. being heard,in person by the Advisory Board. He has not also alleged in these representations and mala fides in passing the order of dention. The District Magistrate who passed the order of detention has filed a counter affidavit. The District Magistrate has stated that the petitioner is rice smuggler operating in Subarban Railway 521 trains in Southern Section of Eastern Railway and that he along with his associates armed with bombs and other deadly weapons attacked the passengers and the guard of railway trains and created terror by hurling bombs in Champahati and Piali Railway Stations. The District Magistrate further proceeds to state that the petitioner was detained for acting in a manner prejudicial to the security of the State or the maintenance of public order in the Jadavpur area of the district of 24 Parganas for his having taken a leading and active part in violent activities. It is further stated in the counter affidavit that the activities of the petitioner disturbed the public order and were so persistent and violent that he became a terror to the residents of the locality and the railway traveling public and that but for his detention he could not have been prevented from acting in a manner prejudicial to the security of the State ,or maintenance of public order. It is further stated that the deponent after receiving reliable information relating to the anti social and prejudicial activities of the petitioner and after carefully considering these materials, he was fully satisfied that the petitioner was engaged and was indulging in activities which were prejudicial to the security of the State or the maintenance of public order, and that his detention was essential. On being thus satisfied, the District Magistrate proceeds to state that he bona fide passed the order of detention on his own satisfaction, judgment and reasoning. The counter affidavit then proceeds to state about the order of confirmation passed by the State Government and other matters resulting finally in the order passed by the Government on July 12, 1971. It may be pointed out that in paragraph 6 of the counter affidavit it has been mentioned that the Advisory Board submitted its report on May 11, 1971 "after hearing the petitioner. " This statement is obviously wrong because the petitioner never asked for being heard in person. The Advisory Board also does not say that the petitioner was heard in person. The counsel appearing for the State has expressed his regret regarding this mistaken averment made in the counter affidavit. But that does not in any manner advance the case of the petitioner, as we will presently show. We have already referred to the fact that the petitioner has merely denied his being associated with the incidents. referred to in the grounds of detention. We are satisfied from the averments made by the District Magistrate in the counter affidavit, which have not been further controverted by the petitioner by filing any rejoinder that the order of detention has been validly and properly passed. Mr. V. Mayakrishnan, Amicus Curiae, appearing on behalf of the petitioner has urged that every one of the grounds has referred to the activities of the petitioner having resulted in disturbance of 522 public order. But the order of detention refers to the fact that the District Magistrate was of the view that the petitioner should be detained with a view to preventing him from acting in any manner prejudicial to the security of the State or the maintenance of public order. No ground showing as to how any activity of the petitioner is prejudicial to the security of the State justifying the order Of detention has been furnished to the petitioner. Therefore, according to the learned counsel, the order of detention is illegal inasmuch as the petitioner has not been informed of any grounds as to how his activities are prejudicial to the security of the State. Inasmuch as both the matters have been mentioned in the order of detention, it must be that the detaining authority has taken into account extrenuous and irrelevant matters in passing the order of detention. In particular, according to the learned counsel, it is only the matters referred to in sub cl. (1) of cl. (a) of section 3 (2) of the Act that will relate to the activities adversely affecting the security of the State. None of those matters have been mentioned in the grounds furnished to the petitioner. Therefore, it is not clear whether the detaining authority passed the order to prevent the petitioner from acting in any manner prejudicial to the Security of the State or for maintenance of public order. For all these, reasons, the counsel urged, the order of detention is illegal. Mr. section P. Mitra, learned counsel appearing for the State drew our attention to the provisions contained in section 3(2) of the Act and pointed out that the various acts mentioned in the grounds of detention come within the expressions "acting in any manner prejudicial to the security of the State or the maintenance of public order." In particular he relied upon cl. (d) of section 2 and pointed out that the petitioner has committed an offence under the , (Act No. 6 of 1908) and, therefore, his detention was legal. We are not inclined to accept the contention of the learned counsel for the petitioner. As already mentioned, under section 3(1) of the Act, what is required is the satisfaction of the State Government or the relevant District Magistrate, as the case may be, of the necessity to detain a person with a view to prevent him from acting in a manner prejudicial to the security of the State or the maintenance of public order. As defined by sub section (2) of section 3, the expression "acting in any manner prejudicial to the security of the State or the maintenance of public order means : lm15 "(a)using or instigating any person by words, either spoken or written, or by signs or by visible representations or otherwise, to use, any lethal weapon (i) to promote or propagate any cause or ideology the promotion or propagation of which affects 523 or is likely to affect, adversely the security of the State or the maintenance of public order. or (ii)to overthrow or to overawe the Government established by law in India. Explanation In this clause, "lethal weapon" includes fire arms, explosive or corresive substances. swords, spears, daggers, bows and arrows; or (b)committing mischief, within the meaning of section 425 of the Indian Penal Code, by fire or any explosive substance on any property of Government or any local authority or any corporation owned or controlled by Government or any University or other educational institution or on any public building, where the commission of such mischief disturbs, or is likely to disturb, public order; or (c)causing insult to the Indian National Flag or to any other object of public veneration, whether by mutilating, damaging, burning, defiling, destroying or otherwise, or instigating any person to do so. Explanation In this clause, "object of public veneration" includes any portrait or statute of an eminent Indian, installed in a public place as a mark of respect to him or to his memory; or (d)committing, or instigating any person to commit, any offence punishable with death or imprisonment for life or imprisonment for a term extending to seven years or more or any offence under the or the , where the commission of such offence disturbs, or is likely to disturb, public order; or (e)in the case of a person referred to in clause (a) to (f) of section 110 of the Code of Criminal Procedure, 1898, committing any offence punishable with imprisonment where the commission of such offence disturbs or is likely to disturb, public order. It will be seen that the Act itself furnishes a dictionary meaning. for the two expressions and a perusal of cls. (a) to (e) clearly shows that any of the matters referred to therein will be both " prejudicial to the security of the State or the maintenance of public order". We are not inclined to accept the contention on behalf of the petitioner that it is only sub cl. (1) of cl. (a) of section 3(2) which 524 deals with the matters, which adversely affect the security of the ,State. In fact that very sub clause refers to the 'matters mentioned therein as affecting the security of the State or the maintenance of public order. Therefore, in this case the grounds of detention .cannot be held to be vague nor can the order of detention be held to be invalid on the ground that the petitioner must have been detained only to prevent him from acting in any manner prejudicial to the maintenance of public order and not to the security of the State. In particular, under cl. (d) of section 2, a person will be considered to be acting in a manner prejudicial to the security of the State or the maintenance of public order, if he commits any offence under the . The various incidents mentioned in the grounds of detention may also come under cl. (b) of sub section (2) of section 3 Section 3 of the , is as follows : "Sec. 3 : Any person who unlawfully and mali ciously causes by any explosive substance an explosion of a nature likely to endanger life or to cause serious injury to property shall, whether any injury to person or property has been actually caused or not, be punished with transportation for life or any shorter term, to which fine may be added, or with imprisonment for a term which may extend to ten years, to which fine may be added." ' The various grounds mentioned in the order of detention clearly bring the activities of the petitioner under section 3 quoted above. The date and the place as well as the time when the incidents occurred, and also the train numbers which were affected, as well as the association of the petitioner with those incidents, have been fully given in the grounds of detention. No doubt the names of the persons, who are stated to be his associates have not been given. For all the above reasons, we are satisfied that the order of detention is valid. In the result, rule nisi is discharged and this writ petition dismissed. G.C. Petition dismissed.

The petitioner was detained under an order dated March 2, 1971 passed by the District Magistrate, 24 Pargana, West Bengal, under sub section (i) read with sub section (3) of section 3 of the West Bengal (Prevention of Violent Activities) Act, 1970. The order stated that the District Magistrate was satisfied that it was necessary that the petitioner should be detained with a view to prevent him from acting in any manner pre judicial to the security of the State or the maintenance of public order as provided in section 3(1). In the grounds of detention supplied to the petitioner three incidents of violence at railway stations in which the petitioner was alleged to have participated and used explosives were men tioned. In his representations against being detained the petitioner did not allege any mala fides against the administration but only denied that he took part in the violent activities. In 'support of the writ petition under article 32 of the Constitution challenging the order of its detention it was urged that while the impugned order mentioned his activities as being prejudicial to public order as well as security of the State, the instances given in the grounds of detention only mentioned activities pre judicial to public order. The detaining authority had thus taken into account extraneous and irrelevant matters in passing the order of detention. ' According to the appellant it is only matters referred to in sub c. (i) of c1. (a) of section 3(2) of the Act which will relate to the activities adversely affecting the security of the State, and none of these matters had been mentioned in the grounds of detention furnished to the petitioner. HELD : The contention of the petitioner that it is only sub cl. (1) of cl. (a) of section 3(2) which deals with matters adversely affecting the security of the State could not be accepted. In fact that very sub clause refers to the matters herein as affectingthe security of the State or the maintenance of public order. Thereforein this case the grounds of detention could not be held to be vague norcould the order of detention be held to be invalid on the ground thatthe petitioner must have been detained only to prevent him from actingin any manner prejudicial to the maintenance of public order and not to the security of the State. In particular under cl. (d) of section 2 a person will be considered to be acting in a manner prejudicial to the security of the State or the maintenance of public order, if he commits any offence under the . The various incidents mentioned in the grounds of detention may also come under cl. (b) of sub section '(2) of section 3. Further the said grounds clearly bring the activities of the petitioner under section 3 of the . [523 H 524 E] Accordingly the detention of the petitioner must be held to be valid and the petition under article 32 must be dismissed.

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Appeal No. 513 of 1961. Appeal by special leave from the judgment and order dated June 23, 1960, of the Kerala High Court in Second Appeal No. 103 1957. 551 S.T. Desai and V.A. Seyid Muhmmad, for the appellants. Sardar Bahadur, for the respondents. August 23, 1963. The facts leading up to this question may now be stated. One Mammotty was married to Seinaba and he made a gift of his properties including immovable property to Seinaba on April 7, 1944 by a registered deed. Mammotty died on May 3, 1946 without an issue. Seinaba also died soon afterwards on February 25, 1947, without leaving an issue. At the time of the gift Seinaba was 15 years 9 months old. It appears that Mammotty was ill for a long time and was in hospital and he was discharged uncured a month before the execution of the gift deed and remained in his mother in law 's house afterwards. There are conflicting versions about the nature of the disease and a plea was taken in the case that the gift was made in contemplation of death and was voidable. This plea need not detain us because the trial Judge and the first Appellate Judge did not accept it. After the death of Seinaba, the present suit was brought by Kunhamu an eider brother of Mammotty for partition and possession of a 6/16 share of the property which he claimed as an heir under the Muhammadan Law, challenging the gift as invalid. To the suit he joined his two sisters as defendants who he submitted were entitled to a 3/16 share each. He also submitted that the first three defendants (the appellants) were entitled to the remaining 4/16 share as heirs of Seinaba. In other words, Kunhamu 's contention was that when succession opened out on the death of Mammotty, his widow Seinaba was entitled to the enhanced share of 1/4 as there was no issue, and the remaining 3/4 was divisible between 552 Kunhamu and his two sisters, Kunhamu getting twice as much as each sister, These shares according to him were unaffected by the invalid gift in faVour of Seinaba and accepted on her behalf by her mother. This contention has been accepted and it has been held in this case in all the three courts that a gift by the husband to his minor wife to be valid must be accepted on her behalf by a legal guardian of her property under the Muhammadan Law, that is to say, by the father or his executor or by the grand father or his executor. As Katheesumma the mother of Seinaba was not a legal guardian of the property of Seinaba it was contended by the plaintiff that the gift was void. It was admitted on behalf of the plaintiff that Mammotty could have himself taken over possession of the property as the guardian of his minor wife; but it was submitted that such was not the gift actually made. These contentions raise the question which we have set out earlier in this Judgment. Mr. S.T. Desai on. behalf of the appellants contends that neither express acceptance nor transfer of possession is necessary for the completion of a gift, when the donor is himself the guardian or the de facto guardian or 'quasi guardian ' provided there is a real and bona fide intention on the donor 's part to transfer the ownership of the subject matter of the gift to the donee, and that even a change in the mode of enjoyment is sufficient evidence of such an intention. He further contends that no delivery of possession is necessary in a gift by a husband to his minor wife provided such an intention as above described is clearly manifested. According to him, the law is satisfied without an apparent change of possession and will presume that the subsequent holding of the property was on behalf of the minor wife. Lastly he submits that in any view of the matter when a husband makes a gift to a minor wife and there is no legal guardian of property in existence, the gift can be completed by delivery of the property to and acceptance by any person in whose control the minor is at the time. If there is no such person one can be chosen and appointed by the donor to whom possession can be made over to manifest the intention of departing from the property gifted. Mr. Desai seeks to justify these submissions on authority as well as by de 553 ductions from analogous principles of Muhammadan Law relating to gifts to minors which are upheld though accepted by persons other than the four categories of legal guardian. The other side contends that there is no rule of Muhammadan Law which permits such acceptance and that the decision of the High Court is right. A gift (Hiba) is the conferring of a right of property in something specific without an exchange (ewaz). The word Hiba literally means the donation of a thing from which the donee may derive a benefit. The transfer must be ' immediate and complete (tamlik ul 'ain) for the most essential ingredient of Hiba is the declaration "I have given". Since Muhammadan Law views the law of gifts as a part of the law of contract there must be a tender (ijab) and an acceptance (qabul) and delivery of possession (qabza). There is, however, no consideration and this fact coupled with the necessity to transfer possession immediately distinguishes gifts from sales. In the present case there is a declaration and a tender by the donor Mammotty and as the gift is by a registered deed no question in this behalf can arise. In so far as Mammotty was concerned there was delivery of possession and the deed also records this fact. Possession was not delivered to Seinaba but to her mother, the first appellant, and she accepted the gift on behalf of Seinaba. Mammotty could have made a declaration of gift and taken possession on behalf of his wife who had attained puberty and had lived with him, for after the celebration of marriage a husband can receive a gift in respect of minor wife even though her father be living; (Durrul Mukhtar, Vol. 3 p. 104 and Fatawa i Alamgiri Vol. 239 240 original text quoted at p. 455 of Institutes of Mussalman Law by Nawab Abdur Rehman). But Mammotty did not complete his gift in this way. His gift included immovable properties and it was accepted by the mother who took over possession on behalf of her minor daughter. A gift to a minor is completed ordinarily by the acceptance of the guardian of the property of the minor Wilayat ul Mal. A mother can exercise guardianship of the person of a minor daughter (Hizanat) till the girl attains puberty after which the guardianship of the person is that of the father if the girl is un 36 2 S.C. India/64 554 married and that of the husband if she is married ' and has gone to her husband. Even under the Guardian and Wards Act, the husband is the guardian of the person after marriage of a girl unless he is considered unfit. The mother was thus not the guardian of the person of Seinaba. Seinaba 's mother was also not a guardian of the property of Seinaba. Mahammadan Law makes a distinction between guardian of the person, guardian of the property and guardian for the purpose of marriage (Wilayat ulNikah) in the case of minor females. Guardians of the property are father and grandfather but they include also executors (Wasi) of these two and even executors of the executors and finally the Kazi and the Kazi 's executor. None of these were in existence except perhaps the Civil Court which has taken the place of the Kazi. Now Muhammadan Law of gifts attaches great importance to possession or seisin of the property gifted (Kabz ul Kamil) especially of immovable property. The Hedaya says that seisin in the case of gifts is expressly ordained and Baillie (Dig. p. 508) quoting from the Inayah refers to a Hadis of the Prophet "a gift is not valid unless possessed". In the Hedaya it is stated "Gifts are rendered valid by tender, acceptance and seisin" (p. 482) and in the Vikayah "gifts are perfected by complete seisin" (Macnaghten 202). The question is whether possession can be given to the wife 's mother when the gift is from the husband to his minor wife and when the minor 's father and father 's father are not alive and there is no executor of the one or the other. Is it absolutely necessary that possession of the property must be given to a guardian specially to be appointed by the Civil Court ? The parties are Hanafis. No direct instance from the authoritative books on Hanafi law can be cited but there is no text prohibiting the giving of possession to the mother. On the other hand there are other instances from which a deduction by analogy (Rai fi 'l qiyas) can be made. The Hanafi law as given in the Kafaya recognises the legality of certain gifts which custom ( 'urf) has accepted. This is because in deciding questions which are not covered by precedent Hanafi jurisprudence attaches to transfer possession immediately distinguishes gifts from sales. In the present case there is a declaration and a tender by the donor Mammotty and as the gift is by a registered deed no question in this behalf can arise. In so far as Mammotty was concerned there was delivery of possession and the deed also records this fact. Possession was not delivered to Seinaba but to her mother, the first appellant, and she accepted the gift on behalf of Seinaba. Mammotty could have made a declaration of gift and taken possession on behalf of his wife who had attained puberty and had lived with him, for after the celebration of marriage a husband can receive a gift in respect of minor wife even though her father be living; (Durrul Mukhtar, Vol. 3 p. 104 and Fatawa i Alamgiri Vol. 239 240 original text quoted at p. 455 of Institutes of Mussalman Law by Nawab Abdur Rehman). But Mammotty did not complete his gift in this way. His gift included immovable properties and it was accepted by the mother who took over possession on behalf of her minor daughter. A gift to a minor is completed ordinarily by the acceptance of the guardian of the property of the minor Wilayat ul Mal. A mother can exercise guardianship of the person of a minor daughter (Hizanat) till the girl attains puberty after which the guardianship of the person is that of the father if the girl is un 36 2 S.C. India/64 555 based on istehsan (liberal construction ; lit. producing symmetry) and istislah (public policy). The Prophet himself approved of Mu 'izz (a Governor of a province who was newly appointed) who said that in the absence of guidance from the Koran and Hadis he would deduce a rule by the exercise of reason. But to be able to say that a new rule exists and has always existed there should be no rule against it and it must flow naturally from other established rules and must be based on justice, equity and good conscience and should not be haram (forbidden), or Makruh (reprobated). It is on these principles that the Mujtahidis and Muftis have allowed certain gifts to stand even though possession of the property was not handed over to one of the stated guardians of the property of the minor. We shall now refer to some of these cases. The rules on the subject may first be recapitulated. It is only actual or constructive possession that completes the gift and registration does not cure the defect nor is a bare declaration in the deed that possession was given to a minor of any avail without the intervention of the guardian of the property unless the minor has reached the years of discretion. If the property is with the donor he must depart from it and the donee must enter upon possession. The strict view was that the donor must not leave behind even a straw belonging to him to show his ownership and possession. Exceptions to these strict rules which are well recognised are gifts by the wife to the husband and by the father to his minor child (Macnaghten page 51 principles 8 & 9). Later it was held that where the donor and donee reside together an overt act only is necessary and this rule applies between husband and wife. In Mohammad Sadiq Ali Khan vs Fakhr Jahan(1), it was held that even mutation of names is not necessary if the deed declares that possession is delivered and the deed is handed to the wife. A similar extension took place in cases of gifts by a guardian to his minor ward (Wilson Digest of Anglo Muhammadan Law 6th Edn. p. 328). In the case of a gift to an orphan minor the ,rule was relaxed in this way: "If a fatherless child be under charge of his mother, (1) (1932) 59 I.A. I. 556 and she take possession of a gift made to him, it is valid. . The same rule also holds with respect to a stranger who has charge of the orphan." Hedaya p. 484. See also Baillie p. 539 (Lahore Edn.) In the case of the absence of the guardian (Gheebuti Moonqutaa) the commentators agree that in a gift by the mother her possession after gift does not render it invalid. Thus also brother and paternal uncle in the absence of the father are included in the list of persons who can take possession on behalf of a minor who is in their charge: Durrul Mukhtar Vol. 4 p. 512 (Cairo Edn.). In Radd ul Mukhtar it is said : "It is laid down in the Barjindi : There is a difference of opinion, where possession has been taken by one, who has it (the child) in his charge when the father is present. It is said, it is not valid; and the correct opinionis that it is valid." (Vol. 4, C.513 Cairo Edn.) In the Bahr al Raiq Vol. 7 p. 314 (Edn. Cairo) "The rule is not restricted to mother and stranger but means that every relation excepting the father, the grand father and their executors is like the mother. The gift becomes complete by their taking possession if the infant is in their charge otherwise not." In Fatawai Kazikhan Vol. 4, p. 289 (Lucknow Edn.), the passage quoted above from Radd ul Mukhtar is to be found and the same passage is also to be found in Fatawai Alamgiri Vol. 4 p. 548 Cairo Edn. All these passages can be seen in the lectures on Moslem Legal Institutions by Dr. Abdullah al Mamun Suhrawardy. The rule about possession is relaxed in certain circumstances of which the following passage from the Hedaya p. 484 mentions some : "It is lawful for a husband to take possession of any thing given to his wife, being an infant, provided she has been sent from her father 's house to his; and this although the father be present, because he is held, by implication, to have resigned the management of her concerns to the husband. It is otherwise where she has not been sent from her father 's house, because then the father is not held to have resigned the management of her concerns. It is also otherwise 557 with respect to 'a mother ' or any others having charge of her; because they are not entitled to possess themselves of a gift in her behalf, unless the father be dead, or absent, and his place of residence unknown ; for their power is in virtue of necessity, and not from any supposed authority ; and this necessity cannot exist whilst the father is present. " Macnaghten quotes the same rule at p. 225 and at page 230 is given a list of other writers who have subscribed to these liberal views. The above views have also been incorporated in their text books by the modern writers on Muhammadan Law. (See Mulla 's Principles of Mahomedan Law 14th Edn. 139, 142, 144 and 146, Tyabji 's Muhammadan Law 3rd Edn. 430 435, sections 397 400, Amir Ali 's Mahommedan Law Vol. 1, pp. 130 131). The principles have further been applied in some decisions of the High Courts in India. In Nabi Sab vs Papiah and ors.(1) it was held that gift did not necessarily fail merely because possession was not handed over to the minor 's father or guardian and the donor could nominate a person to accept the gift on behalf of the minor. It was pointed out that the Muhammadan law if gifts, though strict, could not be taken to be made up of unmeaning technicalities. A similar view was expressed in Nauab Ian vs Safiur Rehman(2). These cases were followed recently in Munni Bai and anr. vs Abdul Gani(3), where it was held that when a document embodying the intention of the donor was delivered to the minor possessing discretion and accepted by her it amounted to acceptance of gift. It was further pointed out that all that was needed was that the donor must evince an immediate and bona fide intention to make the gift and to complete it by some significant overt act. See also Mt. Fatma vs Mt. Autun(4), Mst. Azizi and anr. vs Sona Mir(5) and Mam& ors. vs Kunhdi & ors.(6). (1) A.I.R. (1915) Mad. (2) A.I.R. (1918) Cal. (3) A.I.R. (1959) M.P. 225. (4) A.I.R. (1944) Sind 195, (5) A.I.R. (1962) J. & K. 4. (6) 1962 K.L.J 351. 558 In Md. Abdul Ghani vs Mt. Fakhr Jahan (1), it was held by the Judicial Committee as follows: "In considering what is the Mohammaden Law on the subject of gift intervivos their Lordships have to bear in mind that when the old and admittedly authoritative texts of Mohammedan law were promulgated there were not in the contemplation of any one any Tran sfer of Property Acts, any Registration Acts, any Revenue Courts to record transfers of the possession of land, or any zamindari estates large or small, and that it could not have been intended to lay down for all time what should alone be the evidence that titles to lands had passed. The object of the Mohammedan law as to gifts apparently was to prevent disputes as to whether the donor and the donee intended at the time that the title to the property should pass from the donor to the donee and that the handing over by the donor and the acceptance by the donee of the property should be good evidence that the property had been given by the donor and had been accepted by the donee as a gift. " Later in Mahamad Sadiq Ali Khan vs Fakhr Jahan Begum(2), it was held by the Privy Council that at least between husband and wife Muhammadan law did not require an actual vacation by the husband and an actual taking possession by the wife. In the opinion of the Judicial Committee the declaration made by the husband followed by the handing over of the deed was sufficient to establish the transfer of possession. These cases show that the strict rule of Muhammadan law about giving possession to one of the stated guardians of the property of the minor is not a condition of its validity in certain cases. One such case is gift by the husband to his wife, and another, where there is gift to a minor who has no guardian of the property in existence. In such cases the gift through the mother is a valid gift. The respondent relied upon two cases reported in Suna Mia vs section A. section Pillai(3) where gift to a minor through the mother was considered invalid and Musa Miya and (1) (1922) 491.A. 195 at 209. (2) (1932) 591.A.I. (3) (1932) 11 Rang. 109. 559 anr. vs Kadar Bux(1), where a gift by a grandfather to his minor grandsons when the father was alive, without delivery of possession to the father, was held to be invalid. Both these cases involve gifts in favour of minors whose fathers were alive and competent. They arc distinguishable from those cases in which there is no guardian of the property to accept the gift and the minor is within the care either of the mother or of other near relative or even a stranger. In such cases the benefit to the minor and the completion of the gift for his benefit is the sole consideration. As we have shown above there is good authority for these propositions in the ancient and modern books of Muhammadan law and in decided cases of undoubted authority. In our judgment the gift in the present case was a valid gift. Mammotty was living at the time of the gift in the house of his mother in law and was probably a very sick person though not in marzulmaut. His minor wife who had attained discretion was capable under Muhammadan law to accept the gift, was living at her mother 's house and in her care where the husband was also residing. The intention to make the gift was clear and manifest because it was made by a deed which was registered and handed over by Mammotty to his mother in law and accepted by her on behalf of the minor. There can be no question that there was a complete intention to divest ownership on the part of Mammotty and to transfer the property to the donee. If Mammotty had handed over the deed to his wife, the gift would have been complete under Muhammadan law and it seems impossible to hold that by handing over the deed to his mother in law, in whose charge his wife was during his illness and afterwards Mammotty did not complete the gift. In our opinion both on texts and authorities such a gift must be accepted as valid and complete. The appeal therefore succeeds. The Judgment of the High Court and of the Courts below are set aside and the suit of the Plaintiff is ordered to be dismissed with costs throughout. Appeal allowed.

One Mammotty was married to Seinaba and he made a gift 550 of his properties including immovable property to Seinaba by a registered deed. Mammotty died without an issue more than two years after the execution of the gift deed. Later on, Seinaba also died without leaving an issue. At the time of gift, Seinaba was fifteen years and nine months old. Mammotty was iII for a long time and was in hospital. He was discharged uncured a month before the execution of the gift deed and he remained in his mother in law 's house afterwards. After the death of Seinaba, the present suit was brought by Kunharnu, an eider brother of Mammotty, for partition and possession of 6/16 share of the property which he claimed as an heir under Muhamrnadan law, challenging the gift as invalid. Kunhamu 's contention was that when succession opened out on the death of Mammotty, his widow was entitled to one fourth share and the remaining three fourth share was divisible between him and his two sisters. These shares were unaffected by the in . valid gift in favour of Seinaba and accepted on her behalf by her mother. The contention of Kunhamu was accepted by all the three courts below which held that a gift by the husband to his minor wife to be valid must be accepted on her behalf by a legal guardian of her property under Muhammadan law i.e. by the father or his executor or by grand father or his executor. As the mother of Seinaba was not the legal guardian of the property of Scinaba, the gift was void. The appellant came to this Court by special leave. Held, that under Muhammadan law a gift by a husband to his minor wife of immovable property accepted on her behalf by her mother is valid if none of the guardians of the property of the minor is available provided there is a clear and manifest intention to make the gift and the husband divests himself of the ownership and possession of the property. Held further, on facts the above conditions were satisfied in this case. Mohammad Sadiq Ali Khan vs Fakir Khan (1932) L.R.59 I.A. 1, Nabi Sab vs Papiah and Ors. A.I.R. 1915 Mad. 972, Nawab fan vs Safiur Rahman, A.I.R. 1918 Cal. 786, Munni Bai vs Abdul Gani, A.I.R. 1959 M.P. 225, Mt. Fatma vs Mt. Autun, A.I.R. 1944 Sind. 195, Mst. Azizi vs Sona Mir, A.I.R. 1962 J. & K. 4, Mareroad & Ors. vs Kunhali & Ors., 1962 K.L.J. 351, Md. Abdul Ghani vs Mt. Fakir Khan (1962) 49 I.A. 195, Suna Mia vs S.A.S. Pillai, (1932) 11 Rang. 109 and Musa Miya vs Kadar Bux, I.L.R. , referred to.

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N: Criminal Appeal No. 105 of 1978 with W.P. No. 833 of 1978. (Appeal by special leave from the Judgment and order dt. 27.9.77 of the Gujarat High Court in Criminal Spl. Application No. 176 of 1977) . Ram Jethmalani and H. section Parihar for the appellant in Cr. A. No. 105 and WP No. 833/78. M. N. Phadke and B. D. Sharma and M. N. Shroff for respondent No 1 Girish Chandra for respondent no 4. M. N. Shroff for respondents 1 3. R.B.Datar and Miss A. Subhashini for respondents 4 5. The Judgment of the Court was delivered by KAILASAM, J. After hearing the arguments we allowed the appeal on 5 10 1978 and directed that the detenu be set at liberty forthwith indicating that the detailed judgment would follow. We now proceed to give reasons for our order. This appeal is preferred by the wife of one Virendra Ramniklal Kapadia,, a detenu, by special leave against the judgment of the High Court of Gujarat at Ahmedabad dismissing the writ petition for the issue of a writ of habeas corpus. On 22nd September, 1974 the District Magistrate, Surat, directed. the detention of the detenu under section 3(1) (c) (i) and section 3 (2) of the . The detenu was supplied with the grounds of detention on 27th September, 1974. The 259 detention order passed under the A was cancelled on 9th December, 1974 and the detenu was released. On 7th February, 1977 by an order under section 3(1) of the (hereinafter referred to as COFEPOSAA) in the name of Governor, the Under Secretary to Government, respondent 2, directed that it was necessary to detain the detenu with a view to preventing him from engaging in transporting smuggled goods. On the same day by another order issued under section S of the COFEPOSAA the 2nd respondent directed that the detenu shall be detained in the Ahmedabad Central Prison. A declaration under section 12A, sub section (2) was also passed on the same day by the 2nd respondent stating that it was necessary to detain the detenu for dealing effectively with emergency. In pursuance of the above orders the detenu has been detained in the Ahmedabad Central prison after he surrendered on 4th July, 1977. The grounds of detention were supplied to him on 6th July, 1977. On 2nd August, 1977 a declaration under section 9 of the COFEPOSAA was passed by the 4th respondent stating that he was satisfied that the detenu is likely to I) engage in transporting smuggled goods in the areas around Balashwar and Sachin Gabheni Road in the State of Gujarat which are areas highly vulnerable to smuggling as defined in section 9 of the COFEPOSAA. The High Court negatived all the contentions raised on behalf of the detenu and held that the order of detention was validly made. Mr. Ram Jethmalani, the learned counsel for the appellant, raised various contentions. The first contention raised by him is that the order passed under section 9 by the 4th respondent is bad because on the face of it, it discloses that the satisfaction arrived at by him is mechanical and Without application of his mind. As the detention is continued beyond the period of one year only by virtue of the order made under section 9 the detenu is entitled to be set at liberty if the order is found to be invalid. On hearing the learned counsel for the appellant and Mr. Phadke on behalf of the State, we are satisfied that the contention on behalf of the detenu has to be accepted. Before dealing with this point we would just mention the other grounds raised by the learned counsel for the appellant. It was submitted that the order passed under section 3 is invalid as the authority did not apply its mind. The. detenu was released on 19th December, 1974 and from that date till 7th February, 1977 when the order of detention was passed nothing has been disclosed to implicate the detenu in any fresh activity. As the order was based on the activities of the detenu in 1973 and 1974 before the detenu was released, the order of detention cannot be sustained. It was next submitted that 260 the detenu was not furnished important material which must have influenced the detaining authority. Lastly, it was submitted that the grounds given are vague and even after a careful reading of the grounds, it is not clear as to whether the grounds referred to the incidents that took place in 1973 and 1974 only refer to activities subsequent to his release in December, 1974. As we are upholding the challenge of the learned counsel for the appellant on the validity of the order passed under section 9(1) of the COFEPOSAA we refrain from dealing with any of the other contentions. The order dated 2nd August, 1977 passed by B. B. Gujral, Addl. Secretary to the Government of India, the 4th respondent under section 9(1) of th COFEPOSAA is marked as Annexure E '. It runs as follows : "Whereas Virendra Ramniklal Kapadia @ Kumar has been detained on 4th July, 1977 in pursuance of order No. SB. IV/PSA,2876.87(i) dated the 7th February, 1977 of the Government of Gujarat with a view to preventing him from engaging in transporting smuggled goods. AND WHEREAS I, the undersigned, specially empowered in this behalf by the Central Government, have carefully considered the material bearing on the matter in my possession; NOW, THEREFORE, I, the undersigned, specially empowered by the Central Government, hereby declare that I am satisfied that the aforesaid Virendra Ramniklal Kapadia @ Kumar engages and is likely to engage in transporting smuggled goods in the areas around Baleshwar and Sachin Gabheni Road in the State of Gujarat, which are areas highly vulnerable to smuggling as defined in explanation to section 9(1) of the . " In paragraph 3 respondent 4 declared that he is satisfied that the detenu engages and is likely to engage in transporting smuggled goods in vulnerable areas as defined in explanation section 9 (1) of the COFEPOSAA. It was submitted that there is no material on record on which the 4th respondent could have been satisfied that the detenu "engages and is likely to engage in transporting smuggled goods". The impugned order refers to the order of detention dated 7th February, 1977 of the Government of Gujarat. The order of 7th February, 1977 refers to the consideration of the Government of Gujarat as to whether the detention is necessary for dealing effectively with the emergency referred to in sub 261 section (2) of section 12 A of the Act and states that on a consideration A of the materials the Government of Gujarat was satisfied on the basis of information and material in its possession that it was necessary to detain the said person for dealing effectively with the said emergency. In exercise of its powers under sub section (2) of section 12 A the Government declared that it is necessary to detain the detenu for dealing effectively with the said emergency. On the same date the grounds on which the detention was ordered were sent to the detenu through the Superintendent of the Jail. The ground that is alleged against the detenu in paragraph 1 of the order is as follows: "1. As per the intelligence gathered by the Customs officers, you were an associate of a notorious smuggler Mohmed Kutchi of Surat; that you were engaged in piloting smuggled goods loaded in trucks from the place of landing to the place of storage." (underlying ours). To incidents are given: one relating to an incident on 6th August, 1974 and the other to an incident on 25 August, 1974. It is further stated that the Customs, officers contacted one Karltilal Amratlal Thakkar, who was working as accountant of Mohmed Kutchi. Kantilal Amratlal Thakkar in his statement on 7th November, 1976 stated that the detenu was under the employment of the aforesaid Mohmed Kutchi and was getting a salary of Rs. 5,000 p.m. for ar ranging landing of contraband goods. Kantilal further disclosed that in the year 1973 the detenu had accompanied one Mohmed Bilal with foreign currency. Reference is also made to the statements recorded from one Mohmed Bilal Haji Usmangani on 8th Novemher, 1976 and 9th Novemher, 1976 before the Customs officers wherein it was stated that the detenu was one of the trusted men of the aforesaid Mohmed Kutchi and always remained with him and used to he1p Mohmed Kutchi in managing his smuggling activities. The statement also referred to the detenu helping his uncle Vinod Sakarlal Kapadia in delivery of smuggled fabrics. The statement of one Ramchandra Schedeva Rajbher is also referred to. According to the statement dated 11th october, 1976 it was stated that the detenu remained present along with one Umer Ibrahim Billimoria and his gang at Kadodra/kamraj near poultry farm where trucks loaded with camouflaged consignments were being fed with smuggled cargo. A reading of these grounds makes it clear that the incidents referred to relate to the years l973 and 1974 and that due to examination of three persons Kantilal Amratlal Thakkar, Mohmed Bilal Haji Usmangani and Ramchandra Sahadeva Rajbher, fuller particulars regarding the activities of the 262 detenu came to be known prima facie it appears that the information which the Customs authorities received related to the activities of the detenu in 1973 and 1974. Mr. Phadke, the learned counsel appearing on behalf of the State, submitted that the statement shows that the activities of the detenu after 1974 were also included in the grounds furnished for detention. In order to satisfy ourselves as to whether the statements related to incidents after 1974, we perused the statements made by all the three persons referred to. .It is very clear that the statements do not relate to any incidents after 1974 but only to the activities of the detenu in 1973 and 1974. In the affidavit filed by the 4th respondent" Additional Secretary to the Government of India, it is stated in paragraph 5 of his affidavit that he considered the detention order, grounds of detention relating to the detenu as well as the report in respect of the detention order by the State Government under section 3(3) and was personally satisfied that the detenu Virendra Ramniklal Kapadia @ Kumar engages and is likely to engage in transporting smuggled goods* Mr. P. M. Shah Under Secretary to the Government of Gujarat, in paragraph 10 of his affidavit stated that "fresh material showing the involvement of the detenu in the activity of transporting smuggled goods was collected by the Customs authorities and therefore it was open to the State Government to pass a fresh order of detention. Further, he stated "As pointed out in the grounds material indicating the involvement of the detenu in the incidents of 6.8.74 and 25 8 74 and his close association with Shri Mohmed Kutchi,* a notorious smuggler, came to be known in october, November and December, 1976 x x x x I say that the material on the basis of which the detenu was earlier detained was scanty and no new material indicating involvement of the detenu as alleged against him came to the light till october, 1976". The case for the State. appears to be that they regarded the material on the basis of which the detenu was earlier detained was scanty and fuller particulars came to light in october, 1976 indicating involvement of the detenu in the incidents of 6th August, 1974 and 25th August, 1974. This would indicate that for the fresh order of detention the basis was availability of fuller details regarding clients on which the earlier detention was ordered. It is seen that the High Court also proceeded on the basis that further information obtained in october, November 1976 related to the incidents in the years 1973 and 1974. The High Court observed, "It is no doubt true that some of the, activities attributed to the detenu were of August, 1974. However, the ground that the detenu was in regular employment of one Mohmed Kutchi, who is a notorious smuggler and who is also under detention, *Emphasis Sppluied 263 and which fact has been disclosed from the statement of one Kantilal Amratlal Thakkar recorded on November 7, 1976, clearly indicates the connection of the detenu with the said notorious smuggler. The other statements, which have brought home the involvement of the detenu with the aforesaid Mohmed Kutchi and which also attribute the prejudicial activity to the detenu, were recorded somewhere in october and November, 1976. " We are unable to read the above passage as meaning that reliance was placed on fresh incidents relating to the detenu after December. The detenu was detained on 22nd September, 1974 and was released on 9th December, 1974. Further information about the activities of the detenu during the period 1974 obviously before his arrest on 22nd September, 1974 came to light in october and November, 1976. But it is seen that the fresh order of detention under the COFEPOSAA was not passed till 7th February, 1977. If the authorities were in possession of any activities of the detenu after his release on 9th December, 1974 action would have been taken. It is only the statements that were recorded in October and November 1976 which led the authorities to pass the fresh order of detention on 7th February, 1977. We have seen from the statements recorded in october and November, 1976 that no incident that took place after 1974 has been referred to. The High Court observed that it cannot be urged that reasonable nexus between the prejudicial activity and the purpose of detention has been snapped by the time lag rendering the impugned order of detention as one Without genuine satisfaction of the detaining authority. Whether the time lag between August, 1974 and February, 1977 is enough to snap the reasonable nexus between the prejudicial activity and the purpose of detention would depend upon the facts of the case. It may be that a person in the position of a detenu who was a driver of a well known smuggler on a pay of Rs. 5,000 p.m. and who was taking part in clearing the smuggled goods may satisfy the authority that he is likely to continue in his activities in the future and as such would justify his detention. In Gore vs State of West Bengal(1) this Court after referring to the earlier decisions held that the test of proximity is not a rigid or mechanical test to be blindly applied by merely counting the number of months between the offending acts and the order of detention. The : question is whether the past activities of the detenu are such that the . detaining authority can reasonably come to the conclusion that the detenu is likely to continue in his unlawful activities. If the detaining authority in this case had came to the conclusion taking into account the past (1) ; 264 activities of the detenu that he is likely to continue to indulge in such activities in future there would be no justification for this Court to interfere. It is quite likely that persons who are deeply involved in such activities as smuggling can cause a reasonable apprehension in the minds of the detaining authority that they are likely to continue in their unlawful activities. In this case, the 4th respondent who passed an order under section 9(1) has not stated that he is satisfied that the detenu is likely to engage in transporting all smuggled goods. What he has stated is that the detenu "engages and is likely to engage in transporting smuggled goods '. There was no material before the 4th respondent for coming to the conclusion that the detenu "engages" in transporting smuggled goods. To this extent we have to accept the contention of the learned counsel for the appellant that there is no material for coming to the conclusion that the detenu was "engaging" himself in the unlawful activities. The detenu has been under detention from 4th July, 1977 and the period of detention permissible under section 3 is only one year. Section 9(1) enables the authority to make a declaration which would have the effect of extending the period of detention to two years from the date of detention by virtue of amendment to section 10 by Amending Act 20 of 1976. As we have found that the order under section 9(1) has not been validly made and as the detenu has been in detention for more than one year his continuance in detention is not sustainable. In the circumstances, we allow the petition. P.B. R. Appeal allowed.

The appellant was detained under the in September, 1974 but was released in December, 1974. In February, 1977 he was detained under section 3(1) of the , on the ground that he was "likely to engage in transporting smuggled goods". One of the grounds of .detention stated: "you were an associate of a notorious smuggler, that you were engaged in piloting smuggled goods loaded in trucks from the place of landing . " In support of the above, two instances were mentioned: one relating to an incident on 6th August, 1974 and another on 25th August, 1974. In the appellant 's writ petition the High Court observed (1) that although some of the activities attributed to the detenu related to August 1974, the fact that the detenu was in illegal employment of a notorious smuggler under detention clearly indicated that there was connection between him and the smuggler and (2) that a reasonable nexus between the prejudicial activities and the purpose of detention could not be said to have been snapped by the time lag rendering the impugned order of detention as one without genuine satisfaction of the detaining authoritY. In appeal to this Court it was contended on behalf of the appellant that the order of detention was bad, in that it disclosed that the satisfaction arrived at by the detaining authority was mechanical and without application of his mind. Allowing the appeal, ^ HELD: (1) It is clear from the record that the instances alleged do not relate to any incident after 1974 but only relate to the activities of the detenu in 1973 and 1974. Even though information about the activities of the detenu during the year 1974 came to light in october and November, 1976, a fresh order of detention under the Act was not passed till February, 1977. If the authorities were in possession of any activities of the detenu after his release in December, 1974 action would have been taken. it is only the statements that .were recorded in october and November 1976 which led the authorities to pass a fresh order of detention in February, 1977. From the statements recorded in october and November, 1976 no incidents are shown to have taken place after 1974. [262B; 263C D] 258 (2) Whether the time lag between August 1974 and February 1977 is enough to snap the reasonable nexus between the prejudicial activities and the purpose of detention would depend upon the facts of the case. If the detaining authority had come to the conclusion, taking into account the past activities of the detenu, that he was likely to continue to indulge in his unlawful activities in future there would be no justification for this Court to interfere. It is quite likely that persons who are totally involved in such activities as smuggling can cause a reasonable apprehension in the mind of the detaining authority that they are likely to continue in their unlawful activities. But in the instant case the detaining authority passing the order has not stated that he was satisfied that the detenu was likely to engage in transporting smuggled goods. What he has stated was that the detenu "engages" or is "likely to engage" in transporting smuggled goods. There was no material before the detaining authority for coming to the conclusion that the detenu was "engaging" himself in unlawful activities. [263F; 264A C]

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Civil Appeal No. 1340 of 1982. Appeal by Special leave from the judgment and order dated the 1st March, 1982 of the Allahabad High Court in Civil Miscellaneous Petition No. 6933 of 1981. G.L. Sanghi, R.D. Upadhaya, V.K. Pandita and section Srinivasan for the Appellants. R. K Garg and section N. Singh for the Respondent. The Judgment of the Court was delivered DESAI, J. Even with an ever widening control of the State on the private management of educational institutions, the minimal residuary power still enjoyed by private management can be used to successfully harass a highly qualified teacher is the tragic lesson of this litigation. 973 Appellant, a double M.A. and holding a Doctorate applied in response to an advertisement that appeared in Hindi Daily Bhirgu A Chetna and Dainik Jagran dated May 18, 1980 for the post of a principal of Shrinath Intermediate College, Garhmalpur Sahulie, Distt. Balia ( 'College ' for short) issued by the Committee of Management of the College. The Selection Committee as envisaged by sec. 16F of the Intermediate Education Act, 1921 ( 'Act ' for short) held the interview on April 12, 1981. The Selection Committee consisted of Shri Sudhakar Tiwari Manager/President of the Selection Committee, Shri Ram Dularey Tripathi, Principal Nagrik Degree College, Jaunpur and Dr. Gauri Shanker Misra, Principal, Narihsun Degree College, Harihaun Distt. Jaunpur. The Selection Committee unanimously selected the appellant for appointment to the post of Principal. Pursuant to this decision of the Selection Committee, the Manager of the Committee of Management of the College issued an appointment order dated April 27, 1981 to the appellant informing him that the Committee of Management of the College vide its Resolution No. 3 dated April 19, 1981 has appointed the appellant as Principal on one year probation in the scale of 550 1200 at initial pay alongwith DA admissible under the rules. The appellant was required to present himself before the Manager of the College and take over the charge within 10 days of the receipt of the order of appointment failing which the appointment would be void. On receipt of this letter of appointment the appellant presented himself at the College on May 1, 1981 and requested the Manager to hand over charge to him. There is an endorsement below this communication by the Manager that the appellant was permitted to take charge. On the same day, the appellant wrote to the Manager of the College that as permitted by him he has assumed charge of the post of Principal at 7.30 A.M. and has started functioning. An intimation of the same was also sent to the Distt. Inspector of Schools, Ballia. The appellant on the same day circulated a notice to the staff intimating to them that he has assumed charge of the post of Principal and he has convened an urgent meeting of the staff to be held on the same day after college hours in the teachers ' room. It appears that the State Government was contemplating to bring about a radical change in the mode, method and power of appointment of the teaching staff in non government aided schools and accordingly Secretary to the Government of U.P. Education 974 Department issued an order dated April 7, 1981, communicated by a radiogram to the various authorities. It reads as under: "From Secretary to Government of U.P. Education/ Department G. O. No. 1701/l5 7 FI 1 (27)/81 dated 1.4.81 Stop all fresh selections and appointments of Principals Headmasters and teachers including recruitment by promotion in all non government aided secondary schools except minority institutions pending further orders(.) District Inspectors to ensure non drawal of pay of teachers appointed after his date(.) Detailed instructions follow(.)" Pursuant to the receipt of this radiogram, the District Inspector of Schools, Ballia had sent a copy of it to the College. There is some dispute between the parties as to whether this copy of the radiogram was received by the Management of the College but there is a letter dated May 1, 1981 addressed by the District Inspector of Schools, Ballia to the Manager of Shrinath Intermediate College which reads as under: "Letter. No. 2/26 62/80 81 dated 1.5.81 Sub: In Ref: Appointment of Principals. Sir, In reference to letter No. Sri Nath Inter College dated 27.4.1981 regarding the above mentioned subject, it is informed that as soon as G.O. No. 1701/15 7F (27)/81 dated 7.4.1981 in regard to the prohibition on appointments is received in this office, it has been sent by letter No. 60/81 82 dated 8.4.1981 and it has been received by the clerk of your office on 8.4.1981 and the message of the G.O. have been sent to the experts by telegram. Hence in such a situation there is no question of appointment on the post of Principal. Sd/ B. N. Pandey, District Inspector of Schools, Ballia, l.5.1981 975 Serious dispute arose whether the appellant 's appointment as Principal was valid. The controversy was accentuated by the conduct of one Jagannath who was aspiring to be the Principal and who, it is alleged has some local influence. The management did not pay any salary to the appellant though he functioned as the Principal and ultimately the appellant approached the High Court under article 226 of the Constitution praying for a writ of mandamus directing the 5th respondent, the Committee of Management of the College, not to interfere with the work of the appellant discharging his duties as Principal of the College and also to pay salary. Pursuant to the interim relief granted by the High Court the appellant was paid his salary. To the Writ Petition filed by the appellant he had impleaded 5 respondents including the State of U.P., the Director of Education, U.P, the Deputy Director of Education, VI Region, Varanasi, District Inspector of Schools, Ballia and the Committee of the Management of the College. The petition was primarily contested by the 5th respondent, the Committee of Management. One Shri Phul Deo Pandey filed an affidavit in opposition on behalf of the Committee of Management inter alia contending that the appointment of the appellant was not valid as the power to appoint was withdrawn by the State Government. Reliance was placed on the radiogram in this behalf. The High Court held that the radiogram dated April 7, 1981 contained an order of the State Government in discharge of its executive functions suspending or withdrawing power of appointment of teaching staff including Principal and therefore the Committee of Management of the College had no power to set up a selection committee nor the selection committee had any power to make any appointment and therefore the appointment of the appellant alleged to have been made on May 1, 1981 was not valid. The High Court accordingly dismissed the Writ Petition. Hence this appeal by special leave. Mr. G. L. Sanghi, learned counsel who appeared for the appellant canvassed two contentions at the hearing of this appeal. It was urged that the day i.e. May 1, 1981 on which appointment of appellant was made as Principal of the College, the Committee of Management had the power to make the necessary appointment and the order contained in the radiogram had no effect on the validity of appointment. It was next contended that assuming such a power to issue radiogram was available to the State Government, 976 if the appointment was made without the knowledge of the order contained in the radiogram, the appointment would be valid. Alternatively, it was contended that in any case once appointment was mad unless the procedure prescribed in sub sec. 10 of sec. 16 F. Of the Act is followed, the appointment of the appellant could not be invalidated, and therefore it may be declared that the appellant continues to hold the post of the Principal of the College. Before we deal with these submissions, a brief reference to the relevant provisions of the Act would be advantageous. The Act is a pre Constitution Act enacted in 1921 with a view to acquiring power to establish a Board to take the place of the Allahabad University in regulating and supervising the system of High School and Intermediate Education of the United Provinces. It was more or less an innocuous enactment. The power and authority enjoyed by private managements of educational institutions was left untouched. But there was a comprehensive amendment of the Act by U.P. Act No. 26 of 1975. For implementing the provisions of the Act, sec. 3 envisaged the constitution of a Board. 7 prescribes the power of the Board which would also imply duties and functions of the Board. 9 preserves and protects the powers of the State Government. Sub sec. 4 is material and may be extracted: "(4) Whenever, in the opinion of the State Govern ment, it is necessary or expedient to take immediate action, it may, without making any reference to the Board under the foregoing provisions, pass such order or take such other action consistent with the provisions of this Act as it deems necessary, and in particular, may by such order modify or rescind or make any regulation in respect of any matter and shall forthwith inform the Board accordingly. " Section 13 confers power on the Board to appoint various committees. Section 15 confers power on the Board to make regulations with the previous sanction of the State Government (see sec. 16) for the purpose of carrying into effect the provisions of the Act. 16 A to sec. 16 I were inserted by U.P. Act No. 35 of 1958. Section 16 A provides for a scheme of administration for every institution whether recognised before or after the commencement of U.P. Act No. 35 of 1958. The Scheme of Administration was to inter alia provide for constitution of a Committee of Management 977 vested with authority to manage and conduct the affairs of the Institution. 16 F(I) provides for setting up a Selection Committee for appointment of Head of an Institution and sub sec. 2 provides for setting up of a Committee for selection of candidates for appointment as teacher. 16 D confers power on the Director of Education to cause inspection of recognised institution to be made from time to time and sub clause 2 to sub sec. 3 inter alia requires ascertaining in course of inspection whether the Committee of Management has failed to appoint teaching staff possessing such qualifications as are necessary for the purpose of ensuring the management of academic standards in the Institution or has appointed or retained in service any teaching or non teaching staff in contravention of the provisions of the Act or the Regulations. Having browsed through the relevant provisions let us turn to the contentions raised by Mr. Sanghi. The contention which was put in the forefront was that the date on which appellant was appointed as Principal, the Committee of Management had the power to make appointment notwithstanding the fact that the order contained in the radiogram had suspended or withdrawn its power. While setting out the chronology of events leading to the petition we have pointed out that at the meeting of E the Selection Committee held on April 12, 1981 appellant was selected as a Principal. The question is whether the Selection Committee had any power to make the selection on April 12, 1981 and whether the Committee of Management pursuant or selection had any power on April 27, 1981 to issue appointment order. It is conceded that relevant regulations conferred power on the Committee of management to make appointment upon the recommendation of the Selection Committee. The power to make appointment is conferred by the regulations. The Board has the power to make regulations under sec. IS and this power can be exercised only with the previous sanction of the State Government; Thus the State Government has authority to sanction or not to sanction the regulation proposed by the Board. Every such recognised institution must have a Scheme of Administration as envisaged by sec. 16A and the Scheme of Administration envisages the setting up of a Committee of Management and the Committee of Management has the power to set up a Selection Committee for selecting the candidate for appointment as Head of an Institution as provided in sec 16 F. This power is being regulated by the regulations, 978 Thus it becomes clear that the Board enacts regulations. The regulations confer power of appointments including of the appointment of a Head of the Institution and of the teachers. Sub sec. 4 of section 9 which has been extracted hereinbefore confers power on the State Government without making any reference to the Board to make an order or take such other action consistent with the provisions of the Act as it deems necessary and in particular, may by such order modify or rescind or make any regulation in respect of any matter. It would thus unquestionably transpire that while enacting the regulations prior sanction of the State Government is necessary and under sub section 4 of sec. 9 the State Government enjoys the power to make, modify or rescind any regulation. Armed with this power the State Government issued an order dated April 7, 1981 stopping all fresh selections and appointments of Principals etc. in all non government aided schools. Sri Nath Intermediate College is non government aided school. The effect of the order conveyed by the radiogram would be to rescind the regulation conferring power on the Committee of Management to make appointment and withdrawing and/or suspending power of appointment of Principal and teachers. The issuance of the order is not in dispute. The argument, in the High Court, was that the State Government had no such power and that even if sub sec (4) is deemed to confer such a power it has to be reading just a position with the power conferred on the State Government by sub sections (1), (2), (3) preceding sub sec. (4) of sec. The High Court therefore had to examine the width and ambit of the executive power of the State Government in exercise of which according to the High Court, the order contained in the radiogram was issued. We need not go that far because in our opinion sub sec. (4) specifically confers power on the State Government without making any reference to the Board to make, modify or rescind any regulation as also make such other order consistent with the provisions of the Act. This power of wide amplitude will comprehend the power to stop all appointments for the time being. And the power appears to have been exercised as Government was contemplating taking away the power of private management of non government aided schools to make appointment of teachers including Principals. In order to avoid forestalling of governmental action by private managements, the power to make appointments was suspended for the time being. As pointed out earlier, the regulation confers power on the Committee of Management to make appointment. The regulation was 979 enacted by the Board with the prior sanction of the State Government. The State Government could be said to have rescinded that A regulation conferring power of appointment or at any rate suspend the power conferred on the Committee of Management to make appointment. The order became effective the moment it is issued. The effect of this order is that the Selection Committee had no right to select the appellant nor the Committee of Management had any power to make the appointment. Mr. Sanghi further contended that this order was never received by the institution and therefore the power of the Committee of Management notwithstanding the fact that its power to make appointment was suspended remained intact and therefore the appointment of the appellant would be valid: There is no merit in the submission because the letter dated May 1, 1981 which has been extracted hereinafter clearly shows that on April 7, 1981 the order contained in the radiogram was communicated to the Manager of the Institution. There is no affidavit in opposition of the then Manager of Institution or any responsible person then in charge of the management denying the receipt of the letter dated May 1, 1981. This letter shows that on April 8, 1981 the Institution had received the order that the power of appointment of Principal has been withdrawn or suspended. If the order was valid and power to make appointment was withdrawn or suspended it would not be open to the Selection Committee to make and select appellant nor the Manager on behalf of the Committee of Management can issue appointment order dated April 27, 1981 to the appellant and the appointment of the appellant would be by a body not authorised to make the appointment and hence ineffective though it may not be invalid. In view of the finding that sub sec. (4) of section 9 did confer power on the State Government to make, modify or rescind the regulation or make any other order consistent with the provisions of the Act, the second contention of Mr. Sanghi is equally bound to fail. It is therefore necessary to turn to the alternative contention based on sub sec. (10) of section 16 E. The marginal note of sec. 16 E reads: "Procedure for selection of teachers and head of institutions. Sub sec. (I) confers power on the Committee of the Management to make appointment." 980 Sub sec. 10 provides as under: ("10.) Where the State Government., in case of the appointment of Head of Institution and the Director in the case of the appointment of teacher of an institution is satisfied that any person has been appointed as Head of Institution or teacher, as the case may be, in contravention of the provisions of this Act, the State Government or, as the case may be, the Director may, after affording an opportunity of being heard to such person, cancel such appointment and pass such consequential order as may be necessary. " It was urged that if the State Government is satisfied that any person has been appointed as head of an Institution in contravention of the provisions of the Act, the State Government after affording an opportunity of being heard to such person cancel such appointment and pass such consequential order as may be necessary. Mr. Sanghi vehemently contended that if the appointment of appellant is in contravention of the provisions of the Act, the State Government was bound to hear the appellant before making any consequential order. Sub sec. (I O) provides for a contingency where an appointment is made and the State Government later on comes to know that the appointment has been made in contravention of the Act in respect of a particular individual that the rules of natural justice require that he may be heard before making an order, adverse to such person. The present case is not one which can be dealt with or was required to be dealt with by sub sec. The situation is that the power of appointment conferred by regulation on Committee of Management of all non government aided institutions was withdrawn or suspended. The Committee of Management had no power to make the appointment. It cannot be said that the appointment was in contravention of any provision of the Act. Therefore sub sec. (10) is not attracted in this case and the contention must fail. Undoubtedly appellant is a highly qualified person. There was nothing hanky panky in his appointment. If the power to make appointment was riot suspended we would have no difficulty in upholding the appointment of the appellant and we are not oblivious to the machinations of Shri Jagannath, who possibly thought that the appellant would be a formidable rival and wanted him to be out of way. The private management, at the instance of Shri 981 Jagannath appears to have subsequently backed out from the appointment of the appellant which at one stage they were willing to defend. But as there was no power of appointment, we are unable to help the appellant. However, we would like to make it very clear that the appointment was otherwise valid, though ineffective and if appellant under the orders of the High Court functioned as Principal, discharged his duties and was paid, no question of recovery of amount paid to him could arise and neither the Government nor the Committee of Management nor the Institution would be entitled to recover any salary paid to the appellant. The State Government promulgated the U.P. Secondary Education Service Commission and Selection Board ordinance, 1981 (8 of 1981) which was replaced by the act bearing the identical name. The Act envisages setting up of a Commission for selecting and recommending appointments of teachers including Heads of Institution. The College is topless and an unfair advantage is being taken of this situation by Jagannath whose credentials to be appointed as Principal are still to be investigated. It is the statutory duty of the Commission to proceed to take effective steps to fill in the post of Principal of the College. It is imperative that the State Government should direct the Commission to take necessary steps to fill in the post of Principal of Sri Nath Intermediate College Garhmalpur Ballia within three months from today. Appellant would be eligible to apply for the same. We direct accordingly. As we find no merit in any of the contentions canvassed on behalf of appellants, the appeal fails and is dismissed subject to the directions in the preceding paragraph but in the circumstances of the case with no order as to costs. P.B.R. Appeal dismissed.

The Committee of Management of a non Government aided school, by its resolution dated April 19,1981 appointed the appellant as Principal of the college run by it. The order was communicated to the appellant on April 27 198} and he assumed charge on May 1, 1981. In the meanwhile on April 7, 1981 the Secretary to the Government of U. P. Education Department communicated by radiogram to the various authorities the order of the Government stopping all fresh selections and appointments of principals in all non Government aided secondary schools. A copy of it was sent to the college by the District Inspector of Schools on May 1,1981. Though the appellant continued to function as Principal of the college the Committee of Management stopped payment of his salary on the ground that his appointment was not valid after the issue of the Government order dated April 7,1981. The appellant filed a writ petition under Article 226 of the Constitution praying for a writ of mandamus directing the Committees of Management of the College not to interfere with the discharge of his duties as Principal and also to pay him his salary. T he High Court, dismissing his petition, held that the appellant 's appointment as Principal of the college was invalid in that the Committee of Management had no power to set up the Selection Committee nor had the Selection Committee the power to make any appointment. In appeal to this Court it was contended on behalf of the appellant that on the date of his appointment as Principal the Committee of Management had the power to make the appointment notwithstanding the fact that the Government had withdrawn that power. Dismissing the appeal, ^ HELD: The order of the Government became effective the moment it was issued. The effect of that order was that the Selection Committee had no right to select the appellant nor did the Committee of Management have any power to make the appointment. [1979 A B] 972 The Board constituted under the Act had the power to make regulations and this power could be exercised only with the previous sanction of the State Government. Section 9(4) specifically confers power on the State Government without making any reference to the Board to make, modify or rescind any regulation. This power comprehend the power to stop all appointments for the time being. Exercising power under this section the State Government issued orders stopping all fresh selections and appointments of Principals in all non Government aided schools. The effect of the order was to rescind the regulation conferring power on the Committee of Management to make appointments of Principals. [978 B G] There was no merit in the submission that the letter dated May 1, 1981 had not been received by the Management. [979 D] If the order was valid and power to make the appointment was with drawn or suspended, it would not be open to the Selection Committee to select the appellant an issue the order of appointment to him. The appointment in that event would be by a body not authorised to make it and so it was in effective though not invalid. [979 E F] Section 16E (10) which provides that where the competent authority was satisfied that a person had been appointed as Principal in contravention of the provisions of the Act, it may cancel such appointment after affording him an opportunity of being heard has no application to the present case because power of appointment conferred by the regulation on the Committee of Management was withdrawn or suspended and therefore the Committee had no power to make the appointment. 1980 E Gl

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vil Appeal No. 308 of 1964. Appeal by special leave from the judgment and order dated September 10, 1962 of the Calcutta High Court in Income tax Reference No. 115 of 1957. A.V. Viswanatha Sastri, B. Sen Gupta and P.K. Ghosh, for the appellant. N.D. Karkhanis and R.N. Sachthey, for the respondent. The Judgment of the Court was delivered by Shah, J. The appellant is a Hindu undivided family and carries on business as a dealer in "iron scrap and hardware". Messrs Hoare Miller and Company Ltd. hereinafter called 'the Company ' were owners of a jute pressing factory installed on a piece of land belonging to the Company. Adjacent to that land were two pieces of land: one was leasehold, and the other held by the Company as a licensee from the Government of West 604 605 Bengal. On January 21, 1941 the Company leased out to one Ramnath Bajoria the jute pressing factory together with the machinery standing on the land owned by the Company for ten months commencing from January 10, 1941. Ramnath Bajoria failed to vacate and deliver up possession of the premises demised to him, after the expiry of the period of the lease, and the Company instituted a suit in ejectment against him. By an agreement dated October 31, 1942 the appellant agreed to purchase all the rights of the Company in the factory and the appurtenant premises for Rs. 2,45,000. On November 14, 1942 the Company delivered to the appellant possession of the property agreed to be sold, save and except the factory demised under the lease to Ramnath Bajoria and the machinery included in the lease. On February 26, 1943 the Company executed a conveyance in favour of the appellant conveying the factory and the appurtenant premises. On June 12, 1943 the appellant agreed to sell to one Ranada Prasad Saha the property purchased from the Company for Rs. 4,73,364/3/6 free from all encumbrances. On August 10. 1943 the appellant was substituted as a plaintiff in the suit filed by the Company against Ramnath Bajoria, and obtained possession of the factory premises. By a deed of conveyance dated September 30, 1943 the appellant conveyed to Ranada Prasad Saha the factory and the appurtenant premises and delivered possession thereof. In the deed of conveyance the property sold was described in three separate Schedules. Schedule I, Press House, office, residential buildings and three warehouses on land owned by the Company: Schedule 11 ; leasehold land together with a warehouse known as Kalibari godown: Schedule II1; two warehouses on land held as licensee by the Company from the Government of West Bengal. The Income tax Officer. District Ii(1), CAlcutta. brought to tax in the hands of the appellant Rs. 2,24,864 bring the profit arising out of the sale of the property to Ranada Prasad Saha. The Income tax Appellate Tribunal partially modified the order and reduced the total income by Rs. 7,000. The Tribunal then drew up a statement of case and referred the following question to the High Court of Judicature at Calcutta: "Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that the surplus of Rs. 2,35,211 received by the assessee as a result of the sale of the jute press referred to in the Appellate order arose out of an adventure in the nature of trade and was therefore rightly assessed to tax?" The High Court answered the question in the affirmative. With special leave granted by this Court, the appellant has appealed to this Court. L/P(N)4SCI 12 606 At the material time, capital gains were not taxable, and the only question failing to be determined is whether profit made by the appellant by sale of the property to Ranada Prasad Saha was taxabIe under section 10 of the Indian Income tax Act. The Tribunal found the following facts proved: The appellant was carrying on business in iron scrap and hardware and never carried on any business in jute or in pressing jute. At the material time when the purchase of the Jute Press was made, the appellant had, because of abnormal conditions prevailing in the town of Calcutta, closed its business in iron scrap and hardware. The appellant purchased the jute press and the premises appurtenant thereto subject to litigation pending in the High Court, effected certain repairs and kept the factory in running condition, but made no attempt to start or organise the business of pressing jute, and his plea that he was not able to secure labour for working the press was not true. Soon after he bought the factory, the appellant received an offer from Ranada Prasad Saha to buy the factory and he immediately accepted the offer to sell it to him. These facts in the view of the Tribunal indicated that the appellant purchased the jute press, subject to litigation, with the sole object of reselling at profit at the earliest opportunity, and therefore the transaction was in the nature of a trading venture. The High Court substantially agreed with this view. Section 10 of the Indian Income tax Act, 1922 makes profits and gains of business, profession or vocation carried on by an assessee taxable. The expression "business" is defined in section 2(4) as inclusive of "any trade, commerce, or manufacture or any adventure or concern in the nature of trade, commerce or manufacture". It is common ground that the transaction of purchase and sale of the factory and appurtenant premises was an isolated venture. To reiterate the sequence of material events: the appellant agreed to purchase the Jute Press from the Company on October 31, 1942 subject to litigation pending in the High Court of Calcutta: possession of the property except the premises in the occupation of the tenant was obtained on November 14, 1942 and the sale deed was obtained on February 26, 1943: on June 12, 1943 the appellant agreed to sell the press to Ranada Prasad Saha: on August 10, 1943 the appellant was substituted as plaintiff in the suit flied by the Company against Ramnath Bajoria, and after obtaining possession of the demised premises the appellant executed on September 30, 1943 a sale deed conveying the property and delivered possession to Ranada Prasad Saha. Do these facts make out the case that the transaction was an adventure in the nature of trade? It is for the revenue to establish that the profit earned in a transaction is within the taxing provision and is on that account liable to be taxed as income. The nature of the transaction must 607 be determined on a consideration of all the facts and circumstances which are brought on the record of the income tax authorities. It has consistently been held by this Court that the question whether profit in a transaction has arisen out of an adventure in the nature of trade is a mixed question of law and fact: see G. Venkataswami Naidu & Company vs The Commissioner of Income tax(1) in which case this Court held that the expression "adventure in the nature of trade" in sub section (4) of section 2 of the Act postulates the existence of certain elements in the adventure which in law would invest it with the character of trade or business and that a tribunal while considering a question whether a transaction is or is not an adventure in the nature of trade, before arriving at its final conclusion on facts, has to address itself to the legal requirements associated with the concept of trade or business. Such a question is one of mixed law and fact and the decision of the tribunal thereon is open to consideration under section 66(1) of the Act. See also Saroj Kumar Maiumdar vs Commissioner of Income tax, West Bengal(2). A large number of cases were cited at the Bar in support of the respective contentions of the Commissioner and the assessee. Passages from judgments in the same case were often cited claiming support for the respective contentions. No useful purpose would be served by entering upon a detailed analysis and review of the observations made in the light of the relevant facts, for no single fact has decisive significance, and the question whether a transaction is an adventure in the nature of trade must depend upon the collective effect of all the relevant materials brought on the record. But general criteria indicating that certain facts have dominant significance in the context of other facts have been adopted in the decided cases. If, for instance, a transaction is related to the business which is normally carried on by the assessee, though not directly part of it, an intention to launch upon an adventure in the nature of trade may readily be inferred. A similar inference would arise where a commodity is purchased and sub divided, altered, treated or repaired and sold, or is converted into a different commodity and then sold. Magnitude of the transaction of purchase, the nature of the commodity, subsequent dealings and the manner of disposal may be such that the transaction may be stamped with the character of a trading venture: for instance, a man who purchases a large quantity of aeroplane linen and sells it in different lots, and for the purpose of selling starts an advertising campaign, rents offices, engages an advertising manager, a linen expert and a staff of clerks, maintains account books normally used by a trader, and passes receipts and payments in connection with the linen through a separate banking account: Martin vs Lowry(3): a person who carries on a money lending business purchases very cheaply a (2) [1959] Supp. 1 S.C.R. 640. (2) (3) 608 vast quantity of toilet paper and within a short time thereafter sells the whole consignment at a considerable profit: Rutledge vs The Commissioner of Inland Revenue(1); a person even though he has no special knowledge of the trade in wines and spirits, purchases a large quantity of whisky sells it without taking delivery of it at a considerable profit: Commissioners of Inland Revenue vs Fraser(2), may be presumed having regard to the nature of the commodity and extent of the transaction coupled with the other circumstances, to be carrying on an adventure in the nature of trade. These are cases of commercial commodities. But a transaction of purchase of land cannot be assumed without more to ' be a venture in the nature of trade. A director of a company carrying on the business of ware houseman purchasing a number of houses with a view to resale, and selling them at a profit some years after the purchase: Commissioners of Inland Revenue vs Reinhold(3): a person carrying on business in various lines, including an Engineering Works, purchasing land which was under requisition by the Government, negotiating sale thereof before the land was derequisitioned, and selling it after the land was released: Saroj Kumar Mazumdar vs Commissioner of Income tax, West Bengal(4); and a syndicate formed to acquire, an option over a rubber estate with a view to earn profit, and finding the estate acquired too small acquiring another estate and selling the two estates at a profit: Leeming vs Jones(3) may not be regarded as commencing a venture in the nature of trade. These are cases in which the commodity purchased and sold is not Ordinarily commercial, and the manner of dealing with the commodity does not stamp the transaction as a trading venture. It may be emphasized from an analysis of these cases that a profit motive in entering a transaction is not decisive, for, an accretion to capital does not become taxable income, merely because an asset was acquired in the expectation that it may be sold at profit. Purchase of the property by the appellant was an isolated transaction not related to the business of the appellant. The Tribunal and the High Court were, in our judgment, in error in holding that the right of the Company was not sold to the appellant in the lands in Sch. II and Sch. III properties. The land in Sch. II was leasehold, and on it was constructed a warehouse and the land in Sch. III was held as a licensee and two warehouses were standing thereon. The conveyance by the Company to the appellant is not on the record, but the recitals in the deed dated September 30, 1943 definitely indicate that the rights of the Company without any reservation were purchased by the appellant, and the appellant sold its entire rights in the properties in Schs. I, (1) (2) (3) (4) 11 T.C.297. (5) 15 T.C.333. 609 II and III without any reservation. It is true that the appellant had put the factory in a working condition, but had not organized a jute pressing business, had not obtained a licence for working the factory, had not attempted to secure orders for pressing jute, and had not employed labourers, The appellant 's claim that it was not s9 done because the appellant could not secure labourers has not been accepted. But that is not a decisive circumstance. The factory was in the occupation of the lessee Ramnath Bajoria and possession was obtained after August 10, 1943. But before the 10th of August an agreement of sale was executed by the appellant in favour of Ranada Prasad Saha. In the light of the sequence of events, the inference that the appellant had no intention to commence doing jute pressing business does not necessarily follow. Even if that inference be regarded as binding upon the Court it cannot be presumed that the sole intention of the appellant was to start a venture in the nature of trade. Barring the expectation of profit and realization of profit by sale of the property, there is no evidence bearing on the intention with which the property was purchased. In the deed of conveyance dated September 30, 1943 there is a reference to delivery of "joists, girders, fabricated steel, C.I. roofs, bolts, nuts, hooks and ceiling planks, being portions of the materials of the godowns and structures" standing on the land described in the third schedule. It was submitted that after purchasing the factory and the appurtenant premises the appellant demolished "certain godowns" in Sch. III land and sold the material as scrap. This, it was claimed, was if not part of the business = a venture similar to the normal business of the appellant. But there is no evidence on the record as to how many warehouses stood originally on Sch. III land. The sale deed dated September 30, 1943 clearly states that there were two warehouses on steel frames on the land held as licensee by the Company and possession of these was given to the purchaser Ranada Prasad Saha. Beside these warehouses there were three warehouses on the land described in Sch. I and one warehouse on the land described in Sch. It is not claimed that these warehouses were insufficient for carrying on the business of jute pressing: nor is there any evidence that the warehouse or warehouses which were demolished were in a serviceable condition. The only fact which may be taken to be established is that a warehouse or warehouses were demolished by the appellant and the materials were sold as part of the property sold under the deed dated September 30. From this circumstance, an inference that the entire property was purchased with intent to demolish and dispose of as scrap cannot be raised. Granting that the appellant made a profitable bargain when he purchased the property. and granting further that the appellant had when he purchased it a desire to sell the property if a favourable offer was forthcoming. these could not without other 610 circumstances justify an inference that the appellant intended by purchasing the property to start a venture in the nature of trade. Absence of advertisement inviting offers for purchasing the property, and absence of brokers in the negotiations for sale between the appellant and Ranada Prasad Saha, are circurmtances which lead to no positive inference. There is nothing to show that the appellant desired to convert the property to some other use. No brokers were employed for entering into a transaction of sale. It appears that Ranada Prasad Saha on coming to learn that the factory was for sale approached the Company after the sale deed was executed in favour of the appellant and he was informed that it had already been sold to the appellant. Thereafter Saha contacted the appellant and agreed to purchase the property. The property purchased was not sudh that an inference that a venture in the nature of trade must have been intended by the appellant in respect thereof may be raised. A person purchasing a jute press may intend to start his own business even if he is not already in that business, or he may let it out on favourable terms. The property purchased by the appellant was capable of being let out and it had in fact been let out by the Company before the date of sale in favour of the appellant. It was capable of fetching annual income, and there is no evidence that at the material time it could not be reasonably let out. We therefore discharge the answer given by the High Court in respect of the question submitted by the Tribunal and record a negative answer. The appeal is allowed. The Commissioner to pay the costs in this Court and the High Court. Appeal allowed.

The assessee who was dealing in iron scrap and hardware had purchased a jute press and sold it at a profit. The Income tax Officer brought to tax in the hands of the assessee, the profit arising out of this sale. The Appellate Tribunal modified the order and reduced the total income. At the instance of assessee the Tribunal referred to the High Court, the question, whether the surplus received by the assessee as a result of the sale of the jute press arose out of an adventure in the nature of trade and was, therefore, liable to tax. The High Court answered the question in affirmative. In appeal; HELD: The question must be answered in the negative. Granting that the assessee made a profitable bargain when he purchased the property and granting further that the assessee had, when he purchased it, a desire to sell the property, if a favourable offer was forthcoming, these could not without other circumstances, justify an inference that the assessee intended by purchasing the property to start a venture in the nature of trade. [609H 610A] A profit motive in entering a transact on is no decisive, for, an accretion to capital does not become taxable income, merely because an asset was acquired in the expectation that it may be sold at a profit. [608F] Purchase of the property by the assessee was an isolated transaction not related to the business of the assessee. [608G] Case law referred to.

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Civil Appeal No. 43(NT) of 1975. 306 From the Judgment and Order dated 23.1.1974 of the Gujarat High Court in Income Tax Reference No. 78 of 1970. T.A. Ramachandran, Mrs. J. Ramachandran and S.C. Patel for the Appellant. C.M. Lodha, M.N. Tandon and Ms. A.S. Subhashini, for the Respondent. The Judgment of the Court was delivered by VENKATACHALIAH, J. This appeal by the assessee, The Alembic Chemicals Works Co. Ltd., arises out of and are directed against the judgment dated 23.1.1974, of the High Court of Gujarat in Income Tax Reference 78 of 1970, answer ing in favour of the Revenue a question of law referred to it under Section 256(1) of the Income Tax Act, 1961, (Act) by the Income Tax Appellate Tribunal. On 8.6.1961, the assessee, a company engaged in the manufacture of antibiotics and pharmaceuticals was granted licence for the manufacture, on its plant, of the well known antibiotic, penicillin. In the initial years of its venture the assessee was able to achieve only moderate yields from the pencillin producing strains used by it which yielded only about 5000 units of penicillin per millilitre of the culturemedium. In the year 1963, with a view to increasing the yield of penicillin, the assessee negotiated with M/s. Meiji Seika Kaishna Limited ("Meiji" for short), a reputed enterprise engaged in the manufacture of antibiotics in Japan, which agreed to supply to the assessee the requisite technical know how so as to achieve substantially higher levels of performance of production of more than 10,000 units of penicillin per millilitre of 'cultured broth ' with the aid of better technology and process of fermentation and with better yielding penicillin strains developed by Meiji. The negotiations culminated in an agreement dated 9.10.1963, whereunder Meiji, in consideration of the 'once for all ' payment of 50,000 U.S. dollars (then equivalent to Rs.2,39,625) agreed to supply to the assessee the "sub cultures of the Meiji 's most suitable penicillin producing strains", the technical information, know now and written description of Meiji 's process for fermentation of penicil lin alongwith a flow sheet of the process on a pilot plant; the design and specifications of the main equipments in such pilot plant; arrange for the visits to and training at assessee 's expense, 307 of technical representatives of the assessee to Meiji 's plant at Japan and to advise the assessee in the large scale manufacture of penicillin for a period limited to 2 years from the effective date of the agreement. It was also stipu lated that the technical know how supplied by Meiji was to be kept confidential and secret by the assessee which was prohibited from parting with the technical know how in favour of others or to seek any patent for the process. In the proceedings for assessment to Income tax for the assessment year 1964 65 the assessee claimed that Rs.2,39,625 paid under the agreement to 'Meiji ' was one laid out wholly and exclusively for the purpose of the business and claimed its deduction as a revenue expenditure. The Income tax Officer, on the view that the expenditure was for the acquisition of an asset or advantage of an enduring benefit, held it to be a capital outlay and declined the deduction. This view was affirmed by the Appellate Asst. Commissioner in the assessee 's first appeal. The Income tax Appellate Tribunal, Ahmedabad Bench, dismissed the further appeal of the assessee holding that the arrangements with Meiji envisaged the setting up of a large commercial plant for the production of the antibiotic modelled on the lines of the pilot plant and that, there fore, the out lay could not be treated as an expenditure laid out on and for purposes of the existing business, but must be regarded as one incurred for a new venture on a new process with a new technology on a new type of plant. The Tribunal held that the payment was 'once for all payment ' and was made for the acquisition of a capital asset. The Tribunal inter alia held: "The sub cultures and the information design and flow sheet etc., were to be fur nished once for all. Meiji also agreed to advise the assessee in respect of any diffi culty the assessee may encounter in applying the subcultures and informations obtained by the assessee from Meiji to the large scale manufacture of penicillin. It is apparent from the agreement and the correspondence which has been made available to us that Meiji agreed to give the designs etc., not only for a pilot plant but for the manufacture of penicillin according to Meiji 's process on commercial scale. The assessee has to put in a larger plant modelled on the pilotplant." " . . It is in consideration for Meiji 's agreeing to 308 supply the assessee with complete details of the technical know how, the design, subcul tures, flow sheet and written descriptions of the process once for all that the assessee paid to Meiji the stipulated sum of $ 50,000." " . . It would thus appear that the payment was made for acquiring a capital asset in the shape of technical know how and other allied information. It was not made in the course of carrying out of an existing business of the assessee but was for the purpose of setting up a new plant and a new process. It would, therefore, appear that the revenue authorities have rightly treated the payment as of capital nature." " . . The process which the assessee took over from Meiji was not the same as it was working heretofore. In the present case the outlay was incurred for a complete replacement of the equipment of the business inasmuch us a new process with a new type of plant was to be put up in place of old process and old plant . . . ." (Underlining Supplied) 4. At the instance of the assessee the Tribunal stated a case and referred the fol lowing question of law for the opinion of the High Court: "Whether the sum of Rs.2,39,625 was a revenue expenditure admissible to the asses see for the purpose of computation of its total income?" The High Court by the judgment under appeal answered the question in the negative and against the assessee. This part of the judgment is assailed by the assessee in CA 43 of 1975. The reasoning of the High Court in support of its conclusion was on the following lines: " . It is true that the expenditure was manifestly laid out for the purpose of obtain ing benefits and advantages such as sub cul tures of penicillin producing strains, design of a pilot and exchange of technical personnel with a view to acquiring know how. But the finding of the Tribunal, as we 309 read it, is that all the benefits which asses see received under the agreement were as a part of the transaction which was undertaken with the ultimate view of a setting up a new plant and a new process. In view of the find ings recorded by the Tribunal, no conclusion other than that the expenditure was incurred once and for all with a view to bringing into existence an asset or advantage for the endur ing benefit of the manufacturing trade of the assessee is possible. The expenditure was incurred for introducing a new process of manufacturing and with a view to installing a new plant, even if not immediately then at a later stage, and on that conclusion the only possible answer to the first question referred to us can be in the negative and against the assessee." (Emphasis Supplied) Before the High Court, the assessee also moved an application under Section 256(2) of the Act ITA No. 24 of 1971 for a direction to the Tribunal to refer another question of law, also stated to arise out of the order of the Tribunal. The question of law respecting which the supplementary reference was sought was this: "Whether there was any evidence or material before the Tribunal to hold that (1) a completely new plant with a completely new process and new technical know how was ob tained by the assessee from Messrs Meiji under the said agreement, dated 9.10.1963; and (2) to work out that process separate plant or machinery had to be designed, constructed, installed and operated? The High Court dismissed this application observing that the Tribunal had no where recorded a finding to the effect that a completely new plant was obtained by the assessee from Meiji and that the finding of the Tribunal that under the agreement the assessee had obtained a new process and a new technical know now from Meiji was not without evidence. Against the dismissal of ITA 24 of 1971 by the High Court, the assessee has preferred Civil Appeal No. 44 of 1975. On 24.2.1987, this Court while directing the Tribunal to draw up a supplementary statement of the case and refer for the opinion of this Court the further question of law which, according to the assessee, arose out of the Tribu nal 's order and which was the subject matter of the asses see 's appeal in C.A. 44 of 1975, however, disposed of that 310 appeal formally, leaving the question of law arising out of the supplemental reference to be considered in the present appeal i.e. CA No. 43 of 1975. The Tribunal has since sub mitted the supplementary statement of the case and has referred that question of law also. This is how both the questions of law, are now before us. While in regard to the first question the correctness of the opinion rendered by the High Court requires to be examined, the second question has to be answered for the first time as the reference is called by this court directly. We have heard Shri T.A. Ramachandran, learned Senior Counsel for the assessee and Shri Lodha, learned senior counsel for the revenue. In computing the income chargeable under the head "Profits and Gains of Business or Profession", section 37 of the 'Act ' enables the deduction of any expenditure laid out or expended wholly and exclusively for the purpose of the business or profession, as the case may be. The fact that an item of expenditure is wholly and exclusively laid out for purposes of the business, by itself, is not sufficient to entitle its allowance in computing the income chargeable to tax. In addition, the expenditure should not be in the nature of a capital expenditure. In the infinite variety of situational diversities in which the concept of what is capital expenditure and what is revenue arises it is well nigh impossible to formulate any general rule, even in generality of cases sufficiently accurate and reasonably comprehensive, to draw any clear line of demarcation. Howev er, some broad and general tests have been suggested from time to time to ascertain on which side of the line the out lay in any particular case might reasonably be held to fall. These tests are generally efficacious and serve as useful servants; but as masters they tend to be over exact ing. One of the early pronouncements which serves to indicate a broad area of distinction is City of London Contract Corporation vs Styles, where Bowen, L.J. indicated that the out lay on the "acquisition of the con cern" would be capital while an outlay in "carrying on the concern" is revenue. In Vallambrosa Rubber Co. vs Farmer, Lord Dunedin suggested as 'not a bad crite rion ' the test that if the expenditure is 'once for all ' it is capital and if it is 'going to recur every year it is revenue. In the oft quoted case on the subject, viz, British Insulated Helsby Cables Ltd. vs Atherton, Viscount Cave L.C. said: "But when an expenditure is made, not only once and for 311 all, but with a view to bringing into exist ence an asset or an advantage for the enduring benefit of trade, I think that there is very good reason (in the absence of special circum stances leading to an opposite conclusion) for treating such an expenditure as properly attributable not to revenue but to capital." .8. In Assam Bengal Cement Co. Ltd. vs Commissioner of Income tax, [1955]27 ITR 34, this Court observed: "If the expenditure is made for acquiring or bringing into existence an asset or advantage for the enduring benefit of the business it is properly attributable to capital and is of the nature of capital expenditure. If on the other hand it is made not for the purpose of bring ing into existence any such asset or advantage but for running the business or working it with a view to produce the profits, it is a revenue expenditure." "The aim and object of the expendi ture would determine the character of the expenditure whether it is a capital expendi ture or a revenue expenditure." In Sitalpur Sugar Works Ltd. vs Commissioner of Income tax, [1963] 49 ITR (SC) 160; Lakshmiji Sugar Mills Co. Ltd. vs Commissioner of Income tax, and in Travancore Cochin Chemicals Ltd. vs Commissioner of Income tax, the enunciation made in Assam Bengal Cement Company 's case , which in turn, referred with approval to Lord Cave 's dictum was affirmed. In Sun News Papers Ltd. & Associated News Papers Ltd. vs Federal Commissioner of Taxation; , Dixon J while indicating that the distinction between revenue and capital corresponds with the distinction between the "busi ness entity, structure or organisation set up or established for the earning of profit" on the one hand and "the process by which such an organization operates to obtain regular returns" on the other, however, went on to say that: "The business structure or entity or organiza tion may assume any of an almost infinite variety of shapes and it may be difficult to comprehend under one description all the forms in which it may be manifested . " 312 The learned judge further observed: " . . There are, I think, three matters to be considered, (a) the character of the advan tage sought, and in this its lasting qualities may play a part, (b) the manner in which it is to be used, relied upon or enjoyed, and in this and under the former head recurrence may play its part and (c) the means adopted to obtain it; that is, by providing a periodical reward or outlay to cover its use or enjoyment for periods commensurate with the payment or by making a final provision or payment so as to secure future use or enjoyment . . " 9. In Regent Oil Co. Ltd. vs Strick, Lord Reid emphasised the futility of a strict application of and exclusive dependence on any single principle in the search for the true position and pointed out the difficulty arising from taking too literally the general statements made in earlier cases and seeking to apply them to a different case which their authors certainly did not have in mind. The Learned Lord also identified as another source of difficulty the tendency in some cases to treat some one criterion as paramount and to press it to its logical conclusion without proper regard to the other factors in the case. Lord Reid further said: "So it is not surprising that no one test or principle or rule of thumb is paramount. The question is ultimately a question of law for the court, but is a question which must be answered in the fight of all the circumstances which it is reasonable to take into account, and the weight which must be given to a par ticular circumstance in a particular case must depend rather on common sense than on strict application of any single legal principle. " The question in each case would necessarily be whether the tests relevant and significant in one set of circum stances are relevant and significant in the case on hand also. Judicial metaphors, it is truly said, are narrowly to be watched, for, starting as devices to liberate thought they end often by enslaving it. The non determinative quali ty, by itself, of any particular test is highlighted in B.P. Australia vs Commr. of Taxation of the Commonwealth of Australia, Lord Pearce said: "The solution to the problem is not to be found by 313 any rigid test or description. It has to be derived from many aspects of the whole set of circumstances some of which may point in one direction, some in the other. One considera tion may point so clearly that it dominates other and vaguer indications in the contrary direction. It is a common sense appreciation of all the guiding features which must provide the ultimate answer . " (Emphasis Supplied) The idea of 'once for all ' payment and 'enduring bene fit ' are not to be treated as something akin to statutory conditions; nor are the notions of "capital" or "revenue" a judical fetish. What is capital expenditure and what is revenue are not eternal varities but must needs be flexible so as to respond to the changing economic realities of business. The expression "asset or advantage of an enduring nature" was evolved to emphasise the element of a sufficient degree of durability appropriate to the context. The words of Rich J. in Herring vs Federal Commissioner of Taxation, 1946.72 CLR 543, dealing with an analogous provision in sec. 51 of Income tax Assessment Act of Australia may be re called. " . . Lord Cave L.C., in using the phrase 'enduring benefit ' in British Insulated and Helsby Cables Ltd. vs Atherton, 1926 A.C. 205,213 (HL), was not thinking of advantages that are permanent. There is a difference between the lasting and the everlasting. The time over which the thing 'endures ' is a matter of degree and one element only to be considered. Horses in the old days and motor trucks in these days are plant and their acquisition for the purpose of transport in business usually involves a capital expendi ture. But the horses were not immortal any more than the trucks have proved to be . . " 10. Shri Ramachandran submitted that the approach to the question by the Tribunal was influenced by an erroneous assumption that Meiji 's agreement envisaged the imperative of a totally new plant, for the exploitation of Meiji 's improved fermentation technology. Learned counsel invited our attention to the following passage in the order of the Tribunal where this postulate is found: "On the other hand, a completely new plant with a completely new process and a completely new technical know how was obtained by the assessee from Meiji and it 314 was in consideration of obtaining this techni cal know how that the assessee made the pay ment of $ 50,000." Shri Ramachandran submitted that the Tribunal had failed to take into account that even before the agreement, the assessee had set up a plant for the production of penicillin at an out lay of more Rs.66 lakhs and that the purpose of the agreement with Meiji was only to increase the yield; of penicillin and that no new venture envisaging the setting up of a new plant was ever intended by the assessee. The pro duction of penicillin which was the established line of business of the assessee, says learned counsel, was to be improved upon with the use of an improved process of fermen tation with new penicillin producing strains isolated and developed by Meiji so as to increase the unit yield of penicillin per milli litre of the culture medium. The supply of the technical know how and the flow sheet of the process and the written description of the specifications of the pilot plant from Meiji were incidental to and for the effec tive exploitation of the high penicillin yielding strains of the culture to be supplied by Meiji. Learned counsel submit ted that the whole range of the operations envisaged by the agreement, pertained to the area of the "profit earning process" and not the "profit earning machinery or apparatus". The cost relationship between what was involved in the improvisation of the process and the investment on the plant did, says counsel, indicate that the extant "profit earning machinery" was not sought to be supplanted. Learned counsel also urged that there was no material for the Tribunal to hold that the use of new process and tech nology from Meiji amounted to a new venture not already in the line of the assessee 's existing business or that it required the erection of a new plant discarding and sup planting the huge investment already existing. Learned counsel submitted that it was no body 's case that with the introduction of the Meiji process of fermentation with improved penicillin strains the existing plant and machinery of over Rs.66 lakhs had become obsolete and irrelevant or that the assessee had had to set up an altogether new plant to work out the improvised Meiji process of fermentation. Learned counsel for the Revenue, however, sought to maintain that all the criteria relevant to the question indicated that the assessee had acquired a new technical know how for a new process which required the setting up of a new plant. There was, according to Shri Lodha, a new venture based on a new technology and know how of unlimited duration which required a new plant for its commercial exploitation. There were, according to Shri Lodha, both the acquisition of 315 an enduring asset, and the commencement of a new venture. On a consideration of the matter we are persuaded to hold that there was no material for the Tribunal to record the finding that the assessee had obtained under the agree ment a 'completely new plant ' with a completely new process and a completely new technical know how from Meiji. Indeed, the High Court recognised the fallacy in this assumption of the Tribunal that a completely new plant was obtained by the assessee, though, however, the High Court attributed the inaccuracy to what it considered to be some inadvertence or misapprehension on the part of the Tribunal in that regard. But the High Court was inclined to the view that a complete ly new process and technical know how was obtained from Meiji under the agreement. Certain assumptions fundamental to, and underlying, the approach of the High Court are that the agreement dated 9.10.1963 envisaged a new process and a new technology so alien to the extant infrastructure, equip ment, plant and machinery in the assessee 's enterprise as to amount to an entirely a new venture unconnected with and different from the line of assessee 's extant business. It is in that sense that the expense was held not incurred for the purposes of the day to day business of the assessee but for acquiring a new capital asset. The business of the assessee from the commencement of its plant in 1961, it is undisputed, was the manufacture of penicillin. Even after the agreement the product manufac tured continued to be penicillin. The agreement with Meiji stipulated the supply of the "most suitable sub cultures" evolved by Meiji for purposes of augmentation of the unit yield of penicillin milli litres of the culture medium. Scientific literature on the bio synthesis of penicillin indicates that penicillin is derived from a fermentation process. Some penicillins are obtained from direct fermenta tion and some others by a combination of fermentation and subsequent chemical manipulation of the fermentation product. The manufacturing process, it is stated, consists of four processes: Fermentation, isolation, chemical modifi cation and finishing. Referring to the common basis of commercial production of penicillin in the New Encyclopaedia Britannica, (Micropaedia, Vol. VII) it is mentioned: "penicillin, antibiotic, the discovery of which in 1928 by Sir Alexander Fleming marked the beginning of the antibioticera. Fleming observed that colonies of Staphylococ cus aureus (the pus producing bacterium) failed to grow in those areas of a culture that had been accidentally contaminated 316 by the green mold Penicillium notatum. After isolating the mold, he found that it produced a substance capable of killing many of the common bacteria that infect human beings. This antibacterial substance, to which Fleming gave the name penicillin, was liberated into the fluid in which the mold was grown. This proc ess is the basis of all commercial production of penicillin . . " (p. 850) (Emphasis Supplied) In Encyclopedia of Chemical technology (Kirk Othmer) III Edn. 2 it is found mentioned: " . The specific characteristics of the industrial microbial strains, media, and fermentation conditions cannot be described in detail since these facts are considered trade secrets. The origin of strains, and general principles of culture maintenance, fermenta tion equipment, innoculum preparation, media, and fermentation conditions for penicillin and cephalosporin production, are public knowledge and are reviewed here. . . . . . Fleming 's original strain of P. notatum provided only low yields of penicillin . . . Superior penicil lin producing strain of P. chrysogenum have since been obtained by random screening of variant strains following mutation induction. All of the present day high yielding industri al strains are descendants of the NRRL 1951 strain. . " "Once a high yielding strain has been isolat ed, it is essential that the organism be maintained so that it remains viable and capable of producing the antibiotic at its original rate (54) . . . Under suit able conditions highyielding strains can be preserved for many years without loss of viability or antibiotic producing ability . . " (p. 899 90) We are inclined to agree with Shri Ramachandran that there was no material for the Tribunal to hold that the area of improvisation was not a part of the existing business or that the entire gamut of the 317 existing manufacturing operations for the commercial produc tion of penicillin in the assessee 's existing plant had become obsolete or inappropriate in relation to the exploi tation of the new sub cultures of the high yielding strains of penicillin supplied by Meiji and that the mere introduc tion of the new bio synthetic source required the erection and commissioning of a totally new and different type of plant and machinery. Shri Ramachandran is again fight in the submission that the mere improvement in or updating of the fermentation process would not necessarily be inconsistent with the relevance and continuing utility of the existing infra structure, machinery and plant of the assessee. It would, in our opinion, be unrealistic to ignore the rapid advances in Researches in antibiotic medical microbiology and to attribute a degree of endurability and permanance to the technical know how at any particular stage in this fast changing area of medical science. The state of the Art in some of these areas of high priority. research is constantly updated so that the know how cannot be said to be the element of the requisite degree of durability and none phemerality to share the requirements. and qualifications of an enduring capitalasset. The rapid strides in science and technology in the field should make us a little slow and circumspect in too readily pigeon holing an outlay, such as this as capital. The circumstance that the agreement in so far as it placed limitations on the right of the assessee in dealing with the know how and the conditions as to non partibility, confidentiality and secrecy of the know how incline towards the inference that the right pertained more to the use of the know how than to its exclusive acquisi tion. In the present case, the principal reason that influ enced the option of the High Court was that the initiation and exploitation of the new process brought in their wake a new venture requiring an altogether new plant. We are afraid, this view may not be justified. Clauses 2, 4 and 6 of the agreement provide: "(2) For and in consideration of the subcultures, design, flow sheet and written description to be furnished by Meiji to ALEM BIC PURSUANT to paragraph (1) hereof, Alembic shall pay to MEIJI in advance and in lump sum, such as amount as MEIJI is able to collect Fifty thousand U.S. Dollars ($ 50,000) net in Tokyo after deducting any taxes and charges to be imposed in India upon MEIJI with respect to the said payment to MEIJI. " 318 "4. MEIJI will give advice, to the extent considered necessary be MEIJI, on any diffi culty ALEMBIC may encounter in applying the subcultures and informations obtained by ALEM BIC from MEIJI to the large scale manufacture. The above provision shall be in force after MEIJI 's receipt of the amount set forth in paragraph (2) hereof until the end of two (2) years from the effective date of this agree ment . " "(6) Any of the subcultures and informations obtained by ALEMBIC from MEIJI shall be re garded as strictly confidential by ALEMBIC and its personnel and shall be used by ALEMBIC only in its Penicillin G plant in India, and shall not be disclosed to any other person, firm or agency, governmental or private. Alembic shall take all reasonable steps to ensure that such subcultures and information will not be communicated. ALEMBIC shall take all possible precautions against the escape from its premises of the strain obtained from MEIJI of propagated therefrom. ALEMBIC shall not apply for any patent to any country in relation to any of the subcultures and information obtained by ALEMBIC from MEIJI." As notified earlier the Tribunal in the course of its order, held: " . Meiji agreed to give the designs etc., not only for a pilot plant but for the manufacture of penicillin according to Meiji 's process on commercial scale. The assessee has to put in a larger plant modelled on the pilotplant." (Emphasis Supplied) Having regard to the terms of Clause 4 of the agreement, this conclusion is non sequitur. The improvisation in the process and technology in some areas of the enterprise was supplemental to the existing business and there was no material to hold that it amounted to a new or fresh venture. The further circumstance that the agreement pertained to a product already in the line of assessee 's established business and not to a new product indicates that what was stipulated was an improvement in the operations of the existing business and its efficiency and profitability not removed from the area of the day to day business of the assessee 's established enterprise. 319 14. It appears to us that the answer to the questions referred should be on the basis that the financial outlay under the agreement was for the better conduct and improve ment of the existing business and should, therefore, be held to be a revenue expenditure. Reference may also be made to the observations of this Court in C.I.T.v. CIBA of India Ltd.; , at 705. There is also no single definitive criterion which, by itself, is determinative whether a particular outlay is capital or revenue. The 'once for all ' payment test is also inconclusive. What is relevant is the purpose of the outlay and its intended object and effect, considered in a common sense way having regard to the business realities. In a given case, the test of 'enduring benefit ' might break down. In Commissioner of Income tax, Bombay vs Associated Cement Co. Ltd., (JT 282 2 287 at 290) this Court said: " . . As observed by the Supreme Court in the decision in Empire Jute Co. Ltd. vs Com missioner of Income Tax, [1980] 124 I.T.R.S.C.p. 1 that there may be cases where expenditure, even if incurred for obtaining an advantage of enduring benefit, may, none the less, be on revenue account and the test of enduring benefit may break down. It is not every advantage of enduring nature acquired by an assessee that brings the case within the principles laid down in this test. What is material to consider is the nature of the advantage in a commercial sense and it is only where the advantage is in the capital field that the expenditure would be disallowable on an application of this test . " 15. In the result, for the foregoing reasons the appeal succeeds and is allowed and the question of law referred to the High Court for its opinion in Income Tax Reference No. 78 of 1970 is answered in the affirmative and against the revenue. The judgment under appeal is set aside. , Likewise, the supplementary question of law raised in ITA 24 of 1971 before the High Court and now constituting the subject matter of the supplementary reference made by the Tribunal to this Court is answered in the negative and against Revenue. The appeal is accordingly allowed, but with no order as to costs. G.N. Appeal al lowed.

The appellant assessee, a company engaged in the manu facture of penicillin, in order to increase its production, entered into an agreement with a Japanese firm (Meiji) for supply of sub cultures of penicillin producing strains, technical know how, training, written description of the process on a pilot plant, design and specifications of the main equipment in such pilot plant, and to advise the asses see in the largescale manufacture of penicillin for a limit ed period of two years. As per the agreement, the assessee paid Rs.2,39,625 to Meiji and claimed the same as revenue expenditure in its Income tax assessment for the assessment year 1964 65. Disallowing the claim the Income Tax Officer held that the expenditure was for the acquisition of an asset or advantage of an enduring benefit and thus a capital outlay. The Appel late Assistant Commissioner confirmed the order of the Income Tax Officer. The further appeal of the assessee was dismissed by the Income Tax Appellate Tribunal holding that the payment made to Meiji was 'once for all payment ' made for the acquisition of a capital asset. At the instance of the assessee, the Tribunal referred to the High Court, the question as to whether the sum paid to Meiji was a revenue expenditure. The High Court answered the question in the negative. The present appeal is against that order of the High Court. The assessee also moved an application before the High Court 303 seeking a direction to the Tribunal to refer another ques tion of law as to whether a new plant was obtained or in stalled by the assessee consequent upon the agreement. Declining to interfere, the High Court observed that the Tribunal has not recorded a finding to the effect that a completely new plant was obtained by the assessee and the Tribunal 's decision that the assessee, had obtained a new process and a new technical know how from Meiji was not without evidence. Against the above order of the High Court, the assessee preferred an appeal to this Court, which was formally dis posed of with a direction to the Tribunal to draw up a supplementary statement of the case and refer for the opin ion of this Court, the further question of law as sought for by the assessee; and such a question to be considered in the present appeal. On behalf of the assessee, it was submitted that the Tribunal was influenced by an erroneous assumption that the agreement, envisaged the setting up of a new plant, whereas the objective of the agreement was only to increase the yield of penicillin in the existing plant itself. The Revenue contended that there was a new venture based on a new technology and know how of unlimited duration which required a new plant for its commercial exploration. Allowing the appeal, HELD: 1. The financial outlay under the agreement was for the better conduct and improvement of the existing business 'and should, therefore, be held to be a revenue expenditure. There is also no single definitive criterion which, by itself, is determinative whether a particular outlay is capital or revenue. The 'once for all ' payment test is also inconclusive. What is relevant is the purpose of the outlay and its intended object and effect, considered in a common sense way having regard to the business reali ties. The rapid strides in science and technology in the field should make this Court a little slow and circumspect in too readily pigeon holing an outlay, such as this, as capital. The circumstance that the agreement in so far as it placed limitations on the right of the assessee in dealing with the know how and the conditions as to non partibility, confidentiality and secrecy of the know how incline towards the inference that the right pertained more to the use of the know how than to its exclusive acquisition. [319A, B C; 317D E] CIT vs CIBA of India Ltd., ; ; CIT, Bombay vs 304 Associated Cement Co. Ltd., JT 282 (2) 287, relied on. The idea of 'once for all ' payment and 'enduring benefit ' are not to be treated as something akin to statuto ry conditions; nor are the notions of "capital" or "revenue" a judicial fetish. What is capital expenditure and what is revenue are not eternal verities but must needs be flexible so as to respond to the changing economic realities of business. The expression "asset or advantage of an enduring nature" was evolved to emphasise the element of a sufficient degree of durability .appropriate to the context. [313C] Herring vs Federal Commissioner of Taxation, ; , referred to. In computing the income chargeable under the head "Profits and Gains of Business or Profession", section 37 of the Income tax Act enables the deduction of any expenditure laid out or expended wholly and exclusively for the purpose of the business or profession, as the case may be. The fact that an item of expenditure is wholly and exclusively laid out for purposes of the business, by itself, is not suffi cient to entitle its allowance in computing the income chargeable to tax. In addition, the expenditure should not be in the nature of a capital expenditure. In the infinite variety of situational diversities in which the concept of what is capital expenditure and what is revenue arises it is well nigh impossible to formulate any general rule, even in generality of cases sufficiently accurate and reasonably comprehensive, to draw any clear line of demarcation. Howev er, some broad and general tests have been suggested from time to time to ascertain on which side of the line the out lay in any particular case might reasonably be held to fail. These tests are generally efficacious and serve as useful servants; but as masters they tend to be over exact ing. The question in each case would necessarily be whether the tests relevant and significant in one set of circum stances are relevant and significant in the case on hand also. [310C F; 312G] City of London Contract Corporation vs Styles, ; Vallambrosa Rubber Co. vs Farmer, ; British Insulated Helsby Cables Ltd. vs Atherton, ; Assam Bengal Cement Co. Ltd. vs Commissioner of Income tax, ; Sitalpur Sugar Works Ltd. vs Commissioner of Income tax, [1963] 49 ITR (SC) 160; Laksh miji Sugar Mills Co. Ltd. vs Commissioner of Income tax, ; Travancore Cochin Chemicals Ltd. vs Commissioner of Income tax, ; Sun News Papers 305 Ltd. & Associated News Papers Ltd. vs Federal Commissioner of Taxation, ; ; Regent Oil Co. Ltd. vs Strick, and B.P. Australia vs Commr. of Taxa tion of the Commonwealth of Australia, ; re ferred to. 4. The improvisation in the process and technology in some areas of the enterprise was supplemental to the exist ing business and there was no material to hold that it amounted to a new or fresh venture. The further circumstance that the agreement pertained to a product already in the line of assessee 's established business and not to a new product indicates that what was stipulated was an improve ment in the operation of the existing business and its efficiency and profitability not removed from the area of the day to day business of the assessee 's established enter prise. [318G H] 5. There was no material for the Tribunal to record the finding that the assessee had obtained under the agreement a 'completely new plant ' with a completely new process and a completely new technical know how from Meiji. Indeed, the High Court recognised the fallacy in this assumption of the Tribunal that a completely new plant was obtained by the assessee, though, however, the High Court attributed the inaccuracy to what it considered to be some inadvertence or misapprehension on the part of the Tribunal in that regard. But the High Court was inclined to the view that a complete ly new process and technical know how was obtained from Meiji under the agreement. Certain assumptions fundamental to, and underlying, the approach of the High Court are that the agreement envisaged a new process and a new technology so alien to the extent infra structure, equipment, plant and machinery in the assessee 's enterprise as to amount to an entirely new venture unconnected with and different from the line of assessee 's extant business. It is in that sense that the expense was held not incurred for the purposes of the day to day business of the assessee but for acquiring a new capital asset. But mere improvement in or updating of the fermentation process would not necessarily be inconsistent with the relevance and continuing utility of the existing infra structure, machinery and plant of the assessee. [315A D; 317B] The New Encyclopaedia Britannica, Micropaedia, Vol. II; Encyclopedia of Chemical Technology, Kirk Othmen, 3rd Edn. 2, referred to.

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: Criminal Appeal Nos. 422 424 of 1988. From the Judgment and Order dated 12.2.1986 and 4.9.1986 from the High Court of Punjab and Haryana in Crl. No. 5837 of 1985 and Crl. No. 4488 and 2993 of 1986 respectively. R.S. Suri for the Appellants. M.R. Sharma, Kapil Sibal, M.C. Dhingra, T.S. Arora and Miss Kamini Jaiswal for Respondents. PG NO 914 The Judgment of the Court was delivered by OJHA, J. These appeals raise an identical question of law and can conveniently be decided by a common order. Kailash Nath, respondent in Criminal appeal No. 422/88, was working as Executive Engineer in Public Works Department in the State of Punjab in the year 1979. On various dates in that year, he placed orders for the purchase of sign boards which were required by the Department to avoid accidents on roads and for traffic safety. The requisite sign boards were purchased in pursuance of the aforementioned orders. In the year 1980 some complaints were received in the Department against the respondent pertaining to the purchase of the sign boards. vigilance enquiry was instituted by the Vigilance Bureau to enquire into the complaints and ultimately a First Information Report was lodged on August 27, 1985 against the respondent under sub sections (1) and (2) of Section 5 of the Prevention of Corruption Act. In the meantime, the respondent had retired from the post of Executive Engineer with effect from October 31, 1982. The aforesaid First Information Report was challenged by the respondent in the High Court of Punjab and Haryana in Criminal miscellaneous No. 5837 M/85 on the ground that the same having been lodged about three years after his retirement and about six years after the event of purchase of sign boards in 1979 was in the teeth of Rule 2.2 of the Punjab Civil Service Rules, Volume II and consequently was liable to be quashed. The plea raised by the respondent found favour with the High Court which relying on an earlier decision of that Court in Des Raj Singhal vs State of Punjab, quashed the First Information Report by its order dated February 12, 1986. Mangal Singh Minhas, the respondent in Criminal Appeal Nos. 423 24/1988, was posted in the Industrial Supply Section of the Directorate of Industries where various types of raw materials including wax and import lincences are dealt with. A First Information Report was lodged against the respondent on June 19, 1980. It appears that the respondent applied in the High Court of Punjab and Haryana for quashing of the First Information Report on account of which challan could not be filed and it was only when the challenge to the First Information Report was repelled by the High Court that a challan was filed on August 28, 1985 In the meantime, the respondent retired as Superintendent, Directorate of Industries, Punjab, on September 30, 1983. On the challan being filed the respondent again made an application in the High Court for quashing of the prosecution against him. This prayer has been allowed by the PG NO 915 High Court by its order dated September 4, 1986 and the prosecution against the respondent has been quashed relying on the aforesaid decision in the case of Des Raj Singhal vs State of Punjab. The present appeals have been filed by the State of Punjab against the aforesaid orders passed on the application of Kailash Nath and Mangal Singh Minhas respectively. It has been urged by learned counsel for the appellant that Rule 2.2 of the Punjab Civil Service Rules has been misinterpreted by the High Court in holding that the said Rule placed an embargo on initiating judicial proceedings for prosecution of a government servant on the expiry of four years of the cause of action or the event referred to in the said rule and the High Court committed an error of law in taking the said view. Learned counsel for the respondents, on the other hand, submitted that the view taken by the High Court was correct and in view of Rule 2.2 the First Information Report against Kailash Nath and the prosecution as against Mangal Singh Minhas were rightly quashed. In order to appreciate the respective submissions made by learned counsel for the parties with regard to the scope and interpretation of Rule 2.2, it would be useful to extract the relevant portion of sub rule (b) of Rule 2.2. It reads: "(b) The Government further reserve to themselves the right of withholding or withdrawing a pension or any part of it, whether permanently or for a specified period and the right of ordering the recovery from a pension of the whole or part of any pecuniary loss caused to Govt. if in a departmental or judicial proceedings, the pensioner is found guilty of grave misconduct or negligence during the period of his service, including service rendered upon re employment after retirement. Provided that: (1) . . (2) . . (3) No such judicial proceedings, if not instituted while the officer was in service, whether before his retirement or during his re employment shall be instituted in respect of a cause of action which arose or an event which took place more than four years before such institution: PG NO 916 Explanation: For the purpose of his rule. (a) . . (b) a judicial proceeding shall be deemed to be instituted (i) in the case of a criminal proceedings on the date on which the complaint or report of the police officer on which the Magistrate takes cognizance is made; . ." There is no dispute that Punjab Civil Service Rules have been framed by the Governor in exercise of the power conferred on him by Article 309 of the Constitution and that Rule 2.2 occurs in chapter II of Volume II of the Rules dealing with "Ordinary Pension". It has been urged by the learned counsel for the appellant that keeping in view the scope of Article 309 as also the purpose of Rule 2.2, the said rule cannot be interpreted to be a rule placing an embargo on prosecution of a government servant on the expiry of a period of four years from the date of cause of action or event mentioned therein. Having heard learned counsel for the parties, we find substance in the submission made by learned counsel for the appellant. Article 309 empowers making of rules regulating 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. On the plain language of Article 309, the proposition that any rule framed under this article has to be confined to recruitment and conditions of service of persons mentioned therein admits of no doubt. The rule in question certainly does not purport to regulate recruitment . The question which, therefore, presents itself for answer is whether the said rule if it is to be interpreted as one placing an embargo on institution of judicial proceedings as against a person referred to therein for prosecution in respect of a cause of action which arose or an event which took place more than four years before such institution, as has been held by the High Court can be treated to be a rule regulating the condition of service of such a person. Learned counsel for the respondents asserts that the embargo aforesaid is a condition of service calculated to ensure a person mentioned in the said rule peace of mind after retirement. According to learned counsel for the respondent every employer wants his employee to be efficient and to achieve this object, various incentives are given. Consequently, according to learned counsel, an assurance to an employee that he shall not be prosecuted after his retirement, even though guilty of committing a grave misconduc or negligence during the PG NO 917 period of his service, after the lapse of a particular time which has been fixed in the instant case as four years would fall within the purview of "conditions of service" as contemplated by Article 309. We find it difficult to agree with the submission. As explained by this Court in State of Madhya Pradesh and Ors. vs Shardul Singh, and reiterated in I.N. Subba Reddy vs Andhra University, ; the expression "conditions of service" means all those conditions which regulate the holding of a post by a person right from the time of his appointment till his retirement and even beyond it, in matters like pension etc. In the normal course what falls within the purview of the term "conditions of service" may be classified as salary or wages including subsistance allowance during suspension, the periodical increments, pay scale, leave, provident fund, gratuity, confirmation, promotion, seniority, tenure or termination of service, compulsory or premature retirement, superannuation, pension, changing the age of superannuation, deputation and disciplinary proceedings. Whether or not a government servant should be prosecuted for an offence committed by him obviously cannot be treated to be something pertaining to conditions of service. Making a provision that a government servant, even if he is guilty of grave misconduct or negligence which constitutes an offence punishable either under the Penal Code or Prevention of Corruption Act or an analogous law should be granted immunity from such prosecution after the lapse of a particular period so as to provide incentive for efficient work would not only be against public policy but would also be counter productive. It is likely to be an incentive not for efficient work but for committing offences including embezzlement and misappropriation by some of them at the fag end of their tenure of service and making an effort that the offence is not detected within the period prescribed for launching prosecution or manipulating delay in the matter of launching prosecution. Further, instances are not wanting where a government servant may escape prosecution at the initial stage for want of evidence but during the course of prosecution of some other person evidence may be led or material may be produced which establishes complicity and guilt of such government servant. By that time period prescribed, if any, for launching prosecution may have expired and in that event on account of such period having expired the government servant concerned would succeed in avoiding prosecution even though there may be sufficient evidence of an offence having been committed by him. Such a situation, in our opinion, cannot be created by framing a rule under Article 309 of the Constitution laying down an embargo on prosecution as a condition of service. PG NO 918 There is another cogent ground on account of which the submission that giving a government servant peace of mind after his retirement in his old age can be a good ground to grant him immunity from prosecution cannot be accepted. This would on the face of it be discriminatory and thus arbitrary inasmuch as if peace of mind in old age can be a good ground for immunity from prosecution for offences committed by a person, there seems to be no reason why such immunity may not be available to all old persons and should be confined only to government servants. On the face of it, the government servants cannot constitute a class by themselves so as to bring their cases within the purview of reasonable classification, if the purpose of granting immunity from prosecution is ensuring peace of mind in old age. Even on a plain reading of Rule 2.2, it is apparent that the intention of framing the said rule was not to grant immunity from prosecution to a government servant, if the conditions mentioned the rein are satisfied. As seen above, Rule 2.2 is in chapter II of the Punjab Civil Service Rules which deals with ordinary pension. There can be no manner of doubt that making provision with regard to pension falls within the purview of "conditions of service". The embargo on prosecution spelt out by the High Court is not to be found in the main rule 2.2 but in the third proviso to the said rule. It is the third proviso which enjoins that no judicial proceedings. if not instituted while the officer was in service, whether before his retirement or during his re employment shall be instituted in respect of a cause of action which arose or an event which took place more than four years before such institution. The scope of a proviso is well settled. In M/s Ram Narain Sons Ltd. vs Asst. Commissioner of Sales Tax and others, [1955]2 SCR 483, it was held: "It is a cardinal rule of interpretation that a proviso to a particular provision of statute only embraces the field which is covered by the main provision. It carves out an exception to the main provision to which it has been enacted as a proviso and to no other. " The same view was reiterated in Abdul Jabar Butt vs State of Jammu & Kashmir, ; where it was held that a proviso must be considered with relation to the principle matter to which it stands as a proviso. PG NO 919 With regard to scope of a proviso, it was urged by the learned counsel for the respondents relying on the decision of this Court in Ishverlal Thakorelal Almaula vs Motibhai Nagjibhai, [1966] 1 SCR 367 that even though the proper function of a proviso is to except or qualify something enacted in the substantive clause which but for the proviso would be within that clause, there is no rule that the proviso must always be restricted to the ambit of the main enactment. It may at times amount to a substantive provision. This submission too does not advance the case of the respondent inasmuch as even if in a given case a proviso may amount to a substantive provision, making of such a substantive provision will have to be within the framework of Article 309. If a rule containing an absolute or general embargo on prosecution of a government servant after his retirement for grave misconduct or negligence during the course of the service does not fall within the purview of laying down conditions of service under Article 309, such a provision cannot in the purported exercise of power under Article 309 be made by either incorporating it in the substantive clause of a rule or in the proviso thereto. In view of what has been said above and keeping in mind the scope of rule making power under Article 309 of the Constitution, the third proviso to Rule 2.2 cannot be interpreted as laying down an absolute or general embargo on prosecution of government servant if the conditions stated therein are satisfied. Even if on first impression the said rule may appear to be placing such an embargo it has to be interpreted by taking recourse to the well settled rule of reading down a provision so as to bring, it within the framework of its source of power without, of course, frustrating the purpose for which such provision was made. Clause (b) of Rule 2.2 which can be called the substantive clause reserves to the government the right of withholding or withdrawing a pension or any part of it, whether permanently or for a specified period and the right of ordering the recovery from a pension of the whole or part of any pecuniary loss caused to Govt. if, in a departmental or judicial proceeding, the pensioner is found guilty of grave misconduct or negligence during the period of his service, including service rendered upon re employment after retirement. The purpose of the third proviso thereto is, as is the scope of a proviso, to carve out an exception to the right conferred on the government by the substantive clause if the conditions contemplated by the proviso are fulfilled. This purpose can be achieved if the said proviso by adopting the rule of reading down is interpreted to mean that even if a government servant is prosecuted and punished in judicial proceedings instituted in respect of cause of action which arose or an event which took place more than four years PG NO 920 before such institution the government will not be entitled to exercise the right conferred on it by the substantive provision contained in clause (b) with regard to pension of such a government servant. The word "Such" in the beginning of the third proviso also supports this interpretation. At this place, it may be pointed out that an analogous provision contained in Article 351 A of the Madras Pension Code came up for consideration before the Madras High Court in P. V. Venkatavardan vs The State of Tamil Nadu by the Deputy Superintendent of Police, Vigilance and Anti corruption, Vellore, [1979] 23 MLJ (Crl) 275. Article 35 1 A in so far as it is relevant for the purpose of this case is reproduced hereunder: 351 A. Government further reserve to themselves the right of withholding or withdrawing a pension or any part of it, whether permanently or for a specified period and the right of ordering the recovery from a pension of the whole or part of any pecuniary loss caused to Government, if, in a departmental or judicial proceeding, the pensioner is found guilty of grave misconduct or negligence during the period of his service, including service rendered upon re employment after retirement: Provided that: (a). . (b). . (c) no such judicial proceeding, if not instituted while the officer was in service, whether before his retirement or during his re employment shall be instituted in respect of a cause of action which arose or an event which took place more than four years before such institution; . A similar submission as has been made by the learned counsel for the respondents in the instant cases was made in the case of Venkatavardan, (supra) also. section Natarajan, J. as his Lordship then was repelled the submission and held: "The other point urged was that as per Article 351 A of the Madras Pension Code, the right of the Government to PG NO 921 withhold the pension of a Government sevant will not cover events of grave misconduct or negligence committed by the government servant more than four years prior to the institution of the departmental proceedings. As the offences alleged to have been committed by the petitioner are referable to the years 1968 and 1969, the petitioner contends, the filing of a charge sheet on 5th December, 1973 against him was beyond the period of four years contemplated under Article 351 A of the Madras Pension Code and, therefore, the proceedings were vitiated. Even this contention must fail, for, a prosecution under section 161 and/or section 165, Indian Penal Code, read with section 5(1)(a) and 5(2) of the Prevention of Corruption Act, is not controlled or restricted or trammelled in any manner by the Madras Pension Code. The provisions of the Pension Codemay, if at all, be relied on only for safeguarding the pension and cannot be pressed into service to defeat a prosecution on the threshold itself. " The decision of this Court in State of Punjab vs Charan Singh, ; also throws some light on the principle involved in the instant cases. In that case Rule 16.38 of the Punjab Police Rules 1934 came up for consideration. The Punjab Police Rules laid down the procedure to be followed in imposing punishment on a Police Officer found guilty of misconduct or a criminal offence and made an exhaustive provision for departmental inquiries. Rule i6.38 laid down the guidelines to be followed by the Superintendent of Police in dealing with a complaint about the commission of a criminal offence by a police officer in connection with his official relations with the public. The respondent Charan Singh in that case was a police officer and was convicted and sentenced of an offence under section 5(1)(d) read with section 5(2) of the Prevention of Corruption Act. His conviction as well as sentence was set aside and he was acquitted by the High Court on the ground that there was non compliance with the provisions of Rule 16.38. Setting aside the order of acquittal and remanding the case to the High Court for fresh disposal in accordance with law, this Court held that Rule 16.38 was not designed to be a condition precedent to the launching of a prosecution in a Criminal Court; it was in the nature of instructions to the Department and was not meant to be of the nature of sanction or permission for a prosecution, nor could it overrid the provisions of the Code of Criminal Procedure and the Prevention of Corruption Act. PG NO 922 We may also point out that the correctness of the judgment of the High Court of Punjab and Haryana in the case of Des Raj Singhal, (supra), relying upon which the orders appealed against in the instant cases have been passed, was challenged by the State of Punjab in this Court in Criminal Appeal No. 40 of 1987. The question of law raised in the appeal was, however, not gone into and was left open to be decided in an appropriate case inasmuch as this Court on the facts of that case, in its order dated April 15, 1987 took the view that it would be a futile exercise to consider the question of law involved in the appeal for the reason that the respondent had retired as long as on December 13, 1979. We now proceed to consider the other submissions made by learned counsel for the respondents. It was urged that since government had the power to make suitable amendments even retrospectively in Rule 2.2 of the Punjab Civil Service Rules in order to bring home its intention, it was not open to it to challenge the validity of Rule 2.2. Suffice it to say, so far as this submission is concerned that the purpose of the State of Punjab in filing these appeals is really to get the interpretation made by the High Court of Rule 2.2 reversed and to have the interpretation made by the Trial Court in the case of Des Raj Singhal, (supra) restored and not to get the said rule declared ultra vires. It was also urged by the learned counsel for the respondents that the third proviso to clause (b) of Rule 2.2 as for the benefit of a government servant and virtually incorporates the principle underlying Article 21 of the Constitution by fixing four years as the limit for initiating prosecution. In support of the submission reliance was placed on a full bench decision of the Patna High Court in Madhesh wardhari Singh and Another vs State of Bihar, AIR 1986 Patna Vol. In that case, it was held that in all criminal prosecutions the right to a speedy public trial is now an inalienable fundamental right of the citizen under Article 21 of the Constitution and it extends to all criminal proceedings for all offences generically irrespective of their nature. It was also held that giving effect to fundamental right of a speedy public trial, therefore, would not in any way conflict with the provisions of the Code of Criminal Procedure and that unless the fundamental right to speedy trial is to be whittled down into a mere pious wish, its enforceability in Court must at least be indicated by an outer limit to which an investigation and the trial in a criminal prosecution may ordinarily extend. PG NO 923 We are informed that special leave has been granted by this Court against the aforesaid judgment and its correctness is thus sub judice. That apart, even if the soundness of the principle that there should be speedy trial may not be disputed, the said principle cannot be invoked by the respondents in support of their interpretation of the third proviso to clause (b) of Rule 2.2 framed under Article 309 of the Constitution whose purpose, as already indicated above, is not to place an embargo on prosecution. It is always open to quash a prosecution on the ground of unexplained unconscionable delay in investigation and prosecution on the facts of a given case. It was then urged by the learned counsel for the respondents that the third proviso to clause (b) of Rule 2.2 is in the nature of a beneficent legislation and in case of doubt has to be interpreted in favour of the person for whose benefit the Rule has been framed. In our opinion, keeping in view the scope of the power to frame a rule under Article 309 and the purpose of Rule 2.2, there is no doubt with regard to the interpretation of the said rule. By applying the rule of interpretation with regard to a beneficent legislation, a benefit never intended to be conferred cannot be conferred. Learned counsel for the respondents also submitted that the State enjoys plenary power in the matter of prosecution for an offence and if the Government in its wisdom thought it fit that a government servant after his retirement should not be be prosecuted for grave misconduct of action arose or the incident took place more than your years before the institution of judicial proceedings for prosecution, no exception can be taken to that power. In this connection, apart form relying on various sections of the Code of Criminal Procedure such as sections 197,321,432,433 and 468 and the power of the Governor to grant pardon, learned counsel for the respondents also relied on Harold J. Laski 's "A Girammar Of Politics" for the proposition that every government has a power to decide not to prosecute or prosecution having been commenced to decide upon its discontinuance. We are of opinion that this submission too does not help the respondents in these appeals for the simple reason that the third proviso to clause (b) of Rule 2.2 has not been framed for that purpose but has been framed for a different purpose namely to provide an exception to the power of the government in the matter of withholding or withdrawing etc. of pension of a retired government servant contained in clause (b) of Rule 2.2. PG NO 924 Lastely, it was urged by learned counsel for the respondents in these appeals that on the same principle on which criminal appeal No. 40 of 1987 in the matter of Des Raj Singhal, was dismissed these appeals also deserve to be dismissed. So far as this submission is concerned, we find substance as regards the appeal against Kailash Nath. The First Information Report in this case was lodged on 27th August, 1985, that is, after about six years of the accrual of the cause of action or taking place of the events which took place in 1979 and after about three years even from 3 1st October 1982 when the respondent retired from service. Now in 1988 it would be pursuing a stale matter. In this view of the matter, we are of the opinion that the order of the High Court quashing the First Information Report as against Kailash Nath, respondent in criminal appeal No. 422 of 1988, deserves to be maintained though on a different ground. The facts of the case, with regard to Mangal Singh Minhas, respondent in Criminal Appeal Nos. 423 24 of 1988, however, are different. In this case, as seen above, First Information Report was promptly lodged on June 19, 1980. The filing of challan, however, was delayed on account of the steps taken by the respondent for getting the First Information Report quashed. He retired about three years after lodging of the First Information Report and during the pendency of the proceedings in the High Court for quashing of the said First Information Report. Since the High Court quashed the prosecution of Mangal Singh Minhas on one ground alone based on its earlier decision in the case of Des Raj singhal and did not consider other grounds, if any, that may have been raised by him for quashing of the prosecution, we are of the opinion that after setting aside the orders appealed against in this case, the High Court should be required to decide afresh the petition mde by Mangal Singh Minhas for quashing of the prosecution on grounds, if any, other than those which have already been considered above. In view of the foregoing discussion, Criminal Appeal No. 422 of 1988 as against Kailash Nath is dismissed and the order quashing the First Information Report in his case is maintained even though on another ground; whereas Criminal Appeal Nos. 423 24 of 1988 as against Mangal Singh Minhas are allowed and the orders appealed against passed by the High Court as set aside. The High Court shall however, decide the petition made by Mangal Singh Minhas afresh in accordance with law in the light of the observations made above. R.S.S. Crl. A No. 422/88 is dismissed and Crl. A Nos. 423 24/88 is allowed.

On the basis of a vigilance enquiry against Kailash Nath, respondent, pertaining to the purchase of sign boards by him while working as Executive Engineer in the State Public Works Department, a First Information Report was lodged against him in August 1985. The respondent challenged the F.I.R. in the High Court on the ground that the same having been lodged about three years after his retirement in October 1982 and about six years after the event of purchase in 1979. was in the teeth of proviso (3) to Rule 2.2(b) of the Punjab Civil Service Rules, Volume II, which provided that no judicial proceedings if not instituted while the officer was in service, shall be instituted in respect of a cause of action which arose or an event which took place more than four years before such institution. The same ground was taken by Mangal Singh Minhas, respondent, when a challan was filed against him. The High Court, relying on its earlier decision, quashed the First Information Report and the challan. Dismissing the State appeal against Kailash Nath and allowing it against Mangal Singh Minhas, this Court, HELD: (1) Any rule framed under Article 309 has to be confined to recruitment and conditions of service of persons mentioned therein.[916E] (2) The expression "conditions of service" means all those conditions which regulate the holding of a post by a person right from the time of his appointment till his retirement and even beyond it,in matters like pension etc. PG NO 911 PG NO 912 (3) Rule 2.2. is in Chapter II of the Punjab Civil Service Rules which deals with ordinary pension. There can be no manner of doubt that making provision with regard to pension falls within the purview of "conditions of service". [918D] (4) Whether or not a government servant should be prosecuted for an offence committed by him obviously cannot be treated to be something pertaining to conditions of service. [917D] (5) Even on a plain reading of Rule 2.2, it is apparent that the intention of framing the said rule was not to grant immunity from prosecution to a government servant, if the conditions mentioned therein are satisfied. [918C] (6) Making a provision that a government servant, even if he is guilty of grave misconduct or negligence which constitutes an offencepunishable either under the Penal Code or Prevention of Corruption Act or an analogous law should be granted immunity from such prosecution after the lapse of a particular period so as to provide incentive for efficient work would not only be against public policy but would also be counter productive. [917D E] (7) On the face of it, the government servants cannot constitute a class by themselves so as to bring their case within the purview of reasonable classification, if the purpose of granting immunity from prosecution is ensuring peace of mind in old age. [918B] (8) Even if in a given case a proviso may amount to a substantive provision, making of such a substantive provision, will have to be within the framework of Article 309. If a rule containing an absolute or general embargo on prosecution of a government servant after his retirement for grave misconduct or negligence during the course of his service does not fall within the purview of laying down conditions of service under Article 309, such a provision cannot in the purported exercise of power under Article 309 be made by either incorporating it in the substantive clause of a rule or in the proviso thereto. [919C D] (9) Even if on first impression Rule 2.2 may appear to be placing an embargo on prosecution it has to be interpreted by taking recourse to the well settled rule of reading down a provision so as to bring it within the framework of its source of power, without, of course frustrating the purpose for which such provision was made. This purpose can be achieved if the said proviso by adopting the rule of reading down is interpreted to mean that even if PG NO 913 a government servant is prosecuted and punished in judicial proceedings instituted in respect of cause of action which arose or an event which took place more than four years before such institution the government will not be entitled to exercise the right conferred on it by the substantive provision contained in clause (b) with regard to pension of such a government servant. The word "such" in the beginning of the third proviso also supports this interpretation. [919D H;920A] (10) By applying the role of interpretation with regard to a beneficent legislation, a benefit never intended to be conferred cannot be conferred. [923D] (11) It is always open to quash a prosecution on the ground of unexplained unconscionable delay in investigation and prosecution on the facts of a given case. In this view of the matter. the appeal against Kailash Nath is dismissed whereas the appeals against Mangal Singh Minhas are allowed. [924F] Des Raj Singhal vs State of Punjab, ; State of Madhya Pradesh & Ors. vs Shardul Singh, ; I.N. Subba Reddy vs Andhra University, ; ; M/s. Ram Narain Sons Ltd. vs Asstt. Commissioner of Sales Tax and Others, ; ; Abdul Jabar Butt vs State of Jammu & Kashmir, ; ; Ishverlal Thanorelal Almaule vs Motibhai Nagjibhai [1966] 1 SCR 367; P.P. Venkatavardan vs The State of Tamil Nadu by the Deputy Superintendent of Police, Vigilance and Anti corruption Vellore, [1979] 23 MLJ (Crl.) 275; State of Punjab vs Charan Singh, ; ; Madhashwardhari Singh and Another vs State of Bihar, AIR (1986) Patna (Vol.73) page 324, referred to.

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Appeal No. 524 of 1966. Appeal by special leave from the judgment and order dated December 2, 1964 of the Jammu and Kashmir High Court in Civil First Appeal No. 7 of 1964. B. C. Misra, section K. Mehta and K. L. Mehta, for the appellant. M. C. Setalvad and Mohan Behari Lal, for respondent No. 1. The Judgment of the Court was delivered by Shelat J. Respondent No. 1 Mod a suit in the Court of Addi tional District Judge, Jammu for possession of the house in dispute, owned by the second respondent and sold by her to the appellant. The cause of action pleaded was that respondent No. 1 had a right of prior purchase under section 15 (fourthly) of the 274 Right of Prior Purchase Act, II of 1993 as her house and the house in question had a common outer entrance within the meaning of that clause. The trial court and the High Court on evidence held that the two houses had a common outer entrance and decreed the suit on respondent No. 1 paying the sale price of Rs. 13,000/ . Hence this appeal by special leave. On behalf of the appellant, the vendee, Mr. Misra raised two questions (1) that on a proper construction of section 15 (fourthly) this was not a case of the two houses having a common outer entrance as that clause requires that such an entrance must be owned jointly by the owners of such two houses, and (2) that section 15 (fourthly) is ultra vires as it offends article 19(1)(f) and constitutes an Unreasonable restriction on the appellant 's right to property. The evidence shows that the entire property consisting of these two, together with other houses in the vicinity were owned at one time by witness Mohinder Nath and one Uttam Chand. Subsequently they sold some of them. To give to these houses access to the public road, called the Secretariat Road, they retained to themselves the ownership of the lane but granted a right of way thereon to the said vendees. The lane ends as a blind alley where the two houses are situate. The plan produced during the trial shows that there is first a common outer entrance through which one enters into this lane from the Secretariat Road and at a distance of about IO yards there is another such entrance marked 'common entrance ' in the plan through which one enters into the alley and on which the doors of these and certain other houses open. During the course of the trial, the trial Judge made local inspection and recorded his inspection note which was admitted by the parties as correct. The inspection note is as follows : "On spot I find that there is a common outer entrance from the street to number of houses and then again about 1 0 yards from the common outer entrance there is another common outer entrance of six houses and there is a street which ends at the houses of the plaintiff and the suit house. At the end of the street the outer door of the plaintiff and the suit house abut". There is thus no room for dispute that the said passage leading to the said Secretariat Road has two common entrances, one where it opens on to the said Road and the other at a distance of about 10 yards therefrom. Apart from the inspection note, the parties led oral and documentary evidence on a consideration of which the trial Judge recorded the following finding : "Both the parties agree with this note and they admit that there is a common outer entrance from the Municipal Street to the plaintiff 's house and the suit house. The difference between the plaintiff 's case and the defen 275 dant 's case as made out by the counsel for the defendant is that the plaintiff 's house and the defendant 's house both open into the blank alley (kucha sarbasta) and into the same alley opens some more houses. The plaintiff has not shown that the alley was the private property of the owners of the houses which abut on that. According to the statement of Pt. Mohinder Nath that alley belongs to him and Pt. Uttam Chand. The owners of the houses which abut in that alley are entitled to right of way over it. As they are not owners of the alley so according to the counsel for defendant No. 1 the plaintiff is not entitled to right of prior purchase on the basis of their having a common outer entrance . The words used in the subclause are that the property sold and the property on the basis of which the right is exercised must have a common outer entrance. It is not essential that the street which leads from outer entrance to the houses of the plaintiff and the defendant should be owned by them". The High Court also came to a similar finding and held that once it had been shown that the owners of the four houses abutting on that alley had exclusive right of way over it, it was enough to vest in them the right of pre emption. The High Court also held that it was not necessary to prove that the common outer entrance was jointly owned by the owners of the houses. It is therefore clear that the question raised by the appellant was not that there was no common outer entrance to the two houses but that on a proper construction of section 15 (fourthly), such a common outer entrance would not give rise to a right of prior purchase unless the owner claiming such a right and the owner of the house in question jointly own the common outer passage. The construction urged before the trial court and the High Court and rejected by both of them was once again urged before us by Mr. Misra. The language of section 15(fourthly) is plain. The section in unambiguous language provides that "the right of prior purchase. . . . shall vest Fourthly : Where the sale is of property having a common outer entrance with other properties in the owners of such properties". The section clearly says that where the sale is of property having a common outer entrance with other properties, the right of prior purchase shall vest in the owners of such properties. There is nothing in the section to warrant the construction that such a right would vest only if the common outer entrance is jointly owned by the owners of such houses. What the section requires is the existence of a common outer entrance which need not be owned by the person claiming the right of pre emption. Whether L5Sup. Cl/67 5 276 there is such a common outer entrance which would attract the provisions of section 15(fourthly) would, therefore, depend upon the facts proved in each case. In the present case, both the trial court as also the High Court came to the conclusion from the evidence led by the parties that there does exist a common outer entrance for both the houses. Nothing has been shown by Mr. Misra from the evidence which would justify our disagreeing with that conclusion. Let us now turn to the decisions relied upon by Mr. Misra. In Naba and others vs Piara Mal and another(1), the High Court of Punjab held that the entrance to the alley in question was not 'a common entrance from the street ' of the pre emptor and the vendor within the meaning of section 13(1)(fifthly) of the Punjab Preemption Act, 1905. The decision, however, turned on the facts and the situation of the alley which was said to be the common entrance to the houses in question. The High Court found that the evidence led by the plaintiff was insufficient to prove that the said alley was the private property of the owners of the houses opening on to it or that none except the owners thereof had free access to or right of way over it. Nor was it shown that the houses at one time constituted one building and were subsequently subdivided and that the privacy of those houses was ensured by the blind alley as it ordinarily would be by the existence of a common entrance. In Nanak Chand vs Tek Chand and others(2), the right of pre emption was claimed on the ground that there was a step leading to a thara which formed part of the plaintiff 's house and the house in question. The High Court held that the step could not be called either a 'staircase ' or a common entrance from the street within the meaning of section 13(1)(fifthly) of the Punjab Preemption Act, 1905. In Asa Nand vs Mahmud(3), the dispute was between two parties claiming the right of pre emption and the High Court rejected the defendant 's claim on the ground that he had not even the right of way over the compound and his use of it was only permissive. In Ram Chand vs Ram Jowaya (4 ), the Punjab Chief Court held that a public street leading from the main road to two houses cannot be considered a common entrance from the street and that to bring a case within section 1 3 (1) (fifthly) it would not be sufficient to prove that the street into which the house sold and the house of the person claiming pre emption opened was common to the two properties or that each had an entrance from that street. There must be an entrance from the street which is common to both properties. None of these decisions, in our view, can assist, for, each turned on its own facts which determined whether there was in fact a common entrance within the meaning of the Punjab Act. (1) 912) 44 P. R 159. (2) A.I.R. 1927 Lah. (2) A.I.R. 192) Lah. (4) 277 In the instant case, there is the admitted evidence that the alley, at the blind end of which the two houses are situate, has a common entrance which opens into a passage of about 10 yards where there is again another common entrance opening on to the public road. It is also not in dispute that the entire passage is owned by the original owners of the houses opening into this passage and that at the time of the sales of some of these houses they had granted a right of way over this passage to them so that the said houses may have access from the public road. The said passage, therefore, is the private property of the said Mohinder Nath and Uttam Chand and the right of way over it is enjoyed only by the owners of the houses opening on to it. The appellant did not raise any dispute with regard to these facts. Indeed, the only question raised by her was that in order to constitute a common outer entrance under section 15(fourthly) such an entrance must be owned jointly by the owner of the house in question and the owner claiming pre emption. As aforesaid, both the courts negatived the suggested construction and we think that they were right for the plain words of the section do not justify such a construction. The question next is whether section 15(fourthly) providing for the right of prior purchase amounts to an unreasonable restriction. There can be no doubt that such a provision amounts to a restriction in the sense that a person purchasing such a property has to give way to the person claiming such a right. The nature of the right is expressed in felicitous language by Mahmood J. in Govind Dayal vs Inayatullah(1). The right of pre emption, he observed : "is simply a right of substitution, entitling the pre emptor, by means of a legal incident to which sale itself was subject, to stand in the shoes of the vendee in respect of all the rights and obligations arising from the sale, under which he derived his title. It is, in effect, as if in a sale deed the vendee 's name were rubbed out and preemptor 's name inserted in its place". This statement was approved by this Court in Bishan Singh vs Khazan Singh(2), and the Court summarising the incidents of the right observed : "That the right of pre emption is not a right to the thing sold but a right to the offer of a thing about to be sold. This right is called the primary or inherent right. The pre emptor has a secondary right or a remedial right to follow the thing sold. It is a right of substitution but not of re purchase, i.e., the pre emptor takes the entire bargain and steps into the shoes of the original vendee". That being the nature of the right, the next question is whether the restriction on the vendee 's right of property created by section 15 (fourthly) can be said to be an unreasonable restriction. A similar (1) [1885]1.L.R.7 All.775,809. (2) ; 278 question in regard to a similar provision in section 16 of the Punjab Pre emption Act, 1913 arose in Babu Ram vs Baijnath(1). Section 16 of that Act provided for pre emption on six grounds, the first, third, fourth and sixth grounds being in favour of co sharers, owners of common staircases, owners of common entrance from a street and owners of contiguous property. The Court held that the first, third and fourth grounds of pre emption did not offend Articles 19(1)(f) and 14 and were valid. The Court observed that the law under the first ground providing for pre emption by co sharers imposed reasonable restriction in the interest of the general public on the right under article 19(1)(f). If an outsider was introduced as a co sharer in a property it would make common management extremely difficult and destroy the benefits of ownership in common. The advantage of excluding a stranger in the case of a residential house was all the greater as it would avoid all kinds of disputes. The third ground which applied in a case where the property sold had a staircase common with other properties stood practically on the same footing as that of co sharers. Regarding properties having a common entrance from the street with other properties, the Court held that that ground was similar to the first and the third grounds. At page 741 dealing with the fourth ground, the Court observed that the buildings were in a common compound and perhaps were originally put up by members of one family or one group with a common private passage from the public street. In such a case the owners of the buildings would stand more or less in the Position of co sharers, though actually there might be no co sharership in the house sold. Such a case would approximate to cases of a common staircase and co sharers and, therefore, the right of preemption in such a case was sustainable. The reasoning employed in upholding the validity of the fourth ground in section 16 of the Punjab Act would apply with equal force to the provisions of section 15(fourthly) before us. Consequently, the contention that the impugned provision amounts to an unreasonable restriction cannot be sustained. Both the contentions raised by Mr. Misra fail. The appeal is dismissed with costs. V.P.S. Appeal dismissed. (1) [1962]3Supp.S.C.R.724.

The second respondent sold her house to the appellant. The first respondent filed a suit for possession of the house on the ground that she had a right of prior purchase under section 15 (fourthly) of the Right of Prior Purchase Act 1993, because, her house and the house in question had a common outer entrance within the meaning of that clause The suit was decreed. In appeal to this Court it was contended that: (1) On a proper construct ion of the clause such an entrance would not give rise to a right of pre emption unless the owner claiming the right and the owner of the house in question jointly owned the common outer entrance, and, (2) the clause as interpreted by the Courts below violated article 19(1)(f) of the Constitution and was therefore ultra vires. HELD: (1) The clause provides that where the We is of property having a common outer entrance with other properties, the Tight of prior purchase shall vest in the owners of such properties. There is nothing in the section to warrant the construction that such a right would vest only if the common outer entrance is jointly owned by the owners of such houses. [275H] (2) In the case of properties having a common entrance, the owners of the buildings would stand more or less in the position of co sharers and the right of pre emption is sustainable as a reasonable restriction. [278E] Bhau Ram vs Baijnath, [1962] Supp. 3 S.C.R. 724, followed. Bishan Singh vs Khazan Singh, ; , referred to.

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Appeal No. 206 of 1954. Appeal from the judgment and decree dated March 9, 1951, of the Orissa High Court in Appeal from Original decree No. 14 of 1946, arising out of the judgment and decree dated January 31, 1946, of the Court of Subordinate Judge at Sambalpur in Title Suit No. 16 of 1944. L. K. Jha, Rameshwar Nath, section N. Andley and J. B. Dadachanji, for the appellant. section C. Issacs and R. Patnaik, for the respondents. April 27. The Judgment of the Court was delivered by section K. DAS, J. This appeal on a certificate granted by the High Court of Orissa is from the judgment and decree of the said High Court dated March 9, 1951, by which it substantially affirmed the decision of the learned Subordinate Judge of Sambalpur in Title Suit No. 16 of 1944 except for a modification of the decree for damages awarded by the latter. Two questions of law arise in this appeal, one relating to the interpretation of section 32, sub section (5) and the other to section 50 of the Indian Evidence Act (I of 1872), hereinafter referred to as the Evidence Act. The material facts relating to the appeal are susceptible of a simple and concise statement. Three persons Nimai Charan Misra, Lakshminarayan Misra and Baikuntha Pati brought a suit for a declaration of their title to and recovery of possession of certain properties details whereof are not necessary for our purpose. This suit was numbered Title Suit 16 of 1944 in the court of the Subordinate Judge of Sambalpur. The claim of the plaintiffs, now respondents before us, was founded on the following pedigree: 817 Sankarsan Balaram Bhubana Baidyanath Raghunath Purushottam Satyabhama= Lokanath= Haripriya alias Srihari (died 1942) (2nd wife) Satyananda (died 1902) Natabar Deft. 1 Janardan Devendra Deft. 3 Radha Krushna Dolgovind Ramhari Deft. 4 Deft. 5 Deft. 6 Must. Ahalya Mst. Brindabati Mst. Malabati (dead) married (dead) married. (dead) married. Lakhan Pati. Raghumani. Mandhata Misra. Satyabadi Dasarath Baikuntha Nimai Lakshminarayanm (dead) (Deft.8) (Plaintiff3) Plaintiff1 Plaintiff2 (given in adoption in another family). 818 The last male owner was Satyananda who died unmarried sometime in 1902 1903, and his mother Haripriya succeeded to the estate. She lived till 1942; but in 1916 she had sold a portion of the property to one Indumati, daughter of Dharanidhar Misra (plaintiffs ' witness No. 4) and some of the reversioners, namely, Natabar and Janardan, who were agnates of Haripriya 's husband Lokenath Parichha, brought a suit challenging the alienation. This suit was Suit No. 31 of 1917 in the court of the Subordinate Judge, Sambalpur. The suit was decreed on August 31, 1918, and the alienation was declared to be without legal necessity and not binding on the reversion after the death of Haripriya. In 1929 was passed the Hindu Law of Inheritance (Amendment) Act (II of 1929) which inter alia gave to a sister 's son a place in the order of Mitakshara succession higher than the agnates; before the amending Act a sister 's son ranked as a bandhu, but under it he succeeded next after the sister. The question whether a half sister was entitled to get the benefit of the amending Act gave rise to a difference of opinion, but the Privy Council held in 1942, settling the difference then existing between the various High Courts, that the term I sister ' included a 'half sister '; but a full sister and a half sister did not take together and the latter took only in default of the full sister. (See Mst. Sahodra vs Ram Babu (1) ). The plaintiffs respondents claimed on the strength of the pedigree which they set up that they were sons of the half sister of Satyanand and therefore came before the agnates. The suit was contested by some of the defendants who were agnates of Lokenath Paricha and of whom the present appellant was one. The contesting defendants challenged the correctness of the pedigree alleged by the plaintiffs respondents and their main case was that Ahalya and Malabati were not the daughters of Lokenath Parichha but were daughters of Baidyanath Misra, father of Haripriya. The relevant pedigree which the appellant set up was (1) (1942) L.R. 69 I.A. I45. 819 Baidyanath Misra Haripriya Bisseswar AliaJ Malabati (died on Misra Laksh Pati Mandhata 6 4 1942) Dayasagar Satyanand Sushila P. W. 3 (died in 1903) Dasarathi Baikuntha Plff. 3 Nimai Lakshmi Plff.1 narayan. Plff. 2. As the High Court has put it, the essential controversy between the parties centred round the question if the plaintiffs respondents were the sons of the daughters of Lokenath Parichha by his first wife Satyabhama. On this question the parties gave both oral and documentary evidence. On a consideration of that evidence the learned Subordinate Judge held that they were the sons of the daughters of Lokenath Parichha and on that finding the suit was decreed. There was an appeal to the High Court, and it affirmed the finding Of the learned Subordinate Judge. The High Court relied on exhibit 1, a petition dated November 2, 1917, which Satyabadi on his own behalf and on behalf of his brothers Baikunth Pati and Dasarath Pati had filed in Suit No. 31 of 1917; this petition contained a pedigree which showed that Ahalya, Brindabati, and Malabati were daughters of Lokenath Parichha by his first wife and Satyabadi, Baikunth and Dasarath were the sons of Ahalya. The admissi bility of this document was challenged on behalf of the appellant, but the learned Judges of the High Court held that the document was admissible under section 32(5) of the Evidence Act. The contention before us is that the document was not so admissible, and this is one of the questions for decision before us. As to the oral evidence, Narasimham, J., held that the testimony given by three of the witnesses of the plaintiffs respondents, namely, Janardan Misra (plaintiffs ' witness No. 2), Sushila Misrain (plaintiffs ' witness No. 3) and Dharanidhar Misra (plaintiffs ' witness No. 4)was admissible under section 50 of the Evidence Act, and 820 he relied on that testimony in support of the pedigree set up by the plaintiffs respondents. The learned Chief Justice relied on the evidence of Dharanidbar Misra which be held to be admissible but with regard to the. other two witnesses, he said " With regard to the other two witnesses relied on by the plaintiffs namely that of P. Ws. 2 (Janardan Misra, aged 62) and 3 (Susila Misrani, aged 43) knowledge of relevant facts as to relationships can seldom be attributed to them. Their evidence, though true, and otherwise acceptable, must be based upon their having heard the declarations of such members of the family as were their contemporaries or upon the tradition or reputation as to family descent handed down from generation to generation and recognised and adopted by the family generally. This may partly, if not wholly, be based upon conduct within the meaning of section 50, such as treating and recognising the mothers of the plaintiffs as Lokenath 's daughters, and the plaintiffs as his daughter 's sons. They, judged from their respective ages, could not be considered to have direct knowledge of the matters in issue. Scanning their evidence closely, I find that they have in no way deposed about such conduct of the members of the family of Lokenatb as could be attributed to the knowledge or belief or consciousness of those who had special means of knowledge of the relationships or that the relationship was recognised and adopted by the family generally. In the circumstances, I entertain some doubt as to the acceptability of their statements in evidence. " On behalf of the appellant, it has been contended that the testimony of none of the aforesaid three witnesses fell within the purview of section 50 of the Evidence Act and the High Court was in error in admitting and accepting that evidence or any part thereof, and according to learned counsel for the appellant, the whole of it was hearsay pure and simple some of it being even second or third hand hearsay. Thus the second question for our consideration is if the testi mony of the witnesses mentioned above or of any of them, is 'admissible evidence within the meaning of section 50 of the Evidence Act. 821 We proceed to consider the second question first. The Evidence Act states that the expression " facts in issue " means and includes any fact from which either by itself or in connection with other facts the existence, non existence, nature or extent of any right, liability or disability asserted or denied in any suit or proceeding necessarily follow; "evidence" means and includes (1) all statements which the Court permits or requires to be made before it by witnesses in relation to matters of fact under enquiry ; and (2) all documents produced for the inspection of the Court. It further states that one fact is said to be relevant to another when the one is connected with the other in any one of the ways referred to in the provisions of the Evidence Act relating to the relevancy of facts. Section 5 of the Evidence Act lays down that evidence may be given in any suit or proceeding of the existence or non existence of every fact in issue and 'of such other facts as are declared to be relevant and of no others. It is in the context of these provisions of the Evidence Act that we have to consider section 50 which occurs in Chapter 11, headed " Of the Relevancy of Facts Section 50, in so far as it is relevant for our purpose, is in these terms: " section 50. When the Court has to form an opinion as to the relationship of one person to another, the opinion, expressed by conduct, as to the existence of such relationship, of any person who, as a member of the family or otherwise, has special means of knowledge on the subject, is a relevant fact On a plain reading of the section it is quite clear that it deals with relevancy of a particular fact. It states in effect that when the Court has to form an opinion as to the relationship of one person to another the opinion expressed by conduct as to the existence of such relationship of any person who has special means of knowledge on the subject of that relationship is a relevant fact. The two illustrations appended to the section clearly bring out the true scope and effect of the section. It appears to us that the essential requirements of the section are (I) there, must be a case where the court has to form an opinion as to the 822 relationship of one person to another; (2) in such a,case, the opinion expressed by conduct as to the existence of such relationship is a relevant fact; (3)but the person whose opinion expressed by conduct is relevant must be a, person who as a member of the family or otherwise has special means of knowledge on the particular subject of relationship ; in other words,the person must fulfil the condition laid down in the latter part of the section. If the person fulfils that condition, then what is relevant is his opinion expressed by conduct. Opinion means something more than more retailing of gossip or of hearsay; it means judgment or belief, that is, a belief or a conviction resulting from what one thinks on a particular question. Now, the " belief " or conviction may manifest itself in conduct or behaviour which indicates the existence of the belief or opinion. What the section says is that such conduct or outward behaviour as evidence of the opinion held is relevant and may, therefore, be proved. We are of the view that the true scope and effect of section 50 of the Evidence Act has been correctly and succinctly put in the following observations made in Chandu Lal Agarwala vs Khalilar Rahman (1): "It is only opinion as expressed by conduct which is made relevant. This is how the conduct comes in. The offered item of evidence is the conduct ', but what is made admissible in evidence is ' the opinion ', the opinion as expressed by such conduct)The offered item of evidence thus only moves the Court to an intermediate decision : its immediate effect is only to move the Court to see if this conduct establishes any I opinion ' of the person, whose conduct is in evidence, as to the relationship in question. In order to enable the Court to infer 'the opinion ', the conduct must be of a tenor which cannot well be supposed to have been willed without the inner existence of the I opinion '. When the conduct is of such a tenor, the Court only gets to a relevant piece of evidence, namely, the opinion of a person. It still remains for the Court to weigh such evidence and come to its own opinion as (1) I.L.R. , 309. 823 to the factum probandum as to the relationship in question. " We also accept as. correct the view that section 50 does not make evidence of mere general reputation (without conduct) admissible as proof of relationship: Lakshmi Reddi vs Venkata Reddi (1). It is necessary to state here that how the conduct or external behaviour which expresses the opinion of a person coming within the meaning of section 50 is to be proved is not stated in the section. The section merely says that such opinion is a relevant fact on the subject of relationship of one person to another in a case where the court has to form an opinion as to that relationship. Part 11 of the Evidence Act is headed " On Proof ". Chapter III thereof contains a fascicule of sections relating to facts which need not be proved. Then there is Chapter IV dealing with oral evidence and in it occurs section 60 which says inter alia : " section 60. Oral evidence must, in all cases whatever, be direct; that is to say if it refers to a fact which could be seen, it must be the evidence of a witness who says he saw it; if it refers to a fact which could be heard, it must be the evidence of a witness who says he heard it; if it refers to a fact which could be perceived by any other sense or in any other manner, it must be the evidence of a witness who says he perceived it by that sense in that manner; if it refers to an opinion or to the grounds on which that opinion is held, it must be the evidence of the person who holds that opinion on those grounds. " If we remember that the offered item of evidence under section 50 is conduct in the sense explained above, then there is no difficulty in holding that such conduct or outward behaviour must be proved in the manner laid down in section 60; if the conduct relates to something which can be seen, it must be proved by the person who saw it; if it is something which can be heard, then it must be proved by the person who heard it; and so on. The conduct must be of the (1) A.I.R. 1937 P.C. 201. 824 person who fulfils the essential conditions of section 50, and it must be proved in the manner laid down in the provisions relating to proof. It appears to us that that portion of section 60 which provides that the person who holds an opinion must be called to prove his Opinion does not necessarily delimit the scope of section 50 in the sense that opinion expressed by conduct must be proved only by the person whose conduct expresses the opinion. Conduct, as an external perceptible fact, may be proved either by the testimony of the person himself whose opinion is evidence under section 50 or by some other person acquainted with the facts which express such opinion, and as the testimony must relate to external facts which constitute conduct and is given by persons personally acquainted with such facts, the testimony is in each case direct within the meaning of section 60. This, in our opinion, is the true inter relation between section 50 and section 60 of the Evidence Act. In Queen Empress vs Subbarayan (1) Hutchins, J., said : " That proof of the opinion, as expressed by conduct, may be given, seems to imply that the person himself is not to be called to state his own opinion, but that, when he is dead or cannot be called, his conduct may be proved by others. The section appears to us to afford an exceptional way of proving a relationship, but by no means to prevent any person from stating a fact of which he or she has special means of knowledge. While we agree that section 50 affords an exceptional way of proving a relationship and by no means prevents any person from stating a fact of which he or she has special. means of knowledge, we do not agree with Hutchins, J., when he says that the section seems to imply that the person whose opinion is a relevant fact cannot be called to state his own opinion as expressed by his conduct and that his conduct may be proved by others only when he is dead or cannot be called. We do not think that section 50 puts any such limitation. Let us now apply the tests indicated above to the testimony of the two witnesses, Janardan Misra and (1) Mad. 9, 11. 825 Dharanidhar Misra. As to Sushila Misrain, she was aged about 43 when she gave evidence in 1946. It is unnecessary to consider in detail her evidence, because if the evidence of the other two older witnesses be admissible, that would be sufficient to support the finding arrived at by the courts below another evidence would also be admissible on the same criteria as the evidence of the other two witnesses. The first question which we must consider is if Janardan Misra and Dharanidhar Misra had special means of knowing the disputed relationship. Janardan Misra was aged about 62 in 1946, and he was related to the family of Baidyanath Misra. Kashi Nath Misra was his grand father and was a brother of Baidyanath Misra. Obviously, therefore, Janardan Misra had special means of knowing the disputed relationship, being related to Baidyanath and therefore to Haripriya, who was the second wife of Lokenath. He said in his evidence that he knew Lokenath Parichha, had seen his first wife Satyabhama and remembered the marriage of Haripriya with Lokenath Parichha. Obviously, therefore, he 'fulfilled the condition of special knowledge. He further said that he attended the marriage of Malabati, daughter of Lokenath, when Lokenath was living. That marriage took place in the house of Lokenath. He also said that he was present when the first two daughters of Malabati were married and also at the time of the Upanayan ceremonies of plaintiffs I and 2. According to the witness, Shyam Sundar Pujari, a son of a sister of Lokenath, acted as a maternal uncle at the time of the marriage of the eldest daughter of Malabati and Dayasagar Misra carried Radhika, second daughter of Malabati, at the time of her marriage. The question is whether these statements of Janardan Misra as to his conduct are admissible under section 50, Evidence Act. Learned counsel for the respondent has contended before us that even apart from section 50, the evidence of Janardan Misra is direct evidence of facts which he saw and which should be treated as .directly proving the relationship between Lokenath 104 826 and his daughters. We do not think that learned counsel for the respondent is right in his submission that Janardan 's evidence directly proves the relation between Lokenath and his alleged daughters, Abalya, Brindabati and Malabati. Janardan does not say that he 'was present at the birth of any of these daughters. What be says is that he was present at the marriage of Malabati which took place when Lokenath was living and in Lokenath 's house; he was also present at the marriages of the first two daughters of Malabati and also at the time of the Upanayan ceremonies of plaintiffs I and 2. This evidence, in our opinion, properly comes within section 50, Evidence Act; it shows the opinion of Janardan Misra as expressed by his conduct, namely, his attending the marriage of Malabati as daughter of Lokenath and his attending the marriages and Upanayan ceremonies of the grandchildren of Lokenath. We do not think that it can be suggested for one moment that Janardan Misra attended the marriage and other ceremonies in the family as a mere casual invitee. He must have been invited as a relation of the family and unless he believed that Malabati was a daughter of Lokenath and the others were grand children of Lokenath to whom the witness was related, he would not have said that he attended those ceremonies as those of the children and grand children, of Lokenath. This, in our opinion, is a reasonable inference from the evidence and if that is so, then the evidence of Janardan Misra was clearly evidence which showed his belief as expressed by his conduct on the subject of the relationship between Lokenath and his daughters and Lokenath and his grandchildren. Janardan also said that one Shyamsundar Pujari acted as maternal uncle at the time of the marriage of the eldest daughter of Malabati. There is some evidence in the record that Shyamsundar Pujari was son of Lokenath 's sister. This was, however, disputed by the appellant. The High Court has not recorded any finding on the relation of Shyamsundar Pujari to Lokenath. If it were proved that Shyamsundar was a son of Lokenath 's sister, he would have special 827 means of knowledge as a relation of the family and his conduct at the time of the marriage of Malabati 's daughter would also be admissible under section 50. But in the absence of any finding as to any special means of knowledge on the part of Shyamsundar, the latter 's conduct will not be admissible under section 50. We need not say anything more about Shyamsundar, as the High Court has not based its finding on the conduct of Shyamsundar. The same criteria apply to the evidence of Dharanidhar Misra, who was aged 96 at the time when he gave evidence. He was the maternal uncle of Janardan Misra. Dharanidhar 's evidence showed that he knew Lokenath Parichha and his two wives, Satyabhama and Haripriya. He also had special means of knowing the disputed relationship, though he was not directly related to Lokenath. He said that Lokenath was two years older than him and the witness attended the marriages of Radhika and Sarjoo and the " thread " ceremonies of Lakshminarayan and Nimai. The witness further added that though he did not remember if he was invited to the marriage of Mandhata 's daughters, he was invited to the feasts which followed the marriage. He said that the feasts took place in the house of Mandhata and he attended the " gansana " and marriage feasts of Mandhata 's daughters. The same criteria which make the evidence of Janardan Misra admissible under section 50 also make the evidence of Dharanidhar Misra admissible under the same section. We may in this connection refer to one of our own decisions, Sitaji vs Bijendra Narain Choudhary wherein the following observations were made: " A member of the family can speak in the witness box of what he has been told and what he has learned about his own ancestors, provided what he says is an expression of his own independent opinion (even though it is based on hearsay derived from deceased, not living, persons) and is not merely repetition of the hearsay opinion of others, and provided the opinion is expressed by conduct. His sources of (1) A.I.R 1954 S.C. 601. 828 information and the time at which he acquired the knowledge (for example, whether before the dispute or not) would affect its weight but not its admissibility. This is therefore legally admissible evidence which, if believed, is legally sufficient to support the finding ". It is true that Dharanidhar Misra was not directly related to the family of Lokenath. He was, however, distantly related to Haripriya. He was a friend of Lokenath Parichha and lived in the same neighbourhood. His evidence showed that he knew him and the members of his family quite well. That being the position, his evidence that he attended the marriage ceremonies and the Upanayan ceremonies of several members of the family undoubtedly showed his opinion as expressed by his conduct. We are accordingly of the view that the evidence of both Janardan Misra and Dharanidhar Misra was admissible under section 50 and the learned Judges of the High Court committed no error of law in admitting and considering that evidence. We are concerned here with the question of admissibility only. As to what weight should be given to their evidence was really a matter for the courts below and both the learned Chief Justice and Narasimham, J., accepted the testimony of Dharanidhar Misra and Narasimham, J., further relied on the testimony of Janardan Misra also. We now proceed to a consideration of the first question, namely, the admissibility of the document Ext. The High Court has held the document to be admissible under sub section (5) of section 32 of the Evidence Act. We must first read section 32 (5): " section 32. Statements, written or verbal, of relevant facts made by a person who is dead, or who cannot be found, or who has become incapable of giving evidence, or whose attendance cannot be procured without an amount of delay or expense which, under the circumstances of the case, appears to the Court unreasonable, are themselves relevant facts in the following cases: (1). . . . . . . . . (2). . . . . . . . . 829 (3). . . . . . . . . (4). . . . . . . . (5) When the statement relates to the existence of any relationship by blood, marriage or adoption between persons as to whose relation ship by blood, marriage or adoption the person making the statement had special means of knowledge, and when the statement was made before the question in dispute was raised. (6). . . . . . . . (7). . . . . . . . (8). . . . . . . Now, four conditions must be fulfilled for the application of sub section (5) of section 35: firstly, the statements, written or verbal, of relevant facts must have been made by a person who is dead or cannot be found, etc., as mentioned in the initial part of the section; secondly, the statements must relate to the existence of any relationship by blood, marriage or adoption; thirdly, the person making the statement must have special means of knowledge as to the relationship in question ; and lastly, the statements must have been made before the question in dispute was raised. There is no serious difficulty in the present case as to the first two conditions. Exhibit I contained a pedigree which showed that Lokenath had three daughters by his first wife, the daughters being Ahalya, Brindabati and Malabati; it also showed that Ahalya had three sons Satyabadi, Baikuntha and Dasarath, of whom Baikuntha was one of the plaintiffs in the present suit and the other two plaintiffs Nimai and Lakshminarayan were shown as sons of Malabati. Exhibit I was signed by Satyabadi on his own behalf and on behalf of his brothers Baikuntha and Dasarath. Satyabadi is now dead. So far as Satyabadi is concerned, there can be no doubt that the first two conditions for the application of sub section (5) of section 32 are fulfilled. It has been contended that as Dasarath and Baikuntha are alive (Baikuntha being one of the plaintiffs) and as the statement was the joint statement of three persons of whom one alone is dead, the first and preliminary condition necessary for the application of section 32 is not 830 fulfilled. We do not think that this contention is correct, and we are of the view that the position is correctly stated in Chandra Nath Roy vs Nilamadhab Bhattacharjee (1); that was a case in which the statements were recitals as to a pedigree and were contained in a patta executed by three sisters, two of whom were dead and it was pointed out that the statement in the patta was as much the statement of the sisters who were dead as of the sister who was alive. In the case before us the statements as to pedigree in exhibit I were really the statements of Satyabadi, who signed for self and on behalf of his brothers. Assuming, however, that the statements were of all the three brothers, they were as much statements of Satyabadi as of the other two brothers who are alive. We, therefore, see no difficulty in treating the statements as to pedigree in exhibit I as statements of a dead person as to the existence of a relationship by blood between Lokenath and his daughters Ahalya, Brindabati and Malabati the relationship which is in dispute now. The more important point for consideration is if the statements as to pedigree in exhibit I were made, to use the* words of sub section (5), before the question in dispute was raised. The High Court held that the statements were made ante litem motam. Learned counsel for the appellant has very strongly contended before us that the High Court took an erroneous view in this matter. Let us first see the circumstances in which exhibit I was filed and dealt with in Suit No. 31 of 1917. We have said earlier what that suit was about. It was a suit brought by some of the reversioners for a declaration that the alienation made by Haripriya in favour of Indumati was without legal necessity and, therefore, not binding on the reversion after the death of Haripriya. The suit was filed on August 27, 1917. On November 2, 1917, certain other persons made an application to be added as parties to the suit on the footing that they had the same interest in the suit as the plaintiffs. That application was disposed of by the learned Subordinate Judge by the following order "In a suit like the present, it is not necessary (1) Cal. 236. 831 that all the reversioners should be made parties. So I reject the petition. " Exhibit I was filed on November 5, 1917. In that petition Satyabadi alleged: " The applicants are the legal claimants to inherit the properties left by Lokenath . the applicants therefore beg that they may kindly be made co defendants ". It was further alleged that the plaintiffs of that suit had no legal right over the share in dispute, and this was followed by a pedigree given in para. IV of the petition. This petition (exhibit 1) was put up on November 27, 1917, and the learned Subordinate Judge disposed of the petition by the following order: " The petition of Satyabadi Pati and others was put up in the presence of the plaintiffs pleader. He objects to the same. The petition is, therefore, rejected." Ultimately, the suit was decreed on August 31, 1918, on the finding that the alienation by Haripriya was without legal necessity and did not bind the reversion after her death. The learned Judges of the High Court took the view that in Suit No. 31 of 1917 no dispute arose as to the alleged relation between Lokenath on one side and Ahalya, Brindabati and Malabati on the other. The dispute in that suit was about the validity of the alienation made by Haripriya and the suit having been filed by some of the reversioners on behalf of the reversion, no issue was raised or could be raised as to whether Lokenath had any daughters by his first wife, Such an issue was not relevant to the suit and furthermore nobody could anticipate in 1917 that the sons of a sister or half sister would be preferential heirs in the order of Mitakshara succession. They, therefore, held that the statements in exhibit 1 were ante litem motam and admissible under sub section (5) of section 32, Evidence Act. On behalf of the appellant it has been argued that for a declaratory decree in respect of an alienation made by a Hindu widow or other limited heir, the right to sue rests in the first instance with the next reversioner and the reversioner next after him is not entitled to sue except in some special circumstances 832 and therefore the question as to who the next reversioner was arose in the suit of 1917; and exhibit I did raise a dispute as to who the last male owner was Lokenath or Satyanand and also showed that there was a dispute if the plaintiffs of that suit were entitled to the property in dispute there. The existence of such a dispute, it has been argued, affected the statements in exhibit I and what Satyabadi said therein were not " the natural effusions of a party who must know the truth and who speaks upon an occasion when his mind stands in an even position without any temptation to exceed or fall short of the truth " (as per Lord Chancellor Eldon in Whitelocke vs Baker) (1). Learned counsel has also relied on the decision in Naraini Kuar vs Chandi Din (2) where it was held that section 32(5) did not apply to statements made by interested parties in denial, in the course of litigation, of pedigrees set up by their opponents. We do not think that in Suit No. 31 of 1917 any question as to the relationship of Lokenath with Ahalya, Brindabati and Malabati arose at all. It is to be remembered that even according to the pedigree set up by the appellant one of the plaintiffs is a son of Ahalya and two others are sons of Malabati. What is now in dispute is whether Ahalya and Malabati were daughters of Lokenath Parichha. That is a question which did Dot at all arise for consideration in Suit No. 31 of 1917 ; nor did it arise in the proceedings which the application of Satyabadi (exhibit 1) gave rise to. Prima facie, there is nothing to show that a dispute as to the relationship of Lokenath with Ahalya and Malabati arose at any stage prior to or in the course of the proceedings which arose out of exhibit I ; that would be sufficient to discharge the onus of proving that the statements in exhibit 1 were ante litem motam. Natabar, one of the plaintiffs in the suit of 1917, who might have given evidence of any such dispute if it existed, said nothing about it. We have referred to the circumstances in which exhibit I was filed and disposed of. It is true that the order of the learned Subordinate Judge rejecting the petition exhibit 1 is somewhat cryptic and it does not show what objection the (7) (1807) 13 ves. 510, 514. (8) All. 467. 833 plaintiff of that suit took and on what ground the learned Subordinate Judge rejected the petition. If, however, the various orders made by the learned Subordinate Judge, particularly the orders dated November 2, 1917, and November 27, 1917, to which we have earlier made reference are examined, it seems clear to us that the learned Subordinate Judge was proceeding on the footing that in a suit of that nature it was not necessary to make all the reversioners parties, because the reversioners who brought the suit represented the entire body of reversioners. From the judgment passed in the suit (exhibit Cl) it does not appear that the question as to who the next reversioners were was at all gone into. That may be due to the circumstance, pointed out by the High Court, that Purushottam, uncle of Janardan and Natwar, was then alive. He was admittedly then the nearest reversioner, but as he did not join as a plaintiff he was made a proforma defendant. The nearest reversioner having been added as a party defendant in the suit of 1917, no question of title arose in that suit as between the reversioners inter se. Such a question of title was wholly foreign to the nature of that suit. Nor, do we find anything in the judgment, exhibit Cl, to show that it was ever suggested in that suit that the last male owner was not Satyanand. The sons of the half sister of Satyanand were not preferential heirs at the time and we agree with the learned Judges of the High Court that no question arose or could have arisen in that suit as to the. relation between Lokenath on one side and Ahalya and Malabati on the other. That being the position, the statements as to pedigree con tained in exhibit 1 were made before the precise question in dispute in the present litigation had arisen. It has next been argued by learned counsel for the appellant that in admitting exhibit I under section 32(5) the courts below assumed that Satyabadi had special means of knowledge as to the relation between Lokenath and his alleged daughters Ahalya and Malabati. The argument has been that unless it is assumed that Satyabadi is the grand son of Lokenath, he can have 105 834 relationship. Learned counsel for the appellant has referred us to the decision in Subbiah Mudaliar vs Gopala Mudaliar (1) where it was held that for a statement in a former suit to be admissible under section 32(5) the fact that the person who made the statement had special means of knowledge must be shown by some independent evidence, otherwise it would be arguing in a circle to hold that the document itself proves the relation and therefore shows special means of knowledge. In Hitchins vs Eardley (2) the question of the legitimacy of the declarant was in issue and the same question was necessary to be proved in order to admit his declarations. That was a jurv case and the ques tion relating to the admissibility of evidence being a question of law had to be determined by the Judge; but the same question being the principal question for decision in the case had to be determined by the jury at the conclusion of the trial. In the difficulty thus presented, prima facie evidence only was required at the time of admission. We do not think that any such difficulty presents itself in the case under our consideration. As to Satyabadi 's special means of knowledge, we have in this case the evidence of Janardan. Misra and Dharanidhar Misra, which evidence independently shows that Satyabadi was the grand son of Lokenath, being the son of his daughter, Ahalya. It may be stated here also that it was admitted that Ahalya was Satyabadi 's mother, and that would show that Satyabadi had special means of knowledge as to who his mother 's father was. Therefore, we agree with the High Court that exhibit I fulfilled all the conditions of section 32(5), Evidence Act and was admissible in evidence. We have already said that it is not for us to consider what weight should be given to the oral evidence of Janardan and Dharanidhar or to the statements in exhibit 1. The courts below have considered that evidence and have assessed it. We do not think that we shall be justified in going behind that assessment. Learned counsel for the appellant wished also to (1) A.I.R. 1936 Mad. 808. (2) (1871) L.R. 2 P. & D. 248. 835 argue the point that the Privy Council decision in Mst. Sahodra 's case (1) was wrong and that a halfsister was not entitled to get the benefit of the amending Act of 1929. The Privy Council decision was given at a time when it was binding on the courts in India and it settled differences of opinion which then existed in the different High Courts. That decision was taken as settling the law on the subject and on the faith of that decision a half sister has been held in subsequent cases to be entitled to the benefit of the Amending Act. The High Court dealt with the case in 1951 after the Constitution had come into force and the Privy Council jurisdiction in Indian appeals had ceased. No point was taken on behalf of the appellant in the High Court that the Privy Council decision should be reopened and the question of the right of a half sister re examined. In these circumstances, we did not allow learned counsel for the appellant to argue the correctness or otherwise of the Privy Council decision. The contentions as to the admissibility of exhibit 1 and the oral evidence of Janardan Misra and Dharanidhar Misra being devoid of merit, the appeal fails. We accordingly dismiss the appeal with costs in favour of the contesting respondents. Appeal dismissed. (1) (1942) L.R. 69 I.A. 145.

On the death of H, who as the mother of the last male owner had succeeded to the estate, the respondents claimed the estate and brought a suit for its recovery on the strength of the pedigree which they set up that they were the sons of the halfsisters of the last male owner and therefore came before the agnates. The suit was contested by some of the agnates, of whom the appellant was one, who challenged the correctness of the pedigree, and maintained that the respondents ' mothers were not the half sisters of the last male owner. The trial court agreed with the respondents ' case and decreed the suit and this was confirmed by the High Court. The High Court relied on exhibit 1, a petition dated November 2, 1917, which S, one of the brothers of the third plaintiff, on his own behalf and on behalf of his brothers had filed in Suit NO. 31 Of 19I7 which was a suit instituted by some of the agnates of H 's husband questioning the alienations made by H. In the petition,, S alleged that the applicants were the legal claimants to the properties in the suit and prayed to be added as co defendants to the suit. The petition contained a pedigree which supported the pedigree set up 815 by the respondents, and the High Court held that exhibit I was admissible under section 32(5) of the Indian Evidence Act. The oral evidence of P.W. 2 and P.W. 4 supported the respondents ' case as to the pedigree set up by them and the High Court held that their evidence was admissible under section 50 Of the Indian Evidence Act. On appeal to the Supreme Court, it was contended for the appellant (1) that exhibit I was not admissible under section 32(5) Of the Indian Evidence Act because (a) the statement therein was a joint statement of three persons of whom one alone was dead, and (b) it was not made before disputes had arisen ; and (2) that the testimony of P.W. 2 and P.W. 4 did not fall within the purview Of section 50 Of the Indian Evidence Act and that the High Court erred in admitting and accepting such evidence. Held: (1) that section 32(5) Of the Indian Evidence Act was applicable to the statements as to pedigree in exhibit I because : (a) they were really made by S for self and on behalf of his brothers, and that, in any case, they were as much statements of S as of the other two brothers who are alive. Chandra Nath Roy vs Nilamadhab Bhattacharjee, (1898) I.L.R. , approved. (b) they were made before the precise question in dispute in the present litigation had arisen, as the respondents were not preferential heirs at the time of the previous suit and no question arose or could have arisen then as to the relationship between them and the last male owner. (2) that the evidence of P.W. 2 and P.W. 4 that they were present at the marriage of the mother of plaintiffs 1 and 2 as also at the Upanayanam ceremonies of plaintiffs 1 and 2, showed the opinion of those witnesses as to the relationship as expressed by their conduct, and was admissible under section 50 Of the Indian Evidence Act. The word " opinion " in section 50 Of the Indian Evidence Act means something more than mere retailing of gossip or hearsay; it means judgment or belief, that is, a belief or a conviction resulting from what one thinks on a particular question. Such belief or conviction may manifest itself in conduct or behaviour which indicates the existence of the belief or opinion. Under section 50 such conduct or outward behaviour as evidence of the opinion held is relevent and may be proved. Chander Lal Agarwala vs Khalilay Rahman, I.L.R. , approved. Conduct, as an external perceptible fact, may be proved either by the testimony of the person himself whose opinion is evidence under section 50 or by some other person acquainted with the facts which express such opinion, and as the testimony must relate to external facts which constitute conduct and is given by persons personally acquainted with such facts, the testimony is in each case direct within the meaning of section 60 of the Indian Evidence Act. 816 The observations 'of Hutchins, J., in Queen Empress vs Subbarayan, Mad. 9, that section 50 of the Indian Evidence Act seems to imply that a person whose opinion is a relevant fact cannot be called to state his own opinion as expressed by his conduct and that his conduct may be proved by others only when he is dead or cannot be called, disapproved.

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Civil Appeal No. 8491 of 1983. From the Judgment and Order dated 5th October, 1982 of the Patna High Court at Patna in C.W.J.C. No. 1420 of 1982. P.R. Mridul, and M.P. Jha, for the Appellant. B.B. Singh, for the Respondents The Judgment of the Court was delivered by VENKATARAMIAH, J. This is an appeal by special leave against the order dated October 5,1982 in C.W.J.C. No.1420 of 1982 on the file of the High Court of Patna dismissing the petition filed by the appellant under Article 226 of the Constitution. The facts of the case are these: The appellant was directly recruited and appointed as a Deputy Superintendent of Police in the Police Department of the State of Bihar in the year 1964. In 1973 he was eligible to be considered for appointment as a member of the Indian Police Service under the provisions of the Indian Police Service 301 (Recruitment) Rules, 1954 (hereinafter referred to as 'the Rules ') read with the Indian Police Service (Appointment by Promotion) Regulations, 1955 (hereinafter referred to as 'the Regulations ') framed under sub rule (1) of Rule 9 of the Rules. His case was placed before the Committee constituted under Regulation 4 of the Regulations for the purpose of preparation of the list of suitable officers for promotion to the Indian Police Service Cadre of the State of Bihar in 1973, 1974, 1975 and 1976. In the years 1973, 1974 and 1975, he could not be included in the select list as he was junior to those who were included in the select list. In the year 1976 his name was not included in the select list as there was an adverse entry in his confidential roll of 1973 74. The reasons given by the Committee for superseding the appellant based on the confidential roll were these: "Delayed disposal of pending papers and supervision notes. Inadequate control over office, judgment, initiative, sense of responsibility and management reported to be just fair. Censured by State Govt. order dt. 20th Oct., 1975. " The Selection Committee took the decision to supersede the appellant at its meeting held on December 22, 1976 in view of the above entry in the confidential roll of the appellant. It is not disputed that the said adverse entry was communicated to the appellant in the year 1977 after the above meeting was over. It appears that there were also adverse entries in the annual confidential roll of the appellant for the year 1974 75. They were communicated to the appellant in the year 1976. The appellant made representations in respect of both the adverse entries in time. His main grievance was that they had been made by his official superior who was biased against him. The adverse entry made in the confidential roll for the year 1973 74 was expunged by the State Government on December 3, 1980 and the adverse entries in the confidential roll for the year 1974 75 were expunged by two orders dated February 21, 1978 and October 7, 1980. There was no meeting of the Selection Committee from 1977 to 1980. It, however, met on March 11/12, 1981. On this occasion the appellant represented to the Committee that the adverse entries in his confidential rolls had been removed by the State Government by various orders and requested them to consider his case for promotion to the Indian Police Service Cadre. On this occasion the Committee did not look into the confidential rolls of the appellant for the years 1979 80 and 1980 81 which contained entries very favourable to the appellant for no fault of the appellant. The Committee, however, 302 classified him as 'good ' but did not include him in the select list while some of his juniors were included. The appellant represented to the Committee and the State Government against the decision taken by the Committee. The Committee again met on October 14, 1981. When nothing came out of the representations made by him, the appellant filed a writ petition questioning the validity of the decisions of the Selection Committee before the High Court of Patna. The petition was dismissed at the stage of admission. This appeal is filed by special leave against the order of the High Court. The main point urged before us is that the Selection Committee had committed an illegality in rejecting the claim of the appellant for being included in the select list in the year 1976 by relying upon the adverse entries which had been made in his confidential rolls which had not been either communicated to him or against which he had made representation which had remained undisposed of and which had been subsequently expunged. The true legal position governing such cases is laid down by this Court in Gurdial Singh Fijji vs State of Punjab & Ors,( ') which was a case arising under the Indian Administrative Service (Appointment by Promotion) Regulations, 1955 which more or less correspond to the Regulations applicable to the Indian Police Service. In the above case Chandrachud, C.J. has observed thus: "The principle is well settled that in accordance with the rules of natural justice, an adverse report in a confidential roll cannot be acted upon to deny promotional opportunities unless it is communicated to the person concerned so that he has an opportunity to improve his work and conduct or to explain the circumstances leading to the report. Such an opportunity is not an empty formality, its object, partially, being to enable the superior authorities to decide on a consideration of the explanation offered by the person concerned, whether the adverse report is justified. Unfortunately, for one reason or another, not arising out of any fault on the part of the appellant, though the adverse report was communicated to him, the Government has not been able to consider his explanation and decide whether the report was justified. In these circumstances it is difficult to support the non issuance of the integrity certificate to 303 the appellant. The chain of reaction began with the adverse report and the infirmity in the link of causation is that no one has yet decided whether that report was justified. We cannot speculate, in the absence of a proper pleading, whether the appellant was not found suitable otherwise, that is to say, for reasons other than those connected with the nonissuance of an integrity certificate to him. " It is not disputed that the classification of officers whose cases are taken up for consideration into 'outstanding ', 'very good ', 'good ' or 'bad ' etc. for purposes of promotion to the Indian Police Service Cadre is mainly based upon the remarks in the confidential rolls. On December 22, 1976, when the Selection Committee met, the adverse remarks in the confidential roll for 1973 74 had not been communicated and the appellant 's representation regarding adverse remarks in the confidential roll for the year 1974 75 and censure against him had not been disposed of although it is alleged that one Shri Yamuna Ram against whom also adverse remarks had been made was included provisionally in the select list. When the Selection Committee met on March 11 and 12, 1981 despite State Government 's suo motu decision not to retain adverse remarks for the year 1976 77 on records, the same had not been removed from the confidential roll. This must have influenced the decision of the Selection Committee. It is also seen that the confidential rolls of the appellant for the year 1979 80 and 1980 81 which contained entries favourable to the appellant were not placed before the Selection Committee. On October 14,1981 when the Selection Committee met, it does not appear to have considered the representation made by the appellant against his non selection. In addition to all these, the State Government has expunged the adverse remarks by its orders made from time to time. These facts are not controverted by the respondents. The facts of this case are distinguishable from the facts involved in the decision of this Court in R.L. Butail vs Union of India & Ors. which is relied on by the respondents. In that case the confidential report of the appellant therein for the year 1964 contained an adverse entry and he had made a representation regarding it, When the Departmental Promotion Committee met in March, 1966, the appellant 's representation regarding the adverse entry of 1964 was not placed before it and a decision adverse to the appellant was taken by the Committee without reference to the said representation. The 304 appellant contended before this Court that the omission to consider his representation before the date of meeting of the Committee vitiated its decision. The Court held that the omission either to place the said representation before the Committee or its non consideration before the date of the meeting had no effect on the decision of the Committee as the representation had actually been rejected subsequently with the result that the confidential report for the year 1964 remained unchanged. The position in the case before us is different. Here the adverse entries in question have in fact been expunged by the State Government subsequently. It may be pertinent to state here that the practice of the Departmental Promotion Committee referred to in Butail 's case (supra) was that if in such a case a representation were to be accepted and in consequence the confidential report was altered or the adverse entries were expunged the Committee would have to review its recommendations in the light of such a result. The appellant in the present case has pressed before us for a similar relief as the adverse entries made against him have been since expunged. After giving our anxious consideration to the uncontroverted material placed before us we have reached the conclusion that the case of the appellant for promotion to the Indian Police Service Cadre has not been considered by the Committee in a just and fair way and his case has been disposed of contrary to the principles laid down in Gurdial Singh Fijji 's case (supra). The decisions of the Selection Committee recorded at its meetings in which the case of the appellant was considered are vitiated by reason of reliance being placed on the adverse remarks which were later on expunged. The High Court committed an error in dismissing the petition of the appellant and its order is, therefore, liable to be set aside. We accordingly set aside the order of the High Court. We hold that the appellant has made out a case for reconsideration of the question of his promotion to the Indian Police Service Cadre of the State of Bihar as on December 22, 1976 and if he is not selected as on that date for being considered again as on March 12, 1981. If he is not selected as on March 12, 1981 his case has to be considered as on October 14, 1981. The Selection Committee has now to reconsider the case of the appellant accordingly after taking into consideration the orders passed by the State Government subsequently on any adverse entry that may have been made earlier and any other order of similar nature pertaining to the service of the appellant. If on such reconsideration the appellant is selected he shall be entitled to the seniority and all other consequential benefits flowing therefrom. We issue a direction to the respondents to reconsider the case of the 305 appellant as stated above. We hope that the above direction will be complied with expeditiously but not later than four months from today. Before concluding we wish to state that the Central Government and the State Governments should now examine whether the present system of maintenance of confidential rolls should be continued. Under the present system, entries are first made in the confidential roll of an officer behind his back and then he is given an opportunity to make a representation against any entry that may have been made against him by communicating the adverse entry after considerable delay. Any representation made by him would be considered by a higher authority or the State Government or the Central Government, as the case may be, some years later, as it has happened in this case, by which time any evidence that may be there to show that the entries made were baseless may have vanished. The predicament in which the officer against whom adverse remarks are made is then placed can easily be visualised. Even the authority which has got to pass orders on the representation of the officer will find it difficult to deal with the matter satisfactorily after a long interval of time. In the meanwhile the officer concerned would have missed many opportunities which would have advanced his prospects in the service. In order to avoid such a contingency, the Government may consider the introduction of a system in which the officer who has to make entries in the confidential roll may be required to record his remarks in the presence of the officer against whom remarks are proposed to be made after giving him an opportunity to explain any circumstance that may appear to be against him with the right to make representation to higher authorities against any adverse remarks. This course may obviate many times totally baseless remarks being made in the confidential roll and would minimise the unnecessary suffering to which the officer concerned will be exposed. Another system which may be introduced is to ask the officer who records the confidential remarks to serve a copy of such remarks on the officer concerned before the confidential roll is submitted to the higher authorities so that his representation against the remarks may also reach the higher authority shortly after the confidential roll is received. This would curtail the delay in taking action on the representation. Suspensions, adverse remarks in confidential rolls and frequent transfers from one place to another are ordered or made many a time without justification and without giving a reasonable opportunity to the officer concerned and such actions surely result in the demoralisation of the services. Courts can give very little relief in such cases. The 306 Executive itself should, therefore, devise effective means to mitigate the hardship caused to the officers who are subjected to such treatment. These questions require to be examined afresh in the light of the experience gained in recent years and solutions should be found to eliminate as far as possible complaints against misuse of these powers by official superiors who may not be well disposed towards the officer against whom such action is taken. It is needless to state that a non disgruntled bureaucracy adds to the efficiency of administration. The appeal is accordingly allowed with costs. H.S.K. Appeal allowed.

The appellant, a directly recruited Deputy Superintendent of Police in the Police Department of the Respondent State was considered in 1976 for appointment as a member of the India Police Service under the provisions of the Indian Police Service (Recruitment) Rules, 1954 read with the Indian Police Service (Appointment by promotion) Regulations, 1955. The Selection Committee did not include the appellant in the select list because of an adverse entry in his confidential roll of 1973 74. The appellant was communicated the said adverse entry only in 1977 which was later on expunged by the State Government in December 1980. There were also adverse entries in the confidential roll of the appellant for the year 1974 75 which were communicated to him in 1976 and which were also later on expunged by the State Government in February, 1978 and October 1980. The Selection Committee met again in March 1981, but this time also did not include the appellant in the select list while some of his juniors were included. The appellant questioned the validity of the decision of the Selection Committee in a writ petition before the High Court. The High Court dismissed the writ petition at the stage of admission. Hence this appeal. In this appeal the appellant urged that the Selection Committee was wrong in relying upon the adverse entries which had been made in his confidential rolls which had not been either communicated to him or against which he had made representation which had remained undisposed of and which had been subsequently expunged. Allowing the appeal, ^ HELD: The principle is well settled that in accordance with the rules of natural justice, an adverse report in a confidential roll cannot be acted upon to deny promotional opportunities unless it is communicated to the person concerned so that he has an opportunity to improve his work and conduct or to explain the circumstances leading to the report. Such an opportunity is not an empty formality, its object, partially, being to enable the superior authorities to decide on a consideration of the explanation offered by the person concerned, whether the adverse report is justified. [302 F] Gurdial Singh Fijji vs State of Punjab & Ors., ; referred to. In the instant case, the case of the appellant for promotion to the Indian 300 Police Service Cadre had not been considered by the committee in a just and fair way and his case has been disposed of contrary to the principles laid down in the Gurdial Singh Fijji 's case. The decisions of the Selection Committee recorded at its meetings in which the case of the appellant was considered are vitiated by reason of reliance being placed on the adverse remarks which were later on expunged. The High Court committed an error in dismissing the petition of the appellant. The appellant has made out a case for reconsideration of the question of his promotion to the Indian Police Service Cadre of the State of Bihar as on December 22, 1976. The Selection Committee has now to reconsider the case of the appellant accordingly. [104 E G] R.L. Butail vs Union of India & Ors., [1971] 2 S.C.R. 55. distinguished. In order to avoid a contingency, as arose in this case, the Government may consider the introduction of a system in which the officer who has to make entries in the confidential roll may be required to record his remarks in the presence of the Officer against whom remarks are proposed to be made after giving him an opportunity to explain any circumstance that may appear to be against him with the right to make representation to higher authorities against any adverse remarks. Another system which may be introduced is to ask the officer who records the confidential remarks to serve a copy of such remarks on the officer concerned before the confidential roll is submitted to the higher authorities so that his representation against the remarks may also reach the higher authority shortly after the confidential roll is received. This would curtail the delay in taking action on the representation. [105 E G]

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N/ORIGINAL JURISDICTION: Criminal Appeal No. 745 of 1980. Appeal by Special leave from the Judgment and Order dated the 21st December, 1979 of the Punjab & Haryana High Court in Criminal Appeal No. 1107 of 1979 & Murder Reference No. 15 of 1979. WITH Writ Petition (CRL) No. 529 of 1980 (Under Article 32 of the Constitution of India) AND Writ Petition (CRL) No. 368 of 1981 (Under Article 32 of the Constitution of India) AND Special Leave Petition (CRL.) No. 2744 of 1980 From the Judgment and order dated the 28th August, 1980 of the Punjab & Haryana High Court in Criminal Appeal No. 317 of 1980 and Murder Reference No. 4 of 1980. AND Writ Petition No. 1365 of 1982 (Under Article 32 of the Constitution of India) AND Criminal Appeal No. 303 of 1982 Appeal by Special leave from the Judgment and Order dated the 29th & 30th April, 1982 of the Bombay High Court in Criminal Appeal No. 180 of 1982 & Confirmation Case No. 2/82. AND Criminal Appeal No. 502 of 1982 Appeal by Special leave from the Judgment and Order dated the 4th March, 1982 of the Punjab & Haryana High Court in Criminal Appeal No. 711 DB of 1981. 695 The following Judgments were delivered CHANDRACHUD, CJ : The question which arises for consideration in these proceedings is whether section 303 of the Indian Penal Code infringes the guarantee contained in Article. 21 of the Constitution which provides that "No person shall be deprived of his life or personal liberty except according to procedure established by law. " Section 300 of the Penal Code defines 'Murder ', while section 302 reads thus: "302. Punishment for murder whoever commits murder shall be punished with death, or imprisonment for life, and shall also be liable to fine." Section 302 is not the only section in the Penal Code which prescribes the sentence of life imprisonment. Literally, it is one of the fifty one sections of that Code which prescribes that sentence. The difference between those sections on one hand and section 302 on the other is that whereas, under those sections life imprisonment is the maximum penalty that can be imposed, under section 302 life imprisonment is the minimum penalty which has to be imposed. The only option open to a court which convicts a person of murder is to impose either the sentence of life imprisonment or the sentence of death. The normal sentence for murder is life imprisonment. Section 354(3) of the Code of Criminal Procedure, 1973 provides: "354(3) When the conviction is for an offence punishable with death or, in the alternative, with imprisonment for a term of years, the judgment shall state the reasons for the sentence awarded, and, in the case of sentence of death, the special reasons for such sentence. " While upholding the validity of the death sentence as a punishment for murder, a Constitution Bench of this Court ruled in Bachan Singh(1) that death sentence can be imposed in a very exceptional class of cases "the rarest of rare cases". The Indian Penal Code was passed in 1860. The framers of that Code achieved a measure of success in classifying offences 696 according to their subject matter, defining them with precision and in prescribing what, in the context of those times, was considered to be commensurate punishment for those offences. One of the problems which they had to deal with, was as to the punishment which should be prescribed for the offence of murder committed by a person who is under a sentence of life imprisonment. They solved that problem by enacting section 303, which reads thus: "303. Punishment for murder by life convict Whoever, being under sentence of imprisonment for life, commits murder, shall be punished with death. " The reason, or at least one of the reasons, why the discretion of the Court to impose a lesser sentence was taken away and the sentence of death was made mandatory in cases which are covered by section 303 seems to have been that if, even the sentence of life imprisonment was not sufficient to act as a deterrent and the convict was hardened enough to commit a murder while serving that sentence, the only punishment which he deserved was death. The severity of this legislative judgment accorded with the deterrent and retributive theories of punishment which then held sway. The reformative theory of punishment attracted the attention of criminologists later in the day. How sternly the legislature looked at the offence of murder committed by a life convict can be gauged by the fact that in the early history of the Code of Criminal Procedure, unlike as at present, if a person undergoing the sentence of transportation for life was sentenced to transportation for another offence, the latter sentence was to commence at the expiration of the sentence of transportation to which he was previously sentenced, unless the court directed that the subsequent sentence of transportation was to run concurrently with the previous sentence of transportation. It was in 1955 that section 397 of the Criminal Procedure Code of 1898 was replaced by a new section 397 by Amendment Act 26 of 1955. Under the new sub section (2) of section 397 which came into force on January 1, 1956, if a person already undergoing a sentence of imprisonment for life was sentenced on a subsequent conviction to imprisonment for life, the subsequent sentence had to run concurrently with the previous sentence. Section 427(2) of the Criminal Procedure Code of 1973 is to the same effect. The object of referring to this aspect of the matter is to emphasise that when section 303 of the Penal Code was originally enacted, the legislature did not 697 consider that even successive sentences of transportation for life were an adequate punishment for the offence of murder committed by a person who was under the sentence of life imprisonment. While enacting section 303 in terms which create an absolute liability, the framers of the Penal Code ignored several important aspects of cases which attract the application of that section and of questions which are bound to arise under it. They seem to have had only one kind of case in their mind and that is, the commission of murder of a jail official by a life convict. It may be remembered that in those days, jail officials were foreigners, mostly Englishmen, and, alongside other provisions which were specially designed for the members of the ruling class as, for example, the choice of jurors, section 303 was enacted in order to prevent assaults by the indigenous breed upon the white officers. In its 42nd Report (1971), the Law Commission of India has observed in paragraph 16.17 (page 239), that "the primary object of making the death sentence mandatory for an offence under this section seems to be to give protection to the prison staff". We have no doubt that if a strictly penological view was taken of the situation dealt with by section 303, the framers of the Code would have had a second thought on their decision to make the death sentence mandatory, even without the aid of the constitutional constraints which operate now. But before we proceed to point out the infirmities from which section 303 suffers, we must indicate the nature of the argument which has been advanced on behalf of the petitioners in order to assail the validity of that section. The sum and substance of the argument is that the provision contained in section 303 is wholly unreasonable and arbitrary and thereby, it violates Article 21 of the Constitution which affords the guarantee that no person shall be deprived of his life or personal liberty except in accordance with the procedure established by Law. Since the procedure by which section 303 authorises the deprivation of life is unfair and unjust, the section is unconstitutional. Having examined this argument with care and concern, we are of the opinion that it must be accepted and section 303 of the Penal Code struck down. In Maneka Gandhi vs Union of India,(1) it was held by a seven Judge Bench that a statute which merely prescribes some kind of procedure for depriving a person of his life or personal liberty cannot 698 ever meet the requirements of Article 21: The procedure prescribed by law has to be fair, just and reasonable, not fanciful, oppressive or arbitrary. Bhagwati J. observed in that case that "Principally, the concept of reasonableness must be projected in the procedure contemplated by Article 21, having regard to the impact of Article 14 on that article". In Sunil Batra vs Delhi Administration,(1) while dealing with the question as to whether a person awaiting death sentence can be kept in solitary confinement, Krishna Iyer J. said that though our Constitution did not have a "due process" clause as in the American Constitution, the same consequence ensued after the decisions in the Bank Nationalisation case(2) and Maneka Gandhi: "For what is punitively outrageous, scandalizingly unusual or cruel and rehabilitatively counter productive, is unarguably unreasonable and arbitrary and is shot down by Articles 14 and 19 and if inflicted with procedural unfairness, falls foul of Article 21." Desai J. observed in the same case that: "The word 'Law ' in the expression 'procedure established by law ' in Article 21 has been interpreted to mean in Maneka Gandhi 's case that the law must be right, just and fair, and not arbitrary, fanciful or oppressive. Otherwise it would be no procedure at all and the requirement of Article 21 would not be satisfied. If it is arbitrary, it would be violative of Article 14. " In Bachan Singh which upheld the constitutional validity of the death penalty, Sarkaria J., speaking for the majority, said that if Article 21 is understood in accordance with the interpretation put upon it in Maneka Gandhi, it will read to say that: "No person shall be deprived of his life or personal liberty except according to fair, just and reasonable procedure established by valid law." (page 730) These decisions have expanded the scope of Article 21 in a significant way and it is now too late in the day to contend that it is for the Legislature to prescribe the procedure and for the Court to follow it, that it is for the legislature to provide the punishment 699 and for the courts to impose it. Two instances, undoubtedly extreme, may be taken by way of illustration for the purpose of showing how the courts are not bound, and are indeed not free, to apply a fanciful procedure by a blind adherence to the letter of the law or to impose a savage sentence. A law providing that an accused shall not be allowed to lead evidence in self defence will be hit by Articles 14 and 21. Similarly, if a law were to provide that the offence of theft will be punishable with the penalty of the cutting of hands, the law will be bad as violating Article 21. A savage sentence is anathema to the civilized jurisprudence of Article 21. These are, of course, extreme illustrations and we need have no fear that our legislatures will ever pass such laws. But these examples serve to illustrate that the last word on the question of justice and fairness does not rest with the legislature. Just as reasonableness of restrictions under clauses (2) to (6) of Article 19 is for the courts to determine, so is it for the courts to decide whether the procedure prescribed by a law for depriving a person of his life or liberty is fair, just and reasonable. The question which then arises before us is whether the sentence of death, prescribed by section 303 of the Penal Code for the offence of murder committed by a person who is under a sentence of life imprisonment, is arbitrary and oppressive so as to be violative of the fundamental right conferred by Article 21. Counsel for the respondents rely upon the decision in Bachan Singh in support of their submission that the provision contained in section 303 does not suffer from any constitutional infirmity. They contend that the validity of death sentence was upheld in that case and since, section 303 does no more than prescribe death sentence for the offence of murder, the ratio of Bachan Singh would apply and the question as regards the validity of that section must be treated as concluded by that decision. These questions, it is said, should not be allowed to raise their head over and over again. This argument suffers from a two fold defect. In the first place, it betrays a certain amount of misunderstanding of what was decided in Bachan Singh and secondly, it overlooks the essential distinction between the provisions of section 302 and section 303. Academicians and text book writers have the freedom to discuss legal problems in the abstract because, they do not have to decide any particular case. On the other hand, the decisions rendered by the court have to be understood in the light of the legal provisions which came up for consideration therein and in the light of the facts, if facts were involved. The majority did not lay down any abstract proposition in Bachan Singh 700 that "Death sentence is constitutional", that is to say, that "It is permissible under the Constitution to provide for the sentence of death". To be exact, the question which arose for the consideration of the Court was not whether, under the Constitution, it is permissible to provide for the sentence of death. The precise question which arose in that case was whether section 302 of the Penal Code which provides for the sentence of death as one of the two alternative sentences is valid. It may be recalled that section 302 provides for the sentence of death as an alternative sentence which may be imposed. The normal sentence for murder is life imprisonment; and if the death sentence has to be imposed, the Court is under a legal obligation under section 354(3) of the Criminal Procedure Code to state the special reasons for imposing that sentence. That explains why, in Bachan Singh, Sarkaria J., who spoke for the majority, underscored the words "alternative" and "may" in paragraph 19 of the judgment, whilst observing that the Penal Code prescribes death as an alternative punishment to which the offender may be sentenced in cases relating to seven kinds of offences. The majority concluded that section 302 of the Penal Code is valid for three main reasons: Firstly, that the death sentence provided for by section 302 is an alternative to the sentence of life imprisonment, secondly, that special reasons have to be stated if the normal rule is departed from and the death sentence has to be imposed; and, thirdly, because the accused is entitled, under section 235(2) of the Code of Criminal Procedure, to be heard on the question of sentence. The last of these three reasons becomes relevant, only because of the first of these reasons. In other words, it is because the Court has an option to impose either of the two alternative sentences, subject to the rule that the normal punishment for murder is life imprisonment, that it is important to hear the accused on the question of sentence. If the law provides a mandatory sentence of death as section 303 of the Penal Code does, neither section 235(2) nor section 354(3) of the Code of Criminal Procedure can possibly come into play. If the Court has no option save to impose the sentence of death, it is meaningless to hear the accused on the question of sentence and it becomes superfluous to state the reasons for imposing the sentence of death. The blatant reason for imposing the sentence of death in such a case is that the law compels the court to impose that sentence. The ratio of Bachan Singh, therefore, is that, death sentence is constitutional if it is prescribed as an alternative sentence for the offence of murder and if the normal sentence prescribed by law for murder is imprisonment for life, 701 It will be clear from this discussion that since there is a fundamental distinction between the provisions of section 302 and section 303 of the Penal Code, the ratio of Bachan Singh will not govern the question as regards the validity of section 303. This latter question is res integra. Stated briefly, the distinction between the two sections is that whereas, section 302 provides for the sentence of death as alternative sentence, the only sentence which section 303 prescribes is the sentence of death. The Court has no option under section 303 to impose any other sentence, no matter what is the motivation of the crime and the circumstances in which it was committed. Secondly, section 354(3) of the Code of Criminal Procedure applies in terms to those cases only wherein "the conviction is for an offence punishable with death or, in the alternative, with imprisonment for life or imprisonment for a term of years". Since section 303 does not provide for an alternative sentence, section 354(3) has no application to cases arising under that section. Thirdly, section 235(2) of the Code of Criminal Procedure which confers a right upon the accused to be heard on the question of sentence, becomes, a meaningless ritual in cases arising under section 303. If the Court itself has no option to pass any sentence except the sentence of death, it is an idle formality to ask the accused as to what he has to say on the question of sentence. The question which we had posed for our consideration at the beginning of this judgment was somewhat broad. In the light of the aforesaid discussion, that question narrows itself to a consideration of certain specific issues. The first and foremost issue which arises specifically for our consideration is whether there is any intelligible basis for giving differential treatment to an accused who commits the offence of murder whilst under a sentence of life imprisonment. Can he be put in a special class or category as compared with others who are found guilty of murder and be subjected to hostile treatment by making it obligatory upon the court to sentence him to death ? In other words, is there a valid basis for classifying persons who commit murders whilst they are under the sentence of life imprisonment, separately from those who commit murders whilst they are not under the sentence of life imprisonment, for the purpose of making the sentence of death obligatoy in the case of the former and optional in the case of the latter ? Is there any nexus between such discrimination and the object of the impugned statute ? These questions stem principally from the position that section 303 makes the sentence of death mandatory. That position raises certain side 702 issues which are equally important. Is a law which provides for the sentence of death for the offence of murder, without affording to the accused an opportunity to show cause why that sentence should not be imposed, just and fair ? Secondly, is such a law just and fair if, in the very nature of things, it does not require the Court to state the reasons why the supreme penalty of law is called for ? Is it not arbitrary to provide that whatever may be the circumstances in which the offence of murder was committed, the sentence of death shall be imposed upon the accused ? The first question which we would like to examine is whether there is any valid basis for classifying persons who commit murders whilst they are under the sentence of life imprisonment as distinguished from those who commit murders whilst they are not under the sentence of life imprisonment, for the purpose of making the sentence of death mandatory in the case of the former class and optional in the case of the latter class. We are unable to see any rational justification for making a distinction, in the matter of punishment, between these two classes of offenders. Murders can be motiveless in the sense that, in a given case, the motive which operates on the mind of the offender is not known or is difficult to discover. But, by and large, murders are committed for any one or more of a variety of motives which operate on the mind of the offender, whether he is under a sentence of life imprisonment or not. Such motives are too numerous and varied to enumerate but hate, lust, sex, jealousy, gain, revenge and a host of weaknesses to which human flesh is subject are common motives for the generality of murders. Those reasons can operate as a motive force of the crime whatever may be the situation in which the criminal is placed and whatever may be the environment in which he finds himself. But, as we have stated earlier, the framers of the Penal Code had only one case in mind, namely, the murder of jail officials by life convicts. Even if we confine ourselves to that class of cases, the test or reasonableness of classification will break down inevitably. From that point of view, it will be better to consider under different heads cases in which murders are committed by life convicts within the jail precincts and murders which are committed by life convicts outside the jail, while they are on parole or bail. We will first deal with cases of murders committed by life convicts within the precincts of the jail. The circumstance that a 703 person is undergoing a sentence of life imprisonment does not minimise the importance of mitigating factors which are relevant on the question of sentence which should be imposed for the offence committed by him while he is under the sentence of life imprisonment. Indeed, a crime committed by a convict within the jail while he is under the sentence of life imprisonment may, in certain circumstances, demand and deserve greater consideration, understanding and sympathy than the original offence for which he was sentenced to life imprisonment. This can be illustrated with the help of many instances but one or two of those may suffice. A life convict may be driven to retaliate against his systematic harassment by a warder, who habitually tortures, starves and humiliates him. If the act results in the death of the warder, the crime may amount to murder because none of the exceptions mentioned in section 300 may apply. The question is whether it is reasonable to provide that a life convict who has committed the offence of murder in these circumstances must necessarily be sentenced to death and an opportunity denied to him to explain why the death sentence should not be imposed upon him. And, how is it relevant on the question of the prescription of a mandatory sentence of death that the murder was committed by a life convict ? Then again, to take another instance, there are hundreds of inmates in central jails. A life convict may be provoked gravely but not suddenly, or suddenly but not gravely enough, by an insinuation made against his wife 's chastity by another inmate of the jail. If he commits the murder of the insinuator, the only sentence which can be imposed upon him under section 303 is the sentence of death. The question is, whether it is reasonable to deprive such a person, because he was under a sentence of life imprisonment when he committed the offence of murder, from an opportunity to satisfy the court that he acted under the pressure of a grave insult to his wife and should not therefore be sentenced to death. We are of the opinion that, even limiting oneself to murders committed by life convicts within the four walls of jail, it is difficult to hold that the prescription of the mandatory sentence of death answers the test of reasonableness. The other class of cases in which, the offence of murder is committed by a life convict while he is on parole or on bail may now be taken up for consideration. A life convict who is released on parole or on bail may discover that taking undue advantage of his absence, a neighbour has established illicit intimacy with his wife. If he finds them in an amorous position and shoots the seducer on 704 the spot, he may stand a fair chance of escaping from the charge of murder, since the provocation is both grave and sudden. But if, on seeing his wife in the act of adultery, he leaves the house, goes to a shop, procures a weapon and returns to kill her paramour, there would be evidence of what is called mens rea, the intention to kill. And since, he was not acting on the spur of the moment and went away to fetch a weapon with murder in his mind, he would be guilty of murder. It is a travesty of justice not only to sentence such a person to death but to tell him that he shall not be heard why he should not be sentenced to death. And, in these circumstances, how does the fact that the accused was under a sentence of life imprisonment when he committed the murder, justify the law that he must be sentenced to death ? In ordinary life we will not say it about law, it is not reasonable to add insult to injury. But, apart from that, a provision of law which deprives the court of the use of its wise and beneficent discretion in a matter of life and death, without regard to the circumstances in which the offence was committed and, therefore, without regard to the gravity of the offence, cannot but be regarded as harsh, unjust and unfair. It has to be remembered that the measure of punishment for an offence is not afforded by the label which that offence bears, as for example 'Theft ', 'Breach of Trust ' or "Murder '. The gravity of the offence furnishes the guideline for punishment and one cannot determine how grave the offence is without having regard to the circumstances in which it was committed, its motivation and its repercussions. The legislature cannot make relevant circumstances irrelevant, deprive the courts of their legitimate jurisdiction to exercise their discretion not to impose the death sentence in appropriate cases, compel them to shut their eyes to mitigating circumstances and inflict upon them the dubious and unconscionable duty of imposing a preordained sentence of death. Equity and good conscience are the hall marks of justice. The mandatory sentence of death prescribed by section 303, with no discretion left to the court to have regard to the circumstances which led to the commission of the crime, is a relic of ancient history. In the times in which we live, that is the lawless law of military regimes. We, the people of India, are pledged to a different set of values. For us, law ceases to have respect and relevance when it compels the dispensers of justice to deliver blind verdicts by decreeing that no matter what the circumstances of the crime, the criminal shall be hanged by the neck until he is dead. We are also unable to appreciate how, in the matter of sentencing, any rational distinction can be made between a person who 705 commits a murder after serving out the sentence of life imprisonment and a person who commits a murder while he is still under that sentence. A person who has been in jail, say for 14 years, and commits the offence of murder after coming out of the jail upon serving out that sentence is not entitled to any greater consideration than a person who is still serving the sentence of life imprisonment for the mere reason that the former has served out his sentence and the latter is still under the sentence imposed upon him. The classification based upon such a distinction proceeds upon irrelevant considerations and bears no nexus with the object of the statute, namely, the imposition of a mandatory sentence of death. A person who stands unreformed after a long term of incarceration is not, by any logic entitled to preferential treatment as compared with a person who is still under the sentence of life imprisonment. We do not suggest that the latter is entitled to preferential treatment over the former. Both have to be treated alike in the matter of prescription of punishment and whatever safeguards and benefits are available to the former must be made available to the latter. We have already adverted to the stresses and strains which operate on convicts who are sentenced to long terms of imprisonment like the sentence of life imprisonment. Many scholars have conducted research into this matter. It will serve our purpose to draw attention to the following passage from a book called "The Penalty of Death" by Thorsten Sellin (1) "Anyone who has studied prisons and especially the maximum security institutions, which are the most likely abodes of murderers serving sentences of life imprisonment or long terms of years, realizes that the society of captives within their walls is subject to extraordinary strains and pressures, which most of those in the outside world experience in attenuated forms, if at all. The prison is an unnatural institution. In an area of limited size, surrounded by secure walls, it houses from a few score to several thousand inmates and their custodians. In this unisexual agglomeration of people, separated from family and friends, prisoners are constantly thrown into association with one another and subject to a host of regulations that limit their freedom of action and are 706 imposed partly by the prison authorities and partly by the inmate code. It is not astonishing that in this artificial environment altercations occur, bred by the clash of personalities and the conflict of interests that lead to fights in free society, especially when one considers that most of the maximum security prison inmates are fairly young and have been raised in the poorer quarters of our cities, where resort to physical violence in the settlement of disputes is common. Indeed, what surprises the student of prison violence is the relative rarity of assaultive events, everything considered." (p. 105) This is some good reason why convicts who are under the sentence of life imprisonment should not be discriminated against as compared with others, including those who have served out their long terms of imprisonment. There is another passage in the same book which shows with the help of statistics that the frequency of murders committed by life convicts while they are on parole is not so high as to justify a harsher treatment being accorded to them when they are found guilty of having committed a murder while on parole, as compared with other persons who are guilty of murder. The author says : "In the United States, convicts whose death sentences have been commuted or who have been sentenced to life imprisonment for murder may regain their freedom by being paroled after spending a decade or two in prison. Some are deprived of this opportunity, because they die a natural or violent death while in the institution. Some may be serving time in states that have laws baring the release of first degree murderers or lifers, but even there the exercise of executive clemency may remove the barrier in individual cases. There is no need to discuss here the various aspects of the parole process when murderers are involved because we are concerned only with how such parolees behave once they have been set free. Do they, indeed, abuse their freedom and are they especially likely to prove a menace to the lives of their fellow citizens ? It is fear of that menace that makes some people favor capital punishment as a sure means of preventing a murderer from killing again after his return to freedom in the community. As we shall see, paroled murderers do sometimes repeat their crime, but a look at some facts 707 will show that among parolees who commit homicides, they rank very low." (P. 113) According to the statistics tabulated at page 115 of the book, out of 6835 life convicts who were released on parole, 310 were returned to prison for new crimes committed by them while on parole. Out of these 310 twenty one parolees were returned to the prison on the charge of wilful homicide, that is, murder. There is no comparable statistical data in our country in regard to the behaviour of life convicts who are released on parole or bail but there is no reason to assume that the incidence of murders committed by such persons is unduly high. Indeed, if there is no scientific investigation on this point in our country, there is no basis for treating such persons differently from others who commit murders. Thus, there is no justification for prescribing a mandatory sentence of death for the offence of murder committed inside or outside the prison by a person who is under the sentence of life imprisonment. A standardized mandatory sentence, and that too in the form of a sentence of death, fails to take into account the facts and circumstances of each particular case. It is those facts and circumstances which constitute a safe guideline for determining the question of sentence in each individual case. "The infinite variety of cases and facets to each would make general standards either meaningless 'boiler plate ' or a statement of the obvious. .(1)". As observed by Palekar J., who spoke for a Constitution Bench in Jagmohan Singh vs State of U.P. (2) : "The impossibility of laying down standards is at the very core of the criminal law as administered in India which invests the Judges with a very wide discretion in the matter of fixing the degree of punishment . . The exercise of judicial discretion on well recognised principles is, in the final analysis, the safest possible safeguard for the accused." (Page 559) The self confidence which is manifested in the legislative prescription of a computerised sentence of death is not supported by scientific data. There appears to be no reason why in the case of a 708 person whose case falls under section 303, factors like the age and sex of the offender, the provocation received by the offender and the motive of the crime should be excluded from consideration on the question of sentence. The task performed by the legislature while enacting section 303 is beyond even the present human ability which has greater scientific and sophisticated resources available for compiling data, than those which were available in 1860 when section 303 was enacted as part of the Indian Penal Code. It is because the death sentence has been made mandatory by section 303 in regard to a particular class of persons that, as a necessary consequence, they are deprived of the opportunity under section 235(2) of the Criminal Procedure Code to show cause why they should not be sentenced to death and the Court is relieved from its obligation under section 354(3) of that Code to state the special reasons for imposing the sentence of death. The deprivation of these rights and safeguards which is bound to result in injustice is harsh, arbitrary and unjust. We have stated at the beginning of this judgment that there are as many as 51 sections of the Penal Code which provide for the sentence of life imprisonment. Those sections are : Sections 121, 121 A, 122, 124 A, 125, 128, 130, 131, 132, 194, 222, 225, 232, 238, 255, 302, 304 part I, 305, 307, 311, 313, 314, 326, 328, 363 A, 364, 371, 376, 388, 389, 394, 395, 396, 400, 409, 412, 413, 436, 438, 449, 459, 460, 467, 472, 474, 475, 477, 489 A, 489 B, 489 D and section 511 (attempt to commit offences punishable with imprisonment for life). A person who is sentenced to life imprisonment for any of these offences incurs the mandatory penalty of death under section 303 if he commits a murder while he is under the sentence of life imprisonment. It is impossible to see the rationale of this aspect of section 303. There might have been the semblance of some logic to explain, if not to sustain, such a provision if murder was the only offence for which life imprisonment was prescribed as a punishment. It could then be argued that the intention of the legislature was to provide for enhanced sentence for the second offence of murder. But, under the section as it stands, a person who is sentenced to life imprisonment for breach of trust (though, such a sentence is rarely imposed), or for sedition under section 124 A or for counterfeiting a coin under section 232 or for forgery under section 467 will have to be sentenced to death if he commits a murder while he is under the sentence of life imprisonment. There is nothing in common between such offences previously committed and the subsequent 709 offence of murder. Indeed, it defies all logic to understand why such a provision was made and what social purpose can be served by sentencing a forgerer to a compulsory punishment of death for the mere reason that he was undergoing the sentence of life imprisonment for forgery when he committed the offence of murder. The motivation of the two offences is different, the circumstances in which they are committed would be different and indeed the two offences are basically of a different genre. To prescribe a mandatory sentence of death for the second of such offences for the reason that the offender was under the sentence of life imprisonment for the first of such offences is arbitrary beyond the bounds of all reason. Assuming that section 235(2) of the Criminal Procedure Code were applicable to the case and the Court was under an obligation to hear the accused on the question of sentence, it would have to put some such question to the accused : "You were sentenced to life imprisonment for the offence of forgery. You have committed a murder while you were under that sentence of life imprisonment. Why should you not be sentenced to death ?" The question carries its own refutation. It highlights how arbitrary and irrational it is to provide for a mandatory sentence of death in such circumstances. In its Thirty Fifth Report on 'Capital Punishment ' published in 1967, the Law Commission of India considered in paragraphs 587 to 591 the question of prescribing a lesser sentence for the offences under sections 302 and 303 of the Penal Code. It observed in paragraph 587 that : "For the offence under section 303, Indian Penal Code, the sentence of death is mandatory. The reason for this is that in the case of an offence committed by a person who is already under sentence of imprisonment for life, the lesser sentence of imprisonment for life would be a formality. It has, however, been suggested that even for this offence the sentence of death should not be mandatory. We have considered the arguments that can be advanced in support of the suggested change. It is true that, ordinarily speaking, leaving the court no discretion in the matter of sentence is an approach which is not in conformity with modern trends." 710 After dealing with the question whether the sentence of death ought not to be mandatory and after considering whether section 303 should be amended so as to limit its application to cases in which a person sentenced to life imprisonment for the offence of murder commits again a murder while he is under the sentence of life imprisonment, the Law Commission concluded in paragraph 591 of its Report that "It is not necessary to make any change". It felt that : "Acute cases of hardship, where the extenuating circumstances are overwhelming in their intensity, can be dealt with under section 401, Code of Criminal Procedure, 1898. and that seems to be sufficient". In its Forty second Report on the Indian Penal Code, published in June 1971, the Law Commission considered again the question of amending section 303. It found it anomalous that a person whose sentence of imprisonment for life was remitted unconditionally by the Government could be held not to be under the sentence of life imprisonment, but if a person was released conditionally, he could still be held to be under that sentence. It therefore suggested that section 303 should be amended so as to restrict its application to life convicts who are actually in prison. The Commission did not, however, recommend any change since, section 303 was "very rarely applied". It felt that if there was an exceptionally hard case, it could be easily dealt with by the President or the Governor under the prerogative of mercy. On December 11, 1972 a Bill was introduced in the Rajya Sabha to amend the Penal Code, one of the amendments suggested being that section 303 of the Code should be deleted. On a motion made by the then Minister of State in the Ministry of Home Affairs, the Bill was referred to the Joint Committee of the Rajya Sabha and the Lok Sabha: The Committee held 97 sittings and made various recommendations, one of which was that the punishment for murder which was prescribed separately by sections 302 and 303 of the Penal Code should be brought under one section of the Code. The Committee further recommended that it should not be obligatory to impose the sentence of death on a person who commits a murder while under the sentence of life imprisonment and the question whether, in such a case, the sentence of death or the sentence of life imprisonment should be awarded should be left to the discretion of the Court. The Committee accordingly suggested the addition of a new Clause 125 in the Bill for omitting section 303 of the Penal 711 Code. The Report of the Joint Committee was presented to the Rajya sabha on January 29, 1976 whereupon The Indian Penal Code (Amendment) Bill, XLII B of 1972, was tabled before the Rajya Sabha. But, what was proposed by Parliament was disposed of by the ballot box. A mid term parliamentary poll was held while the Bill was pending and there was a change of Government. The Bill lapsed and that was that. It is to be deeply regretted that the attention of an over worked Parliament has not yet been drawn to urgent reforms suggested in the Penal Code Amendment Bill XLII B of 1972. In all probability, the amendment suggested by Clause 125 (New) for the deletion of section 303 of the Penal Code would have passed muster without any opposition. The only snag in the passing of the Bill has been that it was not revived and put to vote. Section 303 was destined to die at the hands of the court. Our only regret is that during the last six years since 1977, some obscure forger sentenced to life imprisonment, who may have committed murder while under the sentence of life imprisonment, may have been sentenced to the mandatory sentence of death, unwept and unasked why he should not be hanged by the neck until he is dead. On a consideration of the various circumstances which we have mentioned in this judgment, we are of the opinion that section 303 of Penal Code violates the guarantee of equality contained in Article 14 as also the right conferred by Article 21 of the Constitution that no person shall be deprived of his life or personal liberty except according to procedure established by law. The section was originally conceived to discourage assaults by life convicts on the prison staff, but the Legislature chose language which far exceeded its intention. The section also assumes that life convicts are a dangerous breed of humanity as a class. That assumption is not supported by any scientific data. As observed by the Royal Commission in its Report on 'Capital Punishment ' (1) "There is a popular belief that prisoners serving a life sentence after conviction of murder form a specially troublesome and dangerous class. That is not so. Most find themselves in prison because they have yielded to temptation under the pressure of a combination of circumstances unlikely to recur '. In Dilip Kumar Sharma vs Sate of M.P., (2) this Court was not concerned with the question of the vires of section 303, but Sarkaria J., in his concurring judgment, described the vast sweep of that section by saying that "the section is Draconian in severity, relentless and inexorable in 712 operation". We strike down section 303 of Penal Code as unconstitutional and declare it void. It is needless to add that all cases of murder will now fall under section 302 of the Penal Code and there shall be no mandatory sentence of death for the offence of murder. The various cases in this batch of Appeals and writ petitions may now be placed before a Division Bench for disposal on merits in the light of these judgments. CHINNAPPA REDDY, J. Section 303, Indian Penal Code, is an anachronism. It is out of tune with the march of the times. It is out of tune with the rising tide of human consciousness. It is out of tune with the philosophy of an enlightened Constitution like ours. It particularly offends article 21 and the new jurisprudence which has sprung around it ever since the Banks Nationalisation case freed it from the confines of Gopalan. After the Banks Nationalisation case, no article of the Constitution guaranteeing a Fundamental Right was to lead an isolated existence. Added nourishment was to be sought and added vigour was to be achieved by companionship. Beg, CJ,. said it beautifully in Maneka Gandhi: "Articles dealing with different fundamental rights contained in Part III of the Constitution do not represent entirely separate streams of rights which do not mingle at many points. They are all parts of an integrated scheme in the Constitution. Their waters must mix to constitute that grand flow of unimpeded and impartial Justice (social, economic and political), Freedom (not only of thought, expression, belief, faith and worship, but also of association, movement, vocation or occupation as well as of acquisition and possession of reasonable property), of Equality (of status and of opportunity, which imply absence of unreasonable or unfair discrimination between individuals, groups and classes), and of Fraternity (assuring dignity of the individual, and the unity of the nation), which our Constitution visualises. Isolation of various aspects of human freedom, for purposes of their protection, is neither realistic nor beneficial but would defeat the very objects of such protection." Maneka Gandhi carried article 21 to nobler rights and made it the focal point round which must now revolve to advantage all 713 claims to rights touching life and liberty. If article 21 declared, "No person shall be deprived of his life or liberty except according to procedure established by law," the Court declared, without frill or flourish, in simple and absolute terms: "The procedure prescribed by law has to be fair, just and reasonable, not fanciful, oppressive or arbitrary", (Chandrachud, J, as he then was). The question whether Sec. 302 which provides for a sentence of death as an alternative penalty was constitutionally valid was raised in Bachan Singh. Bachan Singh sustained the validity of Sec. 302 because the sentence of imprisonment for life and not death was the normal punishment for murder, and the sentence of death was an alternative penalty to be resorted to in the most exceptional of cases and the discretion to impose or not to impose the sentence of death was given to the Judge. The ruthless rigour of the sentence of death, even as an alternative penalty, was thought to be tempered by the wide discretion given to the Judge. Judicial discretion was what prevented the outlawing of the sentence of death even as an alternative penalty for murder. Even so the Court took care to declare that it could only be imposed in the 'rarest of rare ' cases. Judged in the light shed by Maneka Gandhi and Bachan Singh, it is impossible to uphold Sec. 303 as valid. 303 excludes judicial discretion. The scales of justice are removed from the hands of the Judge so soon as he pronounces the accused guilty of the offence. So final, so irrevocable and so irrestitutable is the sentence of death that no law which provides for it without involvement of the judicial mind can be said to be fair, just and reasonable. Such a law must necessarily be stigmatised as arbitrary and oppressive. 303 is such a law and it must go the way of all bad laws. I agree with my Lord Chief Justice that Sec. 303, Indian Penal Code, must be struck down as unconstitutional.

Section 303, I.P.C. provides that whoever, being under sentence of imprisonment for life, commits murder, shall be punished with death Counsel for appeallants/petitioners contended that section 303, I.P.C. is unconstitutional not only for the reason that it is unreasonable and arbitrary but also because it authorises deprivation of life by an unjust and unfair procedure. Counsel for respondents on the other hand contended that since the validity of death sentence has been upheld in Bachan Singh and since section 303 does no more than prescribe death sentence for the offence of murder, the ratio of Bachan Singh should apply and the question as regards the validity of section 303, I.P.C. must be treated as having been concluded by that decision. Upholding the contention of the appellants/petitioners, ^ HELD: Per Chandrachud, C.J. (Chinnappa Reddy, J Concurring) Section 303, I.P.C. is unconstitutional and void. It violates the guarantee of equality contained in article 14 as also the right conferred by article 21 that no person shall be deprived of his life or personal liberty except according to procedure established by law. [712 A; 711 E] (i) There is no rational justification for making a distinction in the matter of punishment between persons who commit murders whilst they are under the sentence of life imprisonment and persons who commit murders whilst they are not under the sentence of life imprisonment. Further, no rational distinction can be made in the matter of sentencing between a person who commits murder after serving out the sentence of life imprisonment and a person who commits murder while he is still under that sentence. A person who stands unreformed after a long term of incarceration is not, by any logic, entitled to preferential treatment as compared with a person who is still under the sentence of life imprisonment. The classification based upon such a distinction proceeds upon irrelevant considerations and bears no nexus with the object of the statute, namely, the imposition of a mandatory sentence of death. [70 C D; 704 H; 705 B D] 691 (ii) Murders are, by and large, committed for any one or more of a variety of motives which operate on the mind of the offender, whether he is under a sentence of life imprisonment or not. Such motives are too numerous and varied to enumerate but hate, lust, sex, jealousy, gain, revenge and a host of weaknesses to which human flesh is subject, are common motives for the generality of murders. Those reasons can operate as a motive force of the crime whatever may be the situation in which the criminal is placed and whatever may be the environment in which he finds himself. [702 D F] (iii) Even limiting oneself to murders committed by life convicts within the four walls of the jail or while they are on parole or on tail, it is difficult to hold that the prescription of the mandatory sentence of death answers the test of reasonableness. The circumstance that a person is undergoing a sentence of life imprisonment does not minimise the importance of mitigating factors which are relevant on the question of sentence which should be imposed for the offence committed by him while he is under the sentence of life imprisonment. Indeed, a crime committed by a convict within the jail while he is under the sentence of life imprisonment may, in certain circumstances, demand and deserve greater consideration, understanding and sympathy than the original offence for which he was sentenced to life imprisonment. [703 F G; 702 H; 703 A B] (iv) Convicts who are sentenced to long terms of imprisonment like the sentence of life imprisonment are subject to extraordinary stresses and strains and they should not be discriminated against as compared with others. There is no justification for prescribing a mandatory sentence of death for the offence of murder committed inside or outside the prison by a person who is under the sentence of life imprisonment. Research studies conducted abroad have indicated that the frequency of murders committed by life convicts while they are on parole is not so high as to justify a harsher treatment being accorded to them when they are found guilty of having committed a murder while on parole, as compared with other persons who are guilty of murder. There is no comparable statistical data in our country in regard to the behaviour of life convicts who are released on parole or bail but there is no reason to assume that the incidence of murders committed by such persons is unduly high. Indeed, if there is no scientific investigation on this point in our country, there is no basis for treating such persons differently from others who commit murders.[705 D H; 706 A H; 707 A C] (v) There are as many as 51 sections in the Penal Code which provide for the sentence of life imprisonment. A person who is sentenced to life imprisonment for any of these offences incurs the mandatory penalty of death under section 303, if he commits a murder while he is under the sentence of life imprisonment. It is impossible to see the rationale of this aspect of section 303. There might have been the semblance of some logic to explain, if not to sustain, such a provision if murder was the only offence for which life imprisonment was prescribed as a punishment. It could then be argued that the intention of the legislature was to provide for enhanced sentence for the second offence of murder. But, under the section as it stands, a person who is sentenced to life imprisonment for breach of trust or for sedition under section 124 A or for counterfeiting a coin under section 232 or for forgery under s.467 will have to be sentenced to death if he commits a murder while he is under the sentence of life 692 imprisonment. There is nothing in common between such offences previously committed and the subsequent offence of murder. Indeed, it defies all logic to understand why such a provision was made and what social purpose can be served by sentencing a forgerer to a compulsory punishment of death for the mere reason that he was undergoing the sentence of life imprisonment for forgery when he committed the offence of murder. The motivation of the two offences is different, the circumstances in which they are committed would be different and indeed the two offences are basically of a different genre. To prescribe a mandatory sentence of death for the second of such offences for the reason that the offender was under the sentence of life imprisonment for the first of such offences is arbitrary beyond the bounds of all reason. [708 E H; 709 A C] (vi) A standardised mandatory sentence, and that too in the form of a sentence of death, fails to take into account the facts and circumstances of each particular case. It is those facts and circumstances which constitute a safe guideline for determining the question of sentence in each individual case. The impossibility of laying down standards is at the very core of the criminal law as administered in India which invests the judges with a very wide discretion in the matter of fixing the degree of punishment. The exercise of judicial discretion on well recognised principles is, in the final analysis, the safest possible safeguard for the accused. There is no reason why in the case of a person whose case falls under section 303, factors like the age and sex of the offender, the provocation received by the offender and the motive of the crime should be excluded from consideration on the question of sentence. [707 D H; 708 A] Jagmohan Singh vs State of U.P. ; , referred to. (vii) Equity and good conscience are the hall marks of justice. A provision of law which deprives the court of the use of its wise and beneficent discretion in a matter of life and death, without regard to the circumstances in which the offence was committee and, therefore without regard to the gravity of the offence, cannot but be regarded as harsh, unjust and unfair. The legislature cannot make relevant circumstances irrelevant, deprive the courts of their legitimate jurisdiction to exercise their discretion not to impose the death sentence in appropriate cases, compel them to shut their eyes to mitigating circumstances and inflict upon them the dubious and unconscionable duty of imposing a pre ordained sentence of death [704 D F] (viii) It is because the death sentence has been made mandatory by section 303 I.P.C. in regard to a particular class of persons that, as a necessary consequence, they are deprived of the opportunity under section 235 (2), Cr. P.C. to show cause why they should not be sentenced to death and the Court is relieved from its obligation under section 354 (3), Cr. P.C. to state the special reasons for imposing the sentence of death. The deprivation of these rights and safeguards which is bound to result in injustice is harsh, arbitrary and unjust. [708 C D] (ix) After the decisions in Maneka Gandhi, Sunil Batra and Bachan Singh it cannot be contended that it is for the legislature to prescribe the procedure and for the courts to follow it or that it is for the legislature to 693 provide the punishment and for the courts to impose it. The courts are not bound and are indeed not free, to apply a fanciful procedure by a blind adherence to the letter of the law or to impose a savage sentence. The last word on the question of justice and fairness does not rest with the legislature. Just as reasonableness of restrictions under cls. (2) to (6) of article 19 is for the courts to determine, so is it for the courts to decide whether the procedure prescribed by a law for depriving a person of his life or liberty is fair, just and reasonable. [698 G H; 699 C D] Maneka Gandhi vs Union of India, [1978] 2 S.C.R. 621; Sunil Batra vs Delhi Administration, ; ; and Bachan Singh vs State of Punjab, , referred to. (x) In Bachan Singh the majority concluded that s.302, I.P.C. is valid for three main reasons: Firstly, that the death sentence provided for by section 302 is an alternative to the sentence of life imprisonment; secondly, that special reasons have to be stated under section 354 (3), Cr. P.C. if the normal rule is departed from and the death sentence has to be imposed; and, thirdly, because the accused is entitled under section 235 (2), Cr. P.C. to be heard on the question of sentence. The ratio of Bachan Singh, therefore, is that, death sentence is constitutional if it is prescribed as an alternative sentence for the offence of murder and if the normal sentence prescribed by law for murder is imprisonment for life. Since there is a fundamental distinction between the provisions of section 302 and section 303, I.P.C., the ratio of Bachan Singh will not govern the question as regards the validity of s.303: whereas section 302, I.P.C. provides for the sentence of death as an alternative sentence, the only sentence which section 303 I.P.C. prescribes is the sentence of death; and since section 303 I.P.C. does not provide for an alternative sentence, ss.354 (3) and 235(2), Cr. P.C. have no application to cases arising under that section.[700 D H; 701 A D] Bachan Singh vs State of Punjab explained. per Chinnappa Reddy, J. (concurring): Section 303, I.P.C. is out of tune with the philosophy of our Constitution. It particularly offends article 21 and the new jurisprudence which has sprung around since the Bank Nationalisation case. Maneka Gandhi carried article 21 to nobler rights and made it the focal point round which must now revolve to advantage all claims to rights touching life and liberty. The procedure prescribed by law has to be fair, just and reasonable, not fanciful, oppressive or arbitrary. Bachan Singh sustained the validity of s.302 because the sentence of imprisonment for life and not death was the normal punishment for murder, and the sentence of death was an alternative penalty to be resorted to in the most exceptional of cases and the discretion to impose or not to impose the sentence of death was given to the Judge. Judicial discretion was what prevented the outlawing of the sentence of death even as an alternative penalty for murder. Judged in the light of Maneka Gandhi and Bachan Singh, it is impossible to uphold section 303 as valid. Section 303 excludes judicial discretion. So final, so irrevocable and so irrestitutable is the sentence of death that no law which provides for it without involvement of the judicial mind can be said to be fair, just and reasonable. [712 C H; 713 A G] 694 Bank Nationalisation Case; , ; Maneka Gandhi vs Union of India, [1978] 2 S.C.R. 621; and Bachan Singh vs State of Punjab, [1980] 2 S.C.C.684, referred to.

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Appeal No. 24 of 1958. Appeal by special leave from the judgment and order dated October 4, 1956, of the former Bombay High Court in I.T.A. No. 49 of 1956. R.J. Kolah, section N. Andley, J. B. Dadachanji, Rameshwar Nath and P. L. Vohra, for the appellant. K.N. Rajagopal Sastri and D. Gupta, for the respondent. September 22. The Judgment of the Court was delivered by S.K. DAS J. For the assessment year 1946 47 the appellant Homi Jehangir Gheesta was assessed to income tax on a total income of Rs. 87,500 under section 23(3) of the Indian Income tax Act, 1922. The circumstances in which he was so assessed were the following. The appellant 's case was that M. H. Sanjana, maternal grand father of the appellant, died on or about May 10, 1920. There was litigation between his widow Cursetbai and Bai Jerbanoo, Sanjana 's daughter by his first wife, about the validity of a will left by Sanjana. Bai Jerbanoo was the appellant 's mother. The litigation was compromised and the appellant 's mother got one third share in the estate left by Sanjana the total value of which estate was about Rs. 9,88,000. Bai Jerbanoo died in 1933, leaving her husband Jehangirji (appellant 's father), her son Homi (appellant) and a daughter named Aloo. It was stated, though there was no evidence thereof, that Bai Jerbanoo left an estate worth about Rs. 2,10,000 when she died. The appellant was a minor at the time of 772 his mother 's death. He had two uncles then, Phirozeshaw and Kaikhusroo. Phirozeshaw was the eldest member of the family. On his mother 's death the appellant 's share of the estate was Rs. 70,000. Phirozeshaw took charge of it and made investments. He died on December 12, 1945. Kaikhusroo, younger brother of Phirozeshaw and one of the executors of his will, took charge of the estate of Phirozeshaw. When he opened a safe belonging to Phirozeshaw he found a packet with the name of the appellant on it. That packet contained high denomination currency notes of the value of Rs. 87,500. On January 24, 1946, the appellant tendered those notes for encashment and made a declaration which was then necessary and in the declaration he said: "Legacy from my mother who died in 1933 when I was minor and money whereof was invested from time to time by my father and late uncle Phirozeshaw who recently died." When the appellant received a notice from the Income tax Officer to submit a return of his income for the relevant year, he submitted a return showing " nil " income. When asked about the high denomination notes which he had uncashed, he said in a letter dated January 7, 1947, that his uncle Phirozeshaw who used to manage his estate during his minority handed over to him and his father the sum of Rs. 87,500 sometime before his (i. e., Phirozeshaw 's) death in 1945. This was a story different from the one later given, about the opening of the safe by Kaikhusroo after Phirozeshaw 's death and the finding of a packet there in the name of the appellant. The appellant also filed an affidavit before the Income tax Officer on September 29, 1949, which also contained contradictory statements. On a consideration of all the materials before him, the Income tax Officer did not accept the case of the appellant but came to the conclusion that the true nature of the receipt of Rs. 87,500 was not disclosed. He treated the amount as appellant 's income from some source not disclosed and assessed him accordingly. The appellant preferred an appeal to the Assistant 773 Commissioner of Income tax. At the appellate stage the statements of the appellant 's father and uncle were taken by the Income tax Officer, D 11 Ward, Bombay, and a further statement of the appellant 's uncle Kaikhusroo was taken by the appellate authority. That authority came to the same conclusion as the Income tax Officer had come to. Then there was an appeal to the Income tax Appellate Tribunal, which again reviewed the facts of the case. The Tribunal pointed out the following important discrepancies in the case sought to be made out by the appellant: "(i) Declaration dated 24 1 1946 by the assessee says that mother 's legacy was invested " by my father and my late uncle Phirozeshaw ". His letter dated 7 1 1947 says that his uncle (i. e., Phirozeshaw) only managed his estate. The object of this variation is obviously to shield his father from inconvenient examination. The uncle had already departed for his eternal home. (ii)Assessee 's letter dated 7 1 1947 says that the uncle Phirozeshaw handed over money " to me and my father " before his death. The affidavit dated 29 9 1949 tells another story, viz., the executor Kaikhusroo handed over money to the assessee after Phirozeshaw 's death. In another part of the said affidavit it is said that the said executor handed over money to assessee 's father. The affidavit assures us that the declaration regarding high denomination notes was made on the information given him by his father. The assessee son nowhere refers to any " packet ". Indeed, the theory of " packet " was pronounced by the Executor Kaikhusroo only when he appeared before the Income tax Officer on 22 2 1952. (iii) In his statement dated 22 2 1952 Mr. Kaikhusroo says that he " found an envelope containing Rs. 87,500 1 took charge of this money and handed over the money to Homi." Before the Appellate Assistant Commissioner H. Range, the same Mr. Kaikhusroo later on said: " I handed over the packets as they were. I did 774 not count the Dotes or verify the contents. " Some of the answers given as to " receipts " and " inventory " by the executor Kaikhusroo show that he did not take even the reasonable precautions that an ordinary person would take, not to talk of an executor. " The Tribunal then expressed its conclusion thus: " We have, in these circumstances, no hesitation whatever in holding that the assessee has miserably failed to explain satisfactorily the source of the sum of Rs. 87,500. It is properly taxed as income. " It dismissed the appeal by its Order dated October 7, 1955. The appellant then moved the Tribunal to refer certain questions of law to the High Court, which questions according to the appellant arose out of the Tribunal 's order. The Tribunal held that no question of law arose out of its order dated October 7, 1955, and by its order dated March 8, 1956, dismissed the application of the appellant for a reference under section 66 of the Income tax Act, 1922. The appellant unsuccessfully moved the Bombay High Court by means of a petition under section 66(2). This petition was summarily dismissed by the High Court on October 4, 1956. The appellant then filed a petition for special leave to appeal to this Court. By an order dated December 3, 1956, this Court granted Special Leave to Appeal to this Court from the order of the Bombay High Court dated October 4, 1956, but made no order at that stage on the petition for special leave to appeal from the orders of the Tribunal dated October 7, 1955, and March 8, 1956. The present appeal has been filed pursuant to the special leave granted by this Court. The short point for consideration is this was the High Court right in summarily rejecting the petition under section 66 (2) ? In other words, did the order of the Tribunal dated October 7, 1955, on the face of it raise any question of law ? On behalf of the appellant it has been argued that the principles laid down by this Court in Dhirajlal Girdharilal vs Commissioner of Income tax, Bombay (1) apply, because though the decision of the (1) 775 Tribunal is final on a question of fact, an issue of law arises if the Tribunal arrives at its decision by consider ing material which is irrelevant to the enquiry, or by considering material which is partly relevant and partly irrelevant, or bases its decision partly on conjectures, surmises and suspicions. It is contended that on the face of it the decision of the Tribunal suffers from all the three defects mentioned above. Learned Counsel for the appellant has made a grievance of that part of the order in which the Appellate Tribunal states: " We were also not told why the deceased uncle, if he took charge of the minor 's money, did not hand it over to Bai Aloo when she became major in 1939 or even when she got married in 1944 ". It is contended that this was an irrelevant consideration, and Bai Aloo herself made a statement before the Income tax Officer, D II Ward, Bombay, on February 22, 1952, in which she indicated the cir cumstances how she also received a sum of Rs. 85,000 from her uncle Phirozeshaw before the latter 's death. She further stated that she also submitted a return to the Income tax Officer but was not subjected to any assessment on the sum received. The argument of learned Counsel for the appellant is that it was not a relevant consideration as to why Phirozeshaw did not hand over the money to Bai Aloo in 1939 or in 1944, and if Bai Aloo 's statements were to be taken into consideration, they were in favour of the appellant in as much as no assessment was made on Bai Aloo in respect of the sum she had received. We do not consider that the circumstances referred to by the Tribunal in connection with Bai Aloo 's statement were irrelevant. What the Tribunal had to consider was the correctness or otherwise of a story in which the mother was stated to have left Rs. 2,10,000 out of which the heirs got one third share each. The Tribunal had to consider each aspect of the story in order to judge of its probability and from that point of view it was a relevant consideration as to why Bai Aloo 's money was not paid when she became major or when she got married. It was also a relevant consideration as to what the father of the appellant did with his 776 share of the money and the Tribunal rightly pointed out that the father took cover tinder "mixing of investments ". These were relevant considerations for judging the probability of the story. The Tribunal also rightly pointed out that the fact that Bai Aloo was not assessed did not make the story any more probable. The Tribunal stated in its order that a summons was issued to the father by the Income tax Officer to appear before the latter on June 23, 1950. The father failed to comply with the summons. This circumstance, it is argued, should not have been used against the appellant, because the record showed that the summons was served on the father on June 22, 1950, for attendance on the next day and the father wrote a letter stating that it was not possible for him to attend on the next day and, therefore, asked for another date. We do not think that this circumstance vitiates the order of the Tribunal which was based on grounds much more substantial than the failure of summons issued against him. The father was actually examined later and his statements were taken into consideration. One point made by the Tribunal was that no explanation was forthcoming as to why the uncle took charge of the share of the appellant and his sister when their father was alive and why the father allowed himself to be effaced in the matter of custody and management of the funds belonging to his children. We consider that this circumstance was also a relevant consideration, and if the father was in a position to give an explanation, he should have done so when he made his statement before the Income tax Officer, D 11 Ward, Bombay, on February 8,1952. The Tribunal states: " We were also told that the assessee was taking his education between 1943 and 1950 and as such he bad no opportunity to earn any income. In a place like Bombay and particularly in the family of a businessman, a person may earn even when he learns. " These observations of the Tribunal has been very seriously commented on by learned Counsel for the appellant. Learned Counsel has stated that certificates from the school, college and 777 university authorities were produced by the appellant right upto 1950 which showed that the appellant was a student till 1950 and after seeing the certificates the Tribunal should not have said " We were also told etc. " According to learned Counsel this showed that, the finding of the Tribunal was coloured by prejudice. We are unable to agree. Even if it be taken that the appellant satisfactorily proved that he was a student till 1950, we do Dot think that it makes any real difference as to the main question at issue, which was whether the appellant received the sum of Rs. 70,000 from the estate of his mother, later increased by investments to Rs. 87,500 in 1945. The Tribunal rightly pointed out that no evidence was given of the value of the estate left by the mother, though there was some evidence of what the mother received from the estate of her father Sanjana; nor was there any evidence of the investments said to have been made which led to an addition to the original sum of Rs. 70,000. It has been argued that it was a mere surmise on the part of the Tribunal to say that in a place like Bombay a person may earn when be learns. Even if the Tribunal is wrong in this respect, we do not think that it is a matter of any consequence. We must read the order of the Tribunal as a whole to determine whether every material fact, for and against the assessee, has been considered fairly and with the due care; whether the evidence pro and con has been considered in reaching the final conclusion ; and whether the conclusion reached by the Tribunal has been coloured by irrelevant considerations or matters of prejudice. Learned Counsel for the appellant has taken us through the entire order of the Tribunal as also the relevant materials on which it is based. Having examined the order of the Tribunal and those materials, we are unable to agree with learned Counsel for the appellant that the order of the Tribunal is vitiated by any of the defects adverted to in Dhirajlal Girdharilal vs Commissioner of Income tax, Bombay (1) or Omar Salay Mohamed Sait vs Commissioner of Income tax, Madras(2). We must make (1) (2) 778 it clear that we do not think that those decisions require that the order of the Tribunal must be examined sentence by sentence, through a microscope as it were, so as to discover a minor lapse here or an incautious opinion there to be used as a peg on which to hang an issue of law. In view of the arguments advanced before us it is perhaps necessary to add that in considering probabilities properly arising from the facts alleged or proved, the Tribunal does not indulge in conjectures, surmises or suspicions. It has also been argued before us that even if the explanation of the appellant as to the sum of Rs. 87,500 is not accepted, the Department did not prove by any direct evidence that the amount was income in the hands of the appellant. We do not think that in a case like the one before us the Department was required to prove by direct evidence that the sum of Rs. 87,500 was income in the hands of the appellant. Indeed, we agree that it is not in all cases that by mere rejection of the explanation of the assessee, the character of a particular receipt as income can be said to have been established; but where the circumstances of the rejection are such that the only proper inference is that the receipt must be treated as income in the bands of the assessee, there is no reason why the assessing authorities should not draw such an inference. Such an inference is an inference of fact and not of law. For the reasons given above we are of the view that no question of law arose from the order of the Tribunal and we see no grounds for interference with the judgment and order of the Bombay High Court, dated October 4, 1956. The appeal accordingly fails and is dismissed with costs. Appeal dismissed.

The appellant encashed high denomination currency notes of the value of Rs. 87,5oo and was called upon by the Incometax Officer to submit a return for the relevant year. The appellant made three statements, discrepant in material particulars, at different stages as to how he received the amount. The Income tax Officer held that the true nature of the receipt had not been disclosed, treated it as income from an undisclosed source and assessed him accordingly. The Assistant Commissioner of Income tax upheld that order on appeal. On a further appeal, the Appellate Tribunal reviewed the facts, considered the discrepancies in the appellant 's case and affirmed the order of assessment. An application for a reference to the High Court having been made under section 66 of the Indian Income tax Act, the Tribunal held that no question of law arose from its order and dismissed the same. The High Court thereafter summarily dismissed the application made by the appellant under section 66(2) of the Act. Against that order of summary dismissal special leave to appeal was obtained from this court and the sole question for determination in the appeal was whether the order of the Tribunal on the face of it disclosed any question of law and if the High Court was right in summarily dismissing the application under section 66(2) of the Act. Held, that no question of law arose from the order of the Tribunal and the appeal must fail. In order to decide whether the principles laid down by this court in Dhirajlal Girdharilal vs Commissioner of Income tax, Bombay, and Omar Salay Mohamed Sait vs Commissioner of Income tax, Madras, (1959) 37 I.T.R. 151, applied to a particular case, it was necessary to read the order of the Tribunal as a whole for determining whether or not it had properly considered the material facts and the evidence, for and against, in coming to its final conclusion and whether any irrelevant consideration or matter of prejudice had vitiated such conclusion. Those decisions do not require that the order of the Tribunal must be examined sentence by sentence so as to discover a minor lapse here or an incautious opinion there and rest a question of law thereon. 771 Dhirajlal Girdharilal vs Commissioner of Income tax, Bombay, and Omar Saley Mohamed Sait vs Commis sioner of Income tax, Madras, , explained. Although a mere rejection of an explanation given by the assessee does not invariably establish the nature of a receipt. , where the circumstances of the rejection are such as to properly raise the inference that the receipt is an income, the assessing authorities are entitled to draw that inference. Such an inference is one of fact and not of law.

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itions Nos. 53, 100, 101, 105 and 106 of 1967. Petitions under article 32 of the Constitution of India for the enforcement of the fundamental rights. M. C. Setalvad, A. V. Koteswara Rao, K. Rajendra Chaudhuri and K. R. Chaudhuri, for the petitioners (in W. P. No. 53 of 1967). N. C. Chatterjee, A. V. Koteswara Rao, K. Rajendra Chau dhuri and K. R. Chaudhuri, for the petitioners (in W.P. No. 100 of 1967). A. V. Koteswara Rao, K. Rajendra Chaudhuri and, K. R. Chaudhuri, for the petitioners (in W.P. No.101 of 1967). K. R. Chaudhuri and K. Rajendra Chaudhuri, for the peti tioners (in W.P. Nos. 105 and 106 of 1967). C. K. Daphtary, Attorney General and A. V. Rangam, for he respondents (in W.P. No. 53 of 1967). P. Ram Reddy and A. V. Rangam, for the, respondents (in V. Ps. No. 100, 101, 105 and 106 of 1967). Sachin Chaudhury, G. L. Sanghi and O. C. Mathur, for the intervener (in W.P. No. 53 of 1967). The Judgment of the Court was delivered by Bachawat, J. In all these writ petitions under article 32 of the the petitioners ask for an order declaring that section 21 of the Andhra Pradesh Sugarcane (Regulation of Supply and Purchase) Act, 1961 (Andhra Pradesh Act No. 45 of 1961) is unconstitutional and ultra vires and a direction prohibiting the respondents from levying tax under section 21 and to refund the tax already collected. Section 21 of the Act is in these terms: "21(1) The Government may, by notification, levy a tax at such rate not exceeding five rupees per metric tonne as may be prescribed on the purchase of cane required for use, consumption or sale in a factory. (2) The Government may, by notification, remit in whole or in part such tax in respect of cane used, or intended to be used in a factory for any purpose specified in such notification. (3) The Government may, by notification, exempt from the payment of tax under this section (a) any new factory which, in the opinion of the Government has substantially expanded, to the extent of such expansion, for a period not exceeding two years from the date of completion of the expansion. P(N)7SCI 6 708 (4) The tax payable under sub section (1) shall be levied and collected from the occupier of the factory in such manner and by such authority as may be prescribed. (5) Arrears of tax shall carry interest at the rate of nine per cent per annum. (6) If the tax under this section together with the interest, if any, due thereon, is not paid by the occupier of a factory within the prescribed time, it shall be recoverable from him as an arrear of land revenue." Section 2(1) defines a factory which means "any premises including the precincts thereof, wherein twenty or more workers are working or were working on any day during the preceding twelve months and in any part of which any manufacturing process connected with the production of sugar by means of vacuum pans in being carried on or is ordinarily carried on with the aid of mechanical power. Section 2(m) defines the occupier of a factory. B: Ordinance No. 1 of 1967 which was replaced by Act No. 4 on 1967, the following new sub section (I A) was inserted and other consequential amendments were made in section 21 of the principal Act "(1 A) The Government may, by notification, levy a tax at such rate, not exceeding three. rupees and fifty paise per metric tonne, as may be prescribed on the purchase of cane required for use, consumption or sale in a khandsari unit". Also the following sub sections (kk) and (kkk) were inserted in section 2 of the principal Act: "(kk) 'khandasari sugar ' means sugar produced by open pan process in a khandasari unit from sugarcane juice, or from rab or gur or both, containing more than eighty per cent sucrose; (kkk) 'khandasari unit ' means a unit engaged or ordinarily engaged in the manufacture of khandasari sugar and includes a bel;" It may be mentioned that sales and purchases of sugarcane a exempt from tax under the Andhra Pradesh General Sales Tax Act, 1957. The petitioners own sugar factories as defined in 2(1). Their agents are the occupiers of the factories as defined in section 2(m). They purchased cane from canegrowers within their respective factory zones. The State Government had issued notifications levying tax under section 21. For the last several years the petitioners have paid the tax on their purchases of sugarcane and further demands are being made on them for payment of the tax They challenge the vires and the , constitutionality of section 21 of various grounds. The principal submissions were made by M. M. C. Setalvad who appeared in Writ Petition No. 53 of 196 709 and his arguments were adopted by counsel appearing in the other petitions. Mr. N. C. Chatterjee who appeared in Writ Petition No. 100 of 1967 raised a few additional contentions. The submission of Mr. Setalvad is that section 21 so far as it levies a tax on the purchases of sugarcane by or on behalf of the petitioners from the canegrowers in their respective factory zones is ultra vires the powers of the legislature under Entry No. 54, List 11, Sch. VII of the Constitution in the light of the decision in State of Madras vs Gannon Dunkerley & Co.(1). Now, in Gannon Dunkerley 's case(1), the actual decision was that the legislature had no power under List II, Entry 48, Sch. VII of the Government of India Act, 1935 to impose a tax on the supply of materials under an entire and indivisible contract for construction of buildings. But the Court also held that the phrase "sale of goods" in the Entry must be interpreted in the legal sense which it had in the Indian Sale of Goods Act, that the Provincial Legislature had no power to tax a transaction which was not a sale of goods in that sense and that in order to constitute a sale there must be an agreement for sale of goods for a price and the passing of property therein pursuant to such an agreement. Ventakarama Aiyar, J. laid at pp. 397 398: "Thus, according to the law both of England and of India, in order to constitute a sale it is necessary that there should be an agreement between the parties for the purpose of transferring title to goods which of course presupposes capacity to contract, that it must be supported by money consideration, and that as a result of the transaction property must actually pass in the goods. Unless all these elements are present, there can be no sale. " in the light of this decision, the expression "sale of goods" in Entry 54, List II, Sch. VII of the Constitution must be given the ame interpretation. On a parity of reasoning, to constitute a purchase of goods" within this Entry, there must be an agreement for purchase of goods and the passing of property therein pursuant to such an agreement. The question, therefore, is whether the purchases by or on behalf of the petitioners from the cane growers in their respective factory zones were made under agreements of purchase and, sale. It appears that the Cane Commissioner is empowered under s.15 of Act No. 45 of 1961 to declare any area as the factory one for the purpose of supply of cane to a factory during a particular crushing season. Under section 16(1), on the declaration of the factory zone the occupier of the factory is bound to purchase such quantity of cane grown in that area and offered for sale to the factory (1) ; 710 as may be determined by the Cane Commissioner in accordance with the provisions of the schedule. Section 16(2) prohibits the the canegrowers in a factory zone from supplying or selling cane to any factory or other person otherwise than in accordance with the provisions of the schedule. Section 28(2)(1) empowers the Government to make rules providing for the form of agreement to be entered into under the provisions of the Act. Rule 20 of the Andhra Pradesh Sugarcane (Regulation of Supply and Purchase) Rules, 1951 framed under the Act provides that a canegrower or a canegrower 's co operative society may within 14 days of the order declaring an area as the factory zone or such extended time as may be fixed by the Cane Commissioner, offer in Form No. 2 to supply cane grown in that area to the occupier of the factory and such occupier of the factory within 14 days of the receipt of the offer shall enter into an agreement in Form No. 3 or Form No. 4 with the canegrower or the canegrower 's co operative society as the case may be for the purchase of the cane offered. Form No. 3 is the statutory form of agreement with a canegrower. By the agreement in Form No. 3 the occupier of the factory agrees to buy and the canegrower agrees to sell during the crushing season certain sugarcane crop grown in the area at the minimum price noticed by the Government from time to time upon the terms and conditions mentioned in the agreement. The agreement contains an arbitration clause and is signed by or on behalf of the occupier of the factory and the canegrower. The agreement in Form No. 4 with a canegrower 's co operative society is on the same lines. All the terms and conditions of the agreements and the mode of their performance are fixed and regulated by the Act, the Rules and orders made under the Act. Contravention of the provisions of the Act or of any rule or order made under the Act is punishable under section 23. The minimum price of sugarcane is fixed under the Sugarcane Control Order, 1966. The learned Attorney and Mr. Ram Reddy attempted to argue that the occupier of the factory has some option of not buying from the canegrower and some freedom of bargaining about the terms and con ditions of the agreements. But after having read all the relevant provisions of the Act and the Rules, they did not pursue this point. We are satisfied that under the provisions of Act No. 45 of 1961 And the Rules framed thereunder, a canegrower in a factory zone is free to sell or not to sell his sugarcane to the factory. He may consume it or may process it into jaggery and then sell the finished product. But if he offers to sell his cane, the occupier of the factory is bound to enter into an agreement with him on the prescribed terms and conditions and to buy cane pursuant to he agreement in conformity with the instructions issued by the Cane Commissioner. The submission of the petitioners is that as ,hey or their agents are compelled by law to buy cane from the 711 canegrowers their purchases are not made under agreements and are not taxable under Entry No. 54, List 11 having regard to Gannon Dunkerley 's case(1). This contention requires close examination. Under section 4(1) of the Indian , a con tract of sale of goods is a contract whereby the seller transfers or agrees to transfer the property in goods to the buyer for a price. By section 3 of this Act, the provisions of the apply to contracts of sale of goods save in so far as they are inconsistent with the express provisions of the later Act. Section 2 of the provides that when one person signifies to another his willingness to do or to abstain from doing anything with a view to obtaining the assent of the other to such act or abstinence, he is said to make a proposal. When the person to whom the proposal is made signifies his assent thereto, the proposal is said to be accepted. A proposal when accepted becomes a promise. Every promise and every set of promises forming the consideration for each other is an agreement. There is mutual assent to the proposal when the proposal is accepted and in the result an agreement is formed. Under section 10, all agreements are contracts if they are made by the free consent of parties competent to contract for a lawful consideration and with a lawful object and are not by the Act expressly declared to be void,. Sec tion 13 defines consent. Two or more persons are said to consent when they agree upon the same thing in the same sense. Section 14 defines free consent. Consent is said to be free when it is not caused by coercion, undue influence, fraud, misrepresentation or mistake as defined in sections 15 to 22. Now, under Act No. 45 of 1961 and the Rules framed under it, the canegrower in the factory zone is free to make or not to make an offer of sale of cane to the occupier of the factory. But if he makes an offer, the occupier of the factory is bound to accept it. The resulting agreement is recorded in writing and is signed by the parties. The consent of the occupier of the factory to the agreement is not caused by coercion, undue influence, fraud, mis representation or mistake. His consent is free as defined in section 14 of the though he is obliged by law to enter into the agreement. The compulsion of law is not coercion as defined in section 15 of the Act. In spite of the compulsion, the agreement is neither void nor voidable. In the eye of the law, the agreement is freely made. The parties are competent to contract The agreement is made for a lawful consideration and with a lawful object and is not void under any provisions of law. The agreements are enforceable by law and are contracts of sale of sugarcane as defined in section 4 of the Indian . The purchases of sugarcane under the agreement can be taxed by the State legislature under Entry 54, List 11. (1) ; 712 Long ago in 1702, Holt, C.J. said in Lane vs Cotton(1): "When a man takes upon himself a public employment, he is bound to serve the public as far as this employment goes, or an action lies against him for refusing. " The doctrine that one who takes up a public employment is bound to serve the public was applied to innkeepers and common carriers. Without lawful excuse, an innkeeper cannot refuse to receive guests at his inn, and a common carrier cannot refuse to accept goods offered to him for carriage. See Halsbury 's Laws of England, 3rd Edn., Vol. 4, article 375 and Vol. 21, article 938. A more general application of the doctrine was arrested by the growth of the principle of laissez faire which had its heyday in the. midnineteenth century. Thereafter, there has been a gradual erosion of the laissez faire concept. It is now realised that in the public interest, persons exercising certain callings or having monopoly or near monopoly powers should sometimes be charged with the duty to serve the public, and, if necessary, to enter into contracts. Thus, section 66 of the Indian Railways Act, 1890 compels the railway administration to supply the public with tickets for travelling on the railway upon payment of the usual fare. Section 22 of the compels a licensee to supply electrical energy to every person in the area of supply on the usual terms and conditions. Cheshire and Fifoot in their Law of Contract, 6th Edn., p. 23 observe that for reasons of social security the State may compel persons to make contracts. One of the objects of Act No. 45 of 1961 is to regulate the purchase of sugarcane by the factory owners from the canegrowers. The canegrowers scattered in the villages had no real bargaining power. The factory owners or their combines enjoyed a near monopoly of buying and could dictate their own terms. In this unequal contest between the canegrowers and, the factory owners, the law stepped in and compelled the factory to enter into contracts of purchase of cane offered by the canegrowers on prescribed terms and conditions. In The Indian Steel & Wire Products Ltd. vs The State of Madras(2), the Court held that. sales of steel products authorised by the Controller under cls. 4 and 5 of the Iron and Steel (Control of Production and Distribution) Order, 1941 were eligible to tax under Entry 54, List 11. The Court found that the parties had entered into contracts of sale though in view of the Order the area of bargaining between the buyer and the seller was greatly reduced. Hegde, J. speaking for the Court said that as a result of economic compulsions and changes in of the political outlook the freedom to contract was now being confined gradually to narrower and narrower limits. We have here a case where one party (1); , (2) ; 713 to a contract of sale is compelled to enter into it on rigidly prescribed terms and conditions and has no freedom of bargaining. But the contract, nonetheless, is a contract of sale. In Kirkness vs John Hudson & Co. Ltd.,(1) the House of Lords by a majority held that a compulsory vesting of title of the company 's railway wagons in the British Transport Commission under section 29 of the Transport Act, 1947 was not a sale within the meaning of the phrase "is sold" in section 17 of the Income tax Act, 1945. Under section 29, there was a compulsory taking of property. The assent of the company to the taking was not required by statute. By force of law, the property of the company was taken without its assent. There was no offer, no acceptance and no mutual assent and no contract resulted. The House of Lords held that mutual assent was an element of a transaction of sale. In Gannon Dunkerley 's case(1), the Court approved of this principle and rejected the argument of counsel that an involuntary transfer of title as in Kirkness 's case(2) was a sale within the meaning of the legislative Entry. But the Court did not say that if one party was free to make an offer of sale and the other party was obliged by law to accept it and to enter into an agreement for purchase of the goods, a contract of sale did not result. In the present case, the seller makes an offer and the buyer accepts it. The parties then execute and sign an agreement in writing. There is mutual assent and a valid contract, though the assent of the buyer is given under compulsion of statute. Setalvad relied on the following passage in the Law of Contract by G.H. Treitel, at p. 5: "Where the legislation leaves no choice at all to one party, the transaction is not a contract. " But the author does not cite any authority in support of the proposition. , He adds that even a compulsory disposition of property may be treated as contract for the purpose of a particular statute and cites the case of Ridge Nominees vs I.R.C.(3). There, the Court distinguishing Kirkness 's case(3) held that the compulsory transfer of shares of a dissenting shareholder by a person "authorised to make the transfer on his behalf under section 209 of the Companies Act, 1948 corresponding to section 395 of our was having regard to the machinery created by the section a conveyance on sale within section 54 of the Stamp Act, 1 91. The Lord Justices gave separate opinions. It is worthwhile quoting the opinion of Donovan, L. J. who said: "When the legislature, by section 209 of the Companies Act, 1948, empowers the transferee company to appoint an agent on behalf of a dissenting shareholder for the purpose of executing a transfer of his shares (1) (2) ; (3) 714 against a price to be paid to the transferor company and held in trust for the dissenting shareholder, it is clearly ignoring his dissent and putting him in the same position as if he had assented. For the purpose of considering whether this results in a sale, one must, I think, bear that situation in mind, and regard, the dissent of the shareholder as overridden by an assent which the statute imposes upon him, fictional though this may be. in the context of section 209 the transfer becomes in law a conveyance on sale. This conclusion, in my opinion, does not run counter to what was said in the House of Lords in Kirkness (Inspector of Taxes) vs John Hudson & Co. Ltd.,(1), where, in terms of the statute there under consideration, property belonging to other persons was declared to vest on a specified date in the Transport Commission against payment of compensation. This may be no more than a difference of machinery, but machinery may make the very difference between a sale and a mere expropriation against compensation. "Lord Simonds, I venture to think, implies as much when he says he gets no assistance from the cases decided under the Stamp Acts. " In M/s. New India Sugar Mills Ltd., vs Commissioner of Sales Tax, Bihar(2), the Court by a majority held that the supply of sugar by a sugar factory to a Provincial Government in obedience to the directions of the Sugar Controller given under the Sugar and Sugar Products Control Order, 1946 was not a sale taxable under List II, Entry 48, Sch. VII of the Government of India Act, 1935. Mr. Setalvad placed strong reliance on the fol lowing passage in the judgment of Shah, J. at pp. 469 470: "A contract of sale between the parties is therefore a pre requisite to a sale. The transactions of despatches of sugar by the assessees pursuant to the directions of the Controller were not the result of any such contract of sale. It is common ground that the Province of Madras intimated its requirements of sugar to the Controller, and the Controller called upon the manufacturing units to supply the whole or part of the requirement to the Province. In calling upon the manufacturing units to supply sugar, the Controller did not act as an agent of the State to purchase goods: he acted in exercise of his statutory authority. There was mani festly no offer to purchase sugar by the Province, and no acceptance of any offer by the manufacturer. The manufacturer was under the Control Order left no volition: he could not decline to carry out the order; if he (1) (2) [1963] Supp. 2 S.C.R. 459, 469. 715 did so he was liable to be punished for breach of the order and his goods were liable to be forefeited. The Government of the Province and the manufacturer had no opportunity to negotiate, and sugar was despatched pursuant to the direction of the Controller and not in acceptance of any offer by the Government." Divorced from the context, this passage gives some support to the contention that there can be no contract if the acceptance of the offer is made under compulsion of a direction given by a statutory authority. But the passage must be read with the facts of the case. By cl. 3 of the Sugar and Sugar Products Control Order, 1946, producers of sugar were prohibited from disposing of sugar except to persons specially authorised in that behalf by the Controller to acquire sugar on behalf of certain Governments. Clause 5 required every producer or dealer to comply with the directions issued by the Controller regarding production, sales, stocks and distribution of sugar. Clause 6 authorised the Controller to fix the price of sugar. Clause 7(1) authorised the Controller to allot quotas of sugar for any Province and to issue directions to any producer or dealer for the supply of the sugar specifying the price, quantity and type or grade of the sugar and the time and manner of supply. Contravention of the directions entailed forfeiture of stocks under cl. 11 of the Order and was punishable under r. 81(4) of the Defence of India Rules, 1939. The admitted course of dealings between the parties was that the Governments of the consuming States used to intimate to the Sugar Controller their requirement of sugar and the factory owners used to send to him statements of their stocks of sugar. On a consideration of the requisitions and the statements of stock, the Controller used to make allotments. The allotment order used to be addressed by the Controller to the factory owner, directing him to supply sugar to the Government in question in accordance with the latter 's despatch instructions. A copy of the allotment order used simultaneously to be sent to the Government concerned and the latter then used to send to the factory detailed despatching instructions. In these circumstances, Kapur and Shah, JJ. (Hidayatullah, J. dissenting) held that by giving intimation of its requirement of sugar to the Controller and applying for allotment of sugar, the Government of Madras did not make any offer to the manufacturer. The direction of the Controller to the manufacturer to supply sugar to the Government was given in the exercise of his statutory authority and was not the communication of any offer made by the Government. The despatch of the goods in compliance with the directions of the Controller was not the acceptance by the manufacturer of any offer, nor could it be deemed to be an offer by the manufacturer to supply goods. On the, special facts of that case, the majority decision was that there was no offer and acceptance and no contract resulted. That decision should not be 716 treated as an authority for the proposition that there can be no contract of sale under compulsion of a statute. It depends upon the facts of each case and the terms of the particular statute regulating the dealings whether the parties have entered into a contract of sale of goods. Under Act No. 45 of 1961, a canegrower makes an offer to the occupier of the factory directly and the latter accepts the offer. The parties then make and sign an agreement in writing. There is thus a direct privily of contract between the parties. The contract is a contract of sale and pur chase of cane, though the buyer is obliged to give his assent under compulsion of a statute. The State Legislature is competent to tax purchases of canes made under such a contract. Mr. Setalvad submitted that there can be no levy of a pur chase tax with reference to the tonnage of the cane. We cannot accept this contention. Usually the purchase tax is levied with reference to the price of the goods. But the legislature is competent to levy the tax with reference to the weight of the goods purchased. The contention of Mr. Chatterjee that a purchase tax must be levied with reference to the turnover only is equally devoid of merit. Where the purchase tax is levied on a dealer, the levy is usually with reference to his turnover, which normally means the aggregate of the amounts of purchase prices. But the tax need not necessarily be levied on a dealer or by reference to his turnover. It may be levied on the occupier of a factory by reference to the weight of the goods purchased by him. Mr. Chatterjee next submitted that a purchase tax must be levied on goods generally, and there can be no purchase tax with reference to their subsequent use, consumption or sale. He based his argument on paragraphs 17 to 20. III, Vol. III of the Report of the Taxation Enquiry Committee. There, the Committee while discussing the comparative merits of sales tax in relation to customs, excise and octroi, pointed out that sales tax was a major source of revenue and could be applied to the generality of goods, while customs, excise and octroi could be applied to only a limited portion of the industrial output of the country. The Committee did not express any opinion on the scope of List II, Entry 54. Under that Entry, the State legislature is not bound to levy a tax on all purchases of cane. It may levy a tax on purchases of cane required for use, consumption or sale in a factory. The legislature is competent to tax and also to exempt from payment of tax sales or purchases of goods required for specific purposes. Other instances of special treatment of goods required for particular purposes may be given. Section 6 and Sch. 1, item 23 of the Bombay Sales Tax Act, 1946 levy tax on fabrics and articles for personal wear. Section 2(j)(a)(ii) of the C.P and Berar Sales Tax Act, 1947 exempts sales of goods intended for use by a registered dealer as raw materials for the manufacture of goods. 717 Mr. Chatterjee submitted that the tax levied under section 21 was a use tax and referred to McLeod vs Dilworth & Co.(1) and C. G. Naidu & Co. The State of Madras(2). He argued that the State legislature could not levy a use tax which was essentially different from a purchase tax. The assumption of counsel that section 21 levies a use tax is not well founded. The taxable event under section 21 is the purchase of goods and not the use or enjoyment of what is purchased. The constitutional implication of a use tax in American law is entirely irrelevant. The observation in the Madras case that the Explanation to article 286(1)(a) of the Constitution conferred, a power on the State legislature to levy a use tax is erroneous. The Explanation fixed the situs of certain sales. It did not confer upon the legislature any power to levy a use tax. To appreciate another argument of Mr. Chatterjee, it is necessary to refer to a few facts. It appears that paragraph 21 of the Bill published in the Gazette on March 3, 1960 preliminary to the passing of Act No. 45 of 1961 provided for a levy of a cess on the entry of cane into the premises of a factory for use, consumption or sale therein. On December 13, 1960, this Court in Diamond Sugar Mills Ltd. and Another vs The State of Uttar Pradesh and Another(3) struck down a similar provision in the U.P. Sugarcane Cess Act, 1956 on the ground that the State legislature was not competent to enact it under Entry 52, List II as the premises of a factory was not a local area within the meaning of the Entry. Having regard to this decision, paragraph 21 of the Bill was amended and section 21 in its present form was passed by the State Legislature. The Act was published in the Gazette on December 30, 1961. Mr. Chatterjee submitted that in this context the levy under section 21 was really a levy on the entry of goods into a factory for consumption, use or sale therein. We are unable to accept this contention. As the proposed tax on the entry of goods into a factory was unconstitutional, paragraph 21 of the original Bill was amended and section 21 in its present form was enacted. The tax purchase of goods. The taxable event is the purchase of cane for use, consumption or sale in a factory and not the entry of cane into a factory. As the tax is not on the entry of the cane into a factory, it is not payable on cane cultivated by the factory and entering the factory premises. Mr. Setalvad submitted that section 21 impeded free trade, com merce and intercourse and offended article 301 of the Constitu tion and relied on the decision in Firm A. T. Mehtab Majid & (1) ; (2) A.I.R. 1953 Mad. 116, 127 128, (3) ; 718 Co. vs State of Madras(1). In that case, the Court held that r. 16(2) of the Madras General Sales Tax (Turnover and Assessment) Rules, 1939 discriminated against imported hides or skins which had been purchased or tanned outside the State by levying a higher tax on them and contravened article 304(a) of the Constitution. At p. 442, Raghubar Dayal, J. said: "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. Sales tax of the kind under consi deration 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). " That case decides that a sales tax which discriminates against goods imported from other States may impede the free flow of trade and is then invalid unless protected by article 304(a). But the tax levied under section 21 does not discriminate against any imported cane. Under section 21, the same rate of tax is levied on purchases of all cane required for use, consumption or sale in a factory. There is no discrimination between cane grown in the State and cane imported from outside. As a matter of fact, under the Act the factory can normally buy only cane grown in the factory zone. A non discriminatory tax on goods does not offend article 301 unless it directly impedes the free movement or transport of the goods. In Atiabari Tea Co. Ltd., vs The State of Assam and others(2). Gajendragadkar, J. speaking for the majority said: "We are, therefore, satisfied that in determining the limits of the width and amplitude of the freedom guaranteed by article 301 a rational and workable test to apply would be: Does the impugned restriction ope rate directly or immediately on trade or its movement?. It is the free movement of the transport of goods from one part of the country to the other that is intended to be saved, and if any Act imposes any direct res trictions on the very movement of such goods it attracts the provisions of article 301, and its validity can be sustained only if it satisfies the requirements of article 302 or article 304 of Part XIII. " (1) [1963] Supp. 2 S.C.R. 435. (2) ; , 860 861. 719 This interpretation of article 301 Was not dissented from in Automobile Transport (Rajasthan) Ltd. vs State of Rajasthan(1). Normally, a tax on sale of goods does not directly impede the free movement or transport of goods. Section 21 is no exception. It does not impede the free movement or transport of goods and is not violative of article 301. Mr. Setalvad next submitted that section 21 offended article 14 of the Constitution in several ways. It was argued that section 21 read with section 2(e) discriminated between producers of sugar using the vacuum pan and open pan processes. Under section 2 1, as it stood before its amendment by Act No. 4 of 1967 tax was levied on purchases of cane by factories producing sugar by means of vacuum pans but purchases of cane by khandasari units producing khandasari sugar by the open pan process were entirely exempt from the tax. Even the amended section 21 levies a lower rate of tax on the purchases of cane by khandsari units. It was also argued that there was discrimination in favour of producers of jaggery by exempting their purchases of cane from payment of the tax. But the affidavits filed on behalf of the respondents show that factories producing sugar by means of vacuum pans and khandasari units producing sugar by the open pan processes form distinct and separate classes. The industry using the vacuum pan process is in existence since 1932 33. No tax was levied on this industry until 1949. In 1949 when the industry became well established, tax was levied on it for the first time by section 14 of the Madras Sugar Factories Control Act, 1949. The khandasari units carry on a small scale industry. They are of recent origin in the State of Andhra Pradesh. Until 1967, this industry was exempt from the levy. When the industry came to be somewhat established by 1967 a smaller rate of tax was levied on it. In 1965 66, factories adopting the vacuum pan process bought over 32 lakh tonnes of cane while the khandasari sugar units in the State bought about 2.70 lakh tonnes of cane. The manufacture of jaggery has no resemblance to the manufacture of sugar by the vacuum pan or the open pan system. It is a cottage industry wherein individual canegrowers process their cane into jaggery and market it as a finished product. Having regard to the affidavits, we are satisfied that the differential treatment of the factories producing sugar by means of vacuum pans, khandasari units producing sugar by. the open pan process and cane growers using cane for the manufacture of jaggery is reasonable and has a rational relation to the object of taxation. There are marked differences between the three classes of users of cane and their capacity to pay the tax. The legislature could reasonably treat the three sets of users of cane differently for purposes of levy. (1) [1963] 1 S.C.R. 491, 533. 702 It was next argued that the power under section 21(3) to exempt new factories and factories which in the opinion of the Government have substantially expanded was discriminatory and violative of article 14. We are unable to accept this contention. The establishment of new factories and the expansion of the existing factories need encouragement and incentives. The exemption in favour of new and expanding factories is based on legitimate legislative policy. The question whether the exemption should be granted to any factory, and if so, for what period and the question whether any factory has substantially expanded and if so, the extent of such expansion have to be decided with reference to the facts of each individual case. Obviously, it is not possible for the State legislature to examine the merits of individual cases and the function was properly delegated to the State Government. The legislature was not obliged to prescribe a more rigid standard for the guidance of the Government. We hold that section 21 does not violate article 14. The petitioner in Writ Petition No. 101 of 1967 raised the contention that it was a new factory and that the Government of Andhra Pradesh should have exempted it from payment of tax under section 21(3)(a). The contention was controverted by the respondents. The affidavits do not give sufficient materials on the point, nor is there any prayer in the petition for the issue of a mandamus directing the State Government to grant the exemption. In the circumstances, we do not think it fit to express any opinion on the matter. It will be open to the petitioner in Writ Petition No. 101 of 1967 to raise this contention in other proceedings. In the result, the petitions are dismissed with costs, one hearing fee. G.C. Petitions dismissed.

Under the Andhra Pradesh (Regulation of Supply and Purchase) Act 1961 the occupier of a sugar factory had to buy sugarcane from canegrowers in conformity with the directions of the Cane Commissioner. Under section 21 of the Act the State Government had power by notification to tax purchases of sugarcane for use, consumption or sale in a sugar factory. The tax was leviable subject to a maximum rate per metric tonne. The maximum rate for khandsari units was less than that for factories; sugarcane purchased for production of jaggery was not taxed at all. The petitioners were sugar factories in Andhra Pradesh. They filed writ petitions under article 32 of the Constitution challenging the validity of section 21 mainly on the ground that as the petitioners or their agents were compelled by law to buy cane from the canegrowers, their purchases were not made under agreements and were not taxable under Entry 54 List II having regard to Gannon Dunkerley 's case. It was further urged that the tax leviable under section 21 was not truly a purchase tax as it was levied with reference to weight of the goods, that it was levied with reference to use and was therefore a use tax, and that it was the entry of the goods into the factory that was sought to be taxed Articles 14 and 301 of the Constitution were also said to be contravened. Held: (1) There has been a gradual erosion of the laissez faire concept which prevailed in the nineteenth century. It is now realised that in the public interest persons exercising certain callings or having monopoly or near monopoly Powers should sometimes be charged with the duty to serve the public, and if necessary, to enter into contract& The canegrowers scattered in the villages had no real bargaining power. In the unequal contest between the canegrowers and the factory owners, the law stepped in and compelled the factory to enter into contracts of purchase of cane offered by the canegrowers on prescribed terms and conditions. [713 C.F.]. Under Act 45 of 1961 and the Rules framed under it, the canegrower in the factory zone is free to make or not to make an offer of sale of cane to the occupier of the factory. But if he makes an offer, the occupier of the factory is bound to accept it. The resulting agreement is recorded in writing and is signed by the parties. The consent of the occupier of the factory is free as defined in section 14 of the Indian Contract Act. The compulsion of law is not coercion as 706 defined in section 15 of the Act. The, agreements are enforceable by law and are contracts of sale as defined in section 4 of the Indian Sale of Goods Act. The purchases of sugarcane under the agreement can be therefore taxed by the State Legislature under Entry 54 List II. Section 21 of the Andhra Pradesh Sugarcane (Regulation of Supply and Purchase) Act, 1961 is accordingly not ultra vires. [712 F H]. State of Madras vs Gannon Dunkerley & Co. ; and New India Sugar Mills Ltd., vs Commissioner of Sales Tax, Bihar, [1963] Supp. 2 S.C.R. 459, distinguished and explained. Lane vs Cotton, ; E.R. 17, Kirkness vs John Hudson & Co. Ltd. and Ridge Nominees vs I.R.C. , referred to. The Indian Steel & Wire Products Ltd., vs The State of Madras, ; , relied on. (ii) Purchase tax need not always be levied with reference to price of goods or with reference to turnover. It may be levied on the occupier of a factory by reference to the weight of the goods purchased by him. [717 C E]. It cannot he accepted that a purchase tax must be always levied on goods generally and never with reference to their use, consumption or sale. Under List II Entry 54 the State Legislature is not bound to levy a tax on all purchases of cane. It may levy a tax on purchases of cane required for use, consumption or sale in a factory. The tax so levied is not a use tax. [717 F 718 B]. McLeod vs Dilworth & Co. ; and C. G. Naidu & Co. vs State of Madras, A.I.R. 1953 Mad. 116, referred to. The tax under section 21 is not a levy on the (entry of goods into the factory. Cane cultivated by the factory and entering it cannot be taxed under the section. [718 G]. Diamond Sugar Mills Ltd., and Anr. vs State of Uttar Pradesh and Anr. , ; , referred to. (iii) Section 21 does not impede free trade, commerce and intercourse and therefore does not offend article 301 of the Constitution. The tax levied under section 21 does not discriminate against any imported cane. [719 E 720 A]. A. T. Mehtab Majid and Co. vs State of Madras, [1963] Supp. 2 S.C.R. 435, Atiabari Tea Co ' Ltd., vs State of Assam (Rajasthan) Ltd., vs State of Rajasthan, [1963] 1 S.C.R. 491, referred to. (iv) The differential treatment of factories producing sugar by means of vacuum pans, khandsari units producing sugar by the open pan process and canegrowers using cane for the manufacture of jaggery is reasonable and has a rational relation to the object of the Act. There is thus no violation of article 14 of the Constitution. [720 G H]. Nor does discrimination result from the exemption under section 21(3) of factories which are new or which in the opinion of the Government have substantially expanded. The exemption is based on legitimate legislative policy. The question whether the exemption should be granted to a factory and if so for what period and the question whether a factory has substantially expanded and if so the extent of such expansion have to be decided with reference to the facts of each individual case. It is not possible for the State 707 Legislature to examine the merits of individual cases and the function was properly delegated to the State Government. The legislature was not obliged to prescribe a more rigid standard for the guidance of Government. [721 A C].

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tition No. 177 of 1987 etc. (Under Article 32 of the Constitution of India). Dr. L.M. Singhvi, K.K. Venugopal, M.K. Ramamurthi, V.M. 193 Tarkunde, R.K. Garg, Ravi P. Wadhwani, Vrinda Grover, Vandana Chak, Ranjeet Kumar, M.N. Krishnamani, V. Shekhar, B.S. Maan, M.A. Chinnaswami, V.J. Francis, Mathai M. Paikeday, N.M. Popli, M.A. Krishnamurthi, Mrs. Chandan Ramamurthi, Balbir Singh, Rajan Karanjawala, Mrs. Manik Karanjawala, Ravi P. Wadhwani, P.N. Mishra, Ashok Grover, Ezaz Manbool, and K.K. Mohan for the Petitioners. G. Ramasvamy, Additional Solicitor General, Dr. Y.S. Chitale, M.M. Abdul Khader, Soli J. Sorbjee, K.N. Bhat, G.L. Sanghi, O.C. Mathur, Miss Srieen Sethna, Harish Salve, H.S. Parihar, Vipin Chandra, Vijay Kr. Verma, Miss Madhu Moolchandani, Gopal Subramium, Halida Khatoon, Mrs. Sushma Suri and P. Parmeshwaran for the Respondents. E.C. Aggarwala and D.D. Gupta for the Intervener. The Judgment of the Court was delivered by RANGANATH MISRA, J. The writ petitions under Article 32 of the Constitution and appeals by special leave are against the judgment of the Division Bench of the Kerala High Court in writ appeals have a common set of facts as also law for consideration. These matters have been heard together and are disposed of by this common judgment. Hindustan Commercial Bank ( 'Hindustan ' for short). The Bank of Cochin Ltd. (hereafter referred to as 'Cochin Bank ') and Lakshmi Commercial Bank ( 'Lakshmi ' for short) were private banks. Action was initiated under section 45 of the Banking Regulation Act, 1949 ( 'Act ' for short) for amalgamation of these three banks with Punjab National Bank, Canara Bank and State Bank of India respectively in terms of separate schemes drawn under that provision of the Act. Amalgamation has been made. Pursuant to the schemes, 28 employees of Hindustan, 21 employees of Cochin Bank and 76 employees of Lakshmi were excluded from employment and their services were not taken over by the respective transferee banks. Some of these excluded employees of the Cochin Bank went before the Kerala High Court for relief under Article 226 of the Constitution. A learned Single Judge gave them partial relief but on an appeal to the Division Bench by the transferee bank concerned the writ petitions have been dismissed. The civil appeals are against the decision of the Division Bench. The writ petitions directly filed before this Court are by some of the excluded employees of Hindustan and Lakshmi respectively. 194 Though employees of the other two banks had not challenged the vires of section 45 of the Act, on behalf of Lakshmi such a challenge has been made. Since the grounds of attack on this score did not Impress us at all, we do not propose to refer to that aspect of the submissions involving interpretation of Article 31 A, Article 16 and Article 21. It has often been said by this Court that Courts should not enter into constitutional issues and attempt interpretation of its provisions unless it is really necessary for disposal of the dispute. In our opinion, this group of cases can be disposed of without reference to question of vires of some part of section 45 of the Act being examined. Counsel on behalf of the excluded employees have broadly contended that the draft schemes did not include any name of employees intended to be excluded; no opportunity of being heard was afforded to them before exclusion was ordered under the schemes and the authorities concerned have not acted fairly; they deny the allegation that any of them was responsible for ficticious, improper or non business like advances of loan to parties thereby bringing conditions near about bankruptcy for the appropriate banking companies; many other employees against whom there were definite charges already pending enquiry or even orders of dismissal had been proposed have been taken over and retained in service of the transferee banks while these excluded employees without justification have been called upon to face this unfortunate situation. The transferee banks, the Reserve Bank of India (hereafter referred to as RBI for short) and the Union of India have appeared and filed affidavits in opposition. The Union of India has contended that the scheme in respect of each of the banks that has got amalgamated had been approved by it as required under the Act and since finality was attached to such schemes challenge was not open against the schemes particularly in view of the provisions contained in Article 3 I A of the Constitution. On behalf of the Reserve Bank of India, several contentions were raised by way of opposition and shortly stated these submissions are: (1) Law does not require that the draft scheme should contain the names of the employees to be excluded; (2) The incorporation of the names finalised on the basis of scrutiny of the records before the schemes were placed before the RBI was sufficient compliance of the requirements of the law; 195 (3) the provisions of the Act did not confer any right on the employees of being heard; (4) the scheme making process was legislative in character and therefore did not come within the ambit of natural justice. Alternately the action not being judicial or quasi judicial and at the most being administrative or executive was also not open to challenge on allegations of violation of rules of natural justice; (5) moratorium under the statutory provisions could not be beyond six months and in view of the fact that the entire operation had to be finalised within a brief time frame, the requirement of an enquiry by notice to all the officers intended to be excluded could not have been intended to be implanted into the provisions of section 45; and (6) Provision of compensation has been made for those who were excluded from the respective scheme. Each of the transferee banks generally adopted the stand taken by RBI. Before we proceed to examine the tenability of the several contentions and counter contentions advanced at the hearing, it is appropriate that we refer to the relevant provisions of the Act. The entire law applicable to the facts of these cases is to be found in Part Ill of the Act and in particular in section 45. As far as relevant, that section provides: "Notwithstanding anything contained in the foregoing provisions of this Part or in any other law or any agreement or other instrument, for the time being in force. where it appears to the Reserve Bank that there is good reason so to do, the Reserve Bank may apply to the Central Government for an order of moratorium in respect of a banking company. (2) The Central Government, after considering the application made by the Reserve Bank under sub section (1), may make an order of moratorium staying the commencement or continuance of all actions and proceedings against the company for a fixed period of time on such terms and conditions as it thinks fit and proper and may 196 from time to time extend the period so however that the total period of moratorium shall not exceed six months; (3) . . . . . . . (4) During the period of moratorium, if the Reserve Bank is satisfied that (a) in the public interest; or (b) in the interests of the depositors; or (c) in order to secure the proper management of the banking company; or (d) in the interests of the banking system of the country as a whole, it is necessary so to do, the Reserve Bank may prepare a scheme (i) for the reconstruction of the banking company, or (ii) for the amalgamation of the banking company with any other banking institution (in this section referred to as "the transferee bank"). (5) The scheme aforesaid may contain provisions for all or any of the following matters, namely: (a). . . . . . . . . (b). . . . . . . . . (c). . . . . . . . . (d). . . . . . . . . (e). . . . . . . . . (f). . . . . . . . . (g). . . . . . . . . (h). . . . . . . . . 197 (i) the continuance of the services of all the employees of the banking company (excepting such of them as not being workmen within the meaning of the are specifically mentioned in the scheme) in the banking company itself on its reconstruction or, as the case may be, in the transferee bank at the same remuneration and on the same terms and conditions of service, which they were getting or, as the case may be, by which they were being governed, immediately before the date of the order of moratorium: Provided. . . . . . . . (j) notwithstanding anything contained in clause (i) where any of the employees of the banking company not being workmen within the meaning of the are specifically mentioned in the scheme under clause (i), or where any employees of the banking company have by notice in writing given to the banking company or, as the case may be, the transferee bank at any time before the expiry of one month next following the date on which the scheme is sanctioned by the Central Government, intimated their intention of not becoming employees of the banking company on its reconstruction or, as the case may be, of the transferee bank, the payment to such employees of compensation, if any, to which they are entitled under the , and such pension, gratuity, provident fund and other retirement benefits ordinarily admissible to them under the rules or authorisations of the banking company immediately before the date of the order of moratorium: (k). . . . . . . . . (I) . . . . . . . . (6) (a) A copy of the scheme prepared by the Reserve Bank shall be sent in draft to the banking company and also to the transferee bank and any other banking company concerned in the amalgamation, for suggestions and objections, if any, within such period as the Reserve Bank may specify for this purpose; (b) the Reserve Bank may make such modifications, 198 if any, in the draft scheme as it may consider necessary in the light of the suggestions and objections received from the banking company and also from the transferee bank, and any other banking company concerned in the amalgamation and from any members, depositors or other creditors of each of those companies and the transferee bank. (7) The scheme shall thereafter be placed before the Central Government for its sanction and the Centraly Government may sanction the scheme without any modifications or with such modifications as it may consider necessary; and the scheme as sanctioned by the Central Government may specify in this behalf: Provided . . . . . . . . (7A) The sanction accorded by the Central Government under sub section (7), whether before or after the commencement of section 21 of the Banking Laws (Miscellaneous Provisions) Act, 1963, shall be conclusive evidence that all the requirements of this section relating to reconstruction, or, as the case may be, amalgamation have been com plied with and a copy of the sanctioned scheme certified in writing by an officer of the Central Government to be a true copy thereof, shall, in all legal proceedings (whether in appeal or otherwise and whether instituted before or after the commencement of the said section 21), be admitted as evidence to the same extent as the original scheme. (8) on and from the date of the coming into operation of the scheme or any provision thereof, the scheme or such provision shall be binding on the banking company or, as the case may be, on the transferee bank and any other banking company concerned in the amalgamation and also on all the members, depositors and other creditors and employees of each of those companies and of the transferee bank, and on any other person having any right or liability in relation to any of those companies or the transferee bank. . . (9). . . . . . . . . (10) If any difficulty arises in giving effect to the provisions 199 of the scheme, the Central Government may by order do anything not inconsistent with such provisions which appear to it necessary or expedient for the purpose of removing the difficulty. (11) Copies of the scheme or of any order made under sub section ( 10) shall be laid before both Houses of Parliament, as soon as may be, after the scheme has been sanctioned by the Central Government or, as the case may be, the order has been made. (12). . . . . . . . (13). . . . . . . . (14). . . . . . . . (15). . . . . . . . Allegations advanced on behalf of the excluded employees is that the draft scheme contemplated under sub section 6(a) did not specifically mention names of the excluded employees and at a later stage when the scheme was sent up by the RBI to the Central Government a schedule containing the names of the excluded employees was attached to each of the schemes. Section 45 of the Act provides a legislative scheme and the different steps required to be taken under this section have been put one after the other. A reading of this section indicates a sequence oriented pattern. What would ordinarily be incorporated in the draft scheme is indicated in sub section (5). After the requirements of sub section (5) are complied with and the scheme comes to a presentable shape, sub section (6)(a) requires a copy thereof as prepared by RBI to be sent to the banking company (transferer) as also to the transferer bank. Clause (b) of sub section (6) authorises RBI to make modifications in the draft scheme as it may consider necessary in the light of suggestions and objections received from the banking company and the transferee bank. On a simple construction of sub sections (5) and (6) and on the basis of the sequence pattern adopted in section 45 it would be legitimate to hold that the Act contemplates the employees to be excluded to be specifically named in the draft scheme. Since it is a draft scheme prepared by RBI and the right to object or to make suggestions is extended to both the banking company as also the transferee bank, and in view of the fact that clause 200 (i) of sub section (5) specifies this item to be a matter which may be included in the scheme, it must follow that the legislative intention is that the scheme would incorporate the names of such employees as are intended to be excluded in accordance with the scheme. Once it is incorporated in the scheme the banking company as also the transferee bank would be entitled to suggest/object to the inclusion of names of employees. It may be that the names of some of the employees may have been wrongly included and the banking company the hither to employer would be in a position to suggest/object to the inclusion of the names or it may even be that names of some undesirable employees which should have been left out have been omitted and the banking company as the extant employer of such employees would be most competent to deal with such a situation to bring about rectifications by exercising the power to suggest/object to the draft scheme. The contention advanced on behalf of RBI that since it is open to it under sub section (6)(b) of section 45 to make modifications of the draft scheme, even if the names were not included earlier, at the stage of finalising the scheme for placing it before the Central Government as required under sub section (7), the earlier non inclusion is not a contravention is not acceptable. We are of the view that in case some employees of the banking company are intended to be excluded, their names have to be specifically mentioned in the scheme at the draft stage. The requirement of specific mention is significant and the legislature must be taken to have intended compliance of the requirement at that stage. Mr. Salve for the RBI adopted the stand that the provisions of section 45 did not specifically concede a right of objection or making of suggestions to employees and in sub section (6)(b) mention was made only of members, depositors or other creditors. For the reasons we have indicated above, this aspect of the contention does not impress us. It is the common case of RBI as also the transferee banks that the records of service of each of the employees had been scrutinised and the names for inclusion in the scheme were picked up on the basis of materials like irresponsible action in regard to sanction of loans and accommodations to customers which affected the financial stability of the banking company concerned. Such an allegation made in the counter affidavit in this Court has been seriously disputed by the litigating excluded employees. It is their positive case that there was no foundation in such allegation and dubious loans, if any, had been sanctioned under instructions of the superior in the banking company and, therefore, did not involve any delinquency on the part of such employees. Since it is the case of the respondents that exclusion had 201 been ordered on the basis of an objective assessment and the very A foundation of the allegation upon which such assessment has been made is disputed, a situation arose where facts had to be ascertained, and it involved assessment. That has admittedly not been done. These employees were in employment under contract in the banking companies which were private banks. They have been excluded from service under the transferee banks and the contracts have now been terminated as a result of inclusion of their names in the schemes. It cannot be disputed nay has not been that exclusion has adversely affected this category of employees and has brought about prejudice and adverse civil consequences to them. Two contentions have been raised with reference to this aspect of the matter: ,, (1) There has been infraction of natural justice and (2) The transferee banks which are 'State ' and RBI which has monitored the operation being admittedly 'State ' their action in excluding some of the employees of the banking company and taking over the services of others who are similarly situated is hit by Article 14 of the Constitution. It may be pointed out that according to the excluded employees, many facing similar allegations and/or in worse situation have been taken over. Whether there is infraction of Article 14 of the Constitution on the allegation advanced would depend upon facts relating to the excluded employees as also the allegedly derelict employees whose services have been taken over. In the absence of an enquiry in which the excluded employees should have been given an opportunity of participation it has become difficult for us to probe into the matter further. F Admittedly the excluded employees have neither been put to notice that their services were not being continued under the transferee banks nor had they been given an opportunity of being heard with reference to the allegations now levelled against them. Learned counsel for RBI and the transferee banks have taken the stand that the scheme making process under section 45 is legislative in character and, therefore, outside the purview of the ambit of natural justice under the protective umbrella whereof the need to put the excluded employees to notice or enquiry arose. It is well settled that natural justice will not be employed in the exercise of legislative power and Mr. Salve has rightly relied upon a recent decision of this Court being Union of India H 202 & Anr. vs Cynamide India Ltd. & Anr., [ 1987] 2 SCC 720 in support of such a position. But is the scheme making process legislative? Power has been conferred on the RBI in certain situations to take steps for applying to the Central Government for an order of moratorium and during the period of moratorium to propose either reconstruction or amalgamation of the banking company. A scheme for the purposes contemplated has to be framed by RBI and placed before the Central Government for sanction. Power has been vested in the Central Government in terms of what is ordinarily known as a Henery 8 clause for making orders for removal of difficulties. Section 45(11) requires that copies of the schemes as also such orders made by the Central Government are to be placed before both Houses of Parliament. We do not think this requirement makes the exercise in regard to schemes a legislative process. It is not necessary to go to any other authority as the very decision relied upon by Mr. Salve in the case of Cynamide India Ltd. (supra) lays down the test. In paragraph 7 of the judgment it has been indicated: "Any attempt to draw a distinct line between legislative and administrative functions, it has been said, is 'difficult in theory and impossible in practice '. Though difficult, it is necessary that the line must sometimes be drawn as different legal rights and consequences may ensue. The distinction between the two has usually been expressed as 'one between the general and the particular '. 'A legislative act is the creation and promulgation of a general rule of conduct without reference to particular cases; an administrative act is the making and issue of a specific direction or the application of a general rule to a particular case in accordance with the requirements of policy '. 'Legislation is the process of formulating a general rule of conduct without reference to particular cases and usually operating in future; administration is the process of performing particular acts, of issuing particular orders or of making decisions which apply general rules to particular cases '. It has also been said: "Rule making is normally directed towards the formulation of requirements having a general application to all members of a broadly identifiable class" while, "an adjudication, on the other hand, applies to specific individuals or situations. But this is only a broad distinction, not necessarily always true. " Applying these tests it is difficult to accept Mr. Salve 's contention that 203 the framing of the scheme under section 45 involves a legislative process. There are similar statutory provisions which require placing of material before the two Houses of Parliament yet not involving any legislative activity. The fact that orders made by the Central Government for removing difficulties as contemplated under sub clause (10) are also to be placed before the two Houses of Parliament makes it abundantly clear that the placing of the scheme before the two Houses is not a relevant test for making the scheme framing process legislative. We accordingly hold that there is no force in the contention of Mr. Salve that the process being legislative, rules of natural justice were not applicable. The alternate contention on this score is that the scheme making process being an executive activity or alternately an administrative matter, rules of natural justice have no application. This contention has again to be rejected. Neither in "Privy Council, Natural Justice and Certiorari" has indicated: "Formerly the presumption had been that there WAS obligation to give a hearing unless the statute itself indicated such an obligation; now the presumption is that there is such an obligation unless the statute clearly excludes it, notwithstanding the vesting of a power, in subjective terms, in a minister responsible to Parliament." As has beer. pointed out by Wells J. in Perre Brothers vs Citrus organisation Committee, "It is now well established and there is no need for me to canvass the innumerable authorities bearing on this point that duties, responsibilities and functions of an administrative authority may be purely ministerial, or they may embody some quasi or semi judicial characteristic. At one time a good deal of ingenuity and with all respect it seems to me a great deal of energy was wasted in attempting to discern whether a particular function was administrative or quasi judicial. In my view the House of Lords, and now the High Court, have, to a very large extent set all such controversies at rest. In my opinion, the test now is not so much as to whether one can fairly call something "ministerial" or 204 "administrative", or "quasi judicial" but whether the duties of a non judicial authority must, having regard to the wording of the Act, be carried out in a spirit of judicial fairness. " In Re (H) K (an infant), Lord Parker, CJ, found that the immigration officer was not acting in a judicial or quasi judicial capacity. Yet, the learned Chief Justice held that he still had to act fairly. In that case it meant giving K an opportunity of satisfying the officer as to his age, and for that purpose he had to let K know what his immediate impression was so that K could disabuse him of it. Lord Parker observed: "I appreciate that in saying that, it may be said that one is going further than is permitted on the decided cases because heretofore at any rate the decisions of the courts do seem to have drawn a strict line in these matters according to whether there is or is not a duty to act judicially or quasi judicially". The obligation to act fairly even in administrative decision making has since been widely followed. Mulla in 'Fairness: The New Natural Justice ' has stated: "Natural justice co exists with, or reflected, a wider principle of fairness in decision making and that all judicial and administrative decision making and that all judicial and administrative decision makers had a duty to act fairly. " In the case of State of Horsily vs Dr. (Miss) Binapani Dei & ors., [ ; this Court observed: "It is true that the order is administrative in character but even an administrative order which involves civil consequences as already stated, must be made consistently with the rules of natural justice after informing the first respondent of the case of the State, the evidence in support thereof and after giving an opportunity to the first respondent of being heard and meeting or explaining the evidence. No such steps were admittedly taken; the High Court was, in our judgment, right in setting aside the order of the State." 205 ln A.K Kraipak & ors. vs Union of India & ors. , [ a Constitution Bench quoted with approval the observations of Lord Parker in Re: (H) K (an infant) (supra). Hegde, J. speaking for the Court stated: "Very soon thereafter a third rule was envisaged and that is that quasi judicial enquiries must be held in good faith, without bias and not arbitrarily or unreasonablly. But in the course of years many more subsidiary rules came to be added to the rules of natural justice. Till very recently it was the opinion of the courts that unless the authority concerned was required by the law under which it functioned to act judicially there was no room for the application of the rules of natural justice. The validity of that limitation is now questioned. If the purpose of the rules of natural justice is to prevent miscarriage of justice one fails to see why those rules should be made inapplicable to administrative enquiries. Often times it is not easy to draw the line that demarcates administrative enquiries from quasi judicial enquiries. Enquiries which were considered administrative at one time are now being considered as quasi judicial in character. Arriving at a just decision is the aim of both quasi judicial enquiries as well as administrative enquiries. An unjust decision in an administrative enquiry may have more far reaching effect than a decision in a quasi judicial enquiry. " These observations in A.K. Kopak 's (supra) case were followed by another Constitution Bench of this Court in Chandra Bhavan Boarding and Lodging, Bangalore vs The State of Mysore & Anr., l 19701 2 SCR 600. In Swadeshi Cotton Mills vs Union of India, ; a three Judge Bench of this Court examined this aspect of natural justice. Sarkaria, J. who spoke for the Court, stated: "During the last two decades, the concept of natural justice has made great strides in the realm of administrative law. Before the epoch making decision of the House of Lords in Ridge vs Baldwin, it was generally thought that the rules of natural justice apply only to judicial or quasi judicial proceedings; and for the purpose, whenever a breach of the rule of natural justice was alleged, Courts in England used to ascertain whether the impugned action was taken by the statutory authority or tribunal in the exercise of its 206 administrative or quasi judicial power. In India also, this was the position before the decision of this Court in Dr. Bina Pani Dei 's case (supra); wherein it was held that even an administrative order or decision in matters involving civil consequences, has to be made consistently with the rules of natural justice. This supposed distinction between quasi judicial and administrative decisions, which was perceptibly mitigated in Bina Pani Dei 's case (supra) was further rubbed out to a vanishing point in A.K. Kraipak 's case (supra) . . . . . ". On the basis of these authorities it must be held that even when a State agency acts administratively, rules of natural justice would apply. As stated, natural justice generally requires that persons liable to be directly affected by proposed administrative acts, decisions or proceedings be given adequate notice of what is proposed so that they may be in a position (a) to make representations on their own behalf; (b) or to appear at a hearing or enquiry (if one is held); and (c) effectively to prepare their own case and to answer the case (if any) they have to meet. Natural justice has various facets and acting fairly is one of them. RBI which monitored the three amalgamations was required to act fairly in the facts of the case. The situation necessitated a participatory enquiry in regard to the excluded employees. Since the decision to exclude them from service under the transferee banks is grounded upon a set of facts the correctness whereof they deny, if an opportunity to know the allegations and to have their say had been afforded, they could have no grievance on this score. The action deprives them of their livelihood and brings adverse civil consequences and could obviously not be taken on the ipse dixit of RBI officers without verification of facts. It is quite possible that a manoeuvring officer of the banking company adversely disposed of towards a particular employee of such bank could make a report against such employee and have him excluded from further service under the transferee bank. The possibility of exclusion on the basis of some mistake such as to identity cannot also be ruled out. There is all the more apprehension of this type is the process has to be completed quickly and very often the records of a large number of employees have to be scrutinised. We are of the view that rules of natural justice apply to administrative action and in the instant cases the decision to exclude a section of the employees without complying with requirements of natural justice was bad. 207 It has been contended on behalf of respondents that moratorium could be for a total period of six months and that was the time allowed for the entire operation to be conducted. In view of the time frame, by necessary implication it must follow that application of natural justice compliance of which would involve a time consuming process was ruled out. We do not think that there is any merit in this contention either. As a fact, in respect of the three banks the total number of excluded employees is around 125. It is the common case of parties that proceedings were pending against some of them. It may be that in view of the time frame a detailed enquiry involving communication of allegations, show cause, opportunity to lead evidence in support of the allegations and in defence of the stand of the employees may not be possible. Keeping the legislative scheme in view perhaps a simpler enquiry, for instance, communication of the allegation and even receiving an explanation and in cases where the allegation was serious or there was a total denial though there was firm basis for the allegation a single personal hearing could be afforded. In this case we are not really concerned with the manner or extent of hearing as there has been no hearing at all. It must, therefore, be held that the action of excluding these employees in the manner done cannot be supported. Fair play is a part of the public policy and is a guarantee for justice to citizens. In our system of Rule of Law every social agency conferred with power is required to act fairly so that social action would be just and there would be furtherance of the well being of citizens. The rules of natural justice have developed with the growth of civilisation and the content thereof is often considered as a proper measure of the level of civilisation and Rule of Law prevailing in the community. Man within the social frame has struggled for centuries to bring into the community the concept of fairness and it has taken scores of years for the rules of natural justice to conceptually enter into the field of social activities. We do not think in the facts of the case there is any justification to hold that rules of natural justice have been ousted by necessary implication on account of the time frame. On the other hand we are of the view that the time limited by statute provides scope for an opportunity to be extended to the intended excluded employees before the scheme is finalised so that a hearing commensurate to the situation is afforded before a section of the employees is thrown out of employment. We may now point out that the learned Single Judge of the Kerala High Court had proposed a post amalgamation hearing to meet the situation but that has been vacated by the Division Bench. For the 208 reasons we have indicated, there is no justification to think of a post decisional heading. On the other hand the normal rule should apply. It was also contended on behalf of the respondents that the excluded employees could now represent and their cases could be examined. We do not think that would meet the ends of justice. They have already been thrown out of employment and having been deprived of livelihood they must be facing serious difficulties. There is no justification to throw them out of employment and then given them an opportunity of representation when the requirement is that they should have the opportunity referred to above as a condition precedent to action. It is common experience that once a decision has been taken, there is a tendency to uphold it and a representation may not really yield any fruitful purpose. 'Amalgamation ' as such saved under Article 31A(1)(c) of the Constitution is not under challenge here. Strong reliance, however, had been placed on the provisions of sub section (7A) of section 45 of the Act. The relevant part of it is as requoted here for convenience: "The sanction accorded by the Central Government under sub section (7) . shall be conclusive evidence that all the requirements of this section relating to . . amalgamation have been complied with This provision is indeed one for purposes of evidence. In Smt. Somavanti & ors. vs State of Punjab & Ors., [19631 2 SCR 774 this Court pointed out that there was no real difference between 'conclusive proof ' provided for in section 4 of the Evidence Act and 'conclusive evidence ' as appearing in sub section (7A). This provision does not bar the raising of a dispute of the nature received here. As we have already pointed out, amalgamation is not under challenge. Parties are disputing as to what exactly are the requirements of the procedure laid down under the Act and the position that no opportunity was afforded to the excluded employees is not in dispute. To a situation as here protection of the umbrella of conclusive evidence is not attached so as to bar the question from being examined. There is, therefore, nothing in sub section (7A) to preclude examination of the question canvassed here The writ petitions and the appeals must succeed. We set aside the impugned judgments of the Single Judge and Division Bench of the Kerala High Court and direct that each of the three transferee banks 209 should take over the excluded employees on the same terms and conditions of employment under the respective banking companies prior to moratorium. The employee would be entitled to the benefit of continuity of service for all purposes including salary and perks throughout the period. We leave it open to the transferee banks to take such action as they consider proper against these employees in accordance with law. Some of the excluded employees have not come to Court. There is no justification to penalise them for not having litigated. They too shall be entitled to the same benefits as the petitioners. Ordinarily the successful parties should have been entitled to costs but in view of the fact that they are going back to employment, we do not propose to make orders of costs against their employers. We hope and trust that the transferee banks would look at the matter with an open mind and would keep themselves alive to the human problem involved in it. N.P.V. Petitions & Appeals allowed.

The Hindustan Commercial Bank, the Bank of Cochin Ltd. and Lakshmi Commercial Bank were amalgamated with Punjab National Bank, Canara Bank, State Bank of India respectively in terms of separate schemes drawn under the Banking Regulation Act, 1949, and pursuant thereto 125 employees of these banks were excluded from employment, and their services were not taken over by the respective transferee banks. Some of these excluded employees filed writ petitions before the High Court which granted partial relief, but on appeal by the transferee Bank the Writ Petitions were dismissed by the Division Bench. Against this, appeals by Special Leave were filed before this Court. Some of the excluded employees filed writ petitions before this Court directly. It was contended on behalf of the excluded employees that the draft schemes did not include any name of employees intended to be excluded; that no opportunity of being heard as afforded to them before exclusion was ordered, and the authorities concerned had not acted fairly; that none of them was responsible for ficticious, improper or 189 on business like advances of loan to parties thereby bringing conditions nearabout bankruptcy for the appropriate banking companies, that many other employees against whom there were definite charges already pending enquiry or even orders of dismissal had been proposed had been taken over and retained in service of the transferee banks while these excluded employees, without justification, had been called upon to face this unfortunate situation. The transferee banks, the Reserve Bank of India and the Union of India filed affidavits in opposition. It was contended on behalf of the Union of India that the scheme in respect of each of the amalgamated banks had been approved by it as required under the Act and since finality was attached to such schemes, the schemes could not be challenged, particularly in view of the provisions contained in Article 31 A of the Constitution. It was contended on behalf of the Reserve Bank of India that law did not require that the draft scheme should contain the names of the employees to be excluded, that the incorporation of the names finalised on the basis of scrutiny of the records before the schemes were placed before the RBI was sufficient compliance of the requirements of the law; that the provisions of the Act did not confer any right on the employees of being heard; that the scheme making process was legislative in character and, therefore, did not come within the ambit of natural justice, and the action, not being judicial or quasijudicial and, at the most, being administrative or executive was also not open to challenge on allegations of violation of rules of natural justice; that moratorium under the statutory provisions could not be beyond six months and in view of the fact that the entire operation had to be finalised within a brief time frame, the requirement of an enquiry by notice to all the officers to be excluded could not have been intended to be implanted into the provisions of section 45 and that provision of compensation had been made for those who were excluded from the respective schemes. Allowing the writ petitions and appeals, this Court, ^ HELD: 1. Rules of natural justice apply to administrative action and the decision to exclude a section of the employees without complying with requirements of natural justice was bad. [206H] 2.1 Fair play is part of public policy and a guarantee for justice to citizens. In our system of Rule of Law, every social agency conferred with power is required to act fairly so that social action would be just, and there would be furtherance of the well being of citizens. [207E] 190 2.2 The rules of natural justice have developed with the growth of A civilization and the content thereof is often considered as a proper measure of the level of civilization and Rule of Law prevailing in the community. [207E F] 2.3 Natural justice generally requires that persons liable to be directly affected by proposed administrative acts, decisions or proceedings be given adequate notice of what is proposed so that they may be in a position (a) to make representation on their own behalf; (b) or to appear at a hearing or enquiry (if one is held); and (c) effectively to prepare their own case and to answer the case (if any) they had to meet. Even when a State agency acts administratively, rules of natural justice would apply.[206C D] 3.1 Section 45 of the Banking Regulations Act provides a legislative scheme and the different steps required to be taken have been put one after the other. On a simple construction of sub sections (5) and (6) and on the basis of the sequence pattern adopted in section 45, it is clear that the Act contemplates the employees to be excluded to be specifically named in the draft scheme. Since it is a draft scheme prepared by RBI and right to object or to make suggestions is extended to both the banking company as also the transferee bank, and in view of the fact that clause (i) of sub section (5) specifies this item to be a matter which may be included in the scheme, it must follow that the legislative intention is that the scheme would incorporate the names of such employees as are intended to be excluded in accordance with the scheme. Once it is incorporated in the scheme, the banking company as also the transferee bank would be entitled to suggest/object to the inclusion of names of employees. [199E F; H; 200A B] 3.2 In case some employees of the banking company are intended to be excluded, their names have to be specifically mentioned in the scheme at the draft stage. The requirement of specific mention is significant and the legislature must be taken to have intended compliance of the requirement at that stage. The excluded employees in the instant case, were in employment under the contract in the banking companies which were private banks. They have been excluded from service under the transferee banks and the contracts had been terminated as a result of inclusion of their names in the schemes. This exclusion has adversely affected this category of employees and has brought about prejudice and adverse civil consequences to them. [200D E] 4.1 Natural justice cannot be employed in the exercise of legisla 191 tive power. Power has been conferred on the RBI in certain situations to A take steps for applying to the Central Government for an order of moratorium and during the period of moratorium to propose either reconstruction or amalgamation of the banking company. A scheme for the purposes contemplated has to be framed by RBI and placed before the Central Government for sanction. Power has been vested in the Central Government in terms of what is ordinarily known as a Henery 8 clause for making orders for removal of difficulties. [201H; 202A B] 4.2 Section 45(11) requires that copies of the scheme as also such orders made by the Central Government are to be placed before both Houses of Parliament. This requirement does not make the exercise in regard to schemes a legislative process. Framing of the scheme under section 45 does not involve a legislative process, and as such, rules of natural justice are applicable to the instant case. [202C] 4.3 The fact that orders made by the Central Government for removing difficulties as contemplated under sub clause (10) were also to be placed before the two Houses of Parliament makes it abundantly clear that the placing of the scheme before the two Houses is not a relevant test for making the scheme framing process legislative. [203B] 5.1 RBI which monitored the three amalgamations was required to act fairly in the facts of the case. The situation necessitated a participatory enquiry in regard to the excluded employees. If an opportunity to know the allegations and to have their say had been afforded, they could have no grievance on this score. The action deprives them of their livelihood and brings adverse civil consequences and could obviously not be taken on the ipse dixit of RBI owners without verification of facts. In view of the time frame, a detailed enquiry may not be possible but keeping the legislative scheme in view, perhaps, a simpler enquiry could be afforded. [206E F] 5.2 In the facts of the case, there is no justification to hold that rules of natural justice have been ousted by necessary implication on account of the time frame. On the other hand, the time limited by statute provides scope for an opportunity to be extended to the intended excluded employees before the scheme is finalised so that a hearing commensurate to the situation is afforded before a section of the employees is thrown out of employment. [207F G] 5.3 There is no justification to think of a post decisional hearing. H 192 on the other hand, the normal rule should apply. The excluded employees have already been thrown out of employment and having been deprived of livelihood they must be facing serious difficulties. There is no justification to throw them out of employment and then given them an opportunity of representation when the requirement is that they should have the opportunity as a condition precedent to action. It is common experience that once a decision has been taken, there is a tendency to uphold it and a representation may not really yield any fruitful purpose. [208A C] 6. Protection of the umbrella of conclusive evidence is not attached to a situation as in the instant case, so as to bar the question regarding the requirements of the procedure laid down under the Act and the opportunity afforded to the excluded employees from being examined. There is, therefore, nothing in sub section (7A) of section 45 to preclude examination of the question. [208G] [Each of the three transferee banks should take over the excluded employees on the same terms and conditions of employment under the respective banking companies prior to amalgamation. The employees would be entitled to the benefit of continuity of service for all purposes including salary and perks throughout the period. It is open to the transferee banks to take such action as they consider proper against these employees in accordance with law. There is no justification to penalise some of the excluded employees who have not come to the Court. They too shall be entitled to the same benefits as the petitioners.] [208H; 209A B] Union of India & Anr. vs Cynamide India Ltd. & Anr., [1987] 2 SCC 720; Perre Brothers vs Citrus organisation Committee, ; Re (H) K (an infant), ; State of Orissa vs Dr. (Miss) Binapani Dei & Ors., ; ; A.K Kraipak & ors., vs Union of India & Ors., ; Chandra Bhavan Boarding and Lodging, Bangalore vs The State of Mysore & Anr., 11970] 2 SCR 600; Swadeshi Cotton Mills vs Union of India, ; and Smt. Somavanti & Ors. vs State of Punjab & Ors., , referred to.

5469.txt

etition (Criminal) No. 7207 of 1981. (Under Article 32 of the Constitution of India) Ram Jethmalani and Miss Rani Jethmalani for the Petitioner. The Judgment of the Court was delivered by CHINNAPPA REDDY, J. This petition for review and the petition for the issue of Writ under Article 32 were argued by Shri Jethmalani with, what appeared to us to be more than his customary vehemence and emotion. Nonetheless, we confess, we are not impressed. By our judgment dated August 12, 1981(1), we had set aside the judgment of acquittal passed by the High Court of Bombay and restored that of the learned Additional Chief Presidency Magistrate, 8th Court, Esplanade, Bombay, convicting the petitioner under different heads of charges and sentencing him to suffer imprisonment for various terms ranging from two years to four years and to the payment of fine of Rs. 10,000/ on each of different counts. , Shri Jethmalani contended that though he had argued that the period during which the petitioner had been preventively detained under the maintenance of Security Act and the should be 'set off ' against the sentence of imprisonment imposed upon him, we had not touched upon the point. He also drew our attention to a reference to set off ' in the written submissions given to us after the hearing of the case. We may mention that what was argued before us was not that the petitioner was entitled to a 'set off ' but that the period of his detention might be taken into 63 account in considering the question of the appropriate sentence to A be imposed on the petitioner, which question was considered by us. But, we will let that pass, accept Mr. Jethmalani 's word for it and proceed to consider the question straightaway. It appears that the petitioner was detained first under the provisions of the MISA and later under the provisions of the COFEPOSA. The periods of detention were September 17, 1974 to April 18, 1975, July 1, 1975 to November 21, 1975 and May 20, 1976 to March 22, 1977. We are told that the orders of detention, which have not been produced before us, were based on facts which were the vary subject matter of the criminal case. The learned Additional Chief Presidency Magistrate had convicted the petitioner by his judgment dated December 13, 1971 but that was set aside by the High Court by their judgment dated April 20, 1974. The State of Maharashtra filed an application for special leave under article 136 of the Constitution on November 30, 1974 and special leave was granted by this Court on April 15, 1975. It was noticed by this Court at the time of granting special leave that the petitioner was then in preventive detention and it was directed that in case he was released from detention but re arrested in connection with the case he should be released on bail on the same terms as those on which bail had been previously granted by the High Court. The submission of Shri Jethmalani was that the total of the three periods of detention should be "set off ' against the sentence of imprisonment imposed upon him. He relied upon the decision of this Court in Govt. Of Andhra Pradesh & Anr. vs Anne Venkateswara Rao etc. etc.(l) We are unable to agree with the submission of Shri Jethmalani; In the very case cited by the learned counsel, the Court negatived the contention that the expression 'period of detention ' in Section 428 Code of Criminal Procedure included the detention under the Preventive Detention Act or the Maintenance of Internal Security Act. It was observed: "It is true that the section speaks of the period of. detention undergone by an accused person, but it expressly says that the detention mentioned refers to the detention during the investigation, enquiry or trial of the 64 case in which the accused person has been convicted. The section makes it clear that the period of detention which it allows to be set off against the term of imprisonment imposed on the accused on conviction must be during the investigation, enquiry or trial in connection with the 'same case ' in which he has been convicted. We, therefore, agree with the High Court that the period during which the Writ Petitioners were in preventive detention cannot be set off under section 428 against the term of imprisonment imposed on them". After holding that the period during which the petitioners therein were in preventive detention could not 'set off ' under Section 428 Code of Criminal Procedure against the term of imprisonment imposed on them, the Court went on to consider whether the period during which the petitioners were in preventive detention could for any reason be considered as period during which the petitioners were in detention as undertrial prisoners or prisoners serving out a sentence on conviction. In the case of the prisoner A. V. Rao the Court held that the period commencing from the date when he would have normally been arrested pursuant to the First Information Report registered against him should be reckoned as period of detention as an undertrial prisoner. In the case of another prisoner Krishnaiah it was held that the period during which he was in preventive detention subsequent to the conviction and sentence imposed upon him should be treated as detention pursuant to conviction and sentence. The case before us is altogether different. The petitioner had been acquitted by the High Court before any of the orders of detention were made against him. There can be no question of the detention being considered as detention pursuant to conviction; nor can the detention be treated as that of an undertrial. It is only in the circumstances where the prisoner would have unquestionably been in detention in connection with a criminal case if he had not been preventively detained, his preventive detention might be reckoned as detention as an undertrial prisoner or detention pursuant to conviction, for the purposes of Section 428 Code of Criminal Procedure. Shri Jethmalani next contended that the petitioner had not been given an opportunity to argue on the question of sentence, that is hardly fair to us. A substantial part of the argument of Shri Jethmalani on that occasion was on the question of sentence 65 and, in the judgment pronounced by us, we did consider the argument advanced by the learned counsel on the question of sentence. It was also contended before us that the Court was not justified in holding that the petitioner was responsible for the long delay that had been caused in the disposal of the case and that the Court was wrong in holding that it was for the accused to show that he had been prejudiced by the delay. We see no merit in these contentions. The application for review is therefore dismissed. No separate arguments were advanced in the Writ Petition which is also dismissed. N.V.K. Petitions dismissed.

The Presidency Magistrate convicted the petitioner for offences under section 120B of the Indian Penal Code read with section 135 of and Customs Act and Rule 126P(2) (ii) and (iv) of the Defence of India Rules 1962 and sentenced him to suffer imprisonment for various periods ranging from two years to four years and to payment of fine. The conviction and sentence was set aside by the High Court, but this Court in appeal by the State set aside the judgment of acquittal by the High Court and restored that of the Presidency Magistrate. The petitioner was also preventively detained for various periods first under the Maintenance of Internal Security Act and afterwards under the . In the review petition and writ petition to this Court it was contended on behalf of the petitioner that: (I) though it was argued in the appeal to this Court that the periods during which the petitioner had been preventively detained should be 'set off ' against the sentence of imprisonment imposed upon him this court had not touched upon the point; and (2) this court 's decision in Government of Andhra Pradesh and another vs Venkateswara Rao; , , enabled the petitioner to claim the total of the three periods of detention to be 'set off ' against the sentence of imprisonment. Dismissing the review and writ petition, ^ HELD: 1. It was not argued that the petitioner was entitled to a 'set off ' but that the period of his detention might be taken into account in considering the question of the appropriate sentence be imposed on him. [62 H, 63 A]. 2(i) In Government of Andhra Pradesh vs Venkateswara Rao, this Court negatived the contention that the expression period of detention in Section 428, Code of Criminal Procedure 1973 included the detention under the Preventive Detention Act or the Maintenance of Internal Security Act. [63 F G] (ii) Section 428, Code of Criminal Procedure 1973 makes it clear that the period of detention which it allows to be 'set off ' against the term of imprisonment imposed on the accused on conviction must be during the investigation, enquiry, or trial in connection with the 'same case ' in which he has been convicted. [64 A B] 62 (iii) only in circumstances where the petitioner would have unquestionably been in detention in connection with a criminal case if he had not been preventively detained, his preventive detention might be reckoned as detention as an undertrial prisoner or detention pursuant to conviction, for the purposes of Section 428, Code of Criminal Procedure 1973. [64 G] In the instant case the petitioner had been acquitted by the High Court before any of the orders of detention were made against him. There can, there fore, be no question of the detention being considered as detention pursuant to conviction nor can the detention be treated as that of an undertrial. [64 F]

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ivil Appeal Nos. 3741 42 of 1982. From the Judgment and Order dated the 22nd October, 1982 of the Delhi High Court in C.W. Nos. 3577 and 3575 of 1982. V.M. Tarkunde, K.K. Venugopal, F.S. Nariman, Rajiv Datta and A.N. Bhanot for the Appellants. M.K. Banerjee, Additional Solicitor General and Miss A, Subhashini for the Respondent. 3 M.C. Bhandare and section Bhandare for the Respondent. The Order of the Court was delivered by CHINNAPPA REDDY, J. It transpires from the facts which we shall presently set out that the National Agricultural Cooperative Marketing Federation of India, NAFED for short, is a law unto itself and its officers are not unduly concerned either about carrying out the Export Trade Instructions issued by the Government of India or about filing truthful affidavits in the Supreme Court of India. On June 23, 1982, the Chief Controller of Imports and Exports, Ministry of Commerce, Government of India, issued Export Instruction No. 59 of 1982 on the subject of Export Policy of Niger Seeds during 1982 83. Paragraphs 2 and 3 of the Instruction are important and may be fully set out. They are as follows: "On a review of the position it has been decided to allow export of Niger Seeds within an overall ceiling of 10,000 (Ten thousand) tonnes through the canalising agency, viz. The National Agricultural Cooperative Marketing Federation of India Ltd. (NAFED) subject to minimum export price of Rs.8,500/ (Rupees eight thousand five hundred) per metric tonne. While the NAFED can continue to undertake exports themselves, private parties will also be allowed to export Niger Seeds as Associates of NAFED against firm commitments backed by irrevocable Letter of Credit subject to availability of ceiling. Export by private parties will be allowed on first come, first served basis. For this purpose, the exporters should register their contracts with the NAFED. The NAFED will stop registration of contracts as soon as the ceiling is exhausted. The NAFED will be responsible to monitor the ceiling and ensure that export of Niger Seeds not exceeding the overall quantity of 10,000 M.T. during 1982 83. In other words, the export will be allowed only against the balance quantity left unutilised out of the ceiling of 10,000 tonnes released vide Export Instruction No. 15/82 dated 7.4.1982. " 3 Pursuant to the Trade Instruction, a Trade Notice was published by the Joint Chief Controller of Imports and Exports on the same lines. We may mention here that out of the 10,000 tonnes, export of which was to be allowed, the NAFED reserved to itself the right to export 5,000 tonnes and decided to allow its associates to export the remaining 5,000 tonnes. On the faith of the Trade Notice, the petitioner in Special Leave Petition No. 10230 of 1982 entered into a contract with M/s Curtis (Confirmers) Limited of London on 7.7.82 for the sale and export of 1,000 metric tonnes of Indian Niger Seeds at the price of Rs. 8,560 per metric tonne, f.o.b. at any Indian Port. Shipment of 200 metric tonne was to be by October, 1982, 300 metric tonnes by February, 1983 and 500 metric tonnes by March, 1983 at buyer 's option with one month 's clear notice. The payment was to be by 'firm, irrevocable credit, to be opened through first class bank for 10% value now and for balance 90% to be opened 15 days prior to shipment '. The petitioner forwarded the contract to NAFED on 22.7.82 with a request that the contract may be registered and promising to send the letter of credit in two or three days. An Irrevocable Documentary Letter of Credit was duly opened by the Banque Nationale de Paris on behalf of the foreign buyer in favour of the petitioner for the amount of Rs.8,56,000 being 10% of the total value of the goods. The letter of credit also stipulated that within 15 days before each shipment, 'the credit value was to be increased to cover the amount of each shipment and that would be advised as an amendment to the credit '. Letter of Credit was forwarded to the NAFED by the petitioner on 26.7.82 with a request that the quantity of one thousand metric tonnes might be reserved for him for export. The NAFED sent a reply on 6.8.82. "We will revert in the matter shortly". On 3.9.82 the petitioner reminded the NAFED both by letter and telegram about his request for allotment of quota. The petitioner also sent a telegram to the Government of India that matters were unduly delayed though he had completed all the formalities. It appears that meanwhile, the NAFED wrote to the Ministry of Commerce, Government of India, on 17.9.82 informing the Government of India that it was for the NAFED and its Board of Directors to formulate guidelines regarding release and modalities of export. A copy of the guidelines formulated by the NAFED on 16.9.82 was enclosed. Two statements containing the names of the applicants for quotas 5 and other particulars were also enclosed. The first statement showed the names of 22 applicants whose requests for allotment of quotas were said to be backed by Letters of Credit. The appellants in the appeals before us are included in this list though this was denied in the counter affidavit filed on behalf of the NAFED. More about it later. The second statement contained a list of 34 names of applicants whose contracts were not backed by any Letters of Credit. On receipt of this letter the Government of India by their letter dated 30.9.82 objected to the guidelines said to have been approved by the NAFED as they were contrary to the guidelines issued by the Government of India. It was pointed out that according to the instructions of the Government of India the allotment had to be made on first come first served basis whereas according to the guidelines prepared by the NAFED the quotas were to be allotted by a committee consisting of the Chairman and officials of the NAFED, the Government and the trade, after considering all the applications received within a certain specified period. In fact the guidelines issued by the Government of India required that registration of applications should be stopped as soon as the ceiling limit was reached on a first come first served basis. Further, the guidelines prepared by the NAFED provided that Letters of Credit would have to be submitted within three weeks after allotment and this was again contrary to the guidelines issued by the Government of India which required that the Letters of Credit should be made available for registration of the requests for allotment of quotas. The letter of the Government again and again emphasised that quotas should be allotted on first come first served basis to exporters against firm commitments, backed by irrevocable Letters of Credit, subject to availability of ceiling. The Government asked the NAFED to refer to the fact that the letter of the NAFED itself showed that there were 22 parties who had registered their contracts for export, whose requests for allotment were backed by Letters of Credit and that the total of their requests came to 4,859 tonnes. On the other hand, it was pointed out, the requests of the other 34 parties for quotas were not backed by Letters of Credit. The Government of India finally instructed the NAFED to ensure that exports of Niger Seeds were undertaken in conformity with the instructions issued by the Government of India in E.I.No. 59/82 dated 23.6.82. The NAFED was reminded that while the NAFED 6 was only a canalising agency for export of Niger Seeds, the export would have to be undertaken by them only within the policy as laid. down by the Government. The NAFED was further told that a Trade Notice had already been issued by the Joint Controller of Imports and Exports and that it was not for the NAFED to issue another Trade Notice as proposed by it. The instructions of the Government of India reiterated by their letter dated 30.9.82 fell on deaf ears. The NAFED ignored the instructions of the Government of India and persisted in the error of its ways. At a meeting held on 16.10.82 the NAFED purported to select applicants for export quotas neither on a first come first served basis as originally announced in the Trade Notice nor only from among applicants whose contracts were backed by Letters of Credit. They proposed to give time to the selected applicants to produce Letters of Credit. The petitioners moved the Delhi High Court under Article 226 of the Constitution for redress but their Writ Petitions were dismissed in limine. They have come to this Court under Article 136 of the Constitution. As we were told that the applicants who had been selected for allotment of quotas had been able to secure a higher price from their buyers and, therefore, allotment of quotas to the petitioners would result in considerable loss of foreign exchange, we were anxious to know the present attitude of the Government of India in the matter. The Government of India has now appeared before us through the learned Additional Solicitor General and a counter affidavit has been filed on their behalf by a Deputy Secretary in the Ministry of Commerce. The NAFED has no clear or definite answer to the petitioners ' claim. First, it was said that the letter of Credit furnished by the petitioner did not conform to the requirement of the Trade Notice, but the argument was not pursued as it was seen from the file produced by the Government of India that the Letters of Credit furnished by such of the selected applicants for quotas as did furnish Letters of Credit were all similar to those produced by the petitioners. In fact, some of the chosen ones furnished no Letters of Credit and it was proposed to give them time for the production of Letters of Credit. This, of course, was not in accordance with the terms stipulated by the Trade Notice. It is also clear from the letters which the NAFED addressed to the Govern 7 ment of India that it was never for a moment doubted by anyone that the Letters of Credit produced by the petitioners conformed to the requirements of the Trade Notice. The present stand is a clear after thought and a pretence. In the counter affidavit filed on behalf of the NAFED it was stated that 22 applicants for allotment claimed that they had firm contracts backed by Letters of Credit for full value. The total quantity covered by these applications was 4,859 tonnes. It was asserted that the petitioners did not fall in this category. It was stated that the petitioners came in the category of those who had secured a price of Rs. 8,600 per tonne but whose contracts were not backed by Letters of contract. The Learned Counsel who appeared for the NAFED also submitted before us, on instructions, that the petitioners were not among the 22 applicants whose contracts were considered by the NAFED as backed by Letters of Credit. But a perusal of the file produced by the Government of India exposed the statement made in the affidavit filed on behalf of the NAFED as false. The NAFED had itself prepared a statement showing "Enquiries received from private parties backed by Letters of Credit for export of Niger Seeds". This statement was sent to the Government of India along with its letter dated 17.9.82 and it contains a list of twenty two names. Both the appellants in the appeals figure in it. It is clear to us that the statement in the counter affidavit is false. It is also clear to us that the Learned Counsel was misled and wrongly instructed to argue before us that the appellants were not included in the list of twenty two. It appeared to us that a copy of the letter dated 17.9.82 of the NAFED to the Government of India was not made available even to the Learned Counsel. We repeatedly asked for it and we could ultimately get it from the file produced by the Government of India, One of the submissions made to us was that the selected applicants had secured a higher price per tonne and that would help to earn more foreign exchange. In the first place their contracts are not backed by Letters of Credit as stipulated by the Trade Notice and they were not eligible for registration. In the second place the ceiling had already been reached and for that reason also they could not be registered. The counter affidavit filed by the Government of India fully substantiates the claim of the appellants that the NAFED had 8 disregarded the trade instructions issued by the Government of India as well as the Trade Notice issued pursuant to the trade instructions. In paragraph 27 of the counter affidavit, it is expressly stated "I submit that the answering respondents have no objection if relief is granted to the petitioners provided they fulfil the requirements of the export instructions issued by respondents 1,2 and 4". In the circumstances we have no option but to allow these appeals. Necessary directions have already been issued by us on 29.11.82. The appellants are entitled to get their costs in each of these appeals from the 6th respondent, the National Agricultural Co operative Marketing Federation Ltd. We fix the costs at Rs. 5.000/ in each appeal.

In June 1982 the Chief Controller of Imports and Exports issued export instructions on the subject of Export Policy of Niger Seeds during 1982 83. Paragraphs 2 and 3 of the instructions stated that the Government had decided to allow export of Niger Seeds within an overall ceiling of 10,000 metric tonnes through the National Agricultural Cooperative Marketing Federation of India (NAFED) subject to a minimum export price of Rs. 8,500 per metric tonne. In addition to NAFED, private exporters who registered their contracts with NAFED were also allowed to export the seeds on the basis of first come first served, against firm commitments backed by irrevocable letters of credit, subject to availability of ceiling. It was also stated that the NAFED would be responsible to monitor the ceiling and ensure that export of the seeds did not exceed the overall quantity of 10,000 metric tonnes during the year. A Trade Notice on these lines was issued by the Joint Chief Controller of Imports and Exports. On the faith of the trade notice the petitioner entered into contract with a foreign buyer who opened a firm irrevocable letter of credit in favour of the petitioner. The petitioner thereupon requested the NAFED to register the contract and that one thousand tonnes of seed might be reserved for him for export. About six weeks later the petitioner reminded the NAFED by letter and telegram about his request for allotment of the quota. In the meanwhile the NAFED wrote to the Government of India, Ministry of Commerce that it was for NAFED and its Board of Directors to formulate guidelines regarding the release and modalities of export of the seeds and it forwarded two statements one showing names of 22 applicants whose requests for allotment of quotas were said to be backed by letters of credit and the other containing list of 34 names of applicants whose contracts were not backed by letters of credit. The petitioner 's name was included in the first list. Reiterating the earlier instructions the Government wrote to the NAFED that the allotment of quotas should be in conformity with the instructions and the Trade Notice and that it was not for the NAFED to issue another Trade Notice. 2 In disregard of the instructions the NAFED selected certain applicants and gave time to them to produce letters of credit. The petitioners were not in this list. The Delhi High Court dismissed in limine the petitioners ' petition under article 226 of the Constitution. The petitioners thereupon filed their petition under article 136 of the Constitution. Allowing the petition, ^ HELD: While the petitioners satisfy all the requirements of the Trade Notice some of the applicants chosen by the NAFED for allotment of quota did not furnish the letters of credit and the NAFED 's action in giving them time for their production was not in accordance with the terms stipulated by the Trade Notice. [6H] The file produced by the Government of India exposed the statement made in the NAFED 's affidavit that the petitioners were not in the list of 22 as false. Its counsel was misled and wrongly instructed to argue that the petitioners were not included in that list. But the petitioners in fact figured in the statement entitled "enquiries received from private parties backed by letters of credit for export of Niger seeds" prepared by the NAFED and sent to the Government of India. [7 E] Even if the claim of NAFED that the selected applicants had secured a higher price and that would help to earn more foreign exchange is correct, they were not eligible for registration firstly because their contracts were not backed by letter of credit in terms of the Trade Notice and secondly because the ceiling had already been reached. [7 G] The counter affidavit filed by the Government of India fully substantiates the claim of the petitioners that the NAFED had disregarded the trade instructions issued by the Government of India as well as the Trade Notice which was issued pursuant to the trade instructions.

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ivil Appeal Nos. 1725 26 of 1973. From the judgment and order dated 27th October, 1972 of the Allahabad High Court in Special Appeals Nos. 424 and 425 of 1971. P. N. Lekhi, M.K. Garg and V. K. Jain for the Appellants. A. P. section Chauhan and C.K. Ratnaparkhi for the Respondents. The Judgment of the Court was delivered by TULZAPURKAR, J. These appeals by certificate granted by the Allahabad High Court raise the following substantial question of law of general importance which needs to be decided by this Court: "Whether the view taken by the Full Bench in Smt. Maya vs Raja Dulaji and others (1) that the lessor/landlord should not only be disabled person on the relevant dates, but that he should continue to live on the date immediately preceding the date of vesting, within the meaning of clauses (h) of section 21 (1) of the U.P. Zamindari Abolition and Land Reforms Act, represents a correct construction of clause (h) of section 21(1) of the Act ?" The facts giving rise to the aforesaid question may be stated. One Smt Ram Kali, widow of Tikam Singh, was the land holder of the plots (agricultural land) in dispute situated in villages Agaota 371 and Khaiya Khera in District Bulandshahr (U.P.). On June 14, 1945 Smt. Ram Kali who was a Sirdar and a 'disabled person ' falling within section 157 (1) of the U.P. Zamindari Abolition and Land Reforms Act, 1950 (hereinafter called "the Act") executed a registered deed of lease for a period of S years in favour of Uttam Singh (the predecessors in title of the respondents) but before the expiry of the period of S years she died in August, 1945 and Dan Sahai (her husband 's real brother and predecessors in title of the appellants) inherited her interest. Dan Sahai was also a 'disabled person ' within the meaning of section 157(1) of the Act. It seems that after the expiry of the period of the registered lease Uttam Singh and Murli Singh continued to hold the land as tenants from year to year under Dan Sahai. In consolidation proceedings a question arose whether Uttam Singh and Murli Singh, who were lessees under Smt. Ram Kali and Dan Sahai acquired the status of Sirdars or they remained Asamis of the plots in dispute. The case of Dan Sahai was that they were Asamis and not adhivasis entitled to be treated as Sirdars under section 240 of the Act and that depended upon whether as tenants or occupants of the plots in dispute their case fell within the provisions of section 21(1) (h) of the Act. The contention of Dan Sahai was that since Smt. Ram Kali was a disabled person on the date of letting and since he who succeeded her was also a disabled person on April 2, 1946, the lease in favour of Uttam Singh and Murli Singh would fall within section 21(1) (h) and as such Uttam Singh and Murli Singh shall be deemed to be Asamis. On the other hand the contention on behalf of Uttam Singh and Murli Singh was that the land holder should not only be a disabled person on both the dates mentioned in sub cl. (a) of cl. (h) of section 21(1? (being the date of letting as also April 9, 1946) but the same landlord should continue to live on the date immediately preceding the date of vesting (which is 1 7 1952 under the Act) and since in the instant case the same landlord who had let out the plots and who was disabled person on the date of letting had not continued to live on the date immediately preceding the date of vesting section 21(1) (b) was totally inapplicable and, therefore, they were entitled to be treated as Sirdars. The Division Bench of the Allahabad High Court in Special Appeals Nos. 424 425 of 1971 accepted the contention raised by counsel on behalf of Uttam Singh and Murli Singh (the respondents ' predecessors) relying on the view taken by the Full Bench in Smt. Maya vs Raja Dulaji and others (1) and decided the appeals in their favour by holding that they were not Asamis but had become Sirdars. 372 At the outset it may be stated that it was not disputed either in the lower courts or before us that both Smt. Ram Kali as well as Shri Dan Sahai who succeeded to her interest in the plots after her death were disabled persons under section 157((1) of the Act. In fact it was accepted by both the sides that on the date of letting (being 14th June, 1945) Smt. Ram Kali, the then land holder was a disabled person and on 9th April, 1946 (being the other relevant date under sub clause (a) of clause (h) of section 21(1) Dan Sahai, the then land holder, was a disabled person who continued to be the land holder upto the date of vesting, and the question is whether in such 8 case the occupation of the plots by Uttam Singh and Murli Singh under the lease from both of them would fall within the provisions of section 21(1) (h) of the Act. The relevant provision runs thus: "21(1) Notwithstanding anything contained in this Act, every person who, on the date immediately preceding the date of vesting, occupied or held land as . . (h) a tenant of sir of land referred to in sub clause (a) of clause (i) of the explanation under section 16, a sub tenant referred to in sub clause (ii) of clause (a) of section 20 or an occupant referred to in sub clause (i) of the said section where the land holder or if there are more than one land holders, all of them were person or persons belonging (a) if the land was let out or occupied prior to the ninth day of April, 1946, both on the date of letting or occupation, as the case may be, and on the ninth day of April, 1946, and (b) if the land was let out or occupied on or after the ninth day of April, 1946, on the date of letting or occupation, to any one or more of the classes mentioned in sub section (I) of Section 157. shall be deemed to be an asami thereof " 373 In other words, section 21 (1) (h) provides that every person occupying or A holding land in any one of the capacities mentioned in cl. (h) on the date immediately preceding 1 7 1952 shall be deemed to be an Asami thereof notwithstanding anything contained in the Act, if the landholder or if there are more than one all of them were disabled persons within the meaning of section 157(1), both on the date of letting as well as on April 9, 1946 where the letting has taken place prior to April, 9, 1946, or were disabled persons on the date of letting if the letting has occurred after April 9, 1946. In the instant case it is not disputed that Uttam Singh and Murli Singh were on the date immediately preceding the date of vesting holding or occupying the plots in question in one or the other capacity mentioned in cl. (h); secondly, since the letting was prior to April 9, 1946 sub cl. (a) of cl. (h) is attracted and it is also not disputed that on the date of letting the then land holder (Smt. Ram Kali) was a disabled person and on April 9, 1946 the then land holder Dan Sahai, who succeeded her, was also a disabled person under section 157(1) of the Act. Incidentally Dan Sahai continued to be the land holder on the date immediately preceding 1.7 1952. On these facts it seems to us clear that all the requirements of section 21(1) (h) could be said to have been satisfied but the Division Bench relying upon the Full Bench decision in Smt. Maya vs Raja Dulaji and others (supra) held that Uttam Singh and Murli Singh were not Asamis and had become Sirdars because section 21(1) (h) was not attracted inasmuch as in their view it was a requirement of that provision that not merely should the land holder be a disabled person on both the dates mentioned in sub cl. (a) of cl. (h) but the same land holder should continue to be landholder on the date immediately preceding the date of vesting (i.e. the identity of the disabled land holder or landholders on both the dates and the land holder or land holders seeking the benefit or protection of the provision on the date immediately preceding 1.7.1952 must, remain unchanged) and this requirement was not satisfied in this case. The question is whether on true construction of the provision such a requirement can be read into the said provision ? In Smt. Maya vs Raja Dulaji and others (supra) the facts were that the disputed plots belonged to one Bijain and were inherited on his death by his widow Smt. Lakshmi and when Smt. Lakshmi died her minor unmarried daughter Kumari Maya became the land holder. Her elder sister Saheb Kunwar acting as her guardian executed a registered lease of the plots in favour of the plaintiffs (Ram Charan and others) on 15.10.1947 for a period of five years (a case falling under sub cl. (b) of cl. Later on Maya was also married to her 374 sister 's husband Thakurdas who was admitted to the holding as co tenant with Maya, with the consent of the Zamindar in the year 1948. Thus on the date of vesting (1.7.1952) both Maya (who was still minor and disabled person) as well as her husband Thakurdas were the land holders of the plots in question. The lessee plaintiffs filed a suit in the year 1954 for a declaration that they had become Adhivasis of the land on the coming into force of the U.P.Z.A. and L.R. Act and had subsequently acquired Sirdari rights on the passing of the U.P. Act XX of 1954 The suit was decreed by both the Courts below and hence Maya defendant preferred a second appeal to the High Court. The question raised for determination was whether for the purposes of section 21 ( 1) (h) the disability of the landholders who were in existence on the date of vesting was material or the disability of the land holders who let out the land was a deciding factor? The Court noticed that section 21(1) (h) had been introduced in the Act for the first time by U.P. Act XVI of 1953 with retrospective effect from July 1, 1952 and was later on amended by U.P. Act XX of 1954 and has thereafter continued in its present form. Section 21(1) (h), as originally enacted, in express terms required that "the land holder or if there are more than one landholder all of them were person or persons belonging, both on the date of letting and on the date immediately preceding the date of vesting, to any one or more of the classes mentioned in sub section (2) of section 10 or cl. (viii) of sub section (I) of section 157". As a result of the amendment made by Act XX of 1954 the words "both on the date of letting and on the date immediately preceding the date of vesting" were omitted. In other words, by the amendment the requirement that disability of the land holder should subsist on the date immediately preceding the date of vesting was deleted. The Full Bench accepted the position that for purposes of section 21(1) (h), in its present form, the disability of the land holder need not continue or subsist on the date immediately preceding the date of vesting and might cease on or before the date of vesting but took the view that in the case before it there were two land holders on the date immediately preceding the date of vesting, namely, Smt. Maya and her husband Thakurdas, that a new body of 'land holders ' had come into existence subsequent to the date of letting and that all of them were not land holders who had let out the land as disabled person and, therefore, the plaintiffs became Adhivasis and the defendants were not entitled to the benefit of section 21(1) (h) of the Act. In other words, the Full Bench has been of the view that for purposes of section 21(1) (h) it is necessary that the land holders on the date immediately preceding the date of vesting must be the same persons as those who let out the 375 land and suffered from disability on the date of letting, and also on A April 9, 1946 in case the letting was before that date. In other words, the identity of the land holder or land holders must remain unchanged up to the date of vesting. For reading such a requirement into the provision the Full Bench has given two reasons: (a) that such a requirement arises on construction of certain words used in cl. (h) (vide: para 17 of the Judgment) and (b) that the protection given to a disabled landholder was intended to be a personal protection granted to the very individual who let out the land as a disabled person and this was warranted by a historical survey of parallel provisions contained in the preceding Tenancy Laws in U.P. (vide: Para 19). According to the Full Bench the crucial words used in cl. (h) are "where the landholder or if there are more than one land holder all of them were person or persons belonging" to any one or more of the classes of disabled persons under section 157(1) and the Full Bench has reasoned "the word 'are ' and the word 'them ' together with the word 'were ' in the aforementioned phrase clearly show that the intention of the Legislature was that on the date of vesting the 'land holder ' should be the very person who was the land holder on the relevant dates, to earn the benefit of cl. (h) of section 21(1)". The Court observed that section 21(1) (b) could bear the interpretation suggested by counsel for Smt. Maya only if the words 'or their predecessor in interest ' were added before the words "all of them". The Court has further stated that historical survey of the parallel provisions contained in the preceding Tenancy Laws showed that the protection given to a disabled person had always been in the nature of a personal protection granted to the very individual who let out the land as a disabled land holder and the protection ceased to be available when the identity or personality of that land holder is changed and in that behalf reliance was placed on certain provisions of the Agra Tenancy Act, 1926 and U.P. Tenancy Act, 1939. In our view neither reason holds good for sustaining the literal construction placed upon the provision by the Full Bench. It is true that cl. (h) contains the phrase "where the land holder or if there are more than one landholder, all of them were persons belonging" to any one or more of the classes mentioned in section 157(1), but for arriving at the correct interpretation of this crucial phrase it is necessary to have regard to the definition of 'landholder ' and the provisions of section 157 of the Act with which section 21(1) (h) is inter connected. 376 Under section 3(26) of the Act, the definition of 'landholder ' as given in the U.P. Tenancy Act 1939 has been adopted since the expression is not defined in the Act. That expression has been defined in section 3(11) of the U.P. Tenancy Act 1939 thus: "Landholder" means the person to whom rent is or, but for a contract express or implied would be, payable. " This definition must be read in light of section 3(1) of that Act which runs thus: "All words and expressions used to denote the possessor of any right, title or interest in land, whether the same be proprietary or otherwise, shall be deemed to include the predecessors and successors in right, title or interest of such Person." In other words, the expression 'landholder ' who obviously is a possessor of interest in land under section 3(11) means a person to whom rent is payable, and under section 3(1) by legal fiction it shall include his predecessor in interest as also successor in interest to whom the rent was or is payable. It is such definition that will have to be read in the U.P.Z.A. and L.R. Act wherever that expression occurs. It is thus obvious that the expression 'landholder ' occurring in section 21(1) (h) must mean a person to whom rent is payable and by fiction would include his predecessor in interest. Read in this light there would be no question of adding the word predecessor in interest of the land holder in section 21(1) (h) as that would be implicit in the term 'landholder ' on account of the deeming provision of section 3(1) read with section 3(11) of the Tenancy Act, 1939. It does appear that this aspect of the matter was not brought to the notice of the Full Bench when it construed the concerned crucial phrase. Moreover after the amendment effected by Act XX of 1954 the thrust of cl. (h) is on the landholder or landholders being disabled persons on the material dates only. Further section 157(1) permits leases by disabled persons and says that a Bhumidhar or an Asami holding land in lieu of maintenance allowance under section 11, who is a disabled person falling under any of the clauses (a) to (g), may let the whole or any part of his holding; and the proviso thereto is very important which runs thus: "Provided that in the case of a holding held jointly by more persons than one, but one or more of them but not 377 all are subject to the disabilities mentioned in clause (a) to (g), the person or persons may let out his or their share in the holding." And sub section (2) provides that where any share of a holding has been let out under the aforesaid proviso the Court may on an application of the Asami or the tenure holder determine the share of the lessor in the holding and partition the same. Having regard to the aforesaid proviso under which even in the case of a joint holding a lease of his share by a disabled land holder is permissible and the same is liable to be separated by a partition it is obvious that the expression "all of them" must refer to all such land holders who were disabled land holders on the material dates. When under the proviso to s 157(1) a lease of his share by a disabled land holder in joint holding (held alongwith a non disabled person) is expressly permitted and under section 157(2) the Court has to determine such share of the disabled lessor and partition the same on an application being made in that behalf, it is difficult to accept that the Legislature intended to deprive the protection of section 21(1) (h) to such disabled land holder simply because on the date immediately preceding the date of vesting such land holder comes to hold the land jointly with some other non disabled land holder. In other words on the facts found in the Full Bench case when on the date of letting the entire holding belonged to Smt. Maya who was a disabled person and on the date of vesting she alongwith her husband Thakurdas (a non disabled person) became joint holder, could Smt. Maya at any rate to the extent of her share in the joint holding be denied the benefit of section 21(1) (h) notwithstanding the proviso to section 157(1) and section 157(2) being in the Statute ? The answer is obviously in the negative. In fact in view of the fact that on the material date (being the date of letting) the entire holding belonged to Smt Maya the disabled person, and having regard to the deeming provision which has to be read in the definition of 'landholder ' and having regard to the thrust of amended cl. (h) which does not require that the successor in interest be a disabled person on the date of vesting, the benefit of section 21 (1) (h) should have been extended or made available in respect of the entire holding. In other words, on true construction of the crucial phrase occurring in cl. (h) it is not possible to read into the provision the additional requirement, namely, that the identity of the land holder or land holders must remain unchanged up to the date of vesting. 378 Coming to the second reason the Full Bench has observed that a historical survey of parallel provisions of the Agra Tenancy Act 1926 and U.P. Tenancy Act, 1939 supported the conclusion that protection was granted only to the very individual who let out the land as a disabled land holder and the protection ceased when the identity of the personality of that land holder changed and in that behalf reference was made to section 29(6) and (7) of the former Act and section 41 (2) of the latter Act. Now apart from the fact that the scheme of the U.P.Z.A. and L.R. Act is different from these two earlier enactments, a careful analysis of the two provisions in the earlier enactments will clearly show that in each of the provisions express words had been used conferring personal rights on the individuals concerned which is not the case with section 21(1) (h) of the Act. Having regard to the above discussion we are of the opinion that the view taken by the Full Bench of Allahabad High Court in Smt. Maya vs Raja Dulaji and others (supra) does not represent the correct construction of section 21(1) (h) of the Act. On true construction of the said provision in our view, the benefit thereof would be available to the land holder on the date of vesting, if the same landholder or his predecessor existing on the material dates was a person or persons belonging to one or more of the classes mentioned in section 157(1) of the Act. Since in the instant case, which falls under sub cl. (a) of cl. (h), on the date of actual letting Smt. Ram Kali was disabled person and since on the next material date, namely, April, 9 1946 Dan Sahai (successor in interest of Smt. Ram Kali) was also a disabled person, the land holder on the date of vesting, who incidentally happened to be Dan Sahai, would be entitled to the benefit of section 21(1) (h) and the respondents (successors of Uttam Singh and Murli Singh) would remain Asamis and cannot be said to have become Sirdars. We might mention that after the arguments in these appeals were concluded and our Judgment was ready for pronouncement we were informed that in a later case Dwarika Singh vs Dy. Director of Consolidation (l) a larger Bench of S Judges of the Allahabad High Court has, by majority, overruled the view taken in Smt. Maya 's case. 379 In the result the appeals are allowed, the orders of the Division Bench in Special Appeals Nos. 424 425 of 1971 are set aside and for reasons given by us above, the decision of the learned Single Judge dated May 10, 1971 is restored. We direct that each party will bear its own costs. section R. Appeals allowed.

One Smt. Ram Kali, widow of Tikam Singh, was the land holder of the agricultural lands in dispute situated in villages Agaota and Khaiya Khera in District Bulandshahr (U.P.). On June 14, 1915 Smt. Ram Kali, who was a Sirdar and a "disabled person" falling within section 157(1) of the U.P. Zamindari Abolition and Land Reforms Act, 1950, executed a registered deed of lease fora period of five years in favour of Uttam Singh and Murli Singh (the predecessors in title of the respondents) but before the expiry of the period of five years she died in August, 1945 and Dan Sahai, who was also "disabled person" within the meaning of section 157(1) of the Act, (her husband 's real brother and predecessors in title of the appellants) inherited her interest. After the expiry of the period of registered lease Uttam Singh and Murli Singh continued to hold the lands as tenants from year to year under Dan Sahai. In consolidation proceedings a question arose, whether Uttam Singh and Murli Singh, who were lessees (adhivasis) under Smt. Ram Kali and Dan Sahai acquired the status of Sirdars, being entitled to be treated so under section 240B of the Act or they remained Asamis of the plots in dispute. The Division Bench of the Allahabad High Court, relying on the earlier view taken by its Full Bench in Smt. Maya vs Raja Dulaji and others , decided the appeals in favour of the respondents by holding that they were not Asamis but had become Sirdars. Hence the appeals by certificate by successors in title of Ram Kali and Dan Sahai. Allowing the appeals, the Court ^ HELD: 1. On true construction of section 21(1)(h) of the U.P. Zamindari Abolition and Land Reforms Act the benefit thereof would be available to the land holder on the date of vesting, if the same land holder or his predecessor existing on the material dates was a person or persons belonging to one or more clauses mentioned in section 157(1) of the Act. [378 C D] Since, in the instant case, which falls under sub clause (a) of clause (h) on the date of actual letting Smt. Ram Kali was a "disabled person" and since on the next material date, namely, April 9,1946 Dan Sahai (successor in interest of Smt. Ram Kali) was also a disabled person, the land holder on the date of vesting who incidentally happened to be Dan Sahai would be entitled to the benefit of section 21(1)(h) and the respondents (successors of Uttam Singh and 369 Murli Singh) would remain Asamis and cannot be said to have become Sirdars within the meaning of section 240B of the U.P. Zamindari Abolition and Land Reforms Act, 1950. [378 E F] 2. Section 21(1)(h) of the U.P. Zamindari Abolition and Land Reforms Act, 1950 provides that every person occupying or holding land in any one of the capacities mentioned in clause (h) on the date immediately preceding 1 7 1952 shall be deemed to be an Asami thereof notwithstanding anything contained in the Act, if the land holder or if there are more than one all of them were "disabled persons" within the meaning of section 157(1) both on the date of letting as well as on April 9, 1946 where the letting has taken place prior to April 9, 1946 or were disabled persons on the date of letting if the letting has occurred after April 9, 1946. [373 A B] 3:1. It is true that clause (h) contains the phrase "where the land holder or if there are more than one land holder all of them were person or persons belonging" to any one or more than one of the clauses mentioned in section 157(1) of the Act. Under section 3(26) of the Act, the definition of "landholder" as given in the U.P. Tenancy Act, 1939 has been adopted since the expression is not defined in the Act. The expression "land holder" who obviously is a possessor of interest in land under section 3(11) of the U.P. Tenancy Act, 1939 means a person to whom rent is payable, and under section 3(1), ibid. by legal fiction it shall include his predecessor in interest as also successor in interest to whom the rent was or is payable. It is such definition that will have to be read in the U.P. Zamindari Abolition and Land Reforms Act wherever that expression occurs. Therefore the expression "land holder" occurring in section 21(1)(h) of the Act must mean a person to whom rent is payable and by fiction would include his predecessor in interest. Read in this light there would be no question of adding the words predecessor in interest of the land holder in section 21(1)(h) as that would be implicit in the term "land holder" on account of deeming provision of section 3(1) read with section 3(11) of the U.P. Tenancy Act, 1939. [375 G H, 376 A, D F] 3:2. Section 157(1) of the U P. Zamindari Abolition and Land Reforms Act permits leases by disabled persons and provides that a Bhumidar or on an Asami holding land in lieu of maintenance allowance under section 11, who is a disabled person falling under any of the clauses (a) to (g), may let the whole or any part of his holding, "provided that in the case of a holding held jointly by more persons than one, but one or more of them but not all are subject to the disabilities mentioned in clauses (a) to (g), the person or persons may let out his or their share in the holding". Having regard to the proviso under which even in the case of a joint holding a lease of his share by a disabled land holder is permissible and the same is liable to be separated by a partition, the expression "all of them" must refer to all such land holders who were disabled land holders on the material dates. When under the proviso to section 157(1) a lease of his share by a disabled land holder in joint holding (held along with a non disabled person) is expressly permitted and under section 157(2) the Court has to determine such share of the disabled lessor and partition the same on an application being made in that behalf, it cannot be said that the Legislature intended to deprive the protection of section 21(1)(h) to such disabled land holder simply because on the date immediately preceding the date of vesting such land holder comes to hold the 370 land jointly with some other non disabled land holder. On true construction of the crucial phrase occurring in clause (h) it is not possible to read into the provision the additional requirement, namely, that the identity of the land holder or land holders must remain unchanged up to the date of vesting. [376 G H, 377 A, B D, G H] Further the scheme of the U.P. Zamindari Abolition and Land Reforms Act is different from the Agra Tenancy Act, 1926 and U.P. Tenancy Act, 1939. In each of the two provisions of these two Acts express words have been used conferring personal rights on the individuals concerned which is not the case with section 21(1)(h) of the Zamindari Abolition and Land Reforms Act. [378 B C] Smt. Maya vs Raja Dulaji and Ors. [1 over ruled. Dwarika Singh vs Dy. Director of Consolidation All W.C. 213 1981 All. L.J. 484 approved.

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ivil Appeal No. 3704 of 1989. From the Judgment and Order dated 11.3.1987 of the Bombay High Court in Second Appeal No. 725 of 1980. 437 U.R. Lalit, G.A. Shah, V.N. Ganpule for the Appellants. D.A. Dave, R. Karanjawala, Ms. M. Karanjawala and Jatin der Sethi for the Respondents. The Judgment of the Court was delivered by SAWANT.J. This is a case where the High Court in second appeal has interfered with a pure finding of fact recorded by the First Appellate Court for no worthwhile reason, and ignoring the mandatory provisions of Section 100 of the Civil Procedure Code. The only question which was involved in the suit was whether the suit properties in which the plaintiff claimed one fifth share, were the ancestral joint family properties or whether they were the self acquired properties of his father, Ramchandra. The relevant facts are: defendant No. 1, Ramchandra had four sons including the plaintiff, and a daughter. The three other sons and the daughter are defend ants Nos. 2 to 5. One of the sons, defendant No. 3 appears to support the plaintiff. During the pendency of the suit, Ramchandra died and his sons including the plaintiff have been brought on record as his heirs and legal representa tives. The suit properties consisted of lands being (i) Survey No. 21/1 admeasuring 14 acres 3 gunthas, (ii) Survey No. 20/2 admeasuring 2 acres 36 gunthas, (iii) Survey No. 20/1 admeasuring 3 acres 30 gunthas and two houses all situated at Nizampur, Taluka Saaki, District Dhuiia. It was the case of the plaintiff in his plaint that a joint family consisting of his father Ramchandra and his brother, Supadu owned several houses, and a land comprised in Survey No. 71 admeasuring about 14 acres. In the partition between Ram chandra and Supadu, two houses and Survey No. 71 came to the share of Ramchandra The said two houses are included in the suit properties and it is not disputed on behalf of the respondent defendants that they are ancestral properties and the plaintiff has one fifth share in the same. However, the case of the plaintiff that Survey No. 71 was the ancestral property was vehemently disputed and that has been the sheet anchor of contention of both the parties while the plaintiff claims that rest of the suit properties were purchased by Ramchandra out of the income and subsequently the sale proceeds, of the said land (since admittedly the said land was sold by Ramchandra in 1953), it is the case of the defendants that the said land was in fact purchased jointly by Ramchandra and his brother, Supadu out of their own earnings, and in the partition between Ramchandra and Supadu that land came to the share of Ramchandra. Hence, according to the defendants, even 438 assuming that the rest of the suit properties were purchased with the help of the income from Survey No. 71, they were the self acquired properties of Ramchandra. In support of his case that Survey No. 71 was the ancestral property, the plaintiff relied upon the fact that the said survey No. had come to the share. of Ramchandra in a general partition between him and his brother, Supadu in 1918. As against this, the defendants contended that Ram chandra 's father Pandu died in 1904 and since the property all along stood in the name of Supadu it showed that it was purchased after Pandu 's death in 1904. They also relied upon the fact that Ramchandra was a skilled goldsmith and was well known for his artisanship and commanded good business. His brother was also a goldsmith and both of them had pur chased the said land with the earning in goldsmithery. It was also their case that Ramchandra 's father, Pandu had only two houses and no other property nor did he carry on any business even of goldsmithery. Hence, there was no question of purchasing Survey No. 71 out of the income from the ancestral property by Ramchandra and Supadu and the purchase was with the help of the income which they had earned from the business which they were carrying on by their own skill. It was also shown by the defendants that when Survey No. 71 was sold in 1953, no objection whatsoever was taken to the sale nor permission of any of the sons including that of the plaintiff was deemed necessary for the same. They further contended that they had hardly any income from Survey No. 71 and the properties which were purchased prior to 1953 could not have been purchased with the help of any such income assuming that it was an ancestral land. According to them, therefore, the suit properties were purchased only from the income from the business of goldsmithery. The three of the properties were purchased prior to 1953 while the rest were purchased long after 1953, i.e. in 1961, 1965 and 1967. Hence, their purchase had no relation to the sale of Survey No. 71 in 1953, again assuming that it was an ancestral property. It is for these reasons, according to them, that the suit properties except the two houses which were admit tedly the ancestral properties were not the joint family properties in which the plaintiff could claim his share. The relevant issues were framed including the issue as to whether defendants proved that the suit properties were self acquired and plaintiff had no share in it. The Trial Court answered the said issue in favour of the plain tiff and decreed the suit against the defendants. Against the said decision, the defendants appealed and the First 439 Appellate Court after reappreciating the evidence and point ing out the infirmities in the conclusions arrived at by the Trial Court, dismissed the suit except to the extent of the plaintiff 's share in the two ancestral houses. It may be mentioned here that although Ramchandra, defendant No. 1 died during the pendency of the suit, he had willed out his properties in favour of the defendants and, therefore, the plaintiff had no share in the self acquired properties of Ramchandra which could have been granted to him otherwise. The First Appellate Court held that the following circumstances showed that the suit properties except the ancestral houses were the self acquired properties of Ram chandra. The first circumstance was that Survey No. 71 was purchased in the name of Supadu which showed that in all probability the property was purchased after the death of Ramchandra 's father, Pandu. Secondly, since there was no record to show that Pandu had any lands or was carrying on any business, Survey No. 71 must have been purchased by Ramchandra and Supadu with the help of their earnings. It was not disputed and in fact it was admitted that Ramchandra was a skilled goldsmith and was carrying on business of goldsmithery along with his brother, Supadu and was earning sufficient income with the help of which he could purchase the properties. Survey No. 71 further was sold in 1953 without obtaining the consent of the other members of the family. Had it been the joint family property the vendee would have insisted upon such consent. The High Court interfered with these findings on grounds which were not even made out by the plaintiff either in the plaint or in his evidence and which were contrary to the admissions of the plaintiff himself. The High Court held that since the property had come to the share of Ramchandra in general partition, it must be held that it was an ances tral property. The High Court further held that Survey No. 71 was yielding sufficient income with the help of which the other properties would have been purchased and further the goldsmithery business was an ancestral business and, there fore, the properties purchased with the help of such income should also be held to be joint family properties. It may be stated here that the learned counsel appearing for the appellant defendants wanted to produce before us documents to show that in fact Survey No. 71 was purchased in the year 1907 by Ramchandra and his brother Supadu after the death of their father, Pandu in 1904, and that in the Revenue records the property always 440 stood in the name of Supadu. We did not permit him to pro duce the said documents since no explanation whatsoever was available as to why the documents were not produced before the courts below. However, it was not disputed at any time that the property had all along stood in the name of Supadu and, therefore, the presumption drawn by the First Appellate Court that this showed that in all probability the property was purchased after the death of Pandu cannot be said to be unreasonable. Secondly, there is no evidence brought on record by the plaintiff with regard to the quantum of income from Survey No; 71. In fact, the uncontroverted evidence on record shows that Ramchandra who had entered the witness box had no implements and bullocks for cultivating the land and the land was always cultivated with the help of the labour ers who brought their own implements and bullocks. This shows that the family derived less than normal income from the said land. Secondly, it was admitted by the plaintiff that Ramchandra was a skilled goldsmith and was well known in the locality as such, and was doing his business as goldsmith and earning sufficient income. It was not his case further that the goldsmithery was the ancestral business. However, the High Court ignoring the fact that it was not the case of the plaintiff that goldsmithery was an ancestral business and that it was not his case that the suit proper ties were purchased with the help of the income from the said business held that it was so. What is further, the plaintiff 's case was that the suit properties were purchased with the income from Survey No. 71. Thus it is obvious that the conclusions ' which were arrived at by the first Appel late Court were reasonable and legal besides being conclu sions of facts. There was, therefore, no question of law involved in the second appeal. Yet the High Court chose to interfere with the finding ignoring the mandatory provisions of Section 100 of the Civil Procedure Code that unless it was satisfied that the case involved a substantial question of law it could not entertain it and that before it could entertain it, the Court had to formulate such question. We are, therefore, more than satisfied that the High COurt has erred in law in interfering with the decree passed by the First Appellate Court. We, therefore, allow the appeal, set aside the decision of the High Court and restore the decree passed by the First Appellate Court. Since the parties belong to one family we pass no order as to costs. G.N. Appeal al lowed.

S and R were brothers who carried on the business of gold smithery, and a partition took place between them in 1918. R got 2 houses and land in Survey No. 71. Later on, one of the sons of R instituted a suit claiming that Survey No. 71 was an ancestral property and that some of the suit properties were purchased by R out of the income, and subsequently the sale proceeds, of the land. The defendants, viz., the other children of R contended that Survey No. 71 was purchased by S and R with the income they derived from gold smithery and the suit properties except the two houses which were admittedly the ancestral properties, were not the joint family properties in which the plaintiff could claim his share. The Trial Court decreed the suit in favour of the plain tiff. On appeal by the defendants, the First Appellate Court reappreciated the evidence, found infirmities in the conclu sions arrived at by the Trial Court and dismissed the suit except to the extent of plaintiff 's share in the two ances tral houses, on the basis of its finding that the other properties were self acquired properties of R. During the pendency of the suit R died. By virtue of his will the self acquired properties of R went to the defend ants and the plaintiff was left out. The plaintiff preferred an appeal before the High Court against the order of the First Appellate Court. The High Court interfered with the said findings of facts and held that since Survey No. 71 had come to the share of R in general partition, it was ancestral property. it further observed that since the said property was yielding income with the help of which the other properties could have been purchased and since 436 further the gold smithery business was an ancestral busi ness, the properties purchased with the help of such income should be held to be joint family properties. Aggrieved, the defendants have filed this appeal. Allow ing the appeal, HELD: 1. There was, no question of law involved in the second appeal. Yet the High Court chose to interfere with the finding ignoring the mandatory provisions of Section 100 of the Civil Procedure Code that unless it was satisfied that the case involved substantial question of law it could not entertain it and that before it could entertain it, the Court had to formulate such question. [440F] 2.1 It was not disputed at any time that the property in Survey No. 71 had all along stood in the name of Supadu and, therefore, the presumption drawn by the First Appellate Court that this showed that in all probability the property was purchased after the death of his father cannot be said to be unreasonable. There is no evidence brought on record by the plaintiff with regard to the quantum of income from Survey No.71. In fact, the uncontroverted evidence on record shows that Ramchandra had no implements and bullocks for cultivating the land and the land was always cultivated with the help of the labourers who brought their own implements and bullocks. This shows that the family derived less than normal income from the said land. It was admitted by the plaintiff that Ramchandra was a skilled goldsmith and was well known in the locality as such, and was doing his busi ness as goldsmith and earning sufficient income. [440A D] 2.2 The High Court ignoring the fact that it was not the case of the plaintiff that goldsmithery was an ancestral business and that it was not his case that the suit proper ties were purchased with the help of the income from the said business held that it was so. What is further, the plaintiff 's case was that the suit properties were purchased with the income from Survey No. 71. Thus it is obvious that the conclusions which were arrived at by the First Appellate Court were reasonable and legal besides being conclusions of facts. [440D E]

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Civil Appeal No. 2434 of 1977. Appeal by Special Leave from the Judgment and Order dated 4/5th November, 1976 of the Gujrat High Court in S.A. No. 685/69. U. R. Lalit (A.C.),1. N. Shroff and H. section Parihar for the Appellant. section T. Desai, Vimal Dave and Miss K. Mehta for the Respondent. The Judgment of the Court was delivered by, KOSHAL, J. The facts giving rise to this appeal by special leave against a decree dated November 5, 1976 of the High Court of Gujarat 294 may be better appreciated with reference to the following pedigreetable: NARANJI | | Dahyabhai Haribhai | | | | Ranchhodji | | | | Bhimbhai Mohanbhai (died childless in | 1913) | | | Parvatiben=Dayalji Dahyabhai (Plaintiff 8 (Plaintiff 7 | | | | | Bhikhubhai Thakorbhai Nirmalben Padmaben (Plaintiff 5) (Plaintiff 6) (Plaintiff 7) (Plaintiff 10) NARANJI (contd. ) | | Gulabhai Vallabhhai | | Motabhai | | | Nichhabhai= Surbhai | Amba Bai Bai Vijia | (Defendant 1) | | | | | Ghelabhai Lallubhai Chhotubhai Manibhai | (Plaintiff 3) (Plaintiff 4) | | Thakorbhai Ramanbhai (Plaintiff 1) (Plaintiff 2) 2. In the year 1908 Ranchhodji son of Dahyabhai instituted Civil Suit No. 403 of 1908 against Bhimbhai son of Haribhai, Dayalji and Dahyabhai sons of Mohanbhai, Motabhai son of Gulabbhai, Bai Amba widow of Nichhabhai and Bai Vajia widow of Surbhai, for a partition of the joint Hindu family properties belonging to the parties. The suit resulted in a decree dated August 18, 1909 which provided, inter alia, that Dayalji and Dahyabhai sons of Mohanbhai, and Motabhai son of Gulabbhai would be full owners of Survey Nos. 31 and 403 and also owners of a half share in Survey Nos. 591, 611, 288 295 and 659/3. These persons were burdened by the decree with the responsibility to pay an yearly maintenance allowance of Rs. 42/ to Bai Vajia on Magsher Sud 2 of every year and the decree further provided that in the event of default in payment of such allowance continuing for a period of a month after the due date, Bai Vajia would be entitled to take possession of the land above mentioned in lieu of the maintenance awarded to her and would enjoy the income thereof without however being competent to sell, mortgage, bequeath, gift or otherwise transfer the same. The decree declared that any alienation made by Bai Vajia in contravention of the direction given by the decree in that behalf would be void. By clause 8 of the decree sons of Mohanbhai as well as Motabhai were also deprived of the right of alienation of the land during the lifetime of Bai Vajia. Default having been made in the payment of maintenance to Bai Vajia according to the terms of the decree, she took out execution and obtained possession of the land above detailed. Thereafter Dayalji and Dahyabhai sons of Mohanbhai deposited in court the arrears of maintenance and filed an application with a prayer that the land of which possession had been given to Bai Vajia in execution of the decree be restored to them. That application was dismissed on the 8th March 1912 and more than 2 1/2 years later, i.e., on 27th October 1914, Dahyabhai son of Mohanbhai instituted Civil Suit No. 576 of 1914 in the court of the Additional Sub Judge, Valsal, for a declaration that the dismissal of his application was null and void and for recovery of possession of the land which Bai Vajia had taken in execution of the decree. The suit was decreed by the trial court but was dismissed in first appeal on the 13th March 1918. Bai Vajia continued to enjoy the land till the 21st October 1963 when she made a sale of Survey No. 31 in favour of one Dhirubhai Paragji Desai. The sale was challenged in Civil Suit No. 110 of 1966 by 10 persons being the heirs of Mohanbhai and Motabhai as shown in the pedigree table above, the defendants being Bai Vajia and the said Dhirubhai Paragji Desai. It was claimed by the plaintiffs that Bai Vajia had no right to alienate in any manner the land obtained by her in execution as per the terms of the decree, that sub section (1) of section 14 of the (hereinafter referred to as the Act) had no application to her case which was covered by sub section (2) of that section and that the sale by her in favour of defendant No. 2 was null and void. Bai Vajia contested the suit and contended that the sale was good in view of the provisions of subsection (1) abovementioned which enlarged her limited ownership 296 into full and absolute ownership and that sub section (2) aforesaid did not cover her case. The suit was decreed by the trial court and Bai Vajia remained unsuccessful in the appeal which she instituted in the court of the District Judge, Bulsar. A second appeal was filed by her before the High Court of Gujarat and during the pendency thereof she expired when one Dhirubhai Dayalji Desai was substituted for her as her sole heir and legal representative. The appeal came up for hearing before a learned Single Judge of the High Court who by its judgment dated 5th November, 1976 dismissed it holding that the decree passed in Civil Suit No. 403 of 1908 did not recognise any "pre existing" right of Bai Vajia in the property in dispute. In coming to this conclusion, the learned Judge followed Naraini Devi vs Smt. Ramo Devi and others.(1) The legal representative of Bai Vajia is the sole appellant in the appeal before us, the respondents thereto being nine of the plaintiffs and six legal representatives of plaintiff No. 5 as also the purchaser from Bai Vajia who is arraigned as respondent No. 11. At the outset it was pointed out by Mr. I. N. Shroff, learned counsel for the appellant, that Naraini Devi 's case (supra) has since been over ruled by the decision of this Court in V. Tulasamma & others vs V. Sesha Reddi(2) and we find that this is so. In the case last mentioned, the facts were these. The husband of Tulasamma died in the year 1931 in a state of jointness with his step brother V. Sesha Reddi. A decree for maintenance was passed in favour of Tulasamma against V. Sesha Reddi on June 29, 1946. On the 30th July 1949, a compromise between the contending parties was certified by the Court executing that decree. Under the compromise, Tulasamma was allotted certain properties in lieu of maintenance, her right being limited to enjoyment thereof coupled with the specific condition that she would not have any right of alienation whatsoever. Tulasamma took possession of those properties and continued to enjoy them till the early sixties. On 12th of April 1960 she leased out some of the properties to two persons and on the 26th of May 1961 made a sale of some others to another person. V. Sesha Reddi filed a suit on July 31, 1961 for a declaration that the alienations made by Tulasamma were not binding on him and could remain valid only so long as she was alive. The basis of the action was that Tulasamma acquired a restricted estate under the terms of the compromise and that her interest could not be enlarged under sub section (1) of section 14 of the Act in view of sub section (2) of that section. The 297 suit was decreed by the trial court whose decision however was reversed in appeal by the District Judge, with a finding that the allotment of properties to Tulasamma by the terms of the compromise had been made in recognition of a "pre existing" right a finding which was reversed by the High Court, who restored the decree passed by the trial court. The matter came up to this Court in appeal by special leave and Fazal Ali, J., who wrote an exhaustive judgment thus formulated the two points falling for determination: (1) Whether the instrument of compromise under which the properties were given to the appellant Tulasamma before the in lieu of maintenance falls within section 14(1) or is covered by section 14(2) of that Act. (2) Whether a Hindu widow has a right to property in lieu of her maintenance, and if such a right is conferred on her subsequently by way of maintenance it would amount to mere recognition of a pre existing right or a conferment of new title so as to fall squarely within section 14(2) of the . Fazal Ali, J., was of the opinion that the resolution of the dispute made it necessary that the real legal nature of the incidents of a Hindu widow 's right to maintenance be considered. He referred to various works by celebrated authors on Hindu Law and in doing so cited passages from 'Digest of Hindu Law ' by Colebrooke, 'Hindu Law ' by G. section Sastri, 'Hindu Law and Usage ' by Mayne and 'Principles of Hindu Law ' by Mulla and came to the conclusion that the widow 's right to maintenance, though not an indefeasible right to property, is undoubtedly a "pre existing" right. A survey of various judicial pronouncements was then undertaken by Fazal Ali, J., and as a consideration thereof he arrived at the following propositions : "(1) A Hindu woman 's right to maintenance is a personal obligation so far as the husband is concerned, and it is his duty to maintain her even if he has no property. If the husband has property then the right of the widow to maintenance becomes an equitable charge on his property and any person who succeeds to the property carries with it the legal obligation to maintain the widow. 298 (2) Though the widow 's right to maintenance is not a right to property but it is undoubtedly a pre existing right in property, i.e., it is a jus ad rem, not jus in rem, and it can be enforced by the widow who can get a charge created for her maintenance on the property either by an agreement or by obtaining a decree from the civil court. (3) The right of maintenance is a matter of moment and is of such importance that even if the joint property is sold and the purchaser has notice of the widow 's right to maintenance, the purchaser is legally bound to provide for her maintenance. (4) The right to maintenance is undoubtedly a pre existing right which existed in the Hindu Law long before the passing of the Act of 1937(1) or the Act of 1946,(2) and is therefore, a pre existing right. (5) The right to maintenance flows from the social and temporal relationship between the husband and the wife by virtue of which the wife becomes a sort of co owner in the property of her husband, though her co ownership is of a subordinate nature. (6) Where a Hindu widow is in possession of the property of her husband, she is entitled to retain the possession in lieu of her maintenance unless the person who succeeds to the property or purchases the same is in a position to make arrangements for her maintenance. " Fazal Ali, J., then embarked on a consideration of the scope and meaning of section 14 of the Act in the light of various pronouncements made by this Court as also of the decisions rendered by various High Courts in relation to the points in dispute. During the course of the discussion he made the following pertinent observations: "It is true that a widow 's claim for maintenance does not ripen into a full fledged right to property, but nevertheless it is undoubtedly right which in certain cases can amount to a right to property where it is charged. It cannot be said that where a property is given to a widow in lieu of 299 maintenance, it is given to her for the first time and not in lieu of a pre existing right. The claim to maintenance, as also the right to claim property in order to maintain herself, is an inherent right conferred by the Hindu Law and, therefore, any property given to her in lieu of maintenance is merely in recognition of the claim or right which the widow possessed from before. It cannot be said that such a right has been conferred on her for the first time by virtue of the document concerned and before the existence of the document the widow had no vestige of a claim or right at all. Once it is established that the instrument merely recognised the pre existing right, the widow would acquire absolute interest. Secondly, the Explanation to section 14(1) merely mentions the various modes by which a widow can acquire a property and the property given in lieu of maintenance is one of the modes mentioned in the Explanation. Subsection (2) is merely a proviso to section 14(1) and it cannot be interpreted in such a manner as to destroy the very concept of the right conferred on a Hindu woman under section 14(1). Sub section (2) is limited only to those cases where by virtue of a certain grant or disposition a right is conferred on the widow for the first time and the said right is restricted by certain conditions. In other words, even if by a grant or disposition a property is conferred on a Hindu male under certain conditions, the same are binding on the male. The effect of sub section (2) is merely to equate male and female in respect of grant conferring a restricted estate. " Finally, Fazal Ali, J., made a reference to Naraini Devi 's case (supra) to which he himself was a party (apart from Sarkaria, J., who delivered the judgment of the Court) and in relation thereto made the following observations: "This case is no doubt directly in point and this Court by holding that where under an award an interest is created in favour of a widow that she should be entitled to rent out the property for her life time, it was held by this Court that this amounted to a restricted estate under section 14(2) of the 1956 Act. Unfortunately the various aspects, namely, the nature and extent of the Hindu women 's right to maintenance, the limited scope of sub section (2) which 300 is a proviso to sub section (1) of section 14 and the effect of the Explanation, etc., to which we have adverted in this Judgment, were neither brought to our notice nor were argued before us in that case. Secondly, the ground on which this Court distinguished the earlier decision of this Court in Badri Parshad vs Smt. Kanso Devi(1) was that in the aforesaid decision the Hindu widow had a share or interest in the house of her husband under the Hindu Law as it was applicable then, and, therefore, such a share amounted to a pre existing right. The attention of this Court however, was not drawn to the language of the Explanation to section 14(1) where a property given to a widow at a partition or in lieu of maintenance had been placed in the same category, and therefore, the reason given by this Court does not appear to be sound. For the reasons that we have already given, after taking an overall view of the situation, we are satisfied that the Division Bench decision of this Court in Naraini Devi 's case (supra) was not correctly decided and is therefore overruled. " Summarising the conclusions of law which Fazal Ali, J., reached after an exhaustive consideration of the texts and authorities mentioned by him, he enumerated them thus: "(1) The Hindu female 's right to maintenance is not an empty formality or an illusory claim being conceded as a matter of grace and generosity, but is a tangible right against property which flows from the spiritual relationship between the husband and the wife and is recognised and enjoined by pure Shastric Hindu Law and has been strongly stressed even by the earlier Hindu jurists starting from Yajnavalkya to Manu. Such a right may not be a right to property but it is a right against property and the husband has a personal obligation to maintain his wife and if he or the family has property, the female has the legal right to be maintained therefrom. If a charge is created for the maintenance of a female, the said right becomes a legally enforceable one. At any rate, even without a charge the claim for maintenance is doubtless a pre existing right so that any transfer declaring or recognising such a right does not confer any new title but merely endorses or confirms the pre existing right. 301 "(2) Section 14(1) and the Explanation thereto have been couched in the widest possible terms and must be liberally construed in favour of females so as to advance the object of the 1956 Act and promote the socio economic ends sought to be achieved by this long needed legislation. "(3) Sub section (2) of section 14 is in the nature of a proviso and has a field of its own without interfering with the operation of section 14(1) materially. The proviso should not be construed in a manner so as to destroy the effect of the main provision or the protection granted by section 14(1) or in a way so as to become totally inconsistent with the main provision. "(4) Sub section (2) of section 14 supplies to instruments, decrees, awards, gifts, etc., which create independent and new titles in favour of females for the first time and has no application where the instrument concerned merely seeks to confirm, endorse, declare or recognise pre existing rights. In such cases a restricted estate in favour of a female is legally permissible and section 14(1) will not operate in this sphere. Where, however, an instrument merely declares or recognises a pre existing right, such as a claim to maintenance or partition or share to which the female is entitled, the sub section has absolutely no application and the female 's limited interest would automatically be enlarged into an absolute one by force of section 14(1) and the restrictions placed, if any, under the document would have to be ignored. Thus where a property is allotted or transferred to a female in lieu of maintenance or a share at partition, the instrument is taken out of the ambit of subsection (2) and would be governed by section 14(1) despite any restrictions placed on the powers of the transferee. "(5) The use of express terms like "property acquired by a female Hindu at a partition", "or in lieu of maintenance" "or arrears of maintenance", etc., in the Explanation to section 14(1) clearly makes sub section (2) inapplicable to these categories which have been expressly excepted from the operation of sub section (2). "(6) The words "possessed by" used by the Legislature in section 14(1) are of the widest possible amplitude and include the state of owning a property even though the owner is not in actual or physical possession of the same. 302 Thus, where a widow gets a share in the property under a preliminary decree before or at the time when the 1956 Act had been passed but had not been given actual possession under a final decree, the property would be deemed to be possessed by her and by force of section 14(1) she would get absolute interest in the property. It is equally well settled that the possession of the widow, however, must be under some vestige of a claim, right or title, because the section does not contemplate the possession of any rank trespasser without any right or title. "(7) That the words "restricted estate" used in section 14(2) are wider than limited interest as indicated in section 14(1) and they include not only limited interest, but also any other kind of limitation that may be placed on the transferee". Applying these principles Fazal Ali J., held: "(i) that the properties in suit were allotted to the appellant Tulasamma on July 30, 1949 under a compromise certified by the Court; (ii) that the appellant had taken only a life interest in the properties and there was a clear restriction prohibiting her from alienating the properties; (iii) that despite these restrictions, she continued to be in possession of the properties till 1956 when the Act of 1956 came into force; and (iv) that the alienations which she had made in 1960 and 1961 were after she had acquired an absolute interest in the properties. " In this view of the matter Fazal Ali, J., allowed the appeal of Tulasamma 's legal representatives. Bhagwati, J., wrote a separate judgment in Tulasamma 's case and A. C. Gupta, J., agreed with him. He also allowed the appeal substantially for the same reasons as had weighed with Fazal Ali, J., and in doing so observed: "Now, sub section (2) of section 14 provides that nothing contained in sub section (1) shall apply to any property acquired by way of gift or under a will or any other instrument or under a decree or order of a civil court or under an award where the terms of the gift, will or other 303 instrument or the decree, order or award prescribe a restricted estate in such property. This provision is more in the nature of a proviso or exception to sub section (1) and it was regarded as such by this Court in Badri Pershad vs Smt. Kanso Devi.(1) It excepts certain kinds of acquisition of property by a Hindu female from the operation of sub section (1) and being in the nature of an exception to a provision which is calculated to achieve a social purpose by bringing about change in the social and economic position of women in Hindu society, it must be construed strictly so as to impinge as little as possible on the broad sweep of the ameliorative provision contained in sub section (1). It cannot be interpreted in a manner which would rob sub section (1) of its efficacy and deprive a Hindu female of the protection sought to be given to her by sub section (1). The language of sub section (2) is apparently wide enough to include acquisition of property by a Hindu female under an instrument or a decree or order or award where the instrument, decree, order or award prescribes a restricted estate for her in the property and this would apparently cover a case where property is given to a Hindu female at a partition or in lieu of maintenance and the instrument, decree, order or award giving such property prescribes limited interest for her in the property. But that would virtually emasculate sub section (1), for in that event, a large number of cases where property is given to a Hindu female at a partition or in lieu of maintenance under an instrument, order or award would be excluded from the operation of the beneficent provision enacted in sub section (1), since in most of such cases, where property is allotted to the Hindu female prior to the enactment of the Act, there would be a provision, in consonance with the old Sastric law then prevailing, prescribing limited interest in the property and where property is given to the Hindu female subsequent to the enactment of the Act, it would be the easiest thing for the dominant male to provide that the Hindu female shall have only a restricted interest in the property and thus make a mockery of subsection (1). The Explanation to sub section (1) which includes within the scope of that sub section property acquired by a female Hindu at a partition or in lieu of maintenance would also be rendered meaningless, because there 304 would hardly be a few cases where the instrument, decree, order or award giving property to a Hindu female at a partition or in lieu of maintenance would not contain a provision prescribing restricted estate in the property The social purpose of the law would be frustrated and the reformist zeal underlying the statutory provision would be chilled. That surely could never have been the intention of the Legislature in enacting sub section (2). " Bhagwati, J., laid down the nature of the right which a Hindu widow has to be maintained out of the joint family estate in the following terms: "It is settled law that a widow is entitled to maintenance out of her deceased husband 's estate, irrespective whether that estate may be in the hands of his male issue or it may be in the hands of his coparceners. The joint family estate in which her deceased husband had a share is liable for her maintenance and she has a right to be maintained out of the joint family properties and though, as pointed out by this Court in Rani Bai vs Shri Yadunandan Ram(1) her claim for maintenance is not a charge upon any joint family property until she has got her maintenance determined and made a specific charge either by agreement or a decree or order of a Court, her right is "not liable to be defeated except by transfer to a bonafide purchaser for value without notice of her claim or even with notice of the claim unless the transfer was made with the intention of defeating her right". The widow can for the purpose of her maintenance follow the joint family property "into the hands of any one who takes it as a volunteer or with notice of her having set up a claim for maintenance". The courts have even gone to the length of taking the view that where a widow is in possession of any specific property for the purpose of her maintenance, a purchaser buying with notice of her claim is not entitled to possession of that property without first securing proper maintenance for her, vide Rachawa & Ors. vs Shivayanappa(2) cited with approval in Ranibai 's case (supra). It is, therefore, clear that under 305 the Sastric Hindu Law a widow has a right to be maintained out of joint family property and this right would ripen into a charge if the widow takes the necessary steps for having her maintenance ascertained and specifically charged in the joint family property and even if no specific charge is created, this right would be enforceable against joint family property in the hands of a volunteer or a purchaser taking it with notice of her claim. The right of the widow to be maintained is of course not a jus in rem, since it does not give her any interest in the joint family property but it is certainly jus ad rem, i.e., a right against the family property. Therefore, when specific property is allotted to the widow in lieu of her claim for maintenance, the allotment would be in satisfaction of her jus ad rem, namely, the right to be maintained out of the joint family property. It would not be a grant for the first time without any pre existing right in the widow. The widow would be getting the property in virtue of her pre existing right, the instrument giving the property being merely a document effectuating such pre existing right and not making a grant of the property to her for the first time without any antecedent right or title. There is also another consideration which is very relevant to this issue and it is that, even if the instrument were silent as to the nature of the interest given to the widow in the property and did not, in so many terms, prescribe that she would have a limited interest, she would have no more than a limited interest in the property under the Hindu Law as it stood prior to the enactment of the Act and hence a provision in the instrument prescribing that she would have only a limited interest in the property would be, to quote the words of this Court in Nirmal Chand 's case (supra), "merely recording the true legal position" and that would not attract the applicability of sub section (2) but would be governed by sub section (1) of section 14. All the three Judges were thus unanimous in accepting the appeal on the ground that Tulasamma 's right to maintenance was a pre existing right, that it was in recognition of such a right that she obtained property under the compromise and that the compromise there fore did not fall within the ambit of sub section (2) of section 14 of the Act but would attract the provisions of sub section (1) thereof coupled with the Explanation thereto. With respect we find our selves in complete agreement with the conclusions arrived at by 306 Bhagwati and Fazal Ali, JJ., as also the reasons which weighed with them in coming to those conclusions. Mr. section T. Desai, learned counsel for the plaintiffs respondents, and Mr. U. R. Lalit who very ably assisted the Court at its request, contended that for a Hindu female to be given the benefit of subsection (1) of section 14 of the Act she must first be an owner, albeit a limited owner, of the property in question and that Tulasamma not being an owner at all, the Bench presided over by Bhagwati, J., did not reach a correct decision in holding that the sub section aforesaid covered her case. We find that only that part of this argument which is interpretative of sub section (1) is correct, namely, that it is only some kind of "limited ownership" that would get enlarged into full ownership and that where no ownership at all vested in the concerned Hindu female, no question of the applicability of the sub section would arise. We may here reproduce in extenso section 14 of the Act with advantage: "14(1) Any property possessed by a female Hindu, whether acquired before or after the commencement of this Act, shall be held by her as full owner thereof and not as a limited owner. "Explanation: In this sub section, "property" includes both movable and immovable property acquired by a female Hindu by inheritance or devise, or at a partition, or in lieu of maintenance or arrears of maintenance, or by gift from any person, whether a relative or not, before, at or after her marriage, or by her own skill or exertion, or by purchase or by prescription, or in any other manner what so ever, and also any such property held by her as "Stridhana" immediately before the commencement of this Act. "(2) Nothing contained in sub section (1) shall apply to any property acquired by way of gift or under a will or any other instrument or under a decree or order of a civil Court or under an award where the terms of the gift, will or other instrument or the decree, order or award prescribed a restricted estate in such property." A plain reading of sub section (1) makes it clear that the concerned Hindu female must have limited ownership in property, which limited ownership would get enlarged by the operation of that sub section. If it was intended to enlarge any sort of a right which could 307 in no sense be described as ownership, the expression "and not as a limited owner" would not have been used at all and becomes redundant, which is against the well recognised principle of interpretation of statutes that the Legislature does not employ meaningless language. Reference may also be made in this connection to Eramma vs Verrupanna & others(1) where in Ramaswami, J., speaking on behalf of himself, Gajendragadkar, C.J., and Hidayatullah, J., interpreted the sub section thus: "The property possessed by a female Hindu, as contemplated in the section, is clearly property to which she has acquired some kind of title whether before or after the commencement of the Act. It may be noticed that the Explanation to section 14(1) sets out the various modes of acquisition of the property by a female Hindu and indicates that the section applies only to property to which the female Hindu has acquired some kind of title, however restricted the nature of her interest may be. The words "as full owner thereof and not as a limited owner" as given in the last portion of sub section (1) of section 14 clearly suggest that the legislature intended that the limited ownership of a Hindu female should be changed into full ownership. In other words, section 14(1) of the Act contemplates that a Hindu female who, in the absence of this provision, would have been limited owner of the property, will now become full owner of the same by virtue of this section. The object of the section is to extinguish the estate called 'limited estate ' or 'widow 's estate ' in Hindu Law and to make a Hindu woman, who under the old law would have been only a limited owner, a full owner of the property with all powers of disposition and to make the estate heritable by her own heirs and not revertible to the heirs of the last male holder. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . It does not in any way confer a title on the female Hindu where she did not in fact possess any vestige of title. It follows, therefore, that the section cannot be interpreted so as to validate the illegal possession of a female Hindu and it does not confer any title on a mere trespasser. In other words, the provisions of section 14(1) of the Act cannot be attracted in the case of a Hindu female who is in possession 308 of the property of the last male holder on the date of the commencement of the Act when she is only a trespasser with out any right to property." This interpretation of sub section (1) was cited with approval in Mangal Singh and Others vs Shrimati Rattno & Another(1) by Bhargava, J., who delivered the judgment of the Court and observed: "This case also, thus, clarifies that the expression "possessed by" is not intended to apply to a case of mere possession without title, and that the legislature intended this provision for cases where the Hindu female possesses the right of ownership of the property in question. Even mere physical possession of the property without the right of ownership will not attract the provisions of this section. This case also, thus, supports our view that the expression "possessed by" was used in the sense of connoting state of ownership and, while the Hindu female possesses the rights of ownership, she would become full owner if the other conditions mentioned in the section are fulfilled. The section will, however, not apply at all to cases where the Hindu female may have parted with her rights so as to place herself in a position where she could, in no manner, exercise her rights of ownership in that property any longer." Limited ownership in the concerned Hindu female is thus a sine qua non for the applicability of sub section (1) of section 14 of the Act but then this condition was fully satisfied in the case of Tulasamma to whom the property was made over in lieu of maintenance with full rights of enjoyment thereof minus the power of alienation. These are precisely the incidents of limited ownership. In such a case the Hindu female represents the estate completely and the reversioners of her husband have only a spes successionis, i.e., a mere chance of succession, which is not a vested interest and a transfer of which is a nullity. The widow is competent to protect the property from all kinds of trespass and to sue and be sued for all purposes in relation thereto so long as she is alive. Ownership in the fullest sense is a sum total of all the rights which may possibly flow from title to property, while limited ownership in its very nature must be a bundle of rights constituting in their totality not full ownership but something less. When a widow holds the property for her enjoyment as long as she lives, nobody is entitled to deprive her of it or to deal with the property in any manner to her detriment. The 309 property is for the time being beneficially vested in her and she has the occupation, control and usufruct of it to the exclusion of all others. Such a relationship to property in our opinion falls squarely within the meaning of the expression "limited owner" as used in sub section (1) of section 14 of the Act. In this view of the matter the argument that the said sub section did not apply to Tulasammas 's case (supra) for the reason that she did not fulfil the condition precedent of being a limited owner is repelled. The next contention raised by Mr. Desai and Mr. Lalit also challenged the correctness of the decision in Tulasamma 's case. They argued that in any case the only right which Tulasamma had prior to the compromise dated July 30, 1949 was a right to maintenance simpliciter and not at all a right to or in property. For the reasons which weighed with Bhagwati and Fazal Ali, JJ., in rejecting this argument we find no substance in it as we are in full agreement with these reasons and the same may not be reiterated here. However we may emphasize one aspect of the matter which flows from a scrutiny of subsection (1) of section 14 of the Act and the explanation appended thereto. For the applicability of sub section (1) two conditions must co exist, namely: (1) the concerned female Hindu must be possessed of property and (2) such property must be possessed by her as a limited owner. If these two conditions are fulfilled, the sub section gives her the right to hold the property as a full owner irrespective of the fact whether she acquired it before or after the commencement of the Act. The Explanation declares that the property mentioned in sub section (1) includes both movable and immovable property and then proceeds to enumerate the modes of acquisition of various kinds of property which the sub section would embrace. Such modes of acquisition are: (a) by inheritance, (b) by devise, (c) at a partition, (d) in lieu of maintenance or arrears of maintenance, (e) by gift from any person, whether a relative or not, before, at or after her marriage, (f) by her own skill or exertion, 310 (g) by purchase, (h) by prescription, (i) in any other manner what so ever, and (j) any such property held by her as "stridhana" immediately before the commencement of this Act. A reference to the Hindu law as it prevailed immediately before the commencement of the Act would lead one to the conclusion that the object of the Explanation was to make it clear beyond doubt that all kinds of property which fell within the ambit of the term "stridhana" would be held by the owner thereof as a full owner and not as a limited owner. Reference may in this connection be made to the following enumeration of "Stridhana" in paragraph 125 of Mulla 's Hindu law: (1) Gifts and bequests from relations. (2) Gifts and bequests from strangers. (3) Property obtained on partition. (4) Property given in lieu of maintenance. (5) Property acquired by inheritance. (6) Property acquired by mechanical arts (7) Property obtained by compromise. (8) Property acquired by adverse possession. (9) Property purchased with stridhana or with savings of income of stridhana. (10) Property acquired from sources other than those mentioned above. These heads of property are then dealt with at length by Mulla in paragraphs 126 to 135 of his treatise. Prior to the commencement of the Act, the Hindu female did not enjoy full ownership in respect of all kinds of "Stridhana" and her powers to deal with it further varied from school to school. There was a sharp difference in this behalf between Mitakshara and Dayabhaga. And then the Bombay, Benaras, Madras and Mithila schools also differed from each other on the point. Succession to different kinds of "Stridhana" did not follow a uniform pattern. The rights of the Hindu female over "Stridhana" varied according to her status as a maiden, a married woman and a widow. The source and nature of the property acquired also placed limitations on her ownership and made a difference to the mode of succession thereto. A comparison of the contents of the Explanation with those of paragraph 125 of Mulla 's Hindu Law would show that 311 the two are practically identical. It follows that the Legislature in its wisdom took pains to enumerate specifically all kinds of "Stridhana" in the Explanation and declared that the same would form "property" within the meaning of that word as used in sub section (1). This was done, in the words of Bhagwati, J, "to achieve a social purpose by bringing about change in the social and economic position of women in Hindu society". It was a step in the direction of practical recognition of equality of the sexes and was meant to elevate women from a subservient position in the economic field to a pedestal where they could exercise full powers of enjoyment and disposal of the property held by them as owners, untrammelled by artificial limitations placed on their right of ownership by a society in which the will of the dominant male prevailed to bring about a subjugation of the opposite sex. It was also a step calculated to ensure uniformity in the law relating to the nature of ownership of "Stridhana". This dual purpose underlying the Explanation must be borne in mind and given effect to when the section is subjected to analysis and interpretation, and sub section (2) is not to be given a meaning which would defeat that purpose and negative the legislative intent, if the language used so warrants. A Combined reading of the two sub sections and the Explanation leaves no doubt in our minds that sub section (2) does not operate to take property acquired by a Hindu female in lieu of maintenance or arrears of maintenance (which is property specifically included in the enumeration contained in the Explanation) out of the purview of sub section (1). Tulasamma 's case (supra) having, in our opinion been decided correctly, the appeal in hand must succeed as the facts in the latter are on all fours with those in the former. Mr. Desai did vehemently argue that this was not so inasmuch as by the decree dated August 18, 1909 the ownership of the land in dispute was vested in Dayalji and Dayabhai sons of Mohanbhai and Motabhai son of Gulabbhai while Bai Vajia was only given the right to possess it for her life the ownership remaining all along in the said three persons, but this argument does not find favour with us. It has to be noted that so long as she lived, Bai Vajia was to have full enjoyment of and complete control over the land, barring any right to alienate it. Such a right was also taken away from the said three persons. The arrangement meant that whatever rights existed in relation to the land during the life time of Bai Vajia, were exercisable by her alone and by nobody else. Not even the said three persons could deal with the land in any manner whatsoever, and if they did, Bai Vajia had the right to have their acts declared null and void during her life time. After the land 312 was made over to her she became its owner for life although with a limited right and therefore only as a limited owner. Under the decree the land vested in the said three persons only so long as they were not dispossessed of it at the instance of Bai Vajia in accordance with the terms stated therein. As soon as Bai Vajia took possession of the land, no rights of any kind whatsoever in relation thereto remained with them and thus they ceased to be the owners for the span of Bai Vajia 's life. Following Tulsamma 's case we hold that Bai Vajia became a full owner of the land in dispute under the provisions of sub section (1) of section 14 of the Act and that sub section (2) thereof has no application to her case, the land having been given to her as a limited owner and in recognition of her pre existing right against property. In the result therefore, the appeal succeeds and is accepted. The judgment and the decree of the High Court are set aside and the suit giving rise to this appeal is dismissed. In the circumstances of the case, however, we leave the parties to bear their own costs throughout. S.R. Appeal allowed.

As per the decree in a partition suit dated August, 18, 1909 Motabhai and two sons of Mohanbhai being two predecessors in interest of the plaintiffs respondents were burdened with the responsibility of paying an yearly maintenance allowance of Rs. 42/ to Bai Vajia appellant on Magsher Sud 2 of every year. The decree further provided that in the event of default in payment of such allowance continuing for a period of a month after the due date, Bai Vajia would be entitled to take possession of the land allotted to them under the decree viz. Survey Nos. 31, 403, 591, 611, 288 and 659/3 in lieu of the maintenance awarded to her and would enjoy the income thereof without however being competent to sell, mortgage, bequeath, gift or otherwise transfer the same. The decree declared that any alienation made by Bai Vajia in contravention of the direction given by the decree in that behalf would be void. By clause 8 of the decree Motabhai and sons of Mohanbhai were also deprived of the right of alienation of the land during the lifetime of Bai Vajia. Default having been made in the payment of maintenance to her according to the terms of the decree, the appellant, took out execution and obtained possession of the lands in question, which she continued to enjoy till October 21, 1963 when she made a sale of Survey No. 31 in favour of one D. P. Desai. The sale was challenged by the plaintiffs in Civil Suit No. 110/66 which was decreed by the trial Court. The District Court in first appeal confirmed it and the High Court in second appeal upheld the decree of Bai Vajia. Allowing the appeal of the Legal Representative by special leave. the Court. ^ HELD: 1. A combined reading of sub sections (1) and (2) of Section 14 of the and the Explanation following sub section (1) makes it clear, that sub section (2) does not operate to take property acquired by a Hindu female in lieu of maintenance or arrears of maintenance (which is property specifically included in the enumeration contained in this Explanation) out of the purview of sub section (1). [311 D E] 2. For the applicability of sub section (1) of Section 14 two conditions must coexist namely. (1) the concerned female Hindu must be possessed of property; and 292 (2) such property must be possessed by her as a "limited owner". If these two conditions are fulfilled, the sub section gives her the right to hold the property as a full owner irrespective of the fact whether she acquired it before or after the commencement of the Act. [309 D F] The Explanation declares that the property mentioned in sub section (1) includes both movable and immovable property and then proceeds to enumerate the modes of acquisition of various kinds of property which the sub section would embrace. Two such modes are "in lieu of maintenance or arrears of maintenance", and "any such property held by her as Stridhana" immediately before the commencement of the Act. It, therefore, follows that the Legislature in its wisdom took pains to specify all kinds of "Stridhana" in the Explanation and declared that the same would form "property" within the meaning of that word as used in sub section (i). This was done "to achieve a social purpose by bringing about change in the social and economic position of women in Hindu Society". It was a step in the direction of practical recognition of equality of the sexes and was meant to elevate women from a subservient position in the economic field to a pedestal where they could exercise full powers of enjoyment and disposal of the property held by them as owners, untrammelled by artificial limitations placed on their right of ownership by a society in which the will of the dominant male prevailed to bring about a subjugation of the opposite sex. It was also a step calculated to ensure uniformity in the law relating to the nature of ownership of 'Stridhana '. This dual purpose underlying the Explanation must be borne in mind and given effect to when the section is subjected to analysis and interpretation, and sub section (2) is not to be given a meaning which would defeat that purpose and negative the legislative intent, if the language used so warrants. A D] 3. It is true that it is only some kind of "limited ownership" that would get enlarged into full ownership and that where no ownership at all vested in the concerned Hindu Female, no question of the applicability of subsection (1) of section 14 of the Act, would arise. [306 B C] 4. A plain reading of sub section (1) of section 14 of the Act makes it clear that the concerned Hindu female must have limited ownership in property, which limited ownership would get enlarged by the operation of that sub section. If it was intended to enlarge any sort of a right which could in no sense be described as ownership, the expression "and not as a limited owners", would not have been used at all and becomes redundant, which is against the well known principle of interpretation of statutes that the Legislature does not employ meaningless language. [306 H, 307 A] Eramma vs Veerappanna and Ors., ; Mangal Singh and Ors. vs Srimati Rattno & Anr., ; ; reiterated. Limited ownership in the concerned Hindu female is thus a sine qua non for the applicability of sub section (1) of section 14 of the Act. In a case where this condition is fulfilled the Hindu female represents the estate completely and the reversioners of her husband have only a spes succession is i.e. a mere chance of 293 succession which is not a vested interest and a transfer of which is a nullity. The widow is competent to protect the property from all kinds of trespass and to sue and be sued for all purposes in relation thereto so long as she is alive. Ownership in the fullest sense is a sum total of all the rights which may possibly flow from title to property, while limited ownership in its very nature must be a bundle of rights constituting in their totality not full ownership but something less. [308 E H] When a widow holds the property for her enjoyment as long as she lives, nobody is entitled to deprive her of it or to deal with the property in any manner to her detriment. The property is for the time being beneficially vested in her and she has the occupation, control and usufruct of it to the exclusion of all others. Such a relationship to property falls squarely within the meaning of the expression "limited owner" as used in sub section (1) of Section 14 of the Act. [308 H, 309A] 6. In the instant case: Bai Vajia became a full owner of the land in dispute under the provisions of sub section (1) of section 14 of the Act and that sub section (2) thereof has no application to her case, the land having been given to her as a limited owner and in recognition of her pre existing right against property. So long as she lived, she was to have full enjoyment of and complete control over the land, barring any right to alienate it. Such a right was also taken away from Motabhai and two sons of Mohanbhai. The arrangement meant that whatever rights existed in relation to the land during the life time of Bai Vajia were exercisable by her alone and by nobody else. Not even the said three persons could deal with the land in any manner whatsoever, and if they did, Bai Vajia had the right to have their acts declared null and void during her life time. After the land was made over to her she became its owner for life although with a limited right and therefore only as a limited owner. Under the decree the land vested in Motabhai and sons of Mohanbhai only so long as they were not dispossessed of it at the instance of Bai Vajia in accordance with the terms stated therein. As soon as Bai Vajia took possession of the land, no rights of any kind whatsoever in relation thereto remained with them and thus they ceased to be the owners for the span of Bai Vajia 's life. [311 G H, 312 A D] V. Tulasamma and Ors. vs Sesha Reddy, [1977] 3 S.C.R. 261; discussed in extenso and followed.

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ivil Appeal Nos. 1186 to 201 of 1975. Appeals by Special Leave from the Judgment and orders dated the 11th November, 1974, 6th December, 1974 and 27th November, 1974 of the Allahabad High Court in Civil Misc. Writ Nos. 4139, 5354, 5352 5353, 5355 5357, 4065, 4912, 4326, 4212, 4218, 4545, 4328, 4543 and 4769 of 1972 respectively. 804 G. section Pathak (In CA 1186/75), section Swarup Shri Narain for the appellants (In CAs. Nos.1186, 1194 1195 and 1196 1197/75). V. Gupte, R. N. Bhalgotra and S.S. Khanduja for the appellants (In CA No. 1187/75). section section Khanduja for the appellants (In CAs. 1188 1192 of 1975) . V. J. Francis of M/s Ramamurthy & Co. for the appellants (In CA No. 1193/75). Yogeshwar Prasad and Miss Rani Arora for the appellants (In CA No. 1198/75) and (1199/75). N. N. Goswamy and Arvind Minocha for the appellant (In CA No. 1201/75). The Judgment of the Court was delivered by KRISHNA IYER, J. We should have made short shift of this batch of appeals on the brief but fatal ground that the appellants all sugar millers who had over priced this essential consumer article and had failed in their challenge of the controlled price had no moral nor legal claim to keep the huge sums which the High Court had right to directed them to disgorge. When the price of 'levy sugar ' was pegged down by the State, these factory owners rushed to the Court impeaching the validity of the control and secured a stay of operation of the order. Under cover of the Court 's stay order which was granted, on bank guarantee for the excess price being furnished to the court, the appellants sold sugar at free market rates, a euphemism for blackmarket racket unfortunately, with judicial sanction. Crores of rupees were admittedly funnelled into the millers ' tills. But, eventually, the High Court upheld the control of price and the unhappy obligation to restore the unjust enrichment arose. The High Court, whose process kept the control price in cold storage, had to do justice by the community of consumers who were the unwitting victims of this judicially declared holiday from control which was quickly converted into a fleece as you please seller situation. And so the Court made the following direction: "We, therefore, direct that the Registrar will take immediate steps to encash the security and recover the amount so over charged by the petitioners and pay the same to the State Government which will keep it in a separate account. The petitioners will furnish to the State Government, within a period of six weeks of this order, a list of all such persons to whom they sold the levy sugar of 1971 72 season, together with their addresses, quantity of such sugar sold to and the amount of excess price charged from each of them. The State Government will then refund to the persons concerned the excess amount realised from each of them, if necessary, after verifying the claim for refund of such amount made by such persons. " 805 The reluctant millers have sought and got leave to appeal against this just direction and in the course of arguments have made some suggestions about the disposal of the moneys. The inarticulate assumption was, presumably, that crores of rupees could remain with them until a suitable schemes for percolation of the excess prices to the ultimate small buyer could be fashioned. Indeed, at some stage, a hesitant proposal was made that since the sugar industry has allegedly had lean years, these considerable sums 'picked ' from the pockets of a considerable number of consumers had better be allowed to be retained by the millers. Another diffident hint was made that these several crores of rupees be used for stablising the sugar cane growers ' economic position. The easy to see through design behind these 'developmental ' ideas was to have use of this large windfall till some distant project was evolved. Indubitably, the appellants are in unrighteous enjoyment of colossal sums which belong to small consumers. Not amount more can the millers keep what the Court has ordered the Registrar to collect by enforcing the bank guarantees. Indeed, they have had dubious business use of these vast sums for a few years nearly a year, soon after the High Court 's final judgment. Once we disenchanted them, as arguments proceeded, that the conscience of the Court would unconditionally compel the money to be called in forthwith, their interest in making fertile pro bono public.co suggestions as to how best to organise the disbursement of the small sums to the actual buyers flagged and, later in the day, Shri Dadachanji, Advocate on record in these cases, even moved that if leave had not been formally granted, the special leave petitions be allowed to be withdrawn and if leave had been already granted, Court fee exemption for these many appeals may be directed. This shows up the public concern of these sugar manufacturers. Anyway, the Registrar of the High Court shall take immediate steps to encash the security furnished by the appellants. The money of the many little men gotten by the few millers by selling an essential commodity to the community at what is frankly black market price under the umbrella of Court order of stay shall get back to the scattered crowd of a small consumers as early and as inexpensively as possible. A public injury perpetrated by calling in aid Court process must quicken judicial conscience to improvise an ad hoc procedure to restore through the Court 's authority what has been nibbled from the numerous buyers. Innovative realism is obligated on the Court on the broad basis actus curiae neminem gravabit. Why did the buyers pay higher prices for levy sugar ? Because, they respected the High Court 's order. In this justice situation conventional procedures of each small claimant being left to litigate for his little sum from the miller or wholesaler is to write off the remedy and allow the ill gotten wealth to be in the coffers of the wrong doer (who got the charter to charge high, from a Court order). Nor is the seemingly sweet suggestion, that a representative action under order 1. r. 8 C.P.C., be instituted on be half of the class of consumers, feasible. Who is to start? Against whom ? How is he to meet the huge litigative costs and how long (O, Lord, how long!) is he to wait with long drawn out trial procedures appeal, second appeal, special appeal" and Supreme Court appeal ? For, on the other side is the miller with the millions to be coughed up 806 The handling of small claims is probably the most deplorable feature of the administration of civil justice and yet small claims are in many respects more significant than large ones, involving large numbers and inter class disputes. If the confidence of the community in the justice system, especially consumer protection, is to be created, radical reform of the processual law is needed now and here. Rejecting, therefore, the recommendations for solution of the problem arising here. as put forward by counsel for the appellants, we have to devise other measures. We are aware of our limitations . "The judge" even when he is free, is still not wholly free. He is not to innovate at pleasure. He is not a knight errant roaming at will in pursuit of his own ideal of beauty or of goodness. He is to draw his inspiration from consecrated principles. He is not to yield to spasmodic santiment, to value and unregulated benevolence. He is to exercise a discretion informed by tradition, methodized by analogy, disciplined by system, and subordinated to 'the primordial necessity of order in social life. ' Wide enough in all conscience is the field of discretion that remains. " (1) The difficulty we face here cannot force us to abandon the inherent powers of the Court to do. "The inherent power has its roots in necessity and its breadth is co extensive with the necessity".(2) Certainly, we cannot go against any statutory prescription. Had India had a developed system of class actions or popular organisation taking up public interest litigation, we could have hoped for relief otherwise than by this Court 's order. We lag in this regard" although people are poor and claims are individually trivial. Legal aid lo the poor has a processual dimension As things stand, if each victim were remitted to an individual suit the remedy could be illusory, for the individual loss may be too small, a suit too prohibitive in time and money and the wrong would go without redress. If there is to be relief, we must construct it here by simple legal engineering. The Solicitor General appearing for the State of U.P. and the Union of India, informed us that legislation was about to be enacted to take care of these situations. If it did come, it were welcome. After all, the Legislature must show better legal concern for the small marl, as this class of consumers who are wronged or deceived are on the increase In the present case, we think that the following complex of directions will pragmatically meet the needs both of the appellants and the range of buyers from whom higher prices were charged : A. The security by way of bank guarantee furnished by every appellant will be encashed by the Registrar. Of the High Court and kept in short term deposit in the State Bank of India r (1) Benjamin Cardozo 's 'The Nature of the Judicial Process ' Yale university Press (1921) (2) Theoretical Basis Inherent Powers Doctrine Text material prepared by Jim R. Carrigan Publication of National College of The state Judiciary, U.S.A. 807 B. The appellants will be given complete immunity from liability to any sugar buyer, wholesaler or other" to whom sugar has been sold by the appellants at higher prices during the period covered by the High Court 's stay order. If any exceptional case of claim were to be made by any buyer, it . . should be done by motion before the High Court which will I be justly disposed of. The Registrar, under orders of the High Court, will directly or by making over to the State Government, receive and dispose of claims from the ultimate consumer for excess price paid on proper proof. If the State Government is to undertake this task, a proper, easy and cheap machinery for distribution to the real, last buyers will be produced before the High Court and orders obtained. The process should not be too expensive or too formalised. D. Wide publicity will be given about the project and method of returning small claims and the money sent by post or otherwise. The claims also would be received by post or otherwise and verified without delay. The interest accruing from the bank deposits will be used for the incidentals to work out the distribution. F. It will be open to the wholesaler to prove by vouchers the retailers and the latter in turn may prove who the ultimate , buyers are. The High Court may devise modifications of this scheme or direct the State Government to act on any scheme subject to the moneys reaching the real small buyers from the retailers. If any further directions in the mechanics of the scheme are felt necessary, the High Court will report to this court. If, within one year from today, any amounts remain unclaimed they will go into a separate deposit in the High Court to be operated on application by any claimant. If any legislation dealing with this subject were to be made before the amounts are disbursed, the legislative scheme will pro tanto prevail over the directions given above. The court fee on these civil appeals will be exempted in the special circumstances of the case. K. Parties will bear their own costs in this Court. May be the procedure we have suggested above is somewhat unconventional but where public interest is involved. "Courts of equity may, and frequently do, go much further both to give and withhold relief in furtherance of the public interest than they are accustomed to go where only 808 private interests are involved. Accordingly, the granting or withholding of relief may properly be dependent upon considerations as of public interest . "(1) We hope the vigilant legislature will activise itself on behalf of the little men and the law and make quick moving, easily accessible and free of cost consumer protection measures. Slogans are not law and the rule of law in a welfare oriented constitutional order demands 'poverty law none too soon; with emphasis on the delivery of legal services with distances shortened and road hazards removed. It is not for the Court to spell out more, but it is for the State to awaken to a overlooked, but not infrequent, legal phenomenon. P.H.P. Appeals dismissed.

The appellants challenged the validity of fixation of price of levy the high Court. During the pendency of the petitions, the appellants a stay order from the High Court for charging the price in eyes price fixed by the State on furnishing Bank guarantees for the excess price Ultimately, the High Court upheld the control of price and directed appellants to restore the excess money recovered from the consumer to the through the State Government. The appellants filed the present Special Leave against the said order of the High Court and contended that since the Sugar Industry had lean year, the excess amount should be allowed to retained by the appellant or that the excess amount should be to be utilised for stabilising the sugarcane growers ' economic position alternative, it was prayed that the excess amount could remain with the appellant unite a suitable scheme for the return of the excess amount to the was made. Dismissing the appeals, ^ HELD : 1. The appellants had doubt business use of these crores of rupees for nearly a year even after the High Court 's final judgment. The money of the many little men got by the few millers by selling an essential commodity to the community at what is frankly black market price under the umbrella of court order of stay shall get back to the scattered crowd of small consumers as early and as inexpensively as possible. A public injury perpetrated by calling in aid court process must waken judicial conscience to improvise an ad hoc procedure to restore through the court 's authority what has been nibbled from the numerous buyers. The handling of small claims is probably a must deplorable features of the administration of civil justice and yet small claims are in many respect more signification than large ones, involving large numbers and inter class disputes. If the confidence of the community in the justice system especially consumer protection. is to be created, radical reform of the processual law is needed now and here. The inherent power of the court has its roots in the necessity and its breadth is co extensive with the necessity. The Court directed that the Bank guarantees furnished by the appellants should be encashed by the Registrar and kept in short term deposit. That he claims of the consumers should be settled by the Registrar of the High Court under the order of the High Court through an easy and cheap machinery. That wide publicity should be given about the method of returning and that small claims might be accepted by cost and money also returned by post. [804 C E. 806 A. D 807 BD]

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Civil Appeal No.86 of 1958. Appeal by special leave from the Award dated November 15, 1956, of the Industrial Tribunal, Assam, at Dhubri. M. C. Setalvad, Attorney General for India, section N. Mukherjee and B. N. Ghose, for the appellants. Niharendu Dutt Mazumdar and Dipak Dutta Choudhri, for the respondents. October 14. The Judgment of the Court was delivered by SINHA C. J. This is an appeal by special leave from the Award dated November 15, 1956, made by the Industrial Tribunal, Assam. The dispute arose between the employers, the Indian General Navigation 3 & Railway Company Limited, carrying on business at No. 4, Fairlie Place, Calcutta, and the Rivers Steam Navigation Company Limited, carrying on business at No. 2, Fairlie Place, Calcutta, which will be referred to, in the course of this judgment, as the appellants ', and their workmen at Dhubri Ghat, represented by the Dhubri Transshipment Labour Union and Dhubri Local Ghat Transhipment Labour Union, Dhubri, which will be referred to hereinafter as the respondents '. The Award aforesaid was published in the Assam Gazette on December 19, 1956. It is necessary to state the following, facts in order to appreciate the points arising for decision in this case: The appellants carry on business of inland water transport in North East India and in Pakistan, in association with each other, and are commonly known as the Joint Steamer Companies. The appellants jointly maintain a large number of wharves, jetties, godowns, etc., at different river stations in India and in Pakistan, for the purposes of their business. One such station is at Dhubri in Assam. At that station, a large number of workmen are employed for the purpose of loading and unloading the appellant 's vessels and for transshipping goods from railway wagons to the appellants ' vessels and vice versa. Before May, 1954, such workmen were employed by a contractor called the Assam Labour Supply Syndicate which will hereinafter be referred to as 'the Syndicate '. Those workmen were organized under two labour unions, called (1) the Dhubri Transhipment Labour Union which was affiliated to the Indian National Trade Union Congress which is, a Federation of Trade Unions, and (2) the Dhubri Local Ghat Transhipment Labour Union. There were differences between the Syndicate and its employees who made certain demands, and has threatened to go on strike to enforce their demands. Conciliation proceedings under the industrial Disputes Act, 1947 (which will hereinafter be referred to as the Act), took place, in the course of which certain agreements to be referred to in greater detail hereinafter, were reached between the Syndicate and the respondents on 4 February 23, 1953, and March 30, 1953. On May 3, 1954, by virtue of a Memorandum of that date, an agreement was arrived 'at between the appellants and the respondents, whereby the appellants agreed that instead of employing a contractor to handle the work of loading and unloading and transhipment of goods, the appellants would employ supervisors and agents to handle the work " pending the proposed Tripartite Conference to decide the issue of permanent direct employment of employees for the future ". The appellants also agreed to maintain continuity of service of the workmen and the existing terms and conditions of their service. The Tripartite Conference contemplated by the Agreement, was to consist of the represent. natives of the appellants, the workmen and the Government of Assam. As a result of the Tripartite Con ference held on July 9 & 10, 1954, an agreement was reached between the appellants and the Indian National Trade Union Congress, which was incorporated in the form of a letter dated July 16, 1954, from the General Secretary of the Congress, Assam Branch, Dhubri Ghat, to the several Unions at different stations, including Dhubri. As a result of this agreement, the appellants agreed, inter alia, to introduce permanent direct employment at all the transhipment ghats of Assam, progressively, without prejudicing the agreement of May 3, 1954. It will be necessary hereinafter to consider some of the terms of this agreement in detail, when dealing with the several points in controversy between the parties. After the agreement aforesaid, there arose certain differences amongst the workmen represented by the two Unions aforesaid, in respect of the election of their office bearers. As a result of those internal dissensions amongst the employees, two rival groups, each claiming to represent a section of the workmen, came into existence. The appellants, thereupon, notified the Indian National Trade Unions ' Congress, that recognition to the Dhubri Transhipment Labour Union, was being withdrawn pending satisfactory settlement of the internal differences. Thus, came into existence, a new Trade Union known as the 5 Dhubri Transhipment Workers ' Union, in or about July, 1955. Meanwhile, between May 2, 1955, and July 31, 1955, the appellant 's, on five different occasions and on different charges, dismissed eight of their employees, after making such inquiries as they thought necessary against those workmen, and after giving them each an opportunity of explaining their conduct. On July 21, 1955, one B. Chakravarty, Secretary, Dhubri Transhipment Labour Union, served a notice on the appellants under sub section (i) of section 22 of the Act, that " I propose to call a strike on the 11th August, 1955, from zero hours, if the following demands be not fulfilled within fourteen days on receipt of this notice". Then followed an annexure containing ten demands which need not be set out here. A similar notice was also served by the Secretary Dhubri Local Ghat Transhipment Labour Union on the same date ' the annexure in this case containing eleven demands. On July 26, 1955, the Conciliation Officer of the Government of Assam, received the notice of the strike. He held conciliation proceedings on August 6, 1955, but those proceedings ended abruptly without arriving at any settlement. On August 8, 1955, the said Conciliation Officer, who was the Labour Officer of Gauhati, by his letter bearing the same date, informed the Labour Commissioner, Assam, about the failure of the conciliation proceedings, and forwarded copies of that letter to the appellants and the workmen 's Union at Dhubri. Without waiting for the statutory period of seven days from the date of failure of the conciliation proceedings, a large number of workmen concerned went on strike with effect from the mid night of August 10, 1953, in pursuance of the notices of strike aforesaid. They were alleged by the appellants not only to have gone on strike, but also to have forcibly entered the appellants ' jetties and other working places and prevented the loyal workmen, who were willing to carry on the transhipment work, from carrying on their normal work. The strike is, therefore, alleged to have been illegal. On August 11, 1955, the District Magistrate, Goal para, promulgated an 'order under 6 section 144 of the Code of Criminal Procedure, prohibiting the "holding of any meetings, demonstrations, pro cessions, or causing threat, obstructions, annoyance or injury directed against the persons lawfully employed in the following areas in the Dhabri Town and its suburbs". Then followed a specification of the ghats to which the prohibition applied This order was to remain in force till September 10, 1955, In consequence of the aforesaid strike which was treated by the appellants as illegal, they declared a lock out on August 11, 1955, in respect of 91 workmen named in the notice issued to them. Another lock out notice was issued on August 13, 1955, in respect of a much larger number of workmen in different groups described as belonging to a particular Sardar 's gang. The legality of these lock out notices, was seriously challenged by the respondents. The Workers ' Union called off the strike with effect from August 19, and the appellants lifted the lock out with effect from August 27. The appellants took proceedings against those employees who had taken part in the strike. They suspended those workmen who were alleged to have not only taken part in the strike, but also had obstructed those workmen who were willing to work. But those workmen who were alleged to have only participated in the strike, were not suspended during the inquiry. On September 8, 1955, 37 of the employees were convicted under section 188 of the Indian Penal Code, for violation of the aforesaid order under section 144 of the Criminal Procedure, Code, with the result that on September 9, they were Dismissed by the appellants. Another batch of 52 employees were convicted under a 143/188 of the Indian Penal Code, on February 17,1956. Meanwhile, on September 13, 1955, the Government of Assam bad constituted a Board of Conciliation, consisting of three persons, namely, (1) Labour Commissioner of Assam, as the Chairman, (2) D. N. Sarma of Gauhati, as representing the interest of the employees, and (3) P. J. Rayfield, as representing the interest of the employers, with a view to promoting settlement of the dispute between the appellants and their workmen 7 at Dhubri. The appellants alleged that they had dismissed their workmen as a result of the inquiry held by their nominee into the conduct of the persons who had participated in the alleged illegal strike and/ or had caused obstruction, before they became aware of the constitution of the Board of Conciliation, as aforesaid. On coming to know of the constitution of the said Board of Conciliation, the appellants subsequently passed orders, holding the order of dismissal of the two hundred and twenty three employees in abeyance, pending the disposal of their application to the Board for permission to dismiss the said two hundred and twenty three employees. The Board of Conciliation, by majority, P. J. Rayfield dissenting, came to the conclusion that as regard the dismissal of the thirty seven workmen, the Management had violated section 33 of the Act, because, in their opinion, the proceedings of the Board of Conciliation had commenced from August 26, and not from September 13. As regards the permission sought by the Management to dismiss the suspended two hundred and twenty three workmen, by a similar majority, it was held that although the strike prima facie was illegal, it was not unjustified. The dissenting member, P. J. Rayfield, recorded his note of dissent to the effect that the conciliation proceedings commenced on September 13, 1955, and not earlier, as decided by the majority, and consequently, the dismissal of the,thirty seven workmen ( 'discharge ' of 37 workmen, as stated in the note of dissent), was not in contravention of section 33 of the Act, and that the permission to dismiss the two hundred and twenty three workmen on the ground that they had been found guilty, by a departmental inquiry, of participating in an illegal strike and forcibly preventing others from attending work, should have been granted. This conclusion was sought to be based on the alleged legal position that the Board had no power to withhold the permission applied for, and had not the power to decide as to the kind of punishment to be imposed upon the workmen who had admittedly taken part in a strike which had unanimously been held to be illegal. The dissenting note also sought to 8 show that the finding of the majority of the Board that the strike was justified, was not based on a proper appreciation of the facts of the case. The report of the Board of Conciliation was published on Decem ber 5, 1955. As the parties had come to a stalemate, the Government of Assam, by its order dated December 7, 1955,as subsequently amended by its order dated January 23, 1956, referred the dispute to Shri Radhanath Hazarika as an Industrial Tribunal, for the adjudication of the dispute on the following issues: " 1 (a) Are the Management of R.S.N. & I.G.N. Railway Company Limited justified in dismissing the following eight workers: Manzoor Hussain, Sudam Singh, ldrish, Tazmal Hussain (S/o S.K. Gaffur) Jahangir Sardar, Keayamat Hossain, Panchu Shah and Ram Ekbal Singh? (b) If not, what relief, if any, are they entitled to ? (2) (a) Are the Management of R.S.N. & I.G.N. Railway Company Limited justified in dismissing and/or suspending as the case may be 260 workers at Dhubri Ghat on or about the 29th August, 1955? (b) If not, to what relief, if any, are the workers entitled ? " The parties to the dispute filed their written statement before the Tribunal and tendered both oral and documentary evidence before it. The Tribunal made its Award which was published in the Assam Gazette on December 19, 1956, as already stated. The Tribunal held that the strike, though illegal, was justified, but that in the absence of standing orders whereby participation in any illegal strike, could justify a punishment of dismissal, the appellants were not entitled to dismiss those workmen whose case was before the Tribunal. The Tribunal, by its Award, directed reinstatement of 208 out of 260 workmen whom the appellants had dismissed, or had sought permission to dismiss. The remaining 52 workmen were ordered to be refused reinstatement on the ground that they had been convicted under section 143 of the Indian Penal Code, which implied an offence involving 9 use of criminal force. It also directed the appellants to pay full wages and allowances from August 20, 1955, till the date of reinstatement of the workmen who had been directed to be reinstated. The Tribunal also held that the dismissal of the eight workmen who were the subject matter of the issue 1(a) aforesaid of the Reference, was bad, and therefore, those 8 workmen were also ordered to be reinstated with back wages. The present appeal by special leave is directed against the said Award of the Tribunal. Before we deal with the merits of the controversy between the parties, it is convenient at this stage to deal with certain arguments by way of preliminary objections to the maintainability and competence of the appeal, raised on behalf of the respondents. Those objections are of a three fold character, (1) no appeal lies, (2) the appellants did not exhaust their statutory remedies under section 17A of the Act, and (3) the appeal is not competent also for the reason that the Government of Assam has not been impleaded as party respondent to the appeal, In our opinion, there is no substance in any one of these objections. With reference to the first ground, the argument runs as follows: The Tribunal made its Award on November 15, 1956, and, submitted the same to the Assam Government under section 15 of the Act. On December 8 of that year, the Government of Assam directed the said Award to be published in the Assam Gazette, and it was so published on December 19, 1956. According to the order of the State Government, the Award became enforceable under section 17A, on the expiry of 30 days from the date of publication, namely, December 19, 1956. Accordingly, the Award became enforceable on January 18,1957, and acquired the force of law by the operation of the statute. By virtue of section 17(2) of the Act, the Award became " final and shall not be called in question by any court in any manner whatsoever ", subject to the provisions of section 17A. It was, therefore, further contended that in the events which had happened before January 18, 1957, the Award had become enforceable and had 2 10 acquired the force of law by operation of the statute, had, thus, passed beyond the pale of litigation and adjudication by any court of law. This argument has only to be stated to be rejected in view of the provisions of the Constitution. It is manifest that the provisions of the Act are subject to the paramount law as laid down in the Constitution. Article 136 of the Constitution, under which this Court grants special leave to appeal (in this case, from a determination of the Tribunal), cannot be read as subject to the provisions of the Act, as the ' argument on behalf of the respondents would postulate. The provisions of the Act must be read subject to the over riding provisions of the Constitution, in this case, article 136. Therefore, whatever finality may be claimed under the provisions of the Act, in respect of the Award, by virtue of sections 17 and 17A of the Act, it must necessarily be subject to the result of the determination of the appeal by special leave. It was further contended that the Award had merged in the orders of the Government, on publication in the Official Gazette, under section 17 of the Act, but this is the same argument stated in another form, and any argument based on the provisions of the, Act, making the Award final and enforceable, must always be read as being subject to the decision of this Court, in the event of special leave being granted against such determination by the Tribunal and as adopted by the Government. The same argument was advanced in still another form, namely, that the appellants should have moved this Court before the lease of the time contemplated by section 17 and section 17A of the Act, that is to say, before January 18, 1957. Apart from the consideration that this argument tends to curtail the period of limitation, prescribed by this Court by statutory rules, the operation of sections 17 and 17A of the Act, is not automatically stayed by making an application for special leave. It is only by virtue of specific orders made by this Court, staying the operation of the Award or some such order, that the appellant becomes, for the time being, immune from the operation of those provisions of the 11 Act, which impose penalties for the infringement of the terms of the Award. Adverting to the second branch of the preliminary objection, it appears that the provisions of section 17A, particularly, the provisos, have been sought to be pressed in aid of the respondents ' contention, without realizing that the Award in question in this case, does not come within the purview of either of those provisos. The State Government was not a party to the Industrial dispute, nor was it an Award given by a National Tribunal. Hence, there is no substance in the contention that the appellants did not exhaust their statutory remedies under section 17A of the Act. The third branch of the preliminary objection is based on the contention that the Government of Assam was a necessary and proper party, as it had acted under delegated powers of legislation under the Act, in making the Award enforceable and giving it the force of law. It is a little difficult to appreciate how the State Government became a necessary or proper party to this appeal. The State Government does not play any part in the proceedings, except referring the dispute to the Tribunal under section 10 of the Act. The publication of the Award under section 17, is automatic on receipt of the same by the Government. Its coining into operation is also not subject to any action on the part of the State Government, unless the case is brought within the purview of either of the provisos to section 17A. In view of these considerations, it must be held that there is no merit in the preliminary objection. The appeal must, therefore,, be determined on its merits. On the merits of the controversy between the parties, it has been argued by the learned counsel for the appellants that the Tribunal, having held the strike to be illegal, has erred in holding that it was justified; that an illegal strike could never be justified and that the Tribunal was wholly in error in losing sight of the fact that the appellants were carrying on what had been notified as a public utility service. In this connection, it was further argued that in view of 12 the proviso to section 10(1) of the Act, the State Government was bound to make a Reference of the dispute to an Industrial Tribunal when notice of strike under section 22 of the Act had already been given, and that, therefore, the failure of the employer to enter into direct negotiations with the employees, upon receipt of the strike 'notice, could not be used by the Tribunal for coming to the finding that the strike was justified. It was also urged that the Tribunal had clearly erred in holding that the lock out declared by the appellants, was illegal, and that, in coming that conclusion, it had over looked the provisions of section 24(3) of the Act. The Tribunal, it was further argued, had erred in holding that, in the absence of standing orders to the effect that participation in an illegal strike is a gross misconduct, an employer could not dismiss its workmen for mere participation in an illegal strike. Assuming that the last stated argument was not well founded it was argued that the standing orders governing the relations between the Syndicate and the workmen, would also govern the relations between the appellants and the workmen, as a result of the agreement aforesaid whereby the appellants undertook all the liabilities of the Syndicate in relation to the workmen, and guaranteed to them the same conditions of service. In this connection, it was also argued that the Tribunal bad made a serious mistake of record in treating the standing orders of the Syndicate as a mere draft and, therefore, of no binding force as between the employers and the employees; that the Tribunal erred, while considering the case of the eight workmen dismissed before the commencement of the strike, in proceeding upon an unfounded assumption that no charge sheets had been served upon those workmen during the inquiry against them, and that, therefore, the Award, in so far as it related to those 8 workmen, was entirely erroneous. As against the two hundred and eight workmen ordered by the Tribunal to be reinstated, it was argued that the departmental inquiry held by the appellants had resulted in the distinct finding that they bad not only participated in the illegal strike, but had also instigated loyal workmen 13 to join in the illegal strike, and had obstructed tranship ment work by loyal workmen. In this connection, it was also argued that in any view of the matter, the thirty seven persons, who had been convicted by the criminal court under section 188 of the Indian Penal Code, for having transgressed the prohibitions contained in the prohibitory order under section 144 of the Code of Criminal Procedure, were clearly liable to be dismissed on the findings of the criminal court itself, apart from any other considerations bearing on the regularity of the inquiry against them; that the Tribunal was in error in holdidg that the inquiry against the dismissed workmen was not in accordance with the prescribed procedure; and lastly, that this was not a case of reinstatement of the dismissed workmen, and that only compensation should have been awarded to them. On behalf of the respondents, their learned counsel, besides raising the preliminary objection already dealt with, urged that the Tribunal was fully justified in holding that the strike, though illegal, was " perfectly justified " and virtually provoked by the appellants. Though in the statement of the case, the argument had been raised that the strike could not be illegal, because the notification declaring the service at the ghats to be public utility service, was ultra vires, that argument was not persisted in before us, but it was vehemently argued that there were no standing orders either of the Syndicate or of the appellants, which could govern the service conditions of the workmen, and that in any event, mere participation in an illegal strike would not entitle the employers to dismiss those workmen who had joined the strike; that the dismissal orders in all cases, were sheer acts of victimization and unfair labour practice. It was also sought to be argued that the lock out was entirely illegal, and that in any view of the matter, its continuance after the strike had been called of, was wholly unjustified and against the principles of " social justice ". Further, it was urged that the appellants had dismissed and/or suspended 260 workmen without framing any specific charges against them; that the dismissal of the eight workmen 14 in view of the incidents before the commencement of the strike, was also illegal, and in any event, irregular, because, it was urged, no specific charges had been framed against them. It was also sought to be argued that the notice ' inviting the workmen to join their work, being unconditional without any reservations, amounted to a condonation of the strike, and therefore, the dismissal orders against the two hundred and sixty workmen were bad in law. Some other arguments also were advanced on behalf the respondents, but we do not propose to take notice of them, because they were ultimately found to be without any foundation in the record of the case. As a matter of fact, the arguments on behalf of the respondents, were not marked by that strict adherence to the record of the case, or the case made out before the Tribunal, as ought to be the case before courts of justice generally, and certainly, before the highest Court in the land. Now, turning to the merits, it is better to deal with the first issue first, that is to say, whether the dismissal of the eight workmen, named in the Issue as amended, was justified, and if not, to what relief they were entitled. The Tribunal dealt with the individual cases of those workmen, and came to the conclusion that the dismissal of none of them was justified, and that, therefore, all of them were entitled to reinstatement with all their back wages and other benefits accruing to them from the date of their suspension and subsequent dismissal until the date of their reinstatement, minus what had been paid to them. Thus, the first issue in both the parts, was decided entirely in favour of the workmen. We have, therefore, to examine how far the determination of Tribunal on the first issue, is open to question. The cases of Manzoor Hussain, Sudama Singh, Idrish and Tazmal Hussain, have been dealt with together by the Tribunal below. These four workmen had been dismissed by the appellants, upon a report made by Rayfield, the enquiring officer under the appellants, on the allegation that they had assaulted their Labour Supervisor section P. Tevari on May 2, 1955. This charge against those four workmen, was examined by 15 a Magistrate who tried them for the alleged assault on Tewari. The Magistrate found them not guilty and acquitted them by his judgment given in April, 1956. The departmental inquiry by Rayfield was held on May 17, 1955, when a member of witnesses were examined by him on behalf of the appellants. In their joint written statement, these four workmen stated that as the police case was pending against them in regard to these very charges, they were not in a position to make any further statement in their defence. The Tribunal came to the conclusion that, on the material before it had not been made out that Tewari had been actually assaulted, while on duty, and that the dismissal order was passed " possibly with a view to frighten the other workmen and to satisfy the whims of Tewari ". We have examined the record, and we do not find any justification for differing from the conclusions of the Tribunal. With reference to the case against Panchu Shah and Ram Ekbal Singh, it appears that the Tribunal definitely came to the conclusion that their dismissal order was vitiated because it was an act of victimization and was mala fide. In the face of this clear finding,we do not think that we can interfere with the determination of the Tribunal in respect of these two workmen. But the case against Jahangir Sardar and Keayamat Hussain, stands on a different footing. The charge against Jahangir was two fold, namely, (1) wilful insubordination and disobedience, and (2) conduct prejudicial to good order and discipline. To these charges, Jahangir demurred and objected, saying he could not " understand the reasons for the charge sheet ". On this demurrer, a letter dated May 7, 1955, was issued to him, giving him the details of the acts charged against him, with reference to the time, date and place. The charge against Keayamat was similarly, a two fold one, namely, (1) disorderly behaviour and inciting others to disturbance and violence, and (2) conduct prejudicial to good order and discipline. Keayamat also demurred to the charge in the same way that it was vague, and that 16 he was not aware of anything wrong having been done by him. On May 7, Keayamat was also given a similar letter, explaining to him the details of the charge aforesaid, with reference to the time, place and date of the acts which formed the gravamen of the charge against him. A number of witnesses were examined by Raymond who held the inquiry. In both these cases, the Tribunal refused to accept the result of the inquiry, chiefly on the ground that no specific charge had been laid against them, and that the allegations were much too vague. In recording this finding, the Tribunal has fallen into a grievous error of record. It has completely omitted to consider the letter issued to both these workmen on May 7, giving full particulars of the charges against them. If it had considered that letter issued to both these workmen, it would not have fallen into this serious error which has vitiated its award in respect of them. The Tribunal further proceeded to comment on the evidence led before the inquiring officer and remarked that the evidence was meager or insufficient. It also observed that the " degree of proof, even in the departmental enquiry, is the same as required in a Court of Law ". In our opinion, the Tribunal misdirected itself in looking into the sufficiency of proof led before the inquiring officer, as if it was sitting in appeal on the decision of the employers. In the case of these two employees, there is no finding by the Tribunal that the order of dismissal against them, was actuated by any mala fides, or was an act of victimization. In view of these considerations, the dismissal order made by the appellants on a proper inquiry, after giving the workmen concerned sufficient opportunity of explaining their conduct, must be upheld. The appeal in respect of these two workmen, must, therefore, be allowed, and the order of the Tribunal in respect of them, accordingly, set aside. The order of the Tribunal in respect of the other six workmen, is confirmed. Having dealt with the orders of dismissal in respect of the incidents before the strike of August 11, 1955, 17 we now turn to the strike itself The first question that arises in this connection, is whether the strike was illegal as alleged by the appellants and as found by the Tribunal. The learned counsel for the respondents sought to reopen the finding about the illegality of the strike, basing his submissions mainly on the contention that there were no conciliation proceedings pending either in fact or in law on the date of the strike, and that, therefore, the finding of the Tribunal was not correct. It was not disputed on behalf of the respondents that the notices of the strike given by the workmen on July 21, 1955, had been duly received by the Conciliation Officer on July 26, 1955, and that the conciliation proceedings were commenced on August 6, 1955. What was contended on their behalf, was that the proceedings had to be stopped, as it appears from the record of those proceedings, without any settlement of the dispute as the "workers ' representative expressed their inability to take further part in the proceedings, on a question of leave to their other representatives". We shall examine the question later as to which party was to blame for the break down of the conciliation proceedings at the very outset. It is enough to observe that under section 20 of the Act, the conciliation proceedings must be deemed to have commenced on July 26, 1955, when the notice of the strike was received by the Conciliation Officer, and those proceedings shall be deemed to have concluded when the report of the Conciliation Officer is received by the Government. In this case, the report to the Government was made by the Conciliation Officer on August 8, 1955. It is not absolutely clear as to when this report of the Conciliation Officer was actually received by the Government. It is clear, therefore, that the conciliation proceedings certainly lasted between July 26 and August 8, 1955. The strike, having commenced on August 11, was clearly illegal in view of the provisions of section 22 of the Act. We must, therefore, hold in agreement with the Tribunal, that the strike was clearly illegal. The Tribunal, having held that the strike was illegal, proceeded to discuss the question whether it 3 18 was justified, and came to the conclusion that it was "perfectly justified". In the first place, it is a little difficult to understand how a strike in respect of a public utility service, which is clearly, illegal, could at the same time be characterized as "perfectly justified". These two conclusions cannot in law co exist. The law has made a distinction between a strike which is illegal and one which is not, but it has not made any distinction between an illegal strike which may be said to be justifiable and one which is not justifiable. This distinction is not warranted by the Act, and is wholly misconceived, specially in the case of employees in a public utility service. Every one participating in an illegal strike, is liable to be dealt with departmentally, of course, subject to the action of the Department being questioned before an Industrial Tribunal, but it is not permissible to characterize an illegal strike as justifiable. The only question of practical importance which may arise in the case of an illegal strike, would be the kind or quantum of punishment, and that, of course, has to be modulated in accordance with the facts and circumstances of each case. Therefore, the tendency to condone what has been declared to be illegal by statute, must be deprecated, and it must be clearly understood by those who take part in an illegal strike that thereby they make themselves liable to be dealt with by their employers. There may be reasons for distinguishing the case of those who may have acted as mere dumb driven cattle from those who have taken an active part in fomenting the trouble and instigating workmen to join such a strike, or have taken recourse to violence. Apart from the basic error of treating the illegal strike to be perfectly justified, the Tribunal has indulged in language which is not characteristic of a judicial approach. The following observations by the Tribunal, in the course of its inordinately long Award, covering about 42 pages in print, are illustrative of the attitude of the Tribunal towards the appellants : " By this letter the Company 's Joint Agent at Dhubri instead of taking a friendly attitude approached the District Magistrate asking for police help. 19 If the Company 's Agent at Dhubri had the honest intention he could have immediately moved the appropriate authority to come immediately to the spot to stop the proposed strike. But instead of that he has provoked the Union by adopting this back door policy to suppress the demands of the workers. It was really unfair on the part of the Agent. It seems that he bad mala fide intention." For this outburst of the Tribunal, justification is sought in the letter which D. J. Milner, the Joint Agent of the appellants, wrote to the Secretary to the Government of Assam, Transport and Industries Department, Labour Commissioner, Government of Assam, Superintendent of Police, Goalpara District, Labour Officer, Lower Assam, and General Secretary, I.N.T.U.C., Assam Branch, on August 9, 1955, informing them of the threatened strike. The last paragraph of the letter explained the reasons for the long letter addressed by the Joint Agent: " In the interest of maintaining this vital link in Assam 's flood stricken communications and protecting our property,, and that of the Railway, as well as our own staff, Railway Staff and loyal laborers, we have to request that adequate police be available at each of our Ghats from shortly prior to midnight on the 10th instant in order that unlawful damage may not be caused by these illegal strikers who will be acting in defiance of Government regulations, and accepted industrial dispute procedure". We see nothing sinister in this letter, justifying the remarks by the Tribunal, quoted above. It was the usual ,request for the maintenance of public peace and for the prevention of acts of violence by misguided persons. It was also addressed to the I.N.T.U.C., the guardian of Labour. On the same date, that is, August 9,1955, B. Chakravarty, the Secretary of the Dhubri Transhipment Labour Union, addressed a letter to the Superintendent of Police, Goalpara, and Deputy Commissioner, Goalpara, alleging that the Joint Agent of the appellants had instructed the officers in charge of the jetties at the Ghats to raise a " hallah " after the zero hour of August 11, 1955, that the labourers of the 20 Transhipment Department were looting the goods of the ship, when they would go for picketing purposes to strengthen their strike. Those allegations of the Secretary, the Tribunal has taken as proof of those allegations, and has observed: ". it is clear that Mr. Milner hatched a plan to create a trouble and the Secretary of the Union got scent of all the secret arrangements made by the Company to create disturbance at the Ghats just immediately after the strike is declared. " This is the first reason assigned by the Tribunal for coming to the conclusion that the strike was "perfectly justified". The second reason for coming to this conclusion, according to the Tribunal, is to be found in the Conciliation Officer 's report that the appellants did not agree to grant leave to the labour representatives to sit in the conciliation proceedings which were held on August 6, 1955. The Tribunal has observed that it appeared also from the appellant 's attitude in refusing to grant leave to the five representatives of the Union, that the appellants were not inclined to give facilities for the conciliation proceedings. Is this observation justified on the record as it stands ? As already indicated, the Conciliation Officer received a copy of the strike notice on July 26, 1955. He fixed August 6, 1955, 10 a.m., at Dhubri, for the conciliation proceedings. The parties to the dispute were apprised of this meeting of August 6, 1955, on August 1, 1955 (ext. O, p. 119). From the proceedings of the Conciliation Officer, it appears that the Union applied to the appellants for leave to five workmen, officials of the Union, to enable them to represent the workmen in the conciliation proceedings. The attitude of the appellants was that they were agreeable to grant leave even on a verbal request, if the request came from those individual workmen, either direct or through the Union, but the appellants were not prepared to grant leave on a petition from the Union alone. On the other hand, the Union was not agreeable that the petition for leave should be made by the workmen themselves, and the Union insisted that it had the right to apply for leave on behalf of those workmen. Upon this, the Union 21 did not take any further part in the proceedings. It would be a travesty of facts to suggest that the appellants were not prepared to grant leave to those five workmen. In the first instance, leave should have been applied for before the date fixed for the commencement of the conciliation proceedings. Secondly, the application should have been made by the workmen concerned, either direct or through the Union. The Tribunal seems to have been under the impression that this attitude of the appellants amounted to a breach of one of the terms of the agreement as a result of the Tripartite Conference aforesaid. That, again, is an assumption which is not justified by the terms of the Agreement. Secondly, the five workmen selected for representing the workmen in the conciliation proceedings, should have applied in good time to their employers for leave for the purpose, but what we find is that an application (ext. M at p. 118) was made on August 6, 1955, not by those workmen themselves, but by the Secretary of the Union, and a copy of the application was forwarded to the Labour Officer and to the Deputy Commissioner, for information. Apparently, the Union was treating the matter as of sufficient importance, but they did not think it necessary to put in the application in time on behalf of the workmen themselves, even though the application might have been made through the Union. That the appellants were not to blame for the attitude they took in the matter of the procedure for application for leave to particular workmen, becomes clear on a reference to the terms of the Agreement dated February 23, 1953, between the Syndicate and their workmen represented by the Dhubri Transhipment Labour Union, at p. 75, Part 1 of the record. The Demand 5(f) was agreed to in these terms : " All leave applications be submitted by a representative of the Union on Tuesday or Friday in a week before the Management, and the decision be communicated to the Union the next day of submission of the application. " On the other band, in respect of leave, the terms of the Agreement reached between the Syndicate and the 22 Dhubri Local Ghat Transhipment Labour Union, on March 13, 1953, are as follows: " It is agreed that the workers will submit leave applications to the management who will communic ate their decision to the workers direct within three days of receipt of the applications and a copy thereof will he sent to the Union for information". It is clear, therefore,that the conciliation proceedings stopped abruptly not because the Management was to blame for not granting leave to the five chosen representatives of the workmen, but because B. Chakravarty insisted that the leave application would not be made by individual workmen but only by the Union. Even that application was made too late, and in the teeth of the terms of the Agreement, quoted above. If the Secretary had not taken this unreasonable attitude, and if he had been anxious that the conciliation proceedings should continue, the easiest thing for him to have done, was to get those five workmen to make their applications for leave, which the Management was prepared to grant even at that late hour. In our opinion, the conciliation proceedings failed because the Secretary took an unreasonable attitude. The Tribunal, therefore, was in error in throwing the blame for the failure of the conciliation proceedings on the Management. The third ground of attack on the bona fides of the appellants, was said to have been the attempt of the Management to interfere in the internal affairs of the Unions. The following remarks of the Tribunal are another instance of its intemperate language with which the Award bristles: " Curiously enough it appears that the Company 's Joint Agent at Dhubri dabbled in politics and meddled in internal administration of the Unions. He propped up another Union and backed it up to stand as a rival Union. " On an examination of the record of the case, it appears that the Indian National Trade Unions ' Congress, to which the Unions were affiliated, was not in favour of the strike. That would be an indication of the fact that the relation between the employers 23 and the employees had not come to the breaking point, and that the Congress, naturally, expected that conditions of service of the employees, could be improved more effectively by peaceful negotiations than by taking recourse to a strike in respect of a service which had been declared by the Government to be a public utility service . But the Secretary of one of the Unions, B. Chakravarty aforesaid, appears to have brought matters to a head without giving the Conciliation Officer a reasonable chance, as already indicated, of bringing about a reconciliation between the view points of the employers and the employees. The appellants had only recently taken over the workmen under their direct employment, and the Tripartite Conference between them, the representatives of the employees, and the Government, was yet to settle all the outstanding Questions between the parties. Hence, the fact that two rival Unions had come into existence, could not be laid at the door of the appellants as an act of unfair labour practice. The Tribunal was not, therefore, in our opinion, justified in holding that the Management had either meddled in the internal administration of the Unions, or dabbled in politics, and had, thus, been guilty of unfair labour practice. The Tribunal has been rather generous to the workmen without being just to the appellants. This is also shown by the fact that, after having held the strike to be illegal, the Tribunal considered the legality of the lock out declared by the appellants on August 11, 1955, in respect of one Ghat, and on August 13, 1955, in respect of the other Ghat. In this connection, the conclusion of the Tribunal may best be stated in its own words to demonstrate its attitude to the appellants: " In this case the Company used the weapon of lock out just to intimidate and put pressure on the employees to withdraw the demands. The lock out is also prohibited under Section 22(2)(d) of the Act. Therefore, both lock out and strike are illegal. The Company had no justification whatsoever to declare a lock out. " 24 Apparently, the Tribunal ignored the provisions of section 24(3) of the Act. The lock out was clearly not illegal. It is another question whether there was a justification for the appellants to continue the lockout even after the strike had been called off on August 19. The Joint Agent of the appellants, by his letter dated August 17, 1955, to the two Unions, had intimated to them that in view of the illegal strikes, lockout had been declared at the local Ghat on August 11, and at the Transhipment Ghat on August 13, and that the lock out " will remain in force until disciplinary action can be instituted against those of our employees chiefly responsible for leading and continuing the illegal strikes ". The continuance of the lock out after August 19, may be unjustified; but that does not make the lock out itself illegal. It was in pursuance of that order of the Joint, Agent, that proceedings were taken against the socalled leading strikers, leading upto their dismissal. Those orders of dismissal, to be presently discussed, are the main points in controversy between the parties in this Court. But before those orders of dismissal were passed, the Management issued a notice on August 26, 1955, lifting the lock out with effect from the next day. It required the employees to report for duty to the Joint Agent personally, at his office between the hours of 9 and 10 a.m. It also contained the threat that any employee who did not report for duty on August 30, " will in the absence of a letter of explanation and good reason, be treated as having voluntarily terminated his services." R. N. Biswas was then appointed the Inquiry Officer by the appellants, and he held the inquiry in batches, the first batch consisting of 26 workmen, the second, of 114, the third, of 68, the fourth, of 17 and the fifth, of 7. These inquiries related to different incidents in connection with the strikes. Biswas appears from the record as placed before us, to have recorded the statements of Milner, Rayfield, C. R. Das and section P. Tewari officers of the appellants in proof of the allegations against the strikers. We do not think any useful purpose will be served by 25 going into the details of the evidence given by those witnesses, because we have come to the conclusion that those several inquiries suffer from the fundamental defect that there is no satisfactory evidence on the record that charges, giving the details of the acts of violence or obstruction, against the strikers, were served upon the workmen against whom those inquiries had been instituted. As a result of each one of these inquiries, the Inquiry Officer, R. N. Biswas, reported that the charge against each one of the workmen, had been proved to his satisfaction. But before the inquiry was held, the Joint Agent on September 9, 1955, informed the thirty seven workmen who had been convicted as aforesaid, of the criminal charge under section 188 of the Indian Penal Code, that their services were terminated from that date, and that they were to call at his office by the 15th of the month to collect their dues and to vacate the quarters of the appellants. As regards the remaining two hundred and twenty three workmen, orders were passed on September 16, to the effect that as the departmental inquiry made against them, had resulted in the charges against them being proved, they were dismissed from the service of the appellants with effect from August 29, 1955. They were called upon to call at the Labour Office on September 18, to collect their dues, and to vacate the quarters of the appellants. Realising that as the Government had appointed a Board of Conciliation on the 13th instant, to resolve the dispute between the parties, the orders aforesaid of dismissal or termination of services of the thirty seven workmen and of the two hundred and twenty three workmen, as aforesaid, would be illegal, the Joint Agent informed the workmen on September 20, 1955, that those orders would be held in abeyance, pending permission from the Board to dismiss them, and they would be deemed to be under suspension. It may be recalled that the Government had constituted a Board of Conciliation, consisting of three persons, viz., H. P. Duara, the Labour Commissioner of Assam, as the Chairman, and D. N. Sarma and P. J. Rayfield as members, representing the interests of the employees and the employers 4 26 respectively. The Board of Conciliation considered the question of the dismissal or suspension of those thirty seven plus 223 workmen, along with the application, of the Management, asking permission to dismiss 223 workmen for their having taken part in the illegal strike, and forcibly preventing willing workmen from attending work. Two of the three persons constituting the Board, namely, the Chairman and D. N. Sarma, came to the conclusion that as regards the dismissal of the thirty seven workmen the order of dismissal was illegal, as in their opinion, the conciliation proceedings had commenced from August 26, and not from September 13. On the question of suspension of 223 workmen, the Board was of the opinion that suspension without pay, pending the permission of the Board to dismiss the workmen, was no punishment, and therefore, no action was called for. As regards the permission sought by the Management to dismiss the suspended two hundred and twenty three workmen, again by a majority, those two members were of the opinion that although the strike was prima facie illegal, it was not unjustified and therefore, the permission sought, could not be given. Rayfield, the other member of the Board, as already stated, submitted his Minute of dissent. He pointed out that the conciliation proceedings commenced on September 13, and therefore, the discharge of the thirty seven workmen, was not in contravention of section 33 of the Act. He further held that the Board had no power to withhold the permission asked for to dismiss 223 workmen on the ground that they had been found guilty, on a departmental inquiry, of having participated in an illegal strike, and of having forcibly prevented workmen from attending work. He added that the grant of the permission would not debar the Union from raising an industrial dispute in that matter. It may be added that the Board unanimously agreed that dismissal " is an appropriate punishment for participation in an illegal and unjustified strike. " The Tribunal also took the same view of the legal position, when it observed, " If the strike is not justified and at the same time it contravenes the provisions of 27 Section 22 of the Act, ordinarily the workmen participating in it are not entitled to any relief. " As a matter of fact, the Tribunal has closely followed the findings of the majority of the Board of Conciliation. But as we have already pointed out, there can be no question of an illegal strike being justified. We have further held, in agreement with the Tribunal, that the strike was illegal, and that it was not even justified in disagreement with the Tribunal assuming that such a situation could be envisaged, in accordance with the provisions of the Act. We have, therefore, to determine the question what punishment, if any, should be meted out to those workmen who took part in the illegal strike. To determine the question of punishment, a clear distinction has to be made between those workmen who not only joined in such a strike, but also took part in obstructing the loyal workmen from carrying on their work, or took part in violent demonstrations, or acted in defiance of law and order, on the one hand, and those workmen who were more or less silent participators in such a strike, on the other hand. It is not in the interest of the Industry that there should be a wholesale dismissal of all the workmen who merely participated in such a strike. It is certainly not in the interest of the workmen themselves. An Industrial Tribunal, therefore, has to consider the question of punishment, keeping in view the over riding consideration of the full and efficient working of the Industry as a whole. The punishment of dismissal or termination of services, has, therefore, to be imposed on such workmen as had not only participated in the illegal strike, but had fomented it, and had been guilty of violence or doing acts detrimental to the maintenance of law and order in the locality where work had to be carried on. While dealing with this part of the case, we are assuming, without deciding, that it is open to the Management to dismiss a workman who has taken part in an illegal strike. There was a great deal of argument at the Bar on the question whether the Management, in this case, was entitled to dismiss the workmen who had taken part, in the illegal strike. 28 A good deal of argument was devoted to the further question whether there were certified standing orders as between the Syndicate and the workmen, or later, as between the appellants and the workmen, and Whether, even apart from such standing orders, it was open to the employers to deal so drastically with their employees who had taken part in the illegal strike. In our opinion, it is not necessary to decide those general questions, in view of our conclusion, to be presently stated, on the question of the regularity of the inquiry held in different batches, as indicated above, by Biswas, the officer appointed by the appellants to hold the departmental inquiry. In order to find out which of the workmen, who had participated in the illegal strike, belong to one of the two categories of strikers who may, for the sake of convenience, be classified as (1) peaceful strikers, and (2) violent strikers, we have to enquire into the part played by them. That can only be done if a regular inquiry has been held, after furnishing a charge sheet to each one of the workmen sought to be dealt with, for his participation in the strike. Both the types of workmen may have been equally guilty of participation in the illegal strike, but it is manifest that both are not liable to the same kind of punishment. We have,therefore, to look into the nature of the inquiry alleged to have been held by or on behalf of the appellants. On the one hand, the workmen took the extreme position that no inquiry had at all been held, and on the other hand, the employers took up the position that the Inquiring Officer had held a regular inquiry, after furnishing a charge sheet to each one of the workmen against whom the inquiry was held. That there was an inquiry held by Biswas, admits of no doubt. The proceedings before him and the evidence recorded by him, have been placed on record. But the most serious question that we have to determine is whether a charge sheet, giving notice to each workman concerned, as to what the gravamen of the charge against him was, had or had not been furnished to him. On this part of the case, the record is admittedly incomplete. The appellants relied upon the following observations 29 of the Tribunal in support of their case that the inquiry had been entirely regular: " The charges are for fomenting and participating in an illegal strike from the 11th August, 1955 and forcibly preventing other labourers from working on the same day. " On the other hand, reliance was placed on behalf of the workmen on the following passage in the Award of the Tribunal: " In this case the Company has not framed any specific charge against those 260 workers alleging that they indulged in violence or acts subversive of discipline. " The finding of the Tribunal is that no such individual charge sheet was delivered to the workmen. This conclusion of the Tribunal was assailed on behalf of the appellants on the ground that as this point had not been specifically made in the written statement of the workmen, the appellants did not put in those charge sheets in evidence, and had contented themselves with only producing the record of proceedings before the Inquiring Officer. As we, naturally, attached a great deal of importance to this question, we were inclined to give another opportunity to the appellants to remove the lacunas in the evidence bearing upon that question, even at this late stage. More than once, during the course of the arguments by the learned Attorney General, we suggested that he might put in those charge sheets, if they were in existence, as additional evidence in this Court, so that we might be satisfied that there had been a regular inquiry according to the requirements of natural justice. After making the necessary investigation, the learned Attorney General informed us on the last day of the arguments, that no such documents were in existence. It was alleged that the entire bundle of documents, containing those individual charges, had been lost, and that, therefore, there were no means of satisfying this Court by documentary evidence, that there were in fact such individual charge sheets delivered to the workmen concerned. We find, therefore, no good reasons for displacing the finding of the 30 Tribunal that there were no such individual charges,in spite of apparently conflicting observations made by it, as quoted above. The position, therefore, is that the strikes were illegal, that there was no question of those strikes being justified, and that, assuming that the strikers were liable to be punished, the degree and kind of punishment had to be modulated according to the gravity of their guilt. Hence, it is necessary to distinguish between the two categories of strikers. The Tribunal attempted to make such a distinction by directing that the 52 workmen, who had been convicted under section 143, read with section 188 of the Indian Penal Code, were not entitled to reinstatement, and the remaining 208 workmen were so entitled. Dealing with the case of the thirty seven workmen, who had been convicted only under section 188 of the Indian Penal Code, for transgression of the prohibitory orders under section 144 of the Code of Criminal Procedure, the Tribunal put those workmen on the same footing as the rest of the workmen. But, in our opinion, those 37 workmen do not stand on the same footing as the others. Those 37 workmen, who were convicted under section 188 of the Indian Penal Code, had been found to have violated the prohibitory orders passed by the public authorities to keep the public peace. Those convictions were based upon evidence adduced before the Magistrate, showing that the workmen had proceeded to the steamer flat through the jetty, in defiance of the orders promulgated under section 144. We have examined the record and we find that there is sufficient indication that those 37 workmen were among the violent strikers, and could not be placed in the category of peaceful strikers. Hence, it is clear that those workmen not only joined the illegal strike by abstaining from their assigned duty, but also violated regularly promulgated orders for maintaining peace and order. Such persons,apparently,cannot be said to be peaceful strikers, and cannot,therefore, be dealt with as lightly as the Tribunal has done. The Tribunal, in our opinion, is wrong in taking the view that the appellants had nothing to do with the violation of the order under section 144 of the 31 Code of Criminal Procedure, promulgated by the District Magistrate, with a view to maintaining peace and order at the site of work. These 37 workmen, therefore, should not have been ordered to be reinstated. As regards the remaining workmen, the question is whether the Tribunal was entirely correct in ordering their reinstatement with full back wages and allowances on and from August 20, 1955, till reinstatement. This would amount to wholly condoning the illegal act of the strikers. On the findings arrived at before us, the workmen were guilty of having participated in an illegal strike, for which they were liable to 'be dealt with by their employers. It is also clear that the inquiry held by the appellants, was not wholly regular, as individual charge sheets had not been delivered to the workmen proceeded against. When the blame attaches to both the parties, we think that they should divide the loss half and half between them. We, therefore, direct that those workmen whose reinstatement by the Tribunal is upheld by us, should be entitled only to half of their wages during the period between the date of the cessation of the illegal strike (i.e. from August 20, 1955) and the date the Award became enforceable. After that date they will be entitled to their full wages, on reinstatement. In this connection, it has also got to be borne in mind that those workmen, as observed in the judgments of the criminal courts which inflicted nominal fines on them on their conviction, were " day labourers who earned their livelihoods by day to day labour ". It is only natural that during all these years that the workmen have not been employed by the appellants, the workmen should have been earning their living by doing day to day labour. It must, therefore be assumed that they were working for their living, and were not wholly unemployed. Therefore, the burden of the back wages for the long period that has elapsed between the date of the end of the strike and the date of the Award, ordering their reinstatement, should be divided half and half between the parties. The appeal is, therefore, allowed in part, as indicated above, that is to say, (1) the order of reinstatement 32 in respect of Jahangir Sardar and Keayamat Hussain,is set aside, (2) similarly, the order of reinstatement in respect of the thirty seven workmen, who had been convicted under section 188 of the Indian Penal Code, is also Set aside, and (3) the order for payment of full back wages, etc., is modified by reducing those amounts by half, for the period aforesaid. As success between the parties has been divided, they are directed to bear their own costs in this Court. Appeal allowed in part.

It was a contradiction in terms to say that a strike in a public utility service, which was clearly illegal, could also be justified. The law does not contemplate such a position nor is it warranted by any distinction made by the . It should be clearly understood by workmen who participate in such a strike that they cannot escape their liability for such participation and any tendency to condone such a strike must be deprecated. The only question of practical importance, that arises in such a strike is, what should be the kind and quantum of the punishment to be meted out to the participants and that question has to be decided on the charge sheet served on each individual workman and modulated accordingly. In determining the question of punishment, distinction has to be made between those who merely participated in such a strike and those who were guilty of obstructing others or violent demonstrations or defiance of law, for a wholesale dismissal of all the workmen must be detrimental to the industry itself. If the employer, before dismissing a workman, gives him Sufficient opportunity of explaining his conduct, and no question of mala fides or victimisation arises, it is not for the Tribunal, in adjudicating the propriety of such dismissal, to look into the sufficiency or otherwise of the evidence led before the enquiring officer or insist on the same degree of proof as is required in a Court of Law, as if it was sitting in appeal over the decision of the employer. In such a case it is the duty of the Tribunal to uphold the order of dismissal. Consequently, in the present case, where the appellants, who were carrying on business in water transport service, notified as a public utility service, dismissed their workmen for joining an illegal strike, on enquiry but without serving a charge sheet oil 2 each individual workman and the Industrial Tribunal directed their reinstatement, excluding only those who had been convicted under section 143 of the Indian Penal Code but including those convicted under section 188 of the Code, with full back wages and allowances, Held, that the decision of the Tribunal to reinstate those who had been convicted under section 188 of the ' Code must be set aside and the wages and allowances allowed to those reinstated must be reduced by half and the award modified accordingly. Held, further, that the , Must be read as subject to the paramount law of the land, namely, the Constitution, and the finality attaching to an award under sections 17 and 17A of the Act, must, therefore, yield to the overriding powers of this Court under article 136 of the Constitution. As the award in the instant case did not fall within the Provisos to section 17 of the Act, it was not correct to contend that the appellants had any other remedies thereunder to exhaust before they could come up in appeal to this Court. Nor was it correct to contend that the Government of Assam was a necessary party in the appeal inasmuch as it had acted by virtue of delegated powers of legislation under the Act in making the award enforceable as law. A State Government plays no part in such a proceeding except to make the reference under section 10 of the Act, nor has it anything to do with regard to the publication of the award, which is automatic under section 17 of the Act, or its operation, unless the case falls within the provisos to section 17A of the Act. A lock out lawfully declared under section 24(3) of the Act, does not cease to be legal by its continuance beyond the strike, although such continuance may be unjustified.

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Special Leave Petition (Civil) No. 6577 of 1988. From the Judgment and order dated 27.4.1988 of the High Court of Allahabad in C.M.W. No. 3777 of 1987. G.L. Sanghi and Manoj Prasad for the Petitioner. PG NO 278 The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J. This application for leave to appeal under Article 136 of the Constitution arises from the judgment and order of the High Court of Allahabad, dated 27th April, 1988 by the judgment under challenge the Division Bench by majority directed the Addl. City Magistrate or the Officer at present exercising the power of Distt. Magistrate under Rule 10(9) of the U.P. Urban Buildings (Regulation of Letting, Rent & Eviction) Rules 1972 to issue notice on all the five landlords mentioned in the petition within one week of the filing of the certified copy of the Order, and thereafter to make an Order in accordance with law and in the light of the observations made in the said Judgment. The petitioner before the High Court, who is the petitioner herein also, was directed not to be dispossessed until disposal of the matter by the High Court. This application is by the tenant petitioner. The premises in question had five co owners, namely, Veeresh Saxena, R.C. Saxena. D.C. Saxena, Smt. Shanti Saxena and B.S. Saxena, respondent No. 3. Until January, 1978, Veeresh Saxena was in sole and exclusive actual physical possession of the shop and carried on business in it. In January, 1978 the present petitioner filed allotment application for the shop and he was the sole applicant. On 28.1.1978, Veeresh Saxena vacated the shop and sent intimation of vacancy to the Rent Control Officer under the U.P. Urban Buildings (Regulation of Letting & Eviction) Act, 1972 (hereinafter called the Act). The Rent Control Officer, then, directed him to appear in the allotment proceedings The Inspector reported that Veeresh Saxena was found to be in possession of the shop, discontinuing the business and was going to let out the shop. On the Inspector 's report being pasted on the Notice Board of the Rent Controller Office, neither B.S. Saxena nor the other 3 co owners filed any objection. Veeresh Saxena filed an affidavit before the Rent Control Officer that he wanted to let out the shop to the petitioner. The 3 other co owners never objected to the petitioner`s tenancy on the allotment order throughout the last 10 years. The allotment letter was accordingly passed on 12th February, 1978. The possession was, thereafter, taken up, it was alleged by the petitioner in the special leave petition. The petitioner had alleged that he had invested more than Rs.2 lakhs in the shop, but B.S. Saxena. who was a non occupant owner, on or about 25th February, 1978 filed an application under section 16(5) of the Act, after 25 days of allotment, for review of the Order. It was alleged by the petitioner that the evidence was overwhelmingly in support of the fact that he had taken PG NO 279 possession of the premises on or about 4/5th February, 1978. The Rent Controller, however, on the said application of B.S. Saxena allowed the review application and cancelled the allotment order. revision against the said order was filed before the learned Judge under section 18 of the Act. The learned Addl. Distt. Judge dismissed the revision. The petitioner, thereafter, filed a writ petition in the High Court of Allahabad . The question arose about the maintainability of the review application under section 16(5) of the Act. It is upon this point that the matter has been agitated before us. There was a difference of opinion about the maintainability of the review application at the instance of a non occupant owner and the matter was referred to a Bench of 3 learned Judges and by majority the Division Bench came to the conclusion that such an application was maintainable. The petitioner herein contends that the High Court was wrong in the view it took on the construction of Section 16(5)(b) of the Act. The relevant provisions of the said sub section read as follow: "(5)(a) Where the landlord or any other person claiming to be lawful occupant of the building or any part thereof comprised in the allotment or release order satisfies the District Magistrate that such order was not made in accordance with clause (a) or clause (b) as the case may be of sub section (I), the District Magistrate may review the order: Provided 1hat no application under this clause shall be entertained later than seven days after the eviction of such person . (b) Where the District Magistrate on review under this sub section sets aside or modifies his order of allotment or release, he shall put or cause to be put the applicant, if already evicted, back into possession of the building, and may for that purpose use or cause to be used such force as may be necessary. (6) x x x (7) Every order under this section shall subJect to any order made under sec. 18 be final. " PG NO 280 The contention is that a landlord who was not in actual physical possession until making of the allotment order or is evicted in pursuant thereof, is not competent to make an application for review of the allotment order or release order under section 16(5)(a) & (b) of the Act. Admittedly, as mentioned hereinbefore, the respondent applicant was not in occupation when the Order was made. He was, however, indisputably a landlord. So, the question is whether on the construction of the section, a landlord who Is not in actual physical possession at the time of the release order, is entitled under the law to apply for review of the order. The High Court held that he is entitled. We are of the opinion that the High Court was right. Section 16(5)(a) speaks of 'where the landlord or any other person '. Hence,there are two categories of persons contemplated i.e. a landlord, or any other person. The requirement of sub section, to be in lawful occupation of the building or any part thereof, applies Only in case of Lany other person claiming to be in lawful occupation and not in case of landlord. The Section has used the expression ' or" and so the expression or is disjunctive of these two categories to be treated separately. Hence, the requirement to be in lawful occupation. is not there in case of an application by the landlord. Mr. G.L. Sanghi, learned counsel appearing for the tenant, has sought to argue that by virtue of the proviso a landlord who was not in occupation, was not entitled to apply. We are unable to accept this. The proviso puts an embargo of 7 days in making the application for review. It can only apply to those who were in lawful occuaption at the time of the making of the original Order. It cannot curtail the rights of the landlord, as such, it only affects any other person who was lawful occupation. In any event, it is a well settled principle of construction that unless clearly indicated, a proviso would not away substantive rights given by the Section or the sub section. A land lord has a right to the property. The Section should not be construed as to defeat the right to possession of property in appropriate cases unless the intention of the Legislature is manifest We find no such clear intention in the facts of this case. We are, therefore,. of the opinion that the High Court came to the correct conclusion that a landlord, even though not in actual physical possession at the time of the possession of the property. call ask for review of the order of release or allotment. It must be borne in mind that this view was also expressed by Mr. Justice N.D.Ojha, as our learned brother then was, in his judgment in Niren Kumar Das vs The District Judge, Pilibhit & Ors., AIR 1977 Allahabad PG NO 281 47. We agree with that interpretation. In that view of the matter, there is no substance in the contentions urged in the specil leave petition. The application is, therefore,rejected. N.V.K. Petition dismissed.

The petitioner in the Special Leave Petition is the tenant, Respondent No. 3 was one of the five co owners of the petition premises. On January 28, 1978, one of the co owners who had sole possession of the shop vacated the shop and sent intimation of the vacancy to the Rent Controller under the U.P. Urban Buildings (Regulation of Letting and Eviction) Act, 1972. The petitioner filed allotment application for the said shop and he was the sole applicant. The Rent Control Officer directed the petitioner to appear in the allotment proceedings, called for a report from the Inspector, found one of the co owners to he in possession of the shop and that he had discontinued the business and was going to let out the shop. The 3 other co owners never objected to the petitioner 's tenancy on the allotment order. The allotment letter was accordingly passed on 12th February.1978, and possession was taken up by the petitioner thereafter. On or about 25th February, 1978 the 3rd respondent who was a non occupant owner filed an application under section 16(5) of the Act i.e. after 25 days of the allotment, for review of the order. The Rent Controller allowed the review application and cancelled the allotment order. The Additional District Judge having dismissed the revision petition, the petitioner filed a writ petition in the High Court. The question about the maintainability of the review application under section 16(5) of the Act at the instance PG NO 276 PG NO 277 of a non occupant owner having arisen the matter was referred to a Full Bench and by a majority, the Bench came to the conclusion that such an application was maintainable. Dismissing the Special Leave Petition, HELD: 1. A landlord, even though not in actual possession at the time of the possession of the property, can ask for review of the order of release or allotment. [280G] 2. A landlord has a right to the property. The section should not be so construed as to defeat the right to possession of property in appropriate cases unless the intention of the Legislature is manifest. [280F] 3. Section 16(5)(a) speaks of 'where the landlord or any other person '. Hence, two categories of persons are contemplated i.e. a land lord, or any other person. [280C] 4. The requirement of the sub section, to be in lawful occupation of the building or any part thereof, applies only in case of any other person claiming to be in lawful occupation and not in case of landlord. The Section has used the expression "or" and so the expression "or" is disjunctive of these two categories to be treated separately. Hence, the requirement to be in lawful occupation, is not there is case of an application by the landlord. [280C D] 5. The proviso puts an embargo of 7 days in making the application for review. It can only apply to those who were in lawful occupation at the time of the making of the original Order. It cannot curtail the rights of the landlord. as such, it only affects any other person who was in lawful occupation. [280E G] Niren Kumar Das vs 7he District Judge, Pilibhit & Ors. AIR 1977 Allahabad 47, approved.

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ON: Civil Appeal Nos. 2406/77 and 356/ 78. Appeals by Special Leave from the Judgment and order dated 1 9 77 of the Bombay High Court in SCA No. l/77. A. P. Deshpande and M. section Gupta for the Appellant in CA No. 2406/77 and Respondent in CA No. 356/78. H.W. Dhabe and A. G. Ratnaparkhi for the Appellant in CA No. 356/78 and for the Respondent in CA No. 2406/77. The following Judgments of the Court were delivered: KRISHNA IYER, J. A tricky issue of statutory construction, beset with semantic ambiguity and pervasive possibility, and a prickly provision which, if interpreted literally, leads to absurdity and if construed liberally, leads to rationality, confront the court in these dual appeals by special leave spinning around the eligibility for candidature of an employee under the Life Insurance Corporation and the declaration of his rival, 1st respondent, as duly returned in a City Corporation election A tremendous trifle in one sense, since almost the whole term has run out. And yet, divergent decisions of Division Benches of Madras and Calcutta and a recent unanimous ruling of a Bench of five judges of Punjab and Haryana together with the Bombay High Court 's decision under appeal have made the precedential erudition sufficiently conflicting for this Court to intervene and declare the law, guided by the legislative text but informed by the imperatives of our constitutional order. The sister appeal filed by the respondent relates to that part of the judgment of the High Court reverses the declaration grated by the trial judge that he be deemed the returned candidate. 1085 This little preface leads us on to a brief narration of the admitted facts. The appellant (in C.A. 2406 of 1977) was d candidate for election to the Corporation of the City of Nagpur from Ward 34 and his nearest rival was the 1st respondent, although there were other candidates also. Judged by the plurality cf votes, the appellant secured a large lead over his opponents and was declared elected. The and of the poll process is often the beginning of the forensic process at the instance of the defeated candidates with its protracted trial and appeals upon appeals, thus making elections doubly expensive and terribly traumatic. the habit of accepting defeat with grace, save in gross cases, is a sign of country 's democratic maturity. Anyway, in the present case, when the appellant was declared the returned candidate the respondent. challenged the verdict in court on a simple legal ground of ineligibility of the former who was, during the election, a development officer under the Life Insurance Corporation (for short, the LIC) . The lethal legal infirmity, pressed with success, by the respondent was that under Regulation 25 of the Life Insurance Corporation of India (Staff) Regulations, 1960 (briefly, the Regulations framed by the LIC, all its employees were under an embargo on taking part in municipal elections, save with the permission of the Chairman. Therefore, the appellant who was such an employee and had not sought or got the Chairman 's permission laboured under a legal ineligibility as contemplated in l, ' ' section 15(g) of the City of Nagpur Corporation Act, 1948 (hereinafter referred to as the Act '. Both the Courts below shot down the poll verdict with this statutory projectile and the aggrieved appellant urges before us the futility of this invalidatory argument. Section 15(g) is seemingly simple and reads: 15. No person shall be eligible for election as a Councillor if he xx xx xx (g) is under the provisions of any law for the time being in force, ineligible to be a member of any local authority; G So, the search is for any provision of law rendering the returned candidate ineligible to be a member. The fatal discovery of ineligibility made by the respondent consists in the incontestable fact that the appellant was at the relevant time an LIC employee bound by the Regulations, which have the force of Law? having been framed under section 49 of the LIC Act, 1956. The concerned clause is Regulation 25(4) which reads thus: 1086 "25 (4) No employee shall canvass or otherwise interfere or use his influence, in connection with or take part in an election to any legislature or local authority. Provided that xx xx xx (iii) the Chairman may permit an employee to offer himself as a candidate for election to a local authority and the employee so permitted shall not be deemed to have contravened the provisions of this regulation. xx xx xx A complementary regulation arming the Management with power to take action for breach of this ban is found in Regulation 39 which states: 39(1). Without prejudice to the provisions of other regulations, any one or more of the following penalties for good and sufficient reasons, and as hereinafter provided be imposed by the disciplinary authority specified in Schedule on an employee who commits a breach of regulations of the Corporation, or. " The crucial issue is whether this taboo in Regulation 25(4) spells electoral ineligibility or merely sets rules of conduct and discipline for employees, violation of which will be visited with punishment but does not spill over into the area of election law. Two decisions, one of Calcutta Sarafatulla Sarkar vs Surja Kumar Mondal(1) and the other of Punjab & Haryana Uttam Singh vs section Kirpal Singh (Z) support the appellant 's position that mere rules regulating service discipline and conduct, even though they have the force of law, cannot operationally be expanded into an interdict on candidature or amount to ineligibility for standing for election. Chakravarthi, C.J., speaking for a Bench of the Calcutta High Court upheld the stand (1) "it appears to me to be 'abundantly ' clear that in so far as the Government Servants ' Conduct Rules provide tor discipline and document (conduct?) and, in doing so, forbid conduct of certain varieties their aim is merely regulation of the conduct of Government servants, as such (l) A.I.R. 1955 Cal. 382. (2) A. I. R. 1976 P. &. H. 176. 1087 servants, and that aim is sought to be attained by prescribing certain rules of correct conduct and laying down penal ties for their breach. If a Government servant disregards any of the Rules which bear upon discipline and conduct and conducts himself in a manner not approved by the Rules or forbidden by them, he may incur the penalties for which the Rules provide. It cannot, however, be that any of his other rights as a citizen will be affected. Taking the present case, if a Government servant violates the prohibition against offering himself as a candidate for election to one or another of the bodies mentioned in Rule 23, he May incur dismissal or such other penalty as the authorities may consider called for, but the breach of the conditions of service committed by him cannot disenfranchise or take away from him any of the rights which he has in the capacity of the holder of franchise. While, therefore, a Government servant offering him ' self for election to one of the bodies mentioned in Rule 23, may bring upon himself disciplinary action, which may go as far as dismissal, the consequence cannot also be that his election will be invalid or. that the validity of his election will be affected by the breach. The disqualification imposed by Rule 23 is of the nature of a personal bar which can be overstepped only at the Government servant 's peril as regards his membership, of a service under the Government. It is not and cannot be an absolute disqualification in the nature of ineligibility. What the Rule enjoins is that a Government servant shall not take part in any election and that he shall also not take part in the form of offering himself as a candidate The prohibition is directed at personal conduct and not at rights owned by the Government servant concerned. Illustrations of an absolute prohibition of the nature of a real disqualification or ineligibility will be found in Sections 63 E(l) and 80 B, Government of India Act 1915 19 and Article 102 and 1901 of the present Constitution which deal, in both cases with qualification for election, to the Central or the State Legislature In his view, the core purpose of Regulation 25(4) is not to clamp down disqualifications regarding elections but to lay down disciplinary forbiddance on conduct of Government servants qua 1088 government servants contravention of which would invite punishment. If we may say so, this is a purpose oriented interpretation. A Five Judge Bench of the Punjab & Haryana High Court adopted this reasoning in a situation akin to ours and repelled the further submission that the disqualification was founded on the policy that an employee of the Corporation, if he became a member of the Legislature or City Corporation would not be able to carry out his functions. The court also dissented from a Division Bench decision of the Madras High Court which took a contrary view. It is fair to notice the Madras ruling before we discuss the fundamentals and declare the law as we read it to be. In the Madras case Narayanaswamy vs Krishnamurth,(1) which related to an Assembly seat) the court felt that the point was not free from difficulty but reached the conclusion that the Regulation made by the LIC was perhaps intended to ensure undivided attention upon their duties as such employees but it also operated as a disqualification. The contention before the court was somewhat different. The question posed was whether the concerned Regulation could be treated as law which fulfilled the requirements of article 191(1) (e) of the Constitution. The major consideration of the court was as to whether a regulation to ensure proper performance of duties by the employees of the Corporation could also be treated as a law imposing disqualification. Even so, making a liberal approach to the line of reasoning of the court we may consider the observation as striking a contrary note. We do not examine, not having been invited to do so, whether Parliament or its delegate could enact a law relating to elections to local bodies, cl topic which falls within the State List. We confine ourselves to the sole question debated at the Bar as to the ambit and limit, the import and interpretation of Regulation 25(4) of the LIC Regulations, vis a vis section IS(g) of the Act. The Regulations have been framed under s.49 of the LIC Act and a conspectus of the various chapters convincingly brings home the purpose thereof. All the Regulations and the Schedules exclusively devote themselves to defining the terms and conditions of service of the staff. Regulation 25 comes within chapter III dealing with conduct and discipline of the employees. Regulation 39 deals with penalties for misconduct and Regulation 40 deals with appeals. The inference is irresistible that the sole and whole object of Regulation 25, read with Regulation 39, is to lay down a rule of conduct for the I .R. 1089 LIC employees. Among the many things forbidden are, for instance, prohibition of acceptance of gifts or speculation in stocks and shares. Obviously we cannot read Regulation 32 as invalidating a gift to an LIC employee under the law of gifts, or Regulation 33 as nullifying transfer of stocks and shares speculatively purchased by an LIC employee. Likewise. Regulation 25 while it does mandate that the employee shall not participate in an election to a local authority cannot be read as nullifying the election or disqualifying the candidate. The contravention of the Regulation invites disciplinary action, which may range from censure to dismissal. Section 15(g) relates to the realm of election law and eligibility Cr to be a member of a local authority. Ineligibility must flow from a specific provision of law designed to deny eligibility or to lay down disqualification. If a rule or conduct makes it undesirable, objectionable or punishable for an employe to participate in elections to a local authority it is a distortion, even an exaggeration out of proportion, of that provision to extract out of it a prohibition of a citizen`s franchise to be member in the shape of a disqualification from becoming a member of a local authority. The thrust of Regulation 25 is disciplinary not disqualification. Its intent imposes its limit, language used by a legislature being only a means of communicating its will in the given environment. This is obvious from the fact that the Chairman is given the power to permit such participation by an employee 15 depending on the circumstance of each case. Even the range of punishments is variable. No ground rooted in public policy compels us to magnify the disciplinary prescription into a disenfranchising taboo. To revere the word to reverse the sense is to do justice to the art of interpretation. Reed Dickeron quotes a passage from an American case to highlight the guideline :( ') F "The meaning of some words in a statute may be enlarged or restricted in order to harmonize them with the legislative intent of the entire statute. It is the spirit. of the statute which should govern over the literal meaning There is a further difficulty in construing the Regulation as stipulating an ineligibility for candidature because there is a proviso therein for the Chairman to grant permission to the employee to participate in elections Permission is a word of wide import and may even survive the death of the person Who permits (Kally vs Cornhill Insurance Co. (1) The Interpretation and Application of Statutes by Reed Dickerson, pr 199. 1090 Ltd.(1) Equally clearly, where a statute does not necessarily insist on previous permission it may be granted even later to have retrospective effect. Or permission once granted may be retracted. These legal possibilities will create puzzlesome anomalies if we treat the Regulations a ban on participation in election. An employee may stand as a candidate after securing permission, but in the course of the election the Chairman may withdraw the permission. What happens then ? An employee may be refused permission in the beginning and if he still contests and wins it is conceivable that the Chairman may grant him permission which may remove the disability. In such a case, one who was ineligible at one stage becomes eligible at a later state. Other odd consequences may also be conceived of, although it is not necessary to figure them out. The rationale of the Regulation rather, its thrust, is disciplinary not disqualificatory. It is quite conceivable, if the legislature so expresses itself unequivocally, that even in a law dealing with disciplinary control, to enforce electoral disqualifications provided the legislature has competence. The present provision docs not go so far. Even assuming that literality in construction has tenability in given circumstances, the doctrinal development in the nature of judicial interpretation takes us to other methods like the teleological. the textual, the contextual and the functional. The strictly literal may rot often be logical if the context indicates a contrary legislative intent. Courts are not victims of verbalism but are agents of the functional success of legislation, given flexibility of meaning, if the law will thereby hit the target intended by the law maker. Here the emphasis lies on the function, utility aim and purpose which the provision has to fulfil. A policy oriented understanding of a legal provision which does not do violence to the text or the context gains preference as against a narrow reading of the words used. Indeed, this approach is a version of the plain meaning rule,(2) and has judicial sanction. In Hutton vs Phillips the Supreme Court of Delaware said:(1) (Interpretation) involves far more than picking out dictionary definitions of words or expressions used Consideration of the context and the setting is indispensable properly to ascertain a meaning . In saying that a verbal expression is plain or unambiguous, we mean little more than that we are convinced that virtually anyone competent to (1)[1964] , H.L. per Lord Dilhorne, L. C. at p. 323. (2)The Interpretation and Application of Statutes by Reed Dickerson p. 231. (3)45 Del .156,160, 70 A. 2nd IS, 17 (1949) . 1091 understand it,and desiring fairly and impartially to ascertain its signification would attribute to the expression in its context a meaning such as the one we derive rather than any other and would consider any different meaning by comparison or far fetched, or unusual, or unlikely." This perceptive process leaves us in no doubt the soundness of the interpretation which has appealed to the Full Bench of the Punjab and Haryana High Court. There is a broader constitutional principle which supports this semantic attribution. The success of our democracy to 'tourniquet ' zenry indifferent to the political process an enemy of the Republic 's vitality. Indeed absolutism thrives on inaction of the members of the polity. Therefore activist involvement in various aspects of publics affairs by as many citizens as can be persuaded to interest themselves is as sign of the health and strength of our democratic system. Local self government and adult franchise give constitutional impetus to the citizens to take part in public administration. Of course this does not mean that where a plain conflict of interest between holding an office and talking part in in the political affairs of government exists, a disqualification can not be imposed in public interest. The rule is participation the exception exclusion. Viewed from that angle if a government servant or an employee of the LIC participate in local administration of other election it may well be that he may well be that he may forfeit his position as government servant or employment if dual devotion is destructive of efficiency as employee and be subject to disciplinary action a matter which depends on a given milieu and potential public mischief. I am not resting my decision on this general consideration but mention this persuasive factor as broadly supportive our conclusion. I hold that the impact of Regulation 25(4) is not to impose ineligibility on an LIC employee to be a member of a municipal corporation. Its effect is not on the candidature but on the employment itself. In the present case, I am told that the appellant has since resigned his post. The ultimate result of the reasoning that appeals to us is that the judgement of the High Court must be reversed and the appellant restored to the poll verdict and be regarded as validly returned member of the Nagpur City Corporation. 1092 In this view, the next appeal by the first respondent does not fall to be considered although counsel has pressed his contention that the High Court was wrong. I do not think it necessary to discuss elaborately the legal issue except to state that the view taken by the Bombay High Court in pyare Saheb 's case (1) is correct. I am constrained to state that the draftsmanship of the provision is dubious and court in this decision has had to salvage sense out of alternative absurdity flowing from fidelity to pedantry. It is clear in election law,that a defeated candidate cannot claim a seat through an election petition merely out of speculative possibilities of success. The reasoning of the Bombay High Court not merely accords with the well known criteria incorporated in the Representation of the people Act, 1951 as well as in the rulings thereon by this Court but also is in consonance with the election sense. It is true that there is no common law rule applicable in this area and election statutes have to be strictly construed but that does not doctrinally drive the Court to surrender to bizarre verbalism when a different construction may inject reasonableness i n to the provision. Section 428 of the Corporation Act aims at sense and when a plurality of contestants are in the run other than the one whose election is set aside, predictability of the next highest becomes a misty venture. The rule in s.428 contains the corrective in such situation s and the pregnant expression against whose election no cause or objection is found gives jurisdiction to the Court to deny the declaration by the next highest and to direct a fresh election when the constituency will speak. We concur in the reasoning of Masodkar, j in the said ruling.(2) The reliance of Sukh Dev s case (3) by the counsel is inept. I am satisfied that the view of the High Court on this branch of the case is correct. I would therefore appeal No. 2406 of 1977 and dismiss appeal no 356 to 1978. parties will bear their costs at this late when long litigation has kept in suspended animation the constituency 's right to representation. Tulzapurkar, J I have had the benefit of reading the judgement of my esteemed brother Krishna Iyer in these appeals whereby he proposes to allow the returned candidates appeal (CA No 2406 of 1977) and dismiss the election petitioner 's appeal (C.A.NO.356 (1) Pyare Saheb Gulzar Chhotumiya Sawazi vs Dashrath Wasudeo Doff & Others (2) (3) Sukhdev Singh vs Bhagatram ; 1 S.C.C. 421 1093 of 1978) but I regret my inability to agree with him as in my view both the appeals deserve to be dismissed. Judges and lawyers always clamour for legislative simplicity and when, as is the case here, legislative simplicity is writ large on the concerned provision and the text of the provision is unambiguous and not susceptible to dual interpretation, it would not be permissible for a Court by indulging i nuances semantics and interpretative acrobatics, to reach the opposite conclusion than is warranted by its plain text and make it plausible or justify it by spacious references to the object purpose or scheme of the legislation or in the name of judicial activism. Election of Councillors to the Municipal Corporation of city of Nagpur was held on January 29 1975 whereat form ward no 34 Manohar Samarth (Appellant in Civil Appeal NO Marotrao Jadhav and three others (being respondent 1 to 4 in the said Civil Appeal) were the contesting candidates. After the polling was over Manohar Samarth (hereinafter called the returned candidate was declared successful he having secured 1428 votes as against 943 secured by Marotrao Jadhav, 849 by respondent no 2 572 by respondent No 3 and 748 by respondent No 4. Marotrao Jadhav (hereinafter referred to as the election petitioner ) challenged the election of the returned candidate from the said ward by filling an election petition (being Election petition No 6 of 1975) before the District Judge, Nagpur under section 428 of 'the Corporation Act.) principally on the ground that the returned candidate being a Development officer and a salaried employee in the Life Insurance Corporation (for short the L.I.C.) had neither sought nor obtained the Chairman s permission for offering his candidature and as such was disqualified from standing at the election under section 15 (g) of the Corporation 1960. The election was also challenged on ground of corrupt practices, communal propaganda and distribution of malicious and defamatory hand bills on the part of the returned candidate. In his written statement the returned candidate refuted all the grounds on which his election was challenged. On the evidence and materials produced by the parties the learned Assistant Judge. who heard the matter came to the conclusion that he returned candidate who was working as a Development officer in the L.I.C. was its whole time salaried employee and since he had contested the election without seeking or obtaining the permission of the Chairman of the L.I.C. he suffered a disqualification under section 15(g) of the 10 1094 Corporation Act read with Regulation 25 (4) of the L.I.C. (staff) Regulations, 1960 which vitiated his election. On the other ground of challenge namely commission of corrupt practices and indulgence in communal propaganda and distribution of malicious and defamatory hand bills a finding was recorded in favour of the returned candidate and against the election petitioner. In the result by her order dated December 21 1976 ,the learned Assistant Judge set aside the election of the returned candidate as being null and void and acting under s.428 (2) granted a further declaration that since the election petitioner had secured second highest votes, he shall be deemed to have been elected as a Councillor from that ward. The decision of the learned Assistant Judge was challenged by the returned candidate by filing a writ petition (Special Civil Application No. 1 of 1977) before the Nagpur Bench of the Bombay High Court. The High Court confirmed the view of the learned Assistant Judge that the returned candidate suffered a disqualification which vitiated his election but quashed the declaration granted in favour of the election petitioner on the ground that though he had secured the next highest votes there was no material on record from which it could be inferred that had the disqualification of the returned candidate been known to the voters they (the voters) would have definitely returned him as their Councillor to the Municipal Corporation from Ward No. 34. The High Court, therefore, directed that a fresh election to fill the vacancy be held in accordance with law. Civil Appeal No. 2406/77 has been preferred by the returned candidate challenging the High Court 's view on his disqualification while Civil Appeal No. 356/78 has been filed by the election petitioner against that part of the decision which has gone against him. Dealing first with Civil Appeal No. 2406/1977 counsel for the returned candidate (the appellant) pressed only one contention in support of the appeal. He contended that Regulation 25(4) framed under section 49(b) & (bb) of the L.I.C. Act, 1956, upon proper construction was 2 mere prohibition and not a measure laying down any disqualification. According to him the L.I.C. (Staff) Regulations 1960 merely laid down the terms and conditions of service of the staff of the L.I.C. and Regulation 25(4) prescribes a code of conduct for the staff, a breach whereof would entail any of the penalties specified in Regulation. 39 and since in the instant case the returned candidate had offered his candidature without seeking or obtaining permission of the Chairman he could be said to have committed a breach of one of the terms or conditions of his service for which any penalty ranging 1095 from censure to dismissal could be imposed upon him but the purpose A of Regulation 25 (4) was not the enactment of any disqualification and as such the terms of s.15(g) of the Corporation Act were not answered by the mere fact that the returned candidate was an employee of the L.I.C. and was subject to Regulation 25(4). Reference was also made to Regulation 2 and provision (iii) to Regulation 25(4) B, to lend support to the said contention. It was pointed out that Regulation No. 2 made the Staff Regulations applicable to every wholetime salaried employee of the L.I.C. in India "unless otherwise provided by the terms of any contract. agreement or letter of appointment" which Clearly suggested that certain whole time salaried employees of the L.I.C. whose terms and conditions of service were other wise governed by a contract, agreement or letter of appointment would outside the purview of these Regulations and the prohibition contained in Regulation 25(4) would not apply to such employees; similarly, it was pointed out that the prohibition under Regulation 25(4) itself was not absolute inasmuch as under proviso (iii) thereto the employee could offer himself as a candidate for election to a local authority with the permission of the Chairman. It was contended that these aspects also showed that the prohibition under Regulation 25(4) did not amount to a disqualification. In support of the construction sought to be placed on Regulation 25(4) counsel relied upon two decisions one of the Calcutta High Court in Md. Sarfatulla Sarkar vs Surja Kumar Mondal and ors.(l) and the other a Full Bench decision of the Punjab & Haryana High Court in Uttam Singh vs section Kripal Singh & Anr.(2) on the other hand, counsel for the election petitioner (first respondent) supported the view of the High Court that Regulation 25(4) read with section 15(g) of the Corporation Act clearly amounted to a disqualification or ineligibility which vitiated the election of the returned candidate. He relied upon the Madras High Court 's decision in G. Narayanaswamy Naidu vs C. Krishnamurthi & Anr.(3) and urged that the Calcutta decision was clearly distinguishable and as against the Full Bench decision of Punjab and Haryana High Court which merely followed the Calcutta decision he pressed the Madras High Court 's view for our acceptance. According to him the aspects emerging from Regulation 2 and proviso (iii) to Regulation 25(4) had no relevance to the issue of the proper construction of Regulation 25(4) read with section 15(g) of the Corporation Act. He pointed out that cases falling within the two aspects emerging from Regulation 2 and proviso (iii) to Regulation 25(4) were (l) A. T. R. (2) A. 1. R. (3) r. L. R. 1096 completely outside the prohibition, while the real issue was whether or not a case properly falling within the prohibition contained in Regulation 25(4) would entail a disqualification or ineligibility. Since the question turns upon the proper construction of Regulation 25(4) of the L.I.C. (Staff) Regulation 1960 read with section 15(g) of the Corporation Act it will be desirable to set out the material provisions. Section 15 of the Corporation Act enumerates in cls. (a) to (i) the several ' disqualifications of candidates for election and section 15(g), which is by way of a residuary provision, runs thus: "15. No person shall be eligible for election, selection, or or appointment as a Councillor if he (g) is under the provisions of any law for the time being in force, ineligible to be a member of any local authority, Provided that a disqualification under clause (e), (f), (g) or (i) may be removed by an order of The Provincial Government in this behalf. " Regulation 25(4) together with proviso (iii) runs thus: "25. Prohibition against participation in Politics and standing for Elections: (4) No employee shall canvass or otherwise interfere or use his influence in connection with or take part in an election to any legislature or local authority Provided that (iii) the Chairman may permit an employee to offer himself as a candidate for election to a local authority and the employee so permitted shall not be deemed to have contravened the pro visions of this regulation. " It may be stated that Regulation 39 provides for imposition of several penalties ranging from censure to dismissal upon an employee if he were to commit a breach of any of the Staff Regulations. The simple question is whether Regulation 25(4) read with section 15(g) constitutes or amounts to an ineligibility or disqualification for a whole time salaried employee of L.I.C. to become a member of any local authority. In other words, is Regulation 25(4) a provision of law for the time being in force that renders a whole time salaried 1097 employee of L.I.C. ineligible to be a member of the Municipal Corporation within the meaning of section 15(g) of the Corporation Act? Before I consider this question of construction certain positions which were not disputed during the course of the arguments may be stated. It was not disputed that at the relevant time, that is, at the time of the nomination as well as the time of election the returned candidate was a whole time salaried employee of the L.I.C. working as its Development officer and as such he was subject to the Staff Regulations. It was also not disputed that under proviso (iii) to Regulation '25(4) he did not obtain the permission from the Chairman of the L.I.C. for the purpose of offering himself as a candidate at the election of the Municipal Corporation. It was further not disputed that Regulation 25(4) being a statutory regulation framed under section 49(2) of the L.I.C. Act. 1956 had the force of law. Further, though before the High Court a contention was strenuously urged that the words "any lay for the time being in force" occurring in section 15(g) must in the law which ought to have been in existence at the commencement date of the Corporation Act, such a contention was not pressed before us and it was conceded by the counsel for the returned candidate that the said words would include Regulation 25(4) as being the law for the time being in force. Indeed, the concession, in my view, was rightly made by counsel for the returned candidate for the words "any law for the time being in force" occurring in section 15(g) Must in the context refer to the law in force at the relevant time, that is, at the time of nomination or election when the question of disqualification or ineligibility arises for consideration. It is in light of these undisputed position that the question set out above will have to be considered. The contention is that on proper construction Regulation 25(4) merely creates a prohibition but does not amount to a disqualification or ineligibility because the Staff Regulations were and are intended to define the terms and conditions of service of the employees of the L.I.C. it is not possible to accept such construction for more than one reason. Tn the first place the heading of the Regulation clearly shows that it deals with the topic and intends to provide a prohibition against standing for election. Secondly, cl. (4) of the said Regulation in plain and express terms provides, "No employee shall. r . take part in an election to any local authority". In other words, by using negative language it puts a complete embargo (subject to proviso (iii) upon every employee from taking part in an election to any local authority. How else could a disqualification or ineligibility be worded ? To say that Regulation 25(4) merely creates a prohibition against standing for election but does not create any ineligibility or disqualification to stand for an election is merely to quibble at words. 14 409 SCI/79 1098 In my view, there is no distinction between a legal prohibition against a person standing for election and the imposition of an ineligibility or disqualification upon him so to stand. It is true that the purpose of framing Staff Regulations was and is to define the terms and conditions of service of the employees of the L.I.C. and that being the purpose it is bu. natural that a provision for imposition of penalties for breach of such Regulations would also be made therein. In fact the validity of such prohibition contained in the concerned Regulation rests upon the postulate that it prescribes a code of conduct for the employees and as such it would be within the Regulation making power conferred on the L.I.C. under section 49 of the L.I.C. Act, 1956 but while prescribing a code of conduct the Regulation simultaneously creates a disqualification or ineligibility for the employee to stand for election to any local authority. Moreover, to construe Regulation 25(4) as merely prescribing a code of conduct breach whereof is made punishable under Regulation 39 and not imposing a disqualification or ineligibility upon the employee to stand for election to a local authority would amount to rendering a residuary provision like section 15(g) in the Corporation Act otiose. In my view, therefore, on proper construction Regulation 25(4) read with section 15(g) of the Corporation Act imposes a disqualification or creates an ineligibility for the employee of L.I.C. to stand for election to any local authority. Reliance on the aspects emerging from Regulation 2 and proviso S (iii) to Regulation 25(4) cannot avail the returned candidate at all, for it is obvious that cases falling within those aspects are completely taken out of the prohibition contained in Regulation 25(4) while the real issue is whether a case properly falling within the prohibition contained in Regulation 25(4) on its proper construction entails a disqualification/ineligibility or not ? In fact, proviso (iii) to Regulation 25(4) is similar to the proviso to section 15 of the Corporation Act under which a disqualification under cls. (e), (f), (g) or (i) could be removed by an order of the Provincial Government in that behalf and obviously when any one of those disqualifications is removed by an order of the Provincial Government under the proviso the case would clearly be outside section 15. In other words, the two aspects (i) that certain employees under Regulation 2 would not be governed by the Staff Regulations at all and would not, therefore, be hit by the prohibition and (ii) that upon permission being obtained from the Chairman under proviso, (iii) the employee would be outside the prohibition have no bearing on the question of proper construction of Regulation 25(4). Turning to the decided cases, it may be observed that a construction similar to the one which I have placed on Regulation 25(4) of 1099 L.I.C. (Staff) Regulations 1960 was placed by the Madras High Court in a similar L.I.C. Staff Regulation No. 29 read with Article 191(1) (e) of the Constitution in G. Narayanaswamy Naidu 's case (supra) and the very argument that Regulation 29 was merely a rule of conduct prescribed for the employees of the L.I.C., the breach of which might result in disciplinary action being taken against them but it did not render the employees disqualified For standing for election was in terms negatived. At page 549 of the report the relevant observations run thus: "Though the point is not free from difficulty, we have reached the conclusion that this argument of the respondents must be rejected. We see no distinction between a legal prohibition against a person standing for election, and the imposition of a disqualification on him so to stand. It might be that the object of the regulation was to ensure that the employees of the Corporation bestowed undivided attention upon their duties as such employees, but this does not militate against the prohibition operating as a disqualification. If a person is disabled by a lawful command of the Legislature, issued directly or mediately, from standing for election, it is tantamount to disqualifying him from so standing. We, therefore, hold that regulation 29 framed by the Life Insurance Corporation constituted a law which disqualification C. Krishnamurthi (?) from standing for election under Article 191(1)(e) of the Constitution." Though the observations have been prefaced by the words "though the point is not free from difficulty", it seems to me clear that those words were used out of deference to the arguments advanced by learn ed counsel for the respondents in that case but the Court construed the Regulation as imposing a disqualification because its plain language warranted it without getting boggled by the object or purpose of the staff Regulation that had been framed under section 49(2) of the L.I.C. Act 1956. The Calcutta decision in Md. Sarafatulla Sarkar 's case (supra) relied on by the counsel for the returned candidate is clearly distinguishable. It was a case dealing with an election to Union Board under the Bengal Village Self Government Act (5 of 1919) and the question was whether Rule 23 of the Government Servants ' Conduct ,Rules, 1926 made under Rule 48 of the Civil Services (Classification. 1100 Control and Appeal) Rules framed by the Secretary of State under section 96B of the Government of India Act, 1915 19, imposed a disqualification or. a Government servant against offering himself for an election to one of the bodies mentioned in Rule 23 and the Calcutta High Court took the view that it did not so as to render his election invalid but that the prohibition contained therein was of a nature of a personal bar which could be overstepped by the Government servant at his own peril as regards his membership of a service under the Government must be pointed out that section 10 A of the Bengal Village Self Government Act (S of 1919) which provided disqualifications ,for candidates from being a member of Union Board did not contain either a specific disqualification for a Government servant or any residuary provision similar to section 15(g) of the Corporation Act, 1948 or Article 191(1)(e) of the Constitution and it was in the absence of any such provision, either specific or residuary that the Calcutta High Court considered the impact of the prohibition contained in Rule 23 of the Government Servants ' Conduct Rules. In fact, this aspect of the matter has been emphasised by the learned Chief Justice in para 5 of his judgment where he observed: "The learned Single Judge considered it immaterial that the holding of a post under the Government had not mentioned as one of the disqualifications for election in section 10A, Bengal Village Self Government Act, 1919 because in his view, the enumeration of disabilities in that section was not exhaustive. " In other words, it is clear that had section 10A of the Bengal Village Self Government Act, contained either a specific disqualification or a residuary provision of the type that is to be found in section 15(g) of the Corporation Act, 1948 or Article 191(1) (e) of the Constitution Rule 23, it appears, might have been differently construed. Construing Rule 23 by itself the learned Chief Justice came to the conclusion that the prohibition therein was directed at personal conduct and not at right owned by the Government servant concerned. In the instant case Regulation 25(4) has to be read with section 15(g) of the Corporation Act, 1948. The learned Chief Justice referred to Rule 8 of the said Rules, which forbade a Gazetted officer to lend money to any person possessing land within the local limits of his authority and pointed out that even so if a Gazetted officer were to lend money to a person of the specified category, none could say that the officer shall not be entitled to recover the amount of the loan. The test so suggested by the learned Chief Justice may hold good if Rule 8 sim 1101 pliciter were to be construed. But, if in addition to Rule 8 there A was simultaneously in operation a usury law which made certain loans irrecoverable including a loan prohibited by any law for the time being in force then obviously Rule 8 read with such usury law would render the loan given by the Gazetted officer irrecoverable. Similar would be the position regarding the two Regulations No. 32 and No. 33 referred to by my learned brother Krishna Iyer, J. in his judgment. Therefore, the Calcutta decision is clearly distinguishable mainly on the ground that Rule 23 of the Government Servants ' Conduct Rules standing by itself came up for construction before that Court in the absence of any specific disqualification or a general disqualification of a residuary nature being enacted in section 10A of the Bengal Village Self Government, Act, 1919. The Full Bench decision of the Punjab & Haryana High Court, in my view, merely follows the reasoning of the Calcutta decision without considering The distinction indicated above and, therefore, it is clear to me that the construction placed by that High Court on Regulation 25(4) of the L.I.C. (Staff) Regulations (1960) read with Article ]91(1)(e) of the Constitution should be rejected as an erroneous one and the construction placed by the Madras High Court deserves to be approved. Having regard to the above discussion I am clearly of the view that the returned candidate suffered a disqualification or rather was under an ineligibility under Regulation 25(4) read with s; 15(g) of the Corporation Act, 1948 which vitiated his election; if he were keen on active participation in the democratic process it was open to him to do so by either resigning his post or obtaining the Chairman 's permission before offering his candidature but his right as a citizen to keep up the Republic 's vitality by active participation in the political process cannot be secured to him by a purpose oriented construction of the relevant Regulation. His appeal, therefore, deserves to be dismissed. Before parting with this appeal I feel constrained, as a part of my duty, to give vent to my feelings of discomfiture and distress over one thing which is exercising my mind for a considerable time in this Court. In all humility I would like to point out that prefaces and exordial exercises, perorations and sermons as also theses and philosophies (political or social), whether couched in flowery language or language that needs simplification, have ordinarily no proper place in judicial pronouncements. In any case, day in and day out indulgence in these in almost every judgment, irrespective of whether the subject or the context or the occasion demands it or not, serves little purpose, and surely such indulgence becomes indefensible when matters are to be disposed of in terms of settlement arrived at between 1102 the parties or for the sake of expounding the law while rejecting the approach to the Court at the threshold on preliminary grounds such as non maintainability, laches and the like. I am conscious that judicial activism in many cases is the result of legislative inactivity and the role of a Judge as a lawmaker has been applauded but it has been criticised also lauded when it is played within the common law tradition but criticised when it is carried to extremes. Lord Radcliffe in his address titled 'The Lawyer and His Times ' delivered at the Sesquicentennial Convocation of the Harvard Law School observed thus: "do not believe that it was ever an important discovery that judges are in some sense lawmakers. It is much more important to analyse the relative truth of an idea so far reaching; because, unless the analysis is strict and its limitations observed, there is real danger in its elaboration. We cannot run the risk of finding the archetypal image of the judge confused in men 's minds with the very different image of the legislator. " And the risk involved is the possible destruction of the image of the judge as "objective, impartial, erudite and experienced declarer of the law That is" which "lies deeper in the consciousness of civilization than the image of the lawmaker, propounding what are avowedly. new rules of human conduct. Personally I think that judges will serve the public interest better if they Keep quiet about their legislative function. No doubt they will discreetly contribute to changes in the law, because as I have said, they cannot do otherwise, even if they would. But the judge who shows his hand, who advertises what he is about, may indeed show that he is a strong spirit, unfettered by the past; but I doubt very much whether he is not doing more harm to the general confidence in the law as a constant, safe in the hands of the judges, than he is doing good to the law 's credit as a set of rules nicely attuned to the sentiment of the day. " Turning to the election petitioner 's appeal (C.A. No. 356 of 1978) I am in complete agreement with the view expressed by the High Court that the declaration granted to him by the learned Assistant Judge under section 428(2) of the Corporation Act, 1948 should never have been granted. It is true that the election petitioner secured the next highest number of votes but that by itself would not entitle him to get a declaration in his favour that he be deemed to leave been duly elected as a Councillor from Ward No. 34. I may point out 1103 that section 428(2) is not that absolute as was suggested by counsel for the election petitioner, for, the relevant part of sub section (2) provides that if the election of the returned candidate is either declared to be null and void or is set aside the District Court "shall direct that the candidate, if any, in whose favour next highest number of valid votes is recorded after the said person or after all the persons who have returned at the said election and against whose election no cause or objection is found shall be deemed to have been elected. " The underlined words give jurisdiction to the District Court to deny the declaration to the candidate who has secured the next best votes The High Court has rightly taken the view that there was no material on record to show how the voters, who had voted for the returned candidate, would have cast their votes had they known about the disqualification. Therefore, this appeal also deserves to be dismissed. In the result I propose that both the appeals should be dismissed with no order as to costs in each. PATHAK, J. Manohar Nathurao Samrath was a Development officer in the service of the Life Insurance corporation of India. His employment was governed by the Life Insurance Corporation of India (Staff) Regulations, 1960 [shortly referred to as the "(Staff) Regulations]" Desirous of being a Councillor in the Corporation of the City of Nagpur (to which I shall refer as the "Nagpur Corporation"), he stood for election to that office, and was elected. But Regulation 25(4) of the (Staff) Regulations forbade him from taking part in any election to a local authority. He could have taken part in the election if he had sought and obtained the permission of the Chairman of the Life Insurance Corporation of India under the third proviso to Regulation 25(4). He did not obtain permission. His election as Councillor was challenged by an election petition filed by an unsuccessful candidate Marotrao. It was said that Samrath was ineligible to stand for election because of section 15(g) of the City of Nagpur corporation Act, 1948 (to be referred hereinafter as the "Nagpur Corporation Act" 5) read with Regulation 25(4) of the (Staff) Regulations The ground found favour with the learned Assistant Judge trying the election petition, and she declared the election void. She also granted a declaration that Marotrao was the duly elected candidate. Samrath filed a writ petition in the Bombay High Court. The High Court agreed with the learned Assistant Judge that Samrath was not eligible for election and that his election was void. But it also set aside the declaration granted in favour of Marotrao, and directed a fresh election. The Judgment of the High Court has been challenged by these two appeals, one by Samrath and the other by Marotrao. 1104 The central question is whether Samrath is ineligible for election as a Councillor of the Nagpur Corporation because of Section 15(g) of the Nagpur Corporation Act read with Regulation 25(4) of the (Staff) Regulations. Section 15(g) of the Nagpur Corporation Act provides: "15. No person shall be eligible for election as a Councillor if he . . . . (g) is, under the provisions of any law for the time being in force, ineligible to be a member of any local authority: . . . . And Regulation 25(4) of the Staff Regulations declares: "(25) (1) . . . (2) . . . (3). . . . (4) No employee shall canvass or otherwise interfere or use his influence in connection with or take part in an election to any legislature or local authority. Provided that (i). . . . (ii). . . (iii) the Chairman may permit an employee to offer him self as a candidate for election to a local authority and the employee so permitted shall not be deemed to have contravened the provisions of this regulation". The Nagpur Corporation Act contains a number of provisions concerned with holding elections to the Nagpur Corporation. Sections 9 to 22 deal with various matters, electoral roll, the qualification of candidates, disqualification of candidates, term of office, filling up of casual vacancies, and so on. There is an entire Code of election law. And Section 15 is one of its provisions. Now, section 15 of the Nagpur Corporation Act declares a person ineligible for election as a Councillor on any one of several grounds. He may be ineligible be cause he is not a citizen of India, that is to say, he lacks in point of legal status. He may also be ineligible in point of lack of capacity defined by reference to disqualifying circumstances, for example, he may have been adjudged by a competent court to be of unsound mind. ` 1105 The disqualification may be found, by nature of clause (g), under the provisions of any subsisting law. But the law must provide that he is ineligible to be a member of any local authority. The law must deal with ineligibility for membership, and in the context of section 15, that must be ineligibility for election. It must be a law concerned with elections. Clause (g) is a residual clause, not uncommonly found wherever a provision of an election law sets forth specified category of disqualified or ineligible person and thereafter includes a residual clause leaving the definition of remaining categories of two other laws. These other laws must also be election laws. An example is the Representation OF the People Act, 1951 which is relevant to Article 102(1)(e) and Article 191(l)(e) of the Constitution. Since Section 15 of the Nagpur Corporation Act is a provision of the election law, clause (g) must be so construed that the law providing for ineligibility contemplated therein must also be of the same nature, that is to say, election law. Regulation 25(4) of the (Staff) Regulations is not a law, dealing with elections. Chapter III of the (Staff) Regulations, in which Regulation 25 is found, deals with "conduct, discipline and appeals" in regard to employees of the Life Insurance Corporation of India. A conspectus of the provisions contained in the Chapter, from sections 20 to SO, shows that it deals with nothing else. This is a body of provisions defining and controlling the conduct of employees in order to ensure efficiency and discipline in the Corporation, and providing for penalties (Section 39) against erring employees. Regulation 25 prohibits participation in politics and standing for elections. Regulation 25(4) forbids an employee not only from taking part in an election to any legislature or local authority, but also from canvassing or otherwise interfering, or using his influence, in connection with such an election. If he does, he will be guilty of a breach of discipline, punishable under Regulation 39. Regulation 25(4) is a norm of service discipline. In substance, it is nothing else. Tn substance, it is not a provision of election law. It cannot be construed as defined a ground of electoral ineligibility. All that it says to the employee is: "While you may be eligible for election to a legislature or local authority, by virtue of your legal status or capacity, you shall not exercise that right if you wish to conform to the discipline of your service." The right to stand for election flows from the election law. Regulation 25(4) does not take away or abrogate the right; it merely seeks to restrain the employee from exercising it in the interests of service discipline. If in fact the employee exercises the right, he may be punished under Regulation 39 with any of the penalties visited on an employee a penalty which takes its colour from the relevance of em 1106 ployment, and has nothing to do with the election law. No penalty under Chapter III of the (Staff) Regulations can provide for invalidating the election of all employee to a legislature or a local authority. That would be a matter for the election law. It is significant that when the restraint on standing for election imposed by Regulation 25(4) has to be removed, it is by the Chairman of the Life Insurance Corporation of India under the third proviso. When he does so, it is as a superior in the hierarchy of service concerned with service discipline. He does not do so as an authority concerned with elections. Therefore, in my judgment, Regulation 25(4) of the (Staff) Regulation is not a law within the contemplation of section 15(g) of the Nagpur Corporation Act. In reaching that view, I find myself, with regret, unable to sub scribe to what has been observed by the Madras High Court in Narayanaswamy vs Krishnamurthi.(l) I would say that the Calcutta High Court in Sarafatulla Sarkar vs Surja Kumar Mondal( ') and the Punjab and Haryana High Court ill Uttam Singh vs section Kirpal Singh(3 appear to have come a more accurate conclusion. Samrath must, therefore, succeed in his appeal. That being so, Marotrao must fail in his. Samrath having been duly elected to the office of Councillor, Marotrao cannot claim the same office for himself. In the result, Civil Appeal No. 2406 of 1977 is allowed and Civil Appeal No. 356 of 1978 is dismissed. The judgment of the Bombay High Court is set aside and the election petition filed by Marotrao is dismissed. In the circumstances of the case, the parties will bear their costs. ORDER By majority Civil Appeal No. 2406 of 1977 is allowed. Civil Appeal No. 356/78 is dismissed unanimously. There will be no order as to costs in each of the appeals. V.D.K. Ordered accordingly (1) I. L. R (2) A. I. R. (3) A. I. R. 1976 Pb. & Haryana.

Clause (g) of Section 15 of the City of Nagpur Corporation Act, 1948 lays down that "no person shall be eligible for election as a Councillor if he is under the provisions of any law for the time being in force, ineligible to he a member of any local authority. Under sub section (4) of the Life Insurance Corporation of India (Staff) Regulations, 1960, "No 'employee shall canvass or otherwise interfere or use his influence in connection with or take part in an election of any legislature or local authority". However proviso (iii) to the said sub section lays down that "the Chairman may permit an employee to offer himself as a candidate for election to a local authority and the employee so permitted shall not be deemed to have contravened the provisions of the regulation so as to attract punishment under. Regulation 39, ibid. The appellant (in C.A. 2406/77) and a returned candidate as a councillor from ward No. 34 of Nagpur was an employee of the Life Insurance Corporation. The had not sought or got the Chairman 's permission to stand for the election, with the result the election petition filed by his nearest rival respondent 1 and appellant in C.A. 356 of 1978 on this sole ground of taboo Was accepted by the Court 's below. The direction given by the trial court declaring respondent 1 and an elected candidate was however set aside by the High Court and hence C.A. 356 of 1978 against that part of the decision by respondent 1 in C.A. 2406/77. Allowing C.A. 2406/77 and dismissing C.A. 356/78. the Court ^ HELD [Per Krishna Iyer J.] 1. The impact of Regulation 25(4) is not to impose ineligibility on an L.I.C. employee to be a member of a municipal Corporation. Its effect is not on the candidature but on the employment itself. The sole and whole object of Regulation 25 read with Regulation 39, is to lay down a rule of conduct for the L.I.C. employees. Among the many things forbidden are for instance prohibition of acceptance of gifts or speculation in stocks and share. Obviously neither Regulation 32 can be read as invalidating a gift to an L.I.C. employee under the law of gifts, nor Regulation 33 as nullifying transfer of stocks and shares speculatively purchased by the L.I.C. employee. Likewise, Regulation 1079 25 while it does mandate that the employee shall not participate in an election ,4, to a local authority cannot be read as nullifying the election or disqualifying the candidate. The contravention of the Regulation invites disciplinary action which may range from censure to dismissal [1088H, 1089A B, 1091G] 2. Section 15(g) of the City of Nagpur Corporation Act, 1948 relates to the realm of election law and eligibility to be a member of a local authority. Ineligibility must flow from specific provision of law designed to deny eligibility or to lay down disqualification.[1089] 3. If a rule of conduct makes it undesirable, objectionable or punishable for an employee to participate in election to a local authority, it is a distortion, even an exaggeration out of proportion, of that provision to extract out of it a prohibition of a citizen 's franchise to be a member in the shape of a disqualification from becoming a member of a local authority. The thrust of Regulation 25 is disciplinary and not disqualificatory. Its intent imposes its limit, language used by a legislature being only a means of communicating its will in the given environment. This is clear from the fact that the Chairman is of the power under Proviso (iii) to Section 25(4) to permit such participation by an employee depending on the circumstances of each case. Even the range of punishment is variable. [1089C E] 4. There is no ground in public policy to support the plea to magnify the disciplinary prescription into a disenfranching taboo. To revere the word to reverse the sense is to do injustice to the art of interpretation. Permission is a word of wide import and may even survive the death of the person who permits. Equally clearly, where a statute does not necessarily insist on previous permission, it may be granted even later to have retrospective effect, or permission once granted may be retracted. [1089, H, 1090A] 5. The strictly literal construction may not often be logical if the context indicates a contrary legislative intent. Courts are not victims of verbalism but are agents of the functional success of legislation, given flexibility of meaning, if the law will thereby hit the target intended by the law maker. A policy oriented understanding of a legal provision which does not do violence to the text or the context gains preference as against a narrow reading of the words used. So viewed, the core purpose of Regulation 25(4) is not to clamp down disqualifications regarding elections but to lay down disciplinary forbiddance on conduct of government servants qua government servants contravention of which would invite punishment. This is a purpose oriented interpretation. [1087H, 1088A, 1090E] Dr. Hutton vs Phillips, 45 Del. 156, 160, 70A. 2d 15, 17 (1949); quoted with approval. Sarafatulla Sarkar vs Surja Kumar Mondal A.I.R. 1955 Cal. 382 (DB); Uttam Singh vs section Kripal Singh A.I.R. 1976 Punj.& Har. 176, approved. Narayanaswamy Naidu vs Krishnamurthy and Anr. I.L.R. ; explained 6. Another persuassive factor based on a broader constitutional principle supporting the semantic attribution is this : The success of a democracy to 1080 'tourniquet ' excess of authority depends on citizen participation. An inert citizenry indifferent to the political process is an 'enemy of the Republic 's vitality. Indeed, absolutism thrives on inaction of the members of the polity. Therefore activist involvement in various aspects of public affairs by as many citizens as can be persuaded to interest themselves is a sign of the health and strength of our democratic system. Local self Government and adult franchise give constitutional impetus to the citizens to take part in public administration, of course, this does not mean that where a plain conflict of interests between holding an office and taking part in the political affairs of government exists, a disqualification cannot be imposed in public interest. The rule is participation, the exception exclusion. Viewed from that angle if government servant or an employee of the L.I.C. participate in local administration or other election it may well be that he may forfeit his position as government servant or employment, if dual devotion is destructive of efficiency as employee and be subject to disciplinary action a matter which depends on a given milieu and potential public mischief. [1091C F] 7. In election law, a defeated candidate cannot claim a seat through an election petition, merely out of speculative possibilities of success. [1092B] 8. It is true that there is no common law rule applicable in this area and election statutes have to be strictly construed, but that does not doctrinally drive the Ccurt to surrender to bizarre verbalism when a different construction may inject reasonableness into the provision. Section 428 of the Corporation Act aims at sense and when a plurality of contestants are in the run other than the one whose selection is set aside predictability of the next highest becomes a misty venture. The rule in section 428 contains the corrective in such situations and the pregnant expression against whose election no cause or objection is found gives jurisdiction to the Court to deny the declaration by the next highest and to direct a fresh election when the constituency will speak. [1092C E] Pyale Saheb Gulzar Chhotumiyan Sawazi vs Dashrath Wasudeo and Ors. 1977 Mah. L.J. p. 246; approved. Sukhdev Singh vs Bhagatram, [19751 3 S.C R. 619; [1975] I SCC 421, held inapplicable. Per Tulzapurkar J. (contra) 1. The words "any law for the time being in force" occurring in Section 15(g) of the City of Nagpur Corporation Act, 1948 in the context refers to the law in force at the relevant time, that is, at the time of nomination or election when the question of disqualification or ineligibility arises for consideration. On proper construction Regulation 25(4) of the L.I C. (Staff) Regulations 1960 read with section 15(g) of the Corporation Act imposes a disqualification on or creates an ineligibility for the employees of Life Insurance Corporation to stand for election to any local authority. [1097D E] (a) In the first place the heading of the Regulation clearly shows that it deals with the topic and intends to provide a prohibition against standing for election. Secondly, cl. (4) of the said Regulation in plain and express terms provides: (No employee shall . take part in an election to any local authority"). In other words, by using negative language it puts a complete 1081 embargo subject to proviso (iii)] upon every employee from taking part in an election to any local authority. [1097F H] (b) To say That Regulation 25(4) merely creates a prohibition against standing for election but does not create any ineligibility or disqualification to stand for an election is merely to a quibble at words. There s no distinction between a legal prohibition against a person standing for election and the imposition of an ineligibility or disqualification upon him so to stand. [1097H, 1098A] (c) It is true that the purpose of framing Staff Regulations was and is to decline the terms and conditions of service of the employees of the L.I.C and that being the purpose it is but natural that a provision for imposition of penalties four breach of such Regulations would also be made therein. In fact the validity of such prohibition contained in the concerned Regulation rests upon the postulate that it prescribes a code of conduct for the employees and as such it would be within the Regulation making power conferred on the L.I.C. under section 49 of the L.I.C. Act 1956 but while prescribing a code of Conduct the Regulation simultaneously creates a disqualification or ineligibility for the employee to stand for election to any local authority. [1098A C] (d) To construe Regulation 25(4) as merely prescribing a code of conduct breach whereof is made punishable under Regulation 39 and not imposing a disqualification or. ineligibility upon the employees to stand for election to a local authority would amount to rendering a residuary provision like section 15(g) in the Corporation Act otiose. [1098C D] 3. The cases falling within the aspects emerging from Regulation ` and proviso (iii) to Regulation 25(4) are completely taken out of the prohibition contained in Regulation 25(4). Proviso (iii) to Regulation 25(4) is similar to the proviso tc. section 15 of the Corporation Act under which a disqualification under cls. (e) (f) (g) or (i) could be removed by an order of the Provincial Government in that behalf and obviously when any one of those disqualifications is removed by an order of the Provincial Government under the proviso the case would clearly be outside section 15. Tn other words the two aspects (i) that certain employees under Regulation 2 would not be governed by the Staff Regulations at all and would not therefore be hit by the prohibition and (ii) that upon permission being obtained from the Chairman under proviso (iii) the employee would be outside the prohibition have no bearing on the questions of proper construction of Regulation 25 (4). [1098E F] In the instant case the returned candidate suffered a disqualification or rather was under an ineligibility under Regulation 25(4) read with section 15 (g) of the Corporation Act 1948 which vitiated his election; if he were keen on active participation in the democratic process it was open to him to do so by either resigning his post or obtaining the Chairman 's permission before offering his candidature but his right as a citizen to keep up the Republic 's vitality by active participation in the political process cannot be secured to him by a purpose orientated construction of the relevant Regulation [1011D F] G. Narayanaswamy Naidu vs C. Krishnamurthy and Anr. I.L.R. ; explained and approved. 13 409 SCI/79 1082 Md Sarafatulla Sarkar vs Surja Kumar Mondal, A.I.R. distinguished. Uttam singh vs section Kripal Singh and Anr., A.I.R. 1976 P HELD FURTHER (Concurring) of 1978 should be dismissed. The declaration granted to the appellant by the learned Assistant Judge under section 428(2) of the Corporation Act, 1948 should never have been granted. It is true that the election petitioner secured the next highest number of votes but that by itself would not entitle him to meet a declaration in his favour that he be deemed to have been duly elected as a Councillor from Ward No. 34. [1102G H] 5. Section 428(2) is not that absolute for the relevant part of sub section (2) provides that if the election of the returned candidate is either. declared to be null and void or is set aside the District Court "shall direct that the candidate, if any, in whose favour next highest number of valid votes is recorded after the said person or after all the persons who have returned at the said election and against whose election the case or objection is found shall be deemed to have been elected". The words "against whose election no cause or objection is found" give jurisdiction to the District Court to deny the declaration to the candidate who has secured the next best votes. [1103A B] 6. The High Court has rightly taken the view that there was no material on record to show how the voters, who had voted for the returned candidate, would have Cast their votes had they known about the disqualification. [1103B C] Observation 1. Judges and lawyers always clamour for legislative simplicity and when legislative simplicity is writ large on the concerned provision and the text of the provision is unambiguous and not susceptible to dual interpretation, it. would not be permissible for a court, by indulging in nuances semantics and interpretative acrobatics to reach the opposite conclusion than is warranted by its plain text and make it plausible or justify it by spacious references to the object, purpose or scheme of the legislation or in the name of judicial activism. [1093A B] 2. Prefaces and exordial exercises, perorations and sermons as also theses almost every judgment irrespective of whether the subject or the context or language that needs simplification, have ordinarily no proper place in judicial pronouncements. In any case. day in and day out indulgence in these in almost every judgment irrespective of whether the subject or the context or the occasion demands it or not, serves little purpose, and surely such indulgence becomes indefensible when matters are to be disposed of in terms of settlement arrived at between the parties or for the sake of expounding the law while rejecting the approach to the Court at the threshold on preliminary grounds such as non maintainability laches and the like. Judicial activism in many cases is the result of legislative inactivity and the role of a Judge as a law maker has been applauded but it has been criticised also lauded when it is played within the common law tradition but criticised when it is carried to extremes. [1101F H, 1102A B] 1083 Pathak, J, (Concurring) 1. Section 15 of the Nagpur Corporation Act declares a person ineligible for election as a Councillor on any one of the several grounds. He may be ineligible because he is not a citizen of India, that is the say, he lacks in point of legal status. He may also be intelligible in point of lack of capacity defined by reference to disqualifying circumstances, for example, he may nave beer adjudged by a competent court to be of unsound mind. The disqualification 1 may be found, by nature of clause (g) under the provisions of any subsisting law. But the law must provide that he is ineligible to be a member of any local authority. The law must deal with ineligibility for membership, and in the context of section 15, that must be ineligibility for election. lt must be a law concerned with elections. Clause (g) is a residual clause. not uncommonly found wherever provision of an election law sets forth specified category of disqualified or ineligible person and thereafter includes a residual clause, leaving the definition of remaining categories of the other laws. These other laws must also be election laws. An example is the Representation of the people Act, 1951 which is relevant to Article 102(1)(e) and Article 191 (I)(e) of the Constitution. Since section 15 of the Nagpur Corporation Act is a provision of the election law, clause (g) must be so construed that the law providing for ineligibility contemplated therein must also be of the same nature, that is to say, election law. [1104G H, 1105A C] 2. Regulation 25(4) of the (Staff) Regulations is not a law, dealing with elections. Chapter III of the (Staff) Regulations, in which Regulation 25 is found, deals with 'conduct, discipline and appeals ' in regard to employees of the Life Insurance Corporation of India. A conspectus of the provision contained in the Chapter, from section 20 to SO shows that it deals with nothing else. This is a body of provisions defining and controlling the conduct of employees in order to ensure efficiency and discipline in the Corporation, and providing for penalties (Section 39) against erring employees. Regulation 25 prohibits participation in politics and standing for elections. Regulation 25(4) forbids an employee not only from taking part in an election to any legislature or local authority, but also from canvassing or otherwise interfering or using his influence, in connection with such an election. If he does, he will be guilty of a breach of discipline, punishable under Regulation 39. Regulation 25(4) is a norm of discipline. In substance it is nothing else. In substance, it is not a provision of. election law. It cannot be construed as defining a ground of electoral ineligibility. All that it says to the employee is: ' while you may be eligible for election to a legislature or local authority by virtue of your local status or capacity. you shall not exercise that right if you wish to conform to the discipline of your service." [1105D G] 3. The right to stand for election flows from the election law Regulation 25(4) does not take away or abrogate the right; it merely seeks to restrain the employee from exercising it in the interest of service discipline. If in fact the employee exercises the right, he may be punished under Regulation 39 with any of the penalties visited on an employee a penalty which takes its colour from the relevance of 'employment, and has nothing to do with the election law. No penalty under Chapter III of the (Staff) Regulations can provide for invalidating the election of an employee to a legislature or a local authority. [1105G H, 1106A] 1084 When the restraint on standing for election imposed by Regulation 25(4) has to be removed, it is by the Chairman of the Life Insurance Corporation of India under the third proviso. When he does so, it is as a superior in the hierarchy of service concerned with service discipline. He does not do so as an authority concerned with elections. Therefore Regulation 25(4) of the staff Regulations is not a law within the contemplation of Section 15(g) of the Nagpur Corporation Act. Samarth must therefore, succeed in his appeal. That being so, Marotrao must fail in his. Samarth having been duly elected to the office of Councillor Marotrao cannot claim the same office for himself. [1106A C,D] G. Narayanaswamy Naidu vs C. Krishnamurthy & Anr. ILR [1958] Mad. S 13, disapproved. Md. Sarafatulla sarkar vs Suraj Kumar Mandal, A.I.R. Uttam Singh vs section Kirpal Singh, AIR 1976 Punj. & Har. 176; approved.

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Appeal No. 542 of 1962. Appeal from the judgment and order dated April 7, 1960, of the Andhra Pradesh High Court in Tax Revision case No. 27 of 1958. Setalvad, K. Srinivasamurthy and Naunit Lal, for the appellant. A.Ranganadham Chetty and B. R. G. K. Achar, for the respondent. February 6, 1964. The Judgment of the Court was delivered by SHAH, J. With certificate of fitness granted by the High Court of Andhra Pradesh this appeal is preferred by Shree Bajrang Jute Mills Ltd. The appellant is engaged in the manufacture of jute goods, and is a registered dealer under the Madras General Sales Tax Act. For the assessment year 1954 55 the appellant submitted its return for sales tax claiming a deduction of Rs. 21,80,118 1 3 from the turnover in respect 693 of the jute goods supplied by rail to the Associated Cement Company Ltd. hereinafter for the sake of brevity called 'the A.C.C. under despatch instructions from that Company. The Commercial Tax Officer rejected the claim of the appellant for deduction and that order was confirmed in appeal to the Deputy Commissioner of Commercial Taxes. In appeal to the Sales Tax Appellate Tribunal, the order was reversed, the Tribunal holding that the appellant was entitled to exemption in respect of the turnover for the goods supplied to the A.C.C. A revision petition presented against the order to the High Court of Andhra Pradesh was heard with a large number of other petitions which raised certain common questions. The High Court reversed the order of the Tribunal and restored the order passed by the Deputy Commissioner of Commercial Taxes. The factory of the appellant is situated at Guntur. The A.C.C. owns cement factories at many places (including one at Tadepalli in the State of Andhra called the Krishna Cement Works) and for the purpose of marketing its products it requires jute packing bags. For securing a regular supply of jute bags, the A.C.C. entered into a contract with the appellant of which the following four conditions are material : "1. All the goods are sold F.O.R. Guntur unless otherwise expressly stated in this contract. Goods to be packed . well pressed and marked in. bound bales of. per each. Payments to be, made in cash, in exchange for Mills Delivery Order on sellers on due date or for Railway receipts or for Dock receipts, or for Mate 's receipts, (which Dock receipts or Mate 's receipts are to be handed by a Dock 's or Ship 's Officer to the seller 's representative). The buyers agree that the property in the goods sold shall not pass from the sellers to the buyers so long as the sellers are in possession of any bills of lading, railway receipts, dock warrants or Mate 's receipts or any other document of 694 title whether such documents are in the names of sellers or buyers, until payment is made in full. (a) The buyers agree that the risk of loss, deterioration or damage in the goods during transit whether by land or canal or sea or when the goods are in the custody of the seller or any third person in a warehouse, dock or any premises shall be borne by the buyers notwithstanding that the property in the goods does not pass to the buyers during such transit or custody." As and when the gunny bags were needed for packing its products the A.C.C. issued despatch instructions calling upon the appellant to send jute bags by railway to the cement factories of the A.C.C. outside the State of Andhra. Pursuant to those instructions the appellant loaded the goods in the railway wagons, obtained railway receipts in the name of the A.C.C. as consignee and against payment of the price, delivered the receipts to the Krishna Cement Works, Tadepalli which, it is common ground, was for the purpose of receiving the railway receipts and making pay ment, the agent of the A.C.C. It is also common ground that the jute bags were sold to the A.C.C. for the purpose of packing cement by the factories of the A.C.C. to which they were sent and not for any other purpose. The assessing authority and the Deputy Commissioner held that as the railway receipts were delivered to the agent of the buyer within the State of Andhra, and price was also realized from the agent of the buyer within the State, the goods must be deemed to have been delivered to the buyer in the State of Andhra, and the appellant was liable to pay sales tax on the price of the goods sold. With that view the High Court agreed Under the Government of India Act, 1935, the Legislatures of every Province could legislate for levying tax on sales of goods in respect of all transactions, whether the property in the goods passed within or without the Province, provided the Province had a territorial nexus with one or more elements constituting the transaction of sale : Poppat 695 Lal Shah vs The State of Madras(1) and The Tata Iron & Steel Company Ltd. vs State of Bihar(1). But this resulted in simultaneous levy of sales tax by many Provinces in respect of the same transaction each fixing upon one or more element constituting the sale, with which it had a territorial nexus. With the dual purpose of maintaining an important source of revenue to the States, and simultaneously preventing imposition of an unduly heavy burden upon the consumers by multiple taxation upon a single transaction of sale, the Constitution made a special provision imposing restrictions upon the legislative power of the States in article 286 which as originally enacted ran as follows : "(1) No law of a State shall impose, or authorise the imposition of, a tax on the sale or purchase of goods where such sale or purchase takes place (a) outside the State; or (b) in the course of the import of the goods into, or export of the goods out of, the territory of India. Explanation. For the purposes of sub clause (a) a sale or purchase shall be deemed to have taken place in the State in which the goods have actually been delivered as a direct result of such sale or purchase for the purpose of consumption in that State, notwithstanding the fact that under the general law relating to sale of goods the property in the goods has by reason of such sale or purchase passed in another State. (2) Except in so far as Parliament may by law otherwise provide, no law of a State shall impose, or authorise the imposition of, a tax on the sale or purchase of any goods where such sale or purchase takes place in the course of inter State trade or commerce : Provided that the President may by order direct that any tax on the sale or purchase of goods which (1) ; (2) ; 696 was being lawfully levied by the Government of any State immediately before the commencement of this Constitution shall, notwithstanding that the imposition of such tax is contrary to the provisions of this clause, continue to be levied until the thirty first day of March, 1951. (3) No law made by the Legislature of a State imposing, or authorising the imposition of, a tax on the sale or purchase of any such goods as have been declared by Parliament by law to be essential for the life of the community shall have effect unless it has been reserved for the consideration of the President and has received his assent." After the enactment of the Constitution, by a Presidential Order the Provincial Sales Tax Acts were made to accord with the restrictions imposed by article 286 of the Constitution. It is manifest that by article 286 the legislative authority of the States to impose taxes on sales and purchases was restricted by four limitations in respect of sales or purchases outside the State, in respect of sales or purchases in the course of imports into or exports out of India, in respect of sales or purchases which take place in the course of interState trade or commerce and in respect of sales and purchases of goods declared by Parliament to be essential for the life of the community. These limitations may overlap, but the power of the State to tax sale or purchase transactions may he exercised only if it is not hit by any of the limitations. The restrictions are cumulative. The sales in the present case are not sales, which have taken place in the course of inter State trade or commerce. The only point of contest is whether they are "outside the State ' of Andhra. It is now well settled that by article 286(1) (as it stood before it was amended by the Constitution Sixth Amendment Act, 1956) sales as a direct result of which goods were delivered in a State for consumption in such State i.e. the sales falling within the Explanation to article 286(1) were fictionally to be regarded as inside that State for the purpose of cl. (1) (a) and so within the taxing 697 power of the State in which such delivery took place and being outside all other States exempt from sales tax by those other States : Tobacco Manufacturers (India) Ltd. vs The Commissioner of Sales tax, Bihar, Patna(1): Indian Copper Corporation Ltd, The State of Bihar and others (2) and The State of Kerala and others vs The Cochin Coal Com pany Ltd.(3). But the Explanation is not exhaustive of what may be called "inside sales". Clause (1)(a) excludes from the reach of tile power of the States sales outside the State but it does not follow from the Explanation that it localises the situs of all sales. The power of the State under Entry 54 List II of the Seventh Schedule to tax sales [not falling within cls. (1)(b), (2) and (3)] which are outside the Explanation, and which may for the sake of brevity be called 4non Explanation ' sales, remains unimaired. It is not necessary for the purpose of this case to express an opinion, whether the theory of territorial nexus of ;the taxing State, with one or more elements which go to make a completed sale authorises since the promulgation of the Constitution the exercise of legislative power under Entry 54, List II of the Seventh Schedule to tax sales, where property in goods has not passed within the taxing State. The question which then falls to be determined is whether the sales to the A.C.C. by the appellant may be regarded as "non Explanation sales". There can be no doubt that if the goods were delivered pursuant to the contracts of sale outside the State of Andhra for the purpose of consumption in the State into which the goods were delivered, the State of Andhra could have no right to tax those sales by virtue of the restriction imposed by article 286(1) (a) read with the Explanation. The facts found by the taxing authorities clearly establish that property in the goods despatched by the appellant passed to the A.C.C. within the State of Andhra when the railway receipts were handed over to the agent of the A.C.C. against payment of price. The question still remains : were (1) ; (2) ; (3) ; 698 the transactions 'non Explanation sales ' i.e. falling outside the Explanation to article 286(1)? To attract the Explanation, the goods had to be actually delivered as a direct result of the sale, for the purpose of consumption in the State in which they were delivered. It is not disputed that the goods were supplied for the purpose of consumption outside the State of Andhra, and in the States in which they were supplied. It is submitted that the goods were actually delivered within the State, when the railway receipts were handed over to the agent of the buyer. But the expression "a actually delivered" in the context in which it occurs, can only mean physical delivery of the goods, or such action as puts the goods in the possession of the purchaser : it does not contemplate mere symbolical or notional delivery e.g. by entrusting the goods to a common carrier, or even delivery of documents of title like railway receipts. In C. Govindarajulu Naidu & Company vs State of Madras(1) Venkatarama Ayyar, J., dealing with the concept of actual delivery of goods, so as to attract the application of the Explanation to article 286(1) (a) rightly observed: "In the context it can mean only physical delivery and not constructive delivery such as by transfer of documents of title to the goods. The whole object of the Explanation is to give a power of taxation in respect of goods actually entering the State for the purpose of use therein and it will defeat such a purpose if notional delivery of goods as by transfer of documents of title to the goods within the State is held to give the State a power to tax, when the good are actually delivered in another State. " A similar view has been expressed in two other cases M/s. Capco Ltd. vs The Sales Tax Officer and another (2 ) and Khaitan Minerals vs Sales Tax Appellate Tribunal for Mysore (3). (1) A.I.R. 1953 Mad. (3) A.I.R. (2) A.I.R. 1960 AM. 699 Counsel for the respondent State relied upon section 39ofthe Indian , which provides inso far as it is material, by the first sub section that where,in pursuance of a contract of sale, the seller is authorisedto send the goods to the buyer, delivery of the goods toa carrier, for the purpose of transmission to the buyer, is prima facie deemed to be delivery of the goods to the buyer. But that provision will not make mere delivery of the railway receipts representing title to the goods, actual delivery of goods for the purpose of article 286. The rule contained in section 39(1) of the Indian raises a prima facie inference that the goods have been delivered if the conditions prescribed thereby are satisfied: it has no application in dealing with a constitutional provision which while imposing a restriction upon the legislative power of the States entrusts exclusive power to levy sales tax to the State in which the goods have been actually delivered for the purpose of consumption. The High Court was therefore in error in inferring from the fact that the property had passed within the State of Andhra against delivery of the railway receipts, that the goods were actually delivered within the State. If the inference raised by the High Court that the goods were actually delivered within the State of Andhra cannot be accepted, on the facts found there is no escape from the conclusion that the State of Andhra had no authority to levy tax in respect of those sale transactions in which the goods were sent under railway receipts to places outside the State of Andhra and actually delivered for the purpose of consumption in those States. The appeal must therefore be allowed. The order of the High Court is set aside and the order of the Appellate Tribunal is restored. The appellant to get its costs in this Court and the High Court from the respondent State.

The appellant, carrying on business as a manufacturer of jute goods with its factory at Guntur, used to send jute bags by railway to the cement factories of the A.C.C. outside the State of Andhra. For securing a regular supply of jute bags, the A.C.C. entered into a contract with the appellant and under the despatch instructions from that company, the appellant loaded the goods in the railway wagons, obtained railway receipts in the name of the A.C.C. as consignee and against payment of the price, delivered the receipts to the Krishna Cement Works, Tadepalli, which was for the purpose of receiving the railway receipt and making payment, the agent of the A.C.C. From the amounts shown as gross turnover in the return for the assessment year 1954 55, the appellant claimed reduction of certain amounts in respect of the goods supplied by rail to the A.C.C. outside the State of Andhra Pradesh under its despatch instructions. The Commercial Tax Officer and the Deputy Commissioner of Commercial Taxes disallowed the claim and held that as the railway receipts were delivered to the agent of the buyer within the State of Andhra, and price was also realized from the agent of the buyer within the State, goods must be deemed to have been delivered to the buyer in the State of Andhra Pradesh, and the appellant was liable to pay tax on the sales. On appeal, this order was reversed by the Appellate Tribunal. In revision the High Court restored the order of the Deputy Commissioner of Commercial Taxes. The question for determination in this appeal was whether the sales to the A.C.C. by the appellant may be regarded as "non Explanation sales", i.e. falling outside the Explanation to article 286(1). Held:(i) If the goods were delivered pursuant to the contracts of sale outside the State of Andhra for the purpose of consumption in the State into which the goods were delivered, the State of Andhra could have no right to tax those sales by virtue of the restriction imposed by article 286(1)(a) read with Explanation. To attract the Explanation, the goods had to be actually delivered as a direct result of the sale, for the purpose of consumption in the State in which they were delivered. The expression "actually delivered ' in the context in which it occurs, can only mean physical delivery of 692 the goods, or such action as puts the goods in the possession of the purchaser; it does not contemplate mere symbolical or notional delivery. C.Govindarajulu Naidu & Co. vs State of Madras, A.I.R. 1953 Mad. 116, M/s. Capco Ltd. vs Sales Tax Officer, A.I.R. 1960 All. 62 and Khaitan Minerals vs Sales Tax Appellate Tribunal for Mysore, A.I.R. followed. Poppat Lal Shah vs State of Madras, ; , Tata Iron & Steel Co. Ltd. vs State of Bihar, ; , Tobacco Manufacturers(India) Ltd. vs Commissioner of Sales Tax, Bihar, [1961] 2 S.C.R.106, Indian Copper Corporation Ltd. vs State of Bihar, [1961] 2 S.C.R.276 and State of Kerala vs Cochin Coal Co. Ltd., [1961] 2 S.C.R. 219, referred to. (ii)Section 39 of the Indian will not make mere delivery of the railway receipts representing title to the goods, actual delivery of goods for the purpose of article 286. The rule contained is section 39(1) has no application in dealing with a constitutional provision which while imposing a restriction upon the legislative power of the States entrusts exclusive power to levy sales tax to the State in which the goods, have been actually delivered for the purpose of consumption.

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Appeal No. 507 of 1957. Appeal by special leave from the order and judgment dated September 28, 1955, and February 20, 1956, of the Bombay High Court in Income tax Reference No. 28 of 1955. R.J. Kolah and I. N. Shroff, for the appellant. C. K. Daphtary, Solicitor General of India,B. Ganapathy lyer and D. Gupta, for the respondent. March 30. The Judgment of the Court was delivered by HIDAYATULLAH, J. This is an appeal with the special leave of this Court, and is directed against an order dated September 28, 1955, and a judgment dated February 20, 1956, of the High Court of Bombay. By the order, the High Court reframed a question referred to it by the Appellate Tribunal at Bombay, which it answered by its judgment. Mrs. Kusumben D. Mahadevia (hereinafter referred to as the assessee) who has filed this appeal, was, at all material times, residing in Bombay. She was a shareholder, holding 760 shares of Mafatlal Gagalbhai & Co., Ltd., Bombay. For the assessment year 1950 51 (the previous year being the calendar year 1949), she was assessed to income tax on a total income of Rs. 1,50,765 which included a grossed up dividend income of Rs. 1,47,026. In the latter income was included a sum of Rs. 47,120 being the dividends declared by Mafatlal Gagalbhai & Co., Ltd., Bombay. Mafatlal Gagalbhai & Co., Ltd., is a private limited Company with its registered office at Bombay. It was, at all material times, 'resident and ordinarily resident ' in British India. It was also doing business in the former Baroda State, and used to keep its profits derived in that State with Mafatlal Gagalbhai Investment Corporation, Navsari. In the year 1949 Mafatlal Gagalbhai & Co., Ltd., declared dividends out of these accumulated profits by three resolutions, which are reproduced: 25 3 1949. " That a further dividend of Rs. 17 per ordinary share free of income tax for the year 1947 be and is hereby declared absorbing Rs. 4,29,250 419 and the same be payable in Navsari out of the profits of the year 1947 lying at Navsari." 24 9 1949. " That a further dividend of Rs. 24 per ordinary share free of income tax for the year 1948 be and is hereby declared absorbing Rs. 6,06,000 and the same be payable in Navsari out of the profits of the year 1948 lying at Navsari with Messrs. M.G. Investment Corporation Ltd. on or after 30th April, 1949. " 24 9 1949. " Resolved that an Ad interim dividend of Rs. 21 per ordinary share free of income tax absorbing Rs. 5,30,250 be and is hereby declared for the year 1949 out of the income of the Company for the year 1949 remaining unbrought with Messrs. M. G. Investment Corporation Ltd., Navsari, and that the same be payable in Navsari on or after 30th April, 1949. " The assessee did not bring these dividends into British India. She claimed the benefit of para. 4 of the Merged States (Taxation Concessions) Order, 1949 (hereinafter referred to briefly as the Concessions Order); but the Tribunal held that the income did not accrue to her in the Baroda State. The Tribunal pointed out that the dividends were declared by Mafatlal Gagalbhai & Co., Ltd., out of its profits which had accrued partly in, what was then called, British India and partly in the Indian State. The dividend was thus declared out of ' composite profits '. It further pointed out that the assessee had paid for and acquired the shares of a Company in British India and was thus holding an asset in British India, and that the income was from that asset. The Tribunal, however, at the instance of the assessee drew up a statement of the case under section 66(1) of the Indian Income tax Act, and referred the following question to the High Court: " Whether the net dividend income of Rs. 47,120 accrued to the assessee in the former Baroda State, or whether it is income accrued or deemed to have accrued to the assessee in British India ?" When the reference was heard, the High Court was of the opinion that the Tribunal ought to have decided and referred also the question whether the Concessions 420 Order applied to the assessee. The High Court recognised the grievance of the assessee that no such point was raised before the Tribunal. The High Court, however, by its order dated September 28, 1955, decided that there was no need to send the case back for a supplemental statement, since all the facts necessary to decide the two questions were before the High Court. The High Court then reframed the question, as it said, to comprehend the two points of law in the following words: " Whether the assessee is entitled to any concession under the Merged States (Taxation Concessions) Order, 1949, with regard to the net dividend income of Rs. 47,120?" The reference then came up for final disposal on February 20, 1956, and the High Court answered the question in the negative, holding that para. 4 of the Concessions Order did not apply to the assessee. The High Court did not decide where the income had accrued to the assessee. Leave to appeal to this Court was refused by the High Court, but the assessee applied to this Court for special leave against both the order and the judgment and obtained it, and the present appeal has been filed. At the very outset, the assessee has questioned the jurisdiction of the High Court to frame and deal with a question of law not arising out of the order of the Tribunal. The assessee points out that the Tribunal had decided that the income had accrued in British India. The assessee had challenged this part of the decision, and if the Commissioner felt it necessary, he should have obtained the decision of the Tribunal and asked for a reference on the other point also. Since the Tribunal had not gone into the question of the applicability to the assessee of the Concessions Order and had not expressed any opinion thereon, the assessee contends that the High Court could not raise the question on its own, and decide it. The assessee strongly relies upon a decision of this Court in New Jehangir Vakil Mills Ltd. vs Commissioner of Incometax (1). In that case, the Bombay High Court had (1) 421 directed the Tribunal to submit a supplementary statement of the case on points not arising from the order of the Tribunal, and this Court held that the High Court had no jurisdiction to do so. The learned counsel for the Commissioner, on the other hand, contends that the question was the assessability of the assessee, who claimed the benefit of the Concessions Order. The main question was thus the applicability of the Concessions Order, and the question of the accrual of the income, whether in British India or in Baroda, was merely ancillary. The latter question was, according to the respondent, included in the first question, and the High Court was right when it framed a comprehensive question and answered it in the sequence it did. The respondent points out that the High Court having held that the Concessions Order did not apply, was not required to decide the other limb of the question, as it became unnecessary to do so. In our opinion, the objection of the assessee is well founded. The Tribunal did not address itself to the question whether the Concessions Order applied to the assessee. It decided the question of assessability on the short ground that the income had not arisen in Baroda but in British India. That aspect of the matter has not been touched by the Bombay High Court. The latter has, on the other hand, considered whether the Concessions Order applies to the assessee, a matter not touched by the Tribunal. Thus, though the result is the same so far as the assessment is concerned, the grounds of decision are entirely different. The High Court felt that the question framed by it comprehended both the aspects and, perhaps it did. But the two matters were neither co extensive, nor was the one included in the other. The question of accrual of income has to be decided under the Incometax Act, and has but little to do with the Concessions Order. That question can be adequately decided on the facts of this case without advertence to the Concessions Order. It cannot, therefore, be said to be either coextensive with or included in the decision of the question actually considered by the High Court to wit, whether the Concessions Order applied or not. If this 54 422 be so, it is manifest that the Tribunal decided something which stands completely outside the decision of the Bombay High Court. The High Court also decided a matter which was not considered by the Tribunal even as a step in the decision of the point actually decided. The two decisions are thus strangers to each other, though they lead to the same result. Section 66 of the Income tax Act which confers jurisdiction upon the High Court only permits a reference of a question of law arising out of the order of the Tribunal. It does not confer jurisdiction on the High Court to decide a different question of law Dot arising out of such order. It is possible that the same question of law may involve different approaches for its solution, and the High Court may amplify the question to take in all the approaches. But the question must still be one which was before the Tribunal and was decided by it. It must not be an entirely different question which the Tribunal never considered. The respondent attempted to justify the action taken by contending that the decision of the question of the accrual of the income with reference to the place of accrual implied the applicability of the Concessions Order. We do not agree. If this were so, there would be no necessity to frame the question again. Indeed, the High Court itself felt that there were two limbs of the question of assessability, and reframed the question to cover both the limbs. Where the High Court went wrong was in not deciding both the limbs but one of them and that too, the one not decided by the Tribunal. The resulting position can be summed up by saying that the High Court decided something which the Tribunal did not, and the Tribunal decided something which the High Court did not. This is clearly against the provisions of section 66. The respondent referred to Scindia Steam Navigation Co. Ltd. vs Commissioner of Income tax (1), Commissioner of Income tax vs Breach Candy Swimming Bath Trust (2 ) and Ismailia Grain Merchants Association vs Commissioner of Income tax (3). They (1) (2) (3) 423 were all decisions of the same Court, and arose in different circumstances. In two of them, the question was wide enough to take in a line of reasoning not adopted by the Tribunal, and in the third, the question was widened by deleting a reference to a section, when another section was also material. They were not cases where the issues of law as decided by the Tribunal and the High Court were entirely different, which is the case here. The Punjab High Court has taken a contrary view in Mash Trading Co. vs Com missioner of Income tax (1). For the reasons given above, we are of opinion that the High Court exceeded its jurisdiction in going outside the point of law decided by the Tribunal and deciding a different point of law. The order of the High Court will, therefore, be set aside, and the case will be remitted to the High Court to decide the question framed by the Tribunal. In view of the fact that both the assessee and the Commissioner pointed out the anomaly to the : High Court and the question was reframed in spite of this, the costs of this appeal shall be costs in the reference to. be heard by the High Court, and will abide the result. Appeal allowed. Case remitted.

The appellant was a shareholder of a company known as Mafatlal Gagalbhai and Co., Ltd. The Company with its registered office at Bombay was at all material times resident in British India. It was also doing business in the former Baroda State and used to keep its profits derived in that State with Mafatlal Gagalbhai Investment Corporation, Navsari. In the year 1949 Mafatlal Gagalbhai and Co. Ltd. declared dividends out of profits which had accrued partly in British India and partly in the Indian State. The appellant was assessed to income tax on the dividends earned by her. She did not bring those dividends into British India and claimed the benefit of para. 4 of the Merged States (Taxation Concessions) Order. The Tribunal held that the income did not accrue to the appellant in the Baroda State but it did not decide the question whether she was entitled to the benefits of the Taxation Concessions Order. The High Court on a reference to it held that para. 4 of the Taxation Concessions Order. did not apply to the assessee but it did not decide the other question as to where the income had accrued to the assessee. On appeal by special leave the appellant contended, inter alia, that since the Tribunal had not gone into the question of the applicability to the assessee of the Concessions Order and had not expressed any opinion thereon, the High Court could not raise the question on its own and decide it: Held, that the High Court exceeded its jurisdiction in going outside the point of law decided by the Tribunal and deciding a different point of law. Section 66 of the Income tax Act which confers jurisdiction upon the High Court only permits a reference of a question of law arising out of the order of the Tribunal. It does not confer jurisdiction on the High Court to decide a different question of law not arising out of such order. New Jehangir Vakil Mills Ltd. vs Commissioner of Income tax, , Scindia Steam Navigation Co. Ltd. vs Commissioner of Income tax, , Commissioner of Incometax vs Breach Candy Swimming Bath Trust, and Ismailia Grain Merchants Association vs Commissioner of Incometax, [1957] 31 I.T.R. 433, distinguished. Mash Trading Co. vs Commissioner of Income tax, , considered.

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o. 296 of 1951. Appeal against the Judgment and Order dated the 16th January, 1951, of the High Court of Judicature for the State of Rajasthan at Jodhpur (Nawal Kishore and Kanwar Lal Bapna JJ.) in D. B. Civil Miscellaneous Case No. 15 of 1950. M. C. Setalvad, Attorney General for India (G. N. Joshi, with him) for the appellant. N.C. Chatterjee, Senior Advocate (G. L. Agarwal, with him) for the respondent. December 16. The Judgment of the Court was delivered by PATANJALI SASTRI C. J. This is an appeal from an order of the High Court of Rajasthan directing by writ issued under article 226 of the Constitution that the Union of India, appellant herein, should not levy income tax on the income of the respondent accruing, arising or received in Rajasthan (excluding the area of the former covenanting State of Bundi) prior to April 1, 1950. The respondent resides and carries on business in the District of Jodhpur in Rajasthan which is one of the States specified in Part B of the First Schedule to the Constitution (hereinafter referred to as Part B States). In May, 1950, the respondent was required to file a return of his income for the previous year, that is the year ending March 31, 1950, for assessment to income tax, and subsequently was also asked to produce the relevant account books before the Income tax Officer, Jodhpur, on August 11, 1950. Thereupon the respondent presented the petition, out of which this appeal arises, on August 23, 1950, invoking the, jurisdiction of the High Court under article 226 of the Constitution for the issue of "a writ of mandamus or certiorari or other appropriate writ"directing the appellant not to take a any action under the Indian Income tax Act, 1922, (hereinafter referred to as the Indian Act) as amended by the Indian Finance Act, 1950, for the assessment or levy 544 of income tax on the income which accrued or arose to the respondent or was received by him prior to April 1, 1950, on the ground that such income was not liable to be charged "under the provisions of any law validly in force in Rajasthan. " The petition was heard by a Division Bench of the High Court (Nawal Kishore and Kanwarlal Bapna JJ.) who accepted the petition and issued a writ as already stated, overruling sundry preliminary objections to which no reference need be made as they have not been raised by the appellant before us. As is well known, after the Indian Independence Act, 1947, came into force, various Indian States (as they were then known) which had been recognised, subject to certain restrictions and limitations not material here, as independent principalities were brought into the Dominion of India from, time to time under arrangements with their Rulers, and this process of accession and integration . resulted in the expansion of the territory of India in successive stages. So far as Rajasthan is concerned, the Rajaputana States, as they were then called, integrated their territories into the United State of Rajasthan, and the new State acceded to the Dominion of India by an Instrument of Accession executed by the head of the State (Rajpramukh) on April 15, 1949, and accepted by the Governor General of India on May 12, 1949. By clause (3) of the Instrument the Rajpramukh accepted "all matters enumerated in Lists I and III of the Seventh Schedule to the Act (the Government of India Act, 1935) as matters in respect of which the ]Dominion Legislature may make laws for the United State, provided that nothing contained in the said Lists or in any other provisions of the Act shall be deemed to empower the Dominion Legislature to impose any tax or duty in the territories of the United State or prohibit the imposition of any duty or tax by the Legislature of the United State in the said territories.": This limitation on the power of the Dominion Legislature thus imposed by agreement between the two States was given effect to as a 545 constitutional limitation by section 101 of the Government of India Act, 1935, as adapted by the Governor General in August, 1949, in exercise of the powers conferred on him by the Indian Independence Act, 1947. That section provided that "nothing in this Act shall be co nstrued as empowering the Dominion Legislature to make laws for an acceding State otherwise than in accordance with the Instrument of Accession of that State and any limitations contained therein. " The position thus was that the Dominion Legislature had no power to make any law imposing any tax or duty in the territories of the United State of Rajasthan. In July, 1949, however, the. Indian States Finances Enquiry Committee appointed by the Government of India submitted their report recommending, among other things, the financial integration of the acceding States and the imposition of the Indian income tax in their territories as from the first day of April, 1950. Meanwhile the framing of the Constitution of India by the Constituent Assembly, which also included duly appointed representatives of the acceding States, was Hearing completion, and in November, 1949, the Rajpramukh, in exercise of his powers as the duly constituted head of the State, issued a Proclamation whereby he declared and directed that the "Constitution of India shortly to be adopted by the Constituent Assembly of India shall be the Constitution for the Rajasthan State as for the other parts of India, and shall be enforced as such in accordance with the tenor of its provisions and that the provisions of the said Constitution shall, as from the date of its commencement, supersede and abrogate all other constitutional provisions inconsistent therewith which are at present in force in this State. " The Constitution of India then came into force on January 26, 1950. It repealed the Government of India Act, 1935, including section 101 thereof, and brought all the Part B States, including Rajasthan, within the Union of India, incorporating the territories of all those States in the "territory of India" as defined in article 1 (2). It created a new Central 546 Legislature for the Union called Parliament and empowered that Legislature by article 245 "to make laws for the whole or any part of the territory of India" subject to the provisions of the Constitution and, by article 246 (1) read with entry No. 82 of List 1, it conferred "exclusive power" to make laws with respect to"taxes on income other than agricultural income". In exercise of that power and pursuant to there commendation of the Indian States Finances Enquiry Committee referred to above, Parliament enacted the Finance Act, 1950 (Act XXV of 1950) providing by section 2 (1) that income tax and super tax shall be charged "for the year beginning on the first day of April, 1950," (i.e., 1950 51) at the rates specified in Parts I and 11 respectively of the First Schedule to that Act. Section 3 made certain amend ments in the Indian Act "with effect from the first day of April, 1950. " Among these was the substitution of the present clause (14 A) in section 2 in the place of clause (14 A) as it stood before. The new clause defines " taxable territories " as respects different periods so as to correspond to the successive stages of expansion of the territory of India after the Indian Independence Act, 1947. The material part of that clause as amended runs thus: (14 A) I taxable territories ' means . (a). . (b). . (c). (d)as respects any period after the 31st day of March, 1950, and before the 13th day of April, 1950, the territory of India excluding the State of Jammu and Kashmir and the Patiala and East Punjab States Union, and (e) as respect any period after the 12th day of April, 1950, the territory of India excluding the State of Jammu and Kashmir: Provided that the taxable territories shall be deem ed to include (a). 547 (b)the whole of the territory of India excluding the State of Jammu and Kashmir (i) as respects any period, for the purposes of sections4 A and 4 B, (ii) as respects any period after the 31st day of March, 1950, for any of the purposes of this Act, and (iii)as respects any period included in the previous yearfor the.purpose of making any assessment of the yearending on the 31st day of March, 1951, or for any subsequent year. " The definition, it may be observed in passing, is by no means a model of perspicuity. Parts of it seem redundant and even mutually contradictory. For instance, (leaving out the State of Jammu and Kashmir altogether in this discussion) whereas clause (d) excludes the Patiala and the East Punjab States Union from the taxable territories as respects the period from April 1, 1950, to April 12, 1950, subclause (ii) of clause (b) of the proviso would seem to include that State also within such territories as respects the same period, and while clauses (d) and (e) of the substantive part of the definition when read together seem apt by themselves to bring the territory of India within the taxable territories as respects the period after March 31, 1950, sub clause (ii) of clause (b) of the proviso apparently seeks to bring about the same result by means of a fiction. Now, the scheme of the Indian Act is to tax a person resident in the taxable territories during the previous year on all his income of the previous year whether accruing within or without the taxable territories, and to tax a person not resident in the taxable territories upon his income accruing within the taxable territories during the previous year. Residence in the taxable territories has to be determined in accordance with the provisions of section 4 A which, in the case of an individual, takes into account his having been in such territories within the five years preceding the year of assessment. If Rajasthan was a taxable territory in the year 1949 50, the respondent would be chargeable in 72 548 respect of his income whether derived within or without .Rajasthan. It is, however, argued on his behalf by Mr. Chatterjee that section 3 of the Finance Act, 1950, having substituted the amended clause .(14 A) " with effect from the first day of April, 1950," Rajasthan was not a taxable territory during the accounting year 1949 50, and that no income tax being admittedly leviable in that State on the income accruing there in that year, the new clause (14 A) should not be construed so as to impose liability to pay Indian incometax on such income. According to learned counsel the word "assessment" in sub clause (iii) of clause (b) of the proviso must be taken to mean only computation of income and not the imposition of liability. In support of the construction he relied on the decision of the Privy Council in Commissioner of Income tax, Bombay vs Khemchand Ramdas(1) where it was said that the word "assessment" was used in the Indian Income tax Act as meaning "sometimes the computation of income, sometimes the determination of tax payable and sometimes the whole procedure laid down in the Act for imposing liability on the taxpayer." Mr. Chatterjee reinforced the argument by referring to the repealing and saving provisions of section 13 which he read as keeping alive a State law of incometax in.force in any Part B State "for the purposes of levy, assessment and collection of tax" not only in respect of the income of the year 1948 49 but also on the income of,1949 50 which is the previous year for assessment for the year ending March 31, 1951 (i.e., 1950 51). The result, therefore, according to him, was that where any State law of income tax was in force in any Part B State before April 1, 1950, so as to make the income of 1949 50 chargeable to tax, the amended clause (14 A) authorised the computation of such income for the purpose of taxation as, for example, in the State of Bundi. But where, as in the rest of the territory of Rajasthan, no income tax was leviable on the income of the year 1949 50, the amendment by the Finance Act, 1950, which took effect only from April 1, 1950, did not, on its true construction, bring (1) I.L.R. 549 the income of the year 1949 50 into charge under the Indian Act. This argument found favour with the learned Judges in the High Court but we are unable to accept it. A short answer to it is provided by sub clause (i) of clause (b) of the proviso under which the whole of the territory of India including Rajasthan is to be deemed taxable territory for the purpose of section 4 A of the Indian Act "as respects any period. " The words "any period" cannot be taken to mean "any period after March 31, 1950," for the period referred to in the next clause is expressly limited in that sense. ' Those limiting words cannot be read into sub clause (i) which must, therefore, be understood as referring to any period before or after March 31, 1950. As already indicated, residence in the taxable territories within the meaning of section 4 A can, in some cases, relate back to as many as five years before the year of assessment, and that is obviously the reason why the period mentioned in sub claure (i) is not limited as in sub clause (iii) of clause (b) of the proviso. Indeed, if the words "any period" id sub clause (i) were intended to mean any period after March 31, 1950, that sub clause of the proviso which enacts a fiction, would be wholly unnecessary, for clauses (d) and (e) of the substantive part of the definition taken together clearly have the effect, as already stated, of making the territory of India a taxable territory , during that period. If Rajasthan was thus a part of the taxable territories during such period preceding the assessment year, 1950 51, as would be necessary to make the respondent "resident" in such territories within the meaning of section 4 A, then the income accruing or. arising, to him in Rajasthan during the year 1949 50 would be taxable though, Rajasthan was not part of the taxable territories in that year, for, in the case of a person resident in the taxable territories, income accruing or arising to him without the taxable territories is also chargeable to tax under section 4, sub section (1) clause @b) sub clause.(ii) of the Indian Act. This aspect of the matter does not appear to have been sufficiently 550 appreciated in the court below. The learned Judges say: "The first clause in proviso (b) means to say that the earlier residence in Part B States will be taken to be residence in taxable territories while taking account of the residence for a certain prior period." Having thus correctly construed the clause, they failed to realise its effect on the operation of section 4 (1) (b) (ii), for they proceeded to consider the construction of proviso (b) (iii) observing: "The next important question calling for determination is whether Rajasthan became taxable territory during the financial year in this case, i.e., 1949 50, for, if the answer is in the negative, the petitioner must be held to be ' Immune from liability to assessment on the income of that year. " This, as pointed out above, is a misconception. It may well be that proviso (b) (iii) was designed to bring the income,, profits and gains of the year 1949 50 into charge under section 4 (1) (a) and section 4(1) (c), in which cases receipt or accrual, as the case may be,, in the taxable territories is the test of chargeability. it may be mentioned here that the exemption from tax under section 14 (2) (c) of the Indian Act of income accruing within Part B States was abrogated, except as regards the State of Jammu and Kashmir, by the amendment of that provision with effect from the first day of April, 1950. Even assuming it were necessary for the Revenue to bring the case within proviso (b) (iii) in order to sustain the charge on the respondent 's income accruing in Rajasthan during the year 1949 50, we are of opinion that the construction, placed by the learned Judges on that clause cannot be supported. They assume that proviso (b) (iii) is a provision authorising assessment of income tax, and proceed to discuss what the word " 'assessment" in that context should be taken to mean. Charge of income to tax and its computation are matters governed by other provisions of the Indian Act. All that section 2 (14 A) does is to define what the expression "taxable territories" means in certain cases and for certain purposes wherever that expression is used in the various provisions of the Indian Act. 551 And as the expression is used in the charging section 4 in connection with the conditions which are to determine liability to tax, sub clause (iii) of clause (b) of the definition must, when read with section 4 of the Indian Act, have reference to chargeability of income. The result is that sections 3 and 4 of the Indian Act read in the light of the definition in proviso (b) to the amended section 2 (14 A) and section 2 of the Indian Finance Act, 1950, authorise the imposition of the Indian income tax and super tax on the income derived 'by the respondent in they are 1949 50 in the territory of Rajasthan. As already observed, the learned Judges below, in order to reinforce their construction of sub clause (iii) of clause (b) of the proviso, read section 13 of the Finance Act as keeping alive the law of income tax in force in any Part B State for purposes of levy, assessment, and collection of tax in respect of the income of 1949 50. This, in our opinion, is not the effect of section 13 on its true construction. After referring to the decision of the Privy Council to which reference has been made, the learned Judges say "There are three stages in connection with the imposition of a tax. The first is the declaration of liability, the second is the assessment and the third is the collection. This clause makes the territory a taxable territory for the purpose of making any assessment but not for the purpose of chargeability. The chargeability is left to arise by some other law and that law is the previous State law referred to in section 13, Finance Act, 1950. It arises in a twofold manner. In the first place, under section 6 of the General Clauses Act the repeal of the State law as from April 1, 1950 did not affect any liability incurred under the repealed enactment and secondly, though the language used in section 13 is very complicated, a careful perusal makes it clear that the State law is not only kept alive for the purpose of levy, assessment and collection of, incometax the income of the year 1949 50, but also for the above purposes in the subsequent year. The previous year. in relation to the, subsequent year 1951 52 is the 552 year 1950 51 and the period not included therein would be the year 1949 50 and the State law is directed to apply if the income remains untaxed under the Indian law. . Therefore if somebody is liable to income tax in any territory where such law was in force prior to April 1, 1950, but certain period has not been included while assessing him to income tax but the chargeability existed, the proviso (b) (iii) would become applicable for such period as he was not charged but the liability had accrued, and the territory would become taxable territory for the purpose of making any assessment of the year 1950 51. It will be seen that the basis on which this reasoning proceeds is that section 13 of the Finance Act, 1950, ,saves the operation of the States laws relating to income tax in Part B States in the year 1949 50 for the purpose of levy, assessment and collection, and it is those laws that imposed the liability to tax on the income accruing in those States during that, year. This is a misapprehension of the true meaning and effect of section l3. That section, so far as it is material here, runs thus: "Repeal and savings. (1) If immediately before the 1st day of April, 1950, there is in force in any Part B State other than Jammu and Kashmir or in Manipur, Tripura or Vindhya Pradesh or in the merged territory of Cooch Behar any law relating to income tax or supertax or tax on profits of business, that law shall cease to have effect except for the purposes of the levy, assessment and collection of income tax and super tax in respect of any period not included in the previous year for the purposes of assessment under the Indian Income tax Act,, 1922, for, the year ending on the 31st day of March, 1951, or, for any subsequent year. . .A close reading of that provision will show that it saves the operaton of the State law only in respect of 1948 49 or any earlier period 'which is the period not included in the previous year (1949 50) for the purposes of asessment for the year 1950 51. In other words, there remained no State law of income tax in operation, in any Part B State in the year 1949 50, No doubt, 553 there is the phrase "or for any subsequent year" immediately following the words "for the year ending on the 31st day of March, 1951. " Relying on that phrase, the learned Judges argue thus : Take the "subsequent year" 1951 52. The previous year for making an assessment for that year would 'be 1950 51. The year 1949 50 "is a period not included" in that previous year. Therefore, section 13 saves the operation of any law relating to income tax in force in any Part B State in 1949 50 "for the purposes of the levy, assessment and collection of income tax and super tax in respect of that period," that is to say, the income accruing in 1949 50 in a Part B State continues to be chargeable under the State law. But the learned Judges failed to see that, on this reasoning, the same thing could be said of the income of 1950 51, 1951 52, etc. if you take the "subsequent year" to be 1952 53, 1953 54, etc. and work backwards. On this construction of section 13, the State law of income tax would continue to operate for an indefinite period even after the commencement of the Constitution during which period the Indian income tax and super tax would be leviable. In other words, the State law of income tax in Part B States for the levy, assessment and collection would be in operation side by side with the Indian Act even after the financial integration of those States with the Indian Union a result manifestly repugnant to the policy underlying the Finance Act, 1950. No argument, therefore, could be logically based on the words "or for any subsequent period", which evidently were added with a view to catch the income of any broken. period prior to April 1, 1950, which might otherwise escape assessment both under the repealed. State law and the newly introduced Indian Act. Nor can section 6 of the General Clauses. Act, 1897, serve to keep alive the liability to pay tax on the income of the year 1949 50 assuming it to have accrued under the repealed State law, for a "different intention" clearly appears in sections 2 and 13 of the Finance Act read together as indicated above. In any case no question of keeping any such liability alive could arise in the present case as admittedly no State law of 554 income tax was in operation in the territory of Rajasthan, except the former State of Bundi. On this view the whole basis of the reasoning of the learned Judges below falls to the ground. Even so, it was contended, the Finance Act, 1950, in so far as it purports to authorise such levy is ultra vires and void as Parliament was not competent under the Constitution to make such a law. The argument was put in two ways. In the first place, it was said broadly that as the Constitution could not operate retrospectively as held by this court in Kesava Madhava Menon 's case(1), the power of legislation conferred by the Constitution upon Parliament could not extend so as to charge retrospectively the income accruing a prior to the commencement of the Constitu is a fallacy. While it is true that the tion. This Constitution has no retrospective operation, except where a different intention clearly appears, it is not correct 'to say that in bringing into existence new Legislatures and conferring on them, certain powers of legislation, the Constitution operated retrospectively. The legislative powers conferred upon Parliament under article 245 an article 246 read with List I of the Seventh Schedule could obviously be exercised only after the Constitution came into force and no retro spective operation of the Constitution is involved in the conferment of those powers. But it is a different thing to say that Parliament in exercising the powers thus acquired is precluded from making a retroactive law. The question must depend upon the scope of the powers conferred, and that must be determined with reference by which, affirmatively, to the "terms of the instrument the legislative powers were created and by which, negatively, ' they were restricted": [Queen vs Burah (2)]. Article 245 of the Constitution enacts that subject to its provisions Parliament may make laws for the whole or any part of the territory of India and article 246 proceeds to distribute legislative powers as between Parliament and the State Legislatures in the (1) ; (2) 51.A. 178, 555 country. Thus, these articles read with entry No. 82 of List I of the Seventh Schedule empower Parliament to make laws with respect to taxes on income for the whole of the territory of India, and no limitation or restriction is imposed in regard to retroactive legislation. It is, therefore, competent for Parliament to. make a law imposing a tax on the income of any year prior to the commencement of the Constitution. It was said, however, that the line of decisions like, Queen vs Burah(1), which defined the powers of legislatures created by the British Parliament, could have no application to the Union Parliament which came into life as a new legislature on the commencement of the Indian Constitution. It could not be assumed that such a legislature had the power of making a law having retrospective operation in relation to a perio prior to its birth unless the Constitution itself clearly and explicitly conferred such power. In support of this argument certain observations of one of the Judges in an Australian case [Exparte Walsh and Johnson ; In re Yates(2)] were relied on. We are unable to accept the argument. Our Constitution, as appears from the Preamble, derives its authority from the people of India, and learned counsel conceded that it was open to the people to confer on the legislatures established by the Constitution, which they framed through their representatives, power to make laws having operation in relation to periods prior to the commencement of the Constitution. But, it was insisted, such a power should be given in clearly expressed terms. There is, however, no question here of the Constitution operating retrospectively in bringing into existence the Union Parliament or the legislatures of the States. The only question is 'What powers have been conferred upon these legislatures by the representatives of the people who framed the Constitution and, in determining that issue, the principles laid down in cases. like Queen vs Burah (1) apply in full foree. The observations in the Australian case, to which reference has been made, seem to us (1) 5 I.A. 178. (2) ; , at pp 80, 81, 73 556 to go too far and cannot be accepted as sound constitutional doctrine. Nor can it be said, in strictness, that the Finance Act, 1950, is retroactive legislation. That Act, as already noticed, purports by section 2 to charge income tax and super tax at specified rates "for the year beginning on the last day of April, 1950". The case,is thus one where the statute purports to operate only prospectively, but such operation has, under the scheme of the Indian income tax law, to take into account income earned before the statute came into force. Such an enactment cannot, strictly speaking, be said to be retroactive legislation, though its operation may affect acts done in the past. Dealing with a statute authorising the removal of destitute widows from a parish, it was observed in an English case [Queen vs St. Mary, Whitechapel(1) 1: "It was said that the operation of the statute is confined to persons who have become widows after the Act was passed and that the presumption against a retrospective statute being intended supported this construction. But we have before shown that the statute is in its direct operation prospective as it relates to future removals only and that it is not properly called a retrospective statute because a part of the requisites for its action is drawn from time antecedent to its passing. " It is, however, unnessary to pursue this aspect of the matter further as we have held that Parliament has the power to make retroactive laws. Secondly, it was said that section 101 of the Government of India Act, 1935, which gave effect to the stipulation in the Instrument of Accession against the imposition by the Dominion Legislature. of any tax or duty in the territory of the United State of Rajasthan, was kept alive, notwithstanding its repeal by article 395 of the Constitution, by section 6 of the , [which is made applicable to the interpretation of the Constitution by article 367 (1)] as a " right" or "privilege" acquired under the repealed enactment, and so (1) (1848) i2 Q.B. 120,127; ii6 E.R. 8ii, 814. 557 continued to operate under article 372 (1) as a con stitutional limitation on the power of Parliament, with the result that Parliament had no power to impose tax contrary to section 101 of the Government of India Act, 1935. The argument is somewhat ingenious but there are obvious difficulties in the way of its acceptance. For one thing, section 101 of the Government of India Act, 1935, created no right or privilege in the subjects of the United State of Rajasthan which, notwithstanding the repeal of that section, could be regarded as still enuring for their benefit. Section 101 merely imposed a restriction upon the power of the Dominion Legislature to make laws for an acceding State inconsistent with the stipulations contained in the Instrument of Accession. When that section along with the rest of the Government of India Act, 1935, was repealed by the new Constitution, which has created new legislatures with power to make retroactive laws, it is idle to suggest that rights or privileges acquired while the old Constitution Act was in force are preserved for ever for that must be the result of the argument by section 6 of the General Clauses Act, which can have no application to such cases. Furthermore, it will be recalled that the Proclamation made by the Rajpramukh as Ruler of Rajasthan on 23rd November, 1949, declared and directed that the Constitution of India when brought into force "shall be the Constitution for the Rajasthan State" and it expressly "superseded and abrogated all other constitutional provisions inconsistent therewith" which were then in force. The competency of the Rajpramukh as the Ruler of the State to accept the Constitution of India as governing that State also was not challenged before us, and it is manifest that, after such declaration and direction, no I restriction imposed on the Dominion Legislature by the Instrument of Accession and enforced by section 101 of the Government of India Act could prevail against the legislative powers conferred on Parliament by the Constitution of India. The difference in the constitutional position which previously existed between the Provinces and the acceding: States has thus 558 disappeared except, of course, in regard to matters in which such distinction has been preserved by the Constitution itself, e.g., by article 238 and article 371. It follows that the amendment of section ' 2 clause (14 A) of the Indian Act, by the Finance Act, 1950, so as to authorise the levy of tax on income accruing in the territory of Rajasthan in the year 1949 50 is within the competence of Parliament and therefore valid. We accordingly allow the appeal, and set aside the judgment of the High Court. We make no order as to costs. Appeal allowed.

Respondent was residing and carrying on business in the District of Jodhpur in Rajasthan, a Part B State,. His income arising therein during the accounting year 1949 50 was sought to assessed to income tax 'for the year 1950 51 under the Indian Income tax Act 'as amended by the Indian Finance Act. He presented ' a petition under article 226 to the High Court praying 542 for the issue of a writ directing the Union of India not to assess income tax on his income which had accrued to him prior to April 1, 1950, because no income tax was leviable in Rajasthan (except in the State of Bundi) under any provision of law in force there. The High Court having accepted his petition, the Union of India preferred the present appeal to the Supreme Court. Section 3 of the Finance Act 1950 (Act XXV of 1550) made certain amendments in the Indian Income tax Act with effect from the 1st day of April, 1950" and substituted therein the present el. (14 A) in section 2 in place of previous el. (14 A) defining "taxable territories". Held, that under sub el. (i) of el. (b) of the proviso, the whole of the territory of India including Rajasthan is to be deemed taxable territory for the purpose of section 4 A of the Indian Income tax Act "as respects any period" The words "any period" mean any period before or after March 31, 1950. Respondent was therefore resident in the taxable territories during the accounting year 1949 50 and his income, whetherderived within or without the taxable territories was taxable under section 4 sub section (I) cl. (b) sub el. (ii) of the Indian Income tax Act. Further, all that section 2 (14 A) does is to define what the ex pression "taxable territories" means in certain cases and for certain purposes. wherever that expression is used in the various provisions of the Indian Income tax Act, and as the expression is used in the charging section 4 in connection with the conditions which are to determine liability to tax, sub el. (iii) of cl. (b) of the definition must, when read with section 4 of the Indian Income tax Act, have reference to chargeabiiity of income and not merely to its computation, and therefore sections 3 and 4 of the Indian Income tax Act read in the light of the definition in proviso (b) to the amended section Y. (14 A) and section 2 of the I inance Act, 1950, authorise the imposition of Indian income tax and super tax on the income derived by the respondent in the year 1949 50 in the territory of Rajasthan. Held also, that while it is true that the Constitution has no restrospective operation except where a different intention clearly appears, it is not correct to say that in bringing into existence now legislatures and conferring on them certain powers of legislation, the Constitution operated retrospectively. Articles 245 and 246 reda with entry No. 82 of List I of the Seventh Schedule empower Parliament to make laws with to taxes on income for the whole territory of India and limitation or restriction is imposed in regard to retroactive legislation &ad it is, therefore competent for Parliament to make a law imposing a tax on the income of any year prior to the the amendment of section 2, cl (14 A) of the Indian income tax Act by the Finance act by the Finance act the Indian Income tax Act by the Finance ,1950, so as to the authorise the levy of the authorise the levy of tax on income accuring in the territory of Rajasthan in the year 1949 50 ie therefore valid.

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Nos. 97, 97A, 44, 86 to 88, 111, 112, 85, 158, 211 to 251 and 225 to 229 of 1956. Under Article 32 of the Constitution of India for the enforcement of Fundamental Rights ' N. C. Chatterji A. K. Sen, B. P. Maheshwari and Tarachan Brijmohan Lal, for the petitioners in Petitions Nos. 97 and 97A of 1956. N. C. Chatterji and V. section Sawhney, for the petitioners in Petitions Nos. 44., 86 to 88, Ill and 112 of 1956. N. C. Chatterji and D. N. Mukherji, for the petitioners in Petition No. 85 of 1956. Purshottam Tirukumdas and 0. P. Lal, for the petitioners in Petitions Nos. 211 to 215 of 1956. section C. Isaacs and K. R. Chaudhuri. for the petitioners in Petitions Nos. 225 to 229 of 1956. Bhagirth Das and M. L. Kapur, for the petitioner in petition No. 158 of 1956. C. K. Daphtary, Solicitor General of India, G. N. Joshi, Porpus A. Mehta and R. H. Dhebar, for the respondents (Union, of India, the Central Board of Revenue and various Income tax Officers in all petitions.) B. Sen and P. K. Ghose, for the State of West Bengal (Respondents Nos. 2 and 3 in Petitions Nos.211 to 215 of 1956). December 21. The Judgment of the Court was delivered by BHAGWATI J. These petitions under article 32 of the Constitution raise a common question of law whether section 5 (7A) of the Indian Income tax Act, hereinafter 236 called the Act, is ultra vires the Constitution as infringing the fundamental rights enshrined in article 14 and article 19 (1) (g). The facts which led to the filing of the petitions 'nay be shortly stated. petitions Nos. 97 & 97 A of 1956: The petitioners are M/s. pannalal Binjrai, Oilmill owners, merchants and commission agents, carrying on business at Sahibganj in the district of Santhal Pargans, having their branch at 94 Lower Chitpur Road, Culcutta, petitioner No. 1, and R. B. Jamuna Das Chowdhury, resident of the same place and erstwhile karta of the Hindu undivided family, which carried on business in the name and style of M/S. Pannalal Binjr petetioner No. 2. Before September 28, 1954, they, being assessed by the Income tax officer, Special Circle, Patna. On September 28, 1954, the Central Board of Revenue made an order transferring their cases to the Income.tax Officer, Central Circle XI, Calcutta. On January 22, 1955, the Central Board of Revenue transferred the cases of petitioner No. 2 to the Income tax Officer Central Circle VI,Delhi, and on July 12, 1955, it similarly transferred the cases of petitioner No. I to the same officer. Prior to June 29, 1959, he had been assessed to income tax by the Income tax Officer, Special Survey Circle VII, Calcutta. On June 29, 1955, the Central Board of Revenue transferred his case to the Income tax Officer, Special Circle, Ambala,, and the said officer continued the proceedings in the transferred case and also instituted further proceedings against the petitioner and assessed him under section 23 (4) of the Act for the assessment years 1946 47 and 1947 48. Demands were made upon the petitioner for payment of the amount of income tax thus assessed whereupon he filed this petition impeaching the validity of the order of the Central Board 'of Revenue dated June 29, 1955, and the proceedings entertained by the Income tax Officer, Special ' Circle, Ambala,on the ground that section 5 (7A) of the Act was ultra vires the Constitution. Before October 20, 1953, they were being assessed by the Income tax Officer,, Hoshiarpur, but on that date their case was transferred under section 5 (7A) of the Act by the Commissioner of Income tax to the Income tax Officer, Special Circle, Ambala. The said officer continued the said case and reopened the assessment for the years 1944 45 to 1050 51 and completed the assessment for the assessment, years 1947 48, 1950 51 and 1951 52. These petitioners also thereupon filed the petition challenging the validity of the order of transfer made by the Commissioner of Income tax on October 20, 1953, and the proceedings entertained by the Income tax Officer, Special Circle, Ambala, thereafter, on the same ground of the ultra vires character of section 5 (7A) of the Act. of M/s bhagwan Das Sud & Sons and the cases of both these petitionrs were transferred to the Income tax Officer, Special 238 Circle, Ambala, as above, by the said respective orders. Petitions Nos. 86, 87, 88, 111, 112 and 158 of 1956: These petitions may be compendiously described as the Amritsar group. The petitioner in Petition No. 86/56 is Sardar Gurdial Singh, son of section Narain Singh. The petitioner in Petition No. 87/56 is Dr. Sarmukh Singh, son of section Narain Singh. The petitioner in Petition No. 112156 is section Ram Singh, soil of section Narain Singh. These three are brothers and the petitioner in Petition No. 88/56 is the father, section Narain Singh, son of section Basdev Singh. The father and the three sons were the directors in the Hindustan Embroidery Mills (Private) Ltd., petitioner No. 1 in Petition No. 111/56, which is located at Chheharta near Amritsar. All these petitioners were, prior to the orders of transfer made by the Commissioner of Income tax under section 5(7A) of the Act, being assessed by the Income tax Officer, 'A ' Ward, Amritsar, but their cases were transferred on or about June 29, 1953, from the Income tax Officer, 'A ' Ward, Amritsar, to the Income tax Officer, Special Circle, Amritsar. These cases were continued by the latter officer and notices under a. 34 of the Act were also issued by him against them for the assessment years 1947 48 to ' 1951 52. Each one of them filed a separate petition challenging the said orders of transfer by the Commissioner of Income tax and the proceedings entertained by the Income tax Office r, Special Circle, Amritsar, against them on the score of the unconstitutionality of section 5 (7A) of the Act. The petitioner in Petition No. 158/56 is one Shri Ram Saran Das Kapur, the head and karta of the Hindu undivided family carrying on business outside Ghee Mandi Gate, Amritsar. His case also whichprior to the order complained against, was being entertained by the Income tax Officer, 'F ' Ward, Amritsar, was transferred on some date in 1954 by an order of the Commissioner of Income tax under section 5(7A) of the Act to the Income tax Officer, Special Circle, Amritsar. No objection wag taken by the 239 petitioner to this order of transfer until after the assess. ment order was passed against him but he also challenged the validity of the said order of transfer and the proceedings entertained by the Income tax Officer, Special Circle, Amritsar, thereafter, on the same grounds as the other petitioners. Petitions NOs.211 to 215 of 1956: These petitions may be described as the Sriram Jhabarmull group. Though ' separately filed, the petitioner in each of them is the same individuals Nandram Agarwalla, who is the sole proprietor Of a business which he carries on under the name and style of I Sriram Jhabarmull '. It is a business, inter alia, of import and export of piece goods ' as commission agents, and dealers in raw wool and other materials. The principal place of business is at Kalimpong, in the district of Darjeeling, though there is also a branch at Calcutta. Prior to the orders of the Commissioner of Income tax under section 5(7A) of the Act complained against, the petitioner was being assessed by the Income tax Officer, Jalpaiguri, Darjeeling. On June 8, 1946, there was a further transfer assigning the cases to the Income tax Officer, Central Circle 1, Calcutta, and on July 27, 1946, orders were passed by the Commissioner of Income tax Central, Calcutta, under section 5(7A) transferring the cases of the petitioner to the Income tax Officer, Central Circle IV, Calcutta. These are the orders which are complained against as unconstitutional and void invalidating the proceedings which were continued and subsequently instituted by the Income tax Officer, Central Circle IV, Calcutta, against the petitioner on the score of the unconstitutionality of section 5(7A) of the Act. It may be noted, however that these orders were all prior to the Constitution and 240 having been made on July 27, 1946, as aforesaid were followed up by completed assessment proceedings in respect of the said respective years and also certificate proceedings under section 46(2) of the Act. There were further orders dated December 15, 1947, and sometime in September, 1948, transferring the cases of the petitioner from the Income tax Officer, Central Circle IV, Calcutta, to the Income tax Officer, Central Circle 1, Calcutta, and back from him to the Income tax Officer, Central Circle,IV Calcutta. dated July 27, 1946, which was passed under section 5(7A) of the Act. Petitions Nos. 225 to 229 of 1956: These Petitions may be classed as the Raichur group. They concern the assessment for the respective assessment years 1950 5l, 1951 52, 1952 53, 1953 54 and 1954 55. The petitioner in each of them is the same individual, one Kalloor Siddannal who resides and carries on business in Raichur in the State of Hyderabad as commission agent and distributor of agricultural products. Income tax was first imposed in the Hyderabad State in 1946 by a special Act of the Legislature and the petitioner was assessed under the Hyderabad Income tax Act by the Additional Income tax Officer, Raichur, for the assessment years 1948 49 and 1949 50. As from April 1, 195o, the Indian Income tax Act was applied to Hyderabad but the Additional Income tax Officer, Raichur, continued to assess the petitioner. The cases in respect of the assessment years 1950 51, 1951 52 and 1952 53 were pending before that officer and proceedings were taken in connection with the assessment for those years. On December 21, 1953, however, the Commissioner of Income tax Hyderabad, issued a notification under section 5(7) ordering that the case of the petitioner should be transferred from the Additional income tax Officer, Raichur, to the Income tax Officer, Special Circle, Hyderabad. The latter officer continued the assessment proceedings and issued notices under section 22(.4) of the Act on July 1, 1954, November 2, 1954, November 30,1954, 241 December 19, 1954, and March 11, 1955, in respect of the said years of assessment. Assessments for the said years were made on March 21, 1955, and on April 24, 1955, the petitioner made an application under section 27 of the Act to reopen the assessment for the year 1950 51 as on default under section 23 (4) of the Act. It appears, however, that shortly before May 19, 1955, the Commissioner of Income tax, Hyderabad, made another order under section 5 (7A) and section 64 (5)(b) of the Act transferring all the cases of the petitioner to the main Income tax Officer, Raichur. Curiously enough, the petitioner challenged both the orders one dated December 21, 1953, and the other made sometime in May, 1955, under section 5 (7A) of the Act and the proceedings continued and instituted by the respective officers thereunder as unconstitutional and void on the ground that section 5 (7A) was ultra vires the Constitution even though ultimately he was being assessed by the main Income tax Officer, Raichur, under the latter order. This is the common question in regard to the ultra vires character of section 5 (7A) of the Act which is raised in all these petitions, though in regard to each group there are several questions of fact involving the consideration of the discriminatory character of the specific orders passed therein which we shall deal with hereafter in their appropriate places. Section 5 (7A) of the Act runs as under: " 5 (7A) : The Commissioner of Income tax may transfer any ease from one Income tax Officer subordinate to him to another, and the Central Board of Revenue may transfer any case from any one Income tax Officer to another. Such transfer may be made at any 'stage of the proceedings, and shall not render necessary the reissue of any notice already issued by the Income tax Officer from whom the case is transferred. " This sub section was inserted by section 3 of the Indian Income tax Amendment Act, 1940 (XL of 1940) which was passed as a result of the decision of the Bombay High Court in Dayaldas Kushiram vs Commissioner of Income tax, (Central) (1) I.L.R. , 31 242 By the Indian Income tax Amendment Act, 1956 (XXVI of 1956) an explanation was added to section 5(7A) in the terms following as a result of the decision of this Court in Bidi Supply Co. v The Union of India(1): " Explanation : In this sub section, I case ' in relation to any person whose name is specified in the order of transfer means all proceedings under this Act in respect of any year which may be pending on the date of the transfer,, and includes all proceedings under this Act which may be commenced after the date of the transfer in respect of any year. " Section 5(7A) together with the explanation thus falls to be considered by us in these petitions. The argument on behalf of the petitioners is that a. 64, sub sections(1) and (2) of the Act confer upon the assessee a valuable right and he is entitled to tell the taxing authorities that he shall not be called upon to attend at different places and thus upset his business. Section 5(7A) invests the Commissioner of Income tax and the Central Board of Revenue with naked and arbitrary power to transfer any case from any one Income tax Officer to another without any limitation in point of time, a power which is unguided and uncontrolled and is discriminatory in its nature and it is open to the Commissioner of Income tax or the Central Board of Revenue to pick out the case of one assessee from those of others in a like situation and transfer the same from one State to another or from one end of India to the other without 'specifying any object and without giving any reason, thus subjecting the particular assessee to discriminatory treatment whereas the other assessees similarly situated with him would continue to be assessed at the places where they reside or carry on business under section 64 (1) and (2) of the Act. The discrimination involved in section 5(7A) is substantial in character and, therefore, infringes the fundamental right enshrined,in article 14 of the Constitution. It also infringes article 19 (1) (g) in so far as it imposes an unreasonable restriction on the fundamental right to carry on trade or business (Vide Himmatlal Harilal Mehta vs The State of Madhya Pradesh(1)). The very same question as regards the unconstitutionality of section 5(7A) of the Act had come up for decision before this Court in Bidi Supply Co. vs The Union of India (supra). The case of the assessee there had been transferred by the Central Board of Revenue under section 5(7A) of the get from the Income tax Officer, District 111, Calcutta, to the Income tax Officer, Special Circle, Ranchi. The order was an omnibus wholesale order of transfer expressed in general terms without any reference to any particular case and with out any limitation as to time and was challenged as void on the ground that section 5(7A) under which it had been passed was unconstitutional. This Court, by a majority judgment, after discussing the general principles underlying article 14, did not adjudicate upon that question, observing at p. 276: "We do not consider it necessary, for the purpose of this case, to pause to consider whether the constitutionality of Sub section.(7A) of section 5 can be Supported on the principle of any reasonable classification laid down by this Court or whether the Act lays down any principle for guiding or regulating the exercise of discretion by the Commissioner or Board of Revenue or whether the sub section confers an unguided and arbitrary power on those authorities to pick and choose individual assessee and place that assessee at a disadvantage in comparison with other assessees. All assessees are entitled to the benefit of those provisions except where a particular case or cases of a particular assessee for a particular year or years is or are transferred under sub section (7A) of section 5, assuming that section to be valid and if a particular case or cases is or are transferred his right under section 64 still remains as regards his other case or cases. " The majority judgment then proceeded to consider the effect of such an omnibus order unlimited in point of time on the rights of the assessee and further observed in that context at p. 277: " This order is calculated to inflict considerable inconvenience and harassment on the petitioner. Its books of account will have to be produced before the Income tax Officer, Special Circle, Ranchi a place hundreds of miles from Calcutta, which is its place of business. There may be no suitable place where they can put up during that period. There will certainly be extra expenditure to be incurred by it by way of railway fare, freight and hotel expenses. Therefore the reality of the discrimination cannot be gainsaid. In the circumstances this substantial discrimination has been inflicted on the petitioner by an executive fiat which is not founded on any law and no question of reasonable classification for purposes of legislation can arise. Here "the State" which includes its Income tax department has by an illegal order denied to the petitioner, as compared with other Bidi mer chants who are similarly situate, equality before the law or the equal protection of the laws and the petitioner can legitimately complain of an infraction of his fundamental right under Article 14 of the Constitution. " The question as to the constitutionality of section 5 (7A) of the Act was thus left open and the decision turned merely on the construction of the impugned order. 245 Learned counsel for the petitioners, however, lays particular stress on the observations of Bose, J., in the minority judgment which he delivered in that case whereby he held that sections 5 (7A) and 64 (5) (b) of the Act were themselves ultra vires article 14 of the Constitution and not merely the order of the Central Board of Revenue. The learned Judge referred to a passage from the judgment of Fazl Ali, J., in The State of West Bengal vs Anwar Ali Sarkar(1) and also pointed out the decision of this Court in M/S. Dwarka Prasad Laxmi Narain vs The State of Uttar Pradesh and Two Others(2) and observed: " What is the position here? There is no hearing, no reasons are recorded: just peremptory orders transferring the case from one place to another without any warning; and the power given by the Act is to transfer from one end of India to the other; nor is that power unused. We have before us in this Court a case pending in which a transfer has been ordered from Calcutta in West Bengal to Ambala in the Punjab." (p. 283) " If the Legislature itself had done here what the Central Board of Revenue has done and had passed an Act in the bald terms of the order made here transferring the case of this petitioner, picked out from others in a like situation, from one State to another, or from one end of India to the other, without specifying any object and without giving any reason, it would, in my judgment, have been bad. I am unable to see how the position is bettered because the Central Board of Revenue has done this and not Parliament." (p. 284 5) " In my opinion, the power of transfer can only be conferred if it is hedged round with reasonable restrictions, the absence or existence of which can in the last instance be determined by the courts; and the exercise of the power must be in conformity with the rules of natural justice, that is to say, the parties affected must be heard when that is reasonably possible, and the reasons for the order must be reduced, however briefly, to writing so that men may know that (1) ; , 309 310.`(2) ; 246 the powers conferred on these quasi judicial bodies are being justly and properly exercised." (p. 287) The answer furnished on behalf of the State to this argument is fourfold: (i)that the provision contained in section 5 (7A) of the Act is a measure of administrative convenience enacted with a view to more conveniently and effectively deal with the cases of the assessees where the Commissioner of Income tax considers it necessary or desirable to transfer any case from one Income tax Officer subordinate to him to another or the Central Board of Revenue similarly considers it necessary or desirable to transfer any case from any one Income tax Officer to another. The real object with which section 5 (7A) was inserted by the Indian Income tax Amendment Act, 1940 (XL of 1940), has been thus set out in the affidavit of Shri V. Gouri Shankar, Under Secretary, Central Board of Revenue, dated November 19, 1956, which is the pattern of all the affidavits filed on behalf of the State in these petitions: " 4. I say that the provisions of section 5 (7A) were inserted by the Income tax Amendment Act, XL of 1940, with the object of minimising certain procedural difficulties. Before this amendment was passed there was no specific provision in the Act for transferring a case from one Income tax Officer to another except by a long and circuitous course even at the request of the assessees. In order therefore to be able to transfer the case from one 1. to another either because of the request of the assessee or for dealing with cases involving special features such as cases of assessees involving widespread activities and large ramifications or inter related transactions, power to transfer cases was conferred upon the Central Board of Revenue and the Commissioner of Income tax as the case may be. I say that the provisions of section 5 (7A) ate thus administrative in character. . (ii)that the assessee whose case is thus transferred is not subjected to any discriminatory procedure in the matter of his assessment. The Income tax Officer to whom his case is transferred deals with it under the same procedure which is laid down in the relevant 247 provisions of the Act. The decision of the Income tax Officer is subject to appeal before the Appellate Assistant Commissioner and the assessee has the further right to appeal to the Income tax Appellate Tribunal and to approach the High Court and ultimately the Supreme Court, as provided in the Act. All assessees, whether they are assessed by the Income tax Officer of the area where they reside or carry on business or their cases are transferred from one Income tax Officer to another, are subject to the same procedure and are entitled to the same rights and privileges in the matter of redress of their grievances, if any, and there is no dis crimination whatever between assessees and assessees; (iii)that the right, if any, conferred upon the assessee under section 64 (1) and (2) of the Act is not an absolute right but is circumscribed by the exigencies of tax collection and can be negatived as it has been in cases where the Commissioner of Income tax or the Central Board of Revenue, as the case may be, think it necessary or desirable to transfer his case from one Income tax Officer to another under section 5 (7A) of the Act having regard to all the circumstances of the case. The argument of inconvenience is thus sought to be met in the same affidavit: " 5. 1 further say that as a result of any transfer that may be made under the provisions of section 5 (7A) there is no discriminatory treatment with regard to the procedure and that no privileges and rights which are given to the assessees by the Income tax Act are taken away nor is the assessee exposed to any increased prejudice, punitary consequences or differential treatment. I say that in cases where transfers under this section are made otherwise than on request from assessees, the convenience of the assessees is taken into consideration by placing the case in the hands of an Income tax Officer who is nearest to the area where it will be convenient for the assessee to attend. If on account of administrative exigencies this is not possible and the assessee requests that the examination of accounts or evidence to be taken should be in a place convenient to him, the I.T.O. complies with the request 248 of the assessee and holds the hearing at the place requested. " Even if there be a difference between assessees who reside or carry on business in a particular area by reason of such transfers the difference is not material. It is only a minor deviation from a general standard and does not amount to a denial of equal rights; (iv)that the power which is thus vested is a discretionary power and is not necessarily discriminatory in its nature and that abuse of power is not to be easily assumed where discretion is vested in such high officials of the State. Even if abuse of power may sometimes occur, the validity of the provision cannot be contested because of such apprehension. What may be struck down in such cases is not the provision itself but the discriminatory application thereof. The petitioners rejoin by relying upon the following passage from the judgment of Fazl Ali, J., in The State Of West Bengal vs Anwar Ali Sarkar, (Supra), which was referred to by Bose, J., in his minority judgment in Bidi Supply Co. vs The Union of India, (Supra), at page 281: " It was suggested that the reply to this query is that the Act itself being general and applicable to all persons and to all offenses, cannot be Said to discriminate in favour of or against any particular case or classes of persons or cases, and if any charge of discrimination can be leveled at all, it can be levelled only against the act of the executive authority if the Act is misused. This kind of argument however does not appear to me to solve the difficulty. The result of accepting it would be that even where discrimination is quite evident one cannot challenge the Act simply because it Is couched in general terms; and one cannot also challenge the act of the executive authority whose duty it is to administer the Act, because that authority will say: I am not to blame as I am acting under the Act. It is clear that if the argument were to be ,accepted, article 14 could be easily defeated. I think the fallacy of the argument lies in overlooking the fact that the I insidious discrimination complained of is incorporated in the Act itself ', it being so drafted 249 that whenever any discrimination is made such discrimination would be ultimately traceable to it. The pivot of the whole argument of the petitioners is the provisions contained in section 64(1) and (2) of the Act which prescribe the place of assessment. They are: " 64. (1) Where an assessee carries on a business, profession or vocation at any place, he shall be assessed by the Income tax Officer of the area in which that place is situate or, where the business, profession or vocation is carried on in more places than one, by the Income tax Officer of the area in which the principal place of his business, profession or vocation is situate. (2)In all other cases, an assessee shall be assessed by the Income tax Officer of the area in which he resides. " These provisions were construed by the Bombay High Court in Dayaldas Kushiram vs Commissioner Income tax, (Central), (supra), and Beaumont, C.J., observed at p. 657: " In my opinion section 64 was intended to ensure that as far as practicable an assessee should be assessed locally, and the area to which an Income tax Officer is appointed must, so far as the 'exigencies of tax collection allow, bear some reasonable relation to the place where the assessee carries on business or resides." Kania, J., as he then was, went a step further and stated at p. 660: "A plain reading of the section shows that the same is imperative in terms. It also gives to the assessee a valuable right. He is entitled to tell the taxing authorities that he shall not be called upon to attend at different places and thus upset his business. " The learned Judges there appear to have treated the provisions of section 64(1) and (2) more as a question of right than as a matter of convenience only. If there were thus a right conferred upon the assessee by the provisions of section 64(1) and (2) of the Act and that right continues to be enjoyed. by all the assessees except the 32 250 assessee whose case is transferred under section 5(7A) of the Act to another Income tax Officer outside the area where he resides or carries on business, the assessee can urge that, as compared with those other assessees, he is discriminated against and is subjected to inconvenience and harassment. It is, therefore, necessary to consider whether any such right is conferred upon the assessee by section 64(1) and (2) of the Act. Prima facie it would appear that an assessee is entitled under those provisions to be assessed by the Income tax Officer of the particular area where he ,resides or carries on business. Even where a question arises as to the place of assessment such question is under section 64(3) to be determined by the Commissioner or the Commissioners concerned if the question is between places in more States than one or by the Central Board of Revenue if the latter are, not in agreement and the assessee is given an opportunity of representing his views before any such question is determined. This provision also goes to show that the convenience of the assessee is the main consideration in determining the place of assessment. Even so the exigencies of tax collection have got to be considered and the primary object of the Act, viz., the assessment of income tax, has got to be achieved. The hierarchy of income tax authorities which is set up under Chapter 11 of the Act has been so set up with a view to assess the proper income tax payable by the assessee and whether the one or the other of the authorities will proceed to assess a particular assessee has got to be determined not only having regard to the convenience of the assessee but also the exigencies of tax collection. In order to assess the tax payable by an assessee more conveniently and efficiently it may be necessary to have him assessed by an Income tax Officer of an area other than the one in which, he resides or carries on business. It may be that the nature and volume of his business operations are such as require investigation into his affairs in a place other than the one where he resides or carries on business or that he is so, connected with various other individuals or organiza tions in the way of his earning his income as to render 251 such extra tertitorial investigation necessary: before he may be properly assessed. These are but instances of the various situations which may arise wherein it may be thought necessary by the Income tax authorities to transfer his case from the Income tax, Officer of the area in which he resides or carries on business to, another Income tax Officer whether functioning in the same State or beyond it. This aspect of the question wag emphasized by Beaumont, C.J., in Dayaldas Kushiram vs Commissioner of Income tax, (Central), (supra), at page 146, when he used the expression " as far as practicable " in connection with the assessee 's right to be assessed locally and the expression " so far as exigencies of tax collection allow " in connection with the appointment of the Income tax Officer to assess the tax payable by the particular assessee. In the later case of Dayaldas Kushiram vs Commissioner of Income tax, (Central)(1), Beaumont, C.J., expressed himself as follows: " The Income tax Act does not determine the place of assessment. What it does is to determine the Officer who is to have power to assess and in some cases it does so by reference to locality but I apprehend that an appeal would be not against an order of the Commissioner as to the place of assessment, but against the order of assessment of the Income tax, Officer," thus stating in effect that this section does not give a right to the assessee to have his assessment, at a parti cular place but determines the Income tax Officer who is to have power to assess him. This aspect was further emphasized by the Federal Court in Wallace Brothers & Co. vs Commissioner of, Income tax, Bombay, Sind & Baluchistan (2), where Spens, C.J., observed: Clause (3) of section 64 provides that any question as to the place of assessment shall be determined ' by the Commissioner or by the Central Board of Revenue Proviso 3 to the clause enacts that if the place of assessment is called in question by the assessee, the Income tax Officer shall, if not satisfied, with the (1) , 101.(2) A.I.R. 1945 F.C. 9,13.252 correctness of the claim, refer the matter for determination under this sub section before assessment is made. These provisions clearly indicate that the matter is more one of administrative convenience than of jurisdiction and that in any event it is not one for adjudication by the Court. " It may be noted, however, that in the passage at page 276 of the majority judgment in Bidi Supply Co. vs The Union of India (supra), this court regarded the benefit conferred on the assessee by these provisions of a. 64(1) and (2) of the Act as a right and it is, too late in the day for us to say that no such right to be assessed by the Income tax Officer of the particular area, where he resides or carries on his business is conferred on the assessee. This right, however, according to the authorities above referred to, is hedged in with the limitation that it has to yield to the exigencies of tax collection. The position, therefore, is that the determination of the, question whether a particular Income tax Officer should assess the case of the assessee depends on (1) the convenience of the assessee as posited in section 64 (1) and (2) of the Act, and (2) the exigencies of tax collection and it would be open to the Commissioner of Income tax and the Central Board of Revenue who are the highest amongst the Income tax. Authorities under the Act to transfer the case of a particular assessee from the Income tax Officer of the area within which he resides or carries on business to any other Income tax Officer if the exigencies of tax collection warrant the same. It is further to be noted that the infringement of such a right by the order of transfer, under section 5 (7A) of the Act is not a material infringement. It is only a deviation of a minor character from the general standard and does not necessarily involve a denial of equal rights for the simple reason that even after such transfer the case is dealt with under the normal procedure which is prescribed in the Act. The production and investigation of the books of account, the enquiries to be made by the Income tax Officer and the whole of the procedure as to assessment including the further 253 appeals after the assessment is made by the Incometax Officer are the same in a transferred case as in others which remain with the Income tax Officer of the area in which the other assesees reside or carry on business. There is thus no differential treatment and no scope for the argument that the particular assessee is discriminated against with reference to others similarly situated. It was observed by this Court in, M. K. Gopalan vs The State of Madhya Pradesh(1): " In support of the objection raised under article 14 of the Constitution, reliance is placed on the decision of this Court in Anwar Ali Sarkar 's case. In the pre ' sent case, the Special Magistrate under section 14 of the Criminal Procedure Code has to try the case entirely under the normal procedure, and 'no discrimination of the kind contemplated by the decision in Anwar Ali Sarkar 'd case and the other cases following it arises here. A law vesting discretion in an authority under such circumstances cannot be said to be discriminatory as such, and is therefore not hit by article 14 of the Constitution. There is, therefore, no substance in this contention." To a similar effect were the observations of Mukherjea, J., as he then was, in The State of West Bengal vs Anwar Ali Sarkar, (supra), at p. 325: "I agree with the Attorney General that if the differences are not material, there may not be any discrimination in the proper sense of the word and minor deviations from the general standard might not amount to denial of equal rights deemed never at any time to have applied to an assessee where, in consequence of any transfer made under section 5 (7A), a particular Income tax Officer has been charged with the function of assessing that assessee. section 64 (5) was incorporated by the Income tax Law Amendment Act, 1940 (XL of 1940) simultaneously with section 5 (7A). It is ' therefore, urged that an assesse whose case has been thus transferred has no right under section 64 (1) and (2) and those assessees alone who do not come within the purview of section 64 (5) can have the benefit of section 64 (1) and (2). This argument, however, ignores the fact that section 5 (7A) is the very basis of the enactment of the relevant provision in section 64 (5) and if a. 5 (7A) cannot stand by virtue of its being discriminatory in character, the relevant portion of section 64 (5) also must fall with it. It is then contended that a. 5 (7A) is in itself discriminatory and violative of the fundamental right en shrined in article 14. The power which is vested in the Commissioner of Income tax and the Central Board of Revenue is a naked and arbitrary power unguided and uncontrolled by any rules. No rules have been framed and no directions given which would regulate or guide their discretion or on the basis of which such transfers can be made and the whole matter is left to the unrestrained will of the Commissioner of Income tax or the Central Board of Revenue without there being anything which could ensure a proper execution of the power or operate as a check upon the injustice that might result from the improper execution of the same. To use the words of Mr. Justice Matthews in the case of Yick Wo vs Hopkins(1): ". when we remember that this action or nonaction may proceed from enmity or prejudice, from partisan zeal or animosity, from favoritism and other improper influences and motives easy of concealment and difficult to be detected and exposed, it becomes unnecessary to suggest or comment upon the injustice capable of being wrought under cover of such a power, for that becomes apparent to every one who gives to the subject a moment 's consideration." , 373; , 227.255 In other words, " it is not a question of an uncon stitutional administration of a statute otherwise valid on its face but here the unconstitutionality is writ large on the face of the statute itself " (Per Das, J., as he then was, in The State of West Bengal vs Anwar Ali, Sarkar, (supra) at p. 346). It has to be remembered that the purpose of the Act is to levy income tax, assess and collect the same. The preamble of the Act does not say so in terms it being an Act to consolidate and amend the law relating to income tax and super tax but that is the purpose of the Act as disclosed in the preamble of the First Indian Income tax Act of 1886 (Act II of 1886). It follows, therefore, that all the provisions contained in the Act have been designed with the object of achieving that purpose. There is in the first instance, the charge of income tax. Then we find set up the various authorities in the hierarchy who are entrusted with the function of assessing the income tax, the Central Board of Revenue being at the apex. There is also an Appellate Tribunal which is established for hearing appeals against the decisions of the Appellate Assistant Commissioners. Then follow the provisions in regard to taxable income, mode of assessment and cognate provisions. The Income tax Officers are invested with the duty ' of assessing the income tax of the assessees in the first instance. The Assistant Commissioners of Income tax, are the appellate authorities over the decisions of the Income tax Officers and the Income tax Appellate Tribunal is the final appellate authority barring of course references under section 66(1) of the Act to the High Court on questions of law. The Commissioners of Income tax and the Central Board of Revenue are mainly administrative authorities over the Income tax Officers and the Assistant Commissioners of Income tax and they are to distribute and control the work to be done by these authorities. All officers and persons employed in the execution of the Act are to observe and follow the orders instructions and directions of the. Central Board of Revenue which is the highest authority in the hierarchy and, even though normally in accordance 256 with the provisions of section 64 (1) and (2) the work of assessment is to be done by the Income tax Officers of the area within which the assessees reside or carry on business, power is given by section 5(7A) to the Commissioner of Income tax to transfer any case from one Income tax Officer subordinate to him to another and to the Central Board of Revenue to transfer any case from any one Income tax Officer to another. This is the administrative machinery which is set up for assessing the incomes of the assessees which are chargeable to income tax. There is, therefore, considerable force in the contention which has been urged on behalf of the State that section 5(7A) is a provision for administrative convenience. Nevertheless this power which is given to the Commissioner of Income tax and the Central Board of Revenue has to be exercised in a manner which is not discriminatory. No rules or directions having been laid down in regard to the exercise of that power in particular cases, the appropriate authority has to determine what are the proper cases in which such power should be exercised having regard to the object of the Act and the ends to be achieved. The cases of the assessees which come for assessment before the income tax authorities are of various types and no one case is similar to another. there are complications introduced by the very nature of the business which is carried on by the assessees and there may be, in particular cases, such widespread activities and large ramifications or inter related transactions as might require for the convenient and efficient assessment of income tax the transfer of such cases from one Income tax Officer to another. In such cases the Commissioner of Income tax or the Central Board of Revenue, as the case may be, has to exercise its discretion with due regard to the exigencies of tax collection. Even though there may be a common attribute between the assesses whose case is thus transferred and the assessees; who continue to be assessed by the Income tax Officer of the area within which they reside or carry on business, the other attributes would not be common. One assessee may 257 have such widespread activities and ramifications as would require his case to be transferred from the Income tax Officer of the particular area to an Income tax Officer of another area in the same State or in another State, which may be called " X ". Another assessee, though belonging to a similar category may be more conveniently and efficiently assessed in another area whether situated within the State or without it, called " Y ". The considerations which will weigh with the Commissioner of Income tax or the Central Board of Revenue in transferring the cases of such assessee either to the area " X " or the area " Y " will depend upon the particular circumstances of each case and no hard and fast rule can be laid down for determining whether the particular case should , be transferred at 'all or to an Income tax Officer of a particular area. Such discretion would necessarily have to be vested in the authority concerned and merely because the case of a particular assessee is transferred from the Income tax Officer of an area within which he resides or carries on business to another Income tax Officer whether wit in or without the State will not by itself be sufficient to characterize the exercise of the discretion as discriminatory. Even if there is a possibility of discriminatory treatment of persons falling within the same group or category, such possibility cannot necessarily invalidate the piece of legislation. It may also be remembered that this power is vested not in minor officials but in top ranking authorities like the Commissioner of Income tax and the Central Board of Revenue who act on the information supplied to them by the Income tax Officers concerned. This power is discretionary and not necessarily discriminatory and abuse of power cannot be easily assumed where the discretion is vested in such high officials. (Vide Matajog Dobey vs H. section Bhari(1)). There is moreover a presumption that public officials will discharge their duties honestly and in accordance with the rules of law. (Vide People of the State of (1) ; , 932.33 258 New York vs John E. Van De Carr, etc.(1) It has also been observed by this Court in A. Thangal Kunju Musaliar vs M. Venkitachalam Potti(2) with reference to the possibility of discrimination between assessees in the matter of the reference of their cases to the Income tax Investigation Commission that " It is to be presumed, unless the, contrary were shown, that the 'administration of a particular law would be done I not with an evil eye and unequal hand ' and the selection made by the Government of the cases of persons to be referred for investigation by the Commission would not be discriminatory." This presumption, however, cannot be stretched too far and cannot be carried to the extent of always holding that there must be some undisclosed and unknown reason for subjecting certain individuals or corporations to hostile and discriminatory treatment (Vide Gulf, Colorado, etc. vs W. H. Ellis (3)). There may be cases where improper execution of power will result in injustice to the parties. It is pointed that it will be next to impossible for the assessee to challenge a particular order made by the Commissioner of Income tax or the Central Board of Revenue, as the case may be, as discriminatory because the reasons. which actuated the authority in making the order will be known to itself not being recorded in the body of the order itself or communicated to the assesse. This apprehension is, however, ill founded. Though the (1) ; (1905) 310 199 U.S. 552; (2) (1955)2 section C. R. 1196. (3) ; ; 41 L.Ed. 666. (4) [1955] I S.C.R. 140. 259 burden of proving that there is an abuse of power,lies on the assessee who challenges the order as discriminatory, such burden is not by way of proof to the hilt. There are instances where in the case of an accused person rebutting a presumption or proving an. exception which will exonerate him from the liability for the offence with which he has been charged, the burden is held to be discharged by evidence satisfying the jury of the probability of that which the accused is called upon to establish (Vide Rex vs Carr Briant (1)), or in the case of a detenue under the Preventive Detention Act seeking to make out a case of want of bona fides in the detaining authority, the burden of proof is held not to be one which requires proof to the hilt but such as will render the absence of bona fides reasonably probable (Vide Ratanlal Gupta vs The District Magistrat of Ganjam also Brundaban Chandra Dhir Narendra vs The State of Orissa (Revenue Department) (3)). If, in a particular ,case, the assessee seeks to impeach the order of transfer is an abuse of power pointing out circumstances which prima facie and without anything more would make out the exercise of the power discriminatory qua him, it will be incumbent on the authority to explain the circumstances under which the order has been made. The court will, in that event, scrutinize these Circumstances having particular regard to the object sought to be achieved by the enactment of section 5(7A) of the Act as set out in para 4 of the affidavit of Shri V. Gouri Shankar, Under Secretary, Central Board of Revenue, quoted above, and come to its own conclusion as to the bona fides of the order and if it is not satisfied that the order was made by the authorities in bona fide exercise of the power vested in them under section 5(7A) of the Act, it will certainly quash the lame. (3) I.L.R. 1952 Cuttack 529, 573.260 record. The observations of Fazl Ali, J., in The State of West Bengal vs Anwar Ali Sarkar, (supra), at pages 309 310 that the authority will say " I am not to blame as I am acting under the Act " will not necessarily save the order from being challenged because even though the authority purported to act under the Act its action will be subject to scrutiny in the manner indicated above and will be liable to be set aside if it was found to be mala fide or discriminatory qua the assessee. Particular stress is laid on behalf of the petitioners on the observations at page 277 of the majority judgment in Bidi Supply Co. vs The Union of India, (supra), which in the context of the omnibus wholesale order in question emphasized the substantial discrimination to which the assessee there had been subjected as compared with other bidi merchants who were similarly situated. The inconvenience and harassiment to which the assessee was thus put were considered to be violative of article 14 of the Constitution and it is urged that section 5 (7A) is unconstitutional in Boar as it is open to the Commissioner of Income tax or the Central Board of Revenue, as the case may be, to make an order of transfer subjecting the assessee to such inconvenience and harassment at their sweet will and pleasure. This argument of inconvenience, however, is not conclusive. There is no fundamental right in an assessee to be assessed in a particular area or locality. Even considered in the context of section 64 (1) and (2) of the Act this right which is conferred upon the assessee to be assessed in a particular area or locality is not an absolute right but is subject to the exigencies of tax collection. The difference, if any, created in the position of the assessee qua others who continue to be assessed by the Income tax Officer of the area in which they reside or carry on business is not a material difference but a minor deviation from the general standard and would, therefore, not amount to the denial of equal rights (Per Mukherjea, J., as he then was, in The State of West Bengal vs Anwar Ali Sarkar., (supra), at 261 p. 325)). There is also the further fact to be borne mind that this inconvenience to the assessee is sough to be minimised by the authority concerned transferring the case of such assessee to the Income tax Officer who is nearest to the area where it would be convenient for the assessee to attend and if, on account of administrative exigencies, this is not possible an the assessee requests that the examination of account or evidence to be taken should be in a place convenient to him, by the Income tax Officer complying with the request of the assessee and holding the hearing at the place requested. We are bound to take the statement contained in para 5 of the affidavit of Shri.V. Gouri Shankar at its face value and if this is done as it should be, the assessee will not be put to any inconvenience or harassment and the proper balance between the rights of the subject and public interest will be preserved. It is, therefore, clear that the power which is veste in the Commissioner of Income tax or the Central Board of Revenue, as the case may be, under section 5 (7A) of the Act is not a naked and arbitrary power, unfettered, unguided or uncontrolled so as to enable the authority to pick and choose one assessee out of those similarly circumstanced thus subjecting him to discriminatory treatment as compared with others who fall within the same category. The power is guided and controlled by the purpose which is to be achieved by the Act itself, viz., the charge of income tax, the assessment and collection thereof, and is to be exercised for the more convenient and efficient collection of the tax A wide discretion is given to the authorities concerned for the achievement of that purpose, in the matter of the transfer of the cases of the assessees from one Income tax Officer to another and it cannot be urged that such power which is vested in the authorities is discriminatory in its nature. There is a broad distinction between discretion which has to be exercised with regard to a fundamental right guaranteed by the Constitution and some other right which is given by the statute. If the statute deals with a right which is not fundamental in character 262 the statute can take it away but a fundamental right the statute cannot take away. Where, for example, a discretion is given in the matter of issuing licences for carrying on trade, profession or business or where restrictions are imposed on freedom of speech, etc., by a imposition of censorship, the discretion must be controlled by clear rules so as to come within the category of reasonable restrictions. Discretion of that nature must be differentiated from discretion in respect of matters not involving fundamental rights such as transfers of cases. An inconvenience resulting from a change of place or venue occurs when any case is transferred from one place to another but it is not open to a party to say that a fundamental right has been infringed by such transfer. Ili other words, the discretion vested has to be looked at from two points of view, ViZ., (1) does it admit of the possibility of any real and substantial discrimination, and (2) does it impinge on a fundamental right guaranteed by the Constitution? Article 14 can be invoked only when both these conditions are satisfied. Applying this test, it is clear that the discretion which is vested in the Com missioner of Income tax or the Central Board of Reevenue, as the case may be, under section 5 (7A) is not at all discriminatory. It follows, therefore, that section 5 (7A) of the Act is not violative of article 14 of the Constitution and also does not impose any unreasonable restriction on the fundamental right to carry on trade or business enshrined in article 19 (1) (g) of the Constitution. If there is any abuse of power it can be remedied by appropriate action either under article 226 or under article 32 of the constitution and what can be struck down is not the provision contained in section 5 (7A) of the Act but the order passed thereunder which may be mala fide or violative,of these fundamental rights. This challenge of the vires of section 5 (7A) of the Act, therefore, fails. We may, however, before we leave this topic observe that it would be prudent if the principles of natural justice are, followed, where circumstances permit, before any order of transfer under section 5 (7A) of the Act is made by the Commissioner of Income tax or the 263 Central Board of Revenue, as the case may be, and notice is given to the party affected and he is afforded a reasonable opportunity of representing his views on the question and the reasons of the order are reduced however briefly to writing. It is significant that when any question arises under section 64 as to the place of assessment and is determined by the Commissioner or Commissioners or by the Central Board of Revenue, as the case may be, the assessee is given an opportunity under section 64(3) of representing his views before any such question is determined. If an opportunity is given to the assessee in such case, it is all the more ,surprising to find that, when an order of transfer under section 5(7A) is made transferring the case of the assessee from one Income tax 'Officer to another irrespective of the area or locality where he resides or carries on business, he should not be given such an opportunity. There is no presumption against the bona fides or the honesty of an assessee and normally the Income tax authorities would not be justified in refusing to an assessee a reasonable opportunity of representing his views when any order to the prejudice of the normal procedure laid down in section 64 (1) and (2) of the Act is sought to be made against him, be it a transfer from one Income tax Officer to another within the State or from an Income tax Officer within the State to an Income tax Officer without it, except of course where the very object of the transfer would be frustrated if notice was given to the party affected. If the reasons for making the order are reduced however briefly to writing it will also help the assessee in appreciating the circumstances which make it necessary or desirable for the Commissioner of Income tax or the Central Board of Revenue, as the case may be, to transfer his case under section 5(7A) of the Act and it will also help the court in determining the bona fides of the order as passed if and when the same is challenged in court as mala fide or discriminatory. It is to be hoped that the Income tax authorities will observe the above procedure wherever feasible. The next point of attack is that the orders which Were made by the Commissioner of Income tax or the 264 Central Board of Revenue, as the case may be, in these petitions are omnibus wholesale orders of transfer coming within the mischief of Bidi Supply Co. vs The Union of India, (supra), and are, therefore, hit by the majority judgment in that case. The answer of the State is that the orders are valid by virtue of the explanation to section 5(7A) which was added by the Indian Income tax Amendment Act, 1956 (26 of 1956). The main structure of section 5(7A) was, however, maintained and the explanation was added thereto in order to expand the connotation of the word " case " which was used in section 5(7A). The manner in which this result was brought about is subject to criticism that the word ,case" was thus really equated with the word " file " and when a case of a particular assessee was transferred under section 5(7A) it was meant that his whole file would be transferred from one Income tax Officer to another. This inartistic mode appears, however to be adopted by the supposed necessity of maintaining section 5(7A) in the form in which it stood but what we have got to see is whether the desired result has been achieved by adding the explanation in the manner in which it was done. Reading section 5(7A) and the explanation thereto, it is clear that when any case of a particular asssssee which is pending before an Income tax Officer is transferred from that officer to another Income tax Officer whether within the State or without it, all proceedings which are pending against him under the Act in respect of the same year as also previous years are meant to be transferred simultaneously and all proceedings under the 265 Act which may be commenced after the date of such transfer in respect of any year whatever are also included therei in so that the Income tax Officer to whom such case is transferred would be in a position to continue the pending proceedings and also institute further proceedings against the assessee in respect of any year. The proceedings pending at the date of transfer can be thus continued but in the case of such proceedings the provision in regard to the issue of notices contained in the main body of section 5(7A) would apply and it would not be necessary to reissue any notice already issued by the Income tax Officer from whom the case is transferred. This provision applies to pending proceedings which have been transferred leaving unaffected the further proceedings which may be commenced against the assessee after the date of the transfer where fresh notices would have to be issued. It is, however, contended that the cases of the assessee which have been already closed in the previous years cannot be reopened by the Income tax Officer to whom the case of the assessee is thus transferred and the words " after the date of transfer in respect of any year " occurring at the end of the explanation are sought to be construed to mean " after the date of the transfer in respect of the year of transfer " thus rendering it incompetent to the Income tax Officer to whom the case is transferred to institute further proceedings in respect of cases of the assessee which have been already closed before the date of transfer. This contention is, in our opinion, unsound. The words used are " in respect of any year" and not " in respect of the year ". Moreover they are to be read with the preceding words "may be commenced " and not with the words "after the date of transfer". A proper reading of the explanation will be that the inclusive part thereof refers to all proceedings under the Act which may be commenced in respect of any year after the date of the transfer. The date of the transfer has relation only to the particular year in which the case of the assessee is thus transferred and to attach the words " in respect of any year " to the words " after 34 266 the date of transfer" do not make any sense. The words " in respect of any year " appropriately go with the words " which may commenced" and read in this juxtaposition render the inclusive part of the explanation susceptible of a proper meaning. The language of the explanation read in the manner suggested above is thus sufficient to dispel this contention of the petitioners. it follows, therefore, that the omnibus wholesale orders of transfer made against the petitioners by the Commissioner of Income tax or the Central Board of Revenue, as the case may be, are saved by the explanation to section 5(7A) and are not unconstitutional and void: It remains now to consider whether the individual orders against the petitioners are discriminatory in fact or are mala fide and in abuse of the power vested in the Commissioner of Income tax or the Central Board of Revenue, as the case may be, under section 5(7A) of the Act. Petitions Nos. 211 to 215 of 1956, i.e., the Shiram Jhabarmull group, may be dealt with in the first instance as they have a peculiar characteristic of their own. The orders complained against in these petitions were all made by the Commissioner of Income tax Central, Calcutta, on July 27, 1946, and further proceedings were entertained against the petitioners by the Income tax Officer, Central Circle IV, Calcutta, immeasurable thereafter. All these proceedings culminated in assessment orders and certificate proceedings under section 46(2) of the Act were also taken by the authorities against the petitioners for recovery of the tax so assessed before the advent of the Constitution. The question, therefore, arises whether these orders of transfer can be challenged by the petitioners as unconstitutional and void. It is settled that article 13 of the Constitution has no retrospective effect and if, therefore, any action was taken before the commencement of the Constitution in pursuance of the provisions of any law which was a valid law at the time when such action was taken, such action cannot be challenged and the law under 267 which such action was taken cannot be questioned as unconstitutional and void on the score of its infringing the fundamental rights enshrined in Part III of the Constitution (See Keshavan Madhava Menon vs The State of Bombay(1)). The following observations of Das, J., as he then was, at p. 235 of that case, may be appropriately referred to in this context: "As already explained, article 13(1) only has the effect of nullifying or rendering all inconsistent existing laws ineffectual or nugatory and devoid of any legal force or binding effect only with respect to the exercise of fundamental rights on and after the date of the commencement of the Constitution. It has no retrospective effect and if, therefore, an act was done before the commencement of the Constitution in contravention of any law which, after the Constitution, becomes void with respect to the exercise of any of the fundamental rights, the inconsistent law is not wiped out so far as the past act is concerned, for, to say that it is, will be to give the law retrospective effect. . So far as the past acts are concerned the law exists, notwithstanding that it does not exist with respect to the future exercise of fundamental rights." (See also Syed Qasim Razvi vs The State of Hyderabad(2) and Laxmanappa Hanumanthappa Jamkhandi vs Union of India(1)). It is clear, therefore, that the petitioners are not entitled to complain against the said orders of transfer dated July 27, 1946. 225 to 229 of 1956, i.e., the Raichur group, and Petitions Nos. 86, 87, 88, 111, 112 and 158 of 1956, i.e., the Amritsar group, all belong to the same category. In the first group, there was an order of transfer on December 21, 1953, passed by the Commissioner of Income tax, Hyderabad, transferring the cases of the petitioner from the Additional Income tax Officer, Raichur, to the Income tax, Officer, Special Circle, Hyderabad. There was, however, an order passed by the Commissioner shortly before May 19, 1955, transferring the cases of the petitioner from the Income tax (1) ; , 235. (2) (3) ; 268 Officer, Special Circle, Hyderabad, to the main Income tax Officer, Raichur. The petitioner thus reverted to the Income tax Officer, Raichur, and it passes one 's imagination what possible argument he can urge on the score of inconvenience and harassment. The whole attitude of the petitioner is motivated by an intention to delay the payment of income tax legitimately due by him to the Revenue trying to take advantage of a mere technicality. In the second group, there were orders passed by the Commissioner of Income tax transferring the cases of the petitioners from the Income tax Officer, "AWard, Amritsar, or the Income tax Officer, 'F 'Ward, Amritsar, to the Income tax Officer, Special Circle, Amritsar. Both these officers were situated in the same building and under the same roof. The argument of inconvenience and harassment can, under these circumstances, be hardly advanced by them. There is moreover another feature which is common to both these groups and it is that none of the petitioners raised any objection to their cases being transferred in the manner stated above and in fact submitted to the jurisdiction of the Income tax Officers to whom their cases had been transferred. It was only after our decision in Bidi Supply Co. vs The Union of India, (supra), was pronounced on March 20, 1956, that these petitioners woke up and asserted their alleged rights, the Amritsar group on April 20, 1956, and the Raichur group on November 5, 1956. If they acquiesced in the jurisdiction of the Income tax Officers to whom their cases were transferred, they were certainly not entitled to invoke the jurisdiction of this Court under article 32. It is well settled that such conduct of the petitioners would disentitle them to any relief at the hands of this Court (Vide Halsbury 's Laws of England ', Vol. II, 3rd Ed., p. 140, para 265; Rex vs Tabrum, Ex Parte Dash(1); 0. A. 0. K. Lakshmanan Chettiar vs Commissioner, Corporation of Madras and Chief Judge,Court of Small Causes, Madras(2) ). The orders of transfer made by the Commissioner of Income tax or the Central Board of Revenue, as the (1) (2) [1927] 1. L. R. 269 case may be, against the three groups of petitioners, viz., Sriram Jhabarmull group, the Raichur group and the Amritsar group, cannot, therefore, be challenged by them as unconstitutional and void This leaves two sets of petitioners, the petitioners in Petitions Nos. 97 & 97 A of 1956 and the petitioners in Petitions Nos. 44/56 and 85/56. Petitions Nos. 97 & 97 A of 1956 : The petitioners are oilmill owners, merchants and commission agents, carrying on business at Sahibganj in the district of Santhal Parganas and have a branch at 97, Lower Chitpur Road, Calcutta. They were alleged to have concealed income exceeding Rs. 8 lakhs and indulged in business activities spread over a wide area resulting in large profits not disclosed in the books of account or in the various returns filed by them. After the judgment of this Court in Surajmull Mohta & Co. vs A. V. Viswanatha Sastri(2), about 320 cases referred to the Income tax Investigation Commission under section 5 (4) of Taxation on Income Investigation Commission Act (XXX of 1947) were affected and had to be reopened under section 34 (IA) of the Income tax Act. To dispose of these cases, "since they involved many back years ' cases" quickly and promptly, special circles without reference to area were created at Bombay and Calcutta, because the existing circles, whose hands were full, could not take up this extra work. These 320 cases were distributed between these circles on the basis of the geographical area to which these assessees belonged. The petitioners belonged to Bihar and had a branch at Calcutta and their cases were, therefore, allotted to one of the Central Circles at Calcutta. Later on in October 1954, this Court struck down section 5 (1) of the Taxation on Income Investigation Commission Act (XXX of 1947) in Meenakshi Mills Ltd. vs Viswanatha Sastri. (2 ) and as a result thereof cases referred under that section and pending with the (I) [1055] 1 S.C. R. 448. (2) [1955] I S.C. R. 787. 270 Income tax Investigation Commission on July 17,1954, could not be preceded with under the provisions of that Act. These cases numbering about 470 had to be reopened under section 34 (1A) of the Income tax Act. The Government thought that as in the earlier lot of cases, it would help speedier disposal of the cases, if they were allotted to Income tax Officers appointed without reference to area to deal with the same. In addition to the circles already created in Bombay and Calcutta, five more circles at Calcutta and 4 more circles at Bombay and 9 more circles at important centers such as Kanpur, Ahmedabad, Madras and Delhi were set up to deal with all these cases. As a result of the influx of these cases, it was found that the 9 circles at Calcutta had about 280 cases of assessees belonging to Calcutta itself to dispose of and therefore cases not belonging to that area had to be taken out and assigned to one of the newly created circles, Where the work load was low. It was found then that Central Circle VI had a lower work load compared to other circles and, therefore, the cases of the petitioners were transferred to the Income tax Officer, Central Circle VI, Delhi. Having regard to these circumstances which are disclosed in the affidavits of Shri V. Gouri Shankar, Under Secretary, Central Board of Revenue, dated November 19, 1956, and December 3, 1956, it is clear that the transfer of the cases of the petitioners, firstly, from the Income tax Officer, Special Circle, Patna, to the Income tax Officer, Central Circle XI, Calcutta, and next, from the latter officer to the Income tax Officer, Central Circle VI, Delhi, were made as a matter of administrative convenience only. It further appear; from the said affidavits that the examination of accounts and the evidence was done at the places desired by the assessees in order to suit their convenience and the Income tax Officers were instructed accordingly. As a matter of fact the Income tax Officer, Central Circle VI, Delhi, went to Sahibganj and examined the accounts there in the case of the petitioner No. 1 and when the assessee voluntarily requested the Income tax Officer to have 271 the examination done at Delhi (the assessee had then come to Delhi for some other work of his) the Income tax Officer promptly posted the case and examined the accounts. If these were the circumstances under which the cases of the petitioners were transferred from Patna to Calcutta and from Calcutta to Delhi and the petitioners were afforded all conveniences in the matter of the examination of their accounts and evidence, there is no basis for the charge that the orders of transfer made against these petitioners were in any manner whatever discriminatory. Petitions Nos. 44 and 85 of 1956 The petitioner in Petition No. 44/56 is Shri A. L. Sud who originally belonged to Hoshiarpur district in Punjab and since 1948 resides and has his office in Calcutta. Bhagwan Das Sud as the karta thereof. This Hindu undivided family has been carrying on business at Hoshiarpur and at various other places like Bareilly, Calcutta and Bombay. The said joint family of Bhagwan Das Sud & Sons was alleged to have evaded income tax to a large extent and had inter related transactions in respect of their dealings, the petitioner being a copartner of the said joint family. It was, therefore, considered necessary in order to have a proper assessment of the petitioner 's income that his case also should be dealt with by the Income tax Officer assessing the joint family and the petitioner was informed that, in the matter of hearing, he would be put to least inconvenience. These were the circumstances under which his case was transferred from the Income tax Officer, Survey Circle, Calcutta, to the Income tax Officer, Special Circle, Ambala, by an order of the Central Board of Revenue dated June 29, 1955. The case of M/S. Bhagwan Das Sud & Sons, petitioners in Petition No. 85/56; had already been 272 transferred by the Commissioner of Income tax from the Income tax Officer, Hoshiarpur, to the Income tax Officer, Special Circle, Ambala, by an order under section 5(7A) of the Act dated October 20, 1953. The petitioners had their office at Hoshiarpur in Punjab but their activities were scattered in various parts of India some of them being in Assam, Bombay, Bareilly, Calcutta and Kanpur in respect of the contracts they undertook with the Government and other parties. They were alleged to have concealed income assessable to income tax exceeding Rs. 30 lakhs and it was thought necessary to make proper investigation of their widespread activities resulting ' in extensive evasion of income tax. These were the circumstances under which their case was transferred to the Incometax Officer, Special Circle, Ambala, as above. That officer, however, agreed to examine the accounts and evidence at Hoshiarpur itself to suit the convenience of the petitioners but the petitioners did not agree on the ground that their Advocate was to come from Delhi and therefore Ambala would suit them as well. The cases of both the petitioners thus came to be transferred from the respective Income tax Officers who used to assess them at Calcutta and Hoshiarpur respectively to the Income tax Officer, Special Circle, Ambala, and all conveniences were afforded to them in the matter of the examination of their accounts and evidence. The argument of discrimination and inconvenience and harassment thus loses all its force and the orders of transfer made against them cannot be challenged as in any way discriminatory. It may be noted that in the last mentioned four petitions, viz., Petitions Nos. 97 & 97 A of 1956 and Petitions Nos. 44/56 and 85/56, the Central Board of Revenue or the Commissioner of Income tax, as the case may be, instructed the Income tax Officers concerned to minimise the inconvenience caused to the assessees and even proceed to their respective residences or places of business in order to examine the accounts and evidence. Inspite of the denials of the assessees in the affidavits which they filed in 273 rejoinder, we presume that such facilities will continue to be afforded to them in the future and the inconvenience and harassment which would otherwise be caused to them will be avoided. A humane and considerate administration of the relevant provisions of the Income tax Act would go a long way in allaying the apprehensions of the assessees and if that is done in the true spirit, no assessee will be in a position to charge the Revenue with administering the provisions of the Act with " an evil eye and unequal hand ". We have, therefore, come to the conclusion that there is no substance in these petitions and they should be dismissed with costs. There will, be, however, one set of costs between respondents in each of the petitions and one set of costs in each group of these petitions, viz., (1) Petitions Nos.97 & 97 A of 1956, (2) Petitions Nos.44/56 and 85/56, (3) Petitions Nos. 86/56, 87/56, 88/56, 111/56, 112/56 and 158/56, (4) Petitions Nos.211 to 215 of 1956, and (5) Petitions Nos. 225 to 229 of 1956.

These petitions on behalf of the assessees raised the common question as to the constitutionality of section 5(7 A) of the Indian Income tax Act, which was raised but not decided by this Court in Bidi Supply Co. V. The Union of India, ; Reliance was placed on the observations of Bose, J. in his Minority judgment in that case and it was contended that the section read with the explanation, subsequently added to it as a result of that decision,conferred arbitrary and uncontrolled powers of transfer on the Income tax Commissioner and the Central Board of Revenue, was discriminatory and violative of the provisions of article 14 and imposed an unreasonable restriction on the right to carry on trade or business in contravention of article 19(1)(g) of the Constitution. It was further contended that the omnibus wholesale orders of transfer made without any reference to any particular case or without any limitation as to time were inconvenient and discriminatory and ran counter to the majority judgment in that case. The contention of the Central Board of Revenue, supported by affidavits filed on its behalf, was that the section was intended to minimize administrative inconvenience, there was no discrimination after transfer because the same relevant provisions of the Act as applied to others similarly situated, were applied after the transfer and any resulting inconvenience to the assessee was sought to be minimised by transferring his case either to the nearest area or, where that was not feasible, by examining his accounts or evidence, if required by him, at a place suited to his convenience and that the wholesale omnibus orders of transfer were covered by the explanation: Held, that section 5(7A) of the Indian Income tax Act was a measure of administrative convenience, was constitutionally valid and did not infringe any of the fundamental rights conferred by articles 14 and (19)(g) of the Constitution and the orders of transfer in question were saved by the explanation: to that section and. were constitutionally valid. 30 234 The right conferred on the assessee by section 64(1) and (2) of the Act was not an absolute right and must be subject to the primary object of the Act itself, namely, the assessment and collection of income tax, and where the exigencies of tax collection so required, the Commissioner of Income tax or the Central Board of Revenue had the power under section 5(7A) of the Act to transfer his case to some other officer outside the area where he resided or carried on business and any difference in his position created thereby as compared to that of others similarly situated would be no more than a minor deviation from the general standard and would not amount to a denial of equality before the law. This discretionary power vested in the Authorities by the section to override the statutory right of the assessee must be distinguished from the discretion that has to be exercised in respect of a fundamental right guaranteed by the Constitution and the two tests to judge whether it was discriminatory would be, (I) whether it admitted of the possibility of any real and substantial discrimination and (2) whether it impinged on a fundamental right guaranteed by the Constitution and, so judged, the discretion vested in the Authorities by section 5(7 A) of the Act was not at all discriminatory nor did the section impose any unreasonable restriction on the fundamental right to carry on trade or business. Bidi Supply Co. vs The Union of India, ; M.K. Gopalan vs The State of Madhya Pradesh, (1955) I S.C.R.168 ; The State of West Bengal vs Anwar Ali Sarkay, ; ; Dayaldas Kushiram vs Commissioner of Income tax, (Central),, I.L.R. ; Dayaldas Kushiram vs Commissioner of Income tax, Central, ; and Wallace Brothers & Co., Ltd. vs Commissioner of Income tax, Bombay, Sind & Baluchistan, A.I.R. 1945 F.C. 9, discussed. The explanation added to the section by the Amending Act XXVI Of 1956, was intended to expand the connotation of the ' term 'case ' used in the section and included both pending proceedings as also other proceedings under the Act which might be commenced in respect of any year after the date of transfer and as such the orders in question were not unconstitutional or void. The Income Tax Authorities, however, must be held bound by the statements made in their affidavits and where an assessee could make out a prima facie case of a mala fide or discriminatory exercise of the discretion ' vested in them, the Court will scrutinise the circumstances in the light of those statements and where necessary quash an abuse of the power under articles 226 and 32 Of the Constitution. Ratanlal Gupta vs The District Magistrate of Ganjam, I.L.R. 1951 Cuttack 441 and Brundaban; Chandra Dhir Narendra vs 235 The State of Orissa (Revenue Department), I.L.R. 1952 Cuttack 529, referred to. The Income tax Authorities should follow the rules of natural justice and, where feasible, give notice of the intended transfer to the assessee concerned in order that he may re_ resent his view of the matter and record the reasons of the transfer, however briefly, to enable the Court to judge whether such transfer was mala fide or discriminatory, if and when challenged.

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Civil Appeal No. 1402 of 1979. Appeal by Special Leave from the Judgment and Order dated 16 2 1979 of the Allahabad High Court in Second Appeal No. 430/70. P. C. Bhartari for the Appellant. L. M. Singhvi and Pramod Swarup for the Respondent. The Judgment of V. D. Tulzapurkar, J. and A. P. Sen, J. was delivered by Tulzapurkar, J. D. A. Desai, J. gave a dissenting Opinion. TULZAPURKAR, J. This is a tenant 's appeal by special leave directed against the judgment and decree passed by the Allahabad High Court on February 16, 1979 in Second Appeal No. 430 of 1970 whereby the High Court decreed the respondents ' (landlords) suit for ejectment against the appellant (tenant) and the only question of substance raised in the appeal is whether when the landlords ' notice demanding arrears and seeking eviction is sent by registered post and is refused by the tenant the latter could be imputed the knowledge of the contents thereof 60 that upon his failure to comply with the notice the tenant could be said to have committed willful default in payment of rent ? The question arises in these circumstances: The appellant occupied shop No. 5 in Ivanhoe Estate, situated at Landure Cantonment, Mussorie, originally owned by one Parvij Waris Rasool, on an yearly rental of Rs. 250 payable by December 31, every year. The property at all material times was admittedly governed by the U.P. Cantonment, (Control of Rent & Eviction) Act, X of 1952 a Central Act and, in my view, all the Courts below rightly dealt with the matter as being governed by that Act and not by U.P. (Temporary) Control of Rent and Eviction Act, 1947, much less by the later U.P. (Rent and Eviction) Act, 1972. The respondents purchased the aforesaid Estate form its previous owner on November 27, 1964 and the previous owner attorned the tenancy of the appellant to the respondents along with the rental due from him for the year 1964. The appellant continued to be the tenant of the shop during the years 1965 and 1966 as well but since he did not pay the rent the respondents on November 9, 1966 gave a combined notice demanding payment of arrears and seeking ejectment on termination of tenancy which was refused by him on November, 10, 1966. On his failure to comply with the requisitions contained in the notice the respondents filed a suit against the appellant seeking eviction as well as recovery of rents and mesne profits. 967 The suit was resisted by the appellant, inter alia, on the ground that the rent of the accommodation payable to the previous owner was Rs. 250 per annum less 10% rebate on account of repairs; that in 1964 at the intervention of some common friends he agreed to vacate and did surrender the residential portion of the shop comprising two rooms, one kitchen, one bath room and one varandah at the back of the shop in consideration of respondents relinquishing the rental of Rs. 250 due from him for the year 1964; that for the years 1965 and 1966 the rental for the remaining shop was reduced by agreement to Rs. 50 per annum less rebate for repairs and that he had sent a cheque for the amount due to the respondents. He denied that he has committed default in payment of rents and averred that no notice of demand and ejectment was served on him and consequently prayed for dismissal of the suit. On an appreciation of the evidence led by the parties before it the Trial Court came to the conclusion that initially the rent fixed was Rs. 250 per year but after the respondents ' purchase of the property the appellant vacated the residential portion of the shop under an agreement arrived at between the parties where under there was relinquishment of rent due for 1964 and that the rent for the main shop was fixed at Rs. 100 per annum and that no rebate of any kind had been agreed to at any time on account of repairs. Regarding the arrears of rent outstanding against the appellant the Trial Court held that rent for the years 1965 and 1966 had not been paid and was due from him but it held that the notice dated November 9, 1966 was not served on the appellant and hence he could not be held to have committed willful default in payment of arrears of rent. In this view of the matter the Trial Court dismissed the suit insofar as the relief of eviction was concerned but decreed it for arrears of rent at the rate of Rs. 100 per annum. Aggrieved by that judgment and decree the respondents filed an appeal to the District Court, Dehradun. The learned District Judge concurred with the findings of the Trial Court that the rental for the year 1964 had been relinquished and that the rental of the front portion of the shop had been fixed at Rs. 100 per annum. He further held that the notice was tendered to the appellant on November 10, 1966 but he declined to accept it and hence there was service by refusal, but in his opinion despite such service it could not be presumed that the appellant had knowledge about the contents of that notice and consequently he could not be said to have committed any willful default in the payment of rent. In the result the appeal was dismissed. The respondents preferred Second Appeal No. 430 of 1970 to the High Court. In that appeal the tenant sought to reagitate the question 968 whether or not the notice was tendered to him and was refused by him on the ground that the finding had been recorded by the District Court without application of mind to the statement on oath made by him to the effect that no postman had ever gone to him with a registered letter either on 9th or 10th November, 1966 and he had not declined to receive any registered letter but the High Court refused to entertain the contention inasmuch as it found that the learned District Judge had referred to this part of the appellant 's evidence as also the postman 's evidence on the point and that on an appreciation of such rival evidence on record he had recorded a finding that the notice was tendered to the appellant but it was refused by him; in other words in the absence of animus being attributed to the postman the District Judge had preferred the postman 's evidence to that of the appellant 'section The High Court, therefore, accepted the finding of fact recorded by the District Court that there was service of the notice on the appellant by refusal. On the further question as to whether when such refusal had been established, the appellant could be imputed with the knowledge of the contents of the notice, the High Court, following its two previous decisions in Shri Nath and another vs Smt. Saraswati Devi Jaswal and Fanni Lal vs Smt. Chironja, held that when notice was tendered to the tenant and when the latter refused to accept the same, knowledge of the contents of the notice must be imputed to him. The District Judge 's view in this behalf was thus reversed and since there was failure on the part of the appellant to pay the rent within one month of the service of notice upon him, the High Court held that he had committed willful default within the meaning of section 14(a) of the Act. Accordingly the High Court allowed the appeal and the respondents ' prayer for ejectment was granted but the appellant was given three months" time to vacate the accommodation. The tenant has come up in appeal to this Court. Counsel for the appellant vehemently contended before us that the High Court was in error in taking the view that when service by refusal had been effected the tenant must be deemed to have knowledge about the contents of the notice, for, no such presumption could be drawn especially when it was clear on evidence that neither the registered envelope was opened either by the tenant or by the postman nor the contents thereof read before the same was returned to the postman. He further urged that the envelope bore the seal of Shri section P. Singh, Advocate and the appellant could not, therefore, know that the notice was from his landlords; he also pointed out that the appellant was illiterate and did not know English and since the address on the envelope as 969 well as the seal of the lawyer were in English the appellant could not even know who the sender of the notice was. Counsel, therefore, urged that in the peculiar circumstances of the case the learned District Judge had rightly recorded a finding that the knowledge of the contents of the notice could not be imputed to the appellant and, therefore, the appellant could not be regarded as a willful defaulter in the matter of payment of rent. In support of this contention strong reliance was placed by him on the decision of the Bombay High Court in the case of Vaman Vithal Kulkarni and Ors. vs Khanderao Ram Rao Sholapurkar where the following observations of Beaumont, C. J., appear at page 251: "In case of defendants 4 and 5 a registered letter containing the notice was sent to them duly addressed, and service : is alleged to have been refused. In fact the refusal was not proved, as the postman who took the letter and brought it back was not called. But in any case, even if the refusal had been proved, I should not be prepared to hold that a register ed letter tendered to the addressee and refused and brought back unopened, was well served. There are, I know, some authorities in this Court to the contrary, but it seems to me impossible to say that a letter has been served so as to bring the contents to the notice of the person to whom the letter is addressed, if the agent for service states that in fact the notice was not served, although the reason may have been that the addressee declined to accept it. One cannot assume that because an addressee declines to accept a particular sealed envelope he has guessed correctly as to its contents " Counsel also referred to some other decisions including that of the Andhra Pradesh High Court in Mahboob Bi vs Alvala Lachmiah but these other decisions do not touch the aforesaid aspect of visiting the addressee with the knowledge of the contents. Of the refused notice but have expressed the view that refusal of registered notice without more may not amount to proper service and hence it is unnecessary to consider them. But placing strong reliance upon the observations of Chief Justice Beaumont quoted above counsel for the appellant urged that the High Court ought to have confirmed the finding of the learned District Judge that the appellant could not be presumed to have known the contents of the notice or that the notice was one demanding arrears of rent simply because he refused to accept the same. On the other hand, counsel for the respondents contended before us that both under section 27 of the General clauses Act, 1897 and section 114 of 970 the Indian Evidence Act presumption of due service could arise if the notice was sent to the tenant by properly addressing the same, prepaying and sending the same by registered post and it was pointed out that in the instant case as against the denial by the appellant there was positive oath of postman (Kund Ram P.W. 2) who was examined by the respondents to prove the fact that the registered letter containing the notice was tendered to the appellant and when he declined to accept it the postman had made endorsement in his hand on the envelope "Refused. Returned to the sender". Counsel, therefore, urged that in view of such positive evidence of postman led by the respondents which had been accepted by the learned District Judge, the High Court was justified in holding that the appellant must be imputed with the knowledge of the contents of the notice. In this behalf counsel for the respondents placed reliance on the Privy Council decision in Harihar Banerji and Ors. vs Ramshashi Roy and Ors and Madras decision in Kodali Bapayya and Ors. vs Yadavalli Venkataratnam and Ors and the two decisions of the Allahabad High Court relied upon by the High Court. Counsel pointed out that the Madras High Court in Kodali Bapayya 's case (supra) and the Allahabad High Court in its Full Bench decision in Ganga Ram vs Smt. Phulwati have dealt with the Bombay decision and have expressed their disagreement with the view expressed therein. Section 27 of the deals with the topic 'Meaning of service by post ' and says that where any Central Act or Regulation authorises or requires any document to be served by post, then unless a different intention appears, the service shall be deemed to be effected by properly addressing, pre paying and posting it by registered post, a letter containing the document, and unless the contrary is proved, to have been effected at the time at which the letter would be delivered in the ordinary course of post. The section thus arises a presumption of due service or proper service if the document sought to be served is sent by properly addressing, pre paying and posting by registered post to the addressee and such presumption is raised irrespective of whether any acknowledgement due is received from the addressee or not. It is obvious that when the section raises the presumption that the service shall be deemed to have been effected it means the addressee to whom the communication is sent must be taken to have known the contents of the document sought to be served upon him without any thing more. Similar presumption is raised under Illustration (f) to section 114 of the Indian Evidence Act whereunder it is stated that the Court 971 may presume that the common course of business has been followed in h a particular case, that is to say, when a letter is sent by post by pre paying and properly addressing it the same has been received by the addressee. Undoubtedly, the presumptions both under section 27 of the as well as under section 114 of the Evidence Act are rebuttable but in the absence of proof to the contrary the presumption of proper service or effective service on the addressee would arise. In the instant case, additionally, there was positive evidence of the postman to the effect that the registered envelope was actually tendered by him to the appellant on November 10, 1966 but the appellant refused to accept. In other words, there was due service effected upon the appellant by refusal. In such circumstances, we are clearly of the view, that the High Court was right in coming to the conclusion that the appellant must be imputed with the knowledge of the contents of the notice which he refused to accept. It is impossible to accept the contention that when factually there was refusal to accept the notice on the part of the appellant he could not be visited with the knowledge of the contents of the registered notice because, in our view, the presumption raised under section 27 of the as well as under section 114 of the Indian Evidence Act is one of proper or effective service which must mean service of everything that is contained in the notice. It is impossible to countenance the suggestion that before knowledge of the contents of the notice could be imputed the sealed envelope must be opened and read by the addressee or when the addressee happens to be an illiterate person the contents should be read over to him by the postman or someone else. Such things do not occur when the addressee is determined to decline to accept the sealed envelope. It would, therefore, be reasonable to hold that when service is effected by refusal of a postal communication the addressee must be imputed. with the knowledge of the contents thereof and in our view, this follows upon the presumptions that are raised under section 27 of the and section 114 of the Indian Evidence Act. Turning to the Bombay decision in Vaman Vithal 's case (supra), We would like to point out two aspects that emerge clearly from the very observations which have been strongly relied upon by counsel for the appellant. In the first place, the observations clearly show that the refusal to accept the notice was not satisfactorily proved in the case inasmuch as the postman who took the letter and brought it back had not been examined; consequently the further observations made by the leaned Chief Justice were unnecessary for decision on the point and as such will have to be regarded as obiter. 972 Secondly, while making those observations the learned Chief Justice WAS himself conscious of the fact that there were some authorities of that Court taking the contrary view. Having regard to these aspects it is difficult to hold that the concerned observations lay down the correct legal position in the matter. In any event we approve of the view taken by the Allahabad High Court in its three decisions, namely, Sri Nath 's case, Fanni Lal 's case and Ganga Ram 's case (supra) and would confirm the High Court 's finding on the point in favour of the respondents. Counsel for the appellant then faintly argued that the respondents suit was not maintainable under section 14(1) of the Act inasmuch as no permission of the District Magistrate had been obtained by the respondents before filing the suit as required by section 14 and in this behalf reliance was placed on section 14(a) of the Act which ran thus: "14. Restrictions on eviction. No suit shall, without the permission of the District Magistrate, be filed in any Civil Court against a tenant for his eviction from any accommodation except on one or more of the following grounds, namely: (a) that the tenant has willfully failed to make payment to the landlord of any arrears of rent within one month of the service upon him of a notice of demand from the landlord. " According to counsel for the appellant the aforesaid provision clearly shows that under the Act two safeguards were available to a tenant (i) eviction could not be had by any landlord except on one or more of the grounds specified in cls. (a) to (f) of section 14 and (ii) no suit for eviction even on those grounds specified in cls. (a) to (f) could be instituted without the permission of the District Magistrate, and admittedly the landlords in the instant case had filed the suit against the appellant without obtaining the permission of the District Magistrate. He, therefore, urged that the Civil Court had no jurisdiction to entertain the suit and the decree was without jurisdiction. It must be observed that no such contention was raised by the appellant in any of the Courts below presumably because the appellant as well as this lawyer knew how an identical provision contain ed in section 3(1) of the U.P. (Temporary) Control of Rent and Eviction Act, 1947, an allied enactment, had been judicially interpreted by in this Court in Bhagwan Dass vs Paras Nath Section 3 of the U.P. Act 3 of 1947 ran thus: 973 "3. Restrictions on evictions. Subject to any order passed under sub section (3), no suit shall without the permission of the District Magistrate, be filed in any Civil Court against a tenant for his eviction from any accommodation, except on one or more of the following grounds: (a) that the tenant is in arrears of rent for more than three months and has failed to pay the same to the landlord within one month of the service upon him of a notice of demand. " This Court in Bhagwan Dass case Asupra) has explained at page 305 of the report the legal position arising on a grammatical construction of section 3(1) thus: "Section (3) 1 does not restrict the landlord 's right to evict his tenant on any of the grounds mentioned in cls. (a) to (g) of that sub section. But if he wants to sue his tenant for eviction on any ground other than those mentioned in those clauses then he has to obtain the permission of the District Magistrate whose discretion is subject to any order passed under sub section (3) of section 3 by the Commissioner. These are the only restrictions placed on the power of a landlord to institute a suit for eviction of his tenant. " It would be conducive to judicial discipline to interpret an identical provision contained in section 14(1) of the U.P. Cantonment (Control of Rent & Eviction) Act, 1952 in a similar manner. In other words, under section 14(1) of the concerned Central Act permission of the District Magistrate was required if the landlord sought eviction of his tenant on any ground other than those specified in cls. (a) to (f) and not when it was sought on any of the grounds specified in cls. (a) to (f). (If may be stated that both the enactments have since been repealed). It is, therefore, not possible to accept the contention of the counsel for the appellant that the instant suit filed by the respondents against the appellant could not be entertained by the Civil Court. In the result the appeal fails and is dismissed. However, having regard to all the facts and circumstances of the case there will be no order as to costs and we grant the appellant six months time to vacate. DESAI, J. I have very carefully gone through the judgment prepared by my learned brother Mr. Justice V. D. Tuzapurkar, but I regret my inability to agree with the same. 974 The relevant facts leading to the appeal by special leave have been succinctly set out in the main judgment and therefore, I would straightway proceed to deal with the three important questions raised in this appeal. The first and the principal question which goes to the root of the matter is about the construction of section 20(2) (a) of the Uttar Pradesh Urban Buildings (Regulation of Letting, Rent & Eviction) Act, 1972 ( 'Rent Act ' for short). It reads as under: "20. Bar of suit for eviction of tenant except on specified grounds: (2) A suit for the eviction of a tenant from a building after the determination of his tenancy may be instituted on one or more of the following grounds namely: (a) that the tenant is in arrears of rent for not less than four months, and has failed to pay the same to the landlord within one month from the date of service upon him of a demand :" There is a proviso to this sub section which is not material for the purpose of this appeal. A brief resume of concurrently found facts which would high light the question of construction would be advantageous. Appellant was inducted as a tenant of the premises by its former owner on a rent of Rs. 250/ per annum in the year 1964, on a request by the then landlord, appellant tenant surrendered a portion of the premises, comprising two rooms, a kitchen, a bathroom and a verandah at the back of the shop, retaining only possession of the shop, consequently reducing the rent by agreement between the parties at the rate of Rs. 100/ per annum. It is thus an agreed and incontrovertible fact that the appellant tenant is a tenant of a shop on an yearly rent of Rs. 100/ , payable at the end of every year. The focus should immediately be turned to the provision of law under which the landlord seeks to evict this tenant. According to respondent landlord she served notice dated November 9, 1966, terminating the tenancy of the appellant as the appellant tenant was a defaulter within the meaning of section 20(2) (a) and, therefore, she all was entitled to a decree for eviction as she has satisfactorily proved all the requirements or ingredients of section 20(2) (a). Accepting the finding of fact that the appellant is a tenant liable to pay rent 975 @ Rs. 100/ per annum, the crux of the matter is whether his case is covered by section 20(2) (a). What does section 20(2) (a) postulate and what are its components which when satisfied, the landlord would be entitled to evict the tenant ? On analysis following ingredients of section 20(2) (a) would emerge each of which will have to be satisfied before the landlord 1 would be eligible to obtain a decree for eviction, viz: (i) Tenant must be a tenant of premises governed by the Rent Act; (ii) That the tenant is in arrears of rent for not less than four months; (iii) That such a tenant has to pay rent in arrears within a period of one month from the date of service upon him of a notice of demand. In this case, the tenant is a tenant of premises governed by tho Rent Act. The crucial question is whether the second ingredient, as extracted above, is satisfied by the landlord. The attention has to be focused on the expression 'in arrears of rent for not less than four months '. What does this expression signify ? As contended on behalf of the respondent that whatever be the default in payment of rent, the notice can be served after the default has continued for a period of four months, and failure to comply with the requisition in the notice would disentitle the tenant to the protection of Rent Act. Alternatively it was contended that the expression in arrears of rent for not less than four months ' on a literal grammatical construction would signify that rent is payable by the month and that the tenant has committed a default in payment of four months ' rent and further failed to comply with the requisition made in the notice within the stipulated period of one month and only then the protective umbrella of the Rent Act would be removed and the tenant would be exposed to a decree for eviction. The two rival constructions raised a question of construction of a sub section in a statute primarily enacted as can be culled out from the long and short title of the Rent Act, being regulation of letting and rent and arbitrary eviction of tenant from the premises to which the rent Act would apply. It is a socially beneficent statute and in construing such statute certain well recognised canons of construction have to be borne in mind. Undoubtedly, the dominant purpose in construing the statute is to ascertain the intention of the legisla 976 ture. This intention, and, therefore, the meaning of the statute, is primarily to be sought ill the words used in the statute itself, which must, if they are plan and unambiguous, be applied as they stand, however strongly it may be suspected that the result does not re present the real intention of legislature (see Inland Revenue Commissioner vs Hinchy). In approaching the matter from this angle, it is a duty of the Court to give fair and full effect to statute which is plain and unambiguous without regard to the particular consequence in a special case. Even while giving liberal construction to socially beneficent legislation, if the language is plain and simple the making of a law being a matter for the legislature and not courts, the Court must adopt the plain grammatical construction (see River Wear Commissioners vs Adamson) The Court must take the law as it is. And, accordingly, it is not entitled to pass judgment on the propriety or wisdom of making a law in the particular form and further the Court is not entitled to adopt the construction of a statute on its view of what Parliament ought to have done. However, when two constructions are possible and legitimate ambiguity arises from the language employed, it is a plain duty of the Court to prefer and adopt that which enlarges the protection of a socially beneficent statute rather than one which restricts it. In Mohd. Shafi vs Additional District & Sessions Judge (VII), Allahabad and Others, this Court while interpreting the explanation (iv) to section 21 of the Rent Act observed that where the language is susceptible of two interpretations, the Court would prefer that which on larges the protection of the tenants rather than one which restricts it. It was further observed that the construction that the Court adopted would be more consistent with the policy and attainment of the legislation which is to protect the possession of the tenant unless the landlord establishes a ground for eviction. Similarly in Gurucharan Singh vs Kamla Singh & Ors. while interpreting the provision of section 6 of the Bihar Land Reforms Act, 1950, this Court observed that the Court was called upon to interpret a land reforms law are not just an ordinary state and, therefore, the socioeconomic thrust of the law in these areas should not be retarded by judicial construction but filliped by the legal process without parting from the object of the Act. It must also be emphasised that where two constructions are possible, the one that must be preferred is one which would accord with reason and justice (see H. H. Maharaja 977 dhiraja Madhav Rao Jivaji Rao Scindia Bahadur of Gwalior & Ors. vs Union of India & Another. Bearing in mind this interpretative approach let us hark back to the expression used in s.20(2)(a) and ascertain whether the exception is susceptible of one construction only or more than one construction and whether there is ambiguity and if so, in which direction the interpretative jurisprudence must move. The expression "the tenant is in arrears of rent for not less than four months" may suggest that the tenant is in arrears of rent for one or any number of months and that the arrears have fallen due four months back meaning thereby that within four months there was no attempt on the part of the tenant to pay up the arrears and cure the default. This construction would imply that if the tenant is in arrears of rent for one month only, an action under the relevant clause can be commenced against him if this infault has continued for a period of four months even if the tenant has paid rent for subsequent months and on the expiry of the period of four months from the date on which the rent had become due and payable for one month a notice of demand can be served and on the failure of the tenant to comply with the requisition made in the notice he would be liable to be evicted. In other words, a period of four months must elapse between the date of default and the service of notice irrespective of the fact whether the default is in payment of one month 's rent or more than one month 's rent. In this constriction it is implicit that failure to pay rent for four different months is not a sine qua non for commencing action under section 20(2) (a). What is of the essence of matter is that a period of four months must elapse between the date of default complained of and service of notice under section 20(2) (a). It was said that the legislature has given locus poenitentiae to the tenant to repair the default within the period of four months. This approach overlooks the obvious that before action can be commenced under section 20(2) (a) a notice has to be served and tenant is given locus poenitentiae to repair the default within one month. It appears that by section 43 of the Rent Act the United Provinces (Temporary) Control of Rent and Eviction Act, 1947 ( 'Repealed Act ' for short) was repealed. Section 3 of the Repealed Act enumerated grounds on which a tenant could be evicted. Sub clause (a) of section 3 provided that the landlord would be entitled to eviction of a tenant if the tenant was 'in arrears of rent for more than three months ' and had failed to pay the same to the landlord within one month of the service upon him of the notice of demand. The language employed in the repealed provision led 978 the Court to hold that whatever be the default in payment of rent, a period of three months should have expired from the date of default whereafter alone the landlord would be entitled to serve a notice as provided in the relevant sub clause. It was so held by the Allahabad High Court in Ram Saran Das vs L. Bir Sain, but this decision was overruled in Jitendra Prasad vs Mathur Prasad. In order to avoid ally such controversy, in the Repealing statute the expression 'arrears of rent for more than three months ' has been substituted by the expression 'arrears of rent for not less than four months '. This is contemporaneous legislative exposition which clearly brings out the legislative intention that the landlord would be entitled to evict the tenant if the rent is in arrears for not legs than four months. Therefore, it would clearly imply that before the landlord can commence action under sub clause (a), the tenant must have committed default in payment of rent for a period of four months. Therefore, the first suggested construction is not borne out by the language employed in the section. The question still remains: what does the expression 'in arrears of rent for not less than four months ' signify ? It is implicit in the expression that the rent must be payable by month. Irrespective of the fact whether the tenancy is a yearly tenancy or a monthly tenancy, it is implicit in sub clause (a) that either by the contract of lease or by oral agreement or by long usage the tenant is liable to pay rent at the end of every month. In other words, the unit for computation of rent is one month, that is, rent becomes due and payable every month. It is only such a tenant who may fall in arrears for a period of four months. Every month the tenant would be liable to pay the rent in the absence of a contract to the contrary. Thus the rent becomes due and payable at the end of every month. As soon as the month is over the rent becomes due and payable and failure on the part of the tenant to pay the same would dub him as a tenant in arrear of rent for one month. If this process goes on meaning thereby that a period of four months having expired and for each of the four months the rent when It became due and payable was not paid, then alone the tenant could be said to be a tenant in arrears of rent for not less than four months. Two definite ingredients emerge from the expression 'the tenant is in arrears of rent for not less than four months ' (i) that the rent is payable by month; and (ii) the tenant has committed default in payment of rent for four different months and that this default subsists and continues on the date when the landlord invokes the 979 provision of clause (a) and proceeds to serve a notice of demand. Again, if within a period of one month from the date of receipt of the notice the tenant pays up the arrears of rent he does not lose the protection of the Rent Act. The legislature clearly intended to cover those cases of default in payment of rent under clause (a) where the contract of lease provided for payment of rent every month meaning thereby that the unit for liability to pay rent is one month and secondly the tenant has committed default on four different occasions of four different months or four different units agreed upon for payment of rent and that they differ the facility to pay the same has accrued. As stated earlier this is implied in the expression 'the tenant is, in arrears of rent for not less than four months. In this connection one can profitably refer to section 12(3) (a) of the Bombay Rents, Hotel & Lodging House Rates Control Act, 1947, which reads as under: "Where the rent is payable by the month and there is no dispute regarding the amount of standard rent or permitted increases, it such rent or increases are in arrears for a period of six months or more and the tenant neglects to make payment thereof until the expiration of the period of one month after notice referred to in sub section (2), the (2) (Court shall pass a decree) for eviction in any such suit for recovery of possession. " The expression used there is that the rent is payable by month and the tenant is in arrears for a period of six months. In the Rent Act under discussion, a conjoint expression is used that a tenant is in arrears of rent for a period of not less than four months. It only means that where the rent is payable by month and the tenant is in arrears of rent for not less than four months, and that is the clearest intention discernible from the language used in the relevant clause. It was, however, contended that this construction would give an undeserved advantage to the defaulting tenant where the rent is not payable by month. The contention is that a landlord who had agreed to accept rent on an yearly basis would be at the mercy of the tenant because even if the default is contumacious the landlord would not be entitled to evict the tenant and that such could not be the intention of the legislature. It was, therefore, said that the expression 'the tenant is in arrears of rent for not less than four 980 months ' is also susceptible of the meaning that where the rent is payable by year and after the year is over and the rent has become due and payable if the tenant has not paid the rent for four months his case would be covered by clause (a). If a tenant is under a contract with the landlord to pay rent at the end of a specific year agreed to between the parties, could he be said to be a tenant arrears for not less than four months even if he has defaulted in payment of rent at the end of one year l How can a tenant who is to pay rent on the expiry of a specified year be in arrears of rent for not less than four months ? And if that construction is adopted, a tenant who has committed default in payment of rent for one month and the default has continued without repair for a period of Four months even though he has paid rent for subsequent months he would be liable to be evicted, a construction which ought to be rejected on legislative exposition by change in expression adopted in the repealed Act and substituted in the present Act discussed herein above. If that construction is rejected it would be difficult to accept the construction that even of the rent is payable by year once the year is over and a period of four months has elapsed he could be said to be a tenant in arrears of rent for not less than four months. The language does not admit of this construction. Therefore, where the rent is payable by the year clause (a) is not attracted. Now the wild apprehension expressed on behalf of the landlord that such a construction would give an unfair advantage to a tenant who is liable to pay yearly rent need not detain us because the wisdom of enacting a law in a certain manner is for the legislature to decide and not for the court to impose. It may be that the legislature would have intended that such landlords who relied on the income from rent month after month must have a sanction which can be applied if the tenant commits default in payment of rent of four different months but a landlord who apparently does not depend upon the rental income by agreeing to accept yearly rent need not have that sanction and it would be still open to such a landlord to file a suit merely for recovery of rent and not for eviction. Such a thing is not unknown to law because in permanent tenancy and in tenancies of long duration the landlords can only sue for rent and not for eviction on the tenant committing default in payment of rent. Therefore, on examining both the rival constructions one which extends the protection deserves to be accepted in view of the fact that the legislature never intended to provide a ground for eviction for failure to pay rent in case of leases where yearly rent was reserved. Rent Act was enacted to fetter the right of re entry of landlord and this construction accords with the avowed object of the Rent Act. 981 In the instant case the parties are ad idem that the rent is payable by year at the rate of Rs. 100/ per annum. In such a case it could not be said that this tenant was in arrears of rent for not less than four months. His case would not be covered by section 20(2) (a) of the Rent Act and, therefore, the landlord would not be entitled to a decree for eviction on this ground and that was the sole ground on which eviction has been ordered. The second contention is that the High Court was in error in interfering with the concurrent finding of facts while hearing second appeal in February, 1979 and that too without framing the point of law which arose in the appeal. The disputed finding of fact is about the service of notice. If a landlord seeks eviction on the ground of tenant 's default in payment of rent under section 20(2) (a) it is obligatory upon him to serve a notice of demand of the rent in arrears On the tenant and can only seek eviction if the tenant fails to comply with the requisition made in the notice. The appellant tenant in terms contended that no notice was served upon him. On the assertion of the respondent landlord that notice dated November 9, 1966, was served upon the appellant tenant on November 10, 1966, but he refused to accept the same and the refutation thereof by the tenant that no notice was offered to him by the postman nor was any notice refused by him, a triable issue arose between the parties. The learned trial judge framed Issue No. 7 on the question of service of notice. He recorded a finding that the appellant tenant was not served a notice of demand and of ejectment and answered the issue in favour of the appellant tenant. On appeal by the respondent landlord the appellate court framed point No. 2 on the question of service of notice and answered it by observing that the defendant tenant refused to accept the registered notice but no knowledge can be attributed to him of the contents of the registered envelope and, therefore, the tenant could not be said to be guilty of wilful default on the expiry of one month after the service of notice. He accordingly confirmed the finding of the trial court that the plaintiff landlord is not liable to a decree of eviction on the ground mentioned in section 20(2)(a). The landlord approached the High Court in second appeal. When this appeal was heard, section 100 of the Civil Procedure Code after its amendment of 1976 was in force. It restricted the jurisdiction of the High Court to entertain a second appeal only if the High Court was satisfied that the case involved a substantial question of law. Sub section 4 cast a duty on the court to formulate such a substantial question of law and the appeal has to be heard on the question so formulated. It would also be open to the respondent 982 at the hearing of the appeal to contend that the case does not involve such a question. Even prior to the amendment of Section 100, the High Court ordinarily did not interfere with the concurrent findings of fact. This position has been repeatedly asserted and one need not go in search of precedent to support the proposition. However one can profitably refer to R. Ramachandran Ayyar vs Ramalingam Chettiar. After examining the earlier decisions and the decision of the Privy Council in Mst. Durga Chaudhrain vs Jawahar Choudhary Gajendragadkar J. speaking for this Court in terms spelt out the jurisdiction of the High Court in second appeal as under: "But the High Court cannot interfere with the conclusions of fact recorded by lower appellate Court however erroneous the same conclusions may appear to be to the High Court, because, as the Privy Council observed, how ever gross or in excusable the error may seem to be, there is no jurisdiction under section 100 to correct that error". This view was re affirmed in Goppulal vs Dwarkadhishji wherein after reproducing the concurrent finding of fact this Court observed that this concurrent finding of fact was binding on the High Court in second appeal and the High Court was in error in holding that there was one integrated tenancy of six shops. In the facts of this case, there was a concurrent finding that the statutory notice as required by section 20(2) (a) was not served upon the tenant and, therefore, the High Court was in error in interfering with this finding of fact. However, it is not necessary to base the judgment on this conclusion because it was rightly said on behalf of the respondent that whether the notice was offered to the petitioner tenant and he refused to accept the same the finding is not concurrent because the appellate court has held that the notice was offered but the tenant refused to accept the same and, therefore, on the refusal to accept the notice there was no concurrent finding. This contention is legitimate because the appellate court held that notice as required by law was not served because even if the tenant refused to accept the notice the knowledge of the contents of the registered envelope not opened by him cannot be imputed to him, and, therefore, there was no service of notice as required by section 20(2) (a). The first appellate court was of the view that in the absence of knowledge of the demand of rent in arrears as alleged in the notice the tenant cannot be said 983 to be guilty of wilful default so as to be denied the protection of the Rent Act. This accordingly takes me to the third contention in this appeal. The third contention is that even if this Court agrees with the High Court in holding that the notice in question was tendered by the postman to the appellant tenant and he refused to accept the same n: and, therefore, this refusal amounts to service within the meaning of section 20(2)(a), yet as the knowledge of the contents of the notice would reflect on subsequent conduct as wilful or contumacious, it is not sufficient that a notice is served or tendered and refused but it must further be shown that in the event of refusal the tenant did it with the knowledge of the contents of the registered envelope and his subsequent conduct is motivated. The question then is; What would be the effect of a notice sent by registered post and refused by a tenant on the question of his knowledge about the contents of the notice and his failure to act? Would it tantamount to an intentional conduct evidencing wilful default on his part? This aspect cannot be merely examined in the background of some precedents or general observations. One has to examine this aspect in the background of Indian conditions or in the words of Krishna Iyer, J., 'the legal literacy in rural areas and the third world jurisprudence. ' Before we blindly adhere to law bodily imported from western countries we must not be oblivious to the fact that the statutes operating in the western countries are meant for a society if not 100 per cent. , 99 per cent. literate. We must consciously bear in mind that our society especially in the semi urban and rural areas is entirely different and wholly uncomparable to the western society. A literate mind will react to a problem presented to him in a manner other than an illiterate mind because illiteracy breeds fear and fear oriented action cannot be rationally examined on the touchstone of legal presumptions. To articulate the point as it arises in this case, let one put his feet in the shoes of a rural illiterate person to whom a registered envelope by a postman is presented. Does it require too much of imagination to conclude that he will be gripped with fear and he may react in a manner which will be his undoing? He would believe that by refusing to accept the registered envelope he would put off the evil rather than accept the same and approach a person who can advise him and meet the situation. Can this action of fear gripped mind inflict upon the person an injury flowing from the assumption that he not only refused the registered envelope with the conscious knowledge of the fact that it contained a notice by a lawyer on behalf of his landlord and that it accused him of wilful 984 default in payment of rent and that if he would act rationally he would repair the default by tendering the rent within the period of one month granted by the statute? If he is deemed to have acted consciously is it conceivable that he would invite injury by sheer refusal to accept the registered envelope rather than know the con tents or make them knowable to him and meet the charge of wilful default. As was said, again by Krishna Iyer, J., which bears quotation: "The Indian Courts interpret laws the Anglo Indian way, the rules of the game having been so inherited. The basic principles of jurisprudence are borrowed from the sophisticated British system, with the result that there is an exotic touch about the adjectival law, the argumentative method and the adversary system, not to speak of the Evidence Act with all its technicalities". Lord Devlin recently said: "If our business methods were as antiquated as our legal methods, we would be a bankrupt country. There is need for a comprehensive enquiry into the rules of our procedure backed by a determination to adopt it to fit the functions of the welfare State". This is much more apposite in the conditions of our society and this was noticed by Beaumost, C. J. way back in fourth decade of this century in Waman Vithal Kulkarni & Others. vs Khanderao Ram Rao Sholapurkar. An exactly identical question arose before the Division Bench of the Bombay High Court. The facts found were that the registered letter containing the notice was sent to defendants 4 & 5 duly addressed and service was alleged to have been refused. The contention was two fold that the refusal was not proved but alternatively it was contended that even if it was proved, the addressee could not be imputed with the knowledge of the contents of the registered envelope. The pertinent observation is as under: "In the case of defendants 4 and 5 a registered letter containing the notice was sent to them duly addressed, and service is alleged to have been refused. In fact the refusal was not proved, as the postman who took the letter and brought it back was not called. But in any case, even if the refusal had been proved, I should not be prepared to hold 985 that a registered letter tendered to the addressee and refused and brought back unopened, was well served. There are, I know, some authorities in this Court to the contrary, but it seems to me impossible to say that a letter has been served so as to bring the contents to the notice of the person to whom the letter is addressed, it the agent for service states that in fact the notice was not served, although the reason may have been that the addressee declined to accept it. One cannot assume that because an addressee declines to accept a particular sealed envelope he has guessed correctly as to its contents. Many people in this country make a practice of always refusing to accept registered letters, a practice based, I presume, on their experience that such documents usually contain something unpleasant. To that, it is clear that this notice was not served on three of the defendants". Learned counsel for the respondent tried to distinguish this decision by observing that the court did hold that the refusal was not proved, therefore, the rest of the observation was obiter. It is not far a moment suggested that the decision of the Division Bench of the Bombay High Court is binding on this Court but the reasoning which appealed to the Division Bench in 1935 is all the more apposite at present. The Division Bench noticed that in the society from which the defendants came, there was a feeling that such registered letters usually contained something unpleasant. Is there anything to suggest that this feeling is today displaced or destroyed? The Division Bench further noticed that many people in India make a practice of always refusing to accept registered letters and the practice according to the Division Bench was based on their experience that such documents usually contained something unpleasant. The reaction is to put off the evil by not accepting the envelope. Could such ignorant illiterate persons be subjected to a legal inference that the refusal was conscious knowing the contents of the document contained in the registered envelope? To answer it in the affirmative is to wholly ignore the Indian society. And this concept that the registered envelope properly addressed and returned with an endorsement of refusal must permit a rebuttable presumption that the addressee refused it with the knowledge of the contents is wholly borrowed from the western jurisprudence. I believe it is time that we ignore the illusion and return to reality. Reference was also made to Appabhai Motibhai vs Laxmichand Zaverchand & Co., but that case does not touch the point. In Mahboob Bi vs Alvala 986 Lachmiah, an almost identical question figured before the Andhra Pradesh High Court. In that case the Rent Controller issued a notice in respect of the proceedings initiated before him by the landlord for the eviction of the tenant, to the tenant by registered post and the envelope was returned with the endorsement of refusal and the Rent Controller set down the proceedings for ex parte hearing and passed a decree for eviction. The tenant under the decree of eviction preferred an appeal in the City Small Causes Court. A preliminary objection was raised by the respondent landlord that the appeal was barred by limitation as it was filed six days after the time allowed for filing the appeal. The appellant tenant countered this by saying that he had no knowledge of the proceedings before the Rent Controller and that he was never served with the notice of proceedings before the Rent Controller. The relevant rule permitted service of notice by registered post. After examining the relevant rule the Court accepted the contention of the tenant observing as under: "Moreover nothing has been placed before me to show that there is any duty cast upon any person to receive every letter or notice sent by registered post, nor does the refusal to receive has been made the subject matter of any presumption which may arise under sec. 114 of the Evidence Act. Then again, there is the practical difficulty of having to import the knowledge of the date of hearing or the precise proceedings with which the registered notice is concerned in the case of a mere refusal to receive a registered notice". The Court thus was of the view that even if refusal amounted to service, yet it is not service as required by law to fasten a liability on the tenant because no presumption can be raised that the refusal war, with the conscious knowledge of the contents of the registered envelope. Undoubtedly, our attention was also drawn to a contrary view taken by a Division Bench of the Allahabad High Court in Fannilal vs Smt. Chironja. It was contended that even if the registered letter was refused no presumption of knowledge of the contents of the letter could in law the raised against the tenant. In support of the submission reliance was placed on Amarjit Singh Bedi vs Lachchman Das, an unreported decision of a single judge of the Allahabad High Court and the decision of Beaumont, C.J. in Waman Vithal Kulkarni 's case. The Division Bench of the Allahabad High Court did not accept the view of Beaumont, C.J. The Court was of the opinion that a presumption of fact would arise under 987 section 114 of the Evidence Act that the refusal was with the knowledge of the contents of the registered envelope. The Court has not considered the specific Indian conditions, the approach of rural Indians to registered letters and has merely gone by the technical rules of Evidence Act, which, as experience would show, could sometimes cause more harm and lead to injustice through law. The contrary Allahabad decision does not commend to me. On the contrary, the Bombay view is in accord with the conditions of society in rural India and I do not propose to make any distinction even with regard to urban areas where also there are a large number of illiterates Even in the case of a semi literate person who is in a position to read and write he could not be accused of legal literacy. Therefore, it is not possible to accept the submission that mere refusal would permit a presumption to be raised that not only the service was legal but the refusal was the conscious act flowing from the knowledge of the contents of the letter. How dangerous this presumption is can be easily demonstrated, and how it would lead to miscarriage of justice can be manifestly established. Once knowledge of the contents of the registered envelope is attributed to a person to whom a registered envelope is sent and who has refused to accept the same, that this was an act accompanied by the conscious knowledge of the contents of the letter he who may be an innocent defaulter or presumably no defaulter at all, would be charged with a contumacious conduct of being a wilful defaulter. The Rent Act does not seek to evict a mere defaulter That is why a provision for notice has been made. If even after notice the default continues, the tenant can be condemned as wilful defaulter. Could he be dubbed guilty of conscious, wilful, contumacious, intentional conduct even when he did not know what was in the registered envelope? In my opinion, it would be atrocious to impute any such knowledge to a person who has merely been guilty of refusing to accept the registered notice. Where service of notice is a condition precedent, a dubious service held established by examining the postman who must be delivering hundreds of postal envelopes and who is ready to go to the witness box after a long interval to say that the offered the envelope to the addressee and he refused to accept the same, would be travesty of justice. And if this condition precedent is not fully satisfied, the consequent conduct cannot be said to be wilful. In a slightly different context in Commissioner of Income tax, Kerala vs Thayaballi Mulla Jeevaji Rapasi (decd.), this Court held that service of the notice under 988 section 34(1)(a) of the Income tax Act, 1922, within the period of limitation being a condition precedent, to the exercise of jurisdiction, if no notice is issued or if the notice issued is shown to be invalid, then the proceedings taken by the Income tax Officer without a notice or in pursuance of an invalid notice would be illegal and void. It was, however, contended that if the Court accepts the legal contention as canvassed on behalf of the appellant it would be impossible tc serve the notice as statutorily prescribed. This wild apprehension is wholly unfounded. The notice is required to be served in the manner prescribed by section 106 of Transfer of Property Act which, inter alia, provides for affixing a copy of the notice on the premises in possession of tenant. Therefore, it cannot be said that the approach of the Court would render it impossible for the landlord to meet with the statutory requirement of service of notice before Commencing the action for eviction. Having, therefore, examined the three vital contentions, in my opinion the suit of the landlord must fail on the ground that the rent was not payable by month and, therefore, section 20(2) (a) is not attracted. And further, even if it is attracted, as the statutory notice as required by section 20(2) (a) was not served, a decree for eviction cannot be passed on the only ground of default in payment of rent. I would accordingly allow this appeal and dismiss the suit of the respondent for eviction but with no order as to costs in the circumstances of the case. S.R. Appeal dismissed.

The appellant was inducted in the year 1964 as a tenant of the suit premises on an yearly rental payable by December 31, every year. Since the appellant did not pay the rent for the years 1965, 1966 a combined notice dated November 9, 1966 demanding payment of arrears and seeking ejectment on termination of tenancy, was sent by registered post by the respondents. The appellant refused to receive the notice on November 10, 1966. On his failure to comply with the requisitions contained in the notice, the respondents filed a suit against the appellant seeking eviction as well as recovery of rents and mensne profits. Having lost before the trial court and the first appellate court, the respondents came up before the High Court in second appeal. The High Court accepted the finding of fact recorded by the first appellate court that there was service of the notice on the appellant by refusal and held that when notice was tendered to the tenant and when the latter refused to accept the same know ledge of the contents of the notice must be imputed to him. The High Court allowed the landlords ' appeal and granted three months time to the appellant to vacate the shop. Hence, the tenant 's appeal after obtaining special leave from this Court. Dismissing the appeal, the Court ^ HELD: (By majority) Per Tulzapurkar, J. (On behalf of A. P. Sen, J. and himself). The presumptions that are raised under section 27 of the and section 114 of the Indian Evidence Act, make it clear that, when service is effected by refusal of a postal communication, the addressee must be imputed with the knowledge of the contents thereof. [971 E F] 1:2. Before the knowledge of the contents of the notice could be imputed, it is not necessary that the sealed envelope must be opened and read by the addressee or when the addressee happens to be an illiterate person the contend should be read over to him by the post man or someone else. Such things do not occur when the addressee is determined to decline to accept the sealed envelope. [971 D E] 963 Vaman Vithal Kulkarni and Ors. vs Khanderao Ram Rao Sholapurkar, , explained and dissented from. Mahboob Bi vs Alvala Lachmiah, A.I.R. 1964 A.P. 324, held inapplicable. Shri Nath and another vs Smt. Saraswati Devi Jaiswal, A.I.R. 1964 All. 52; Fanni Lal vs Smt. Chironja, ; Ganga Ram vs Smt. Phulwati, ; Kodali Bapayya and Ors. vs Yadavalli Venkataratnam and Ors., A.I.R. 1953 Mad. 884, approved. Harihar Banerji and Ors. vs Ramshashi Roy and Ors., A.I.R. 1918 P.C. 102, referred to. The suit under section 14(1) of the U.P. Cantonment (Control of Rent & Eviction) Act (Central Act X of 1952), in the instant case was maintainable. Under section 14(1) of the Central Act, which in pari materia with section 3(1) of the U.P. (Temporary) Control of Rent and Eviction Act, 1947, permission of the District Magistrate was required if the landlord sought eviction of the tenant on any ground other than those specified in clauses (a) to (f) and not when it was sought on any of the grounds specified in clauses (a) to (f). [973 E P] Bhagwan Dass vs Paras Nath, ; , followed. All the courts rightly dealt with the matter as being governed by the U.P. Cantonments (Control of Rent & Eviction) Act, X of 1952 a Central Act and not by U.P. (Temporary) Control of Rent and Eviction Act, 1947 much less by the later U.P. (Rent & Eviction) Act, 1972. [966 E F] Per Desai. J. Contra. Uttar Pradesh Urban Buildings (Regulation of Letting, Rent & Eviction) Act, 1972 is a socially beneficient statute and should be construed according to well recognised canons of construction. The words used in the statute, if they are plain and unambiguous must be applied as they stand, however, strongly it may be suspected that the result does not represent the real intention of the legislature. However, if two constructions are possible and legitimate ambiguity arises from the language employed that which enlarges the protection of a socially beneficient statute rather than one which restricts it should be preferred and adopted. In other words the construction which would be more consistent with the policy and attainment of the legislation which is to protect the possession of the tenant unless the landlord establishes a ground for eviction should be preferred. Further where two constructions are possible the one which would accord with reason and justice must be preferred. [975 G H, 976 A, D, G] Inland Revenue Commissioners vs Hinchy, , H. L. at 767= (1960) 1 All India Reports 505 at 512; River Wear Commissioners vs Adamson, & 765, quoted with approval. Mohd. Shafi vs Additional District & Sessions Judge (VII), Allahabad and Others, ; Gurucharan Singh vs Kamla Singh & Ors. ; ; H. H. Maharajadhiraja Madhav Rao Jivaji Rao Scindia Bahadur of Gwalior & Ors. vs Union of India & Another, [1971] 1 S.C.C. 85, reiterated. 964 2:1. The substitution of the expression, "arrears of rent for not less than four months" in sub clause (a) of sub section (2) of section 20 of the Uttar Pradesh Urban Buildings (Regulation of Letting Rent & Eviction) Act, 1972 is a contemporaneous legislative exposition bringing out clearly the legislative intention that the landlord would be entitled to evict the tenant if the rent is in arrears for not less than four months. Before the landlord can commence action under sub clause (a): (i) the tenant must have committed default in Payment of rent for a period of four months, and (ii) a notice has to be served, giving the tenant locus poeniteniae to repair the default within month. [978 B C] 2:2. Two ingredients emerge from the expression "the tenant is in arrears of rent for not less than four months": (i) that the rent is payable by month and (ii) the tenant has committed default in payment of rent for four different months and that this default subsists and continues on the date when the land lord invokes the provision of clause (a) and proceeds to serve a notice of demand. Again, if within a period of one month from the date of receipt of notice, the tenant pays up the arrears of rent he does not lose the protection of the Rent Act. [978 G H 979] 2:3. It is implicit in the expression "the tenant is in arrears of rent for not less than four months" that the legislature clearly intended to cover those cases Of default in payment of rent under clause (a) where the contract of lease provided for payment of rent every month meaning thereby that the unit for liability to pay rent is one month and secondly the tenant has committed default on four different occasions of four different months or four different units agreed upon for payment of rent and that too after the liability to pay the same has accepted. [979 A C] 2:4. Section 20(2)(a) of the Rent Act, 1972 does not attract cases where the landlords accept rent on an yearly basis. The language of the section does not admit of a construction, namely, that even if the rent is payable by year, once the year is over and a period of four months has elapsed he could be said to be "a tenant in arrears, of rent for not less than four months". In the instant case, the parties are ad idem that the rent is payable by year at the rate of Rs. 100/ per annum. In such a case it could not be said that this tenant was in arrears of rent for not less than four months. His case would not be covered by section 20(2) of the Rent Act and, therefore, the landlord would not be entitled to a decree for eviction on this ground and that was the sole ground on which eviction has been ordered. [980 C D, 981 A B] 3. The amended section 100 of the Civil Procedure Code restricted the jurisdiction of the High Court to entertain a second appeal only if the High Court was satisfied that the case involved a substantial question of law. Sub section G(4) cast a duty on the court to formulate such substantial question of law and the appeal has to be heard on the question so formulated. It would also be open to the respondent at the hearing of he appeal to contend that the case does not involve such a question. Thus, the High Court ordinarily cannot and did not interfere with the concurrent findings of fact arrived at by the courts below. [981 G H, 982 A] In the facts of this case, there was a concurrent finding that the statutory notice as required by section 20(2)(a) was not served upon the tenant and, therefore, the High Court was in error in interfering with this finding of fact. [982 B C] 965 R. Ramachandran Ayyar vs Ramalingam Chettiar, ; Mst. Durga Chaudhrain vs Jawahar Choudhary, 1890 LR 17 IA, 122; Goppulal vs Dwarkadhishji, [1969] 3 S.C.R. 989, reiterated. Mere refusal of a registered letter would not permit a presumption to be raised that not only the service was legal, but the refusal was the conscious act flowing from the knowledge of the contents of the letter. [987 C] 4:2. This concept that the registered envelope properly addressed and returned with an endorsement of refusal must permit a rebuttable presumption that the addressee refused it with the knowledge of the contents is wholly borrowed from the western jurisprudence. Not considering the specific Indian conditions and the approach of rural Indian to registered letters, but merely going in with the technical rules of Evidence Act would cause more harm and lead to injustice through law. [985 G H, 986 A] 4:3. The Rent Act does not seek to evict a mere defaulter. That is why a provision for notice has been made. If even after notice the default continues, the tenant can be condemned as willful defaulter. He could not be dubbed guilty of conscious, willful, contumacious, intentional conduct even when he did not know what was in the registered env`elope. It would be atrocious to impute any such knowledge to a person who has merely been guilty of refusing to accept the registered notice. Where service of notice is a condition precedent, a dubious service held established by examining the postman who must be delivering hundreds of postal envelopes and who is ready to go to the witness box after a long interval to say that he offered the envelope to the addressee and he refused to accept the same, would be travesty of justice. And if this condition precedent is not fully satisfied, the subsequent conduct cannot be said to be willful. [987 E G] Fannilal vs Smt. Chironja, (1972) All. Law J. 499 (D.B.) dissented to. Appabhai Motibhai vs Laxmichand Zaverchand & Co., A.I.R. 1954 Bom. 159, held inapplicable. Mahboob Bi vs Alvala Lachmiah, A.I.R. 1964 A.P. 314; Amarjit Singh Bedi vs Lachman Das; Waman Vithal Kulkarni & Others vs Khandera Ram Rao Sholapurkar, A.I.R. 1935 Bom. 247, quoted with approval. The argument that it would be impossible to serve the notice as statutorily prescribed, once it is held that no knowledge of the contents of the refused letter could be imputed to the tenant, is incorrect. The notice is required to be served in the manner prescribed by section 106 of Transfer of Property Act which, inter alia, provides for affixing a copy of the notice on the premises in possession of the tenant. Therefore, it cannot be said that the approach of the Court would render it impossible for the landlord to meet with the statutory requirement of service of notice before commencing the action for eviction [1988 C] 966

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etition (Civil) No. 508 of 1988. (Under Article 32 of the Constitution of India). (With WP(C) Nos. 534/88, CA. 5513/85, 5679/85, 5686/85, 183/86, 192, 235 36/86, 363,/86, 447/86, 510 15/86, 529/86, 646/86, 647/86, 1199/86, 1200/86, 1250/86, WP. (C) Nos. 143, 269, 434/86, T.P. (C) Nos. 76, 77, 78 79/86, 88/86, 139 49/86, 154/86, 155/86, CA. Nos. 81 83/86, T.C. (C) No. 81/86, I.A. Nos. 1 & 2/92 in CA. No. 5513,185) WITH (CA. No. 174/86 Manipal Finance Crop. vs U.O.L, and Anr. With CA. 193/86, 624/86, 509/86, W.P. (C) No. 1506/87, CA. 69699/86, 949 50/86, 541/86, W.P. (C) No. 602/89) D.N. Dwivedi, Additional Solicitor General, G. Viswanatha Iyer, K.N. Bhat, Anil B. Diwan, E.M.S. Anam, P.H. Parekh, C.N. Sree Kumar, R. Mohan, section Balakrishnan, M.K.D, Namboodiri, M.S. Ganesh, S.S. Khanduja, Y.P. Dhingra, B.K. Satija, Kuldeep, section Paribar. H.S. Parihar, Ms. A Sub hashini, C.V. Subba Rao, K,R. Nambiar, M.P. Shorawala, D.K, Garg, S.K. Nandy,Randhir Jain, Ms. Malini Poduval,M.A.Krishna Moorthy, K.J,John, Ms. section Vaidyalingam, A.K. Sanghi, P.N. Puri, Ms. Abha Jain, Ms. Madhu Moolchandani and A.G. Ratnaparkhi for the Appearing Parties. The Judgment of the Court was delivered by MOHAN, J. All these civil appeals arise by certificate granted by the 836 High Court of Delhi against the decision reported in Kanta Mehta vs Union of India and others, Company Cases Vol. 62 1987 page 769. All these civil appeals and writ petitions challenge the constitutional validity of Chapter 111 C read with section 58B (5A) of the , introduced by the Banking Laws (Amendment) Act, 1983 (Act 1 of 1984). Hence, they are dealt with under a common judgment. In order to appreciate the challenge the necessary legal background may be set out. In the year 1949, the Banking Regulation Act of 1949 was enacted. That contained regulatory, provisions in regard to banking under the surveillance of the Reserve Bank of India as to what would constitute "banking" as defined under Section 5(b) of the 1949 Act. In the year 1959, the Banking Companies (Amendment) Act, 1959 was passed. Sections 17 and 18 were substituted which required banking companies to create reserve fund and maintain cash reserve. In the year 1963, Banking Laws (Miscellaneous Provisions) Act, 1963 inserted Chapter III B in the . This Chapter conferred extensive powers on the Reserve Bank of India to issue suitable instructions, to regulate and monitor diverse activities of non banking companies. The powers to control and regulate these non banking institutions are set out in Sections 45 I to 45 L. While exercising these powers, the Reserve Bank of India was issuing various directions to these non banking financial institutions. One such important direction was issued on 1st of January, 1967 to the effect that the non banking financial companies were not to hold deposits in excess of 25 per cent of its paid up capital and the reserves as also to non banking, non financial companies. They were also required to take steps to keep the deposits within the limits. This direction was challenged unsuccessfully before the Madras high Court as seen from the case reported in Mayavaram Financial Corporation vs Reserve Bank of India. In, 1968, by Banking Laws (Amendment) Act, 1968, Sections 10A to 10D were introduced. Section 10A provided that the Board of Directors shall include persons with professional or special knowledge. Section 10A(5) empowered the Reserve Bank of India to vary the composition of the Board. 837 When a report of the Study Group of non banking financial intermediaries was submitted in the year 1971 that was studied. Thereafter in 1973 the Reserve Bank of India issued Miscellaneous Non Banking Companies (Reserve Bank) Directions, 1973 placing certain restrictions on companies carrying on prize chit and chit business from receiving deposits from the public. In 1974, Section 58A of the Companies Act was inserted by the Companies (Amendment) Act of 1974, which came into force from 1st of February, 1975. The object was to regulate deposits received by non banking non financial companies. The financial companies were already covered by Reserve Bank of India directions under the . Therefore, they were exempted under Section 58A (7) from the purview of that Section. Since the non banking non financial companies came within the purview of Section 58A, the earlier directions issued by the to non banking nonfinancial companies in the year 1966 Were withdrawn. By an amendment of 1977, Section 58A was further enlarged and the Central Government was empowered to grant extensions. In June 1974, another Study Group was constituted which is popularly known as James Raj Committee. In July 1975, the above Study Group gave its report. In accordance with the recommendations of the Study Group elaborate rules were issued by the Central Government under Section 58A, called Banking Companies (Acceptance of Deposits) Rules, 1975 with a view of regulate the various activities of the companies to accept deposits from public. The validity of the section and the deposit rules were questioned. This Court in DCM Ltd. vs U. O.L, ; upheld the same. In 1977, directions were issued by the Reserve Bank of India superseding earlier directions of 1966 and 1973. In 1978, Bill 183 of 1978 called Banking Laws (Amendment) Bill, 1978 was introduced in the Parliament. The said Bill provided limits on depositors which were lower than the current provisions. However, the Bill lapsed on dissolution of Parliament. Thereafter prize chits and Money Circulation Schemes (Banning) Act, 1978 was enacted. This was also challenged. But that challenge was thrown out by this Court in Srinivasa Enterprises vs Union of India, ; 838 In 1981, several new regulatory directions were given by the Reserve Bank of India. Inter alia they included restrictions on accepting or renewing deposits from shareholders, Directors etc. which exceeded 15 per cent of the net owned funds of the companies as also restricted payment of interest on deposits at a rate of interest exceeding 15 per cent per annum. The validity of the amendment was upheld by the Madras High Court in the case reported in AIR 1983 Madras 330 A.S.P. Ayar vs Reserve Bank of India. In State of West Bengal vs Swapan Kumar Guha, known as Sanchaita case, reported in ; , this Court while quashing the F.I.R. launched against the firm, Sanchaita Investments, directed that the Government and Reserve Bank of India should look into the matter deeply. It is in this background the Banking Laws (Amendment) Act, 1983 came to be enacted. Section 45S states thus: 45 S : Deposits not be accepted in certain cases (1) No person, being an individual or a firm or an unincorporated association of individuals. shall at any time, have deposits from more than the number of depositors specified against each, in the table below. TABLE (i) Individual Not more than twenty five depositors excluding depositors who are relatives of the individual. (ii) Firm Not more than twenty five depositors per partner and not more than two hundred and fifty depositors in all, excluding, in either case, depositors who are relatives of any of the partners. (iii) Unincorporated Not more than twenty five depositors per Association of individual and not more than two hundred and individualsfifty depositors in all excluding, in either case, depositors who are relatives of any of the individuals constituting the association. (2) Where at the commencement of Section 10 of the Banking Laws (Amendment) Act, 1983 the deposits her by any such person are not in accordance with sub section 839 (1), he shall before the expiry of a period of two years from the date of such commencement, repay such of the deposits as are necessary for bringing the number of depositors within the relative limits specified in that sub section. Explanation : For the purposes of this section (a) a person shall be deemed to be a relative of another if, and only if, (i) they are members of a Hindu undivided family , or (ii) they are husband and wife; or (iii) the one is related to the other in the manner indicated in the list of relatives below List of Relatives 1. Father. Mother (including step mother). Son (including Stepson). Son 's wife. Daughter (including step daughter). Father 's father. Father 's mother. Mother 's mother. Mother 's father. Son 's son. Son 's son 's wife. Son 's daughter. Son 's daughter 's husband. Daughter 's husband. Daughter 's son. Daughter 's son 's wife. Daughters daughter. Daughter 's daughter 's husband. Brother (including step brother) . Brother 's wife. Sister (including step sister). Sister 's husband; (b) a person in whose favour a credit balance in outstanding for a period not exceeding six months in any account relating to mutual dealings in the ordinary course of trade or business shall not, on account of such balance alone, be deemed to be a depositor." Thus, the number of depositors has come to be limited. As to the penalty for contravention of Section 45S it is provided for under Section 58B (5A). It runs thus: "(5A). If any person contravenes any provision of Section 45S, he shall be punishable with imprisonment for a terms which may extend to two years, or with fine which may extend to twice the amount of deposit received by 840 such person in contravention of that section or rupees two thousand, whichever is more, or with both." These provisions were challenged by the appellants in the various civil appeals as violative of Articles 14 and 19 of the Constitution. A Division Bench of the High Court of Delhi in, Kanta Mehta 's case supra "Section 45S read with section 58B (5A) of chapter III C of the , as introduced by section 10 of the Banking laws Amendment) Act, 1983, is not violative of articles 14 and 19 of the Constitution. There is nothing demonstrably irrelevant or perverse in limiting in section 45S the number of depositors that an individual, firm or association could accept. Nor is there any element of compulsion on individuals and firms or associations which are not incorporated to incorporate themselves as a company and article 19(1)(c) is not violated by the provisions of section 45S limiting the number of depositors whom individuals, firms and unincorporated associations could accept. Chapter III C of the , imposes reasonable restrictions on the right of individuals, firms and unincorporated associations to carry on the business of acceptance of deposits and advancing or giving loans to the public. There is also a further safeguard that Chapter 111 C is being operated under the supervision and control of the Reserve Bank of India. The business of acceptance of deposits from the public does not fall within entry .30 or entry 32 of List II. of Schedule VII of the Constitution. It falls within entry 45 or in any case under entry 97 of List I of Schedule VII under which only Parliament has power to pass the impugned legislation. Parliament had full competence and power to pass Chapter III C of the ." Mr. G. Viswanatha Iyer, learned counsel for the writ petitioners in 841 WP. 508 and 534 of 1988 submits that Section 45B is violative of the fundamental right under Article 19(1)(g) of the Constitution as it restricts the number of depositors and the rate of interest under Section 4(2)(iii) of the Kerala Money Lenders Act, 1958 (hereinafter referred to as the Kerala Act). The two years ' period prescribed under Section 42 is unreasonable. Under Kerala Act, with effect from 15.10.85 only 14 per cent interest alone could be charged. In any event, while receiving deposits it was not an offence, making it a criminal liability and directing payment, would amount, to ex post facto law, offending Article 20(1) of the Constitution. In support of this submission, reliance is placed on Chinoy Bottling Co. Pvt. Ltd. vs Assistant Registrar of Companies, Madras, page 770 and Oudh Sugar Mills Ltd. vs Union of India, AIR 1970 SC 1070. The other learned counsel seriously pressed the point relating to criminal liability and prayed for time to comply with the provisions of Section 45S. Mr. Anil B. Diwan, learned counsel appearing for Respondent 2 in C.A. No. 447 of 1986, after referring us to the development of law, would submit that it is open to the Government to regulate the economic activities. While examining the validity of such provisions the courts always have regard to the wisdom of the Legislature because that alone has the necessary information and expertise pointing to the need of such a legislation. In R.K Garg vs Union of India, ; at 969 70 this aspect of the matter was highlighted. It was in this view, this Court upheld Maharashtra Debt Relief Act, 1976 in Fatehchand Himmatlal and others vs State of Maharashtra, ; If properly analysed, it can be seen that these provisions constitute. a regulatory scheme and not a penal liability. Much is made of the penal provisions under Section 58B (5A). It is submitted that imprisonment of a recalcitrant debtor is permissible in law. If one goes by the facts of these cases even after 1986, they collect deposits 842 when law required them not to do so. Under Section 45(1)(bb) deposit has been defined. If as per the definition there are enough sources of deposit there is no reason why the appellants cannot reduce the deposits. If, therefore, the package is reasonable there is no justification to dilute the effect of Section 58B (5A). While examining the scope of the Section it might be contrasted with Section 125 (3) of the Criminal Procedure Code wherein a sufficient cause is provided. In Reserve Bank of India vs Peerless General Finance and Investment Co. Ltd, ; this Court had occasion to consider the adventures indulged by the persons like appellants. It criticised the fraud played by such financial vultures. This approach was approved in Peerless General Finance and Investment Co. Ltd vs Reserve Bank of India, ; @ 354. The learned counsel also draws our attention to the Non banking Financial Companies (Reserve Bank) Directions of 1966. They came into force on January 1, 1967. Clause 4 sub clause (3) specifically provides that the deposit shall be reduced to 25 per cent of the paid up capital for which two year period was provided. Similar directions of 1977 known as Non Banking Financial Companies (Reserve Bank) Directions, 1977 came to be issued with effect from 1st of July, 1977. There were complaints, even then, that the financial companies were not paying interest regularly and the Reserve Bank was requested to help the depositor. Therefore, in the teeth of this provision, to say that suddenly the appellants and the writ petitioners are called upon to reduce, would work hardship and they should not be penalised, is incorrect. They took a calculated risk and, therefore, they had to suffer for their own fault. In examining the various submissions addressed on behalf of the appellants and the petitioners we propose to examine the same in the following background since it is a law relating to regulation of economic activities. In R.K Garg 's case (supra) it is held at pages 969 70 . "Another rule of equal importance is that laws relating 843 to economic activities should be viewed with greater latitude than laws touching civil rights such as freedom of speech, religion etc. It has been said by no less a person than Holmes, J. that the legislature should be allowed some play in the joints, because it has to deal with complex problems which do not admit of solution through any doctrinaire or straight jacket formula and this is par ticularly true in case of legislation dealing with economic matters, where, having regard to the nature of the problems required to be dealt with, greater play in the joints has to be allowed to the legislature. The greater play in the joints has to be allowed to the legislature. The court should feel more inclined to give judicial deference to legislature judgment in the field of economic regulation than in other areas where fundamental human rights are involved. Nowhere has this admonition been more felicitously expressed than in Morey vs Dond, ; where Frank further, J. said in his inimitable style: "In the utilities, tax and economic regulation cases, there are good reasons for judicial self restraint if not judicial deference to legislative judgment. The legislature after all has the affirmative responsibility. The courts have only the power to destroy, not to reconstruct. When these are added to the complexity of economic regulation, the uncertainty, the liability to error, the bewildering conflict of the experts, and the number of times the judges have been overruled by events self limitation can be seen to be the path to judicial wisdom and institutional prestige and stability. " The court must always remember that "legislation is directed to practical problems, that the economic mechanism is highly sensitive and complex, that many 'problems are singular and contingent, that laws are not abstract propositions and do not relate to abstract units and are not to be measured by abstract symmetry ' that exact wisdom and nice adaptation of remedy are not always possible and that 'Judgment is largely a prophecy 844 based on meagre and uninterpreted experience". Every legislation particularly in economic matters is essentially empiric and it is based on experimentation or what one may call trial and error method and therefore it cannot provide for all possible situations or anticipate all possible abuses. There may be crudities and inequities in complicated experimental economic legislation but on that account alone it cannot be struck down as invalid. " At page 988 it is held: "That would depend upon diverse fiscal and economic considerations based on practical necessity and administrative expediency and ,would also involve a certain amount of experimentation on which the Court would be least fitted to pronounce. The court would not have the necessary competence and expertise to adjudicate upon such an economic issue. The court cannot possibly assess or evaluate what would be the impact of a particular immunity or exemption and whether it would serve the purpose in view or not. There are so many imponderable that would enter into the determination that it would be wise for the court not to hazard an opinion where even economists may differ, The court must while examining the constitutional validity of a legislation of this kind, "be resilient, not rigid, forward looking, not static, liberal, not verbal" and the court must always bear in mind the constitutional proposition enunciated by the Supreme Court of the United States in Munn vs Illinois, namely, "that courts do not substitute their social and economic beliefs for the judgment of legislative bodies". The court must defer to legislative judgment in matters relating to social and economic policies and must not interfere, unless the exercise of legislative judgment appears to the palpably arbitrary. The court should constantly remind itself of what the Supreme Court of the United States said in Metropolis Theater Co. vs City of Chicago, (57 Lawyers ' Edition 730). "The problems of 845 government are practical ones and may justify, if they do not require, rough accommodations, illogical it maybe, and unscientific. But even such criticism should not be hastily expressed. What is best is not always discernible, the wisdom of any choice may be disputed or condemned. Mere errors of government are not subject to our judicial review. No doubt, the impugned legislation places restrictions on the right of the appellants to carry on business, but what is essential is to safeguard the rights of various depositors and to see that they are not preyed upon. From the earlier narration, it would be clear that the Reserve Bank of India, right from 1966, has been monitoring and following the functioning of non banking financial institutions which invite deposits and then utilise those deposits either for trade or for other various industries. A ceiling for acceptance of deposits and to require maintenance of certain liquidity of funds as well as not to exceed borrowings beyond a particular percentage of the net owned funds have been provided in the corporate sector. But for these requirements, the depositors would be left high and dry without any remedy. Even the corporate sector was not free from blame. It had done damage to the economy and brought ruination to small depositors. This was why Section 58A in the Companies Act of 1956 came to be introduced. It is worthwhile to quote the notes on clauses concerning this provision: "It has been the practice of the companies to take deposits from the public at high rates of interest. Experience had shown that in many cases deposits taken by the companies have not been refunded on the due dates, either the companies have gone in liquidation or funds are depleted to such an extent that the companies are not in a position to refund the deposits, it was accordingly considered necessary to control the activities of the companies when accepting deposits from the 'the public". We approve of the reasoning of the Delhi High Court in Kanta Mehta 's case (supra). At pages 798 99 it runs as follows: "The danger of allowing deposits to be accepted without regulation is so acute and urgent, that to bind the 846 hands of the Legislature that only one course alone is permissible and not to permit a play of joints would be to totally make it ineffective in meeting the challenge of the social evil. For, it must be remembered that "in the ultimate analysis, the mechanics of any economic legislation has necessarily to be left to the judgment of the executive and unless it is patent that there is hostile discrimination against a class, the processual basis of price fixation has to be accepted in the generality of cases as valid. " See Prag Ice and Oil Mills vs Union of India, ; , para 50). Also such provisions meant to check such evil must be viewed, as Krishna Iyer J. said, through a socially constructive, not legally captious, microscope to discover glaring unconstitutional infirmity, that when laws affecting large chunks of the community are enacted, stray misfortunes are inevitable and that social legislation, without tears, affecting vested rights is virtually impossible. See B. Banerjee vs Smt. Anita Pan, ; , at pages 1150 51. The stress by learned counsel for the petitioners on the private right of the petitioners to have unrestricted deposits and make advances in any manner they like must receive short shrift, for by now, it is too well settled to be doubted that private rights must yield to be public need and that any form of regulation is unconstitutional only if arbitrary, discriminatory or demonstrably irrelevant to the policy the Legislature is free to adopt. " May be, Kerala Act restricts the rates of interest under Section 4(2)(iii) but that cannot enable the writ petitioners in W.P. Nos. 508 and 534 of 1988 to disregard these provisions, being the non banking financial institutions. Hence, we reject the first of the arguments. As regards the reasonableness of two year period Section 45(1)(bb) of the Reserve Bank Act defines "deposit" as follows: "(bb) "deposit" includes and shall be deemed always to have 847 included any receipt of money by way of deposit or loan or in any other form, but does not include (i) amounts raised by way of share capital; (ii) amounts contributed as capital by partners of a firm; (iii) any amount received from, (iv) any amount received from, (a) the Development Bank; (b) a State Financial Corporation established under the ; (c) any financial institution specified in or under section 6A of the ; or (d) any other financial institution that may be specified by the Bank in this behalf; (v) amounts received, in the ordinary course of business, by way of security deposit or dealership deposit; (vi) any amount received from an individual or a firm or an association of individuals not being a body corporate, registered under any enactment relating to money lending which is, for the time being in force in any State; and (vii)any amount received by way of subscriptions in respect of a conventional chit. " Therefore, as rightly argued by Mr. Anil Diwan as per this definition, .if there are enough sources of deposit there is no reason why the appellants and the writ petitioners cannot reduce the deposits. Further, non banking financial companies are required under clause 4 sub clause (3) as follows: "(3) Every non banking financial company, not being a hire purchase finance company, or a holding finance company, which on the date of commencement of these 848 directions holds deposits in excess of twenty five per cent of its paid up capital and free reserves shall secure before the expiry of a period of two years from the date of such commencement, by taking such steps as may be necessary for this purpose, that the deposits, received by the company and outstanding on its books are not in excess of the aforesaid limit. " These directions came into force from 1st of January, 1967. Similar directions came to be issued as Miscellaneous Non Banking Companies (Reserve Bank) Directions. Clause 5 dealing with acceptance of deposits states as under: "Acceptance of deposits by miscellaneous non banking companies: On and from 1st of July, 1977, no miscellaneous nonbanking company shall: (a) receive any deposit repayable on demand or on notice, or repayable after a period of less than six months and more than thirty six months from the date of receipt of such deposit or renew any deposit received by it, whether before or after the aforesaid date unless such deposit, on renewal, is repayable not earlier than six months and not later than thirty six months from the date of such renewal; Provided that where a miscellaneous non banking company has before the 1st July, 1977, accepted deposits repayable after a period of more than thrity six months, such deposits shall, unless renewed in accordance with these directions, be repaid in accordance with the terms of such deposits; Provided further that nothing contained in this clause shall apply to monies raised by the issue of debentures or bonds. (b) receive or renew: 849 (i) any deposit against an unsecured debenture or any deposit from a shareholder (not being a deposit received by a private company from its shares holders as is referred to in clause (vi) or paragraph 4) or any deposit guaranteed by any person who, at the time of giving such guarantee, was or is a director to the company, if the amount of any such deposits together with the amount of such other deposits of all or any of the kinds referred to in this sub clause and outstanding in the books of the company as on the date of acceptance or renewal of such deposits, exceeds fifteen per cent of its net owned funds. (ii) any other deposit, if the amount of such deposit, together with the amount of such other deposits, not being deposits of the kind referred to in sub clause (i) of this clause already received and outstanding in the books of the company as on the date of acceptance of such deposits, exceeds twenty five per cent of its net owned funds. " If, therefore, this was the position, it cannot be contended that suddenly the companies like the appellant and the petitioners arc called upon to reduce deposits. Even otherwise, the interests of the depositors is the prime concern. Coming to the last point, as to whether Section 58B (5A) is violative of Article 20(1) of the Constitution, we find, when a similar argument was raised against Section 58A of the Companies Act, that was repelled by this Court in Delhi Cloth and General Mills vs Union of India, ; at page 468 which runs thus: "Mr. G.A. Shah canvassed one more contention. After stating that Rule 3A became operative from April 1, 19 ',8, he specifically drew attention to the proviso to Rule 3A (1) which required that with relation to the deposits maturing during the year ending on the 31st day of March, 1979, the sum required to be deposited or invested under sub rule 3A (1) shall be deposited or invested before the 30th day of September, 1978. It was then contended that this provision would necessitate depositing 10% of the 850 deposits maturing during the year ending 31st March, 1979 which may have been accepted prior to the coming into force of rule 3A and to this extent the rule has been made retrospective and as there was no power conferred by sec. 58A to prescribe conditions subject to which deposits can be accepted retrospectively Rule 3A is ultra vires sec. 58A. Unquestionably, Rule 3A is to deposit 10% of the deposits maturing during the year in the manner prescribed in Rule 3. Some deposits would be maturing between April 1, 1978 and March 31, 1979. To provide for such marginal situation, a proviso is inserted. Does it to make the rule retroactive? Of course, not. In D.S. Nakara vs Union of India, ; a Constitution Bench of this Court has, in this context, observed as under: "A statute is not properly called a retroactive statute because a part of the requisites for its action is drawn from a time antecedent to its passing." Viewed form this angle, the provision can be properly called prospective and not retroactive. Therefore, the contention does not commend to us. " In the light of this, we should hold that the ruling of the Madras High Court in Chinoy Bottling Co. Pvt. Ltd. (supra) is incorrect. As to the plight of these depositors we need only to quote the case in Peerless General Finance and Investment Co. Ltd.; , At paragraph 37 it is held: "We would also like to query what action the Reserve Bank of India and the Union of India are taking or proposing to take against the mushroom growth of 'finance and investment companies ' offering staggeringly high rates of interest to depositors leading us to suspect whether these companies are not speculative ventures floated to attract unwary and credulous investors and capture their savings. One has only to look at the morning 's newspaper to be greeted by advertisements inviting deposits and offering interest at astronomic rates. 851 On January 1, 1987 one of the national newspapers published from Hyderabad, where one of in happened to be spending the vacation, carried as many as ten advertisements with 'banner headlines ', covering the whole of the last page, a quarter of the first page and conspicuous spaces in other pages offering fabulous rates of interest. At least two of the advertisers offered to double the deposit in 30 months. 2000 for 1000, 10,000 for 5,000, they said. Another advertiser offered interes t ranging between 30 per cent to 38 per cent for periods ranging between six months to five years. Almost all the advertisers offered extra interest ranging between 3 per cent to 6 per cent deposits were made during the Christmas Pongal season. Several of them offered gifts and prizes. If the Reserve Bank of India considers the Peerless Company with eight hundred crores invested in government securities, fixed deposits with National Banks etc. unsafe for depositors, one wonders what they have to say about the mushroom non banking companies which are accepting deposits, promising most unlikely returns and what action is proposed to be taken to protect the investors. It does not require much imagination to realise the adventurous and precarious character of these businesses. Urgent action appears to be called for to protect the public. While on the one hand these schemes encourage two vices affecting public economy, the desire to take quick and easy money and the habit of excessive and wasteful consumer spending, on the other hand the investors who generally belong to the gullible and less affluent classes have no security whatsoever. Action appears imperative." And paragraph 42 also requires to be quoted "I share my brother 's concern about the mushroom growth of financial companies all over the country. Such companies have proliferated. The victims of the schemes, that the attractively put forward in public media, are mostly middle class and lower middle class people. Instances are legion where such needy people have been 852 reduced penniless because of the fraud played by such financial vultures. It is necessary for the authorities to evolve fool proof schemes to see that fraud is not allowed to be placed upon persons who are not conversant with the practice of such financial enterprises who pose themselves as benefactors of people. " We may also add that this has been reaffirmed in Reserve Bank of India vs Timex Finance and Investment Co. Ltd., at page 354. Therefore, we are in entire agreement with the Delhi High Court. Since, as we have stated above, all the appellants and writ petitioners were praying for time to comply with these provisions, the matter was adjourned from time to time. Though some of them have complied with the requirements of law yet a few others have not done so. We make it clear that in spite of this indulgence, their failure to comply cannot be countenanced. We dismiss the appeals and the petitions along with 1A.Nos.1 and 2 in C.A. No.5513 of 1985. However, there shall be no orders as to cost. N.V.K. Petitions and appeals dismissed.

The petitioners in the writ petition challenged the constitutional validity of chapter III C read with Section 58B(5A) of the introduced by the Banking Laws (Amendment) Act, 1983. Along with the writ petition were had several civil appeals, where the appellants had unsuccessfully challenged the aforesaid provisions as violative of Articles 14 and 19 of the Constitution, in the High Court of Delhi, which upheld their validity, and granted a certificate to appeal to this Court vide Kanta Mehta vs Union of India, The newly incorporated Section 45S of the provided that no individual or firm or an unincorporated association of individuals shall, at any time, have deposits from more than the number of depositors specified against each in the table mentioned therein. It was further provided that where at the commencement of the Act, the deposits held were not in accordance thereof,a period of two years was prescribed for bringing down the number of depositors within the relative limits specified in the Act, and contravention thereof was rendered penal. 'These provisions were brought into force on February 15, 1984. On behalf of the petitioners it was submitted that Section 45B was 833 violative of the fundamental rights under Article 19(1) kg) of the Constitution as it restricts the number of depositors and the rate of interest under Section 4(2)(iii) of the Kerala Moneylenders Act, 1958, that the two year period prescribed under Section 42 is unreasonable, and that under the Kerala Act with effect from 15110185 only 149% interest alone could be charged. It was further submitted that while receiving deposits it was not an offence and making it a criminal liability and directing payment, would amount to ex postfacto law offending Article 20(1) of the Constitution. The writ petition and appeals were contested by submitting on behalf of the Reserve Bank of India that it was open to the Government to regulate economic activities, and that while examining the validity of such provisions courts a laws have regard to the wisdom of the Legislature as it alone has the necessary information and expertise pointing to the needs for such a legislation. Attention was also drawn to the provisions of the Non Banking Financial Companies (Reserve Bank) Directions of 1966 which came into force on January 1, 1969 which specifically provided that deposits shall be reduced to 25% of the paid up capital for which a two years period was prescribed and that similar directions knows as Non Banking Financial Companies Reserve Bank Directions, 1977 came to be issued with effect from 1st of July, 1977, Dismissing the writ petition and the appeals, this Court, HELD: 1. The impugned legislation no doubt places restrictions on the right of the appellants to carry on business, but what is essential is to safeguard the rights of various depositors and to see that they are not preyed upon. [844G] 2. The Reserve Bank of India, right from 1966, has been monitoring and following the functioning of non banking financial institutions which invite deposits and utilise those deposits either for trade or for other various industries. A ceiling for acceptance of deposits and to requires maintenance of certain liquidity of funds as well as not to exceed borrowings beyond a particular percentage of the net owned funds have been provided in the corporate sector. But for these requirements, the depositors would be left high and dry without any remedy. [844H, 845A] 3. Even the corporate sector was not free from blame. It had done damage to the economy and brought ruination to small depositors. Ex 834 perience had shown that In many cases deposits taken by the companies had not been refunded on the due dates, either the companies had gone in liquidation or funds are depleted to such an extent that the companies were not in a position to refund the deposits. It was accordingly considered necessary to control the activities of the companies when accepting deposits from the 'the public". That was why Section 58A in the Companies Act of 1956 came to be introduced. [845B, C D] 4. The danger of allowing deposits to be accepted without regulation is so acute and urgent, that to bind the hands of the Legislature that only one course alone is permissible and not to permit a play of joints would be to totally make it ineffective in meeting the challenge of the social evil. The mechanics of any economic legislation has necessarily to be left to the judgment of the executive and unless it is patent that there is hostile discrimination against a class, the processual basis has to be accepted 5. May be, Kerala Moneylenders Act restricts the rates of Interest under Section 4(2)(iii) but that cannot enable the writ petitioners to disregard these provisions introduced by the Banking laws (Amendment) Act 1983 being the non banking financial institutions. [846D] 6. Section 45 (1) (bb) of the Reserve Bank Act defines 'deposit. If there are enough sources of deposit there is no reason why the appellants and the writ petitioners cannot reduce the deposits. The prescription of the two year period for reduction is therefore reasonable. [847D] 7. Moreover, similar directions cam to be issued as Miscellaneous Non Banking Companies (Reserve Bank) Directions. If, therefore, this was the position, it cannot be contended that suddenly the companies like the appellants and the writ petitioners are called upon the reduce deposits. Even otherwise, the interests of the depositors is the prime concern. [847G, 849B] Kanta Mehta vs Union of India and others, Company Cases Vol. 62 1987 page 769, approved. Chiney Bottling Co. Pw. Ltd. vs Assistant Registrar of Companies, Madras, page 770, disapproved. DCM Ltd. vs U. O.I., ; ; Srinivasa Enterpries vs Union 835 of India; , ; State of West Bengal vs Swapan Kumar Guha ; ; R.K Garg vs Union of India ; and Fatehchand Himmatlal and others vs State of Maharashtra ; , referred to, Reserve Bank of India vs Peerless General Finance and Investment Co. Ltd, ; ; Peerless General Finance and Investment Co. Ltd vs Reserve Bank of India, @ 354; Delhi Cloth and General Mills vs Union of India; , at page 468 and Reserve Bank of India vs Timex Finance and Investment Co. Ltd., at page 354, referred to.

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vil Appeal Nos. 1271 and 1272 of 1978. From the Judgment and Order dated 18.4.1978 of the Allahabad High Court in Civil Revision Nos. 161 and 163 of 1975. G.L. Sanghi, K.B. Rohtagi and Praveen Jain for the Appellants. Satish Chandra Aggarwal, S.K. Dhingra, Pramod Swarup, S.K. Mehta and Aman Vachhar for the Respondents. The Judgment of the Court was delivered by OJHA, J. These appeals by special leave have been preferred by tenants of certain premises against the judgment of the Allahabad High Court dismissing their civil revisions. The facts in a nutshell necessary for the decision of these appeals are that one Mahabir Prasad had let out the PG NO 240 premises in question to the appellants. It appears that on 28th November, 1966 Sukmal Chand alias Lalloo, son of Mahabir Prasad was murdered leaving Smt. Sulochna Devi as his widow and two sons Sanjeev Kumar alias Teetu aged 1 1/2 years and Rajeev Kumar alias Cookoo aged 3 years. Mahabir Prasad on 8th December, 1966 executed a registered deed with regard to certain properties including the premises in question which he described as his own by using the words "out of my property". The nature of the deed would appear from the following recital contained therein: "I give the benefits arising out of the above said property to my grand sons Rajeev Kumar alias Cookoo aged 3 years, and Sanjeev Kumar alias Teetu aged 1 1/2 years S/o Sukmal Chand and Guardian Smt. Sulochna Devi mother of the children, residents of Town Sardhana. Therefore Smt. Sulochna Devi will be able to maintain herself and her born and unborn children from the rent realized from the above said three shops and she will use the house as her residence and with her I and my wife Sunheri Devi will live throughout life. Sulochna Devi will neither be able to transfer these shops and house nor to mortgage them by borrowing money. She will have the right to maintain her children only with the benefit arising from them. I will neither interfere with her right nor transfer the ownership of this property. Hence this Parivarik Vayawastha Patra i.e. family settlement has been scribed. dated 8 December. " It further appears that after executing the said deed Mahabir Prasad informed the tenants concerned to make payment of rent to Smt. Sulochna Devi in terms of the aforesaid deed and the tenants started paying rent accordingly. Mahabir Prasad, however, subsequently executed a deed of cancellation dated 3rd November, 1970. This deed too was registered and Mahabir Prasad thereby purported to cancel the deed dated t3th December, 1966 for reasons stated therein. In this deed Mahabir Prasad inter alia stated that by the deed dated 8th December, 1966 written in favour of Sanjeev Kumar alias Teetu and Rajeev Kumar alias Cookoo, guardian Smt. Sulochna Devi mother had been given the right to realise rent and that the deed of cancellation "debarred them from the right to realising the rent". The tenants were informed about the deed of cancellation also. PG NO 241 Subsequently suits were instituted by Mahabir Prasad against the appellants for recovery of arrears of rent etc. and their eviction from the premises in their tenancy on the ground that notwithstanding being informed of the deed of cancellation they had not paid rent to him and were in arrears. One of the pleas raised in defence by the appellants was that the deed dated 8th December, 1966 could not be unilaterally cancelled by Mahabir Prasad by the subsequent deed dated 3rd November, 1970 and that the rent claimed by Mahabir Prasad to be in arrears had already been paid by them to Smt. Sulochna Devi. In other words, title of Mahabir Prasad to realise rent from the appellants was disputed by them. Sulochna Devi was also arrayed as a defendant in these suits. She seems to have filed a written statement acknowleding receipt of rent claimed by Mahabir Prasad as arrears from the appellants. The pleas raised by. the appellants in their defence did not find favour with the Judge, Small Causes in whose court the suits were filed and consequently the suits were decreed. The appellants filed revisions before the District Judge and on these revisions being dismissed the appellants filed further revisions before the High Court which too were dismissed. It is against these judgments of the High Court that these appeals have been preferred. With regard to the deed dated 8th December, 1966 it has been held that by the said deed only a permission bad been granted by Mahabir Prasad to Smt. Sulochna Devi to realise rent and to maintain herself and her two children and that it did not amount to a transfer of immovable property in favour of Smt. Sulochna Devi. It has further been held that in this view of the matter Mahabir Prasad was competent to revoke the permission granted to Smt. Sulochna Devi. The other plea that the suit involved a question of title and consequently was not cognizable by a court of small causes also did not, as a consequence of the aforesaid finding, find favour with the courts below. It has been urged by learned counsel for the appellants that by the deed dated 8th December, 1966 the right to rent and not only the right to realise the rent was transferred and this right was described in the deed by saying "I give the benefits arising out of the abovesaid property". According to learned counsel benefits arising out of immovable property themselves partook the nature of immovable property and the said deed having been acted upon, it was not open to Mahabir Prasad to unilaterally cancel the benefits conferred on Smt. Sulochna Devi and her sons, by the subsequent deed. PG NO 242 Learned counsel appearing for the landlord on the other hand urged that the courts below have rightly interpreted the deed dated 3th December, 1966 to be one which only granted the permission to realise rent and the plea raised by the tenants did not involve any question of title. Having heard learned counsel for the parties we are of the opinion that on the facts of the instant case the provisions of Section 23 of the Provincial Small Cause Courts Act (hereinafter referred to as the Act) are clearly attracted and the plaints of these cases ought to have been returned for presentation to a court having jurisdiction to determine the title. Section 23 reads as hereunder: "23. Return of plaints in suits involving questions of title : (1) Notwithstanding anything in the foregoing portion of this Act, when the right of a plaintiff and the relief claimed by him in a Court of Small Causes depend upon the proof or disproof of a title to immovable property or other title which such a Court cannot finally determine, the Court may at any stage of the proceedings return the plaint to be presented to a Court having jurisdiction to determine the title. (2) When a Court returns a plaint under sub section (1), it shall comply with the provisions of the second paragraph of section 57 of the Code of Civil Procedure ( 14 of 1982) and make such order with respect to costs as it deems just and the Court shall, for the purposes of the Indian Limitation Act, 1877 (15 of 1877) be deemed to have been unable to entertain the suit by reason of a cause of a nature like to that of defect of jurisdiction. With regard to the applicability of Section 23 aforesaid the High Court has taken the view that the said section gave a discretion to a court to return or not to return the plaint where a question of title is raised and did not debar it from deciding the suit. If in a particular case the Judge, Small Causes did not exercise his discretion to return the plaint the said discretion could not be interfered with in a civil revision. It is true that Section 23 does not make it obligatory on the court of small causes to invariably return the plaint once a question of title is raised by the tenant. It is also PG NO 243 true that in a suit instituted by the landlord against his tenant on the basis of contract of tenancy, a question of title could also incidentally be gone into and that any finding recorded by a Judge, Small Causes in this behalf could not be res judicata in a suit based on title. It cannot, however, be gainsaid that in enacting Section 23 the Legislature must have had in contemplation some cases in which the discretion to return the plaint ought to be exercised in order to do complete justice between the parties. On the facts of the instant cases we feel that these are such cases in which in order to do complete justice between the parties the plaints ought to have been returned for presentation to a court having jurisdiction to determine the title. In case the plea set up by the appellants that by the deed dated 8th December, 1966 the benefit arising out of immovable property which itself constituted immovable property was transferred and in pursuance of the information conveyed in this behalf by Mahabir Prasad to them the appellants started paying rent to Smt. Sulochna Devi and that the said deed could not be unilaterally cancelled, is accepted, it is likely not only to affect the title of Mahabir Prasad to realise rent from the appellants but will also have the effect of snapping even the relationship of landlord and tenant. between Mahabir Prasad 'and the appellants which could not he revived by the subsequent unilateral cancellation by Mahabir Prasad of the said deed dated 8th December, 1966. In that event it may not he possible to treat the suits filed by Mahabir Prasad against the appellants to be suits between landlord and tenant simpliciter based on contract of tenancy in which an issue of title was incidentally raised. If the suits cannot be construed to be one between landlord and tenant they would not be cognizable by a court of small causes and it is for these reasons that we are of the opinion that these are such cases where the plaints ought to have been returned for presentation to appropriate court so that none of the parties was prejudiced. In the result. both these appeals are allowed and the judgments and decrees of the courts below are set aside and the Judge, Small Causes is directed to return the plaints of these two cases for presentation to the appropriate court as contemplated by Section 23 of the Act. The amount of rent which may have been deposited by the appellants in any of the courts below in these suits shall, however. not be refunded to the appellants and shall be disbursed in accordance with the decision of the appropriate civil court. In case the dispute about title is settled by the parties amicably, the aforesaid amount of rent can be disbursed in pursuance of such amicable settlement also. We further direct that the tenant appellants shall, till the dispute PG NO 244 about title is decided or settled, deposit rent of the premises in their tenancy regularly as contemplated by sub section (2) of Section 30 of the U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1977. In the circumstances of the case, the parties shall bear their own costs throughout. S.L. Appeals allowed.

These appeals were preferred by tenants against the judgment of the High Court in civil revisions. Respondent Mahabir Prasad had executed a registered deed dated 8th December, 1966 with regard to premises in question, giving the benefits arising out of the said properties to his grandsons and their mother Smt. Sulochana Devi. He informed the tenants to make payment of rent to Smt. Sulochana Devi in terms of the said deed. Later, Mahabir Prasad executed a registered deed of cancellation dated 3rd November, 1970, cancelling the aforesaid deed dated 8th December, 1966 and debarring the grandsons and their mother from the right to realise rent and informed the tenants about the said deed of cancellation. Subsequently, Mahabir Prasad instituted suits in the Court of the Judge, Small Causes against the appellant tenants for recovery of arrears of rent and their eviction on the ground that in spite of their being informed of the deed of cancellation, they had not paid rent to him. The appellants contended that the deed dated 8th December, 1966, could not be unilaterally cancelled by Mahabir Prasad, and the rent claimed by him had already been paid by them to Smt. Sulochana Devi. The title of Mahabir Prasad to realise rent was disputed by the appellants who had contended that the suit involving a question of title was not cognizable by a Court of Small Causes. The Judge, Small Causes, decreed the suits. The appellants filed revisions before the District Judge who dismissed the same. Further revisions filed by the appellants in the High Court were also dismissed. The appellants moved this Court for relief by special leave against the Judgments of the High Court. PG NO 238 PG NO 239 Allowing the appeals, the Court, HELD: The provisions of section 23 of the Provincial Small Cause Courts Act (the Act) were clearly attracted in these cases and the plaints in the cases ought to have been returned for presentation to a Court having jurisdiction to determine the title. It is true that Section 23 does not make it obligatory on the Court of Small Causes to invariably return the plaint once a question of title is raised by the tenant, and that in a suit instituted by the landlord against his tenant on the basis of contract of tenancy, a question of title could also incidentally be gone into and that any finding recorded by a Judge, Small Causes, in this behalf could not be res judicata in a suit based on title, but it cannot be gainsaid that in enacting section 23 the Legislature must have had in contemplation some cases in which the discretion to return the plaint ought to be exercised in order to do complete justice between the parties. On facts, these are cases in which~ in order to do ' complete justice between the parties the plaints ought to have been returned for presentation to a court having jurisdiction to determine the title so that none of the parties was prejudiced. [242E, H, 243A C, F] Judgments and decrees of the courts below were set aside and the Judge, Small Causes was directed to return the plaints of the cases for presentation to the appropriate Court as contemplated by section 23 of the Act. [243F G]

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Appeal No. 208 of 1952. Appeal by Special Leave from the Judgment and Order dated the 28th day of September 1951 of the Authority under the , Bombay in Application No. 500 of 1951. M. C. Setalvad, Attorney General for India (G. N. Joshi, PorUs A. Mehta and P. G. Gokhale, with him), for the appellant. J. B. Dadachanji, M. V. Jayakar and Rajinder Narain, for respondent No. 1. 1955. March 2. The Judgment of the Court was delivered by 1347 SINHA J. This is an appeal by special leave from the orders dated the 28th September 1951 passed by the 2nd respondent, the Authority appointed under section 15(1) of the (IV of 1936), (which hereinafter will be referred to as the Act) allowing the 1st respondent 's claim for house rent allowance as part of his wages. In this case the facts are not in dispute and may shortly be stated as follows: The 1st respondent is a gangman in the employ of the Central Railway (which previously used to be known as the G.I.P. Rly.), since April 1945. At that time his wages were Rs. 18 per month plus dearness allowance. With effect from the 1st November 1947 the Railway Board under the Ministry of Railways of the Government of India introduced a scheme of grant of compensatory (city) allowance and house rent allowance at rates specified in their memorandum No. E47 CPC/14. This scheme was modified by the Railway Board 's letter No. E47 CPC/14 dated 1st December 1947. As a result of this scheme certain railway employees stationed at specified headquarters were eligible for the allowance aforesaid at certain specified rates. The 1st respondent thus became entitled to the allowance of Rs. 10 per month. This allowance the 1st respondent drew along with his salary until the 18th August 1948 when he was offered by the Government, quarters suitable to his post, but he refused to occupy the same. On his refusal to occupy the quarters offered by the Government, the house rent allowance was stopped with effect from the 19th August 1948. On the 8th June 1951 the 1st respondent put in his claim before the Authority for Rs. 290 on the ground that the appellant, the Divisional Engineer, G.I.P. Ry., who was the authority responsible under section 4 of the Act for payment of wages, had stopped payment of house rent allowance to him from the 19th August 1948. The claim covered the period the 19th August 1948 to the 18th January 1951 at the rate of Rs. 10 per month. The appellant appeared before the Authority and by his written statement contested the claim on the ground that the house rent allowance which was 1348 the subject matter of the claim was not "wages" within the meaning of section 2(vi) of the Act. It was, therefore, submitted by the appellant who was the opposite party before the Authority that it had no jurisdiction to entertain the claim which should be dismissed in limine. It was further pleaded that the claim was inadmissible on the ground that there had been no illegal deduction from the respondent 's wages inasmuch as the respondent had been allotted railway quarters of a suitable type and as he had refused to occupy those quarters he was not entitled under the rules to any house rent allowance. Alternatively, it was further pleaded by the appellant that so much of the claim as, related to a period preceding six months immediately before the date of the application was time barred under the first proviso to section 15(2) of the Act. ' The Authority condoned the delay and that part of the order condoning the delay is not in controversy before us. On the issues thus joined between the parties the Authority came to the conclusion that the house rent allowance was "wages" as defined in the Act that as a matter of fact, accommodation was offered to the 1st respondent and he refused it; but that even so, the appellant was not entitled to withhold the house rent allowance. Accordingly the claim for Rs. 290 was allowed by the Authority. The short point to be decided in this case is whether the house rent allowance claimed by the 1st respondent came within the purview of the definition of "wages" contained in the Act. There being no difference on questions of fact between the parties, the answer to the question raised must depend upon the construction to be placed upon the following material portion of the definition of "wages" in section 2(vi) of the Act: 'Wages ' means all remuneration, capable of being expressed in terms of money, which would, if the terms of the contract of employment, express or implied, were fulfilled, be payable, whether conditionally upon the regular attendance, good work or conduct or other behaviour of the person employed or other 1349 wise, to a person employed in respect of his employment or of work done in such employment, and includes any bonus or other additional remuneration of the nature aforesaid which would be so payable and any sum payable to such person by reason of the termination of his employment, but does not include (a)the value of any house accommodation, supply of light, water, medical Attendance or other amenity, or of any service excluded by general or special order of the State Government. . . Shorn of all verbiage, "wages" are remuneration payable by an employer to his employee for services rendered according to the terms of the contract between them. The question then arises, what are the terms of the contract between the parties. When the 1st respondent 's employment under the railway administration represented by the appellant began, admittedly be was not entitled to any such house rent allowance. As already indicated, the scheme for payment of house rent allowance was introduced with effect from the 1st November 1947 when the rules were framed, admittedly under sub section (2) of section 241 of the Government of India Act, 1935, by the Governor General. Those rules were amended subsequently. We are here concerned with the amendment made by the Railway Board by its letter No. E47CPC/ 14 dated the 1st December 1947, particularly rule 3(i) which is in these terms: "The house rent allowance will not be admissible to those who occupy accommodation provided by Government or those to whom accommodation has been offered by Government but who have refused it". It has been argued on behalf of the appellant that the terms of the contract between the parties include the rule quoted above and that therefore the position in law is that there is no absolute right in the 1st respondent to claim the house rent allowance; in other words, it is contended that there is a condition precedent to the claim for house rent allowance being admissible, namely, that the employee should be posted at one of those places, like Bombay, Calcutta, 1350 Madras ' etc., before the claim for house rent allowance could arise and that there is a condition subsequent, namely, that the employee posted at any one of those places will cease to be entitled to the allowance if either the Government provides accommodation to the employee in question or the employee refuses to occupy the accommodation so offered to him. On the other hand, it has been argued on behalf of the 1st respondent that the employee 's right to the allowance accrues as soon as he has fulfilled the terms of the contract of employment including regular attendance, good work or conduct and his other behaviour in terms of the definition of "wages" as contained in the Act. It was also argued on behalf of the 1st respondent that the terms of the definition have to be construed consistently with the provisions of sections 7 and 11 of the Act; that rule 3(i) quoted above is inconsistent with some of the terms of the definition of "wages" and the provisions of sections 7 and 11 and that in any event, if rule 3(i) aforesaid were to be considered as a part of the terms of the contract between the parties, section 23 of the Act prohibits an employee from entering into such a contract as has the effect of depriving him of his vested rights. It should be noted at the outset that the learned Attorney General appearing on behalf of the appellant has not pressed the argument which appears to have been raised in the written statement of the appellant and also before the Authority as would appear from the orders passed by him, that clause (a) excluding "the value of any house accommodation" clearly showed that house rent allowance was not included in "wages" as defined in section 2(vi) of the Act. As will presently appear, this argument proceeds on the unwarranted assumption that house rent allowance is synonymous with the value of any house accommodation referred to in the definition of "wages" and in section 7(2)(b) and section 11 of the Act. The answer to the question whether house rent allowance is "wages" may be in the affirmative if the rules framed by the department relating to the grant of house rent allowance make it compulsory for the 1351 employer to grant house rent allowance without anything more: in other words, if the house rent allowed had been granted without any conditions or with conditions, if any, which were unenforceable in law. But the statutory rules framed by the Government governing the grant of house rent allowance do not make it unconditional and absolute in terms. The house rent allowance in the first instance is not admissible to all the employees of a particular class. It is admissible only to such railway employees as are posted at specified places in order "to compensate railway servants in certain costlier cities for excessive rents paid by them over and above what they might normally be expected to pay"; nor is such an allowance "intended to be a source of profit" or to be "an allowance in lieu of free quarters", as specifically stated in the preamble to the letter No. E47CPC/14, dated 1st December 1947, issued by the Railway Board. The argument on behalf of the 1st respondent would have been valid if the rules in terms contemplated the grant of house rent allowance to every employee of a particular category but the rules do not make the grant in such absolute terms. The house rent allowance is admissible only so long as an employee is stationed at one of the specified places and has not been offered Government quarters. The rules distinctly provide that the allowance will not be ad raissible to those who occupy Government quarters or to those to whom such quarters have been offered but who have refused to take advantage of the offer. Once an employee of the description given above has been offered suitable house accommodation and he has refused it, he ceases to be entitled to the house rent allowance and that allowance thus ceases to be "wages" within the meaning of the definition in the Act, because it is no more payable under the terms of the contract. In our opinion, it is clear beyond all reasonable doubt that the rules which must be included in the terms of contract between the employer and the employee contemplate that an employee posted at one 173 1352 of the specified places would be entitled to house rent allowance; but that as soon as he is offered Government quarters for his accommodation, he ceases ' to be so entitled., whether he actually occupies or does not occupy the quarters offered to him. Hence the grant of house rent allowance does not create an indefeasible right in the employee at all places wherever he may be posted and in all circumstances, irrespective of whether or not he has been offered Government quarters. But it has been argued on behalf of the respondent that such a conclusion would be inconsistent with the provisions of sections 7 and 1 1 of the Act. We do not see any such inconsistency. Section 7 of the Act deals with such deductions as may be made from the wages as defined in the Act, of an employee. Subsection (2) of section 7 categorically specifies the heads under which deductions may lawfully be made from wages. Clause (d) of this sub section has reference to "deductions for house accommodation sup plied by the employer", and section 11 provides that such a deduction shall not be made unless the house accommodation has been accepted by the employee and shall not exceed the amount equivalent to the value of such accommodation. The definition of "wages" in the Act also excludes from its operation the value of house accommodation referred to in sections 7 and II as aforesaid. The legislature has used the expression "value of any house accommodation" in the definition of "wages" as denoting something which can be deducted from "wages". The one excludes the other. It is thus clear that the definition of "wages" under the Act cannot include the value of any house accommodation supplied by the employer to the employee; otherwise it would not be a legally permissible deduction from wages. It Is equally clear that house rent allowance which may in certain circumstances as aforesaid be included in "wages" is not the same thing as the value of any house accommodation referred to in the Act. That being so, there is no validity in the argument advanced on behalf of the 1st respondent that rule 3(i) aforesaid is 1353 inconsistent with the provisions of sections 7 and 11 of the Act. It remains to consider the last argument advanced on behalf of the 1st respondent that section 23 of the Act prohibits an employee from relinquishing such a right as is the subject matter of rule 3(i) quoted above. This argument proceeds on the assumption that house rent allowance which is a right conferred on the employee is an absolute right. It has already been held above that the Act read along with the rules which constitute the terms of the contract between the employer and the employee does not create any absolute right in the employee to the house rent allowance. That being so, there is no question of the employee relinquishing any such right as is contemplated by section 23. For the reasons aforesaid, the appeal succeeds. The orders passed by the Authority are set aside. In the special circumstances of this case there will be no order as to costs. Appeal allowed.

The Railway Board under the Ministry of Railways of the Gov ernment of India introduced a scheme with effect from the 1st 1346 November 1947 granting compensatory (city) allowance and house rent allowances at certain rates to certain Railway employees (including the 1st respondent who was a railway employee since 1945) stationed at specified head quarters. The first respondent drew this ' allowance along with his salary up to the 18th August 1948, when he was offered by the Government, quarters 'suitable to his post, but he refused to occupy the same and the house rent allowance was stopped from the date of his refusal to occupy the quarter offered to him. Rule 3(i) of the Statutory Rules framed by the Government and put into effect on 1st November 1947 runs as follows: "The house rent allowance will not be admissible to those who occupy accommodation provided by Government or those to whom accommodation has been offered by Government but who have refused". Held, that the house rent allowance is admissible only so long as an employee is stationed at one of the specified places and has not been offered Government quarters. The rules distinctly provide that the allowance will not be admissible to those who occupy Government quarters or those to whom such quarters have been offered but who have refused to take advantage of the offer. Once an employee of the description given above has been offered suitable house accommodation and he has refused it, he ceases to be entitled to the house rent allowance and that allowance ceases to be "wages" within the meaning of the definition in section 2(vi) of the Act because it is no more payable under the terms of the contract. The grant of house rent allowance does not create an indefeasible right in the employee at all places wherever he may be posted and in all circumstances, irrespective of whether or not he has been offered Government quarters.

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Civil Appeal No. 2329 of 1969. Appeal by Special Leave from the Judgment and Order dated 16 12 1966 of the Allahabad High Court in S.C.A. No. 346/66. G. N. Dikshit, M. V. Goswami and O. P. Rana for the Appellant. section K. Mehta and P. N. Puri, for Respondent Nos. The Judgment of the Court was delivered by SHINGHAL, J. This appeal by special leave arises from a Judgment of the Allahabad High Court dated February 26, 1964. It will be enough to state the admitted facts for they are quite sufficient for its disposal. 893 Mohammed Salamat Ullah Khan, Mohammed Sharafat Ullah Khan and Mohammed Latafat Ullah Khan were three brothers owning one third share each in their joint property. Mohammed Salamat Ullah Khan died, and his sons Karamat Ullah Khan, Dilawar Ullah Khan, Muzaffar Ullah Khan and Tahir Khan migrated to Pakistan in 1948. The remaining two brothers of Mohammed Salamat Ullah Khan, namely, Mohammed Sharafat Ullah Khan and Mohammed Latafat Ullah Khan, stayed in India and had a two third share in that property. Major Chandra Bhan Singh was a refugee from Pakistan, and a temporary allotment of the one third evacuee share in the property was made in his favour on April 4, 1955. As the property was listed as composite property, notices were issued in April, 1955, under section 6 of the , hereinafter referred to as the Act. They were "individual" notices and the Competent Officer has stated that they were served on Latafat Ullah Khan and Sharafat Ullah Khan and their acknowledgements were placed on the record. No claim was however filed by anyone, and an order was made by the competent Officer on August 31, 1955, under section 11 of the Act, vesting the property in the Custodian. It may be mentioned that Mohammed Sharafat Ullah Khan had died earlier, leaving behind his four sons Shaukat Ullah Khan, Habib Ullah Khan, Nasar Ullah Khan and Aman Ullah Khan. It so happened that the property was again reported to be composite property. The earlier order dated August 31, 1955, was lost sight of, and fresh notices were issued to the co sharers under section 6 of the Act. They were served personally on Mohammed Latafat Ullah Khan, and on Mohammed Sharafat Ullah Khan through his son Shaukat Ullah Khan, on February 25, 1956. But again no claim was filed under section 7 of the Act by anyone, claiming any interest in the composite property. An order was therefore again made on March 23, 1957, under section 11 of the Act, vesting the property in the Custodian. The Assistant Custodian (L) sent a senior Inspector to take possession of the vested property. Shaukat Ullah Khan, the eldest son of Mohammed Sharafat Ullah Khan, took notice of that development and undertook to file his claim within 15 days. No claim was however filed even then. Possession of Mohammed Salamat Ullah Khan 's one third share in the property was delivered to Major Chandra Bhan Singh on March 7, 1958, under orders of the Assistant Custodian. Thereafter an order was made on June 6, 1958 giving him quasi permanent allotment along with his brother Raghubir Singh. 894 In the meantime, an application was made by Mohammed Latafat Ullah Khan and the four sons of Mohammed Sharafat Ullah Khan on March 12, 1958, for "restoration". It was stated in the accompanying affidavit of Arshad Ullah Khan, son of Mohammed Latafat Ullah Khan, that Mohammed Sharafat Ullah Khan had died in 1950, and no notice for separation of the evacuee interest in the property was ever served on them. It was further stated that they learnt of the vesting order only on March 6, 1958, when the Manager of the evacuee property went to the village to take possession. An order was quickly made on March 15, 1958, setting aside the vesting order which, it will be recalled, had been made as far back as August 31, 1955. The case was then taken up on May 12, 1958, when it was stated by Arshad Ullah Khan on oath that the only grove in the property was in plot No. 1791. The Competent Officer relied on that statement, and gathered the impression that the Assistant Custodian (L) had no objection to the transfer of the evacuee interest in the property to Mohammed Latafat Ullah Khan and the four sons of Mohammed Sharafat Ullah Khan for Rs. 5000/ . An order was made to that effect the same day. One of the items of the property was however left out of evaluation even at that time for subsequent decision. The Assistant Custodian of Evacuee Property however made an application to the Competent Officer soon after, on June 11, 1958, for a review of his order dated May 12, 1958, on the ground, inter alia, that certain grove plots were treated as agricultural plots. That was followed by another application for review dated July 10, 1958, on the ground that the Competent officer made his order dated May 12, 1958 under the incorrect impression that the Assistant Custodian (L) had no objection to the transfer of the evacuee share in the land to Mohammed Latafat Ullah Khan and the four sons of Mohammed Sharafat Ullah Khan for Rs. 5000/ . It was also pointed out that the evacuee interest in the property had already been allotted to Major Chandra Bhan Singh, who was a displaced person from Pakistan. It was therefore prayed that the order dated May 12, 1958, may be reviewed and the property partitioned so as to separate the evacuee 's one third interest. The Competent Officer partly disposed of the review application dated July 10, 1958, the same day. He corrected the mistaken impression that the Assistant Custodian had no objection to the transfer of the evacuee share in the property for Rs. 5000/ and modified the earlier order dated May 12, 1958, by deleting that statement from it. Mohammed Shaukat Ullah Khan however raised an objection against the maintainability of the review applications. The Competent Officer took the view that as the Appellate Officer had held in 895 appeal No. 953 of 1957, that he (Competent Officer) could review his own order, there was no force in the objection to the contrary. He examined the petition in terms of the requirements of Order 47 rule 1 of the Code of Civil Procedure and held that a new and important matter regarding the allotment of the land to the refugees (Major Chandra Bhan Singh and his brother Raghubir Singh) had been discovered which justified reconsideration of the earlier decision dated May 12, 1958. He therefore reviewed that order and set it aside by his order dated September 8, 1958. He gave his reasons for taking the view that the proper course was to partition the property, and allotted the plots mentioned in that order to the Custodian in lieu of the evacuee share of Karamat Ullah Khan, Dilawar Ullah Khan, Muzaffar Ullah Khan and Tahir Khan sons of Mohammed Salamat Ullah Khan. The other plots were left to the Share of the non evacuee co sharers, namely, Mohammed Latafat Ullah Khan, Shaukat Ullah Khan, Aman Ullah Khan, Habib Ullah Khan and Nasar Ullah Khan their two third share by way of non evacuee interest. Plot No. 1791/1 was left out for separate decision after receipt of the report regarding its valuation. Mohammed Latafat Ullah Khan and the four sons of Mohammed Sharafat Ullah Khan felt aggrieved against that order of the Competent Officer and moved the High Court by a petition under article 226 of the Constitution. The High Court took the view in its impugned judgment dated February 26, 1964, that in the absence of any provision in the Act for review, it was not permissible for the Competent Officer to review his order dated May 12, 1958. It therefore allowed the writ petition, quashed the order of review dated September 8, 1958, and directed the "opposite parties" not to give effect to it and not to disturb the possession of the writ petitioners on the plots in dispute. This, as has been stated, has given rise to the present appeal. In order to appreciate the controversy, it will be desirable to examine the facts and circumstances of the case with due regard to the provisions of the Act. It has not been disputed before us, and is in fact beyond challenge, that the property in question was "composite property" within the meaning of section 2(d) of the Act because the one third undivided share of Mohammed Salamat Ullah Khan 's sons Karamat Ullah Khan, Dilawar Ullah Khan, Muzaffar Ullah Khan and Tahir Khan, who had migrated to Pakistan in 1940, had been declared to be evacuee property and had vested in the Custodian under the , while the remaining share belonged to the other two brothers of Mohammed Salamat Ullah Khan who were 896 non evacuees. The evacuee interest in the property was therefore confined to that one third share in the entire property being the right, title and interest of the evacuees therein within the meaning of clause (e) of section 2. It is equally clear that it was permissible for the non evacuee shareholders having the remaining two third share in the property to make a claim in respect of it within the meaning of clause (b) of section 2 of the Act in their capacity as co sharers of the evacuees in the property. Section 5 of the Act gives jurisdiction to the Competent Officer to decide any claim relating to a composite property, and section 6 requires that for the purpose of determining or separating the evacuee interest in a composite property, the Competent Officer may issue a general, and also an individual notice on every person who in his opinion may have a claim in that property to submit claims in the prescribed form and manner. It will be remembered that as the property was listed as "composite property", notices were issued under section 6 of the Act and the individual notices were served on Latafat Ullah Khan and Sharafat Ullah Khan and their acknowledgments were placed on the record. No claim was however filed under section 7 of the Act claiming any interest in the composite property. Section 8 of the Act provides that on receipt of a claim under section 7, the Competent Officer shall hold an inquiry into the claim and give his decision thereon, while sections 9 and 10 deal with reliefs in respect of mortgaged property of evacuees and separation of the interest of evacuees from those of the claimants in a composite property. Section 11 provides for the vesting of evacuee interest in the custodian where a notice under section 6 is issued in respect of any property but no claim is filed. As no statement of claim was received by the Competent Officer, the evacuee interest in the "composite property" vested in the Custodian and the Competent Officer accordingly took a decision to that effect on August 31, 1955. It was a lawful order under section 8 read with section 11 of the Act. Section 14 provides that any person aggrieved by an order of the Competent Officer made under Section 8 may prefer an appeal to the Appellate Officer within 60 days of that order, and it would then be for the Appellate Officer to confirm, vary or reverse the order appealed from and to pass such orders as he deems fit. Section 15 of the Act further provides that the Appellate Officer may at any time call for the record of any proceeding in which the Competent Officer has passed an order for the purpose of satisfying himself as to the legality or propriety thereof and to pass such order in relation thereto as he thinks fit. This appellate and revisional jurisdiction was therefore available to the writ petitioners if they felt dissatisfied with the order 897 of the Competent Officer dated August 31, 1955, but it is admitted before us that they did not avail of it. Section 18 of the Act therefore came into operation which provides as follows : "18. Save as otherwise expressly provided in this Act, every order made by any appellate officer or competent officer shall be final and shall not be called in question in any Court by way of an appeal or revision or in any original suit, application or execution proceedings. " So when the aggrieved persons did not invoke the appellate or revisional jurisdiction of the Appellate Officer, the order of the Competent Officer dated August 31, 1955, became final by virtue of section 18 and could not be called in question thereafter. It will be recalled that, as has been mentioned, the property was again reported to be of a composite nature, and fresh notices were inadvertently issued to the non evacuee shareholders. They were personally served on Mohammed Latafat Ullah Khan, and on Mohammed Shamfat Ullah Khan through his son Shaukat Ullah Khan, on February 25, 1956, but no claim was filed by anyone in spite of that second opportunity, and a vesting order was once again made under section 11 of the Act on March 23, 1957. No appeal or revision application was filed against that order also, under sections 14 and 15 of the Act. In fact it was after a lapse of some 2 1/2 years from the order dated August 31, 1955, and 1 year from March 23, 1957 that Mohammed Latafat Ullah Khan and the four sons of Mohammed Sharafat Ullah Khan made an application for "restoration" of their claims on March 12, 1958. By then the order dated August 31, 1955 had become final and binding under section 18 and it was not permissible for any one to reopen it merely on the basis of a "restoration" application and to review the earlier order dated August 31, 1955 in disregard of the statutory bar of that section. It is well settled that review is a creature of statute and cannot be entertained in the absence of a provision therefor. It will be enough to make a reference in this connection to the decision of this Court in Harbhajan Singh vs Karam Singh and others(1) which approved the earlier Privy Council decision in Baijnath Ram Goenka vs Nand Kumar Singh(2) the decision in Anantharaju Shetty vs Appu Hegde(3) and reiterated the decision in Patel Chunibhai Dajibhai etc. vs Naravanrao Khanderao Jambekar and another(4). The orders of the Competent Officer dated March 15, 1958 and May 12, 1958 in favour of the writ petitioners setting aside 898 the vesting order dated August 31, 1955, and transferring the evacuee interest in the property to Mohammed Latafat Ullah Khan and the four sons of Mohammed Sharafat Ullah Khan for Rs. 5000/ were therefore without jurisdiction. As has been stated, the Assistant Custodian felt aggrieved against the orders of the Competent Officer dated March 15, 1958, and May 12, 1958, and made application soon after, on June 11, 1958, and July 10, 1958, for review, and the Competent Officer allowed them by his orders dated July 10, 1958 and September 8, 1958. The order dated July 10, 1958 was not of much consequence. The fact therefore remains that the two sets of orders of the Competent Officer, namely, the first set of the two orders dated March 15, 1958 and May 12, 1958, and the second set consisting of the orders dated July 10, 1958 and September 8, 1958 suffered from the same vice of lack of jurisdiction and were equally void. This fact was specifically brought to the notice of the High Court, but it ruled it out by merely saying that the "fact that the petitioners had wrongly filed a review application which was allowed by the Competent Officer would not confer jurisdiction on the Competent Officer to review his orders if the statute had not made any provision for it. " That was begging the question, and could not possibly meet the objection of the present appellants. If we may say so with respect, what the High Court failed to appreciate was that while it was true that want of jurisdiction to review the order of August 31, 1955, could not be cured by waiver, it would not necessarily follow that the Court was obliged to grant certiorari at the instance of a party whose conduct was such as to disentitle it for it. The High Court was exercising its extraordinary jurisdiction and the conduct of the petitioners was a matter of considerable importance. The High Court did not take due notice of the fact that the writ petitioners (or their predecessors in interest) had allowed the passing of the order dated August 31, 1955 in spite of the individual notices which were issued under section 7, and did not deserve any relief. It did not notice the further fact that when the order dated August 31, 1955 had become final because of the failure to file an appeal or an application for revision, it was not permissible under the law, in view of the specific bar of section 18, for the writ petitioners to move a "restoration" application on March 12, 1958 for its review and to obtain its reversal by the Competent Officer 's orders dated March 15, 1958 and May 12, 1958, and to obtain a wholly beneficial order for the transfer of the one third evacuee interest to them on payment of Rs. 5000/ . They, nevertheless, did so. So when the writ petitioners had themselves unlawfully invoked the review jurisdiction of the Competent Officer, which did not exist, to their advantage, and to the disadvantage of the present appellant, by 899 their application dated March 12, 1958, they could not be heard to say, when the Department invoked the self same jurisdiction on two important grounds (to which reference has been made earlier) that the review orders of the Competent Officer dated July 10, 1958 and September 8, 1958 were void for want of jurisdiction and must be set aside for that reason. The conduct of the writ petitioners was therefore such as to disentitle them to certiorari, and the High Court erred in ignoring that important aspect of the matter even though it was sufficient for the dismissal of the writ petition. The appeal is allowed, the impugned judgment of the High Court dated February 26, 1964, is set aside and the writ petition is dismissed. There will however be no order as to costs in the facts and circumstances of the case. N.V.K. Appeal allowed.

Practice and Procedure Conduct of parties to be taken into account while granting relief in writ petition. The property in dispute was undivided property (composite property) of three brothers, one of whom died and his sons migrated to Pakistan. One third share of the property was declared evacuee property and vested in the Custodian under the . It was allotted to the appellant who was a refugee. The Competent Officer issued individual notices under Section 6 of the to the two remaining brothers of the evacuee and their acknowledgments were placed on record. Since no claim was filed by anyone, an order was made by the Competent Officer on 31 8 1955 vesting the property in the Custodian under Sec. 11. As the property was again reported to be composite property, fresh notices were inadvertently issued to the co sharers, but no claim was filed by anyone and an order was again made on 23 3 1957 vesting the property in the Custodian. Possession of the evacuees one third share in the property was delivered to the appellant under order of Assistant Custodian. After a lapse of time, the respondents filed an application for 'restoration ' alleging that no notice for separation of the evacuee interest in the property was ever served on them and that they learnt of the vesting order only when the Manager of the evacuee property went to the village to take possession. The Competent Officer passed an order setting aside the vesting order dated 31 8 1955 and transferred the property to the sons of the deceased brother for Rs. 5,000/ . The Assistant Custodian of Evacuee Property made an application to the Competent Officer for a review of his order, pointing out a wrong impression. It was stated that the evacuee interest in the property had already been allotted to the appellant. The Competent Officer partly allowed the review. The respondents questioned the power of the Competent officer to review his order, but the objection was rejected. The respondents filed a writ petition under article 226 of the Constitution. The High Court quashed the order of review on the ground that in the absence of any provision in the Act for review, it was not permissible for the Competent Officer to review his order. Allowing the appeal to this Court, 892 ^ HELD: (1) The conduct of the respondents was such as to disentitle them to a writ and the High Court erred in ignoring that important aspect of the matter even though it was sufficient for the dismissal of the writ petition. [899B] (2) Review is a creature of a statute and cannot be entertained in the absence of a provision therefor. [897G] Harbhajan Singh vs Karan Singh & Ors., ; ; Patel Chunibhai Dajibhai etc. vs Narayanrao Khanderao Jambekar & Anr., ; referred to. Baijnath Ram Goenka vs Nand Kumar Singh, 40 I.A. 54; Ananatharaju Shetty vs Appu Hegde, AIR 1919 Mad. 244, approved. (3) The earlier two orders of the Competent Officer setting aside the vesting order and transferring the evacuee interest in the property to the respondents were therefor without jurisdiction. [897H 898A] (4) But when the respondents had themselves unlawfully invoked the review jurisdiction of the Competent officer, which did not exist, to their advantage, and to the disadvantage of the appellant, they could not be heard to say, when the Department invoked the self same jurisdiction on two important grounds, that the review orders of the Competent Officer were void for want of jurisdiction and must be set aside for that reason. [898H 899B] (5) The High Court failed to appreciate that while it was true that want of jurisdiction to review the order by the Competent Officer could not be cured by waiver, it would not necessarily follow that the Court was obliged to grant a writ at the instance of a party whose conduct was such as to disentitle it for it. The High Court was exercising its extraordinary jurisdiction and the conduct of the petitioners was a matter of considerable importance. [898E] (6) The High Court did not take due notice of the fact that the respondents had allowed the passing of the impugned orders, in spite of the individual notices to them. It did not notice the further fact that when that order had become final because of the failure to file an appeal or an application for revision it was not permissible in view of the specific bar of Sec. 18 for the respondents to move a "restoration" application and to obtain its reversal by the Competent Officer. [898F G]

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Appeal No. 889 of 1971. Appeal from the order dated December 9, 1970 of the Madhya Pradesh High Court in Miscellaneous Petition No. 267 of 1969. L. section Baghel, Pramod Swarup and section section Khanduja, for the appellants. R. Paniwani and section K. Gambhir, for respondent No. 1. R. P. Kapur, for respondents Nos. 2 and 3. The Judgment of U Court was delivered IV Hegde, J. This is an appeal by certificate. It relates to the .elections to Municipal Council, Sidhi. The elections were held 60 in 1969. In that election six persons ie. four appellants and respondents 5 and 6 in this appeal were elected. Thereafter the first respondent herein an elector and apparently a busy body filed a petition under Article 226, of 'the Constitution in the High Court of Madhya Pradesh challenging the validity of the election of all the returned candidates on several grounds. The High Court accepted that petition and set aside the election of all the returned candidates. The only ground on which the election of the returned candidates was set aside is that the returned candidates in their nomination papers had merely mentioned the number of the wards for which they were candidates but had failed to mention the names of those wards. It is not the case of the election petitioner nor is it the finding of the High Court that there was any difficulty in identifying the ward in which the concerned returned candidate wanted to seek election. The Returning Officer did not find any such difficulty. He accepted their nomination papers. Admittedly every ward had a specific number in addition to having a name. The High Court was of the opinion that the successful candi dates failure to, mention the name of the wards in their nomination papers was fatal and therefore the Returning Officer was not competent to accept their nomination. It thought that it was mandatory for all the, candidates to mention in their nomination papers the names of the wards in which they wanted to seek election. Further it opined that a mere mentioning of the number of the ward may lead to clerical errors and therefore the rule making authority had prescribed that the name of the ward also should be mentioned in the nomination paper. It is nobody 's case that in the nomination papers with which we are concerned there are any errors as regard the ward numbers. Let us now examine whether the High Court was justified in taking such a technical view of the matter. The election to the municipal councils is regulated by Rule 13 of the Rules framed under the Madhya Pradesh Municipalities Act, 1961. Rule 13 (1) reads "13(1)(i). On or before the date fixed for filing nomination paper of candidates each candidate shall, either in person or by his proposer or seconder, between the hours of 11 O 'clock in the forenoon and 3 O 'clock in the afternoon, deliver to the supervising officer a nomination paper completed in For IV. and subscribed by the candidate himself as assenting to the nomination and by two duly qualified voters of the ward as proposer and seconder. 61 The relevant column in Forma IV reads "Name and number of the ward". Going back to Rule 13 it is necessary to notice sub rule (vi) of that rule which says. : "The supervising officer shall not reject any nomination paper on the ground of any defect which is not a substantial character. " The question for decision is whether the non mentioning of the names of the wards in the nomination papers is a defect of a substantial character ? For deciding that question we must first find out the reason behind the rule requiring the candidates to mention the names and the number of the wards in which they want to contest. It is obvious that the particulars in question are required to identify the constituency in which a candidate is desirous of seeking election. That purpose will be served if either the number of the ward or its name is given unless there are more than one wards having the same name. Once the number of the ward is mentioned in the nomination paper the identification of the constituency is complete. The name of the ward is merely an additional piece of evidence to identify the constituency. if the number of the ward is mentioned there will be no difficulty for the Returning Officer to find out in which constituency the candidate wants to seek election. We have no hesitation in holding that the nomination papers of the returned candidates were rightly accepted by the Returning Officer as they substantially complied with rules. If a nomination is accepted by the Returning Officer the presumption is that the nomination is a valid nomination. It is for the party who challenges its validity to establish his plea by showing that there was no substantial compliance with law. Form III in the Rules prescribes the form of notice calling for election of councillors. That form reads : "Election of Councillor(s) for Ward(s) No. . of the . Municipality, Tehsil District . . This form shows that even when the authorities call upon the electors to elect councillors they do so with reference to ward numbers and not with reference to the names of the wards evidently because in the case of names of the wards more than one ward may have the same or similar names but in the case of number no such difficulty can arise. If there is a possibility of an error creeping into numbers there is similar possibility in the case of names. The candidates have to guard against such errors. The question whether the failure to mention the name of the constituency, in which the candidate wants to seek election in his nomination paper per se vitiates his nomination came up for consi 62 deration before this Court in Rangilal Chowdhury vs Dahu San & ors. That case related to a bye election for the Dhanbad assembly constituency in the Bihar State. In his nomination paper the candidate had mentioned the constituency in which he was seeking election as 'Bihar '. nomination paper was rejected by the Returning Officer on the ground that the candidate had not mentioned the name of the constituency in which he desires to seek election. This Court differing from the opinion taken by the Returning Officer held that the nomination paper was valid in law. The ground on which this Court came to. that conclusion was that the election in question was a bye election; it pertained to only one constituency ie. Dhanbad. That, being so there was no difficulty for the Returning Officer to identify the constituency in which the candidate wanted to seek election. The ratio of that decision is that so long as there is no difficulty in identifying the constituency in which the candidate wants to seek election any omission in filling the, column relating to tile constituency will be considered as unsubstantial. A somewhat similar view was taken by this Court in Ram Awadesh Singh vs Smt. Sumitra Devi & Ors.(2) Mr. Panjwani appearing for respondent No. 1 invited our attention to certain decisions where the courts had taken the view that the particulars mentioned in the nomination papers before them did not sufficiently comply with the rules. That was because, that from the particulars given in the nomination papers it was not possible to definitely identify the constituency in which the concerned candidates desired to contest. 'nose decisions were rendered on the peculiar facts of those cases. The real test as mentioned earlier is whether from the particulars given in a nomination paper the constituency from which the candidate wants to seek election can be reasonably identified. Once it is held that test is satisfied then the requirement of the rule is met. Any failure to give further particulars canno t be considered as substantial. In the result this appeal is allowed and the order of the High Court is set aside and the Writ Petition is dismissed. The first respondent will pay the costs of the appellants herein both in this court as well as the High Court. The other respondents will bear their own costs S.C. Appeal allowed.

According to Rule 13 framed under Madhya Pradesh Municipalities Act, 1961, a candidate for election to the Municipal Council shall deliver to the supervising officer a nomination paper completed in Form IV and the relevant column in Form IV required the candidate to mention the "name and number of the Ward". Further, sub rule (IV) of Rule 13 provided that the 'supervising officers shall not reject any nomination paper on the ground of any defect which is not of substantial character High Court in a writ petition set aside the elections of 6 persons to the 'Municipal Council on the ground that they only mentioned the question whether the number of the wards but not their names. On non mentioning the names of the wards in teh nomination paper was a defect of a substantial character, HELD . : The nomination papers of the returned candidates were rightly accepted by th` Returning Officer as they substantially complied with the Rule. The particulars in question were required to identify the constituency in which a candidate was desirous of seeking election. That purpose was served when either the number and the ward, or its name was given unless them were, more than on a ward having the same name the identification of the constituency was complete. The name of the ward .was merely an additional piece of evidence to identify the constitute Once the number of the ward was mentioned there was no difficulty for the Returning Officer to find out in which constituency tin candidates wanted to seek election. [61D] Rangila Chowdhury vs Dultu Sen & Ors. ; and Rain Awadesh Singh vs Smt. Sumitra Devi & Ors., A.I.R. , referred to.

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Special Leave Petition (C) No. 4325 of 1992. From the Judgment and Order dated 6.3.1992 of the Punjab and Haryana High Court in Civil Revision No. 2830 of 1991. Dr. A.M. Singhvi and Ms. Kirti Misra for the Appellant. D.V. Sehgal, S.M. Sarin, P.N. Puri, Ranbir Singh Yadav and G.K. Bansal for the Respondent. The Judgment of the Court was delivered by S.C. AGRAWAL, J. This petition for special leave to appeal arises out of proceedings for eviction initiated by the respondent (landlord) against the petitioner (tenant) under section 13A of the East Punjab Urban Rent Restriction Act, 1949 (hereinafter referred to as `the Act '), as amended by Act No. 2 of 1985. The proceedings relate to a residential house in Chandigarh which was let out to the petitioner by the respondent. The respondent was initially employed as Accounts Officer with the Finance Department of the Government of Haryana. In 1969, he went on deputation with the Haryana Agricultural University (hereinafter referred to as `the University '). His services were transferred to the University by the Government of Haryana with effect from November 1, 1975, and while he was employed on the post of Comptroller in the University he retired from service with effect from February 28, 1991. Claiming to be a `specified landlord ' within the meaning of section 2(hh) of the Act, the respondent moved a petition seeking eviction of the petitioner under section 13A of the Act before the Rent Controller, Chandigarh. The said petition was dismissed by the Rent Controller by order dated August 5, 1991 on the view that the respondent did not fall within the ambit of the definition of `specified landlord ' since he had failed to show that he was holding or has held an appointment in a public service or post in connection with the affairs of the Union or of the State. The respondent filed a revision petition before the High Court under section 18 A(8) of the Act which was allowed by the High Court by judgment dated March 6, 1992. The High Court held that the respondent, at the time of his retirement from the post of Comptroller in the University, was holding an appointment in connection with the affairs of the State and hence he is a specified landlord within the meaning of section 2(hh) of the Act. The High Court further found that the respondent had fully satisfied the conditions as contained in section 13 A of the Act and he was entitled to recover the possession of the premises in dispute from the petitioner. Allowing the revision, the High Court set aside the order of the Rent Controller and accepted the petition filed by the respondent under section 13 A of the Act for ejectment of the petitioner. The High Court further directed as under: "However, the respondent is allowed one month 's time to vacate the premises provided he pays the entire arrears of rent within 15 days from today, and also files an undertaking with the Court of the Rent Controller to the effect that he shall hand over the vacant possession of the premises on the expiry of aforesaid period. " On March 16, 1992, the petitioner moved a petition in the high Court under section 151 CPC seeking three months, time to vacate the house and for waiving the requirement of filing of an undertaking. The said petition was rejected by the High Court by order dated March 18, 1992. Thereafter, the petitioner submitted an undertaking dated March 20, 1992 before the Rent Controller wherein the petitioner after referring to the direction contained in the order of the High Court dated March 6, 1992 gave the following undertaking: "That the respondent hereby gives undertaking that he will vacate the premises and shall handover the vacant possession of the premises on the expiry of one month from 6.3.92 as per the order of Hon 'ble High Court, subject to his rights for filing SLP in the Hon 'ble Supreme Court against the order of eviction. The respondent has already sent draft for the rent for the month of March 1992 to the petitioner and he is not in arrears of rent. " On March 21, 1992, the petitioner filed the special leave petition under Article 136 of the Constitution in this Court. On the said petition the following order was passed on March 26, 1992: "To come up in normal course. In the meantime, no dispossession to be effected. " On April 9, 1992, an order was passed in the following terms: "Issue notice returnable within two weeks. In the meantime, stay of eviction to continue." . In response to the said notice, the respondent filed a counter affidavit on April 18, 1992 wherein an objection has been raised that in view of the undertaking given by him the petitioner cannot invoke the jurisdiction of this Court under Article 136 of the Constitution. Shri D.V. Sehgal, the learned senior counsel appearing for the respondent, has submitted that in view of his having taken the benefit of direction contained in the order of the High Court allowing him one month 's time to vacate the premises on his filing an undertaking that he shall hand over vacant possession of the premises on the expiry of aforesaid period and his having submitted a written undertaking in accordance with the said direction, the petitioner is precluded from assailing the judgment of the High Court by invoking the jurisdiction of this Court under Article 136 of the Constitution. Shri Sehgal has urged that the fact that the petitioner has qualified his undertaking by using the words "subject to his rights for filing SLP in the Hon 'ble Supreme Court against the order of eviction" would not alter the position. In support of his aforesaid submission Shri Sehgal has placed reliance on the decisions of this Court in Thacker Hariram Motiram vs Balkrishan Chatbrabhu Thacker & Ors., [1989] Supp. 2 SCC 655; Vidhi Shanker vs Heera Lal, [1987] Supp. SCC 200 and Ramchandra Jai Ram Randive vs Chandanmal Rupchand & Ors., [1987] Supp. SCC 254. Dr. A.M. Singhvi, the learned counsel appearing for the petitioner, has, however, laid stress on the fact that the undertaking had to be given by the petitioner in the peculiar circumstances arising on account of this Court being closed due to vacations from March 16, 1992 to March 20, 1992. Dr. Singhvi has submitted that the petitioner has not taken any undue advantage by giving the undertaking inasmuch as before giving the under taking, he had moved an application for extension of time before the High Court wherein he had clearly indicated that he intended to file a special leave petition in this Court against the order of the High Court dated March 6, 1992 and this was also expressly stated in the undertaking filed in the Court wherein it is mentioned that the undertaking was subjected to his right to file the special leave petition in this Court against the order of eviction. Dr. Singhvi has urged that in view of the aforesaid facts and circumstances the decisions on which reliance has been placed by Shri Sehgal would have no application to the present case. In view of the judgment of the High Court allowing the petition for eviction filed by the respondent, the petitioner was liable to be evicted from the premises forthwith. Under the direclions given by the High Court, the petitioner could continue in occupation of the premises for a period of one month on his (i) paying the entire arrears of rent within 15 days from the date of the judgment; and (ii) filing an undertaking with the court of Rent Controller to the effect that he shall hand over the vacant possession of the premises on the expiry of the period of one month. The petitioner made an effort to obtain extension of time for vacating the premises without furnishing the undertaking and he filed a petition for the purpose before the High Court. The said petition was, however, dismissed by the High Court. Having failed in his attempt to obtain extension of time for vacating the premises without furnishing an undertaking the petitioner had two options open to him, (i) to avail the protection from eviction from the premises for 3a period of one month by tiling an undertaking as directed, or (ii) not to avail the said protection and run the risk of immediate eviction. The petitioner chose the first option. In order to avail the protection from eviction from the premises for a period of one month he filed the requisite undertaking in the court of the Rent Controller within the period of 15 days prescribed under the directions of the High Court. The statement in the undertaking that it was subject to the rights of the petitioner to file special leave petition in this Court against the order of eviction, does not, in our view, have any effect on the legal consequences flowing as a result of the filing of the undertaking by the petitioner. By furnishing the said undertaking the petitioner elected to avail the protection from eviction from the premises and he enjoyed the said protection till the passing of the order by this Court on March 26, 1992, staying dispossession of the petitioner. Having elected to avail the protection from eviction under the order dated March 6, 1992 passed by the High Court, by filing the requisite undertaking, the petitioner cannot be permitted to assail the said order. Law does not permit a person to both approbate and reprobate. This principle is based on the doctrine of election which postulates that no party can accept and reject the same instrument and that "a person cannot say at one time that a transaction is valid any thereby obtain some advantage, to which he could only be entitled on the footing that it is valid, and then turn round and say it is void for the purpose of securing some other advantage". [See: Verschures Creameries Ltd. vs Hull and Netherlands Steamship Co. Ltd., (1921) 2 R.B. 608, at p.612, Scrutton, L.J]. According to Halsbury 's Laws of England, 4th Edn. ,Vol. 16, "after taking an advantage under an order (for example for the payment of costs) a party may be precluded from saying that it is invalid and asking to set it aside". (para 1508). In Thacker Hariram Motiram vs Balkrishan Chatbrabhu Thacker & Ors.(supra), this Court was dealing with a similar situation. The High (Court, while deciding the second appeal in an eviction matter gave the appellant (tenant) one year 's time subject to his giving an undertaking within a period of three weeks stating that vacant possession would be handed over within the aforesaid time. The appellant gave an undertaking in accordance with the said terms wherein he undertook that he would vacate and give vacant possession of the suit premises by December 31, 1985, i.e., to say after one year if "by that time no stay order from the Supreme Court is received as I intend to file an appeal in the Supreme Court". It was held that in view of the said undertaking the petitioner could not invoke the jurisdiction of this Court under Article 136 of the Constitution and he should abide by the terms of the undertaking, and it was observed "This undertaking filed by the appellant in our opinion is in clear variation with the oral undertaking given to the learned Judge which induced him to give one year 's time. a We do not wish to encourage this kind of practice for obtaining time from the court on one plea of filing the undertaking and taking the different stand, in applications under Article 136 of the Constitution." (p.655) Similarly in Vidhi Shanker vs Heera Lal (supra) and Ramchandra Jai Ram Randive vs Chandanmal Rupchand & Ors. (supra), this Court declined to exercise its discretion under Article 136 of the Constitution in cases where the petitioner had given an undertaking in the High Court and had obtained time to vacate the premises on the basis of such undertaking. We are, therefore, of the opinion that the petitioner, having given an undertaking in pursuance to the directions given by the High Court in the Judgment dated March 6, 1992, and having availed the protection from eviction on the basis of the said undertaking, cannot be permitted to invoke the jurisdiction of this Court under Article 136 of the Constitution and assail the said judgment of the High Court. In that view of the matter, we do not consider it necessary to deal with the submissions urged by Dr. Singhvi that the respondent, being an employee of the University at the time of his retirement, was not a 'specified landlord ' under section 2(hh) of the Act. The special leave petition is, accordingly, dismissed but without any orders as to costs. V.P.R. Petition dismissed.

A residential house was let out to the petitioner by the respondent. The respondent was initially employed as Accounts Officer with the Finance Department of the Government. In 1969, he went on deputation with the Haryana Agricultural University. While he was employed on the post of Comptroller in the University he retired from service with effect from February 28, 1991. Claiming to be a "specified landlord" within the meaning of Section 2(hh) of the East Punjab Urban Rent Restriction Act, 1949, the respondent moved a petition seeking eviction of the petitioner under section 13A of the Act before the Rent Controller. The petition was dismissed by the Rent Controller on the view that the respondent did not fall within the ambit of the definition of "specified landlord", since he failed to show that he was holding or had held an appointment in a public service or post in connection with the affairs of the Union or of the State. The respondent filed a revision petition before the High Court under section 18 A(8) of the Act, which was allowed by the High Court on March, 1992. The High Court held that the respondent, at the time of his retirement from the post of Comptroller in the University, was holding an appointment in connection with the affairs of the State and hence he was a specified landlord within the meaning of section 2(hh) of the Act and that the respondent had fully satisfied the conditions as contained in section 13 A of the Act and he was entitled to recover the possession of the premises in dispute from the petitioner. The High Court allowed one month 's time for the petitioner to vacate the premises subject to his paying the entire arrears of rent within 15 days from the date of the order and filing an undertaking that he would hand over the vacant possession of the premises on the expiry of the aforesaid period. On March 16, 1992, the petitioner moved a petition in the High Court under section 151 CPC seeking three months ' time to vacate the house and for waiving the requirement of filing of an undertaking. The High Court rejected the petition. Thereafter, the petitioner submitted an undertaking dated March 20, 1992 before the Rent Controller wherein the petitioner referred to the direction contained in the order of the High Court dated March 6, 1992. On March 21, 1992, the petitioner filed the special leave petition under Article 136 of the Constitution in this Court and succeeded to get an order staying dispossession on March 26, 1992. In response to the notice issued on the Special Leave Petition, the respondent filed a counter affidavit raising an objection that in view of the undertaking given by the petitioner, the jurisdiction of this Court under Article 136 of the Constitution could not be invoked. The respondent landlord submitted that in view of petitioner tenant 's having taken the benefit of direction contained to the order of the High Court allowing him one month 's time to vacate the premises on his filing an undertaking that vacant possession of the premises would be handed over on the expiry of the period and his having submitted a written undertaking in accordance with the direction, the petitioner was precluded from assailing the judgment of the High Court by invoking the jurisdiction of this Court under Article 136 of the Constitution. The petitioner tenant submitted that he did not take any undue advantage by giving the undertaking; that prior to the undertaking, he had moved an application for extension of time before the High Court wherein he had clearly indicated that he intended to file a special leave petition in this Court against the order of the High Court dated March 6, 1992 and that it was also expressly stated in the undertaking filed in the Court wherein it is mentioned that the undertaking was subject to his right to file the special leave petition in this Court against the order of eviction. Dismissing the special leave petition, this Court, HELD: 1.01 Law does not permit a person to both approbate and reprobate. This principle is based on the doctrine of election which postulates that no party can accept and reject the same instrument. [263 F] 1.02 The petitioner, having given an undertaking in pursuance to the directions given by the High Court in the judgment dated March 6, 1992 and having availed the protection from eviction on the basis of the said undertaking, cannot be permitted to invoke the jurisdiction of this Court under Article 136 of the Constitution and assail the said judgment of the High Court. [264 H] 1.03 The statement in the undertaking, that it was subject to the rights of the petitioner to file special leave petition in this Court against the order of eviction, does not have any effect on the legal consequencew flowing as a result of the filing of the undertaking by the petitioner. [263 D] Verschures Creameries Ltd. vs Hull and Netherlands Steamship Co. E Ltd., at p. 612; Thacker Hariram Motiram vs Balkrishan Chatbrabhu Thacker & Ors., [1989] Supp. 2 SCC 655 and Vidhi Shanker vs Heera Lal 1987 Supp. SCC 200; Ramchandra Jai Ram Randive vs Chandanmal Rupshand & Ors., [1987] Supp. SCC 254, referred to. Halsbuly 's Laws of England, 4th Edn. 16, para 1508, referred to.

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ivil Appeal No. 2588 of 1966. Appeal from the judgment and decree dated January 14, 1964 of the Patna High Court in First Appeal No. 572 of 1958. D. Goburdhun and R. Goburdhun, for the appellants. A. N. Sinha and P. K. Mukherjee, for respondent No. 1. 640 The Judgment of the Court was delivered by Mitter, J. The only question involved in this appeal is, whether the direction of the High Court that the partition suit launched in 1943 should be allowed to proceed in view of the provisions of section 6 of the Bihar Land Reforms Act, 1950 which came into force on 25th September, 1950, is correct. The suit had a chequered career. It was instituted against a number of persons the main relief asked for being partition of four annas Milkiat interest in Touzi No. 702, Tappa Haveli, Pargana Maheshi, District Champaran, Bihar. The Subordinate Judge of Motihari made a preliminary decree for partition declaring the first respondent 's share in the property as claimed by him. The High Court in appeal modified the decree reducing the plaintiff 's share to Rs. 0 1 4 interest only. In further appeal to these Court the trial court 's preliminary decree was upheld on 5th ,October 1953. In the meanwhile the Bihar Land Reforms Act of 1950 effecting far reaching changes in the incidents of land tenure and land holdings had been passed. The first appellant made an application to the trial court in June 1958 prayina that the proceedings for final decree be treated as having abated in view of the vesting of all estates in land in the State of Bihar. This was accepted by the Subordinate Judge by an order dated July 12, 1958. The High Court allowed the appeal with the direction above mentioned which the appellants now seek to have set. aside. The bone of contention between the parties is the extensive "bakasht ' lands in the aforesaid Mouza. The appellants contend that under section 6 (1) of the Act all these lands vested in the State and came to be held by the persons in "khas possession" thereof as raiyats under the State. To appreciate the plea it is necessary to make a brief reference to some of the provisions of the Act. As is well known the object of the Act was to cause transference to the State of the interest of proprietors and tenure holders in land as also of the mortgagees and lessees of such interests including interests in trees, forests, fisheries, jalkars, ferries, hats, bazars, mines and minerals and to provide for certain consequences following there from and connected therewith. section 3 of the Act ,enabled the State Government to declare by notification that the estates or tenures of a proprietor or tenure holder specified therein 'would pass to and become vested in the State. The consequences ,of such vesting are set forth in section 4. Under cl. (a) : "Such estate or tenure including the interests of the proprietor or tenure holder in any building or part of a building comprised in such estate or tenure and used 641 primarily as office or cutchery for the collection of rent of such estate or tenure, and his interest in trees, forests, fisheries, jalkars, sairati interest as also his interest in all sub soil including any rights in mines and minerals whether discovered or undiscovered, or whether being worked or not, inclusive of such rights of a lessee of mines and minerals, comprised in such estate or tenure (other than the interests of raiyats or under raiyats) shall, with effect from the date of vesting, vest absolutely in the State free from all encumbrances and such proprietor or tenure holder shall cease to have any interest in such estate or tenure, other than the interests expressly saved by or under the provisions of the Act. " section 6 of the Act provides for such saving and the relevant portion thereof runs as follows "(1) On and from the date of vesting all lands used for agricultural or horticultural purposes, which were in khas possession of an intermediary on the date of such vesting, including (a) (i) proprietor 's private lands let out under a lease for a term of years or under a lease from year to year. . . (ii) landlords privileged lands let out under a registered lease for a term exceeding one year or under ,a lease, written or oral, for, a period of one year or less, referred to in section 43 of the Chota Nagpur Tenancy Act, 1908, (b) lands used for agricultural or horticultural purposes and held in the direct possession of a temporary lessee of an estate or tenure and cultivated by himself with his own stock or by his own servants or by hired labour or with hired stock, and (c) lands used for agricultural or horticultural purposes forming ' the subject matter of a subsisting mortgage on the redemption of which the intermediary is entitled to recover khas possession thereof; shall. . . be deemed to be settled by the State with such intermediary and he shall be entitled to retain possession thereof and hold them as a raiyat under the State having occupying rights in respect of such lands subject to the payment of such fair and equit able rent as may be determined by the Collector in the prescribed manner. 642 The broad proposition which was advanced before the High Court and rejected by it and reiterated before us is that the consequence of section 6, was to put an end to the character of the possession of the bakasht lands to the malik by causing them to vest in the State and simultaneously creating a tenancy in favour of the person in khas possession thereof. There is no dispute that bakasht lands fall under categories (b) and (c). We are not here concerned with category (c) and have quoted it to appreciate some decisions relied on where there are references to that category. This question has engaged the attention of the Patna High Court more than once and it would appear that the views expressed in different cases have not been uniform. So far as the said High Court is concerned the point was settled by a decision of the Full Bench in Mahanth Sukhdeo Das. vs Kashi Prasad Tewari and Shrideo Misra vs Ramsewak Singh(1). The main questions before the Full Bench were whether on the vesting of an estate which was mortgaged at the material time the bakash lands therein which are deemed to be settled with the ex proprietor in khas possession would form substituted security for the purpose of the mortgage, and whether a co sharer proprietor not in actual possession of such lands had Any claim thereto on the basis of his constructive possession. The High Court answered both the above in the affirmative. One of the earliest cases in which this Court had to interpret section 6 of the Act was that of Surajnath Ahir vs Prithinath Singh (2 ) . There the question which engaged the attention of this Court was whether the appellants who had originally gone into possession on the strength of a mortgage lost their right to continue in possession even if they claimed to be trespassers after the redemption of their mortgage by reason of the estate vesting in the State on the passing of the Act. Although the case is not directly in point, it bears upon the identical provisions of law which have to be applied to the facts of the case before us. The facts in that case were that the appellants had entered into possession of kasht lands of the mortgagors on the strength of a mortgage deed. The mortgagors thereafter executed another mortgage with respect to their milkiat (proprietary) interest in favour of certain persons. The plaintiff respondents bought the milkiat rights together with "kasht" lands from the mortgagors and entered into possession of the milkiat property and subsequently redeemed the mortgage deeds in 1943. The appellants however did not make over possessions of the lands in dispute even after the redemption of the mortgage. It was held by this Court that the respondents could not take advantage of section 6 (1) (c) of the Act as no mortgage subsisted on the date of vesting and the mere fact that the proprietor had a subsisting (1) I.L.R. 37 Patna 918. (2) [1963] 3 S.C.R. 290 643 title to possession over certain land on the date of vesting could, ' not amount to that land being treated as under his "khas possession" for the purposes of the Act. Referring to the definition of "Khas possession" in section 2(k) of the Act as meaning "the possession of such proprietor or tenure holder by cultivating such land or carrying on horticultural operations thereon himself with his own stock or by his own servants or by hired labour or with hired stock". it was held that in order that the respondents could take advantage of the provision of section 6 (1 ) (c) of the Act they had to, establish a subsisting mortgage on the date of vesting which was inclusive, of the land subject to their right of redemption. On the question of possession of the lands it was observed "On the date of vesting, the appellants were not in possession as mortgagees. The mortgages had been redeemed in 1943. Thereafter, the possession of the appellants was not as mortgagees. It may be as trespassers or in any other capacity. The land in suit, therefore, did not come within cl.(c) of section 6 of the Act. " Rejecting the construction put on the expression 'khas possession by the High Court in Brijnandan Singh vs Jamuna Prasad(1) it was said : " The mere fact that a proprietor has a subsisting title to possession over certain land on the date of vesting would not make that land under his 'khas possession '. " The Full Bench decision of the Patna High Court, came up for consideration by this Court in Ram Ran Bijai Singh vs Behari Singh alias Bagandha Singh(2). There the appellants before this, Court were the plaintiffs who had filed a suit for a declaration that a certain plot of land was their zeraiti land and that the persons impleaded as the defendants 1st and 2nd parties had no right or title thereto and for recovery of possession of the said land by dispossessing them therefrom. It was argued that in view of the concurrent findings of the courts below that the lands were the zeraiti lands of the plaintiffs they would not vest in the State because of the saving in section 6 of the Act and the appellant should be deemed to have been in khas possession of the land under section 6 (1) (c). The respondents contended that it was not a case of a mortgagee remaining in possession after payment of the debt without anything more but of tenants who claimed to remain in possession by asserting a title which was as much against the mortgagors as against the mortgagees. Reference was made in the (1) A.I.P. 1958 Patna 580. (2) (3) I.L.R.37Pat. 644 course of arguments to the Full Bench decision in Sukhdeo Das 's case(3) and it was submitted that a mortgagee continuing in possession of the mortgaged property after payment of the :mortgage amount must hold the same on behalf of the mortgagor and in trust for him. Counsel further relied on certain observations in the judgment of the Full Bench in aid of his proposition and submitted on the basis thereof that even the possession of a trespasser who had not perfected his title by adverse possession for the requisite period of time under the Limitation Act should be considered as in khas possession of the true owner. Turning down this submission it was observed by this Court (p. 378) : "We consider that this equation of the right to possession with 'khas possession ' is not justified by principle or authority. Besides this is also inconsistent with the reasoning of the Full Bench by which constructive pos session is treated as within the concept of khas possession. " The Court went on to add that "The possession of the contesting defendants in the present case was in their own right and adverse to the plaintiffs, even on the case with which the appellants themselves came to court." Noting the statement of the plaintiffs in their plaint that the mortgagees had fulfilled their obligations and the obstruction to possession was put forward only 'by persons who claimed occupancy rights this Court concluded that, in the circumstances of the case, it was not possible for the appellants to contend that these tenants (defendants 1st and 2nd parties) were in possession of the property on behalf of the mortgagor or by virtue of any right through the mortgagor. The case is not therefore an authority for the proposition that a co sharer 's constructive possession is to be ignored under section 6 (1) (c) of the Act. Counsel for the appellants also referred us to a recent decision of this Court in section P. Shah vs B. N. Singh(1) in aid of his contention that the true effect of section 6 of the Act was to create a new right ,of tenancy in favour of the person in khas possession and consequently even if the plaintiff in the partition suit had a right to ask for demarcation of his Rs. 0 4 0 share of the bakasht lands before the passing of the Land Reforms Act, he could not pursue his claim by a prayer that he be considered a tenant along with those who were in actual khas possession. In our view the above decision is no authority for this broad proposition. In that case the appellants who were mortgagees of an estate including bakasht lands and other lands filed a suit on (1) ; 64 5 their mortgage and tried to follow up the preliminary decree which was obtained before the Act came into force by a petition for passing a final decree. One of the questions before this Court was whether the mortgage decree had become unexecutable in view of the provisions of the Act. It was held that the net effect of sections 3, 4 and 6 was that although on the vesting of the, lands in the State a settlement was deemed to be effected with the person in khas possession in law, there were two different transactions and the deemed settlement was in effect a separate transaction creating new rights. The Court came to the conclusion that the only remedy open to the decree holders wag that provided in Chapter IV of the Act i.e. a claim under section 14 before the Claims Officer for determining the amount of debt legally and justly payable to each creditor in respect of his claim. The Court was there dealing with the rights of the mortgage creditors after the Act had come into force. Chapter IV of the Act made special provisions for dealing with the rights of secured creditors and section 4 (1) (d) expressly provided for the abatement of all suits and proceedings for the recovery of any money through proceedings which might be pending on the date of vesting arising out of securities created by mortgage or a charge on an estate or tenure. Here however we are not dealing with the claims of mortgagees under Chapter IV. In this case we have to consider whether the appellants had laid a claim which a co sharer could not put forward except by pleading ouster or any other independent ground. Even if they were in actual khas possession within the meaning of section 2 (k) of the Act it must be held that the plaintiff who was a co sharer was in constructive possession through the appellants as "under the law possession of one co sharer is possession of all the co sharers". We see no reason to hold that the observations of this Court to the above effect in P. L. Reddy vs L. L. Reddy(1) are not applicable to the case before us. The appellants do not claim to be trespassers on the property neither did they claim any title to the lands adversely to the plaintiff respondent. The deeming provision of section 6 must therefore enure for the benefit of all who in the eye of law would be regarded as in actual possession. It follows that the plaintiff had not lost his share in the bakasht lands and had a right to them though not as tenure holder or proprietor but certainly as a raiyat under the provisions of the Land Reforms Act. ' The appeal must therefore be dismissed with costs. V.P.S. Appeal dismissed. (1) ; , 202.

In a suit for partition of bakash land a preliminary decree was passed. The defendants appellants, claiming to be in actual possession of the bakasht land, filed a petition contending that the consequence of section 6. of the Bihar Land Reforms Act, 1950 (which came into force in the meanwhile) was to put an end to the proprietor 's possession of the bakasht land by causing them to vest in the State and simultaneously creating a tenancy in favour of the person in khas possession thereof, and therefore, no final decree could be passed. The trial court accepted the contention and dismissed the plaintiff 's application for passing final decree. In appeal, the High Court set aside the order. In appeal to this Court, HELD : Even if the appellants were in actual khas possession within the meaning of section 2(k) of the Act, it must be held that the plaintiff respondent, who was a co sharer, was in constructive possession through the appellants, as, under the law, possession of one co sharer is possession of all co shares. The appellants did not claim to be trespassers on the property neither did they claim any title to the lands adversely to the respondent. The deeming provision of section 6 must, therefore, enure for the benefit of all, who in the eye of land) would be regarded as in actual possession. Therefore, the respondent had not lost his share in the bakasht lands and had a right to his share in them, though not as tenure holder or proprietor, but as a raiyat under the provisions of the Act. [645 E G] P. L. Reddy vs L. L. Reddy, ; , 202, followed. Surajnath Ahir vs Prithitnath Singh, , Ram Ran Baijal Singh vs Behari Singh alias Bagandha Singh, , section P. Shah vs, B. N. Singh; , and Mahant Sukhdeo Das vs Kashi Prasad, Tewari referred to.

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121 of 1958. Petition under Article 32 of the Constitution for enforcement of Fundamental rights. G. B. Pai and Sardar Bahadur, for the petitioner. M. C. Setalvad, Attorney General for India, B. Sen and T. M. Sen, for the respondents. December 11. The Judgment of the Court was delivered by GAJENDRAGADKAR, J. The petitioner has been doing business as an exporter of coir products to foreign countries for the last twenty years. On July 4, 1958, he applied to respondent 2, the Chairman, Coir Board, Ernakulam, requesting that he should be registered as an established exporter. This application was accompanied by an income tax clearance certificate and attested copies of bills of lading. Respondent 2 declined to register the petitioner on the ground that his application was defective inasmuch as the requisite certificate regarding his financial status bad not been produced and no evidence had been given to show that he had exported the minimum quantity required (500 Cwts.). The petitioner was told that unless he complied with the requirements asked for within seven days his application would be rejected without further notice. The petitioner found that he could not comply with the directions issued by respondent 2 and so it became impossible for the petitioner to get registration and licence applied for by him. That is why he filed the present petition under article 32 of the Constitution and prayed for the issue of a writ or order in the nature of mandamus to direct the second respondent to grant the petitioner registration and licence as applied for by him and to prohibit or restrain the said respondent from acting on, or implementing, the rules issued under the , by issue of a writ of certiorari, prohibition or such other writ or order appropriate to protect his rights. The petitioner also prayed that " if found necessary " the said 781 rules should be declared to be ultra vires the powers of the Central Government and invalid being in violation of the fundamental rights guaranteed by articles 14 and 19 of the Constitution. The Union of India has, been impleaded as respondent 1 to the petition. Before dealing with the points raised by the petition it would be necessary to refer briefly to the provisions( of the (45 of 1953), hereinafter called the Act, and the rules framed under it in 1958. This Act was enacted by the Parliament because it was thought expedient in the public interest that the Union should take under its control the coir industry (section 2). Section 4 of the Act provides for the establishment and constitution of the Coir Board and section 10 enumerates its functions and duties. Under section 10(1) it shall be the duty of the Board to promote by such measures as it thinks fit the development under the control of the Central Government of the coir industry. Sub section (2) enumerates the measures which the Board may take with the object of developing the coir industry without prejudice to the generality of the provisions of sub section Amongst the measures thus enumerated, sub section (2) (b) refers to the regulation under the supervision of the Central Government of the production of husks, coir yarn and coir products by registering coir spindles and looms for manufacturing coir products, as also manufacturers of coir products, licensing exporters of coir yarn and coir products and taking such other appropriate steps as may be prescribed. Sub section (2)(g) refers to the promotion of co operative Organisation among producers of husks, coir fibre and coir yarn and manufacturers of coir products, and sub section (2)(1) refers to the licensing of retting places and warehouses and otherwise regulating the stocking and sale of coir fibre, coir yarn and coir products both for internal market and for exports. Section 26(1) confers on the Central Government power to make rules for carrying out the purposes of the Act subject to the condition of previous publication. Sub section (2) enumerates the matters in res pect of which rules may be made, in particular and without prejudice to the generality of the power 782 conferred by sub section Sub section (2) (k) refers inter alia to the registration of manufacturers of coir products and the conditions for such registration and the ,,grant or issue of licences under the Act; and sub section (2)(1) deals with the form of applications for registration and licences under the Act and the fee, if any, to be paid in respect of any such applications. Under the powers conferred by section 26 the Central Government framed rules in 1958. For the purposes of the present petition it would be relevant to refer to rr. 17 to 22. Rule 17 deals with registration and licensing of exports; and it provides that no person shall, after the coming into force of the rule, export coir fibre, coir yarn or coir products unless he has been registered as an exporter and has obtained an export licence under these rules. The proviso deals with exemptions with which we are not concerned. Rule 18 lays down that any person who has in any of the three years immediately preceding the commencement of the rules exported not less than twenty five tons of coir yarn or coir products other than coir rope, or exported any quantity of coir fibre or coir rope, may be registered an exporter of coir yarn, coir products other than coir rope or coir fibre or coir rope as the case may be. Rule 19 provides for the registration of persons other than those covered by r. 18 and it lays down inter alia that such persons may be registered as exporters of coir yarn if, during the period of twelve months immediately preceding the date of application, a minimum quantity of twenty five tons of coir yarn had been rehanked or baled in a factory owned or otherwise possessed by the applicant and registered under the Indian , or, if the applicant has had a total purchase turnover of one hundred tons of coir yarn. The proviso to this rule authorises the Chairman by notification to exempt from the operation of this rule any co operative society the members of which are owners of industrial establishments or any Central Co operative Marketing Society. Rules 20 and 22 prescribe the mode of making an application for registration as an exporter and for licence respectively while r. 21 provides for the 783 cancellation of registration. The present petition does not challenge the validity of any of the provisions of the Act. It, however, seeks to challenge the vires of rr. 18, 19, 20(1)(a), 21 and 22(a). There is no doubt that coir and coir products play an important role in our national economy. They are commodities which earn foreign exchange, the total ' value of our exports in these commodities being of the order of Rupees Ten Crores per year. It was found that several malpractices had crept in the export trade of these commodities such as non fulfilment of contracts, supplying goods of inferior qualities and cut throat competition; and these in turn considerably affected the volume of the trade. That is why Parliament thought it necessary that the Union should take under its control the coir industry in order to regulate its export trade. It is with the object of developing the coir industry that the Coir Board has been established and the registration and licensing of exporters has been introduced. The petitioner does not dispute this position and makes no grievance or complaint against the relevant provisions in the Act. It is, however, urged that the relevant rules which prescribe the quantitative test for the registration of established exporters are ultra vires because the introduction of the said test is inconsistent with the provisions of the Act. In this connection Mr. Pai, for the petitioner, sought to rely on the report submitted by the Ad Hoc Committee for external marketing which the Coir Board had appointed on August 20, 1954. His grievance is that the report of the said Committee does not recommend the adoption of the quantitative test, but seems to suggest that a qualitative test would be more appropriate ; and that, according to Mr. Pai, also indicates that the quantitative test had been improperly prescribed by the rules. We are not impressed by these arguments. It is clear that there is no provision in the Act which excludes or prohibits the application of the quantitative test in making rules for registration of exporters or for issuing licences for export trade. In fact the Act has deliberately left it to the rule making authority to frame rules 784 which it may regard as appropriate for regulating the trade; and so it would be impossible to accept the argument that the rule making authority was bound to prescribe the qualitative rather than the quantitative test. Besides, it does not appear that the report of the Committee on which Mr. pai relied definitely indicated its partiality for the adoption of the qualitative test. Indeed Appx. XI to the said report would suggest that the Committee in fact was not averse to the adoption of a quantitative test; but even if the Committee had expressly recommended the adoption of a qualitative, not a quantitative, :test, it would be idle to suggest that the Coir Board was bound to accept the said recommendation or that the Central Government was not competent to make rules contrary to the recommendations of the Committee. The validity of the rules can be successfully challenged if it is shown that they are inconsistent with the provisions of the Act or that they have been made in excess of the powers conferred on the rule making authority by section 26 of the Act. In our opinion, no such infirmity has been established in respect of the impugned rules. It is then contended that the relevant rules would ultimately tend to establish a monopoly in the export trade of coir commodities and would thereby extinguish the trade or business of small dealers like the petitioner. It is also contended that the application of the quantitative test discriminates between persons carrying on business on a large scale and those who carry on business on a small scale. That is how articles 19 and 14 of the Constitution are invoked and the validity of the relevant rules is challenged on the ground that they violate the fundamental rights of the petitioner under the said Articles. We think there is no substance in this contention. If it is conceded that the regulation of the coir industry is in the public interest, then it would be difficult to entertain the argument that the regulation or control must be introduced only on the basis of a qualitative test. It may well be that there are several difficulties in introducing and effectively enforcing the qualitative test. It is well known that granting 785 permits or licences to export or import dealers on the basis of a quantitative test is not unknown in regard to export and import of essential commodities. It would obviously be for the rule making authority to decide which test would meet the requirements of public interest and what method would be most expedient in controlling the industry for the national ' good. Beside,%, even the adoption of a qualitative test may tend to extinguish the trade of those who do not satisfy the said test; but such a result cannot obviously be treated as contravening the fundamental rights under article 19. Control and regulation of any trade, though reasonable within the meaning of article 19, sub article (6), may in some cases lead to hardship to some persons carrying on the said trade or business if they are unable to satisfy the requirements of the regulatory rules or provisions validly introduced ; but once it is conceded that regulation of the trade and its control are justified in the public interest, it would not be open to a person who fails to satisfy the rules or regulations to invoke his fundamental right under article 19(1)(g) and challenge the validity of the regulation or rule in question. In our opinion, therefore, the challenge to the validity of the rules on the ground of article 19 must fail. The challenge to the validity of the said rules on the ground of article 14 must also fail, because the classification of traders made by rr. 18 and 19 is clearly rational and is founded on an intelligible differentia distinguishing persons falling under one class from those falling under the other. It is also clear that the differentia has a rational relation to the object sought to be achieved by the Act. As we have already pointed out, the export trade in coir com modities disclosed the existence of many malpractices which not only affected the volume of trade but also the reputation of Indian traders; and one of the main reasons which led to this unfortunate result was that exporters sometimes accepted orders far beyond their capacity and that inevitably led to non fulfilment of contracts or to supply of inferior commodities. In 99 786 order to remedy this position the trade had to be regulated and so the intending exporter was required to satisfy the test of the prescribed minimum capacity and to establish the prescribed minimum status before his application for registration is granted. In this connection it may also be relevant to point out that the rules seem to contemplate the granting of exemption from the operation of some of the relevant tests to co operative societies; and that shows that the intention of the Legislature is to encourage small traders to form co operative societies and carry on export trade on behalf of such societies; and so it would not be possible to accept the argument that the impugned rules would lead to a monopoly in the trade. It is thus clear that the main object which the rules propose to achieve is to remove the anomalies and malpractices prevailing in the export trade of coir commodities and to put the said trade on a firm and enduring basis in the interest of national economy. We are, therefore, satisfied that the challenge to the impugned rules on the ground of infringement of article 14 of the Constitution must also fail. In the result we hold that there is no substance in the petition. It accordingly fails and is dismissed with costs. Petition dismissed.

The petitioner, an unsuccessful applicant for registration as an exporter and licensee for exporting coir products, challenged the vires of the rr. 18, 19, 20(1)(a), 21 and 22(a) made by the Central Government in exercise of its powers under section 26(1) of the (45 Of 1953). The Act had for its object the regulation and control of the Coir industry in public interest. It was contended on his behalf that the impugned rules, which prescribed the quantitative, and not the qualitative, test for registration of established exporters, were inconsistent with the provisions of the Act and as such, ultra vires the Act and that they tended to create a monopoly in the export trade of coir commodities and thereby destroy the business of small dealers and discriminated between those who carried on large scale business and those who carried on small scale business and thus impugned articles 19 and 14 Of the Constitution. Held, that the contentions were without substance and must be negatived. There was no provision in the , that excluded or prohibited the application of the quantitative test and the rules were in no way inconsistent with the Act nor in excess of the powers conferred on the Central Government by section 26 of the Act. Where an Act sought to control an industry in public interest it would obviously be for the rule making authority to decide which rules and regulations would meet the requirement of public interest. Such rules and regulations, though reasonable within the meaning of article 19(6), might cause hardship to those who failed to comply with them. But once it was conceded that the regulation and control of the trade were justified in public interest, article 19(1)(g) could not be invoked to challenge the validity of the rules. Nor did the impugned rules violate article 14 Of the Constitu tion. The classification of traders under rr. 18 and 19 was clearly founded on an intelligible differentia that had a rational relation to the object of the Act. The exemption made by the rules in favour of co operative societies from some of the relevant tests indicated that the Legislature intended to encourage small 780 traders. It was not, therefore, correct to say that the rules would lead to a monopoly in the trade.

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XXIX of 1950. Application under article 32 of the Constitution of India for a writ of certiorari and prohibition. The facts are stated in the judgment. N.C. Chatterjee (B. Banerji, with him) for the petition er. M.C. Setalvad, Attorney General for India, (section M. Sikri, with him) for the respondent. May 26. The judgment of Kania C.J., Patanjali Sastri, Mehr Chand Mahajan, Mukherjea and Das JJ. was deliv ered by Patanjali Sastri J. Fazl Ali J. delivered a separate dissenting judgment, 607 PATANJALI SASTRI J. This is an application under arti cle 32 of the Constitution praying for the issue of writs of certiorari and prohibition to the respondent, the Chief Commissioner of Delhi, with a view to examine the legality of and quash the order made by him in regard to an English weekly of Delhi called the Organizer of which the first applicant is the printer and publisher, and the second is the editor. On 2nd March, 1950, the respondent, in exercise of powers conferred on him by section 7 (1) (c) of the East Punjab Public Safety Act, 1949, which has been extended to the Delhi Province and is hereinafter referred to as the impugned Act, issued the following order: "Whereas the Chief Commissioner, Delhi, is satisfied that Organizer, an English weekly of Delhi, has been pub lishing highly objectionable matter constituting a threat to public law and order and that action as is hereinafter mentioned is necessary for the purpose of preventing or combating activities prejudicial to the public safety or the maintenance of public order. Now there more in exercise of the powers conferred by section 7 (1)(c) of the East Punjab Public Safety Act, 1949, as extended to the Delhi Province, I, Shankar Prasad, Chief Commissioner, Delhi, do by this order require you Shri Brij Bhushan, Printer and Publisher and Shri K.R. Halkani, Editor of the aforesaid paper to submit for scrutiny, in duplicate, before publication, till further orders, all communal matter and news and views about Pakistan including photographs and cartoons other than those derived from official sources or supplied by the news agencies, viz., Press Trust of India, United Press of India and United Press of America to the Provincial Press Officer, or in his absence, to Superintend ent of Press Branch at his office at 5, Alipur Road, Civil Lines, Delhi, between the hours 10 a.m. and 5 p.m. on work ing days. " The only point argued before us relates to the consti tutional validity of section 7 (1) (c) of the impugned Act which, as appears from its preamble, was passed "to provide special measures to ensure public safety 608 and maintenance of public order. " Section 7 (1) (c) under which the aforesaid order purports to have been made reads (so far as material here) as follows : "The Provincial Government or any authority authorised by it in this behalf if satisfied that such action is neces sary for the purpose of preventing or combating any activity prejudicial to the public safety or the maintenance of public order may, by order in writing addressed to a print er, publisher or editor require that any matter relating to a particular subject or class of subjects shall before publication be submitted for scrutiny." The petitioners claim that this provision infringes the fundamental right to the freedom of speech and expression conferred upon them by article 19 (1) (a) of the Constitu tion inasmuch as it authorises the imposition of a restric tion on the publication of the journal which is not justi fied under clause (2) of that article. There can be little doubt that the imposition of precen sorship on a journal is a restriction on the liberty of the press which is an essential part of the right to freedom of speech and expression declared by article 19 (1)(a). As pointed out by Blackstone in his Commentaries "the liberty of the press consists in laying no previous restraint upon publications, and not in freedom from censure for criminal matter when published. Every freeman has an undoubted right to lay what sentiments he pleases before the public; to forbid this, is to destroy the freedom of the press(1). The only question therefore is whether section 7 (1)(c) which authorises the imposition of such a restriction falls within the reservation of clause (2) of article 19. As this question turns on considerations which are essentially the same as those on which our decision in Petition No. XVI of 1950(2) was based, our judgment in that case concludes the present case also. Accordingly, for the reasons indicated in that judgment, we allow this petition and hereby quash the impugned order of the Chief Commission er, Delhi, dated the 2nd March, 1950. (1) Blackstone 's Commentaries, Vol. IV, pp. 151, 152. (2) Romesh Thappar vs The State of Madras, supra p. 594. 609 FAZL ALI J. The question raised in this case relates to the validity of 'section 7 (1) (c) of the East Punjab Public Safety Act, 1949 (as extended to the Province of Delhi), which runs as follows : "The Provincial Government or any authority authorised by it in this behalf if satisfied that such action is neces sary for the purpose of preventing or combating any activity prejudicial to the public safety or the maintenance of public order, may, by order in writing addressed to a print er, publisher or editor * * * * (c) require that any matter relating to a particular subject or class of subjects shall before publication be submitted for scrutiny;" It should be noted that the provisions of sub clause (c) arc not in general terms but are confined to a "particular subject or class of subjects," and that having regard to the context in which these words are used, they must be connect ed with "public safety or the maintenance of public order. " The petitioners, on whose behalf this provision is assailed, are respectively the printer (and publisher) and editor of an English weekly of Delhi called Organizer, and they pray for the issue of writs of certiorari and prohibi tion to the Chief Commissioner, Delhi, with a view ' 'to examine and review the legality" of and "restrain the operation" of and "quash" the order made by him on the 2nd March, 1950, under the impugned section, directing them "to submit for scrutiny, in duplicate, before publication, till further orders, all communal matter and news and views about Pakistan including photographs and cartoons other than those derived from official sources or supplied by the news agencies. " The order in question recites among other things that the Chief Commissioner is satisfied that the Organizer has been publishing highly objectionable matter constituting a threat to public law and order and that action to which reference has been made is necessary for the purpose of preventing or combating activities 610 prejudicial to the public safety or the maintenance of public order. It is contended on behalf of the petitioners that notwithstanding these recitals the order complained against is liable to be quashed, because it amounts to an infringement of the right of freedom of speech and expres sion guaranteed by article 19 (1) (a) of the Constitution. Articles 19 (1) (a) and (2), which are to be read together, run as follows : 19, (1) All citizens shall have the right (a) to freedom of speech and expression; * * * * (2) Nothing in sub clause (a) of clause (1) shall affect the operation of any existing law in so far as it relates to, or prevent the State from making any law relating to, libel, slander, defamation, contempt of Court or any matter which offends against decency or morality or which under mines the security of, or tends to overthrow, the State. " It is contended that section 7 (1)(c) of the Act, under which the impugned order has been made, cannot be saved by clause (2) of article 19 of the Constitution, because it does not relate to any matter which undermines the security of, or tends to overthrow, the State. Thus the main ground of attack is that the impugned law is an infringement of a fundamental right and is not saved by the so called saving clause to which reference has been made. There can be no doubt that to impose pre censorship on a journal, such as has been ordered by the Chief Commissioner in this case, is a restriction on the liberty of the press which is included in the right to freedom of speech and expression guaranteed by article 19 (1) (a) of the Constitu tion, and the only question which we have therefore to decide is whether clause (2) of article 19 stands in the way of the petitioners. The East Punjab Public Safety Act, 1949, of which sec tion 7 is a part, was passed by the Provincial Legislature in exercise of the power conferred upon it by section 100 of the Government of India Act, 1935, is 611 read with Entry 1 of List II of the Seventh Schedule to that Act, which includes among other matters "public order." This expression in the general sense may be construed to have reference to the maintenance of what is generally known as law and order in the Province, and this is confirmed by the words which follow it in Entry 1 of List II and which have been put within brackets, viz., "but not including the use of naval, military or air forces or any other armed forces of the Union in aid of the civil power. " It is clear that anything which affects public tranquillity within the State or the Province will also affect public order and the State Legislature is therefore competent to frame laws on matters relating to public tranquillity and public order. It was not disputed that under the Government of India Act, 1935 (under, which the impugned Act was passed) it was the responsibility of each Province to deal with all internal disorders whatever their magnitude may be and to preserve public tranquillity and order within the Province. At this stage, it will be convenient to consider the meaning of another expression "public safety" which is used throughout the impugned Act and which is also chosen by its framers for its title. This expression, though it has been variously used in different contexts (see the Indian Penal Code, Ch. XIV), has now acquired a well recognized meaning in relation to an Act like the impugned Act, as a result of a long course of legislative practice, and may be taken to denote safety or security of the State. In this sense, it was used in the Defence of the Realm (Consolidation) Act, 1914, as well as the Defence of India Act. and this is how it was judicially interpreted in Rex vs Governor of Wormwood Scrubbs Prison(1). The headnote of this case runs as follows "By section 1 of the Defence of the Realm (Consolidation) Act, 1914, power was given to His Majesty in Council 'during the continuance of the present war to issue regula tions . for securing the public safety and the de fence of the realm ' : (1) 612 Held, that the regulations thereby authorized were not limited to regulations for the protection of the country against foreign enemies, but included regulations designed for the prevention of internal disorder and rebellion " Thus 'public order ' and 'public safety ' are allied matters, but, in order to appreciate how they stand in relation to each other, it seems best to direct our atten tion to the opposite concepts which we may, for convenience of reference, respectively label as 'public disorder ' and 'public unsafety '. If 'public safety ' is, as we have seen, equivalent to 'security of the State ', what I have designat ed as public unsafety may be regarded as equivalent to 'insecurity of the State '. When we approach the matter in this way, we find that while 'public disorder ' iS wide enough to cover a small riot or an affray and other cases where peace is disturbed by, or affects, a small group of persons, 'public unsafety ' (or insecurity of the State), will usually be connected with serious internal disorders and such disturbances of public tranquillity as jeopardize the security of the State. In order to understand the scope of the Act, it will be necessary to note that in the Act "maintenance of public order" always occurs in juxtaposition with "public safety", and the Act itself is called "The East Punjab Public Safety Act. " The prominence thus given to 'public safety ' strongly suggests that the Act was intended to deal with serious cases of public disorder which affect public safety or the security of the State, or cases in which, owing to some kind of emergency or a grave situation having arisen, even public disorders of comparatively small dimensions may have far reaching effects on the security of the State. It is to be noted that the Act purports to provide "special measures to ensure public safety and maintenance of public order. " The words "special measures" are rather important, because they show that the Act was not intended for ordinary cases or ordinary situations. The ordinary cases are provided for by the Penal Code and other existing laws, and 613 with these the Act which purports to be of a temporary Act is not apparently concerned. It is concerned with special measures which would presumably be required for special cases or special situations. Once this important fact is grasped and the Act is viewed in the proper perspective, much of the confusion which has been created in the course of the arguments will disappear. The line of argument advanced on behalf of the petitioners is that since the Act has been passed in exercise of the power granted by the expression "public order," used in the Government of India Act, which is a general term of wide import, and since it purports to provide for the maintenance of public order, its provisions are intended or are liable to be used for all cases of breaches of public order, be they small or insig nificant breaches or those of a grave or serious nature. This is, in my opinion, approaching the case from a wrong angle. The Act is a piece of special legislation providing for special measures and the central idea dominating it is public safety and maintenance of public order in a situation requiring special measures. It was argued that "public safety" and "maintenance of public order" are used in the Act disjunctively and they are separated by the word "or" and not "and," and therefore we cannot rule out the possibility of the Act providing for ordinary as well as serious cases of disturbance of public order and tranquillity. This, as I have already indicated, is a somewhat narrow and technical approach to the question. In construing the Act, we must try to get at its aim and purpose, and before the Act is declared to be invalid, we must see whether it is capable of being so construed as to bear a reasonable meaning consistent with its validity. We therefore cannot ignore the fact that preservation of public safety is the dominant purpose of the Act and that it is a special Act providing for special measures and therefore it should not be confused with an Act which is applicable to ordinary situations and to any and every trivial case of breach of public order, 614 In my opinion, the word "or" is used here not so much to separate two wholly different concepts as to show that they are closely allied concepts and can be used almost inter changeably in the context. I think that "public order" may well be paraphrased in the context as public tranquillity and the words "public safety" and "public order" may be read as equivalent to "security of the State" and "public tran quillity. " I will now advert once more to clause (2) of article 19 and state what I consider to be the reason for inserting in it the words "matter which undermines the security of, or tends to overthrow, the State. " It is well recognized in all systems of law that the right to freedom of speech and expression or freedom of the press means that any person may write or say what he pleases so long as he does not infringe the law relating to libel or slander or to blasphemous, obscene or seditious words or writings: (see Halsbury 's Laws of England, 2nd Edition, Vol. II, page 391). This is prac tically what has been said in clause (2) of article 19, with this difference only that instead of using the words "law relating to sedition," the framers of the Constitution have used the words mentioned above. It is interesting to note that sedition was mentioned in the original draft of the Constitution, but subsequently that word was dropped and the words which I have quoted were inserted. I think it is not difficult to discover the reason for this change and I shall briefly state in my own words what I consider it to be. The latest pronouncement by the highest Indian tribunal as to the law of sedition is to be found in Niharendu Dutt Majumdar vs The King(1) which has been quoted again and again and in which Gwyer C.J. laid down that public disor der, or the reasonable anticipation or likelihood of public disorder, is the gist of the offence of sedition and "the acts or words complained of must either incite to disorder or (1) 615 must be such as to satisfy reasonable men that is their intention or tendency. " For this view, the learned Chief Justice relied on certain observations of Fitzgerald J. in R.v. Sullivan (1), and he also added that he was content to adopt "the words of that learned Judge which are to be found in every book dealing with this branch of the criminal law. " There is no doubt that what Gwyer C.J. has stated in that case represents the view of a number of Judges and authors and was also the view of Sir James Stephen in regard to whom Cave J. in his charge to the jury in a case relating to the law of sedition JR. vs Burns(2) said : "The law upon the question of what is seditious and what is not is to be found stated very clearly in a book by Stephen J. who has undoubtedly a greater knowledge of crimi nal law than any other Judge who sits upon the Bench, and what he has said upon the subject of sedition was submitted to the other Judges, who sometime back were engaged with him in drafting a criminal code, and upon their report the Commissioners say that his statement of law appears to them to be stated accurately as it exists at present. " The decision of Gwyer C.J. held the field for several years until the Privy Council, dealing with a case under the Defence of India Rules, expressed the view in King Emper or vs Sadhashiv Narayan Bhalerao(3) that the test laid down by the learned Chief Justice was not applicable in India where the offence under section 124A of the Indian Penal Code should be construed with reference to the words used in that section. They also added : "The word 'sedition ' does not occur either in section 124A or in the Rule; it is only found as a marginal note to section 124A, and is not an operative part of the section, but merely provides the name by which the crime defined in the section will be known. (1) [1868] 11 Cox c.c. 44. (2) [1886] 16 cox 855. (8) 74 I.A. 616 There can be no justification for restricting the contents of the section by the marginal note. In England there is no statutory definition of sedition; its meaning and content have been laid down in many decisions, some of which are referred to by the Chief Justice, but these decisions are not relevant when you have a statutory definition of that which is termed sedition as we have in the present case. Their Lordships are unable to find anything in the language of either section 124A or the Rule which could suggest that 'the acts or words complained of must either incite to disorder or must be such as to satisfy reasonable men that this is their intention or tendency. " The framers of the Constitution must have therefore found themselves face to face with the dilemma as to whether the word "sedition" should be used in article 19 (2) and if it was to be used in what sense it was to be used. On the one hand, they must have had before their mind the very widely accepted view supported by numerous authorities that sedition was essentially an offence against public tranquil lity and was connected in some way or other with public disorder; and, on the other hand, there was the pronounce ment of the Judicial Committee that sedition as defined in the Indian Penal Code did not necessarily imply any inten tion or tendency to incite disorder. In these circumstances, it is not surprising that they decided not to use the word "sedition" in clause (2) but used the more general words which cover sedition and everything else which makes sedi tion such a serious offence. That sedition does undermine the security of the State is a matter which cannot admit of much doubt. That it undermines the security of the State usually through the medium of public disorder is also a matter on which eminent Judges and jurists are agreed. Therefore it is difficult to hold that public disorder or disturbance of public tranquillity are not matters which undermine the security of the State. 617 It will not be out of place to quote here the following passage from Stephen 's Criminal Law of England (Vol. II, pp. 242 and 243) : "It often happens, however, that the public peace is disturbed by offences which without tending to the subver sion of the existing political constitution practically subvert the authority of the Government over a greater or less local area for a longer or shorter time. The Bristol riots in 1832 and the Gordon riots in 1780 are instances of this kind. No definite line can be drawn between insur rections of this sort, ordinary riots, and unlawful assem blies. The difference between a meeting stormy enough to cause well founded fear of a breach of the peace, and a civil war the result of which may determine the course of a nation 's history for centuries, is a difference of degree. Unlawful assemblies, riots, insurrections, rebellions, levying of war, are offences which run into each other, and are not capable of being marked off by perfectly definite boundaries, All of them have in common one feature, namely, that the normal tranquillity of a civilised society is in each of the cases mentioned disturbed either by actual force or at least by the show and threat of it. Another class of offences against public tranquillity are those in which no actual force is either employed or displayed, but in which steps are taken tending to cause it. These are the formation of secret societies, seditious conspiracies, libels or words spoken. Under these two heads all offences against the internal public tranquillity of the State may be arranged. " This passage brings out two matters with remarkable clarity. It shows firstly that sedition is essentially an offence against public tranquillity and secondly that broadly speaking there are two classes of offences against public tranquillity: (a) those accompanied by violence including disorders which 618 affect tranquillity of a considerable number of persons or an extensive local area, and (b) those not accompanied by violence but tending to cause it, such as seditious utter ances, seditious conspiracies, etc. Both these classes of offences are such as will undermine the security of the State or tend to overthrow it if left unchecked, and, as I have tried to point out, there is a good deal of authorita tive opinion in favour of the view that the gravity ascribed to sedition is due to the fact that it tends to seriously affect the tranquillity and security of the State. In principle, then, it would not have been logical to refer to sedition in clause (2) of article 19 and omit matters which are no less grave and which have equal potentiality for undermining the security of the State. It appears that the framers of the Constitution preferred to adopt the logical course and have used the more general and basic words which are apt to cover sedition as well as other matters which are as detrimental to the security of the State as sedition. If the Act is to be viewed as I have suggested, it is difficult to hold that section 7 (1) (c) falls outside the ambit of article 19 (2). That clause clearly states that nothing in clause (1) (a) shall affect the operation of any existing law relating to any matter which undermines the security of, or tends to overthrow, the State. I have tried to show that public disorders and disturbance of public tranquillity do undermine the security of the State and if the Act is a law aimed at preventing such disorders, it fulfils the requirement of the Constitution. It is needless to add that the word "State" has been defined in article 12 of the Constitution to include "the Government and Parlia ment of India and the Government and Legislature of each of the States and all local or other authorities within the territory of India or under the control of the Government of India. " I find that section 20 of the impugned Act provides that the Provincial Government may by notification 619 declare that the whole or any part of the Province as may be specified in the notification is a dangerously disturbed area. This provision has some bearing on the aim and object of the Act, and we cannot overlook it when considering its scope. It may be incidentally mentioned that we have been informed that, under this section, Delhi Province has been notified to be a "dangerously disturbed area. " It must be recognized that freedom of speech and expres sion is one of the most valuable rights guaranteed to a citizen by the Constitution and should be jealously guard ed by the Courts. It must also be recognised that free political discussion is essential for the proper functioning of a democratic government, and the tendency of modern jurists is to deprecate censorship though they all agree that "liberty of the press" is not to be confused with its "licentiousness. " But the Constitution itself has pre scribed certain limits for the exercise of the freedom of speech and expression and this Court is only called upon to see whether a particular case comes within those limits. In my opinion, the law which is impugned is fully saved by article 19 (2) and if it cannot be successfully assailed it is not possible to grant the remedy which the petitioners are seeking here. As has been stated already, the order which is impugned in this case recites that the weekly Organizer has been publishing highly objectionable matter constituting a threat to public law and order" and that the action which it is proposed to take against the petitioners "is necessary for the purpose of preventing or combating activities prejudi cial to public safety or the maintenance of public order. " These facts are supported by an affidavit sworn by the Home Secretary to the Chief Commissioner, who also states among other things that the order in question was passed by the Chief Commissioner in consultation with the Central Press Advisory Committee, which is an independent body elected by the All India Newspaper Editors ' Conference and is composed of 620 representatives of some of the leading papers such as The Hindustan Times, Statesman, etc. In my opinion, there can be no doubt that the Chief Commissioner has purported to act in this case within the sphere within which he is permitted to act under the law, and it is beyond the power of this Court to grant the reliefs claimed by the petitioners. In these circumstances, I would dismiss the petitioners ' application. Petition allowed. Agent for the petitioners: Ganpat Rai.

Section 7 (1) (c) of the East Punjab Public Safety Act, 1949, as extended to the Province of Delhi provided that "the Provincial Government or any authority authorised by it in this behalf, if satisfied that such action is necessary for preventing or combating any activity prejudicial to the public safety or the maintenance of public order may, by order in writing addressed to a a printer, publisher or editor require that any matter relating to a 606 particular subject or class of subjects shall before publi cation be submitted for scrutiny. " Held per KANIA C. J., PATANJALI SASTRI, MEHR CHAND MAHAJAN, MUKHERJEA and DAS JJ. (FAZL ALI J. dissenting) that inasmuch as section 7 (1) (c) authorised the imposition of restrictions on the fundamental right of freedom of speech and expression guaranteed by article 19 (1.) (a) of the Consti tution for the purpose of preventing activities prejudicial to public safety and maintenance of public order, it was not a law relating to "a matter which undermines the security of or tends to overthrow, the State" within the meaning of the saving provisions contained in cl. (9.) of article 19 and was therefore unconstitutional and void. Romesh Thappar vs The State ([1950] S.C.R. 594) followed. Per FAZL ALI J. The expression "public safety" has, as a result of a long course of legislative practice acquired a well recognised meaning and may be taken to denote safety or security of the State; and, though the expression "public order" is wide enough to cover small disturbances of the peace which do not jeopardise the security of the State yet, prominence given in the Act to public safety, the fact that the Act is a piece of special legislation providing for special measures and the aim and scope of the Act in gener al, show that preservation of public safety is the dominant purpose of the Act, and "public order" may well be para phrased in the context as "public tranquillity". Public disorders which disturb the public tranquillity do undermine the security of the State and as section 7 (1) (c) of the im pugned Act is aimed at preventing such disorders it is difficult to hold that it falls outside the ambit of article 19 (2) of the Constitution. Held by the Full Court. The imposition of pre censor ship on a journal is a restriction on the liberty of the press which is an essential part of the right to freedom of speech and expression declared by article 19 (1)(a). Black stone 's Commentaries referred to.

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iminal Appeal No. 98 of 1960. Appeal by special leave from the judgment and order dated January 20, 1960 of the Punjab High Court in Criminal Appeal No. 683 of 1957. I. M. Lall and B. N. Kirpal, for the appellant. B. K. Khanna and R. N. Sachthey, for the respondent. August 28, 1963. The Judgment of the Court was delivered by DAS GUPTA J. Sajjan Singh, son of Chanda Singh, joined the service of the Punjab Government in January 1922 as an Overseer in the Irrigation Department. He continued as Overseer till July 1944 when he became a Sub divisional Officer in the Department. From the date till May 1947 he worked as Sub Divisional Officer in that part of Punjab which has now gone to West Pakistan. From November 30, 1947 to September 26, 1962 he was employed as Sub Divisional Officer of Drauli Sub Division of the Nangal Circle, except for a short break from November 8, 1950 to April 3, 1951, when he was on leave. The work of excavation for the Nangal Project 632 within the Drauli Sub Division was carried out by several contractors, including Ramdas Chhankanda Ram and M/s. Ramdas Jagdish Ram. On December 7, 1952, the General Manager, Bhakra Dam, made a complaint in writing to the Superintendent of Police, Hoshiarpur, alleging that Sajjan Singh and some other officials subordinate to him had by illegal and corrupt means and by abusing their position as public servants, dishonestly and fraudulently, obtained illegal gratification from the contractors Ramdas Chhankanda Ram and M/s. Ram Das Jagdish Ram by withholding their payments and putting various obstacles in the smooth execution of the work entrusted to them. A case under section 45(2) of the Prevention of Corruption Act, 1947 was registered on the basis of this complaint, which was treated as a first information report and after sanction of the Government of Punjab had been obtained for the prosecution of Sajjan Singh under section 5(2) of the Prevention of Corruption Act and section 161/165 of the Indian Penal Code, Sajjan Singh was tried by the Special Judge, Ambala, on a charge under section 5(2) of the Act. The learned Special judge convicted him under section 5(2) of the Prevention of Corruption Act and sentenced him to rigorous imprisonment for one year and a fine of Rs. 5000/in default of payment of fine, he was directed to undergo rigorous imprisonment for six months. The conviction and sentence were confirmed by the Punjab High Court, on appeal. The High Court however rejected the State 's application for enhancement of the sentence. The present appeal is by Sajjan Singh against his conviction and sentence under section 5(2) of the Prevention of Corruption Act by special leave of this Court. The prosecution case is that after work had been done by the firm Ramdas Chhankandas for several months, and some 'running ' payments had been received without difficulty, the appellant demanded from Ram Das, one of the partners of the firm, his commission on the cheques issued to the partenrship firm. It is said that Ram Das at first refused. But, ultimately when the appellant started unnecessary criticism of the work done by them and even withholding some running payments the partners of the firm decided to pay commission to him as demanded. The 633 first payment, it is said, was made on March 21, 1949 and further payments were thereafter made from time to time. The case is that the partnership paid altogether a sum of Rs. 10,500/ in cash as commission to the appellant, besides paying Rs. 2,000/ to him for payment to the Executive Engineer and Rs. 241/12/ made up of small sums paid on different occasions on behalf of the accused. All these payments made to the appellant were fully entered in the regular Rokar and Khata Bhais of the partnership under a fictitious name of Jhalu Singh, Jamadar, though a few of the later payments were entered in these books in Sajjan Singh 's own name. In order to allay suspicion some fictitious credit entries were also made in the books. The prosecution also alleged payment to the appellant of Rs. 1,800/ by another firm M/s. Ram Das Jagdish Ram. But as that has not been found to be proved it is unnccessary to mention details of the allegations in that connection. To prove its case against the appellant the prosecution relied on the testimony of three partners of the firm who claimed to have made payments and on various entries in the several books of account of the firm. The prosecution also tried to prove the guilt of the accused by showing that the pecuniary resources and property that were in the ap pellant 's possession or in the possession of his wife, Dava Kaur, and his son, Bhupinder Singh, on his behalf we are disproportionate to the appellant 's known sources of income. The learned Special judge mentioned the possession of pecuniary resources and property disproportionate to his known sources of income in the charge framed against the accused. According to the prosecution the total assets held by the appellant, and his wife, Dava Kaur, and his son Bhupinder Singh on his behalf, on December 7, 1952 amounted to Rs. 1,47,502/12/ , while his total emoulments upto the period of the charge would come to about Rs. 80,000/ . The main defence of the appellant as regards this allegation of possession of pecuniary resources and property disproportionate to his known sources of income was that the property and pecuniary resources held by his wife and son were not held on his behalf and that what, was in his possession amounted to less than Rs. 50,000/ and can by no means be said to be disproportionate to his known 41 2 section C. India/64. 634 sources of income. In denying the charge against him the appellant also contended that false evidence had been given by the three partners and false and fictitious books prepared by them in support of their own false testimony. The learned Special judge rejected the defence contention that the account books on which the prosecution relied had not been kept regularly in the course of business and held the entries therein to be relevant under section 34 of the Indian Evidence Act. He accepted the defence contention that evidence of the partners who were in the position of accomplices required independent corroboration and also that the account books maintained by themselves would not amount to independent corroboration. Independent corroboration was however in the opinion of the learned Judge furnished by the fact that some admitted and proved items of payment were interspersed in the entire account books. The learned judge also accepted the prosecution story as regards the possession of pecuniary resources and property by the appellant 's wife and his son on his behalf and adding these to what was in the appellant 's own possession he found that the total pecuniary resources and property in his possession or in the possession of his wife and son were disproportionate to his known sources of income, and that such possession had not been satisfactorily accounted for. He concluded that the presumption under section 5(3) of the Prevention of Corruption Act was attracted. On all these findings he found the appellant guilty of the charge for criminal misconduct in the discharge of his duties and convicted and sentenced him as, stated above. The two learned judges of the Punjab High Court who heard the appeal differed on the question whether pecuniary resources and property acquired before March 11, 1947, when the Prevention of Corruption Act came into force, could be taken into consideration for the purpose of section 5 (3) of the Act. In the opinion of Mr. Justice Harbans Singh these could not be taken into consideration . Taking into consideration the assets acquired by the appellant after January 1948 the learned judges held that these came to just above Rs. 20,000/ and could not be held to be disproportionate to his known sources of income. The other learned Judge, Mr. Justice 635 Capoor, was of opinion that pecuniary resources and property acquired prior to March 11, 1947 had also to be taken into consideration in applying section 5 (3) of the Prevention of Corruption Act if they were in the possession of the accused or anybody on his behalf, on the date when the complaint was lodged. He agreed with the Special judge that certain assets possessed by Daya Kaur and Bhupinder Singh were possessed by them on behalf of the appellant and that those possessed by him, or by his wife and son on his behalf were much in excess of his known sources of income, even without making any allowance for his house hold expenses. Mr. justice Capoor further held that if the pecuniary resources or property acquired during the period April 1, 1947 to June 1, 1950 as suggested on behalf of the appellant were considered such assets held by the appellant or any other person on his behalf were more than double of the known sources of his income without making any allowance whatever for the appellant 's house hold expenses. In the opinion of the learned judge a presumption under subsection 3 of section 5 of the Act therefore arose that the appellant had committed the offence, as the appellant had not been able to prove to the contrary. Both the learned judges agreed that the witnesses who gave direct evidence about the payment of illegal gratification could not be relied upon without independent corroboration and that the entries in the books of account did by themselves amount to such corroboration, but that the fact of admitted and proved items being interspersed in the entire account furnished the required corroboration. In the result, as has been already stated, the learned judges affirmed the conviction and sentence. In support of the appeal Mr. 1. M. Lall has attacked the finding that the books of account were kept regularly in the course of business and has contended that the entries therein were not relevant under section 34 of the Indian Evidence Act. He further contended that even if they be relevant evidence the Special judge as also the High Court while rightly thinking that they by themselves did not amount to independent corroboration, were in error when they thought that the fact of certain admitted entries being interspersed through the books of account furnished the 636 necessary independent corroboration. Mr. Lall has also argued that the Special Judge as well as Mr. justice Capoor in the High Court were wrong in drawing a presumption under section 5(3) of the Prevention of Corruption Act. We shall first consider the question whether on the evidence on the record a presumption under section 5(3) of the Prevention of Corruption Act arose. It is useful to remember that the first sub section of section 5 of the Prevention of Corruption Act mentions in the four clauses a, b, c and d, the acts on the commission of which a public servant is said to have committed an offence of criminal misconduct in the discharge of his duties. The second subsection prescribes the penalty for that offence. The third subsection is in these words: "In any trial of an offence punishable under sub section (2) the fact that the accused person or any other person on his behalf is in possession, for which the accused person cannot satisfactorily account, of pecuniary resources or property disproportionate to his known sources of income may be proved, and on such proof the court shall presume, unless the contrary is proved, that the accused person is guilty of criminal. misconduct in the discharge of his official duty and his conviction therefor shall not be invalid by reason only that it is based solely on such presumption. " This sub section thus provides an additional mode of proving an offence punishable under sub section 2 for which any accused person is being tried. This additional mode is by proving the extent of the pecuniary resources or property in the possession of the accused or any other person on his behalf and thereafter showing that this is disproportionate to his known sources of income and that the accused person cannot satisfactorily account for such possession. If these facts are proved the section makes it obligatory on the Court to presume that the accused person is guilty of criminal misconduct in the discharge of his official duty, unless the contrary, i.e., that he was not so guilty is proved by the accused. The section goes on to say that the conviction for an offence of criminal misconduct shall not be invalid by reason only that it is based solely on such presumption. 637 This is a deliberate departure from the ordinary principle of criminal jurisprudence, under which the burden of proving the guilt of the accused in criminal proceedings lies all the way on the prosecution. Under the provision of this subsection the burden on the prosecution to prove the guilt of the accused must be held to be discharged if certain facts as mentioned therein arc proved; and then the burden shifts to the accused and the accused has to prove that in spite of the assets being disproportionate to his known sources of income, he is not guilty of the offence. There can be no doubt that the language of such a special provision must be strictly construed. if the words are capable of two constructions, one of which is more favorable to the accused than the other, the Court will be justified in accepting the one which is more favourable to the accused. There can be no Justification however for adding any words to make the provision of law less stringent than the legislature has made it. Mr. Lall contends that when the section speaks of the accused being in possession of pecuniary resources or pro perty disproportionate to his known sources of income only pecuniary resources or property acquired after the date of the Act is meant. To think otherwise, says the learned Counsel, would be to give the Act retrospective operation and for this there is no 'Justification. We agree with the learned Counsel that the Act has no retrospective operation. We are unable to agree however that to take into consideration the pecuniary resources or property in the possession of the accused or any other person on his behalf which are acquired before the date of the Act is in any way giving the Act a retrospective operation. A statute cannot be said to be retrospective "because a part of the requisites for its action is drawn from a time antecedent to its passing". (Maxwell on interpretation of Statutes, 11th Edition, p. 211; See also State of Maharashtra vs Vishnu Ramchandra(l)). Notice must be taken in this connection of a suggestion made by the learned Counsel that in effect sub section 3 of section 5 creates a new offence in the discharge of official duty, different from what is defined in the four clauses of section 5(l). It is said that the act of being in possession of pecuniary resources or pro (1) ; 638 perty disproportionate to known sources of income, if it cannot be satisfactorily accounted for, is said by this sub section to constitute the offence of criminal misconduct in addition to those other acts mentioned in cls. a, b, c and d of section 5(l) which constitute the offence of criminal mis conduct. On the basis of this contention the further argu ment is built that if the pecuniary resources or property acquired before the date of the Act is taken into consi deration under sub section 3 what is in fact being done is that a person is being convicted for the acquisition of pecuniary resources or property, though it was not in vio lation of a law in force at the time of the commission of such act of acquisition. If this argument were correct a conviction of a person under the presumption raised under the section 5(3) in respect of pecuniary resources or property acquired before the Prevention of Corruption Act would be a breach of fundamental rights under article 20(l) of the Constitution and so it would be proper for the Court to construe section 5(3) in a way so as not to include possession of pecuniary resources or property acquired before the Act for the purpose of that subsection. The basis of the argument that section 5(3) creates a new kind of offence of criminal misconduct by a public servant in the discharge of his official duty is however unsound. The sub section does nothing of the kind. It merely prescribes a rule of evidence for the purpose of proving the offence of criminal misconduct as defined in section 5(1) for which an accused person is already under trial. It was so held by this Court in C.D.S. Swamy vs The State(1) and again in Surajpal Singh vs State of U.p.(2). It is only when a trial has commenced for criminal misconduct by doing one or more of the acts mentioned in cls. a, b, c and d of section 5(l) that sub s 3 can come into operation. When there is such a trial, which necessarily must be in respect of acts committed after the Prevention of Corruption Act came into force, sub section 3 places in the hands of the prosecution a new mode of proving an offence with which an accused has already been charged. Looking at the words of the section and giving them their plain and natural meaning we find it impossible to say that pecuniary resources and property acquired before (1) ; (2) [1961] 1 2 S.C.R. 971. 639 the date on which the Prevention of Corruption Act came into force should not be taken into account even if in possession of the accused or any other person on his behalf. To accept the contention that such pecuniary resources or property should not be taken into consideration one has to read into the section the additional words "if acquired after the date of this Act" after the word "property". For this there is no justification. It may also be mentioned that if pecuniary resources or property acquired before the date of commencement of the Act were to be left out of account in applying subs. 3 of section 5 it would be proper and reasonable to limit the receipt of income against which the proportion is to be considered also to the period after the Act. On the face of it this would lead to a curious and anomalous position by no means satisfactory or helpful to the accused himself. For, the income received during the years previous to the commencement of the Act may have helped in the acquisition of property after the commencement of the Act. From whatever point we look at the matter it seems to us clear that the pecuniary resources and property in the possession of the accused person or any other person on his behalf have to be taken into consideration for the purpose of sub section 3 of section 5, whether these were acquired before or after the Act came into force. Mention has next to be made of the learned Counsel 's submission that the section is meaningless. According to the learned Counsel, every pecuniary resource or property is itself a source of income and therefore it is a contradic tion in terms to say that the pecuniary resources or pro perty can be disproportionate to the known sources of income. This argument is wholly misconceived. While it is quite true that pecuniary resources and property are themselves sources of income that does not present any difficulty in understanding a position that at a particular point of time the total pecuniary resources or property can be regarded as assets, and an attempt being made to see whether the known sources of income including, it may be, these very items of property in the past could yield such income as to explain reasonably the emergence of these assets at this point of time. Lastly it was contented by Mr. Lall that no presump 640 tion under section 5(3) can arise if the prosecution has adduced other evidence in support of its case. According to the learned Counsel, section 5(3) is at the most an alternative mode of establishing the guilt of the accused which can be availed of only if the usual method of proving his guilt by direct and circumstantial evidence is not used. For this astonishing proposition we can find no support either in principle or authority. Mr. Lall sought assistance for his arguments from a decision of the Supreme Court of the United States of America in D. Del Vecchio vs Botvers(1). What fell to be considered in that case was whether a presumption created by section 20(d) of the Longshoremen 's and Harbor Workers ' Compensation Act that the death of an employee was not suicidal arose where evidence had been adduced by both sides on the question whether the death was suicidal or not. The Court of Appeal had held that as the evidence on the issue of accident or suicide was in its judgment evenly balanced the presumption under section 20 must tip the scales in favour of accident. This decision was reversed by the learned Judges of the Supreme Court. Section 20 which provided for the presumption ran thus: "In any proceedings for the enforcement of a claim for compensation. it shall be presumed, in the absence of substantial evidence to contrary that the injury was not occasioned by the wailful intention of the injured employee to injure or kill himself or another. " On the very words of the section the presumption against suicide would arise only if substantial evidence had not been adduced to support the theory of suicide. It was in view of these words that the learned judges observed: .lm15 "The statement in the act that the evidence to overcome the effect of the presumption must be substantial adds nothing to the well understood principle that a finding must be supported by evidence. Once the employer has carried his burden by offering testimony sufficient to justify a finding of suicide, the presumption falls out of the case. It never had and cannot acquire the attribute of evidence in the claimant 's favour. Its only office is to control the result where (1)296 U.S. 280 : 80 L. ed. 229. 641 there is an entire lack of competent evidence. If the employer alone adduces evidence which tends to support the theory of suicide, the case must be decided upon that evidence. Where the claimant offers substantial evidence in opposition, as was the case here, the issue must be resolved upon the whole body of proof pro and con. " The whole decision turns upon the words 'in the absence of substantial evidence". These or similar words are conspicuous by their absence in sub section 3 of section 5 of the Prevention of Corruption Act, and consequently, Del Vec chio 's Case(1) is of no assistance. Mr. Lall then drew our attention to an observation of Lord Denning in Bratty vs Attorney General for Northern Ireland(2) where speaking about the presumption that every man has sufficient mental capacity to be responsible for his crimes, the Lord Justice observed that the presumption takes the place of evidence. Similarly, argues Mr. Lall, the presumption under section 5(3) of the Prevention Corruption Act also merely "takes the place" of evidence. So, he says, it can arise only if no evidence has been adduced. We are not prepared to agree however that when the Lord Justice used the words "a presumption takes the place of evidence" he meant that if some evidence had been offered by the prosecution the prosecution could not benefit by the presumption. We see no warrant for the proposition that where the law provides that in certain circumstances a presumption shall be made against the accused the pro secution is barred from adducing evidence in support of its case if it wants to rely on the presumption. Turning now to the question whether the facts and circumstances proved in this case raise a presumption under section 5(3), we have to examine first whether certain pecuniary resources or property in possession of Daya Kaur and those in possession of Bhupinder Singh were possessed by them on behalf of the appellant as alleged by the prosecution. On December 7, 1952, Bhupinder Singh has been proved to have been in possession of: (1) Rs. 28,998/7/3/ in the Punjab National Bank; (2) Rs. 20,000/ in fixed deposit with the Bank of Patiala at Doraha (3) Rs. 5,577/ (1)226 U.S. 280. (2) [1961] 3 All. E.R. p. 523 at 535. 642 in the Imperial Bank of India at Moga; (4) Rs. 237/8/3/in the Savings Bank Account in the Bank of Patiala at Doraha; and (5) Half share in a plot of land in Ludhiana of the value Rs. 11,000/ . Bhupinder Singh has given evidence (as the 11th witness for the defence) and has tried to support his father 's case that none of the properties were held by him on behalf of his father. Bhupinder Singh has been in military service since 1949 and was at the time when he gave evidence a Captain in the Indian Army. If the bank deposits mentioned above had been made by him after he joined military service there might have been strong reason for thinking that they were his own money. That however is not the position. Out of the sum of Rs. 28,998/ with the Punjab National Bank a part is admittedly interest; the remainder, viz., about Rs. 26,000/ was deposited by Bhupinder Singh in his account long before 1949 when he joined military service. His explanation as to how he got this money is that Rs. 20,200/ was received by him from Udhe Singh in December 1945 and Rs. 6,000/ was given to him by his grand father Chanda Singh. Udhe Singh has given evidence in support of the first part of the story and has said that he paid Rs. 20,200/ to Bhupinder Singh in payment of what he owed to Bhupinder Singh 's grandfather Chanda Singh and to his father Sajjan Singh. When asked why he made the payments to Bhupinder Singh, son of Sajjan Singh instead of to Chanda Singh or to Chanda Sing 's son Surjan Singh, Udhe Singh replied that he did so "because my account was with Sardar Sajjan Singh." Udhe Singh it has to be remembered is a close relation of Sajjan Singh, Sajjan Singh 's father Chanda Singh being Udhe Singh 's mother 's brother. On a careful consideration of the evidence of these two witnesses, Bhupinder Singh and Udhe Singh and also the registered letter which was produced to show that a pucca receipt was demanded for an alleged payment of Rs. 20,200/ we have come to the conclusion that the Special Judge has rightly disbelieved the story that this sum of Rs. 20,000/ was paid by Udhe Singh to Bhupinder Singh. It has to be noticed that even if this story of payment was believed that would not improve the appellant 's case. For, according to Udhe Singh this payment was 643 made by him to Bbupinder Singh on behalf of his father. In any case, therefore, this amount of Rs. 20,200/ was Sajjan Singh 's money. As regards the other amount of Rs. 6000/ which formed part of the deposits in the Punjab National Bank and a further sum of Rs. 20,000/in fixed deposit with the Bank of Patiala the defence case as sought to be proved by Bhupinder Singh was that these were received by him from his grand father Chanda Singh. The learned Special judge disbelieved the story and on a consideration of the reasons given by him we are of opinion that his conclusion is correct. When it is remembered that Bhupinder Singh was at the relevant dates a student with no independent income or property of his own the reasonable conclusion from the rejection of his story about these amount is, as held by the Special Judge, that these were possessed by him on behalf of his father, Sajjan Singh. We are also convinced that the Special Judge was right in his conclusion that Rs. 5,577/ in the Imperial Bank of India at Moga, Rs. 237/8/3 in the Savings Bank Account in the Bank of Patiala at Doraha and the half share in a plot of land in Ludhiana of the value of Rs. 11,000/ standing in the name of Bhupinder Singh were held by Bhupinder Singh on behalf of his father, Sajjan Singh. It has to be mentioned that Mr. Justice Capoor in the High Court agreed with these conclusions, while the other learned judge (Mr. Justice Harbans Singh) did not examine this question at all being wrongly of the opinion that the properties acquired prior to March 11, 1947 should not be taken into consideration. Thus even if we leave out of account the amount of Rs. 26,500/ standing in the name of appellant 's wife Daya Kaur which according to the prosecution was held by her on behalf of her husband, Sajjan Singh, it must be held to be clearly established that the pecuniary resources or property in possession of Sajjan Singh and his son, Bhupinder Singh, on his behalf amounted to more than Rs. 1,20,000/ . The question then is: Was this disproportionate to the appellant 's known sources of income? As was held by this Court in Swamy 's Case(1) "the expression 'known sources of income ' must have reference to (1) ; 644 sources known to the prosecution on a thorough investigation of the case" and that it could not be contended that 'known sources of income ' meant sources known to the accused. In the present case the principal source of income known to the prosecution was what the appellant received as his salary. The total amount received by the appellant throughout the period of his service has been shown to be slightly less than Rs. 80,000/ . The appellant claimed to have received considerable amounts as traveling allowance a Overseer and S.D.O. and also as horse and conveyance allowance. For the period of his service prior to May 1947, the records which would have shown what the accused drew as traveling allowance were not available. The Special judge found that from May 1947 upto January 1953 the appellant got Rs. 6,504/6/ as traveling allowance. On that basis he also held that for the period of service as S.D.O. prior to May 1947 he may have got about Rs. 5,000/ at the most. For the period of his service as Overseer, the learned Special judge held that, the appellant did not get more than Rs. 100/ a year as travelling allowance, including the horse allowance. No reasonable objection can be taken to the conclusion recorded by the Special Judge as regards the travelling allowance drawn by the appellant for the period of his service as S.D.O. It was urged however that Rs. 100/ a year ,is travelling allowance is too low an estimate for his services as Overseer. As the relevant papers are not available it would be proper to make a liberal estimate under this head favourable to the appellant. Even at the most liberal estimate it appears to us that the total receipts as travelling allowance as Overseer could not have exceeded Rs. 5,000/ . One cannot also forget that much of what is received as travelling allowance has to be spent by the officer con cerned in travelling expenses itself. For many officers it 'IS not unlikely that travelling allowance would fall short of these expenses and they would have to meet the deficit from their own pocket. The total receipt that accrued to the appellant as the savings out of travelling allowance inclusive of horse allowance and conveyance allowance, could not reasonably be held to have exceeded Rs. 10,000/at the most. Adding these to what he received as salary and also as Nangal Compensatory allowance the total in 645 come received during the years would be about Rs. 93,000/ . It also appears that income by way of interest was earned by the appellant on his provident fund and also the bank deposits standing in his own name or in the name of his son, Bhupinder Singh. The income under this head appears to be about Rs. 10,000/ . The total receipts by the appellant from his known sources of income thus appears to be about Rs. 1,03,000/ . If nothing out of this had to be spent for maintaining himself and his family during all these years from 1922 to 1952 there might have been ground for saying that the assets in the appellant 's possession, through himself or through his son (Rs. 1,20,000/ ) were not disproportionate to his known sources of income. One cannot however live on nothing; and however frugally the appellant may have lived it appears to us clear that at least Rs. 100/ per month must have been his average expenses throughout these years taking the years of high prices and low prices together. These expenses therefore cut a big slice of over Rs. 36,000/ from what he received. The assets of Rs. 1,20,000/ have therefore to be compared with a net income of Rs. 67,000/ . They are clearly disproportionate indeed highly disproportionate. Mr. Lall stressed the fact that the legislature had not chosen to indicate what proportion would be considered disproportionate and he argued on that basis that the Court should take a liberal view of the excess of the assets over the receipts from the known sources of income. There is some force in this argument. But taking the most liberal view, we do not think it is possible for any reasonable man to say that assets to the extent of Rs. 1,20,000/ is anything but disproportionate to a net income of Rs. 1,03,000/ out of which at least Rs. 36,000/ must have been spent in living expenses. The next question is : Has the appellant satisfactorily accounted for these disproportionately high assets? The Speical judge has examined this question carefully and rejected as untrustworthy the appellant 's story of certain receipts from one Kabul Singh, his son Teja Singh, and from his father, Chanda Singh. These conclusions appear to us to be based on good and sufficient reasons and we can see nothing that would justify us in interfering with these. 646 The prosecution has thus proved facts on which it becomes the duty of the Court to assume that the accused has committed the offence with which he is charged, unless the contrary is proved by him. Mr. Lall has submitted that if the other evidence on which the prosecution relied to prove its case against the appellant is examined by us, he will be able to satisfy us that evidence is wholly insufficient to prove the guilt of the accused. It has to be remembered however that the fact assuming it to be a fact in this case that the prosecution has failed to prove by other evidence the guilt of the accused, does not entitle the Court to say that the accused has succeeded in proving that he did not commit the offence. Our attention was drawn in this connection to this Court 's decision in Surajpal Singh 's Case(1) where this Court set aside the conviction of the appellant Surajpal Singh on the basis of the presumption under section 5(3). What happened in that case was that though the accused had been charged with having committed the offence of criminal misconduct in the discharge of his duty by doing the acts mentioned in cl. (c) of sub section 1 of section 5, the Special Judge and the High Court convicted him by invoking the rule of presumption laid down in sub section 3 of section 5, of an offence under cl. (d) of section 5(l). This Court held that it was not open to the Courts to do so. This case is however no authority for the proposition that the courts could not have convicted the accused for an offence under section 5 ( 1) (c) for which he had been charged. On the contrary it seems to be a clear authority against such a view. After pointing out that the charge against the appellant was that he has dishonestly and fraudulently misappropriated or otherwise converted for his own use property entrusted to him, this Court observed: "It was not open to the learned Special Judge to have convicted the appellant of that offence by invoking the rule of presumption laid down in sub section (3). He did not however to do so. On the contrary he acquit ted the appellant on that charge. Therefore, learned Counsel has submitted that by calling in aid the rule of presumption in sub section 3 the appellant could not be found guilty of any other type of criminal misconduct (1) ; 647 referred to in cls. (a), (b) or (d) of sub section (1) in respect of which there was no charge against the appellant. We consider that the above argument of learned Counsel for the appellant is correct and must be accepted. " The appellant 's Counsel is not in a position to submit that there is evidence on the record which would satisfy the Court that the accused has "proved the contrary", that is, that he had not committed the offence with which he was charged. We have therefore come to the conclusion that the facts proved in this case raise a presumption under section 5(3) of the Prevention of Corruption Act and the appellant 's conviction of the offence with which he was charged must be maintained on the basis of that presumption. In this view of the matter we do not propose to consider whether the High Court was right in basing its conclusion also on the other evidence adduced in the case to prove the actual payment of illegal gratification by the partners of the firm M/s. Ramdas Chhankanda Ram. Lastly, Mr. Lall prayed that the sentence be reduced. The sentence imposed on the appellant is one year 's rigorous imprisonment and a fine of Rs. 5,000/ . Under section 5(2) the minimum sentence has to be one year 's imprisonment, subject to the proviso that the Court may for special reasons to be recorded in writing, impose a sentence of imprisonment of less than one year. We are unable to see anything that would justify us in taking action under the proviso. In the result, the appeal is dismissed. Appeal dismissed.

The appellant was an overseer and then became a Sub Divi sional Officer in the Irrigation Department. On the basis of a complaint, a case was registered against him and after sanction by the Government had been obtained for his prosecution under section 5(2) of the Prevention of Corruption Act and section 161/165 of the Indian Penal Code he was tried by the special judge on a charge under section 5(2) of the Act. The allegation made was that the appellant demanded his commission from the contractors on the cheques issued to them and on are Used he started with holding their payments and putting obstacles in the smooth execution of the work entrusted to them. The commission was then paid from time to time and the payments were fully entered in the regular Rokar and Khata Bhais. The trial court accepted the prosecution case and found that the total pecuniary resources and property in appellant 's possession or in the possession of his wife and son were disproportionate to his known sources of income and that such possession had not been satisfactorily accounted for. On these findings the presumption under section 5(3) of the Prevention of Corruption Act was raised and the appellant was convicted and sentenced to rigorous imprisonment for one year and a fine of Rs. 5,000/ in default, rigorous imprisonment for six months. On appeal, the conviction and sentence were confirmed by the High Court. The two learned judges of the High Court, however, differed on the question whether pecuniary resources and property acquired before the Prevention of Corruption Act came into force, could be taken into consideration for the purpose of section 5(3) of the Act. Held, that to take into consideration the pecuniary resources or property in the possession of the accused or any other person on his behalf which were acquired before the date of the Act, was in no way giving the Act a retrospective operation. Maxwell on Interpretation of statutes, 11th Edition, P. 210 and State of Bomaby vs Vishnu Ramchandra, [1961] 2 S.C.R. 26, relied on. Sub section 3 of section 5 does not create a new kind of offence. It merely prescribes a rule of evidence for the purpose of proving the offence of criminal misconduct as defined in section 5(l) for which an accused person is already under trial. C.S.D. Swamy vs The State, [196 of 1 S.C.R. 461 and Surajpal Singh vs State of U.P. ; , relied on. 631 On proper construction of the words of the section and giving them their plain and natural meaning, it is clear, that the pecuinary resources and property in possession of the accused person or any other person on his behalf have to be taken into consideration for the purpose of section 5(3), whether these were acquired before or after the Act came into force. While it is quite true that pecuniary resources and property are themselves sources of income, that does not present any difficulty in understanding a position that at a particular point of time the total pecuniary resources or property can be regarded as assets, and an attempt being made to see whether the known sources of income, including, it may be, these very items of property, in the past, could yield such income as to explain reasonably the emergence of these assets at this point of time. There is no warrant for the proposition that where the law provides that in certain circumstances a presumption shall be made against the accused, the prosecution is barred from adducing evidence in support of its case if it wants to rely on the presumption. D. Del Vecchio vs Bowers, ; ; 80 L. ed. 229 and Bratty vs Attorney General for Northern Ireland, ; , held inapplicable. The facts proved in this case raise a presumption under section 5(3) of the Act and the appellant 's conviction must be maintained on the basis of that presumption.

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Appeal No. 1156 of 1967. Appeal from the judgment and decree dated January 6, 1967 of the Punjab and Haryana High Court in Civil Regular First Appeal No. 152 of 1958. Brij Bans Kishore, Mahabir Prasad Jain and J.P. Gupta ', for the appellants. V.C. Mahajan and M.S. Gupta, for respondent Nos. 1 and 2. The Judgment of the Court was delivered by Dua, J. This appeal on certificate has been preferred by one set of pre emptors (plaintiffs in suit No. 556 of 1958) against the judgment and decree of the High Court of Punjab and Haryana allowing the rival plaintiffs pre emptors ' appeal by reducing the pre emption money and passing a decree of pre emption on payment of Rs. 1,05,800/ instead of Rs. 1,35,000/ as directed by the trial Court. On behalf of the rival pre emptors (plaintiffs in suit No. 558 of 1958) who are arrayed as respondents 1 to 3 in this Court, a preliminary objection was taken to the competency of the present appeal. The appellants ' right to appeal was challenged on the ground that the amendment of the Punjab Pre emption Act (hereinafter called the Act) by the Punjab Act X of 1960 had deprived them of their right of pre emption with retrospective effect. The appellants had based their right of pre emption in their suit on the ground of their being proprietors of the village. They were deprived of this right by the Amending Act of 1960 and section 31 of 131 the Act as amended made the amendment retrospective in its operation by prohibiting the Courts from passing decrees inconsistent with the Amended Act. The right of respondents 1 to 3 who had sued as sons of the vendors remained undisturbed by the amendment. It was on this basis that the preliminary objection was pressed before us. The facts relevant for the present appeal may now briefly be stated. The land in suit was sold by a registered sale deed on June 18, 1957 by Kashi, Harchand and Bhagoo (respondents 4 to 6 in this Court) to respondents 7 to 18 for an ostensible consideration of Rs. 1,35,000/ . The appellants and respondents 1 to 3 instituted two separate suits for pre emption in respect of this sale. In both the suits the sale price as inserted in the sale deed was questioned. The two suits were consolidated and the plaintiffs in each suit were joined as defendants in the other suit as contemplated by section 28 of the Act. It appears that on April 28, 1958, a statement was made on behalf of the vendees admitting the right of the pre emptors in both the suits and conceding that a decree be passed in favour of respondents 1 to 3 in the first instance and on their failure to pay the amount, the appellants be held entitled to a decree on payment of Rs. 1,35,000/ . Apparently all other objections raised by the vendees to the right of the pre emptors were dropped. Counsel for the appellants also made a statement expressing his willingness to pay a sum of Rs. 1,35,000/ . Counsel for the respondents 1 to 3 however did not accept the amount of consideration as entered in the sale deed and wanted the issue in regard to the pre emption money to be decided on the merits. The trial Court by its judgment and decree dated June 30, 1958 granted to the plaintiffs in both the suits a decree in the following terms: "It is ordered that a decree is granted to the plaintiffs for possession of land in suit by pre emption on payment of Rs. 1,35,000/ on the condition that the plaintiffs deposit this amount in the court for payment to the vendees defendants within one month on or before 30th July, 1958, otherwise this suit shall stand dismissed. In case of default by the plaintiffs Godhu etc. Moola and other rival pre emptors, who are plaintiffs in suit No. 556 of 1958 shall be entitled to deposit the above amount as pre emption money on or before 30th October, 1958, and get the possession of the land in suit. " This decree was apparently framed in the light of the provisions of section 28 of the Act and Order 20 ', r. 14, C.P.C. Section 28 which provides for concurrent hearing of two or more suits for pre empting the same sale lays down that each decree shall state the order in which each claimant is entitled to exercise his right of pre emption. Order 20 r. 14( 1 )(a) lays down that the decree 132 in a pre emption suit shall, when purchase money has not been paid in the Court, specify a day on or before which the same shall be paid and Order 20 r. 14(2)(b) provides inter alia that in so far as the claims decreed are different in degree, the claim of the inferior pre emptor shall not take effect unless and until the superior pre emptor has failed to comply with the provisions of sub rule 1. Respondents 1 to 3, feeling dissatisfied with the decision on the amount of deposit to be made, preferred an appeal to the Punjab High Court. On January 6, 1967 the High Court allowed the appeal and reduced the amount of deposit to Rs. 1,05,800/ . While framing the decree the High Court allowed the plaintiffs pre emptors a period of three months from January 6, 1967, for depositing in Court the amount of Rs. 1,05,800/ failing which their suit was directed to stand dismissed. Nothing was stated in the decree as regards the claim of the appellants. Attention of the High Court apparently does not seem to have been drawn to the provisions either of section 28 of the Act or of Order 20, r. 14, Civil P.C. or of para 3 of Chapter 1 M(c) at page 59 of Volume 1 of the Punjab High Court Rules and Orders. Para 3 aforesaid emphasises the importance of specifying a definite date for the deposit of money in Court. It may at this stage appropriately be observed that the omission to state in the decree the order in which the two rival claimants were entitled to exercise their right of pre emption might have been due either to the fact that the appellants (who were impleaded as respondents in the High Court) in view of section 31 as interpreted in Ram Swarup vs Munshi and Others(1) did not press their claim and did not ask for the inclusion of a direction regarding their right in the High Court decree, or to the fact that they may have felt that having expressed .their willingness in the trial Court to deposit Rs. 1,35,000/ it was no longer open to them to question this valuation. It is also not unlikely that in view of the decision in Ram Swarup 's case(1) the High Court thought that the only right of pre emption subsisting on January 6, 1967 was that of respondents 1 to '3 and that there was, therefore, no occasion for making any consequential order in fax,our of the appellants under Order 41, r. 33 Civil P.C. The judgment of the High Court does not contain any discussion on the point as to why no reference was made to the appellants ' claims. It would certainly have been more helpful if the High Court had stated something in its judgment on this aspect. In the circumstances of this case, however, we need say nothing more on this point. It is against the decree of the High Court reducing the amount of deposit to be made by respondents 1 to 3 that the appellants (1) ; ? 133 pre emptors have come to this Court on appeal and their right to appeal is challenged on the ground that the existing law of preemption has retrospectively deprived them of their right to preempt by prohibiting the courts from passing a decree for pre emption inconsistent with the Act as amended. The challenge seems to be well founded. This Court had in Ram Swarup 's case(1) occasion to construe the effect of section 31 of the Act. According to that decision, section 31 is plain and comprehensive enough to require an appellate court to give effect to the substantive provisions of the Amending Act whether the appeal before it is one against a decree granting pre emption or one refusing that relief. Following the ratio of this decision it must be held that it is not open to this Court to pass a decree of pre emption in favour of the appellants who were deprived in 1960 of their right to secure such a decree in the present suit. Indeed it was not open even to the High Court to pass a decree of pre emption in favour of the appellants on January 6, 1967 and the decree of that court is unexceptionable in this respect. The argument that the appellants. had already cured a decree in their favour by the trial Court, which decree has become final, and that they have fully complied with its terms and further that in the present appeal, they are merely seeking modification of the decree of the High Court in favour of respondents 1 to 3 by getting the amount of pre emption money enhanced to Rs. 1,35,000/ , without claiming any right of pre emption in their own favour, is unsustainable. This argument ignores that the scheme of section 28 of the Act read with Order 20, r. 14, Civil P.C. does not postulate decrees of pre emption in favour of rival pre emptors on payment of different amounts of purchase money in respect of the same sale. Such a course may lead to conflicting decisions on the question of value of the property sought to be pre empted for the purposes of pre emption suit. Besides the appellants ' right to pre empt the sale under the unamended law was admittedly inferior to that of respondents 1 to 3 and the appellants could only be held entitled to exercise their right after the failure of the said respondents to comply with the terms of the decree in their favour. The right of respondents 1 to 3 was determined by the High Court and it was claimed on their behalf at ' the Bar of this Court that they had already deposited the preemption money as required by the High Court decree. Indeed this assertion was not disputed on behalf of the appellants. We are accordingly unable to hold that the appellants have successfully executed the decree of pre emption in their favour. The appellants further developed their argument by submitting that the decree passed by the trial Court in their favour was (1) 134 never appealed against and that the same has become final and binding on all parties. The only appeal preferred by respondents 1 to 3, according to this submission was from the decree in their own suit, with the result that the decree in favour of the appellants passed by the trial Court in their suit has by now become conclusive and unassailable. We cannot accept this submission. There is nothing on the record to show that the appeal presented in the High Court by respondents 1 to 3 was directed against the decree passed in their suit. Apparently, the appeal was filed against the decree passed in the consolidated suits dealing with the rights of both the rival pre emptors, and all the parties interested in the right of pre emption were impleaded in the appeal. Besides, this contention seems to us to be only another way of putting the same argument, namely, that there can be two or more different determinations of the amount of pre emption money in the two consolidated suits for pre empting the sale in question. It also postulates a claim by an inferior pre emptor to pre empt the sale by making the deposit of the pre emption money before the superior pre emptor has failed to comply with the terms of the decree in his favour. This argument, as the foregoing discussion shows, is without merit. In the present case, a further question arises as to whether or not it was open to the appellants to ask the High Court not to vary the determination of pre emption money in the appeal preferred by respondents 1 to 3 without formally preferring a separate appeal from the other decree considered to have been passed in the other suit because passing of such an inconsistent decree on appeal on the question of valuation would not be permissible in law. No argument on these lines was addressed in the High Court. The effect of this omission has not been canvassed in this Court either. We would, therefore, express no opinion on this aspect. The final decree relating to the rival claims of pre emption in respect of the sale in question, however, seems to be that of the High Court which may well be considered to be binding on all the parties to it. And then, if the appellants ' claim that the decree passed in their favour by the trial Court in their suit has already become final and their right is unaffected by the decree of the High Court, then they cannot be considered to be aggrieved by the impugned decree, and, therefore, they cannot claim any locus standi to appeal against it. From whichever point of view one looks at the position, the appellants cannot claim a right of appeal from the decree of the High Court determining the pre emption money to be Rs. 1 05,800, The right to appeal against that decree can only be exercised by a person whose claim of pre emption in respect of the sale in question can be considered to have been adversely affected by it. The appellants on their own argument possess no such right. 135 The preliminary objection, therefore, succeeds and allowing the same we dismiss the appeal with costs. Respondents 1 t0 3 claim to have deposited the amount within the time specified by the High Court and as the appellants do not as indeed cannot claim a decree in their favour from this Court, it becomes unnecessary for us to specify any date for the payment of such deposit. R.K.P.S. Appeal dismissed.

After the land in suit was sold in June, 1957, for an ostensible sum of Rs. 1,35:000/ , the appellants and respondents 1 to 3 instituted two separate suits for pre emptions in which the sale price inserted in the sale deed was also questioned. The two suits were consolidated and the plaintiffs in each suit were joined as defendants in the other suit under section 38 of Punjab Pre emption Act, 1913. The vendees thereafter admitted the rights of preemptors in both the suits conceding that a decree may be passed in their favour. The appellants accepted the sale price of Rs, 1,35,000 on or before 30th July 1958 and although respondents 1 to 3 wanted this issue to be decided on the merits, the trial court passed a decree in both the ,suits granting respondents 1 to 3 the right to preemption in the first instance on payment of Rs. 1,35,000 and, on their failure to so pay, holding the appellants entitled to exercise the right to pre emption on payment of the said amount on or before 30th October 1958. In an appeal to the High Court, respondents 1 to 3 challenged the correctness of the amount of the deposit to be made. Allowing the appeal, the High Court reduced the amount of deposit to Rs. 1,05,800/ and directed respondents 1 to 3 to deposit the amount within three months. In an appeal by the appellants to this Court against the decision of the High Court, a preliminary objection was taken challenging the appelants right to appeal it was contended that the appellants had based their right to pre emption in their suit on the ground of their being proprietors of the village where the land was situated. They were deprived of that right by the amendment of section 31 of the Punjab Pre emption Act by Punjab Act 10 of 1969 which amendment was retrospective in its operation and prohibited the Courts from passing any decree inconsistent with the amended Act. On the other hand it was contended inter alia for the appellants that they had already secured a decree in their favour by the trial court which had become final 'and with the terms of which the had complied: in the present appeal they were merely seeking modification of the decree of the High Court in favour of respondents 1 to 3 by getting the amount of pre emption money enhanced t0 Rs. 1,35,000/ without claiming any rights of pre emption in their own favour furthermore, the only appeal preferred by respondents 1 to 3 to the High Court was from the decree in 'heir own suit and for this reason also the decree in favour of the appellants by the trial court had become conclusive and unassailable. 130 HELD: Upholding the preliminary objection, It was not open to this Court to pass a decree of pre emption in favour of the appellants who were deprived by the Amendment Act of 1960 of their right to secure such a decree. [133 C D] The contention that the decree in the appellants ' suit had become final and the High Court 's order was only in relation to the suit of respondents 1 to 3 ignored the scheme of section 28 of the Act read with O.20, r. 14, C.P.C. which does not postulate decrees of pre emption in favour of rival preemptors on payment of different amounts of purchase money in respect of the same sale. Such a course may lead to conflicting decisions on the question of value of the property sought to be pre empted for the purposes of a pre emption suit. Besides., the appellants ' right to pre empted the sale under the unamended law was admittedly inferior to that of respondents 1 to 3 and the appellants could only be held entitled to exercise their right after the failure of those respondents to comply with the terms of the decree in their favour. [133 E G] Ram Swarup vs Munshi and Others, ; ; referred to.

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t Petition (Civil) No. 13704 of 1983. (Under Article 32 of the Constitution of India) P.N. Lekhi and M.K. Garg for the Petitioner. Prithvi Raj, P.P. Rao, Govind Mukhoty, Satish Chander, Raju Ramachandran, Mrs. section Dikshit, A.K. Sangal, P.K. Chakraborty. Ms. Sadhya Goswami and Y.C. Maheshwari for the Respondents. K.R. Gupta, Smt. Nanita Sharma, R.C. Gubrele, Vivek Sharma and O.P. Sharma for the Intervener. The Judgment of the Court was delivered by KULDIP SINGH, J. Ram Sewak Prasad, the petitioner before us, was appointed as Excise Sub Inspector, in the State of Uttar Pradesh in February, 1964 and was promoted to the post of Excise Inspector on ad hoc basis on February 24, 1972. He was confirmed as Excise Sub Inspector by an order dated December 2, 1972 with effect from April 1, 1967. Though promoted on ad hoc basis the petitioner 887 has continuously been working as Excise Inspector since February 24, 1972. Raghubir Singh and Ram Dhan, respondents are direct recruits to the post of Excise Inspector. The joined as such on March 29, 1972 and May 14, 1972 respectively. They were promoted to the post of Excise Superintendent by an order dated September 29, 1983. It is not disputed that the petitioner was not considered for promotion alongwith the respondents or at any time thereafter. Even his name was not shown in the seniority list of Excise Inspectors circulated from time to time. The respondents, including the State Government, have taken the stand that the petitioner 's promotion to the post of Excise Inspector was against the rules, he continues to be an ad hoc appointee and is not a member of the Excise Inspectors Service constituted under the rules. For that reason he is neither been shown in the seniority list of Excise Inspectors nor considered for promotion to the post of Excise Superintendent. It is necessary to examine the relevant statutory rules regulating recruitment and conditions of service of the Excise Inspectors. Rule 3(ix) and 5 of the Uttar Pradesh Subordinate Excise Service Rules, 1967 (hereinafter called `1967 rules ') are as under: "3(ix). "Member of the service" means a person appointed in a substantive capacity under the provisions of these rules, or of rules in force previous to the enforcement of these rules to a post in the cadre of the service" . 5. Sources of recruitment Recruitment to the service shall be made (a) by direct recruitment of candidates, on the result of a combined competitive examinations conducted by the Commission, who having been selected in the prescribed manner for undergoing practical training have completed the course of training and passed the departmental examination prescribed in rule 23: Provided that no candidate shall be allowed to avail of more than three chances for appearing at the competitive examination; (b) by promotion of permanent clerks of the office at 888 the Headquarters of the Excise Commissioner and other regional and Subordinate Excise Offices of Assistant Excise Commissioners and Superintendents of Excise in Uttar Pradesh; and (c) by promotion of permanent Tari Supervisors The 1967 rules were superseded by the Uttar Pradesh Subordinate Excise Service Rules, 1983 (hereinafter called 1983 rules) which came into force on March 24, 1983. Rule 3(g), 3(j), 5 and 21(1) of the 1983 rules are reproduced hereinafter: "3(g). "Member of Service" means a person substantively appointed under or the rules or orders in force prior to the commencement of these rules to a post in the cadre of the service". "3(j). "Substantive appointment" means an appointment, not being an ad hoc appointment, on a post in the cadre of the service, made after selection in accordance with the rules and, if there are no rules, in accordance with the procedure prescribed for the time being by executive instructions, issued by the Government. " Sources of Recruitment. Recruitment to the various categories of posts in this service shall be made from the following sources: (A) EXCISE INSPECTOR (1) 90% by direct recruitment on the result of a combined competitive examination conducted by the Commission. (2) 10% by promotion from amongst the permanent sub Excise Inspectors. "Rule 21(1) Except as hereinafter provided, the seniority of persons in any category of post shall be determined from the date of the order of substantive appointment and if two or more persons are appointed together, by the order in which their names are arranged in the appointed order; 889 Provided that if the appointment order specifies a particular back date with the effect from which a person is substantively appointed, that date, will be deemed to be the date of order of substantive appointment and, in other case it will mean the date of issue of the order;" Mr. Satish Chandra, learned senior advocate, appearing for some of the respondents who are direct recruits of 1982/83 has contended that the 1967 rules were holding the field when the petitioner was promoted as Excise Inspector on ad hoc basis. According to him only clerks and Tari Supervisors could be considered for promotion to the post of Excise Inspector under rule 5 of the 1967 rules and the Excise Sub Inspectors were not eligible. The petitioner 's promotion being in violation of the 1967 rules, he was not a member of the service and as such was rightly not shown in the seniority list of Excise Inspectors. He, however, accepts the position that the petitioner can be considered for promotion to the post of Excise Inspector under the 1983 rules and would become member of the service from the date of promotion under the said rules. Mr. Satish Chandra finally contended that the appointment of the petitioner from 1972 to 1983 being violative of 1967 rules, the benefit of the said service cannot be given to the petitioner towards seniority in the cadre of Excise Inspectors. In support of his arguments Mr. Satish Chandra relied upon the judgments of this Court in Masood Akhtar Khan and Others vs State of Madhya Pradesh and Others, and Direct recruits class II Engineering Officers Association vs State of Maharashtra and Others, [1990] 2S.C.C. 715. Mr. Govind Mukhoty, Mr. P.P. Rao and Mr. O.P. Sharma, learned senior advocates appearing for various respondents reiterated, with different flavour, the arguments advanced by Mr. Satish Chandra. They further cited P. Mahendran and Ors etc. vs State of Karnataka and Ors. etc. , ; State of Punjab vs Jagdip Singh and Ors., ; ; Krishena Kumar and Ors. vs Union of India and Ors. , ; and A.K. Bhatnagar and Ors. vs Union of India and Ors. , ; Mr. Prithviraj, learned senior advocate appearing for the State of Uttar Pradesh stated that it may be possible to absorb the petitioner in the cadre of Excise Inspectors from the date of enforcement of the 1983 rules but the benefit of service rendered by him as Excise Inspector prior to that date cannot be given to him. Mr. P.N. Lekhi, learned senior advocate appearing for the petitioner vehemently argued that the petitioner was promoted in `public interest ' as Excise Inspector in the year 1972 and since then he 890 has been working as such continuously. He is being paid the same salary for doing the same work as is being done by the directly recruited Excise Inspectors. There can no justifiable reason to treat the petitioner as an ad hoc Excise Inspector even after working as such for almost two decades. According to him the 1967 rules which confined the channel of promotion to Tari Inspectors and Clerks were wholly arbitrary and as such violative of Articles 14 and 16 of the Constitution of India. The Excise Sub Inspectors are at a lower rung in the same hierarchy of service to which Excise Inspectors belong. The Sub Inspectors perform similar duties of less responsibility. Mr. Lekhi further contended that providing avenue of promotion to Tari Inspectors and Clerks who had no similarity or service0link with the cadre of Excise Inspectors and depriving the same to the Excise Sub Inspectors render the 1967 rules arbitrary and discriminatory. He relied upon Baleshwar Dass and Ors. vs State of U.P. and Ors., [1981] 1 SCR 449; Narender Chadha and Ors. vs Union of India and Ors. , ; ; Rajendera Parsad Dhasmane vs Union of India and Ors., ; and Kumari Shrilekha Vidyarthi etc. vs State of U.P. and Ors., Mr. Lekhi finally submitted that the petitioner is, in any case, entitled to be promoted substantively to the cadre of Excise Inspectors under the 1983 rules and he is entitled to fixation of seniority by counting his entire service as Excisa Inspector from 1972 onwards. It is not necessary to go into the judgments cited by the learned counsel for the parties. The judgments are on the peculiar facts of these cases and do not render much assistance to resolve the controversy before us. The 1967 rules provided recruitment to the cadre of Excise Inspectors by way of direct recruitment and by promotion. Recruitment by promotion was only confined to permanent clerks in the office of Excise Commissioner and Tari Supervisors. The Excise Sub Inspectors were not eligible. On the plain interpretation of 1967 rules Mr. Satish Chandra is justified to contend that the petitioner was not eligible for promotion to the post of Excise Inspector and as such he could not be member of the Uttar Pradesh Subordinate Excise Service as constituted under the 1967 rules. On the other hand there is plausibility in the argument of Mr. P.N. Lekhi that rule 5 of the 1967 rules which denies avenue of promotion to the Excise Sub Inspectors is arbitrary and discriminatory. When the 1967 rules were enforced on May 24, 1967 there was in existence a permanent cadre of Excise Sub Inspectors. The nature of duties of both the cadres 891 were similar. The Excise Inspectors, on molasses duty of the ranges, used to supervise the work of Excise Sub Inspectors under them. The Excise Sub Inspectors were thus natural contenders for the post of Inspectors. There was no justification whatsoever with the framers of the 1967 rules to have kept the Excise Sub Inspectors out of the channel of promotion to the post of Excise Inspectors. Prima facie there is no escape from the conclusion that the Excise Sub Inspectors were dealt with in an arbitrary manner by the framers of 1967 rules. However, the view we propose to take on the interpretation of 1983 rules it is not necessary for us to deal with the respective arguments of the learned counsel for the parties regarding the 1967 rules. Rule 5 of the 1983 rules provides recruitment to the cadre of Excise Inspectors from two sources, 90% by direct recruitment and 10% by promotion from amongst the permanent Excise Sub Inspectors. It is not disputed that under the 1983 rules the petitioner is eligible to be promoted and appointed as Excise Inspector. In the writ petition the petitioner has specifically pleaded that the service record of the petitioner is unblemished and he is holding the post of Excise Inspector within the 10% promotion quota provided for the permanent Excise Sub Inspectors. The State Government in its counter has not denied these averments. The 1983 rules came into force on March 24, 1983. There is nothing on the record to show as to why the petitioner was not considered for promotion under the 1983 rules till today. Inaction on the part of the State Government is wholly unjustified. The petitioner has been made to suffer for no fault of his. He has been serving the State Government as Excise Inspector since February 24, 1972 satisfactorily. Least the State Government could do was to consider the petitioner under the 1983 rules. Mr. Prithviraj, learned counsel for the State of Uttar Pradesh has however fairly stated that the State Government is willing to promote the petitioner to the cadre of Excise Inspectors under the 1983 rules effect from the date of enforcement of the said rules. Rule 21(1) of the 1983 rules provides that the seniority of a person in any category of post shall be determined from the date of the order of substantive appointment. First proviso provides that if the appointment order specifies a particular back date with effect from which a person is substantively appointed then the said back date shall be deemed to be the date of order of substantive appointment. It is thus obvious that rule 21(1) of the 1983 rules specifically permits substantive appointment to the cadre of Excise Inspectors with back date. The framers of the 1983 rules were conscious that the cadre of 892 Excise Sub Inspectors was in existence from 1964 onwards and some of them were promoted to the post of Excise Inspectors much earlier to the enforcement of the 1983 rules. In all probability the provision of back date appointment was made in the 1983 rules to do justice to persons like the petitioner. The petitioner is eligible under the rules to be appointed as Excise Inspector by way of promotion. It is not disputed that the petitioner was appointed as Excise Inspector on February 24, 1972 and he has been actually working in the said post continuously from that date and has been drawing the salary of the post of Excise Inspector. This is a fit case where the petitioner should be appointed as Excise Inspector under the 1983 rules by giving him back date appointment with effect from February 24, 1972. We, therefore, hold that the petitioner shall be deemed to be appointed by way of promotion as substantive Excise Inspector under the 1983 rules with effect from February 24, 1972. The petitioner shall be entitled to the benefit of his entire period of service as Excise Inspector from February 24, 1972 towards fixation of his seniority in the cadre of Excise Inspector. We further direct that the petitioner shall be considered for promotion to the post of Excise Superintendent from a date earlier than the date when respondents Ram Dhan and Raghubir Singh were promoted to the said post. The petitioner shall also be entitled to be considered to the post of Assistant Excise Commissioner in accordance with the rules from a date earlier than the date when any of his juniors were promoted to the said post. We make it clear that none of the respondents who have already been promoted to the higher rank of Excise Superintendents or Assistant Excise Commissioners be reverted to accommodate the petitioner or any other person similarly situated. The State Government shall create additional posts in the cadre of Excise Superintendents and Assistant Excise Commissioners to accommodate the petitioner and other similar persons, if necessary. The writ petition is allowed with costs in the above terms. We quantify the costs as Rs.10,000 to be paid by the State of Uttar Pradesh. Y.Lal. Petition allowed.

The petitioner was appointed as Excise Sub Inspector in February 1964 in the State of U.P. and was later promoted as Excise Inspector on ad hoc basis on February 24, 1972. He was confirmed as Excise Sub Inspector w.e.f. April 1, 1967. Though promoted on ad hoc basis, the petitioner has continuously been working as Excise Inspector since February 24, 1972. Raghubir Singh and Ram Dhan, respondents are direct recruits to the post of Excise Inspector and they had joined the cadre later in point of time than the petitioner i.e. after 24.2.1972. They were promoted to the post of Excise Superintendent on 29.9.1983 and the petitioner was ignored. Being aggrieved the petitioner has filed this petition under Article 32 of the Constitution. According to the State and other respondents, the petitioner 's promotion to the post of Excise Inspector being on ad hoc basis was against the 1967 rules, he continues to be an ad hoc appointed and as such is not a member of the Excise Inspectors service constituted under the rules. His name has not been shown in the seniority list of Excise Inspectors. According to them his case has rightly not been considered for further promotion. On the other hand, it is contended on behalf of the petitioner that the 1967 Rules in as much as they confine the channel of promotion to Tari Inspectors and Clerks were wholly arbitrary and as such violative of Articles 14 and 16 of the Constitution. It is submitted on his behalf that the petitioner is, in any case, entitled to be promoted substantively to the cadre of excise Inspectors under 1983 rules and he is also entitled to fixation of seniority by counting his entire service as Excise Inspector from 1972 onwards. Respondents concede that the petitioner can be appointed under 1983 rules, but contend that he is not entitled to the benefit of past service for purposes of seniority. 885 Allowing the writ petition this Court HELD: When the 1967 rules were enforced on May 24, 1967 there was in existence a permanent cadre of Excise Sub Inspectors. The nature of duties of both the cadres were similar. The Excise Inspectors, on molasses duty of the ranges, used to supervise the work of excise Sub Inspectors under them. The Excise Sub Inspectors were thus natural contenders for the post of Inspectors. There was no justification whatsoever with the framers of the 1967 rules to have kept the Excise Sub Inspectors out of the channel of promotion to the post of Excise Inspectors. Prime facie there is no escape from the conclusion that the Excise Sub Inspectors were dealt with in an arbitrary manner by the framers of 1967 rules. [890H 891B] It is not disputed that under the 1983 rules, the petitioner is eligible to be promoted and appointed as Excise Inspector. [891C D] The 1983 rules came into force on March 24, 1983. There is nothing on the record to show as to why the petitioner was not considered for promotion under the 1983 rules till today. Inaction on the part of the State Government is wholly unjustified. The petitioner has been made to suffer for no fault of his. He has been serving the State Government as Excise Inspector since February 24, 1972 satisfactorily. [891E] Rule 21(i) of the 1983 rules specifically permits substantive appointment to the cadre of Excise Inspectors with back date. In all probability the provision of back date appointment was made in the 1983 rules to do justice to persons like the petitioner. The petitioner is eligible under the rules to be appointed as Excise Inspector by way of promotion. Accordingly the Court directed that the petitioner shall be deemed to be appointed by way of promotion as substantive Excise Inspector under the 1983 rules with effect from February 24, 1972. The petitioner shall be entitled to the benefit of his entire period of service as Excise Inspector from February 24, 1972 towards fixation of his seniority in the cadre of Excise Inspector. The petitioner shall be considered for promotion to the post of Excise Superintendent from a date earlier than the date when respondents Ram Dhan and Raghubir Singh were promoted to the said post. The petitioner shall also be entitled to be considered to the post of Assistant Excise Commissioner in accordance with the rules from a date earlier than the date when any of his juniors were promoted to the said post. [891G, 892B E] None of the respondents who have already been promoted to the 886 higher rank of Excise Superintendents or Assistant Excise Commissioners be reverted to accommodate the petitioner or any other person similarly situated. The State Government shall create additional posts in the cadre of Excise Superintendents and Assistant Excise Commissioners to accommodate the petitioner and other similar persons, if necessary. [892F] Masood Akhtar Khan & Ors. vs State of Madhya Pradesh, ; Direct recruits Class II Engineering Officers Association vs State of Maharashtra & Ors., ; ; P. Mahendran & Ors, etc. vs State of Karnataka Singh & Ors. , ; ; Krishena Kumar & Ors. vs Union of India & Ors. , ; ; A.K. Bhatnagar & Ors. vs Union of India & Ors. , ; ; Baleshwar Dass & Ors. etc. vs State of U.P. & Ors. , [1981] 1 S.C.C. 449; Narender Chadha & Ors. vs Union of India & Ors. , ; and Kumari Shrilekha Vidyarthi etc. vs State of U.P. & Ors. , , referred to.

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Appeal No. 82 of 1957. Appeal from the judgment and decree dated April 4, 1955, of the Calcutta High Court in Appeal from Appellate Decree No. 1224 of 1953. G. section Pathak and D. N. Mukherjee, for the appellant. H. N. Sanyal, Additional Solicitor General of India and P. K. Chatterjee, for the respondents. February 10. The Judgment of the Court was delivered by SHAH, J. Of the premises relating to which this dispute arises No. 5, Raja Rajkissen Street, Calcutta the respondents are the owners and the appellant was a contractual tenant from June 15, 1917, till June 15, 1947, under three successive tenancies for 10 years each. Under the first tenancy, the appellant paid rent at the rate of Rs. 84,15,0,per month, under the second tenancy at the rate of Rs. 180 per month 815 and under the third tenancy at the rate of Rs. 225 per month. The tenancy was in respect of buildings used for manufacturing " tin canisters " and open land. On September 30, 1946, the Governor of Bengal issued the Calcutta Rent Ordinance, V of 1946, making certain provisions for control of rent of premises in the town of Calcutta. By section 12 of the Ordinance, it was provided in so far as it is material that notwithstanding, anything contained in the Transfer of Property Act, the Presidency Small Cause Courts Act or the Indian Contract Act, no order or decree for the recovery of possession of any premises shall be made as long as the tenant pays rent to the full extent allowable by the Ordinance and performs the conditions of the tenancy. By the proviso, the landlord was, notwithstanding the protection granted entitled, if the conditions specified therein were fulfilled, to obtain possession of the premises. This Ordinance was replaced by Act I of 1947 which contained substantially the same provisions. By the West Bengal Act V of 1948, the provisions of Ordinance V of 1946 and Act I of 1948, were continued. Thereafter on December 1, 1948 the West Bengal Premises Rent Control (Temporary Provisions) Act XXXVIII of 1948 was brought into operation and by this Act, the West Bengal Act V of 1948 was repealed, but the protection granted to the tenants was con tinued. This Act was repealed by the West Bengal Premises Rent Control Act, 1950, and by section 12 of the latter Act protection to tenants, including tenants whose tenancies had expired, against eviction was granted by prohibiting courts from passing decrees or orders for recovery of possession of any premises in favour of landlords. It was provided by that Act that the landlord shall be entitled to obtain a decree in ejectment, inter alia, where the premises are reasonably required by, him either 1 for the purpose of building or rebuilding or for his own occupation. By letter dated May 15, 1957, the respondents called upon the appellant. to vacate and deliver possession on the expiry of the period of tenancy. Possession was however not delivered by the appellant 816 and he continued to pay the stipulated amount and the same was accepted by the respondents. In an application under section 9 of the West Bengal Premises Rent Control (Temporary Provisions) Act, 1948, the Controller fixed the standard rent of the premises at Rs. 455 per month. After the enactment of the West Bengal Premises Rent Control Act, 1950, another application was submitted by the appellant and the standard rent was reduced to Rs. 247,8,0. On October 10, 1950, the respondents served a notice upon the appellant requiring him " to quit, vacate and deliver possession of the premises occupied ", which the appellant was described as holding as " monthly tenant ", on the expiry of the 31st of Chaitra, 1357 B. section, i.e., April 14, 1951. The ground for eviction, it was claimed, was that the premises were reasonably required by the landlords for putting up now buildings thereon. The appellant having failed to vacate the premises, the respondents sued in the Court of Small Causes, Calcutta, for a decree in ejectment. The Court of Small Causes decreed the suit filed by the respondents. In appeal to the Special Bench, Court of Small Causes, the decree passed by the court of first instance was reversed. The appellate court held that by acceptance of rent after determination of the tenancy in June, 1947, the appellant continued to be " a tenant holding over " and as the purpose of the tenancy was manufacturing, it could be determined only by a notice of six months, expiring with the year of tenancy and as no such notice was served, the tenancy was not determined and the suit was liable to fail. In appeal to the High Court of Judicature at Calcutta, the decree passed by the Special Bench was reversed and the decree passed by the court of first instance was restored. With certificate of fitness under article 133(1)(c) of the Constitution this appeal is preferred by the appellant against the order of the High Court. The contractual tenancy in favour of the appellant was determined by efflux of time on June 15, 1947, and since that date there has been between the parties no fresh contractual tenancy. The respondents were, 817 it appears, anxious to obtain possession of the premises let out to the appellant, but they were unable to obtain assistance of the court in view of the protection afforded to the appellant by the successive rent control Acts. In the meanwhile, the appellant continued to pay every month amounts equal to the contractual rent, and later the rent declared to be the statutory rent. Does the acceptance of the amounts paid by the appellant confer upon him the right of a tenant holding over within the meaning of section 116 of the Transfer of Property Act? Section 116 of the Transfer of Property Act in so far as it is material provides that if a lessee of property remains in possession thereof after the determination of the lease granted to him and the lessor accepts rent from the lessee or otherwise assents to his continuing in possession, the lease is, in the absence of an agreement to the contrary, renewed from year to year or from month to month according to the purpose for which the property is leased as specified in section 106. It is, however, well settled that where a con tractual tenancy to which the rent control legislation applies has expired by efflux of time or by determination by notice to quit and the tenant continues in possession of the premises, acceptance of rent from the tenant by the landlord after the expiration or determination of the contractual tenancy will not afford ground for holding that the landlord has assented to a new contractual tenancy. It was observed by B. K. Mukherjee, J. (as he then was), in Kai Khushroo vs Bai Jerbai (1): " On the determination of a lease, it is the duty of the lessee to deliver up possession of the demised premises to the lessor. If the lessee or a sub lessee under him continues in possession even after the determination of the lease, the landlord undoubtedly has the right to eject him forthwith; but if he does not, and there is neither assent or dissent on his part to the continuance of occupation of such person, the latter becomes in the language of English law a tenant on sufferance who has no lawful title to (1) , 270,273. 818 the land but holds it merely through the laches of the landlord. If now the landlord accepts rent from such person or otherwise expresses assent to the continuance of his possession, a new tenancy comes into existence as is contemplated by section 116, Transfer of Property Act, and unless there is an agreement to the contrary, such tenancy would be regarded as one from year to year or from month to month in accordance with the provisions of section 106 of the Act. " It was further observed ". . . in cases of tenancies relating to dwelling houses to which the Rent Restriction Acts apply, the tenant may enjoy a statutory immunity from eviction even after the lease has expired. The landlord cannot eject him except on specified grounds mentioned in the Acts themselves. In such circumstances, acceptance of rent by the landlord from a statutory tenant whose lease has already expired could not be regarded as evidence of a new agreement of tenancy, and it would not be open to such a tenant to urge, by way of defence, in a suit for ejectment brought against him, under the provisions of Rent Restriction Act that by acceptance of rent a fresh tenancy was created which had to be determined by a fresh notice to quit. " Under the Calcutta Rent Ordinance, 1946, and the subsequent legislation which culminated in the West Bengal Premises Rent Control Act, 1950, in the expression "tenant" was included any person who continued in possession after termination of his tenancy. Section 12 of the West Bengal Premises Rent Control Act, 1950, expressly protects a tenant whose lease has expired. By the Rent Restriction Statutes ' at the material time, statutory immunity was granted to the appellant against eviction, and acceptance of the amounts from him which were equivalent to rent after the contractual tenancy had expired or which were fixed as standard rent did not amount to acceptance of rent from a lessee within the meaning of section 116, Transfer of Property Act. Failure to take action which was consequent upon a statutory prohibition 819 imposed upon the courts and not the result of any voluntary conduct on the part of the appellant did not also amount to " otherwise assenting to the lessee continuing in possession. " Of course, there is no prohibition against a landlord entering into a fresh contract of tenancy with a tenant whose right of occupation is determined and who remains in occupation by virtue of the statutory immunity. Apart from art express contract, conduct of the parties may undoubtedly justify an inference that after determination of the contractual tenancy, the landlord had entered into a fresh contract with the tenant, but whether the conduct justifies such an inference must always depend upon the facts of each case. Occupation of premises by a tenant whose tenancy is determined is by virtue of the protection granted by the statute and not because of any right arising from the contract which is determined. The statute protects his possession so long as the conditions which justify a lessor in obtaining an order of eviction against him do not exist. Once the prohibition against the exercise of jurisdiction by the court is removed, the right to obtain possession by the lessor under the ordinary law springs into action and the exercise of. the lessor 's right to evict the tenant will not unless the statute provides otherwise, be conditioned. The High Court was in our judgment right in holding that by merely accepting rent from the appellant and by failing to take action against him, the appellant did not acquire the rights of a tenant holding over. It is true that in the notice dated October 10, 1950, the appellant is described as a " monthly tenant ", but that is not indicative of conduct justifying an inference that a fresh contractual tenancy had come into existence. Within the meaning of the West Bengal Premises Rent Control Act, 1950, the appellant was a " tenant " and by calling the appellant a tenant the respondents did not evince an intention to treat him as a contractual tenant. The use of the adjective monthly " also was not indicative of a contractual relation. The tenancy of the appellant was determined by efflux of time an subsequent occupation by him 820 was not in pursuance of any contract express or implied, but was by virtue of the protection given by the successive statutes. This occupation did not confer any rights upon the appellant and was not required to be determined by a notice prescribed by is. 106 of the Transfer of Property Act. In that view of the case, this appeal fails and is dismissed with costs. Appeal dismissed.

The appellant was a contractual tenant of certain premises in the town of Calcutta of which the respondents were the owners. The respondents called upon the appellant to vacate and deliver possession of the premises on the expiration of the period of tenancy but possession was not delivered and the respondents were unable to obtain possession in view of the protection afforded to the tenants by the successive rent control Acts passed by the State. In the meantime the 814 appellant continued to pay every month amounts equal to the contractual rent, and later the rent declared to be the statutory rent and the respondent accepted the same. The question arising for decision was whether the acceptance of the amounts by the respondents conferred upon the appellant the right of a tenant holding over within the meaning of section 116 of the Transfer of Property Act. Held, that where a contractual tenancy to which the rent control legislation applied, had expired by efflux of time or by determination by notice to quit and the tenant continued in possession of the premises, acceptance of rent from the tenant by the landlord after the expiration or determination of the contractual tenancy will not afford ground for holding that the landlord had assented to a new contractual tenancy. Kai Khushroo vs Bai Jerbai , followed. Acceptance by the landlord from the tenant of amounts equivalent to rent after the contractual tenancy had expired or amounts which were fixed as standard rent did not amount to acceptance of rent from a lessee within the meaning of section 116 of the Transfer of Property Act. Occupation of the appellant after the determination of tenancy was not in pursuance of any contract express or implied but was by virtue of protection granted by the successive statutes and such occupation was not required to be determined in the manner prescribed by section 106 of the Transfer of Property Act.

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ns Nos. 31, 50, 52, 54, 81 and 82 of 1964. Petitions under article 32 of the Constitution of India for the enforcement of Fundamental Rights. R. Gopalakrishnan, for the petitioners (in W.P. Nos. 31 and 52 of 1964). G. C. Kasliwal, Advocate General, State of Rajasthan, K. K. Jain (for W. P. No. 31 of 1964 only) and R. N. Sachthey, for the respondent (in W. P. Nos. 31 and 52 of 1964). C. K. Daphtary, Attorney General and R. H. Dhebar, for the Union of India. M. C. Setalvad, J. B. Dadachanji, O. C. Mathur and Ravinder Narain, for intervener No. 1. G. section Pathak, J. B. Dadachanji, O. C. Mathur and Ravinder Narain, for intervener No. 2. Dipak Dutta Chaudhuri and A. K. Nag, for the petitioners (in W. P. No. 50 of 1964). B. K. Khanna and R. N. Sachthey, for the respondent (in W. P. No. 50 1964). section K. Mehta, K. L. Mehta, for the petitioners (in W. P. No. 54 of 1964). B. K. Khanna and R. N. Sachthey, for respondents Nos.1 to 3 (in W. P. No. 54 of 1964). R. V. section Mani, for the petitioners (in W. P. Nos. 81 and 82 of 1964). 937 C. K. Daphtary, Attorney General, B. Sen and R. H. Dhebar, for respondent No. 1 (W. P. No. 81 of 1964). C. K. Daphtary, Attorney General, R. K. P. Shankardass and R. H. Dhebar, for respondent No. 1 (in W. P. No. 82 of 1964). N. Krishnaswamy Reddy, Advocate General, State of Madras, A. Ranganadham Chetty and A. V. Rangam, for respondent No. 2 (in W. P. Nos. 81 and 82 1964). K. section Chawla and R. V. section Mani, for intervener No. 3. The Judgment of P. B. GAJENDRAGADKAR C.J., K. , N. WANCHOO and RAGHUBAR DAYAL JJ. was delivered by GAJENDRAGADKAR C.J. M. HIDAYATULLAH and J. R. MUDHOLKAR JJ. delivered separate judgments. Gajendragadkar C.J. These six writ petitions which have been filed under article 32 of the Constitution, seek to challenge the validity of the Constitution (17th Amendment) Act, 1964. The petitioners are affected by one or the other of the Acts added to the 9th Schedule by the impugned Act, and their contention is that the impugned Act being constitutionally invalid, the validity of the Acts by which they are affected cannot be saved. Some other parties who are similarly affected by other Acts added to the 9th Schedule by the impugned Act, have intervened at the hearing of these writ petit ions, and they have joined the petitioners in contending that the impugned Act is invalid. The points raised in the present proceedings have been elaborately argued before us by Mr. Setalvad and Mr. Pathak for the interveners and Mr. Mani for the petitioners. We have also heard the Attorney General in reply. The impugned Act consists of three sections. The first section gives its short title. Section 2(i) adds a proviso to cl. (1) of article 31A after the existing proviso. This proviso reads thus "Provided further that where any law makes any provision for the acquisition by the State of any estate and where any land comprised therein is held by a person under his personal cultivation, it shall not be lawful for the State to acquire any portion of such land as is within the ceiling limit applicable to him under any law for the time being in force or any building or structure standing thereon or appurtenant thereto, unless the law relating to the acquisition of such land, building or structure, provides for payment of compensation at a rate which shall not be less than the market value thereof". 938 Section 2 (ii) substitutes the following sub clause for sub cl. (a) of cl. (2) of article 31A: "(a) the expression "estate" shall, in relation to any local area, have the same meaning as that expression or its local equivalent has in the existing law relating to land tenures in force in that area and shall also include (i) any jagir, inam or muafi or other similar grant and in the States of Madras and Kerala, any janmam, right; (ii) any land held under ryotwari settlement; (iii) any land held or let for purposes of agriculture or for purposes ancillary thereto, including waste land, forest land, land for pasture or sites of buildings and other structures occupied by cultivators of land, agricultural labourers and village artisans". Section 3 amends the 9th Schedule by adding 44 entries to it. That is the, nature of the provisions contained in the impugned Amendment Act. In dealing with the question about the validity of the impugned Act, it is necessary to consider the scope and effect of the provisions contained in article 368 of the Constitution, because a large part of the controversy in the present writ petitions turns upon the decision of the question as to what the true scope and effect of article 368 is. Let us read article 368 : "368. An amendment of this Constitution may be initiated only by the introduction of a Bill for the purpose in either House of Parliament, and when the Bill is passed in each House by a majority of the total membership of that House and by a majority of not less than two thirds of the members of that House present and voting, it shall be presented to the President for his assent and upon such assent being given to the Bill, the Constitution shall stand amended in accordance with the terms of the Bill : Provided that if such amendment seeks to make any change in (a) Article 54, Article 55, Article 73, Article 162 or Article 241, or (b) Chapter IV of Part V, Chapter V of Part VI, or Chapter 1 of Part XI, or 939 (c) any of the Lists in the Seventh Schedule, or (d) the representation of States in Parliament, or (e) the provisions of this Article, the amendment shall also require to be ratified by the Legislatures of not less than one half of the States by resolutions to that effect passed by those Legislatures before the Bill making provision for such amendment is presented to the President for assent". It would, thus, appear that the broad scheme of article 368 is that if Parliament proposes to amend any provision of the Constitution not enshrined in the proviso, the procedure prescribed by the main part of the Article has to be followed. The Bill introduced for the purpose of making the amendment in question, has to be passed in each House by a majority of the total membership of that House and by a majority of not less than two thirds of the members of that House present and voting. This requirement postulates that a bill seeking to amend the relevant provisions of the Constitution should receive substantial support from members of both the Houses. That is why a two fold requirement has been prescribed in that behalf. After the bill is passed as aforesaid, it has to be presented to the President for his assent and when he gives his assent, the Constitution shall stand amended in accordance with the terms of the bill. That is the position in regard to the amendment of the provisions of the Constitution to which the proviso does not apply. If Parliament intends to amend any of the provisions of the Constitution which are covered by clauses (a) to (e) of the proviso, there is a further requirement which has to be satisfied before the bill car. be presented to the President for his assent. Such a bill is required to be ratified by the Legislatures of not less than one half of the States by Resolutions to that effect passed by them. In other words, in respect of the Articles covered by the proviso, the further safeguard prescribed by the proviso is that the intended amendment should receive the approval of the Legislatures of not less than one half of the States. That means that at least half of the States constituting the Union of India should by a majority vote, approve of the proposed amendment. It is obvious that the fundamental rights enshrined in Part III are not included in the proviso, and so, if Parliament intends to amend any of the provisions contained in Articles 12 to 35 which are included in Part III, it is not necessary to take recourse to the proviso and to satisfy the additional requirements prescribed by it. 940 Thus far, there is no difficulty. But in considering the scope of article 368, it is necessary to remember that article 226, which is included in Chapter V of Part VI of the Constitution, is one of the constitutional provisions which fall under cl. (b) of the proviso; and so, it is clear that if Parliament intends to amend the provisions of article 226, the bill proposing to make such an amendment must satisfy, the requirements of the proviso. The question which calls for our decision is : what would be the requirement about making an amendment in a constitutional provision contained in Part III, if as a result of the said amendment, the powers conferred on the High Courts under article 226 are likely to be affected ? The petitioners contend that since it appears that the powers prescribed by article 226 are likely to be affected by the intended amendment of the provisions contained in Part III the bill introduced for the purpose of making such an amendment, must attract the proviso, and as the impugned Act has admittedly not gone through the procedure prescribed by the proviso, it is invalid; and that raises the question about the construction of the provisions contained in article 368 and the relation between the substantive part of article 368 with its proviso. In our opinion, the two parts of article 368 must on a reasonable construction be harmonised with each other in the sense that the scope and effect of either of them should not be allowed to be unduly reduced or enlarged. It is urged that any amendment of the fundamental rights contained in Part III would inevitably affect the powers of the High Court, prescribed by article 226, and as such, the bill proposing the said amendment cannot fall under the proviso; otherwise the very object of not including Part III under the proviso would be defeated. When the Constitution makers did not include Part III under the proviso, it would be reasonable to assume that they took the view that the amendment of the provisions contained in Part III was a matter which should be dealt with by Parliament under the substantive provisions of article 368 and not under the proviso. It has no doubt been suggested that the Constitution makers perhaps did not anticipate that there would be many occasions to amend the fundamental rights guaranteed by Part M. However that may be, as a matter of construction, there is no escape from the conclusion that article 368 provides for the amendment of the provisions contained in Part III without imposing on Parliament an obligation to adopt the procedure prescribed by the proviso. It is true that as a result of the amendment of the fundamental rights, the area over which the powers prescribed by article 226 would operate may be reduced, but apparently, the ,Constitution makers took the view that the diminution in the area 941 over which the High Courts ' powers under article 226 operate, would not necessarily take the case under the proviso. On the other hand, if the substantive part of article 368 is very liberally and generously construed and it is held that even substantial modification of the fundamental rights which may make a very serious and substantial inroad on the powers of the High Courts under article 226 can be made without invoking the proviso, it may deprive cl. (b) of the proviso of its substance. In other words, in construing both the parts of article 368, the rule of harmonious construction requires that if the direct effect of the amendment of fundamental rights is to make a substantial inroad on the High Courts ' powers under article 226, it would become neces sary to consider whether the proviso would cover such a case or not. If the effect of the amendment made in the fundamental rights on the powers of the High Courts prescribed by article 226, is indirect, incidental, or is otherwise of an insignificant order, it may be that the proviso will not apply. The proviso would apply where the amendment in question seeks to make any change, inter alia, in article 226. and the question in such a case would be : does the amendment seek to make a change in the provisions of article 226 ? The answer to this question would depend upon the effect of the amendment made in the fundamental rights. In dealing with constitutional questions of this character, courts generally adopt a test which is described as the pith and substance test. In Attorney General for Ontario vs Reciprocal Insurers and others(1), the Privy Council was called upon to consider the validity of the Reciprocal Insurance Act, 1922 (12 & 13 Geo. 5, Ont., c. 62) and section 508c which had been added to the Criminal Code of Canada by sections 7 & 8 Geo. 5, c. 29 Dom. Mr. Justice Duff, who spoke for the Privy Council, observed that in an enquiry like the one with which the Privy Council was concerned in that case, "it has been formally laid down in judgments of this Board, that in such an inquiry the Courts must ascertain the 'true nature and character ' of the enactment : Citizens ' Insurance Co. vs Parsons(1); its 'pith and substance ' : Union Colliery Co. vs Bryden(3); and it is the result of this investigation, not the form alone, which the statute may have assumed under the hand of the draughtsman, that will determine within which of the categories of subject matters mentioned in sections 91 and 92 the legislation falls; and for this purpose the legislation must be 'scrutinised in its entirety ' "Great West Saddlery Co. vs The King" (4). It is not (1) (2) [1881] 7 App. Cas 96. (3) (4) , 117. 942 necessary to multiply authorities in support of the proposition that in considering the constitutional validity of the impugned Act, it would be relevant to inquire what the pith and substance of the impugned Act is. This legal position can be taken to be established by the decisions of this Court which have consistently adopted the view expressed by Justice Duff, to which we have just referred. What then is the pith and substance of the impugned Act ? For answering this question, it would be necessary to recall very briefly the history of Articles 31A and 31B. Articles 31A and 3 1 B were added to the Constitution with retrospective effect by section 4 of the Constitution (First Amendment) Act, 1951. It is a matter of general knowledge that it became necessary to add these two provisions in the Constitution, because it was realised that legislative measures adopted by certain States for giving effect to the policy of agrarian reform which was accepted by the party in power, had to face a serious challenge in the courts of law on the ground that they contravened the fundamental rights guaranteed to the citizens by Part III. These measures had been passed in Bihar, Uttar Pradesh and Madhya Pradesh, and their validity was impeached in the High Courts in the said three States. The High Court of Patna held that the relevant Bihar legislation was unconstitutional, whilst the High Courts at Allahabad and Nagpur upheld the validity of the corresponding legislative measures passed in Uttar Pradesh and Madhya Pradesh respectively. [See Kameshwar vs State of Bihar(1) and Surya Pal vs U. P. Government(1). The parties aggrieved by these respective decisions had filed appeals by special leave before the Supreme Court. At the same time, petitions had also been preferred before the Supreme Court under article 32 by certain other zamindars, seeking the determination of the same issues. It was at this stage that Parliament thought it necessary to avoid the delay which would necessarily have been involved in the final decision of the disputes pending before the Supreme Court, and introduced the relevant amendments in the Constitution by adding Articles 31A and 31B. 'Mat was the first step taken by Parliament to assist the process of legislation to bring about agrarian reform by introducing Articles 31A and 31B. The second step in the same direction was taken by Parlia ment in 1955 by amending article 31A by the Constitution (Fourth Amendment) Act, 1955. The object of this amendment was to widen the scope of agrarian reform and to confer on the legislative measures adopted in that behalf immunity from a possible attack (1) A.I.R. 1951 Pat. 91. (2) A.I.R. 1951 AU. 674. 943 that they contravened the fundamental rights of citizens. In other words, this amendment protected the legislative measures in respect of certain other items of agrarian and social welfare legislation, which affected the proprietary rights of certain citizens. That is how the second amendment was made by Parliament. At the time when the first amendment was made, article 31B expressly provided that none of the Acts and Regulations specified in the 9th Schedule, nor any of the provisions thereof, shall be deemed to be void or ever to have become void on the ground that they were inconsistent with or took away or abridged any of the rights conferred by Part III, and it added that notwithstanding any judgment, decree or order of any Court or tribunal to the contrary, each of the said Acts and Regulations shall subject to the power of any competent legislature to repeal or amend, continue in force. At this time, 19 Acts were listed in Schedule 9, and they were thus effectively validated. One more Act was added to this list by the Amendment Act of 1955, so that as a result of the second amendment, the Schedule contained 20 Acts which were validated. It appears that notwithstanding these amendments, certain other legislative measures adopted by different States for the purpose of giving effect to the agrarian policy of the party in power, were effectively challenged. For instance, in Karimbil Kunhikoman vs State of Kerala(1), the validity of the Kerala Agrarian Relations Act (IV, of 1961) was challenged by writ petitions filed under article 32, and as a result of the majority decision of this Court, the whole Act was struck down. This decision was pronounced on December 5, 1961. In A. P. Krishnaswami Naidu, etc. vs The State of Madras (2 the constitutionality of the Madras Land Reforms (Fixation of Ceiling on Land) Act (No. 58 of 1961) was put in issue, and by the decision of this Court pronounced on March 9, 1964, it was declared that the whole Act was invalid. It appears that the Rajasthan Tenancy Act HI of 1955 and the Maharashtra Agricultural Lands (Ceiling and Holdings) Act 27 of 1961 have been similarly declared invalid, and in consequence, Parliament thought it necessary to make a further amendment in article 31B so as to save the validity of these Acts which had been struck down and of other similar Acts which were likely to be struck down, if challenged. With that object in view, the impugned Act hasenpfeffer s.3 by which 44 Acts have been added to Schedule 9. If the impugned Act is held to be valid and the amendment made (1) [1962] Supp. 1 S.C.R. 829. (2) [1964]7 S.C.R. 82 944 in the Schedule is found to be effective, these 44 Acts would have to be treated as valid. Thus, it would be seen that the genesis of the amendments made by Parliament in 1951 by adding Articles 31A and 31B to the Constitution, clearly is to assist the State Legislatures in this country to give effect to the economic policy in which the party in power passionately believes to bring about much needed agrarian reform. It is with the same object that the second amendment was made by Parliament in 1955, and as we have just indicated, the object underlying the amendment made by the impugned Act is also the same. Parliament desires that agrarian reform in a broad and comprehensive sense must be introduced in the interests of a very large section of Indian citizens who live in villages and whose financial prospects are integrally connected with the pursuit of progressive agrarian policy. Thus, if the pith and substance test is applied to the amendment made by the impugned Act, it would be clear that Parliament is seeking to amend fundamental rights solely with the object of removing any possible obstacle in the fulfilment of the socioeconomic policy in which the party in power believes. If that be so, the effect of the amendment on the area over which the High Courts ' powers prescribed by article 226 operate, is incidental and in the present case can be described as of an insignificant order. The impugned Act does not purport to change the provisions of article 226 and it cannot be said even to have that effect directly or in any appreciable measure. That is why we think that the argument that the impugned Act falls under the proviso, cannot be sustained. It is an Act the object of which is to amend the relevant Articles in Part III which confer fundamental rights on citizens and as such it falls under the substantive part of article 368 and does not attract the provisions of cl. (b) of the proviso. If the effect of the amendment made in the fundamental rights on article 226 is direct and not incidental and is of a very significant order, different considerations may perhaps arise. But in the present case, there is no occasion to entertain or weigh the said considerations. Therefore the main contention raised by the petitioners and the interveners against the validity of the impugned Act must be rejected. Then, it is urged that the true purpose and object of the impugned Act is to legislate,in respect of land, and legislation in respect of land falls within the jurisdiction of the State Legislatures under Entry 18 of List II. The argument is that since the State Legislatures alone can make laws in respect of land, Parliament had no right to pass the impugned Act. This argument is 945 based on the assumption that the impugned Act purports to be, and in fact is, a piece of land legislation. The same argument is placed before us in another form. It is urged that the scheme of Articles 245 and 246 of the Constitution clearly shows that Parliament has no right to make a law in respect of land, and since the impugned Act is a legislative measure in relation to land, it is invalid. This argument, in our opinion, is misconceived. In dealing with this argument, again, the pith and substance test is relevant. What the impugned Act purports to do is not to make any land legislation but to protect and validate the legislative measures in respect of agrarian reforms passed by the different State Legislatures in the country by granting them immunity from attack based on the plea that they contravene fundamental rights. Parliament, in enacting the impugned Act, was not making any provisions of land legislation. It was merely validating land legislations already passed by the State Legislatures in that behalf. It is also urged that inasmuch as the impugned Act purports in substance to set aside the decisions of courts of competent jurisdiction by which some of the Acts added to the Ninth Schedule have been declared to be invalid, it is unconstitutional. We see no substance in this argument. It is hardly necessary to emphasize that legislative power to make laws in respect of areas entrusted to the legislative jurisdiction of different legislative bodies, can be exercised both prospectively and retrospectively. The constituent power conferred by article 368 on the Parliament can also be exercised both prospectively and retrospectively. On several occasions, legislatures think it necessary to validate laws which have been declared to be invalid by Courts of competent jurisdiction and in so doing, they have necessarily to provide for the intended validation to take effect notwithstanding any judgment, decree or order passed by a court of competent jurisdiction to the contrary. Therefore, it would be idle to contend fiat by making the amendment retrospective, the impugned Act has become constitutionally invalid. It has also been contended before us that in deciding the question as to whether the impugned Act falls under the proviso, we should take into account the operative words in the proviso. The proviso takes in cases where the amendment sought to be made by the relevant bill seeks to make any change in any of the Articles specified in clauses (a) to (e) of the proviso, and it is urged that on a fair reading of clauses (b) and (c), it would follow that the impugned Act purports to do nothing else but to seek to amend the provisions contained in article 226. It is not 946 easy to appreciate the strength or validity of this argument. This argument is really based on the assumption that the legislative mechanism adopted by the Parliament in passing the impugned Act introduces this infirmity. The argument obviously assumes that it would have been open to Parliament to make appropriate changes in the different Articles of Part III, such as Articles 14 and 19, and if such a course had been adopted, the impugned Act would have been constitutionally valid. But inasmuch as the impugned Act purports to amend only articles 31A and 31B and seeks to add several Acts to the Ninth Schedule, it does not amend any of the provisions in Part III, but is making an independent provision, and that, it is said, must take the case within the scope of the proviso. It is clear that what the impugned Act purports to do is to amend article 3 1 A, and Article 3 1 A itself is included in Part III. If Parliament thought that instead of adopting the cumbersome process of amending each relevant Article in Part III, it would be more appropriate to add Articles 3 1 A and 3 1 B, and on that basis, it passed the material provisions of the Constitution (First Amendment) Act, it would not be reasonable to suggest that this method brings the amendment within the proviso. What the Parliament did in 1951, has afforded a valid basis for further amendments made in 1955 and now in 1964. It would be clear that though the arguments which have been urged before us in the present proceedings have been put in different forms, basically. they involve the consideration of the main question whether the ' impugned Act falls within the scope of the proviso or not; and the answer to this question, in our opinion, has to be against the petitioners by the application of the doctrine of pith and substance. Then, it is urged that the power to amend, which is conferred by article 368, does not include the power to take away the fundamental rights guaranteed by Part III. The contention is that the result of the material provisions of the impugned Act is to take away a citizen 's right to challenge the validity of the Acts added to the Ninth Schedule, and that means that in respect of the said Acts, the relevant fundamental rights of the citizens are taken away. We do not think there is any substance in this argument. it is true that the dictionary meaning of the word "amend" is to ,correct a fault or reform; but in the context, reliance on the dictionary meaning of the word is singularly inappropriate. because what article 368 authorises to be done is the amendment of the provisions of the Constitution. It is well known that the amendment of a law may in a proper case include the deletion of any one or more of the provisions of the law and substitution in their 947 place of new provisions. Similarly, an amendment of the Constitution which is the subject matter of the power conferred by article 368, may include modification or change of the provisions or even an amendment which makes the said provisions inapplicable in certain cases. The power to amend in the context is a very wide power and it cannot be controlled by the literal dictionary meaning of the word "amend". The question about the validity of the Constitution (First Amendment) Act has been considered by this Court in Sri Sankari Prasad Singh Deo vs Union of India and State of Bihar(1). In that case, the validity of the said Amendment Act was challenged on several grounds. One of the grounds was that the newly inserted Articles 31A and 31B sought to make changes in Articles 132 and 136 in Chapter IV of Part V and article 226 in Chapter V of Part VI 'and so, they required ratification under cl. (b) of the proviso to article 368. This contention was rejected by this Court. Patanjali Sastri J., as he then was, who spoke for the unanimous Court, observed that the said Articles "did not either in terms or in effect seek to make any change in article 226 or in Articles 132 and 136", and he added that it was not correct to say that the powers of the High Courts under article 226 to issue writs for the enforcement of any of the rights conferred by Part HI or of this Court under Articles 132 and 136 to entertain appeals from orders, issuing or refusing to issue such writs were in any way affected. In the opinion of the Court, the_ said powers remained just the same as they were before; only a certain class of cases had been excluded from the purview of Part Ill. The fact that the courts could not exercise their powers in respect of the said class of cases, did not show that the powers of the courts were curtailed in any way or to any extent. It only meant that certain area of in which the said powers could have been exercised, had been withdrawn. Similarly, the argument that the amendments were invalid because they related to legislation in respect of land, was also rejected on the ground that the impugned Articles 31A and 31B were essentially amendments of the Constitution which Parliament alone had the power to make. It would thus appear that in substance the points urged before us in the present proceedings are really concluded by the decision of this Court in Sankari Prasad 's case(1). It was, however, urged before us during the course of the hearing of these writ petitions that we should reconsider the matter and review our earlier decision in Sankari Prasad 's case. It is true that the Con (1) ; Supp.1/65 948 stitution does not place any restriction on our powers to review our earlier decisions or even to depart from them and there can be no doubt that in matters relating to the decision of constitutional points which have a significant impact on the fundamental rights of citizens, we would be prepared to review our earlier decisions in the interest of public good. The doctrine of stare decisis may not strictly apply in this context and no one can dispute the position that the said doctrine should not be pemiitted to perpetuate erroneous decisions pronounced by this Court to the detri ment of general welfare. Even so, the normal principle that judgments pronounced by this Court would be final, cannot be ignored and unless considerations of a substantial and compelling character make it necessary to do so, we should be slow to doubt ,,the correctness of previous decisions or to depart from them. It is universally recognised that in regard to a large number of constitutional problems which are brought before this Court for its decision, complex and difficult questions arise and on many of such questions, two views are possible. Therefore, if one View has been taken by this Court after mature deliberation, the fact that another Bench is inclined to take a different view may not justify the Court in reconsidering the earlier decision or in departing from it. The problem of construing constitutional provisions cannot be reasonably solved merely by adopting a literal construction of the words used in the relevant provisions. The Constitution is an organic document and it is intended to serve as a guide to the solution of changing problems which the Court may have to face from time to time. Naturally, in a progressive and dynamic society the shape and appearance of these problems are bound to change with the inevitable consequence that the relevant words used in the Constitution may also chance their meaning and significance. That is what makes the task of dealing with constitutional problems dynamic rather than static. Even so, the Court should be reluctant to accede to the suggestion that its earlier ,decisions should be lightheartedly reviewed and departed from. ' In such a case the test should be : is it absolutely necessary and essential that the question already decided should be re opened ? The answer to this question would depend on the nature of the infirmity alleged in the earlier decision, its impact on public good, and the validity and compelling character of the considerations urged in support of the contrary view. If the said decision has been followed in a large number of cases, that again is a factor ,which must be taken into account. In the present case, if the arguments urged by the petitioners 949 were to prevail, it would lead to the inevitable consequence that the amendments made in the Constitution both in 1951 and 1955 would be rendered invalid and a large number of decisions dealing with the validity of the Acts included in the Ninth Schedule which have been pronounced by different High Courts ever since the decision of this Court in Sankari Prasad 's(1) case was declared, would also be exposed to serious jeopardy. These are consideration, which are both relevant and material in dealing with the plea urged by the petitioners before us in the present proceedings that Sankari Prasad 's case should be re considered. In view of the said plea, however, we have deliberately chosen to deal with the merits of the contentions before referring to the decision itself. In our opinion, the plea made by the petitioners for reconsidering Sankari Prasad 's case is wholly unjustified and must be rejected. In this connection, we would like to refer to another aspect of the matter. As we have already indicated, the principal point which has been urged before us in these proceedings is, that the impugned Act is invalid for the reason that before presenting it to the President for his assent, the procedure prescribed by the proviso to article 368 has not been followed, though the Act was one which fell within the scope of the proviso. In other words, it was not disputed before us that article 368 empowers Parliament to amend any provision of the Constitution, including the provisions in respect of the fundamental rights enshrined in Part M. The main contention was that in amending the relevant provisions of the Constitution, the procedure prescribed by the proviso should have been followed. But it appears that in Sankari Prasad 's case, another argument was urged before this Court in challenging the validity of the Constitution (First Amendment) Act, and since we are expressing our concurrence with the said decisions, we think it is necessary to refer to the said argument and deal with it, even though this aspect of the matter has not been urged before us in the present proceedings. In Sankari Prasad 's case, it was contended that though It may be open to Parliament to amend the provisions in respect of the fundamental rights contained in Part III, the amendment, if made In that behalf, would have to be tested in the light of the provisions contained in article 13(2) of the Constitution. The argument was that the law to which article 13(2) applies, would include a law passed by Parliament by virtue of its constituent power to amend ' the Constitution, and so, its validity will have to be tested by article 13(2) itself. It will be recalled that article 13(2) prohibits (1) ; 950 the State from making any law which, takes away or abridges the rights conferred by Part III, and provides that any law made in contravention of clause (2) shall, to the extent of the contravention, be void. In other words, it was urged before this Court in Sankari Prasad 's(1) case that in considering the question as to the validity of the relevant provisions of the Constitution (First Amendment) Act, it would be open to the party challenging the validity of the said Act to urge that in so far as the Amendment Act abridges or takes away the fundamental rights of the citizens, it is void. This argument was, however, rejected by this Court on the ground that the word "law" used in article 13 "must be taken to mean rules or regulations made in exercise of ordinary legislative power and not amendments to the Constitution made in exercise of constituent power with the result. that article 13 (2) does not affect amendments made under article 368". It is significant that Patanjali Sastri J. as he then was, who spoke for the Court, described as attractive the argument about the applicability of article 13 (2) to Constitution Amendment Acts passed under article 368, examined it closely, and ultimately rejected it. It was noticed in the judgment that certain constitutions make certain rights "eternal and inviolate", and by way of illustration, reference was made to article 11 of the Japanese Constitution and article 5 of the American. Federal Constitution. It was also noticed that the word "law" in its literal sense, may include constitutional law, but it was pointed out that "there is a clear demarcation between ordinary law, which is made in exercise of legislative power, and constitutional law which is made in exercise of constituent power". The scheme of the relevant provisions of the Constitution was then examined, and ultimately, the Court reached the conclusion that though both Articles 13 and 368 are widely phrased, the harmonious rule of construction requires that the word "law" in article 13 should be taken to exclude law made in exercise of the constituent power. In our opinion, this conclusion is right, and as we are expressing our full concurrence with the decision in Sankari Prasad 's(1) case, we think it is necessary to indicate our reasons for agreeing with the conclusion of the Court on this point, even though the coffectness of this conclusion has not been questioned before us in the course of arguments. If we had felt a real difficulty in accepting this part of the conclusion, we would have seriously considered the question as to whether the matter should not be referred to a larger Bench for a further examination of the problem. (1) ; 951 The first point which falls to be considered on this aspect of the matter is the construction of article 368 itself. Part XX which contains only article 368 is described as a Part dealing with the Amendment of the Constitution; and article 368 which prescribes the procedure for amendment of the Constitution, begins by saying that an amendment of this Constitution may be initiated in the manner there indicated. In our opinion, the expression "amendment of the Constitution plainly and unambiguously means amendment of all the provisions of the Constitution. It would, we think, be unreasonable to suggest that what article 368 provides is only the mechanics of the procedure to be followed in amending the Constitution without indicating which provisions of the Constitution can be amended and which cannot. Such a restrictive construction of the substantive part of article 368 would be clearly untenable. Besides, the words used in the proviso unambiguously indicate that the substantive part of the article applies to all the provisions of the Constitution. It is on that basic assump tion that the proviso prescribes a specific procedure in respect of the amendment of the articles mentioned in clauses (a) to (e) thereof. Therefore, we feel no hesitation in holding that when article 368 confers on Parliament the right to amend the Constitution the power in question can be exercised over all the provisions of the Constitution. How the power should be exercised, has to be determined by reference to the question as to whether the proposed amendment falls under the substantive part of article 368, or attracts the provisions of the proviso. It is true that article 13(2) refers to any law in general, and literally construed, the word "law" may take in a law made in exercise of the constituent power conferred on Parliament; but having regard to the fact that a specific, unqualified and unambiguous power to amend the Constitution is conferred on Parliament, it would be unreasonable to hold that the word "law" in article 13 (2) takes in Constitution Amendment Acts passed under article 368. If the Constitution makers had intended that any future amendment of the provisions in regard to fundamental rights should be subject to article 13 (2), they would have taken the precaution of making a clear provision in that behalf. Besides, it seems to us, very unlikely that while conferring the power on Parliament to amend the Constitution, it was the intention of the Constitutionmakers to exclude from that comprehensive power fundamental rights altogether. There is no doubt that if the word "law" used in article 13(2) includes a law in relation to the amendment of the 952 Constitution, fundamental rights can never be abridged or taken away, because as soon as it is shown that the effect of the amendment is to take away or abridge fundamental rights, that portion of the law would be void under article 13 (2). We have no doubt that such a position could not have been intended by the Constitution makers when they included article 368 in the Constitution. In construing the word "law" occurring in article 13(2), it may be relevant to bear in mind that, in the words of Kania C.J. in A. K. Gopalan vs The State of Madras(1), "the inclusion of article 13 (1) and (2) in the Constitution appears to be a matter of abundant caution. Even in their absence, if any of the fundamental rights was infringed by any legislative enactment, the Court has always the power to declare the enactment, to the extent it transgresses the limits, invalid". The importance and significance of the fundamental rights must obviously be recognised and in that sense, the guarantee to the citizens contained in the relevant provisions of Part III, can justly be described as the very foundation and the comer stone of the democratic way of life ushered in this country by the Constitution. But can it be said that the fundamental rights guaranteed to the citizens are eternal and inviolate in the sense that they can never be abridged or amended? It is true that in the case of A. K. Gopalan(1) Patanjali Sastri, as he then was, expressed the view that "there can be no doubt that the people of India have, in exercise of their sovereign will as expressed in the Preamble, adopted the democratic ideal which assures to the citizen the dignity of the individual and other cherished human values as a means to the full evolution and expression of his personality, and in delegating to the legislature, the executive and the judiciary the irrespective powers in the Constitution. reserved to themselves certain fundamental rights, so called, I apprehend, because they have been retained by the people and made paramount to the delegated powers, as in the American model" (p. 198). This hypothesis may, prima facie, tend to show that the right to amend these fundamental rights vested not in Parliament, but in the people of India themselves. But it is significant that when the same learned Judge had occasion to consider this question more elaborately in In re The , (1) etc. he has emphatically expressed the view that it is established beyond doubt that the Indian Legislature, when acting within the limits circumscribing its legislative power, has and was intended to have (1) ; , at p. 100. (2) ; , at pp. 883 84. 953 plenary of legislation as large and of the same nature as those of the British Parliament itself and no constitutional limitation on the delegation of legislative power to a subordinate unit is to be found in the Indian Councils Act, 1861, or the Government of India Act, 1935, or the Constitution of 1950. The suggestion that the legislatures, including the Parliament, are the delegate of the people of India in whom sovereignty vests, was rejected by the learned Judge when he observed that "the maxim 'delegates ten protest delegate ' is not part of the Constitutional law of India and has no more force than a political precept to be acted upon by legislatures in the discharge of their function of making laws, and the courts cannot strike down an Act of Parliament as unconstitutional merely because Parliament decides in a particular instance to entrust its legislative power to another in whom it has confidence or, in other words, to exercise such power through its appointed instrumentality, however repugnant such entrustment may be to the democratic process. What may be regarded, as politically undesirable is constitutionally competent". It would thus appear that so far as our Constitution is concerned, it would not be possible to deal with the question about the powers of Parliament to amend the Constitution under article 368 on any theoretical concept of political science that sovereignty vests in the people and the be statures are merely the delegate of the people. Whether or not Parliament has the power to amend the Constitution must depend solely Upon the question as to whether the said power is included in article 368. The question about the reasonableness, or expediency or desirability of the amendments in question from a political point of view would be irrelevant in construing the words of article 3 6 8. Incidentally, we may also refer to the fact that the Constitutionmakers had taken the precaution to indicate that some amendments should not be treated as amendments of the Constitution for the purpose of article 368. Take, for instance article 4(2) which deals with law made by virtue of article 4(1). article 4(2) provides that no such law shall be deemed to be an amendment of the Constitution for the purposes of article 368. Similarly, article 169(3) provides that any law in respect of the amendment of the existing legislative apparatus by the abolition or creation of Legislative Councils in State ,; shall not be deemed to be an amendment of the Constitution for the purposes of article 368. In other words, laws falling within the purview of Articles 4(2) and 169(3) need not be passed subject to the restrictions imposed by 'article 368, even though. in effect they may amount to the amendment of the relevant provisions of the Constitution. If the Constitution makers took the 954 precaution of making this specific provision to exclude the applicability of article 368 to certain amendments, it would be reasonable to assume that they would have made a specific provision if they had intended that the fundamental rights guaranteed by Part HI should be completely outside the scope of article 368. Apart from the fact that the words used in article 368 are clear and unambiguous in support of the view that we are taking, on principle also it appears unreasonable to suggest that the Constitution makers wanted to provide that fundamental rights guaranteed by the Constitution should never be touched by way of amendment. It must not be forgotten that the fundamental rights guaranteed, by article 19, for instance, are not absolute; the scheme of this article itself indicates that the fundamental rights guaranteed by subclauses (a) to (g) of clause (1), can be validly regulated in the light of the provisions contained in clauses (2) to (6) of article 19. In other words, the broad scheme of article 19 is two fold; the fundamental rights of the citizens are of paramount importance, but even the said fundamental rights can be regulated to serve the interests of the general public or other objects mentioned respec tively in clauses (2) to (6), and that means that for specified purposes indicated in these clauses, even the paramountcy of fundamental rights has to yield to some regulation as contemplated by the said clauses. It is hardly necessary to emphasise that the purposes for which fundamental rights can be regulated which are specified in clauses (2) to (6), could not have been assumed by the Constitution makers to be static and incapable of expansion. The Constitution makers must have anticipated that in dealing with socioeconomic problems which the legislatures may have to face from time to time, the concepts of public interest and other important considerations which are the basis of clauses (2) to (6), may change and may even expand; and so, it is legitimate to assume that the Constitution makers know that Parliament should be competent to make amendments in these rights so as to meet the challenge of the problems which may arise in the course of spcio economic progress and development of the country. That is why we think that even on principle, it would not be reasonable to proceed on the basis that the fundamental rights enshrined in Part III were intended to be finally and immutably settled and determined once for all and were beyond the reach of any future amendment. Let us illustrate this point by reference to some of the provisions of the Constitution (First Amendment) Act, 1951 itself. By this Act, Articles 15, 19 and 31 were amended. One has merely to 955 recall the purpose for which it became necessary to amend Articles 15 and 19 to be satisfied that the changing character of the problems posed by the words used in the respective articles could not have been effectively met unless amendment in the relevant provisions was effected; and yet, if the argument that the fundamental rights are beyond the reach of article 368 were valid, an these amendments would be constitutionally impermissible. That, we think is not the true purport and effect of article 368. We are, therefore, satisfied that this Court was right in rejecting the said argument in the case of Sankari Prasad(1). This question can be considered from another point of view. The argument that the fundamental rights guaranteed by Part in are eternal, inviolate, and beyond the reach of article 368, is based on two assumptions. The first assumption is that on a fair and reasonable construction of article 368, the power to amend the fundamental rights cannot be held to be included within the constituent powers conferred on Parliament by the said Article. We have already held that a fair and reasonable construction of article 368 does not justify this assumption. The other assumption which this argument makes, and must of necessity make, is that if the power to amend the fundamental rights is not included in article 368 as it stands, it cannot ever be included within its purview; because unless it is assumed that the relevant power can never be included in article 368, it would be unrealistic to propound the theory that the fundamental rights are eternal, inviolate, and not within the reach of any subsequent constitutional amendment. It is clear that article 368 itself can be amended by Parliament, though cl. (e) of the proviso requires that before amending article 368, the safeguards prescribed by the proviso must be satisfied. In other words, even if the powers to amend the fundamental rights were not included in article 368, Parliament can, by a suitable amendment of article 368, take those powers. Thus, the second assumption underlying the argument about the immutable character of the fundamental rights is also not well founded. There is one more point to which we would like to refer. In the case of Sankari Prasad(1) this Court has observed that the question whether the latter part of article 31B is too widely expressed, was not argued before it, and so, it did not express any opinion upon it. This question has, however, been argued before us, and so, we would like to make it clear that the effect of the last clause in article 31B is to leave it open to the respective legislatures to repeal (1) ; 956 or amend the Acts which have been included in the Ninth Schedule. In other words, the fact that the said Acts have been included in the Ninth Schedule with a view to make them valid, does not mean that the legislatures in question which passed the said Acts have lost their competence to repeal them or to amend them. That is one consequence of the said provision. The other inevitable quince of the said provision is that if a legislature amends any of the provisions contained in any of the said Acts, the amended provision would not receive the protection of article 31B and its validity may be liable to be examined on the merits. Before we part with this matter, we would like to observe that Parliament may consider whether it would not be expedient and reasonable to include the provisions of Part III in the proviso to article 368. It is not easy to appreciate why the Constitution makers did not include the said provisions in the proviso when article 368 was adopted. In In re : the Berubari Union and Exchange of Enclaves(1), this Court had pointed out that amendment of article 1 of the Constitution consequent upon the cession of any part of the territory of India in favour of a foreign State, does not attract the safeguard prescribed by the proviso to article 368, because neither article 1 nor article 3 is included in the list of entrenched provisions of the Constitution enumerated in the proviso; and it was observed that it was not for this Court to enquire or consider whether it would not be appropriate to include the said two articles under the proviso, and that it was a matter for Parliament to consider and decide. Similarly, it seems somewhat anomalous that any amendment of the provisions contained in article 226 should fall under the proviso but, not an amendment of article 32. Article 226 confers on High Courts the power to issue certain writs, while article 32, which itself is a guaranteed fundamental right, enables a citizen to move this Court for similar writs. Parliament may consider whether the anomaly which is apparent in the different modes prescribed by article 368 for amending Articles 226 and 32 respectively, should not be remedied by including Part HI itself in the proviso. If that is done, difficult questions as to whether the amendment made in the provisions of Part III substantially, directly and materially affects the jurisdiction and powers of the High Courts under article 226 may be easily avoided. In the result, we hold that the impugned Act is constitutionality valid. The petitions, accordingly, fail and are dismissed. There will be no order as to costs. (1) 957 Hidayatullah J. I have had the privilege of reading the judgment just delivered by my lord the Chief Justice. I agree, with him that there is no force in the contention that the 17th Amendment required for its valid enactment the special procedure, laid down in the proviso to article, 368. It would, of course, have, been necessary if the amendment had sought to make a change in article 226. This eventuality cannot be said to have arisen. Article 226 remains unchanged after the amendment. The proviso comes into play only when the article is directly changed or its ambit as such is sought to be changed. What the 17th amendment does is to enlarge the meaning of the word 'estate ' in article 31 A and ' to give protection to some Acts passed by the State Legislatures by including them in the Ninth Schedule under the shield of article 31 B. These Acts promoted agrarian reform and but for the inclusion in the Ninth Schedule they might be assailed by the provisions of Articles 14, 19 or 31 of the Constitution. Some of the Acts were in fact successfully assailed but the amendment makes them effective and invulnerable to the three articles notwithstanding article 13 of the Constitution. In Sri Sankari Prasad 's(1) case when the Constitution (First Amendment) Act was passed and Articles 3 I A and 31 B and Ninth Schedule were introduced, the effect of that amendment on article 226 was considered and it was held that the Amendment had not the effect visualised by the proviso to article 368. The reasoning in that case on this point applies mutatis mutandis to the 17th Amendment. I find, however, some difficulty in accepting a part of the reasoning in Sankari Prasad 's case and my purpose in writing a separate judgment is to say that I decide the present cases without, the assistance of that reasoning. I shall briefly indicate what that reasoning is and why I have doubts. In Sankari Prasad 's case it was contended that by article 13(2) the Fundamental Rights in Part III of the Constitution were put beyond the reach of article 368 and outside the power of amendment conferred on Parliament by article 368. This argument was considered "attractive ', but was rejected because of certain "important considerations" which it was held pointed "to the opposite conclusion". Two reasons alone appear to have weighed with this Court. The first is that as constitutional law is distinguishable from other municipal laws and as there is no "clear indication" to be found that the Fundamental Rights are "immune from constitutional amendment", only the invasion of the Fundamental Rights by laws other than constitutional laws (1) ; 958 must be the subject of the prohibition in article 13 (2). article 13 may to be quoted at this stage : "13. Laws inconsistent with or in derogation of the fundamental rights. (1) All laws in force in the territory of India immediately before the commencement of this Constitution, in so far as they are inconsistent with the provisions of this Part, shall, to the extent of such inconsistency, be void. (2) The State shall not make any law which takes away or abridges the rights conferred by this Part and any law made in contravention of this clause shall, to the extent of the contravention, be void. (3) In this article, unless the context otherwise requires, (a) "law" includes any Ordinance, order, bye law, rule, regulation, notification, custom or usage having in the territory of India the force of law; (b) It is true that there is no complete definition of the word "law" in the article but it is significant that the definition does not seek to exclude constitutional amendments which it would have been easy to indicate in the definition by adding "but shall not include an amendment of the Constitution". The meaning is also sought to be enlarged not curtailed. The meaning of article 13 thus depends on the sense in which the word "law" in article 13(2) is to be understood. If an amendment can be said to fall within the term "law", the Fundamental Rights become "eternal and inviolate" to borrow the language of the Japanese Constitution. Article 13 is then on par with article 5 of the American Federal Constitution in its immutable prohibition as long as it stands. But the restricted meaning given to the word "law" prevents this to be held. There is a priori reasoning without consideration of the text of the articles in Part M. The Articles use the language of permanency. I am of opinion that there are indications in the Constitution which needed to be considered and I shall mention some of them later as illustrations. The next reason was that article 368 was "perfectly general" and allowed amendment of "the Constitution, without any exception whatsoever" and therefore article 13 (2) did not cover a constitutional ;amendment. It was observed in this connection that if it was con 959 sidered necessary to save Fundamental Rights a clear proviso in article 368 would have conveyed this intention without any doubt. To my mind the easiest and most obvious way was to say that the word "law" in article 13 did not include an amendment of the Constitution. It was finally concluded as follows : "In short, we have here two articles each of which is widely phrased, but conflicts in its operation with the other. Harmonious construction requires that one should be read as controlled and qualified by the other. Having regard to the considerations adverted to above, we are of opinion that in the context of article 13 'law ' must be taken to mean rules or regulations made in exercise of ordinary legislative power and not amendments to the Constitution made in exercise of constituent power, with the result that article 1. 3 (2) does not affect amendments made under article 368. " At the hearing reliance was not placed on article 13 (2) but emphasis was laid on the amendment of article 226. Mr. R. V. section Mani did, however, refer to the provision for the suspension of Fundamental Rights as showing that unless suspended in an emergency, Part III must stand unchanged and he referred to article 32(4). For the disposal of these cases I indicate my view that on, the arguments before us I must hold that as decided in Sankari Prasad 's(1) case article 226 is not sought to be changed by the 17th Amendment. But I make it clear that I must not be understood ' to have subscribed to the view that the word "law" in article 13(2) does not control constitutional amendments. I reserve my opinion on that case for I apprehend that it depends on how wide is the word "law" in that Article. The prohibition in that article may have to be read in the light of declarations in the various articles in Part III to find out the proper meaning. Though I do not express a final opinion I give a few examples. Take for instance article 32. It reads : "32. Remedies for enforcement of rights. (1) The right to move the Supreme Court by appropriate proceedings for the enforcement of the rights conferred by this Part is guaranteed. (2) The Supreme Court shall have power to issue directions or orders or writs in the nature of habeas corpus, mandamus, prohibition, quo warranto and certiorari, whichever may be appropriate, for the (1) ; 960 enforcement of any of the rights conferred by this, Part. (3) Without prejudice to the powers conferred on the Supreme Court by clauses (1) and (2), Parliament may by law empower any other court to exercise within the local limits of its jurisdiction all or any of the powers exercisable by the Supreme Court under clause (2). (4) The right guaranteed by this article shall not be suspended except as otherwise provided for by the Constitution. " It is prima facie at least, reasonable to think that if cls. (1) and (4) of this Article were included in Part XX (Amendment of the Constitution) that would have made the guarantee absolute against any amendment. It is a matter for consideration whether this guarantee is any the less because the article.is in another Part ? The first clause assures a guaranteed remedy. That guarantee is equally against legislative and executive actions. Part III is fun of declarations of what the legislature can do and what it cannot do. The guarantee covers all those actions which are not open to the legislature and the executive. If it be held that the guarantee is inviolable would not the guarantee of the remedy make the rights 'equally protected ? Another provision, namely, the Preamble of the Constitution is equally vital to our body politic. In In re : The Berubart Union and Exchange of Enclaves(1) it is held that although the preamble is the key to the mind of the Constitution makers, it does not form part of the Constitution. Perhaps, in one sense, it does not but, in another sense, it does. Our preamble is more akin in nature to the American Declaration of Independence (July 4, 1776) than to the preamble to the Constitution of the United States. It does not make any grant of power but it gives a direction and purpose to the Constitution which is reflected in Parts III and IV. Is it to be imagined that a two thirds majority of the two Houses at any time is all that is necessary to alter it without even consulting the States ? It is not even included in the, proviso to article 368 and it is difficult to think that as it has not the protection of the proviso it must be within the main part of article 368. Again, article 13 (1) rendered void the laws in force in the territory of India which conflicted with Part III. Can it be said that article 13 may be repealed retrospectively and all those statutes (1) 961 brought back to life ? Because of successive amendments we have seen many faces of article 31 A. It is for consideration whether article 13 was not intended to streamline all existing and future laws to the basic requirements of Part 111. Or is the door left open for reversing the policy of our Constitution from time to time by legislating with a bigger majority at any given time not directly but by constitutional amendments ? It is possible to justify such amendments with the aid of the provisos in article 19 which permit the making of laws restricting the freedoms but not by ignoring article 13 and relying solely on article 368. I am aware that in A. K. Gopalan vs State of Madras(1) Kania C.J. said the inclusion of article 13(1) and (2) in the Constitution appears to be a matter of abun dant caution. Even in their absence, if any of the fundamental rights was infringed by any legislative enactment, the Court has always the power to declare the enactment, to the extent it transgresses the limits invalid. " The observation is not clear in its meaning. There was un doubtedly a great purpose which this article achieves. It is probable that far from belittling the importance of article 13 the learned Chief Justice meant rather to emphasize the importance and the commanding position of Fundamental Rights in that even without article 13 they would have the same effect on other laws. To hold that article 13 is framed merely by way of abundant caution, and serves no additional or intrinsic function of its own, might, by analogy persuade us to say the same of article 32 ( 1 ) because this Court would do its duty under article 32(2) even in the absence of the guarantee. I would require stronger reasons than those given in Sankari Prasad 's (2) case to make me accept the view that Fundamental Rights were not really fundamental but were intended to be within the powers of amendment in common with the other parts of the Constitution and without the concurrence of the States. No doubt article 19 by clauses numbered 2 to 6 allows a curtailment of rights in the public interest. This shows that Part III is not static. It as change and progress but at the same time it preserves the individual rights. There is hardly any measure of reform which cannot be introduced reasonably, the guarantee of individual liberty notwithstanding. Even the agrarian reforms could have been partly carried out without Article 31 A and 31 B but they would have cost (1) ; at p. 100. (2) 962 more to the public exchequer. The rights of society are made paramount and they are placed above those of the individual. This is as it should be. But restricting the Fundamental Rights by resort to cls. 2 to 6 of article 19 is one thing and removing the rights from the Constitution or debilitating them by an amendment is quite another. This is the implication of Sankari Prasad 's case. It is true that such things would never be, but one is concerned to know if such a doing would be possible. It may be said that the words of article 368 are quite explicit. article 368 does not give power to amend "any provision" of the Constitution. At least the article does not say so. Analysed by the accepted canons of interpretation it is found to lay down the manner of the amendment of "this Constitution" but by "this Constitution" it does not mean each individual article wherever found and whatever its language and spirit. The Constitution itself indicates in some places a contrary intention expressly (See Articles 4, 169 and the former article 240) and in some others by implication (See article 1 1). What article 368 does is to lay down the manner of amendment and the necessary conditions for the effectiveness of the amendment. The contrast between the opening part and the proviso does not show that what is outside the proviso is necessarily within the powers of amendment. The proviso merely puts outside the exclusive Power of Parliament to amend those provisions 'on which our federal structure rests. It makes it incumbent that a majority of the States should also agree. The proviso also preserves the structure of the higher judiciary so vital to a written Constitution and to a Democracy such as ours ' But the article no where says that the preamble and every single article of the Constitution can be amended by two thirds majority despite any permanency in the language and despite any historical fact or sentiment. The Constitution gives so many assurances in Part III that it would be difficult to think that they were the play things of a special majority. To hold this would mean prima facie that the most solemn parts of our Constitution stand on the same footing as any other provision and even on a less firm ground than one on which the articles mentioned in the proviso stand. The anamoly that article 226 should be somewhat protected but not article 32 must give us pause. Article 32 does not erect a shield against private conduct but against state conduct including the legislatures (See article 12). Can the legislature take away this shield ? Perhaps by adopting a literal construction of article 368 one can say that. But I am not inclined to play a grammarian 's role. As at present advised I can only say that the power to make amendments ought not 963 ordinarily to be a means of escape from absolute constitutional restrictions. For these reasons though I agree with the order proposed, I would not like to be understood to have expressed a final opinion on the aspect of the case outlined above. Mudholkar J. I have seen the judgments of my Lord the Chief Justice and my brother Hidayatullah J. and I agree that the, Writ Petitions should be dismissed. Of the various contentions raised in Sankari Prasad Singh De& vs Union of India and State of Bihar(1) in which the Constitution (First Amendment) Act, 1951 was challenged before this Court only two would be relevant in the context of the Constitution (Seventeenth Amendment) Act, 1964. They are : (a) whether the Amendment Act in so far as it purports to take away or abridge the rights conferred by Part III of the Constitution falls within the prohibition of article 13(2) and (b) whether articles 31A and 31B seek to make changes in articles 132, 136 or 226 or in any of the Lists in the Seventh Schedule and, therefore, the requirements of the proviso to article 368 had to be satisfied. Both these contentions were negatived by this Court. The first contention has not been raised in the arguments before us and the attack on the Seventeenth Amendment Act was based only on the second contention. Most of the grounds which learned counsel urged before us were the same as those urged in the earlier case. Some additional arguments were also urged before us but, as my Lord the Chief Justice has pointed out, they are unsubstantial. An attempt was made by Mr. Mani, learned counsel for the petitioners, to persuade us to reconsider the decision in the earlier case with regard to the second contention. As, however, no case was made out by him for reconsideration of that decision we intimated to him that we do not. propose to reconsider it. Since my Lord the Chief Justice in his judgment has dealt with the first contention also and expressed the view that the previous decision is right I think it necessary to say, partly for the reasonsstated by my learned brother Hidayatullah J. and partly for some other reasons, that I would reserve my opinion on this question and that I do not regard what this Court has held in that case as the last word. It seems to me that in taking the view that the word "law" occurring in article 13 (2) of the Constitution does not include an amend (1) ; L2Sup./65 18 964 ment to the Constitution this Court has not borne in mind some important considerations which would be relevant for the purpose. The language of article 368 is plain enough to show that the action of Parliament in amending the Constitution is a legislative act like one in exercise of its normal legislative power, The only difference in respect of an amendment of the Constitution is that the Bill amending the Constitution has to be passed by a special majority (here I have in mind only those amendments which do not attract the proviso to article 368). The result of a legislative action of a legislature cannot be other than 'law ' and, therefore, it seems to me that the fact that the legislation deals with the amendment of a provision of the Constitution would not make its result ,any the less a 'law '. Article 3 6 8 does not say that when Parliament makes an amendment to the Constitution it assumes a different capacity, that of a constituent body. As suggested by my learned brother Hidayatullah J. it is open to doubt whether this Article confers any such power upon Parliament. But even assuming that it does, it can only be regarded as an additional legislative power. Then again while the Constitution as originally framed can only be interpreted by a court of law and the validity of no provision therein can be challenged the same cannot be said of an amendment to the Constitution. For an amendment to be treated as a part of the Constitution it must in fact and in law have become a part of the Constitution. Whether it has become a part of the Constitution is thus a question open to judicial review. It is obvious that an amendment must comply with the requirements of the Constitution and should not transgress any of its provisions. Where, therefore, a challenge is made before the Court on the ground that no amendment had in fact been made or on the ground that it was 'not a valid amendment it will be both the duty of the Court as well as be and within its power to examine the question and to pronounce upon it. This is precisely what a Court is competent to do in regard to any other law, the validity of which is impugned 'before it. Neither of these matters appears to have been considered in Sankari Prasad 's case(") and I think that they do merit consideration. My Lord the Chief Justice has observed that though in A. K. Gopalan vs The State of Madras (2) Patanjali Sastri J., (as he then 'was) has said that fundamental rights are those rights which the people have reserved for themselves that learned Judge has emphati (1) ; (2) [1950] S.C.R. St. 965 cally stated in In re The Delhi Laws Act, 1912(1) that Parliament, acting within the limits of its legislative power, has plenary powers of legislation which are as large and which are of the same nature as those of the British Parliament and rejected the suggestion that, Parliament is the. delegate of the people in whom the sovereignty rests. But does it follow that the learned Judge has departed from his earlier view ? No reference was made by him in. Sankari Prasad 's case (2) to his observations though they needed to be explained. In the case(1) he has undoubtedly said that Parliament enjoys plenary powers of legislation. That Parliament has plenary powers of legislation within the circumscribed limits of its legislative power and cannot be regarded as a delegate of the people c while exercising its legislative powers is a well accepted position. The fact, however, remains that unlike the British Parliament our Parliament, like every other organ of the State, can function only within the limits of the powers which the Constitution has conferred upon it. This would also be so when, in the exercise of its legislative power, it makes an amendment to the Constitution or to any of its provisions. It would, therefore, appear that the earlier observation of Patanjali Sastri J., cannot be regarded as inconsistent with what he has said in the case(1). At any rate, this is an aspect of the matter which requires further consideration, particularly because the same learned Judge has not adverted to those observations in Sankari Prasad 's case (2). It is true that by virtue of section 8 of the Indian Independence Act, 1947 it was upon the Constituent Assembly which framed the Constitution and not upon the people of India that sovereignty devolved after the withdrawal of the British power. But both the "Objectives Resolution" adopted by the Constituent Assembly on January 22, 1947 and the Preamble to the Constitution show that this sovereign body framed the Constitution in the name of the people of India and by virtue of the powers derived from them. In the circumstances it would have to be considered whether Patanjali Sastri J., was not right in saying that the fundamental rights are the minimum rights reserved by the people to themselves and they are, therefore, unalterable. It is true that the Constitution does not directly prohibit the amendment of Part III. But it would indeed be strange that rights which are considered to be fundamental and which include one which is guaranteed by the Constitution (vide article 32) should be more easily capable of being abridged or restricted than any of the matters referred to in the proviso to article 368 some of which (1) ; (2) ; 966 are perhaps less vital than fundamental rights. It is possible, as suggested by my learned brother, that article 368 merely lays down the procedure to be followed for amending the Constitution and does not confer a power to amend the Constitution which, I think, has to be ascertained from the provision sought to be amended or other relevant provisions or the preamble. The argument that if fundamental rights are regarded as unchangeable it will hamper legislation which the changing needs of a dynamic society may call for in future is weighty enough and merits consideration. It is possible that there may be an answer. The rights enumerated in article 19(1) can be subjected to reasonable restrictions under cls. (2) to (6) of article 19 and the other fundamental rights or at least many of them can perhaps be adapted to meet the needs of a changing society with the aid of the directive principles. For, article 37, the second Article in Part IV which deals with 'Directive Principles of States Policy ', imposes a duty on the State to apply those directive principles in making laws. These principles are also fundamental in the governance of the country and the provisions of Part III of the Constitution must be interpreted harmoniously with those principles. This is also an aspect of the matter which requires consideration. We may also have to bear in mind the fact that ours is a written Constitution. The Constituent Assembly which was the repository of sovereignty could well have created a sovereign Parliament on the British model. But instead it enacted a written Constitution, created three organs of State, made the union executive responsible to Parliament and the State executives to the State legislatures; erected a federal structure and distributed legislative power between Parliament and the State legislatures; recognised certain rights as fundamental and provided for their enforcement; prescribed forms of oaths of office or affirmations which require those who subscribe to them to owe true allegiance to the Constitution and further require the members of the Union Judiciary and of the higher judiciary in the States, to uphold the Constitution. Above all, it formulated a solemn and dignified preamble which appears to be an epitome of the basic features of the Constitution. Can it not be said that these are indicate of the intention of the Constituent Assembly to give a permanency to the basic features of the Constitution ? It is also a matter for consideration whether making a change in a basic feature of the Constitution can be regarded merely as an amendment or would it be, in effect, rewriting a part of the 967 Constitution; and if the latter, would it be within the purview of article 368 ? The Constitution has enjoined on every member of Parliament before entering upon his office to take an oath or make an affirmation to the effect that he will bear true faith and allegiance to the Constitution. On the other hand under article 368 a procedure is prescribed for amending the Constitution. If upon a literal interpretation of this provision an amendment even of the basic features of the Constitution would be possible it will be a question for consideration as to how to harmonise the duty of allegiance to the Constitution with the power to make an amendment to it. Could the two be harmonised by excluding from the procedure for amendment, alteration of a basic feature of the Constitution ? It would be of interest to mention that the Supreme Court of Pakistan has, in Mr. Fazlul Quader Chowdhry vs Mr. Mohd. Abdul Haque(1) held that franchise and form of government are fundamental features of a Constitution and the power conferred upon the President by the Constitution of Pakistan to remove difficulties does not extend to making an alteration in a fundamental feature of the Constitution. For striking down the action of the President under, what he calls 'sub constitutional power ' Cornelius C.J., relied on the Judges ' oath of office. After quoting the following passage from Cooley 's Constitutional Limitations: "For the constitution of the State is higher in authority than any law, direction, or order made by anybody or any officer assuming to act under it, since such body or officer must exercise a delegated authority, and one that must necessarily be subservient to the instrument by which the delegation is made. In any case of conflict the fundamental law must govern, and the act in conflict with it must be treated as of no legal validity. " the learned Chief Justice observed "To decide upon the question of constitutional validity in relation to an act of a statutory authority, how highso ever, is a duty devolving ordinarily upon the superior Courts by virtue of their office, and in the absence of any bar either express or implied which stands in the way of that duty being performed in respect of the Order here in question it is a responsibility which cannot be avoided." (p. 506) (1) 968 The observations and the passage from Cooley, quoted here for convenience support what I have said earlier regarding the power of the Courts to pronounce upon the validity of amendments to the Constitution. The Constitution indicates three modes of amendments and assuming that the provisions of article 368 confer power on Parliament to amend the Constitution, it will still have to be considered whether as long as the preamble stands unmended, that power can be exercised with respect to any of the basic features of the Constitution. To illustrate my point, as long as the words 'sovereign democratic republic ' are there, could the Constitution be amended so as to depart from the democratic form of Government or its republic character ? If that cannot be done, then, as long as the words "Justice, social economic and political etc. ," are there could any of the rights enumerated in articles 14, to 19, 21, 25, 31 and 32 be taken away ? If they cannot, it will be for consideration whether they can be modified. It has been said, no doubt, that the preamble is not a part of our Constitution. But, I think, that if upon a comparison of the preamble with the broad features of the Constitution it would appear that the preamble is an epitome of those features or, to put it differently if these features are an amplification or concretisation of the concepts set out in the preamble it may have to be considered whether the preamble is not a part of the Constitution. While considering this question it would be of relevance to bear in mind that the preamble is not of the common run such as is to be found in an Act of a legislature. It has the stamp of deep deliberation and is marked by precision. Would this not suggest that the framers of the Constitution attached special significance to it ? In view of these considerations and those mentioned by my learned brother Hidayatullah J. I feel reluctant to express a definite opinion on the question whether the word 'law ' in article 13 (2) of the Constitution excludes an Act of Parliament amending the Constitution and also whether it is competent to Parliament to make any amendment at all to Part III of the Constitution. In so far as the second contention is concerned I generally agree with what my Lord the Chief Justice has said but would only like to add this : Upon the assumption that Parliament can amend Part III of the Constitution and was, therefore, competent to enact therein Articles 31A and 31B as also to amend the definition of 'estate ', the question still remains whether it could validate a State 969 law dealing with land. I take it that only that legislature has power to validate a law which has the power to enact that law. Since the agrarian laws included in the Ninth Schedule and sought to be protected by article 31B could not have been enacted by Parliament, would it be right to say that Parliament could validate them ? If Parliament could amend Part III it could, indeed, remove the impediment in the way of the State. Legislatures by enacting article 3 1A and amending the definition of 'estate. But could it go to the extent it went when it enacted the First Amendment Act and the Ninth Schedule and has now added 44 more agrarian laws to it ? Or was it incompetent to it to go beyond enacting article 31A in 1950 and now beyond amending the definition of estate ? This, however, does not appear to have been considered in Sankari Prasad 's case(1) nor was such an argument advanced before us in this case. I am only mentioning this to make It clear that even in so far as the second contention is concerned I base my decision on the narrow ground that upon the arguments advanced before us no case has been made out for striking down the Seventeenth Amendment. As indicated in the judgment of my Lord the Chief Justice an amendment made by resort to the first part of article 368 could be struck down upon a ground such as taking away the jurisdiction of the High Courts under article 226 or of this Court under article 13 6 without complying with the requirements of the proviso. To this I would like to add that if the effect of an amendment is to curtail substantially, though indirectly, the jurisdiction of High Courts under AA. 226 or of this Court under article 136 and recourse has not been had to the proviso to article 368 the question whether the amendment was a colorable exercise of power by Parliament will be relevant for consideration. Before I part with this case I wish to make it clear that what I have said in this judgment is not an expression of my final opinion but only an expression of certain doubts which have assailed me regarding a question of paramount importance to the citizens of our country : to know whether the basic features of the Constitution under which we live and to which we owe allegiance are to endure for all time or at least for the foreseeable future or whether the yard no more enduring than the implemental and subordinate provisions of the Constitution. Petitions dismissed.

In 1951, several State legislative measures passed for giving effect to a policy of agrarian reform faced a serious challenge in the Courts. In order to assist the State Legislatures to give effect to the policy, articles 31A and 31B were added to the Constitution by the Constitution (First. Amendment) Act, 1951. Article 31B provided that none of the Acts specified in the Ninth Schedule to the Constitution shall be deemed to be void or ever to have become void. In 1.955, by the Constitution (Fourth Amend ment) Act, article 31A was amended. Notwithstanding those amendments some legislative measures adopted by different States for giving effect to the policy were effectively challenged. In order to save the validity of those Acts as well as of other Acts which were likely to be struck down, Parliament enacted the Constitution (Seventeenth Amendment), Act 1964, by which article 31A was again amended and 44 Acts, were added to the Ninth Schedule. The petitioners in the Writ Petitions in Supreme Court, and interveners, were persons affected by one or other of those Acts. They contended that none of the Act by which they were affected could be saved because the Constitution (Seventeenth Amendment) Act was constitutionally invalid. It was urged that : (i) Since the powers prescribed by article 226, which is in Chapter V, Part VI of the Constitution, were likely to be affected by Seventeenth Amendment, the special procedure laid down in the proviso to article 368, namely ' requiring the ratification by not less half the number of States, should be followed; (ii) The decision in Sri Sankari Prasad Singh Deo vs Union of India and State of Bihar, ; , which negatived such a contention when dealing with the First Amendment, should be reconsidered; (iii) The Seventeenth Amendment Act was a legislative measure in respect of land and since Parliament had no right to make a law in respect of land, the Act was invalid and (iv) Since the Act purported to set aside decisions of Court of competent jurisdiction, it was unconstitutional. HELD (by P. B. Gajendragadkar C. J., Wanchoo, and Raghubar Dayal JJ.) : (i) The main part of article 368 and its proviso must on a reasonable construction be harmonised with each other in the sense that the scope and effect of either of them should not be allowed to be unduly reduced or enlarged. Such a construction requires that if amendment of the fundamental rights is to make a substantial inroad on the High Court 's powers under article 226, it would become necessary to consider whether the proviso to article 368 would cover such a case. If the effect is indirect, incidental or otherwise of an insignificant order the proviso may not apply. In dealing With such a question, the test to be adopted is to find the pith and substance of the impugned Act. So tested it is clear that the Constitution (Seventeenth Amendment) Act amends the fundamental rights solely with the object of removing obstacles in the fulfilment of a socioeconomic policy. Its effect 934 on article 226 is incidental and insignificant. The Act therefore falls under the substantive part of article 368 and does not attract the proviso. [940 D E; 941 B E; 944 D F] (ii) On the contentions urged there was no justification for reconsidering Shankari Prasad case. [947 G H] Though the Constitution is an organic document intended to serve as a guide to the solution of changing problems the Court should be reluctant to accede to the suggestion that its earlier decisions should be lightheartedly reviewed and departed from. In such a case the test is : Is it absolutely and essential that the question already decided should be reopened. The answer to the question would depend on the nature of the infirmity alleged in the earlier decision, its import on public good and the validity and compelling character of the considerations urged in support of the contrary view. It is therefore relevant and material to note that if the argument urged by the petitioners were to prevail, it would lead to the inevitable consequence that the amendments of 1951 and 1955 and a large number of decisions dealing with the validity of the Acts in the Ninth Schedule would be exposed to serious jeopardy. [948 E H; 949 A B] (iii) Parliament in enacting the impugned Act was not making any provision of land Legislation but was merely validating land Legislation already passed by the State Legislatures in that behalf. [945 C] (iv) The power conferred by article 368 on Parliament can be exercised both prospectively and retrospectively. It is open to Parliament to validate laws which have been declared invalid by courts. [945 E F] (v) The power conferred by article 368, includes the power to take away the fundamental rights guaranteed by Part III. In the context of the constitution it includes the power of modification, or changing the provisions, or even an amendment which makes the said provisions inapplicable in certain cases. The power to amend is a very wide power and cannot be controlled by the literal dictionary meaning of the word "amend". The expression "amendment of the Constitution" plainly and unambiguously means amendment of all the provisions of the Constitution. The words used in the proviso unambiguously indicate that the substantive part of the Article applies to all the provisions of the Constitution. A B; 951 B] The word "law" in article 13(2) does not include a law passed by Parliament by virtue of its constituent power to amend the Constitution. if the Constitution makers had intended that any future amendment of the provisions in regard to fundamental rights should be subject to article 13(2), they would have taken the precaution of making a clear provision in that behalf. It would not be reasonable to proceed on the basis that the fundamental rights in Part III were intended to be finally and immutably settled and determined once for all and were beyond the reach of any future amendment. The Constitution makers must have anticipated that in dealing With the socioeconomic problems which the legislatures may have to face from time to time, the concepts of public interest and other important considerations may change and expand, and so, it is legitimate to assume that the Constitution makers knew that Parliament should be competent to make amendments in those rights so as to meet the challenge of the problems which may arise. The fundamental rights guaranteed by Part III could not have been intended to be eternal, inviolate and beyond the reach of article 368 for, even if the powers to amend the fundamental 'rights were not included in the Article, Parliament ran by a suitable amendment of the Article take those powers. [951 F H; 954 F H; 955 E G] Article 226 which confers on High Court the power to issue writs falls under the proviso to article 368, while article 32 which is itself a guaranteed fundamental right and enables a citizen to move the Supreme Court to 935 issue writs, fall under the main part of the section. Parliament may consider whether the anamoly which is apparent in the different modes prescribed by article 368 for amending articles 226 and 32 respectively, should not be remedied by including Part III itself in the proviso. [956 E G] Sri Sankari Prasad Singh Deo vs Union of India and State of Bihar, ; , followed. A. K. Gopalan vs State of Madras, ; and In re: The Delhi Laws Act; , , referred to. (vi) It is not reasonable to suggest that, since the impugned Act amends only articles 31A and 31B and adds several Acts to the Ninth Schedule it does not amend the provisions of Part III but makes an independent provision, and so, comes within the scope of the proviso to article 368. If Parliament thought that instead of adopting the cumbersome process of amending each relevant Article in Part III, it would be more appropriate to add articles 31A and 31B, then what Parliament did in 1951 has afforded a valid basis for further amendments in 1955 and in 1964. [946 B E] (vii) The fact that the Acts have been included in the Ninth Schedule with a view to making them valid, does not mean that the Legislatures which passed the Acts have lost their competence to repeal or amend them. Also, if a legislature amends any provision of any such Act, the amended provision would not receive the protection of article 3 1B and its validity will be liable to be examined on the merits. [956 A C] Per Hidayatullah and Mudholkar JJ. Quaere (i) Whether the word "law" in article 13(2) of the Constitution excludes an Act of Parliament amending the Constitution. [959 E F; 968 G] (ii) Whether it is competent to Parliament to make any amendment at all to Part III of the Constitution. [961 F G; 968 G] Per Mudholkar J. An amendment made by resort to the first part of article 368 could be struck down upon a ground such as taking away the jurisdiction of High Courts under article 226 or of the Supreme Court under article 136 or that the effect of the amendment is to curtail substantially, though indirectly, the jurisdiction of the High Courts under article 226 or the Supreme Court under article 136, and recourse had not been had to the proviso to article 368. The question whether the amendment was a colorable exercise of power by Parliament may be relevant for consideration in the latter kind of case. [969 D F] The attack on the Seventeenth Amendment Act was based on grounds most of which were the same as those urged and rejected in the earlier case of Sankari Prasad Singh Deo vs Union of India and State of Bihar, ; , and on some grounds which are unsubstantial. No case has therefore been made out by the petitioners either for the reconsi deration of that decision or for striking down the Seventeenth Amendment. [963 FG] The following matters however were not considered in Sankari Prasad 's case and merit consideration : (i) Where Legislation deals with the amendment of a provision of the Constitution, does it cease to be law within the meaning of article 13(2) merely because it has to be passed by a special majority ? [964 B C] (ii) Where a challenge is made before the Court on the ground that no amendment to the Constitution had in fact been made or on the ground that it was not a valid amendment, would it not be the duty of the Court and within its power to examine the question and to pronounce upon it since this is precisely what a Court is competent to do in regard to any other law? (iii) Is the statement in A. K. Gopalan vs State of Madras, ; that the fundamental rights are the minimum rights reserved by the people to themselves, and therefore unalterable, inconsistent with the statement in In re ; , that Parliament has plenary powers of legislation ? [965 D E] (iv) Whether making a change in the basic features of the Constitution can be regarded merely as an amendment or would it be, in effect, rewriting a part of the Constitution, and if it is the latter, would it be within the purview of article 368 ? [966 H, 967 A] (v) Upon the assumption that Parliament can amend Part III of the Constitution and was therefore competent to enact articles 31A and 31B, as also to amend the definition of "estate", can Parliament validate a State law dealing with land ? [968 H, 969 A] (vi) Could Parliament go to the extent it went when it enacted the First Amendment and the Ninth Schedule and now when it added 44 more agrarian laws to it ? Or, was Parliament incompetent to go, beyond enacting article 31A in 1950, and now, beyond amending the definition of "Estate" ? [969 B C]

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ivil Appeal No. 3544 of 1989. From the Judgment and Order No. 131/89 D dated 9.5. 1989 of the Central Excises & Gold (Control) Appellate Tribunal, New Delhi in Appeal No. E/1176/88 D. Rajiv Dutta, Nimish Kothare and K.K. Patel for the Appel lant. The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J. This is an appeal under section 35L of the Central Excise & Salt Act, 1944 (hereinafter referred to as 'the Act '). The appellant is a manufacturer of various types of food products known as Sapaghetti, Macaroni, Vermicelli, etc., falling under Heading No. 1902.10 of the Central Excise Tariff Act. The appellant filed classification list effec tive from 1st March, 1987 claiming that their pre budget stocks of non excisable goods, namely, various types of food products declared in the classification list as aforesaid were entitled to duty free clearance being pre budget stocks. The Assistant Collector of Central Excise, however, held that the question of clearing pre budget stocks duty free did not arise because the products in question were excisable though exempted from the duty. There was an appeal from the said order of the Assistant Collector before the Collector of Central Excise (Appeals), Bombay. He dismissed the appeal. The appellant went up in appeal before the Tribunal. It was contended before the Tribunal on behalf of the appellant that the goods in question were not leviable to duty under the aforesaid head until 28th February, 1987 and the said goods had been made dutiable only by the 313 Finance Bill, 1987 88 with effect from 1st March, 1987. It was submitted further that on 27th February, 1987, the appellant had in their factory a stock of the said product which were fully manufactured, packed and ready for sale and the inventory of the said stock was prepared by the Supdt. of Central Excise on 1st March, 1987. Reliance was placed on several decisions of the different High Courts, namely, decision of the Madhya Pradesh High Court in Kirloskar Brothers Ltd. vs Union of India, ; Union of India vs Kirloskar Brothers Ltd., , decision of the Bombay High Court in Synthetic Chemicals Pvt. Ltd. vs S.C. Coutinho, , decision of the Bombay High Court in New Chemicals Ltd. vs Union of India, decision of the Madras High Court in Sundaram Textiles Ltd. vs Asstt. Collector of Central Excise, , decision of the Allahabad High Court in Union of India vs Delhi Cloth & General Mills, On the other hand, the revenue contended that the goods forming the pre budget stocks were very much excisable goods and that for the purpose of collecting duty, date of manufacture was not material under the scheme of the Act even though the taxable event is the manufacture. It was, therefore, contended that at the time of manufacture of the goods in question, the goods were excisable goods and in view of rule 9A of the Central Excise Rules, 1944, though the taxable event is the manufacture and production, the payment of duty is related to and postponed to the date of removal of articles from the manufactury. The Tribunal accepted the said contention. We are of the opinion that the Tribunal was right. It is well settled by the scheme of the Act as clarified by sever al decisions that even though the taxable event is the manufacture or production of an excisable article, the duty can be levied and collected at a later stage for administra tive convenience. The Scheme of the said Act read with the relevant rules framed under the Act particularly rule 9A of the said rules, reveals that the taxable event is the fact of manufacture or production of an excisable article, the payment of duty is related to the date of removal of such article from the factory. In that view of the matter, the Tribunal dismissed the appeal and rejected the assessee 's contention. Appearing before us in support of the appeal, Mr. Rajiv Dutta, learned counsel for the appellant contended that in several decisions it has been held, and referred us to the said decisions referred to hereinbefore, that the relevant date would be the date of manufacture and in this case the manufacture was complete before the introduction of the budget. It was submitted that until 28th February, 1987, when, 314 according to Shri Dutta, the goods had been manufactured, the goods in question were unconditionally exempt from the duty. Under the Finance Bill, 1987 88, the said products were made dutiable at the rate of 15% ad valorem on or from 1st March, 1987. But the appellant had in their factory, a stock of the said products which were duly manufactured, according to Shri Dutta, packed and ready for sale prior to 28th February, 1987. In those circumstances, the goods in question, according to Shri Dutta, would not be subjected to duty at 15% ad valorem. Having considered the facts and the circumstances of the case, we are unable to accept this submission. Excise is a duty on manufacture or production. But the realisation of the duty may be postponed for admin istrative convenience to the date of removal of goods from the factory. Rule 9A of the said rules merely does that. That is the scheme of the Act. It does not, in our opinion, make removal be the taxable event. The taxable event is the manufacture. But the liability to pay the duty is postponed till the time of removal under rule 9A of the said Rules. In this connection, reference may be made to the decision of the Karnataka High Court in Karnataka Cement Pipe Factory vs Supdt. of Central Excise, 13, where it was decided that the words 'as being subject to a duty of ex cise ' appearing in section 2(d) of the Act are only descriptive of the goods and not to the actual levy. 'Excisable goods", it was held, do not become non excisable goods merely by the reason of the exemption given under a notification. This view was also taken by the Madras High Court in Tamil Nadu (Madras State) Handlook Weavers Cooperative Society Ltd. vs Assistant Collector of Central Excise, [1978] ELT J 57. On the basis of rule 9A of the said rules, the central excise authorities were within the competence to apply the rate prevailing on the date of removal. We are of the opinion that even though the taxable event is the manufacture or the production of an excisable article, the duty can be levied and collected at a later date for administrative conven ience. Having regard to the facts and the circumstances of this case and having regard to the scheme of the excise law, we are of the opinion that the Tribunal was right and there are no grounds to assail the order of the Tribunal. In the aforesaid view of the matter, the appeal must fail and, accordingly, is dismissed. there will, however, be no order as to costs. R.S.S. Appeal dis missed.

The appellant is a manufacturer of various types of food products known as Sapaghetti, Macaroni, Vermicelli, etc., failing under Heading No. 1902.10 of the Central Excise Tariff Act. The said goods had been made dutiable only by the Finance Bill 1987 88 with effect from Ist March, 1987. The appellant claimed that their pre budget stocks of fully manufactured non excisable goods were entitled to duty free clearance. The Assistant Collector of Central Excise, the Collector of Central Excise (Appeals) and the Tribunal rejected the claim of the appellant. Before this Court it was contended on behalf of the appellant that the relevant date would be the date of manu facture and in this case the manufacture was complete before the introduction of the budget. Dismissing the appeal, this Court, HELD: (1) Excise is a duty on manufacture or production. But the realisation of the duty may be postponed for admin istrative convenience to the date of removal of goods from the factory. Rule 9A of the Central Excise Rules merely does that. [314C] (2) The scheme of the Act read with the relevant rules framed under the Act, particularly rule 9A, reveals that the taxable even is the fact of manufacture or production of an excisable article, the 312 payment of duty is related to the date of removal of such article from the factory. [313F] (3) On the basis of rule 9A of the Central Excise Rules, the Central Excise authorities were within the competence to apply the rate prevailing on the date of removal. [314E] Karnataka Cement Pipe Factory vs Supdt. of Central Excise, and Tamil Nadu (Madras State) Handloom Weavers Co operative Society Ltd. vs Assistant Collector of Central Excise, [1978] ELT J. 57, referred to.

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ivil Appeal Nos. 1168 69 (NT) of 1973. Appeal by Special leave from the Judgment and Order dated 103 the 3rd January, 1973 of the Allahabad High Court in I. T. Ref. No. 450 of 1969. S.C. Manchanda and M. J.P. Malhotra for the Appellant. S.T. Desai, B.B. Ahuja and Miss A. Subhashini for the Respondent. The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J. These appeals by certificate granted by the High Court of Allahabad under Section 66A(2) of the Indian Income Tax Act, 1922, arise out of judgment delivered and order passed on 3rd January, 1973 by the High Court of Allahabad in Income tax Reference No. 450 of 1965. The following question of law had been referred to the High Court for consideration under Section 66(1) of the Income Tax Act, 1922 by the Appellate Tribunal, Allahabad Bench, Allahabad: "Whether, on the facts and in the circumstances of the case, valid assessments could be made on 31st May, 1962, for the assessment years 1948 49 and 1949 50 on the basis of voluntary returns of income filed under Section 22(1) of the Indian Income Tax Act, 1922 on 18.11.1950? The matter came up before a Division Bench of the High Court and as there was a previous bench decision of that Court in the case of Sool Chand Ram Sewak vs Commissioner of Income tax, U.P. which supported the revenue 's case and as the division bench before whom this case came was unable to accept that view, the division bench referred the case to a larger Bench. This reference thereafter came before a Full Bench consisting of Gulati, H. N. Seth & C.S.P. Singh, JJ. Gulati and C. section P. Singh, JJ. answered the question in the affirmative in favour of the revenue and against the assessee. Seth J. however, was in favour of assessee. In view of the majority the question was answered in favour of the revenue and in affirmative. 104 Before we deal with the question in controversy, it will be necessary to note some of the relevant facts. There were originally four appeals for the assessment years 1946 47, 1947 48, 1948 49 and 1949 50. As the appeals for the assessment years 1946 47 and 1947 48 were withdrawn by the revenue, we are now concerned with appeals for the assessment years 1948 49 and 1949 50. The present assessee is a branch of a bigger Hindu undivided family known as Nathu Ram Jawahar Lal, Jhansi. The bigger Hindu undivided family of M/s Nathu Ram Jawahar Lal was partitioned on 19th May, 1945, and the present assessee along with another smaller H.U.F. came into existence and the said bigger H.U.F. had made a claim in respect of the partition under Section 25A of the Indian Income Tax Act, 1922. While this claim was pending the present assessee filed voluntary returns under Section 22(1) of the Act for the assessment years 1946 47 to 1949 50 on 10th November, 1950. The said claim of partition by the bigger H.U.F. was rejected by the Income tax Officer and also by the Appellate Assistant Commissioner. The said H.U.F. thereafter, filed appeals to the Appellate Tribunal in respect of the order under claim of partition under Section 25A of 1922 Act which by its order dated 31st August, 1954 accepted the claim under Section 25A of 1922 Act, and the Tribunal passed orders on that basis in the appeals relating to the assessment orders in respect of the bigger H.U.F. on 28th October, 1954. The Income tax Officer, thereafter, initiated proceedings under Section 34 of the Income tax Act of 1922 for assessing the smaller Hindu undivided family, the present assessee in view of the fact that the claim for disruption of the bigger H. U. F. had been accepted by the Tribunal. The present assessee filed fresh returns of income on 12.4.1955 in response to notices under Section 34 of 1922 Act. The returns originally filed were under Section 22(1) and were filed on 18th November, 1950. The assessee 's objection regarding the validity of the assessments being made under Section 34 on merits as well as on the point that time for making the assessment under Section 34 had already expired, were rejected by the Income tax Officer. He, therefore, completed the assessments on 8.9.1955 under Section 23(3) read with Section 34 of the Income tax Act, 1922. The assessee could not get any decision in his favour either from the Appellate Assistant Commissioner or from the Tribunal and being aggrieved by these orders, filed a Writ Petition to the High Court of Allahabad challenging the validity of the Appellate 105 orders. The assessee was successful in the Writ and, therefore, the appellate orders were quashed by the High Court. The revenue having failed in its attempt to complete the assessee 's assessments under Section 34, made another attempt to assess the assessee on the basis of the voluntary returns originally filed by the assessee on 18.11.1950 by relying upon the order of the Tribunal dated 28.10.1954 and invoking the provisions of 2nd proviso to Section 34(3). The said assessments which were completed on 31st May, 1962 were the subject matters of appeals before the Tribunal. The point before the Tribunal was whether valid assessments could be made for the assessment years under consideration on 31st May, 1962 on the basis of the returns filed under Section 22(1) of the Act of 1922 on 18th November, 1950. The Appellate Assistant Commissioner by his order held that no valid assessments could be made on 31st May, 1962. It appears that on 28th October, 1950, relating to the assessment years 1946 47 to 1949 50 in case of bigger Hindu undivided family, M/s Nathu Ram Jawaharlal, Jhansi, order was passed by the Tribunal in the appeal relating to the assessments pending before it. It should be noted that originally on the basis that the bigger H.U.F. had not been disrupted assessments for these years had been made and appeals relating to those assessments were pending before the Tribunal. The Tribunal disposed of these appeals by the order dated 28th October, 1954 and the Tribunal in the said order had observed, inter alia, as follows; "The assessments for those years were (have) necessarily to be set aside with the direction that fresh assessments should be made, one for the period 19.5.1945 upto which the Hindu undivided family was in existence and the others on the component Hindu undivided families, namely M/s Jawaharlal Mani Ram and Bhagwan Das Sita Ram. " The Tribunal in the instant appeal out of which the reference was made to the High Court and out of which these appeals arise, after discussing the relevant facts and the provisions of law confirmed the order of the Appellate Assistant Commissioner and dismissed the appeals. As mentioned hereinbefore after the Tribunal had directed the assessments should be made on the component units of the bigger Hindu undivided family, after partition was accepted, namely, the assessee and Jawaharlal Mani Ram, the Income tax Officer instead 106 of proceeding on the basis of the voluntary returns already filed by the assessee proceeded to take action under Section 34(1) (b) of the Act of 1922 and completed the assessments for all the four years on September 8,1955. The assessee appealed against these assessments to the Appellate Assistant Commissioner of Income tax, but before the appeals were taken up for hearing, the assessee moved the High Court of Allahabad under Article 226 of the Constitution. On March 30, 1960, the High Court quashed the assessment orders on the ground that as voluntary returns filed by the assessee were pending, no proceeding could be taken under Section 34 of the Act, 1922. Thereafter the Income tax Officer initiated proceedings on the basis of the voluntary returns. The assessee again filed a writ petition praying for quashing the proceedings on the ground that revenue could not proceed against it on the basis of the voluntary returns. This petition was rejected by the High Court and thereafter the Income tax Officer proceeded to complete the assessments under Section 23(3) and passed assessment orders on 31st May, 1962, in respect of the four years. The first question, is, whether the assessment could be made under Section 23(3) on the basis of voluntary returns filed or action should have been taken under Section 34 with the help of the second proviso to sub section (3) of Section 34. It is well settled that when a return of income is filed by the assessee voluntarily under Section 22(1) of the Act, 1922, assessment proceedings commence against him and Section 34 does not come into play at all so long as the assessment proceedings remain pending. But it was contended that a return exhausted itself after the expiry of four years from the end of the assessment year to which it related. After the expiry of that period, no assessment was possible on the basis of the voluntary return. In such a case assessment was possible under Section 34, if the case was covered by the second proviso to Section 34(3). The High Court was of the opinion that sub section (3) of Section 34 provides a period of limitation of four years for assessment under Section 23 of the Act, 1922. If the assessment proceedings commence by filing of voluntary return, as indeed these do, on the expiry of the period of four years from the end of the year in which the income, profits or gains were first assessable, such proceedings are suspended or interrupted. But neither the proceedings nor the returns become invalid. The High Court referred to the provisions of Section 34(3) and was of the view that since the order was passed by the Tribunal giving direction, the bar or limitation was lifted and 107 the assessments could be made without any bar or limitation. Reference was made to the decision of this Court in the case of Commissioner of Income tax Bombay City II vs Ranchhoddass Karsondas, and in the case of Estate of the late A.M.K.M. Karuppan Chettiar vs Commissioner of Income tax, Madras and Commissioner of Income tax Madras vs M.K.K.R. Muthukaruppan Chettiar. The High Court, on the basis of these decisions, was of the view that assessments could be made on the basis of voluntary returns already filed by the assessee. We are of the opinion that the High Court was right. The next question is whether it was open to the Tribunal to give a finding or direction in respect of the present assessee. Reliance was placed on the decision of this Court in Income tax Officer, A Ward, Sitapur vs Murlidhar Bhagwan Das. There, this court after referring to the expression "any person" in the 2nd proviso of sub section (3) of Section 34 of 1922 Act observed at page 346 of the report as follows. "The expression "any person" in its widest connotation may take in any person, whether connected or not with the assessee, whose income for any year has escaped assessment; but this construction cannot be accepted, for the said expression is necessarily circumscribed by the scope of the subject matter of the appeal or revision, as the case may be. That is to say, that person must be one who would be liable to be assessed for the whole or a part of the income that went into the assessment of the year under appeal or revision. If so construed, we must turn to section 31 to ascertain who is that person other than the appealing assessee who can be liable to be assessed for the income of the said assessment year. A combined reading of section 30(1) and Section 31(3) of the Act indicates the cases where persons other than the appealing assessees might be affected by orders passed by the Appellate Commissioner. Modification or setting aside of assessment made on a firm, joint Hindu family, association 108 of persons, for a particular year may affect the assessment for the said year on a partner or partners of the firm, member or members of the Hindu undivided family or the individual, as the case may be. In such cases though the latter are not co nomine parties to the appeal, their assessments depend upon the assessments on the former. The said instances are only illustrative. It is not necessary to pursue the matter further. We would, therefore, hold that the expression "any person" in the setting in which it appears must be confined to a person intimately connected in the aforesaid sense with the assessments of the year under appeal. " The High Court was of the view that "any person" would include the person who would be liable to be assessed for the whole or a part of the income that went into the assessment of the year under appeal or revision. In that view of the matter, the majority judgment of the High Court on this aspect was in favour of the revenue. Then on the question whether the direction for the assessment could be given in respect of any other year, other than the year in which the partition took place, it was contended that direction could be given only for the assessment year 1946 47. Majority judgment of the High Court found no force in that contention. As this question arose directly for the assessment years 1948 49 and 1949 50 in respect of which the appeals came before the Tribunal in which the directions had been given, the High Court was of the view that it was necessary for the Tribunal to give a finding with regard to the partition of the family and the ownership of the income in both the appeals. The Tribunal was thus competent to give the direction. In that view of the matter, the two learned judges of the Allahabad High Court were of the opinion that assessments were valid and answered the question in favour of the revenue. Referring to the said decision which has been mentioned in the majority judgment, Seth J. however was of the view that the direction given by the Tribunal in this case did not authorise the assessment on the smaller Hindu undivided family. Seth J. was further of the view that such direction could only have been given in the year in which disruption of the bigger H.U.F. took place. In that view of the matter, Seth J. expressed dissent as mentioned hereinbefore. We are of the opinion that the majority of the learned judges of the High Court were right. Second proviso to Section 34(3) of the Indian Income tax Act, 1922 authorised directions to be given by the Tribunal in respect of the assessee or any person beyond four years as provided in Section 34(3) of 1922 Act. 109 As noted before the expression "any person" in respect of whom such direction could be given was explained by this Court in Income tax Officer, A Ward Sitapur vs Murlidhar Bhagwandas (supra). As mentioned in the passage quoted above from the said decision, if so construed then the Court must turn to Section 31 of 1922 Act to a certain who is that person other than the appealing assessees might be affected by the orders passed by the appellate authority. Modification or setting aside of assessment made on a firm, joint Hindu family, association of persons, for a particular year may affect the assessment for the said year on a partner or partners of the firm, member or members of such Hindu undivided family or the individual, as the case might be. It was therefore argued that it was only those types of assessees mentioned by this Court in the passage noted above were the 'persons ' who could be "any person" other than the appealing assessee who can be said to be liable to be assessed and in respect of whom direction might be given, otherwise such directions or provision for such directions if the provision is so read would be ultra vires article 14 of the Constitution. We must make it clear that this Court had itself made it clear categorically in the passage quoted above that the instances given in the above passage were only illustrative passage meaning thereby that the instances were not exhaustive. This Court made it clear that the expression "any person" in its widest amplitude might take in any person connected or not with the assessee, whose income for any year had escaped assessment; but this construction could not be accepted, for the said expression was necessarily circumscribed by the scope of the subject matter of the appeal or revision, as the case might be. So therefore the person must be one who would be liable to be assessed for the whole or any part of the income that went into assessment of the year under appeal or revision (Emphasis supplied). Therefore, this Court observed that "any person" in sub section (3) of Section 34 must be confined to a person intimately connected in the aforesaid sense with the assessments of the years under appeal. Reference may be made to the decision of this Court in the case of Rajinder Nath vs Commissioner of Income tax, Delhi, where the I.T.O. treated two buildings as belonging to a firm comprised of a father and his two major sons as partners and in the assessments on the firm for the assessment years 1955 56 and 1956 57 and he estimated the cost of construction of the buildings at a higher figure than that 110 disclosed and brought to tax the excess as income in the hands of the firm. On appeal, the A.A.C. found that the money advanced for the construction of the buildings had been debited in equal shares to the father and two major sons and a minor son and held that the firm was not the owner of the properties and delected the addition. The A.A.C. also observed that the I.T.O. was free to take action to assess the excess in the hands of the co owners. The I.T.O. thereupon issued notices under Section 147(a) of the I.T. Act, 1961 and reopened the assessments of the individual assessees (the co owners) and included therein the proportionate shares of the additions on account of the estimated excess of the cost of construction. On appeal, the A.A.C. held that Section 147(a) could not apply but upheld the assessments under Section 153(3) (ii) of 1961 Act. On further appeal, the Tribunal held that Section 153(3) (ii) could not apply because there was neither a finding nor a direction in the earlier order of the A.A.C. and further that A.A.C. could not convert the assessments made under Section 147(a) into those under Section 153(3) (ii). On a reference of the questions, (i) whether the A.A.C. was justified in holding that the provisions of Section 147(a) were not applicable, and (ii) whether the provisions of Section 153 (3) (ii) were not applicable, the High Court held that the provisions of Section 153(3) were applicable observing that the A.A.C 's finding that the properties did not belong to the firm and, therefore, the excess amount of the cost of construction could not be regarded as the income of the firm was a finding which was necessary for the disposal of the firm 's appeal and as a corollary it was held that the buildings belonged to the co owners and this necessitated the "direction" to the I.T.O. that he was free to assess the excess in the hands of the co owners. Dealing with this contention, Pathak J. who delivered the judgment of this Court observed at page 20 of the report: "The expression "another person" in the Expln. would include persons intimately connected with the person in whose case the order is made in the sense explained by this Court in Murlidhar Bhagwan Das It is one thing for the partners of a firm to be required to explain the source of a receipt by the firm, it is quite another for them in their individual status to be asked to explain the source of amounts received by them as separate individuals. On such opportunity being provided it would have been open to the assessees to show that the excess alleged over the disclosed cost of construction did not constitute any taxable income. The finding contemplated in Expln. 3, it will be 111 noted, is a finding that the amount represents the income of another person. " In the instant case before us, applying the test observed in that case this was a case where the facts showed that income can belong either to the bigger Hindu undivided family or to the smaller Hindu undivided family, the present assessee along with another smaller H.U.F. and to no one else. Therefore a finding that it belongs or it does not belong to the bigger Hindu undivided family which had disrupted on partition would determine the issue whether it could be taxed in the hands of the present assessee. Judged in the light of the test laid down in Murlidhar Bhagwan Das (supra) and as pointed out in Rajinder Nath 's case, it appears to us that the present assessee can be said to be a person who would be liable to be assessed for the whole or part of the income that went to the assessment of the bigger Hindu undivided family in years under appeal and is a person intimately connected with the assessments of the bigger Hindu undivided family. The income in this case cannot be the income of both bigger Hindu undivided family and the present assessee, it must be either of these two. We are, therefore, of the opinion that directions given in the appeals filed by the bigger Hindu undivided family would be applicable to the present assessee. On behalf of the assessee it was contended that only the categories of persons referred to in Sections 30(1) and 30(3) of 1922 Act would be governed by the said expression "any person" Sub section (3) of Section 31, inter alia, authorises the Appellate Assistant Commissioner in case of an order cancelling registration of a firm under sub section (42) of Section 23 or refusing to register a firm under sub section (4) of Section 23 or Section 26A or to make fresh assessment or to confirm such order, or cancel it and direct the Income tax officer to register the firm or to make a fresh assessment, as the case may be, or in the case of an order under sub section (2) of Section 25 or sub section (1) of Section 23A or sub section (2) of Section 26 or Section 48, 49 or 49F, confirm cancel or vary such order. It also authorises in case of an order under sub section (1) of Section 25A to confirm such order or cancel it and either direct the Income tax officer to make further inquiry and pass a fresh order or to make an assessment in the manner laid down in sub section (2) of section 25A. The other cases were cases of orders under Section 28 or sub section (6) of Section 44E or sub section (5) of Section 44F or sub section (1) of Section 46, 112 or in case of an appeal against a computation of loss under Section 24, confirm or vary such computation, or in case of an appeal under sub section (1A) of Section 30 decide that the person is or is not liable to make the deduction and in the latter case direct the refund of the sum paid under sub section (6) of Section 18. While on these provisions it is material to refer to sub section (4) of Section 33 which authorises the Tribunal after giving both parties an opportunity of being heard to pass such orders thereon as it thinks fit and to communicate any such orders to the assessee and to the Commissioner. The contention on behalf of the assessee is that though the Appellate Tribunal has wide powers as indicated in sub section (4) of Section 33 but the amplitude of that power is curtailed by other provisions. It was contended that read with sub section (3) of Section 34, as assessment order could not be passed after the expiry of four years from the end of the year in which the income, profits or gains were first assessable and is view of the fact that here in the instant case voluntary returns for the years under question had been filed by the assessee within time, after four years no direction could be given by the Tribunal. It was, secondly, contended that the present smaller Hindu undivided family was not intimately connected with the assessment of the bigger Hindu undivided family as contemplated by the observations of this Court in Income tax Officer vs Murlidhar Bhagwan Das (supra), this direction was of no use and the assessment made on the basis of this direction cannot be availed of. We are unable to accept this contention. Firstly it must be observed that the Tribunal passed the orders and gave its direction in respect of the years concerned. These years were the subject matters of appeal before the Tribunal in the case of bigger H.U.F. It was contended that these direction were given subsequent to the order under Section 25A and could not affect position thereafter. We are a unable to accept this position also. As mentioned hereinbefore, the order under Section 25A was passed in August, 1954. The bigger Hindu undivided family had applied for order under Section 25A regarding the disruption of the Hindu undivided family, the Income tax Officer rejected that prayer. The assessee appealed therefrom. In August, 1954, this order was set aside by the Tribunal and it was held that the bigger Hindu undivided family had been disrupted. In as much as the income liable to be assessed on the smaller Hindu undivided family would arise only on the disruption of the larger Hindu 113 undivided family, this direction was proper. The order under Section 25A declares the status of the family and the smaller Hindu undivided family became liable to be assessed as a result of disruption of the bigger Hindu undivided family. The assessment orders however were passed based on the previous order under section 25A but these orders were passed for all these four years and the assessments under appeal for all these four years were pending before the Tribunal in disposing of which the Tribunal gave the direction to make the assessments on the smaller Hindu undivided family. Therefore no question arises as to whether for subsequent periods directions could have been given. This is a direction clearly within the contemplation of sub section (3) of Section 34. Secondly, we are of the opinion that the smaller Hindu undivided family is one of the persons which was clearly contemplated by sub section (3) of Section 34 in the facts and circumstances of this case. The assessability of income and the quantum of the same of the present assessee was linked up with the assessability of the bigger Hindu undivided family if the bigger Hindu undivided family was liable to be assessed if there was no disruption then there was no income of the smaller Hindu undivided family. The income in the hands of smaller Hindu undivided family could then not have been liable to be assessed. I on the other hand it was the other way that there was a valid partition, the bigger Hindu undivided family no longer existed and the smaller Hindu undivided family would be liable to be assessed. From that point of view it clearly comes within the ratio of the observation of this Court in Income tax officer vs Murlidhar Bhagwan Das (supra). Further more looked at from another point of view, though the Karta represented the bigger Hindu undivided family, all the members of the bigger Hindu undivided family, including those who were members of the smaller Hindu undivided family were parties though not oe nomine for all practical purposes, because they were liable as members of the family for the amount assessed. In that view of the matter, we are of the opinion that this direction was quite valid and would be applicable. The observations of this Court in the case of Commissioner of Income tax Central, Calcutta vs National Taj Traders are in consonance with the conclusions reached by us. Tulzapurkar, J. explained in the said decision the situations in which directions could be given under Section 33B of the Income tax Act, 1922 where 114 there was no express provision like sub section (3) of Section 34. In our opinion in the facts of this case, the present assessee can be said to be "any person" as indicated in Murlidhar Bhagwan Das (supra) in Section 34(3) of 1922 Act. The view taken by us is also in consonance with the observation of this Courts in the case of Commissioner of Income tax, Andhra Pradesh vs Vadde Pullaiah & Co.1 Reference was also made to a Bench decision of the Bombay High Court in the case of Mathuradas B. Mohta vs Commissioner of Income tax, Poona, and a decision of this Court in the case of Commissioner of Income tax, U.P. vs Mohd. Shakoor Mohd. Bashir. But in view of the facts and circumstances of the instant case before us, it is not necessary to deal with the said decisions. On behalf of the assessee, reliance was placed on a decision of the Division Bench of Gujarat High Court in the case of Commissioner of Income tax, Gujarat vs Shantilal Punjabhai. There an individual Shantilal was a member of the Hindu undivided family and also a partner of a firm. The Income tax officer found that the assessee was the nominee of the Hindu undivided family in the said firm, and, therefore, included the share of profits the assessee in the said firm, in the total income of the Hindu undivided family. The decision proceeded on the basis that the Income tax Act did not contemplate two different assessees in the same assessment year for the same taxable income. In that case the assessee was also an assessee in his own right. In that case the Court had observed at page 80 of the report that there were two separate and distinct assessment proceedings, one in respect of the assessee in his status as an individual and the other in respect of the Hindu undivided family. The assessment proceedings in respect of the assessee, Shantilal, were in respect of his income arising from his self acquired and separate property. The assessment proceedings against the Hindu undivided family, were proceedings against the entire entity, and though the assessee, Shantilal, was a member of the family, the assessment was on the income derived by the Hindu undivided family from the property or business of the said Hindu undivided family. In that 115 assessment, the income accruing and arising from the separate property of the assessee, Shantilal could not be assessed, as the business carried on by the asseseee, Shantilal, was not the business of the Hindu undivided family. The Income tax Officer held that Shantilal was the nominee of the Hindu undivided family, meaning thereby that the business belonged to the Hindu undivided family and it was that conclusion of the Income tax officer which was reversed by the Tribunal. The Tribunal holding that the revenue had failed to prove that the assessee, Shantilal was the nominee of the family, in other words, that the income arising from the firm 's business was the income of the Hindu undivided family. The direction given by the Tribunal was on the question which was between the revenue and the Hindu undivided family and the only finding that could be given by the Tribunal was between the two parties, namely, the Hindu undivided family and the revenue and not between the revenue and the assessee. Shantilal, who was not an assessee nor a party to those assessment proceedings. Therefore, if any action had to be taken in consequence of the finding or the direction given by the Tribunal, that action could be taken not against the assessee, Shantilal, but against the Hindu undivided family. As would be apparent, the facts of that case were entirely different. Here in the instant case the proceeding against the assessee in the present case could be taken only if there was disruption of the Hindu undivided family. Therefore in the assessment of Hindu undivided family. viz. if the bigger Hindu undivided family was considered to be an existing entity then in such a case the assessment against the present assessee could not be sustained. If on the other hand the assessment on the bigger H.U.F. could not be sustained because there was disruption of the family as contended for by the bigger Hinud undivided family then only the present assessee could be assessed. In that view of the matter, we are of opinion that the present assessee can be said to be. a person other then the appealing assessee would be affected by the order concerned and would come within the meaning of "any person" as explained by this Court in the case of Income tax officer vs Murlidar Bhagwan Das (supra). Decision of this Court in the case of Commissioner of Income tax, Punjab, Jammu & Kashmir and Himachal Pradesh vs section Raghubir Singh Trust was relied on behalf of the assessee. There the res 116 pondent trust created by R. filed its return of income for the assessment year 1954 55. Holding that the trust was invalid, the Income tax officer assessed the income of the trust in the hands of R.R. carried the matter in appeal and other proceedings and ultimately the High Court held that the trust was valid and the income was the income of the trust and not of R. The I.T.O. issued a notice on 19th September, 1961, under Section 34(1)(b) of the Indian I.T. Act, 1922, to reopen the assessment of the trust. The trust claimed that the notice was barred by limitation. The Tribunal accepted the claim and held that trust was a stranger to the proceedings for the assessment of R and the second proviso to Section 34(3) did not save the reassessment proceedings initiated against the trust from the bar of limitation and the High Court, on a reference, agreed with the Tribunal. On appeal to this Court it was held, affirming the decision of the High Court, that even though the finding of the High Court that the income belonged to the trust and not to R was a finding necessary for disposing of the reference in favour of R and it was a "finding", but the trust was a stranger to the assessment proceedings of R. and not "any person" within the meaning of the second proviso to Section 34(3) and, therefore, the second proviso to Section 34(3) was not attracted and the reassessment proceedings against the trust were barred by time. That decision must be understood in the facts of that case. The settler and the trust cannot be said so intimately connected as to come within the ratio of Murlidhar Bhagwan Das 's case. The Court found that assessee trust could not be said to be intimately connected with the assessment of Raghubir Singh. As a result of the trust deed failing, there may be numerous situations viz., there might be resulting trust or it might be that the trust property would go to other beneficiaries. It is not necessary for us to explore or explain those possibilities. But in the facts of this case, we are of the opinion that whether the income of the smaller Hindu undivided family, namely the present assessee is liable to be taxed is so intimately or inextricably linked up with the question of assessability of bigger Hindu undivided family, which again is dependent upon the question whether there was disruption of bigger Hindu undivided family and that being the very subject matter of appeals in the four years in which this direction had been given, we are of the opinion that directions given in this case are valid and would save the assessments against the assessee for the two years in question. In the aforesaid view of the matter, we are of the opinion that 117 the majority of the learned judges of the High Court were right in their conclusions and the question was correctly answered by the majority of the learned judges of the High Court. The appeals therefore fail and are dismissed with costs. H.S.K. Appeals dismissed.

A bigger Hindu undivided family (HUF) had filed income tax returns for the assessment years 1946 47 to 1949 50. When the assessment was being done the bigger (HUF) made a claim under section 25A of the Income Tax Act, 1922, that the said HUF was partitioned on 19.5.1945. While this claim was pending, the appellant along with a smaller HUF (hereinafter referred to as the assessee) which had come into being on partition of the bigger HUF, filed voluntary returns on 18.11.1950 for the assessment years 1946 47 to 1949 50 under s.22(1) of the Act. The bigger HUF 's claim partition, which was rejected by the Income Tax Officer and the Appellate Assistant Commissioner, was accepted by the Appellate Tribunal on 31.8.1954. While disposing of the appeals of the bigger HUF against the assessment orders, the Tribunal gave a direction on 28.10.1954 that assessments be made on the bigger HUF after accepting partition. After the claim of partition was accepted the Income tax Officer sent notices to the assessee for initiating proceedings against him under s.34(1) (b). In response to the notices the assessee filed fresh returns on 12.4.1955. Rejecting the contention of the assessee that the time for making assessment under s.34 had expired, the Income tax Officer completed assessments under section 23(3) read with section 34 on . 8.9.1955. The assessee 's appeal was rejected by the Appellate Assistant Commissioner and the Appellate Tribunal. The assessee filed a writ petition in the High Court which was allowed and the assessment orders were quashed on 30.3.1960. The High Court observed that as voluntary returns filed by the assessee were pending no proceeding could be taken under section 34. Thereafter the Revenue attempted to assess the assessee on the basis of voluntary returns originally filed on 18.11.1950 by relying upon the order of the Tribunal dated 23.10.1954 in the bigger HUF 's case and invoking second proviso to section 34(3). The assessee filed a writ petition and that was dismissed. The Income tax Officer completed assessment under section 23(3) on 31.5.1962. In appeal the Appellate Assistant Commis 101 sioner held that no valid assessment could be made on 31.5.1962 and this view was confirmed by the Appellate Tribunal. A reference was made to the High Court on the question whether on the facts and circumstances of the case, valid assessment could be made on 31.5.1962 for the assessment years 1948 49 and 1949 50 on the basis of voluntary returns of income filed under section 22(1) of the Act. The assessee contended that since a return exhausted itself after expiry of four years from the end of the assessment year to which it related, no assessment could be made on the basis of voluntary return, it could be done under section 34 only if 2nd proviso to sub section (3) of section 34 applied. By majority a full Bench of the High Court answered the question in the affirmative in favour of the revenue. Hence these appeals. The two questions which arose were: (1) whether the assessment could be made under section 23(3) on the basis of voluntary returns filed or action should have been taken under section 34 with the help of the second proviso to sub section (3) of section 34; and (2) whether the Tribunal could give a finding or direction in respect of the assessee. Dismissing the appeals, ^ HELD : On Question No. (1) The High Court was right in taking the view that assessments could be made on the basis of voluntary returns already filed by the assessee. Sub section (3) of section 34 provides a period of limitation of four years for assessment under section 23 of the Act. If the assessment proceedings commence by filing of voluntary returns, as indeed these do, on the expiry of the period of four years from the end of the year in which the income, profits or gains were first assessable, such proceedings are suspended or interrupted. But neither the proceedings nor the returns become invalid. Since the order was passed by the Tribunal giving direction, the bar of limitation provided by section 34(3) was lifted and the assessments could be made without any bar of limitation. [106 G H, 107 A] Commissioner of Income tax Bombay City II vs Ranchhoddass Karsondas, ; Estate of the late A.M.K.M. Karuppan Chettiar vs Commissioner of Income tax, Madras, ; and Commissioner of Income tax Madras vs M.K.K.R. Muthukaruppan Chettiar, , referred to On question No. (2) The High Court rightly answered the question in favour of the revenue on the view that the Tribunal was competent to give the direction in respect of the present assessee. [108 E G] Second proviso to section 34(3) authorises directions to be given by the Tribunal in respect of the assessee or any person beyond four years as provided in section 34(3) of the Act. As explained in Income tax Officer vs Murlidhar Bhagwandas, "any person" in respect of whom such direction could be given must be one who would be liable to be assessed for the whole or a part of the income that went into the assessment of the year under appeal or revision. The court must turn 102 to section 31 of the Act to ascertain who is that person other than the appealing assessee who might be affected by the orders passed by the appellate authority. Modification or setting aside of assessment made on a firm, joint Hindu family, association of persons for a particular year may affect the assessment for the said year on a partner or partners of the firm, member of members of such Hindu undivided family or the individual, as the case might be. These instances are only illustrative and not exhaustive. The expression "any person" in its widest amplitude might take in any person connected or not with the assessee, whose income for any year had escaped assessment; but this construction cannot be accepted, for the said expression was necessarily circumscribed by the scope of the subject matter of the appeal or revision, as the case might be. So therefore the person must be one who would be liable to be assessed for the whole or any part of the income that went into assessment of the year under appeal or revision (Emphasis supplied). Therefore, "any person" in sub section (3) of section 34 must be confined to person intimately connected in the aforesaid sense with the assessments of the years under appeal. [701 C S, 108 A F] Income tax Officer, A Ward, Sitapur vs Murlidhar Bhagwan Das, ; Rajinder Nath vs Commissioner of Income tax, Delhi, ; Commissioner of Income tax, Central, Calcutta vs National Taj Traders, 121 I.T.R. 535; and Commissioner of Income tax, Andhra Pradesh vs Vadde Pullaiah & Co., , referred to. The facts in the instant case show that income can belong either to the bigger Hindu undivided family or to the smaller Hindu undivided family, the present assessee alongwith another smaller H.U.F. and to no one else. Therefore a finding that it belongs or it does not belong to the bigger Hindu undivided family which had disrupted on partition would determine the issue whether it could be taxed in the hands of the present assessee. Judged in the light of the test laid down in Murlidhar Bhagwan Das case and as pointed out in Rajinder Nath 's case, it appears that the present assessee can be said to be a person who would be liable to be assessed for the whole or part of the income that went to the assessment of the bigger Hindu undivided family in years under appeal and is a person intimately connected with the assessments of the bigger Hindu undivided family. The income in this case cannot be the income of both bigger Hindu undivided family and the present assessee, it must be either of these two. Therefore, the directions given in the appeals filed by the bigger Hindu undivided family would be applicable to the present assessee. [111 A D] Commissioner of Income tax, Gujarat vs Shantilal Punjabhai, , distinguished. Commissioner of Income tax, Punjab, Jammu & Kashmir and Himachal Pradesh vs section Raghubir Singh Trust, referred to.

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iminal Appeal No. 33 of 1955. Appeal under Articles 132 (1) and 134 (1) (c) of the Constitution of India from the Judgment and Order dated June 30, 1954, of the Court of Judicial Commissioner, Kutch in Criminal Revision Application No. 13 of 1952. Porus A. Mehta and B. H. Dhebar, for the appellant. H. J. Umrigar, for the respondent. March 7. The Judgment of the Court was delivered by KAPUR J. Two important questions arise for decision in this case of a small magnitude and the State has filed this appeal not for the purpose of obtaining a conviction but because of the importance of the questions raised and implications of the judgment 747 of the Judicial Commissioner. The respondent was convicted of an offence under section 12(a) of the Bombay Prevention of Gambling Act (Act IV of 1887 hereinafter termed the Bombay Act) as applied to Kutch and was sentenced to a fine of Rs. 50 or in default simple imprisonment for 15 days and for feiture of the amounts recovered from the respondent at the time of the commission of the offence. He took a ' revision to the Judicial Commissioner of Kutch, who hold that the Act under which the respondent had been convicted had not been validly extended to and was not. in force in the State of Kutch. It is the correctness of this decision which has been canvassed before us. There was sufficient evidence against the respondent which was accepted by the trying magistrate; and if the Act was validly extended to and was in operation in the State of Kutch, his conviction by the learned magistrate was correct and his acquittal by the learned Judicial Commissioner erroneous. On June 7, 1951, the respondent, it was alleged committed the offence he was charged with He was convicted by the magistrate on July 26, 1951, and his revision to the Sessions Judge was dismissed. He then took a revision to the Judicial Commissioner of Kutch who allowed his petition on June. 30, 1954, and granted a certificate under articles 132(1) and 134(1) of the Constitution. Kutch before 1948 was what was called an Indian State. The Maharao of Kutch handed over the gover. nance of the State to the Dominion of India on June 1, 1948 and thus the whole administration of the State passed to the Dominion and it became a Centrally administered area. On July 31, 1949, the then Central Government issued under section 4 of the Extra Provincial Jurisdiction Act (Act XLVII of 1947), an order called the Kutch (Application of Laws) Order, 1949. Under cl. 3 of this order certain enactments were applied to Kutch with effect from the date of the commencement of the order. One of these enactments was the Bombay Act. Clauses 4 and 6 of this order are important and may be quoted; 748 4. "Except as otherwise specifically provided in the first schedule to this order the enactments applied by this order shall be construed as if references therein to the authorities and territories mentioned in the first column of the table hereunder printed were references to the authorities and territories, respectively, mentioned opposite thereto in the second column of the said table. TABLE. Provincial Government, Governor The Chief Commissioner of Kutch. or Chief Controlling Revenue Authority. Government The Central Government or the Chief Commissioner, as the con text may require. High Court Court of the judicial Commissioner, Kutch. Provinces of India, any Province Kutch or any part thereof of India or any part thereof. The Province or Presidency of Kutch or any part thereof. Bombay or any part thereof. " Any Court may construe the provisions of any enactment, rule, regulation, general order or byelaw applied to Kutch or any part thereof by this order, with such modifications not affecting the substance as may be necessary or proper in the circumstances. " On August 1, 1949, Kutch became a Chief Commissioner 's province under the States Merger (Chief Commissioners Provinces) Order, 1949. Clause 2(1)(c) of this order is as follows: " As from the appointed day, the parts of States specified in the Second Schedule to this order shall be administered in all respects as if they were a Chief Commissioner 's Province, and shall be known as Chief Commissioner 's Province of Kutch. " The Second Schedule gives the parts of the pre 1947 Indian States which were to comprise the Chief Commissioner 's Province of Kutch. Under el. 4 of this Order all laws which were in force including orders made under section 4 of the Extra Provincial Jurisdiction Act of 1947, were to continue in force until replaced. On January 1, 1950, Merged States ' Laws Act (Act LIX of 1949), came into force. By this Act certain Central Acts were extended to the province of Kutch 749 including the General Clauses Act (Act X of 1897). On January 26, 1950, the Constitution of India came into force and Adaptation of Laws Order, 1950, was promulgated the same day. Clause 4(1) of this order provides: "Whenever an expression mentioned in column 1 of the table hereunder printed occurs (otherwise than in a title or preamble or in a citation or description of an enactment) in an (existing Central or Provincial Laws) whether an Act, Ordinance or Regulation mentioned in the Schedule to this Order or not, then, unless that expression is by this Order expressly directed to be otherwise adapted or modified, or to stand unmodified, or to be omitted, there shall be substituted therefor the expression set opposite to it in column 2 of the said Table, and there shall also be made in any sentence in which the expression occurs such consequential amendments as the rules of grammar may require." The necessary portions of the table are: Province (except where it occurs in any expression mentioned above) State Provincial. . . State Provinces (except where it occurs in any expression mentioned above). States Clauses 15 and 16 in (Part III) Supplementary, are as follows: 15. " Save as is otherwise provided by this Order, all powers which under any law in force in India or any part thereof were, immediately before the appointed day, vested in or exercisable by any person or authority shall continue to be so vested or exercisable until other provision is made by some legislature or authority empowered to regulate the matter in question." 16. " Subject to the provisions of this Order any reference, by whatever form of words in any existing law to any authority competent at the date of the passing of that law to exercise any powers or authorities, or to discharge any functions, in any part of India shall, where a corresponding new authority has been constituted by or under the Constitution, have 750 effect until duly repealed or amended as if it were a reference to that new authority. " On November 28, 1950 the Chief Commissioner of Kutch issued the following notification: In exercise of the powers vested in him under section I of the Bombay Prevention of Gambling Act, '1887 (IV of 1887) as applied to Kutch by the Kutch (Application of Laws) Order, 1949 the Chief Commissioner has been pleased to order that all the provisions of the said Act shall come into force throughout the whole of Kutch with immediate effect. " On a consideration of all the Acts and Orders as well as the above mentioned Adaptation of Laws Order, of 1950, the learned Judicial Commisioner was of the opinion that , all such powers vested in or exercisable by any other person or authority before 26 1 1950 ceased to be so vested or exercisable by that person or authority ", and, therefore, only the President, whether exercising the powers himself or through the Chief Commissioner, could exercise the powers of a State Government and the Chief Commissioner himself could not. His finding therefore was that the Chief Commissioner could not issue the above notification of November 28, 1950. In its appeal against the Order of acquittal by the learned Judicial Commissioner, the State has raised two questions: (1)that the Bombay Act had been validly extended to and was in force in the whole of Kutch because of the Kutch (Application of Laws) Order, 1949 and thus any contravention of that Act became punishable under the Act, and (2)That even if the Bombay Act was not thus extended to Kutch, the Act became applicable to the State of Kutch by the issuing of the notification of November28, 1950, and therefore, the respondent was rightly convicted and the conviction was wrongly set aside by the learned Judicial Commissioner. In: order to decide the first contention we have to see what is the effect of the various provisions of the Acts and Orders above referred to. In cl. 4 of the 751 Kutch (Application of Laws) Order, 1949, the words; used are shall be construed as if reference therein. . In our opinion all that these words mean is I shall be read as ' and if that is how these words are understood then wherever in the Bombay Act the words 'Provincial Government ' are used they have to be read as the Chief Commissioner of Kutch; the word Government has to be read as the " Chief Commissioner of Kutch"; and the Province or the " Presidency of Bombay " as " Kutch or any part thereof ". If the Bombay Act is so read, then at the time when the Constitution came into force the words Provincial Government or Government or Province or Presidency of Bombay were no longer in the Act which had become applicable to the State of Kutch. On the other hand, the words there must be taken to be Chief Commissioner of Kutch, and Kutch or any part thereof, respectively. The fallacy in the learned Judicial Commissioner 's judgment lies in this that due effect was not given to these words which had become substituted, but emphasis was laid on the words 'shall be construed as ' as if these words had been used for the purposes of interpretation of the different words in the Bombay. Act rather than implying substitution of the corresponding words. In this view of the matter cl. 2 (1) (c) of the States Merger (Chief Commissioners ' Provinces) Order, 1949 which provided for the administration of the State of Kutch as if it was a Chief Commissioner 's Province, would not affect the position nor would the extension of the General Clauses Act under the Merged States ' Laws Act. Clause 4 of the Adaptation of Laws Order, 1950 only substituted in place of the words Province, Provincial and Provinces the words State or States, wherever they occurred in any existing law, and the effect of cls. 15 and 16 of that order was the continuance of the powers vested in the authorities in whom they had previously been vested. The position which therefore emerges on a combined reading of these various clauses is that in Bombay Act, as applied to Kutch, the words I Presidency of Bombay ' were to be replaced by the. words 'Kutch or any part thereof ' and the I Provincial 752 Government ' by the I Chief Commissioner of Kutch ' and the powers which had been given to the different authorities under the different Acts were to continue to remain in the person or persons in whom they were already vested. As the powers had been vested in the Chief Commissioner under the provisions of these various Acts and Orders, they continued to remain so vested and the General Clauses Act did not have any operational effect on these various words which were used in the Bombay Act as modified and applied to Kutch. ,SO understood, section 1 of the Bombay Act would read as follows: " This Act may be cited as the Bombay Prevention of Gambling Act, 1887. All or any of its provisions may be extended from time to time by the Chief Commissioner of Kutch by an order published in the " Official Gazette " to any local area in Kutch or any part thereof." The Chief Commissioner of Kutch may, from time to time, by an order published as aforesaid, cancel or vary any order made by it under this section. " The portion of this section, viz., "It extends to the city of Bombay, to the Island of Salsette, to all Railways and railway Station houses without the said city and island and to all places not more than three miles distant from any part of such station houses respectively " would not continue in the Act as applied to Kutch because these parts are not in the State of " Kutch or any part thereof " and cl. 6 of the Kutch (Application of Laws) Order, 1949 would come into operation for the purpose. It was then contended that by the mere application of the Bombay Act to Kutch it became operative and came into force in the whole of Kutch. This argument suffers from the infirmity that in its application to Kutch section 1 of the Bombay Act would have to be excluded which would be an incorrect way of looking at the question. The true position is that the whole of the Act including amended section 1 as given above, became applicable to Kutch and therefore a notification 753 ,was necessary before it could be brought into force in any part of Kutch. It was applied to Kutch, but its provisions were not in operation before the notification; and in our opinion, the judgment of Baxi J. C. in Agaria Osman Alarakhya vs The Kutch State (1) which has been followed in the case now before us, to the extent that it dealt with the necessity of a notification under section 1 of the Bombay Act, was correctly decided; and therefore, the first contention raised by counsel for the appellant is unsustainable and we hold that without a notification, the Bombay Act, could not be held to have been validly applied to the State of Kutch. This brings us to the second question, i.e., the validity of the notification issued on November 28, 1950. The learned Judicial Commissioner held: " The Chief Commissioner of a Part C State can act to such extent as he is authorised by the President to do. These being the provisions of the Constitution, the Bombay Act must be construed with the adaptation that the rule of construction mentioned in the Kutch (Application of Laws) Order, 1949 is deleted. Hence, even if substitution of expression as mentioned in para 4 of the Adaptation of Laws Order, 1950 is not made, the rule of construction mentioned in the Kutch (Application of Laws) Order, 1949 for construing the expression I Provincial Government ' as the I Chief Commissioner, Kutch ' does not survive. " Article 239 of the Constitution relates to administration of Part C States and provides: " Subject to the other provisions of this Part, a State specified in Part C of the First Schedule shall be administered by the President acting, to such extent as he thinks fit, through a Chief Commissioner or a Lieutenant Governor to be appointed by him. . . This Article has been relied upon for urging that in a Part C State, the administration had to be carried on by the President acting through a Chief Commissioner. But this does not take away the powers of the Chief Commissioner given to him under any other Statute or (1) A.I.R. (1951) Kutch 9. 97 754 Order. The Chief Commissioner of Kutch under section I of the Bombay Act, had the power to issue notifications making that Act operative in Kutch or any part of Kutch and those powers were not affected by article 239 of the Constitution particularly because of el. 15 of the Adaptation of Laws Order, 1950, which preserved these powers of the Chief Commissioner. Therefore, the notification issued by the Chief Commissioner on November 28, 1950 was valid and issued under legal authority; and the Act came into force in the parts to which the notification made it so applicable. We have therefore, come to the conclusion that the learned Judge was in error in holding that the notification was not a valid one and in so far as that was the basis of the acquittal of the accused, the judgment under appeal must be set aside. In the result the appeal of the State is allowed, the judgment of the learned Judicial Commissioner acquitting the respondent is set aside and that of the learned Magistrate sentencing him to a fine of Rs. 50 and sentence in default and of forfeiture restored. Appeal allowed.

By cl. 3 of the Kutch (Application of Laws) Order, 1949, the Bombay Prevention of Gambling Act (Bom. IV of 1887) was made applicable to Kutch. Clause 4 of the Order provided that the Acts applied to Kutch by the Order " shall be construed " as if (1) vs Chester, Mayor, etc.) 96 746 references therein to the authorities and territories were references to the authorities and territories of Kutch as set out in that clause. The words "shall be construed as " mean "shall be read as" and: consequently wherever in the Bombay Act the words " Provincial Government " or " Government " are used, they have to be read as " Chief Commissioner of Kutch and the words ,Province or the Presidency of Bombay " as Kutch or any part thereof ". So understood, section 1 of the Bombay Act as applied to Kutch provided that all or any of the provisions of that Act may be extended from time to time by the Chief Commissioner of Kutch by an order published in the Official Gazette to any, local area in Kutch or any part thereof. The contention that the Bombay Act had been validly extended to and was in force in the whole of Kutch because of the Kutch (Application of Laws) Order, 1949, is not sound. The true position is that the whole of the Act including amended section 1 became applicable to Kutch and, therefore, a notification was necessary before it could be brought into force in any part of Kutch. The Chief Commissioner issued a notification on November 28, 195o, bringing all the provisions of the Bombay Act into force throughout the whole of Kutch with immediate effect. The Chief Commissioner of Kutch under section 1 of the Bombay Act, had powers to issue the notification making that Act operative in Kutch or in any part of Kutch and those powers were not affected by article 239 Of the Constitution. The notification was valid and the Act came into force in the parts of the State to which the notification made it applicable.

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IVIL Appeal No. 1863 of 1968. P. Ram Reddy, K. Jayaram and A. V. V. Nair, for the appel lant. T.C. Raghavan, B. Parthasarathi and section Shaukat Hussain, for the respondent. The Judgment of the Court was delivered by RAY, C.J. This appeal by special leave is against the judgment dated 3 April, 1967 of the High Court of Andhra Pradesh. The respondent filed this suit to set aside the order of compulsory retirement on the ground that it was illegal, wrongful, ultra vires and inoperative. The respondent al leged that the departmental enquiry was initiated by the Chief Justice and not by the Administrative Bench of the High Court which alone could do so under the Hyderabad High Court Act. The respondent alleged that he was not given a reasonable opportunity inasmuch as the report of the Enquiry Officer was submitted 129 to the Chief Justice and not to the Administrative Bench and that the Public Service Commission was not consulted. The respondent further alleged that the Chief Justice added his own findings to the report of the Enquiry Officer while sending it to the Government and in doing so he took extra neous matters which had not been the subject matter of the enquiry. The respondent alleged that he had no opportunity to defend himself with reference to the findings of the Chief Justice. The High Court held that the report of the High Court took into consideration extraneous matters and thus deprived the respondent from giving a reasonable opportunity. The High Court, therefore, held that Article 311(2) was violat ed. The High Court confirmed the decree of the trial Court but modified the order to the extent that the respondent was entitled to arrears of salary. The Hyderabad Civil Services (Classification, Control and Appeal) Rules referred to as the Rules contain in Part III the following relevant provisions. Rule 9(b) states that compulsory retirement before completion of 30 years or 25 years of qualifying service is one of the penalties. Rule 12 provides that the Government may impose any of the penalties mentioned in items (ii) to (viii) of Rule 9 on members of the State Services after consultation with the Public Service Commission where such consultation is neces sary. Rule 17(b) provides that in every case where it is proposed to impose on a member of a Service any of the penalties mentioned in items (iv), (vi), (vii) and (viii) of rule 9. the grounds shall be communicated. The.charges are to be communicated together with the statement of the alle gations on which each charge is based. A written statement is required to be filed by the officer and an enquiry shall be held. After the enquiry has been completed, the person charged shall be entitled to put in, if he so desires. any further written statement in his defence. After the enquiry has been completed and after the authority competent to impose the penalty mentioned in that clause has arrived at provisional conclusions, the person charged shall be sup plied with the copy of the report of the enquiring authority and be called upon to show cause within a reasonable time against the particular penalty proposed to be inflicted. Rule 14 states that after completing the oral enquiry, if any, and giving the person charged an opportunity of making a written statement, the inquiry officer should record his, findings on each charge, the reason for such findings and recommendations as regards the penalty on each of the charges. Rule 16 states that on receipt of the report of the enquiry officer the punishing authority should arrive at a provisional conclusion in regard to the penalty to be imposed and the person charged shall be supplied with a copy of the report of the enquiry officer and be called upon to show cause within a reasonable time why the particular penalty or penalties should not be inflicted upon him. Any representation submitted by the person charged in this behalf shall be duly taken into consideration by the punish ing authority before final orders are passed. The Rules further provide that in a case in which it is necessary to consult the Public Service Commission according to the provisions of 130 the Public Service Commission Regulations, the complete papers of the case should be sent to the Commission for their advice as regards the action to be taken without any observation on the merits of the case. On receipt of the advice of the Commission, if it be found that the Commission have agreed with the provisional conclusion reached by the punishing authority as regards the penalty to be inflicted, final orders should be issued to the person Charged. If, however, it be found that there has been disagreement on this point and the punishing authority has no objection to accept the advice of the Commission, final orders should be issued to the person charged. If, however, the punishing authority does not consider it feasible to accept the advice of the Commission another reference on this point should be made to the Commission and if they still adhere to their views the case should be submitted through the Services Branch of the General Administrative Department for the orders of the Chief Minister showing reason for the proposal and such orders as may be passed by the Chief Minister shall be communicated to the person charged. Uuder the Hyderabad High Court Act 3 of 1337 fasli corresponding to the year 1937 section 12 provides for the Administrative Bench consisting of at least two Judges appointed by the Chief Justice. The Chief Justice may constitute more than one Administrative Bench. Every ques tion before the Administrative Bench shall be decided either by a consensus or by majority of opinion. But where a disagreement does not produce a majority of opinion, action shall be taken in accordance with the view with which the Chief Justice might concur. If the Chief Justice does not join the Bench and there is no majority of opinion all opinions shall be placed before the Chief Justice and the opinion concurred by him shall be given effect to. Section 13 of the Hyderabad High Court Act deals with powers of Administrative Bench of the High CoUrt. The Administra tive Bench shall have power inter alia to sanction, suspen sion, fines, dismissal. The respondent was appointed as Munsiff Magistrate in the year 1948. Sometime in 1951 and 1952 a preliminary enquiry by the District and Sessions Judge was made. The Administrative Bench consisting of the Chief Justice of the High Court and another learned Judge deputed Justice Manohar Prasad to conduct the enquiry in accordance with the Rules. On 16 April, 1953 the respondent was suspended. A charge sheet was served on the respondent along with the statements of four persons. On the following charges it was proposed to remove the respondent from service namely (1) Communal bias in deciding case, (2) disregarding judicial orders, (3) suggesting names of Muslim lawyers to Muslim parties and (4) inefficiency. On 3 August, 1953 the Enquiry Officer Justice Manohar Prasad submitted a report finding the respondent guilty of charges numbered 1 and 3 and he recommended a warning. On 25 August, 1953 the report of the Chief Justice on his own examination of the evidence confirmed the findings of the enquiry officer and he recommended compulsory retirement. On 5 September, 1953 the Administrative Bench the High Court sent both the reports to the Government. 131 On 14 October, 1953 a show cause notice was issued from the Government for compulsory retirement of the respondent. The Government show cause notice enclosed the report of Justice Manohar Prasad. The respondent answered the find ings of the enquiry report and also protested against the report of the Chief Justice saying that the Chief Justice had no authority to add his own remarks and his findings were arrived at without hearing the respondent. On 22 December, 1953 the matter was referred to the Public Service Commission. On 27 February, 1954 the Public Service Commission approved compulsory retirement. On 8 April, 1954 the respondent was compulsorily retired. On 28 June, 1954 the respondent preferred an appeal to the Rajpramukh. On 4 November, 1954 the Rajpramukh dis missed the appeal. In 1957 the respondent filed this suit. The City Civil Court found that the respondent did not have a chance to meet some of the allegations referred to by the Chief Justice. The City Civil Court also found that the report of the Chief Justice weighed with the Government. The City Civil Court also found that the respondent had no reasonable opportunity for defending himself against the imposition of penalty of compulsory retirement. The High Court held that the findings of the Chief Justice were based to a considerable extent on material which was not produced before the High Court. The High Court also held that the Government had accepted the report of the Chief Justice both with regard to the guilt and punishment. The High Court held that since the report of the Chief Justice formed an integral part of the enquiry, the respondent was denied reasonable opportunity at both the stages of enquiry and punishment and, therefore, the compul sory retirement was bad. On behalf of the appellant it was contended that assum ing the report of the Chief Jusitce was taken into consider ation by the Government the findings of the Chief Justice were based on evidence let in before the Enquiry Officer and not any extraneous circumstances. It was also submitted that it was open to the Government to accept or reject the recommendation of the Chief Justice on the question of punishment. The further submission was that the respondent was given a reasonable opportunity at both the stages of the enquiry and punishment, and, therefore, the order of compul sory retirement, is good. In the alternative it was submitted on behalf of the appellant that the Government of .its own came to the con clusion that compulsory retirement was the proper punish ment, and, therefore, the Government did not act on the recommendation of the Chief Justice. The report of the Chief Justice referred to the report of the Enquiring Judge. The Enquiring Judge held that charges relating to the communal bias of the respondent and charges relating to unbecoming conduct of the respondent in relation to engagement of counsel in pending cases were proved. The Chief Justice in his report said that he was flooded with complaints from lawyers, litigants and from all sides 132 which emanated not only from the members of the Bar but also from responsible officers. The Chief Justice said in his report that on consideration of all the facts he had not the slightest doubt that in this case leniency would be mis placed and in the interest of purity of services such prac tices, when proved, as they have been proved, must be dealt with firmly. He, therefore, expressed the opinion that the respondent should be compulsorily retired and he concluded with the observation "let the Government be moved according ly". Under the Rules the Government has power under rule 12 to impose, inter alia, the penalty of compulsory retirement after consultation with the Public Service Commission where such consultation is necessary. The Chief Justice recom mended compulsory retirement. He took note of complaints received by him from lawyers and other persons. The Chief Justice took note of insubordination which charge was re jected by the Enquiry Officer. Rule 17(e) of the Rules requires that all orders of punishment shall state the grounds on which they are based and shall be communicated to the person against whom they are passed. The report of the Chief Justice was not given to the respondent. The High Court Act did not authorise the Chief Justice to send a supplementary report with his own findings. The respondent had no reasonable opportunity of making any representation against the report of the Chief Justice of the proposed punishment of compulsory retirement. The High Court rightly held that the report of the Chief Justice took into consideration extraneous matters, and he was not authorised to do so under the Rules of the High Court Act. The report submitted by the Chief Justice is not the report of the Administrative Bench. The High Court rightly held that the Government accepted the Chief Jus tice 's report and took action on it. The High Court was right in holding that the report of the Chief Justice was based to a large extent on secret information which the respondent had no opportunity of meeting. The respondent was denied the opportunity of being heard at that stage of enquiry. The respondent was denied a reasonable opportunity of making a representation against the penalty proposed by the Government. For these reasons the appeal is dismissed. The respond ent is entitled to costs.

The respondent, Munsiff Magistrate, was found guilty in an enquiry held by a High Court Judge, regarding serious allegations against him. The Chief Justice of the High Court also examined the evidence on his own, and confirming the findings of the Enquiry Officer, recommended compulsory retirement. Both reports were sent to the Government, and a show cause notice with the Enquiry Officer 's report was issued to the respondent. Later, with the Public Service Commission 's approval, the respondent was compulsorily retired. His appeal to the Rajpramukh was dismissed, but the City Civil Court and High Court decided in his favour. The question before this Court was, whether the Chief Jus tice 's report was in accordance with the Hyderabad Civil Service (Classification, Control and Appeal) Rules and the High Court Act, and whether the failure to communicate it to the respondent, amounted to a denial of reasonable opportu nity for defending himself at the stages of enquiry and punishment. Dismissing the appeal, the Court, HELD: (1) The report of the Chief Justice of the pro posed punishment of compulsory retirement took into consid eration extraneous matters, and he was not authorised to do so under the Rules, or the High Court Act. The report was based, to a large extent, oh secret information which the respondent had no opportunity of meeting. [132 D E] (2) The Government accepted the Chief Justice 's report and took action on it. The report was not given to the respondent. He was denied the opportunity of being heard at that stage of enquiry. The respondent was denied a reasona ble opportunity of making a representation against the penalty proposed by the Government. [132 E F]

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Criminal Appeal No. 823 Of 1981 Etc. From the Judgment and Order dated 27.7.1981 of the Karnataka High Court in Crl. A.NO. 215 of 1981. M. Veerappa for the Appellant. M.B. Lal (Amicus Curiae) K.R. Nagaraja for the Respondents. The Judgment of the Court was delivered by, OZA, J. These appeals have been preferred by the State of Karnataka against the judgment of the High Court of Karnataka setting aside conviction of the respondents and remanding the cases before the Sessions Court for retrial. The respondents were committed for trial to the Sessions Judge, Metropolitan Area, Bangalore City in number of Ses sions cases including Sessions Case No. 35 of 1980 in re spect of an offence under Sec. 302 for which after trial the respondent Kuppuswamy was sentenced to death and also for offence under Sec. 332 of the Indian Penal Code and sentence of rigorous imprisonment of one year. Against the conviction and sentences appeal were preferred before Hon 'ble the High Court. Kuppuswamy 's matter also came before the High Court apart from his appeal also by reference. The facts which gave rise to these appeals were that about 2 A.M. on 9th April 1980 it was alleged that Kuppuswa my the present respondent stabbed Narayanaswamy who expired at 11 P.M., and also Ramu who expired at 8.05 P.M. and Sunil Kumar, Sub Inspector of Police, who expired at 2.30 A.M. on the next day. Sunil Kumar and his police party happened to go there in a van on hearing galata in the railway platform of the Cantonment railway station, Bangalore, and when Sunil Kumar caught hold of the wrist of the accused respondent. 298 he somehow managed to slip out and stabbed him. PW 1 Ulaga nathan, who was the Senior Trains Clerk, went and lodged the First Information Report exhibit Investigation was taken up and after investigation chargesheet was filed. It is not necessary for us to go into these question as question involved in these appeals is merely a technical question pertaining to procedure and does not pertain to the merits of the matter. The accused persons were committed to the Sessions Court, Metropolitan Area, Bangalore City and it appears that the Principal Sessions Judge Metropolitan Area, made over the Sessions case in exercise of his powers under Section 194 of the Code of Criminal Procedure to II Additional Sessions Judge, Metropolitan Area, Bangalore City who framed charges on 21.8.80 and recorded to plea of the accused persons. On 17th November 1980 City Civil Courts Act came into force. ,Monthly statements of cases wherein the accused persons were in custody were prepared and it appears that these statements also reached the High Court and have been made use of by the learned Judges in disposing of these appeals. It has been observed by the learned High Court that in the monthly statement of October 1980 Sessions Case No. 35 of 1980 (with which we are concerned) is shown having been pending on the board of II Additional Sessions Judge, Metropolitan Area, Bangalore City and was posted for evi dence. It is further observed by the learned Judges of the High Court that the statement of November 1980 which was prepared after the Bangalore City Civil Courts Act was brought into force and powers of Sessions were conferred on all the City Civil Judges under Sec. 9(3) Cr. P.C. by the High Court, this case has been shown as pending before the IV Additional City Civil and Sessions Judge, Metropolitan Area, Bangalore City. The High Court has also referred to a Notification issued on 30th January 1981 by the Registrar of Bangalore City Civil Courts saying that Sessions cases and other matters pending before the II, III and VI Additional City Civil and Sessions Judges are to be tried by them and on 12th Jan. 1981 the III Additional City Civil and Sessions Judge, Bangalore City recorded the evidence in the case. It is also observed by the High Court in its judgment that the Office informed the learned Judges that there was no order of transfer under Sec. 407 Cr. P.C. transferring this case viz. Sessions Case No. 35 of 1980 from the file of the IV Additional City Civil and Sessions Judge to the file of III Additional City Civil and Sessions Judge. 299 Under Sec. 194 Cr. P.C. the Principal City Civil and Sessions Judge, Metropolitan Area, Bangalore has the power to make over a Sessions case for trial and disposal in accordance with law. The High Court, it appears, has pro ceeded on the basis that as the plea was recorded when the case was pending before the II Additional City Civil and Sessions Judge, the Sessions Judge could not transfer the case to the board of III Additional City Civil and Sessions Judge under the provisions contained in Sec. 409 clause 2. The High Court also proceeded on the assumption that there is no order of the Sessions Judge presiding over the Princi pal City Civil Court for allotment of this case to the Court of III Additional City Civil and Sessions Judge. The learned High Court also came to the conclusion that provisions contained in Sec. 465 also will not remedy the defect. Consequently the High Court allowed the appeals, quashed the convictions and directed remand for retrial of the cases. What appears from the judgment of the High Court is that after commitment this case i.e. Sessions Case No. 35 of 1980 was shown in the list of October 1980 as pending in the Court of II Additional Sessions Judge as it was made over to that Court in exercise of powers conferred under Sec. 194 by the Principal Sessions Judge and this also was inferred by the High Court from the fact that the II Additional Sessions Judge framed charges on 21.8.80 in this case and recorded the plea of the accused on the same day. After the coming into force of the City Civil Courts Act in November 1980, in the list this case was shown to be pending before the IV Additional City Civil and Sessions Judge and what further has been observed by the High Court is that on 12th January 1981 the evidence in the case com menced on the board of III Additional City Civil and Ses sions Judge. It appears that the learned Judges of the High Court looked into the Notification issued by the Registrar of the City Civil Court and also the list of pending cases pertaining to accused in custody which probably was sent to the High Court every month and also made enquiries from the Office of the High Court as to whether any sessions trial was transferred by orders of the High Court under Sec. 407 but it appears that the learned Judges did not direct to get the orders passed by the Principal Sessions Judge of the Sessions Division under Sec. 194 Cr. As the Principal Sessions Judge of the Division under Sec. 194 had power to allot any Sessions case to any one of the Additional Ses sions Judges of the Division. At the same time such orders under Sec. 194 could be passed by the Principal Sessions Judge either for individual cases or by general orders allotting particular 300 areas to particular Additional Judge of the Division. In fact Sec. 194 contemplates that all the Sessions Judges (Principal and Additionals) who are the Sessions Judges in the Division, have been notified as Sessions Judges in the Division and therefore each one of them has jurisdiction to try the case arising out of an incident in that Division. What has been observed by the learned Judges of the High Court that this case from IV Additional City Civil and Sessions Judge went to the III Additional City Civil and Sessions Judge for which they could not find any order of transfer passed under Sec. 407 by the High Court but it appears that if enquiries were made it might have been discovered that the case might have been transferred in exercise of powers under Sec. 194 by the Principal Sessions Judge. The usual practice in big places (Sessions Divisions) where a number of cases are committed and there are number of courts exercising the same jurisdiction in respect of the whole Division, distribution memos are prepared by the Principal Sessions Judge so that cases are so distributed to all the Additional Judges so that they are disposed of expeditiously. It appears that this aspect of the matter was not brought to the notice of the learned Judges of the High Court even by the counsel appearing for the State. It is not disputed that the Metropolitan Area, Bangalore City has a Sessions Division and is presided over by a Principal Sessions Judge and has a number of Additional Sessions Judges. It is also not disputed that all the Ses sions Judges sitting in this Division are notified as Ses sions Judges for the Division and therefore it is also not disputed that all of them have jurisdiction to try a case arising out of the Sessions Division. Even the judgment of the High Court does not indicate any lack of inherent juris diction. What has weighed with the High Court is that as the charge was framed by the II Additional Sessions Judge the case could not be transferred to the board of III Additional City Civil and Sessions Judge without an order of transfer by the High Court as it was observed that under Sec. 194 the case could not be withdrawn by the Principal Sessions Judge after commencement of the trial and this was inferred from the provisions contained in Sec. 409 clause reads as under: "Additional and Assistant Sessions Judges to try cases made over to them: An Additional Sessions Judge or Assistant Sessions Judge shall try such cases as the Sessions Judge of the Division may, by general or special order, make over to 301 him for trial or as the High Court may, by special order, direct him to try. " Sec. 194 authorises an Additional Sessions Judge or an Assistant Sessions Judge to try a Sessions case arising in the Sessions Division when such a case is allotted to him either by a special or general order or a case which has been allotted to him by the High Court. Apparently therefore the III Additional City Civil and Sessions Judge who tried the case, tried it as it must have been allotted to him. It is not disputed that it must have been allotted to him as the distribution orders have not been sent for by the High Court nor have been produced nor it is disputed but what is observed by the High Court is that as the charge was framed by the II Additional City Civil and Sessions Judge it could not have been withdrawn under Sec. 409 clause 2 and allotted to any other Additional Sessions Judge: "Section 409 reads: "Withdrawal of cases and appeal by Sessions Judge: (1) A Sessions Judge may withdraw any case or appeal from, or recall any case or appeal which he has made over to any Assistant Sessions Judge; or Chief Judicial Magistrate subordinate to him. (2) At any time before the trial of the case or the hearing of the appeal has commenced before the Additional Sessions Judge, a Ses sions Judge may recall any case or appeal which he has made over to any Additional Sessions Judge. (3) Where a Sessions Judge withdraws or re calls a case or appeal under sub section (1) or sub section (2), he may either try the case in his own Court or hear the appeal himself, or make it over in accordance with the provi sions of this Code to another Court for trial or hearing, as the case may be." Clause 2 talks of "before the trial of the case . commenced. " In fact the scheme of Sec. 409 indicates that the Sessions Judge had powers to withdraw any case and to allot to any one of the Additional Sessions Judges. In a Sessions trial recording of plea whether will amount to commencement of the trial or not has not been discussed by the High 302 Court and it is not necessary for us also to go into this question. So far as the trial of the case is concerned it is not found by the High Court that the Sessions Judge who tried the case had no jurisdiction. On the contrary it is not disputed before us that he had the jurisdiction to try the case arising out of the Sessions Division, the only objection which has prevailed with the High Court is that as charge was framed and plea was recorded by the II Additional City Civil and Sessions Judge it could not have been with drawn by the Principal Sessions Judge and made over to III Additional City Civil and Sessions Judge. It is not disputed that it was withdrawn and made over. In this view of the matter therefore the provisions contained it Sec. 465 are of some importance. The High Court, however, observed that provisions of Sec. 465 Cr. P.C. can not be made use of to regularise this trial. No reasons have been stated for this conclusion. 465 Cr. P.C. reads as under: "Finding or sentence when reversible by reason of error, omission or irregularity: (1) Subject to the provisions hereinbefore contained, no finding, sentence or order passed by a Court of competent jurisdiction shall be reversed or altered by a Court of appeal, confirmation or revision on account of any error, omission or irregularity in the complaint, summons, warrant, proclamation, order, judgment or other proceedings before or during trial or in any inquiry or other pro ceedings under this Code, or any error, or irregularity in any sanction for the prosecu tion, unless in the opinion of that Court, a failure of justice has in fact been occasioned thereby. (2) In determining whether any error, omission or irregularity in any proceeding under this Code, or any error, or irregularity in any sanction for the prosecution has occasioned a failure of justice, the Court shall have regard to the fact whether the objection could and should have been raised at an earlier stage in the proceedings. " It is provided that a finding or sentence passed by a Court of competent jurisdiction could not be set aside merely on the ground of irregularity if no projudice is caused to the accused. It is not disputed that this question was neither raised by the accused at the trial nor any prejudice was pleaded either at the trial or at the appellate stage and 303 therefore in absence of any prejudice such a technical objection will not affect the order or sentence passed by competent court. Apart from Sec. provides for remedy in cases of trial in wrong places. 462 reads as under: "Proceedings in wrong place: No finding, sentence or order of any Criminal Court shall be set aside merely on the ground that the inquiry trial or other proceedings in the course of which it was arrived at or passed, took place in a wrong sessions divi sion, district, sub division or other local are unless it appears that such error has in fact occasioned a failure of justice. " This provision even saves a decision if the trial has taken place in a wrong Session Division or Sub Division or a district or other local area and such an error could only be of some consequence if it results in failure of justice otherwise no finding or sentence could be set aside only on the basis of such an error. It is therefore clear that even if the trial before the III Additional City Civil and Sessions Judge would have been in a Division other than the Bangalore Metropolitan Area for which III Additional City Civil and Sessions Judge is also notified to be a Sessions Judge still the trial could not have been quashed in view of Sec. 462. This goes a long way to show that even if a trial takes place in a wrong place where the Court has no territorial jurisdiction to try the case still unless failure of justice is pleaded and proved, the trial can not be quashed. In this view of the matter therefore reading Sec. 462 alongwith Sec. 465 clearly goes to show that the scheme of the Code of Criminal Procedure is that where there is no inherent lack of jurisdiction merely either on the ground of lack of territorial jurisdiction or on the ground of any irregularity of procedure an order or sentence awarded by a competent court could not be set aside unless a prejudice is pleaded and proved which will mean failure of justice. But in absence of such a plea merely on such technical ground the order or sentence passed by a competent court could not be quashed. It is not disputed that the plea of prejudice or failure of justice is neither pleaded nor proved. Not only that even the judgment of the High Court does not indicate any possi bility of prejudice or failure of justice. Learned counsel appearing for the respondent also did not suggest. any possibility of projudice or failure of justice. Under these 304 circumstances therefore the view taken by the High Court does not appear to be correct in view of the language of Sec. 462 read with Sec. 465. The judgment of the High Court is therefore set aside. The direction of remand made by the High Court is also quashed. It is unfortunate that these matters pertaining to incidents of 1980 should not have been disposed of till today and that the matter should have remained pending on such technical grounds for all these years. We therefore direct that the appeals be remitted back to the High Court so that they are heard and disposed of on merits as expeditiously as possible. P.S.S. Appeal allowed.

The case of the respondent accused was committed to the Sessions Court, Metropolitan Area, Bangalore City and made over under section 194 Cr. P.C. by the Principle Sessions Judge for trial to the II Additional Sessions Judge who framed charges on August 21, 1980 and recorded the plea of the accused persons. In the monthly statement of October, 1980 the case was shown pending on the board of II Additional Sessions Judge and listed for evidence. On November 17, 1980 the Bangalore City Civil Courts Act came into force and powers of Sessions were conferred on all the City Civil Judges under s.9(3) Cr. In the monthly statement prepared thereafter for November, 1980 the case was shown pending before the IV Additional City Civil and Sessions Judge. However, the evidence in the case was recorded and the respondent accused convicted under s.302 and 332 IPC by the III Additional City Civil and Sessions Judge. In appeal and reference the High Court looked into the monthly statements of pending cases and observing that there was no order under s.407 Cr. P.C. transferring the case from the file of the IV Additional City Civil and Sessions Judge to the file of III Additional City Civil and Sessions Judge, that as the charge was framed and plea recorded when the case was pending before the II additional Sessions Judge the case could not be withdrawn by the Principle Sessions Judge under s.409(2) after the commencement of the trial and allotted to any other Additional Sesssion Judge that there was no order of the Principal Session Judge under section 194 transferring the case to the board of III Additional City Civil and Sessions Judge and that the defect could not be remedied under s.465 Cr.P.C., quashed the conviction and directed remand for retrial. The State came in appeal to this Court. Allowing the appeal, the Court, 296 HELD: 1.1 The view taken by the High Court was contrary to the language of ss.462 and 465 of the Code of Criminal Procedure. The judgment of the High Court could not, there fore, be sustained. [304A] 1.2 Reading section 462 alongwith s.465 goes to show that the scheme of the Code of Criminal Procedure is that where there is no inherent lack of jurisdiction, merely either on the ground of lack of territorial jurisdiction or on the ground of any irregularity of procedure an order of sentence award ed by a competent court could not be set aside unless preju dice is pleaded and proved, which will mean failure of justice. [303F G] In the instant case, it is not found by the High Court that the Sessions Judge who tried the case arising out of the Sessions Division had no jurisdiction. The Metropolitan Area, Bangalore City has a Sessions Division and is presided over by a Principal Sessions Judge and has a number of Additional Sessions Judges. All the Sessions Judges sitting in this Division are notified as Sessions Judges for the Division and, therefore, all of them have jurisdiction to try a case arising out of the Sessions Division. the plea of prejudice of failure of justice is neither pleaded nor proved. Not only that, even the judgment of the High Court does not indicate any possibility of prejudice or failure of justice. There was no suggestion either of any possibility of prejudice or failure of justice. The order passed by the 1II Additional City Civil and Sessions Judge could not, therefore, be quashed. [302A C] 2. Section 462 Cr. P.C. even saves a decision if the trial has taken place in a wrong Sessions Division or Sub Division or a district or other local area where the court has no territorial jurisdiction, and such an error could only be of some consequence if it results in failure of justice, otherwise no finding or sentence could be set aside only on the basis of such an error. Therefore, even if the trial before the III Additional City Civil and Sessions Judge would have taken place in a Division other than the Bangalore Metropolitan Area for which III Additional City Civil and Sessions Judge is also notified to be a Sessions Judge, still the trial could not have been quashed in view of s.462. [303C E] 3.1 The scheme of s.409 indicates that the Sessions Judge had powers to withdraw any case and to allot it to any one of the Additional Sessions Judges. The Principal Ses sions Judge of the Division under section 194 had power to allot any Sessions case to any one of the Additional Sessions Judges of the Division. He could pass such orders either for individual cases or allot particular areas to particular Additional Judge of the Division. [299H; 300A] 297 3.2 The III Additional City Civil and Sessions Judge who tried the instant case apparently tried it as it must have been allotted to him. The Case must have been allotted to him as the distribution orders have not been sent for by the High Court nor have they been produced. If enquiries were made it might have been discovered that the case had been transferred in exercise of the powers under section 194 by the Principal Sessions Judge. [300B C]

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iminal Appeal No. 48 of 1952. Appeal under article 134(1) (c) of the Constitution of India from the Judgment and Order dated the 21st March, 1952, of the High Court of Judicature at Calcutta (Das Gupta and Lahiri JJ.) in Criminal Appeal No. 77 of 1950 arising out of the Judgment and Order dated the 29th April, 1950, of the Court of the Additional Sessions Judge, Burdwan in Session Trial No. I of 1950. N.C. Chakravarti and Sukumar Ghose for the appellant. B. Sen and I. N. Shroff for the respondent. G. N. Joshi and P. G. Gokhale for the Intervener (The Union of India). April 20. The Judgment of the Court was delivered by MEHR CHAND MAHAJAN C.J. This is an appeal under article 134(1) (c) of the Constitution of India from the judgment of the High Court at Calcutta dated the 21 st of March, 1952, whereby the High Court upheld the conviction of the appellant under section 467 of the Indian Penal Code but reduced the sentence passed upon him by the Additional Sessions Judge of Burdwan. The appeal concerns one of a series of cases known generally as " The Burdwan Test Relief Fraud Cases " which had their origin in the test relief operations held in the District of Burdwan in 1943, during the Bengal famine of that year. The acute scarcity and the prevailing distress of the famine stricken people in the district called for immediate relief and test relief operations were undertaken by the District Board in pursuance of the advice of the District Magistrate. The Government of Bengal sanctioned four lakhs of rupees as advance to the District Board for such test relief operations. The District Board, however, instead of 227 conducting the relief work directly, appointed several agents on commission basis through whom the test relief operations were carried out. This was in 'Clear violation of the Bengal Famine Code and the Famine Manual, 1941, and as exceedingly large sums were being spent the suspicions of the Government were aroused about the bona fides of the test relief work carried out through their agent&. This led to an inquiry and as a result of this several cases were started against various persons and the appellant 's case is one of them. The Government reached the decision that these cases were not fit for trial by jury and accordingly on 24th February, 1947, a notification was issued for trial of these cases by the Court of Sessions with the aid of assessors. The notification is in these terms: "No. 4591 17th February, 1947. Whereas by a notification dated the 27th March, 1893, published in the Calcutta Gazette of the same date, it was ordered that on and after the 1st day of April, 1893, the trial of certain offences under the Indian Penal Code before any Court of Session in certain districts including the District of Burdwan shall be by jury; "And whereas by notification No. 3347 1, dated the 22nd September, 1939, published at page 2505 of Part I of the Calcutta Gazette of the 28th September, 1939, it was ordered that on and from the 1st day of January, 1940, the trial of certain other offences under the Indian Penal Code before any Court of Session shall be by jury; "And whereas certain persons 'are alleged to have committed offences under sections 120 B, 420,467, 468, 471 and 477 A of the Indian Penal Code in a set of cases known as the Burdwan Test Relief Fraud Cases ' of whom the accused persons in two cases, namely Emperor vs Dhirendra Nath Chatterjee and Others and (2) Emperor vs Golam Rahman and Others, have been committed to the Court of Session at Burdwan for trial and the accused persons in the remaining cases may hereafter be committed to the said Court for trial; "Now, therefore, the Governor in exercise of the power conferred by subsection (1) of section 269 of the 228 Code of Criminal Procedure, 1898, is pleased to revoke the said notifications in so far as they apply to the trial of the offences with which the accused in the said cases are charged in the Court of Session. " In pursuance of this notification the appellant along with six others was sent up for trial before the Additional Sessions Judge of Burdwan. The charge against him was under section 420 read with section 120 B, Indian Penal Code, for conspiracy to cheat the District Board of Burdwan and some of its officers in charge of the test relief operations between the 21st May, and the 21st July, 1943. The appellant was also charged on 24 counts of forgery under section 467, Indian Penal Code and the case for the prosecution against the appellant on these counts was that he committed forgery by putting his own thumb impressions on pay sheets on which the thumb impressions of persons who received payment for work done on a road which was constructed as part of a scheme for the relief of the people in Burdwan ought to have been taken. He was one 'of the persons appointed by Jnanendra Nath Choudhuri, an agent, and it was his duty to disburse the money to the mates in charge of the gangs and to take thumb impressions on pay sheets in token of receipt of payment. It was alleged that the appellant put his own thumb impressions in several cases mentioned in the charges with full knowledge that no payment had been made and put names of imaginary persons against the thumb impressions to make it appear that payments had been made to real persons and by this process had obtained wrongful gain for himself and for his employers. The appellant 's plea in defence was that the thumb impressions were not his and alternatively if the thumb impressions were his, he put them on the authority of persons. whose names were shown against the thumb impressions and that in putting these thumb impressions he did not act dishonestly or fraudulently. The learned Additional Sessions Judge acquitted the appellant and all other accused persons on the charge of conspiracy to cheat under section 420 read with 229 section 120 B, Indian Penal Code. He, however, convicted the appellant under eleven specific charges of forgery, under section 467, Indian Penal Code, and sentenced him to undergo rigorous imprisonment for a period of one year. On appeal the conviction of the appellant was affirmed in regard to nine counts only and 'the sentence was reduced. The main point urged by the appellant in the High Court was that the trial was vitiated inasmuch as he was denied the equal protection of laws under article 14 of the Constitution. The High Court rejected this contention and held that the appellant 's trial before the Additional Sessions Judge with the aid of assessors was a valid trial in accordance with law. Das Gupta J. who delivered the judgment of the Court observed as follows : "By this notification, the Government acting in .the exercise of powers under section 269 of the Code of Criminal Procedure formed one class of all the cases known as the Burdwan Test Relief Cases, in which some persons had prior to the date of the notification alleged to have committed some specified offences and withdrew from these trial by jury so that these became triable by the aid of assessors. The question is whether this classification satisfied the test that has been laid down, mentioned above. In my judgment, these cases, which are put in one class, have the common feature that a mass of evidence regarding the genuineness of thumb impressions and regarding the existence or otherwise of persons required consideration. This was bound to take such a long time that it would be very difficult, if not impossible, for a juror to keep proper measure of the evidence. This common feature distinguished this class from other cases involving offences under the same sections of the Indian Penal Code. The classification is in my judgment reasonable with respect to the difference made, viz., the withdrawal of jury trial and is not arbitrary or evasive. " The appellant made an application to the High Court for leave to appeal to this Court and the leave was allowed. It was contended at the time of the leave 230 that by a notice of revocation the State Government could not deprive particular persons of the right of trial 'by jury leaving other persons charged of the same class or classes of offences with a right to be tried by a jury. The Bench thought that this was a point of considerable difficulty and was a fit one to be decided by this Court. The learned counsel for the appellant urged two points :before us. In the first instance, he contended that the notification was in excess of the powers conferred on the State Government under section 269(1) of the Code of Criminal Procedure and that it travelled beyond that section. Secondly it was urged that the notification denied the appellant equal protection of the laws and was thus an abridgement of his fundamental right under article 14 of the Constitution and the view of the High Court that the classification was not arbitrary or evasive was incorrect. At this stage it may be mentioned that the Union Government, at its request, was allowed to intervene in this appeal, in view of the contention raised by the appellant that section 269(1) of the Code of Criminal Procedure was void by reason of its being inconsistent with the provisions of Part III of the Constitution. The intervention, however, became unnecessary because the learned counsel for the appellant abandoned this point at the hearing and did not argue it before us. As regards the two points urged by the learned counsel, it seems to us that both the contentions raised are well founded. The notification, in our opinion, travels beyond the ambit of section 269(1) of the Code of Criminal Procedure. This section is in these terms : "The State Government may by order in the Official Gazette, direct that the trial of all offences, or of any particular class of offences, before any Court of Session, shall be by jury in any district, and may revoke or alter such order." Though the trial by jury is undoubtedly one of the most valuable rights which the accused can have, it has not been guaranteed by the Constitution. Section 269(1) of the Code of Criminal Procedure is an enabling 231 section and empowers the State Government to direct that the trial of all offences or of any particular class of offences before any Court of Session shall be by jury. It has the further power to revoke or alter such an order. There is nothing wrong if the State discontinues trial by jury in any district with regard to all or any particular class of offences, but the question is whether it can direct that the trial of a particular case or of a ' particular accused shall be in the Court of Session by jury while in respect of other cases involving the same offence the trial shall be by means of assessors. It appears to us that the section does not empower the State Government to direct that the trial of a particular case or of a particular accused person shall be by jury while the trial of other persons accused of the same offence shall not be by jury. On a plain construction of the language employed in the section it is clear that the State Government has been empowered to direct that the trial of all offences or of any Particular class of offences before any Court of Session shall be by jury in any district. The section does not take notice of individual accused or of individual cases. It only speaks of offences or of a particular class of offences, and does not direct its attention to particular cases on classes of cases and it does not envisage that persons accused of the same offence but involved in different cases can be tried by the Court of Session by a different procedure, namely, some of them by jury and some of them with the help of assessors. The ambit of the power of revocation or alteration is co extensive with the power conferred by the opening words of the section and cannot go beyond those words. In exercise of the power of revocation also the State Government cannot pick out a particular case or set of cases and revoke the notification qua these cases only and leave cases of other persons charged with the same offence triable by the Court of Session by jury. This was the construction plated on the section by Mr. Justice Chakravarti and was endorsed by some of us in this Court in The State of West Bengal vs Anwar Ali Sarkar(1). it was there pointed out that a jury trial could (1) , 326, 232 not be revoked in respect of a particular case or a particular accused while in respect of other cases involving the same offences that order still remained in force. The notification in this case clearly refers to accused persons involved in the " Burdwan Test Relief Fraud cases and does not remove from the category of offences made triable by jury offences under sections 120 B, 467,468,477 etc. , no matter by whom committed or even committed within a particular area. The cases of persons other than the accused and involved in offences under sections 120 B, 420, 467, 468, 477 are still triable by a Court of Session by jury. The language of the earlier notification of 1893, and of the second notification of 1939, by which it was directed that the trial in Court of Session of certain offences in certain districts shall be by jury is significant and is in sharp contrast to the language used in the operative portion of the impugned notification. By the notification of the 27th March, 1893, it was ordered that on or after the last day of April, 1893, the trial of certain offences under the Indian Penal Code before any Court of Session in certain districts including the District of Burdwan shall be by jury. It will be noticed that this notification has no reference to cases of any individuals or particular accused persons; it is general in its terms. By the notification dated the 22nd September, 1939, it was ordered that on and from the 1st day of January, 1940, the trial of certain other offences under the Indian Penal Code before any Court of Session shall be by jury. This notification is also in general terms. In other words, the first notification made out a schedule of offences and directed that those offences, irrespective of the fact by whom they were committed, be tried by a Court of Session by jury. The second notification added a number of other offences to that list. The revocation order does not subtract any offences from the list; it leaves them intact. What it does is that it denies to certain individuals the right to be tried by jury while retaining that right in the case of other individuals who have committed the same or similar offences and in this respect it travels beyond 233 the power conferred on the State Government by section 269(1) of the Code of Criminal Procedure, and is thus void and inoperative. We are further of the opinion that the notification is also bad as it contravenes the provisions of article 14 of the Constitution. The High Court negatived this contention on the ground that the classification made for withdrawal of jury trial in these cases was reasonable and was neither arbitrary nor evasive. It was said that these cases formed one class of cases and that they had the common feature that a mass 'of evidence regarding the genuineness of thumb impressions and regarding the existence or otherwise of persons required consideration and that this was bound to take such a long time that it would be very difficult, if not impossible, for a juror to keep proper measure of the evidence, and that these common features distinguished this class of cases from other cases involving offences under the same sections of the Indian Penal Code. Now it is well settled that though article 14 is designed to prevent any person or class of persons from being singled out as a special subject for discriminatory legislation, it is not implied that every law must have universal application to all persons who are not by nature, attainment or circumstance, in the same position, and that by process of classification the State has power of determining who should be regarded as a class for purposes of legislation and in relation to a law enacted on a particular subject; but the classification, however, must be based on some real and substantial distinction bearing a just and reasonable relation to the objects sought to be attained and cannot be made arbitrarily and without any substantial basis. The notification, in express terms, has not indicated the grounds on which this set of cases has been segregated from other set of cases falling under the same sections of the Indian Penal Code. The learned Judges of the High Court however thought that this set of cases was put into one class because of their having the "common features that a mask; of evidence regarding the genuineness 234 of thumb impressions and regarding the existence or otherwise of persons required consideration and this was bound to take such a long time that it would be very difficult, if not impossible, for a juror to keep proper measure of the evidence. " In our opinion this classification has no relation to the object in view, that is, the withdrawal of jury trial in these cases. There can be mass of evidence in the case of persons accused of the same offence in other cases or sets of cases. The mere circumstance of a mass of evidence, and the suggestion that owing to the length of time the jurors might forget what evidence was led before them furnishes no reasonable basis for denying these persons the right of trial by jury. It is difficult to see how assessors can be expected to have better memory than jurors in regard to cases in which a mass of evidence has to be recorded and which may take a long time. It is a matter of daily experience that jury trials take place in a number of cases of dacoity, conspiracy,, murder etc. where the trial goes on for months and months and there is a mass of evidence. On that ground alone a jury trial is not denied, as that is not a reasonable basis for denying it. The memory of jurors, assessors, judges and of other persons who have to form their judgment on the facts of any case, can afford no reasonable basis for a. classification and for denial of equal protection of the laws. Similarly, the quantum of evidence in a particular case can form no reasonable basis for classification and thus can have no just relation to the object in view. The features mentioned by the High Court can be common to all cases of forgery, conspiracy, dacoity, etc. Mr. Sen for the respondent State contended in the first instance, that the defect in the trial, if any, was cured by the provisions of section 536 of the Code of Criminal Procedure as this objection was not taken in the trial Court. In our opinion, this contention is without force. Section 536 postulates irregularities at the trial after the commencement of the proceedings but it does not concern itself with a notification made under section 269 (1) which travels beyond the limits of that 235 section or which contravenes article 14 of the Constitution. The chapter of the Code of Criminal Procedure in which this section is included deals with mere procedural irregularities in the procedure committed by a Court and envisages that when an objection is taken, the Court is then enabled to cure the irregularity. This argument cannot apply to a case like the present. The Court had no power to direct a trial by jury when the Government had revoked its notification with reference to these cases. Moreover the nature of the objection is such that it goes to the very root of the jurisdiction of the Court, and such an objection can be taken notice of at any, stage. Mr. Sen placed reliance on a Bench decision of the Madras High Court in Queen Empress vs Ganapathi Vannianar and Others(1). The matter there was not considered from the point of view mentioned above and we do not think that that case was correctly decided. Mr. Sen further argued that in any case the notification in this case was issued in February, 1947, three years before the Constitution came into force, and that though the trial had not concluded before the coming into force of the Constitution, the trial that had started by the Court of Session with the help of assessors was a good trial and it cannot be said that it was vitiated in any manner. Now it is obvious that if the assessors here were in the status of jurors and gave the verdict of "not guilty" as they did in this case, the accused would have been acquitted unless there were reasons for the Sessions Judge to make a reference to the High Court to quash the trial. Clearly therefore the accused was prejudiced by a trial that continued after the inauguration of the Constitution and under a procedure which was inconsistent with the provisions of article 14 of the Constitution. It was also vitiated because the notification which authorised it also travelled beyond the powers conferred on the State Government by section 269 (1) of the Code of Criminal Procedure. Mr. Sen, for the contention that the continuation of the trial after the inauguration of the Constitution (1) I.L.R. 236 under the notification of 1947, even if that notification was discriminatory in character, was not invalid, placed reliance on two decisions of this Court (1) Syed Kasim Razvi vs The State of Hyderabad(1) and (2) Habeeb Mahomed vs The State of Hyderabad(2). In our opinion, these decisions, instead of helping his contention, completely negative it so far as the facts of this case are concerned. In both these decisions, it was pointed out that for the purpose of determining whether the accused was deprived of the protection under article 14, the Court has to see first of all, whether after eliminating the discriminatory provisions it was still possible to secure to the accused substantially the benefits of a trial under the ordinary law; and, if so, whether that was actually done in the particular case. Now it is obvious that it is impossible to convert a trial held by means of assessors into a trial by jury and a trial by jury could not be introduced at the stage when the procedure prescribed by the notification became discriminatory in character, It is not a case where the discriminatory provision of the law can be separated from the rest. Again, a fair measure of equality in the matter of procedure cannot be secured to the accused in this kind of cases. As pointed, out in Syed Kasim Razvi 's case(1) if the normal procedure is trial by jury or with the aid of assessors, and as a matter of fact there was no jury or assessor trial at the beginning, it would not be possible to introduce it at any ' subsequent stage ' and that having once adopted the summary procedure it is not possible to pass on to a different procedure at a later date. In such cases the whole trial would have to be condemned as bad. The same was the view taken by this Court in Lachmandas Kewalram Ahuja vs The State of Bombay (1). That case proceeded on the assumption that it was not possible for the Special Court to avoid the discriminatory procedure after the 26th January, 1950. Therefore the trial was bad. In view of these observations, it is not possible to accept this part of Mr. Sen 's contention. (1) [I953] S.C.R. 589. (3) [1952]S.C.R. 710. (2) ; 237 Mr. Sen, in his quiet manner, faintly suggested that in view of the decisions of this Court in Kathi Ranig Rawat vs The State of Saurashtra(1) and Kedar Nath Bajoria vs The State of West Benga(2)the decision of this Court in Anwar Ali Sarkar 's case (3), in which it was pointed out that the State Government could not pick out a particular case and send it to Special Court for trial, had lost much of its force. It seems to us that this suggestion is based on a wrong assumption that there is any real conflict between the decision in Anwar Ali Sarkar 's case(3) and the decision in the Saurashtra case(1) or in the case of Kedar Nath Bajoria(2). It has been clearly pointed out by this Court in Kedar Nath Bajoria 's case that whether an enactment providing for special procedure for the trial of certain offences is or is not discriminatory and violates article 14 of the Constitution must be determined in each case as it arises, and no general rule applicable to all cases can be laid down. Different views have been expressed on the question of application of article 14 to the facts and circumstances of each case but there is no difference on any principle as to the construction or scope of article 14 of the Constitution. The majority judgment in Kedar Nath Bajoria vs The State of West Bengal(2) distinguished Anwar Ali Sarkar 's Case(3) on the ground that the law in Bajoria 's case(2) was based on a classification which, in the context of the abnormal post war economic and social conditions, was readily intelligible and obviously calculated to subserve the legislative purpose, but did not throw any doubt whatsoever on the correctness of that decision. The present notification is more on the lines of the Ordinance that was in question in Anwar Ali Sarkar 's case(3) and has no affinity to the Ordinance and the attending circumstances that were considered in the Saurashtra case(1) or in the case of Kedar Nath Bajoria(2) and in the light of that deci sion it must be held that the notification issued in 1947 became discriminatory in character on coming into force of the Constitution and was hit by article 14 of the Constitution. (1) ; (2) ; (3) [1952) S.C.R. 284. 238 The result therefore is that the trial of the appellant after the 26th January, 1950, by the Sessions Judge with the aid of assessors was bad and must therefore be quashed and the conviction set aside. In our opinion, it would not advance the ends of justice if at this stage a fresh trial by jury is ordered in this case. We therefore allow the appeal, set aside the conviction of the appellant and direct that he be set free. Appeal allowed.

Trial by jury is undoubtedly one of the most valuable rights which an accused can have but it has not been guaranteed by the Constitution. Section 269(1) of the Code of Criminal Procedure is an enabling section and empowers the State Government to direct (1) 75 I.A. 41 (2) 76 1,A. 10 225 that the trial of all offences or of any particular class of offences before any Court of Session shall be by jury. It has the further power to revoke or alter such an order. There is nothing wrong if the State discontinues trial by jury in any district with regard to all or any particular class of offences. The section does not empower the State Government to direct that the trial of a particular case or of a particular accused person shall be by jury while the trial of other persons accused of the same offence shall not be by jury. The section does not envisage that persons accused of the, same offence but involved in different cases can be tried by the Court of Session by a different procedure namely some of them by jury and some of them with the help of assessors. The ambit of the power of revocation or alteration is co extensive with the power conferred by the opening words of the section and cannot go beyond those words. The impugned notification of the year 1947 revoking the pre vious two notifications had denied to certain individuals the right to be tried by jury while retaining that right in the case of other individuals who had committed the same or similar offences and thus it had travelled beyond the powers conferred on the State Government by section 269(1) of the Code of Criminal Procedure and was thus void and inoperative. The impugned notification also contravened the provisions of article 14 of the Constitution inasmuch as the classification was not based on some real and substantial distinction bearing a just and reasonable relation to the objects sought to be attained but was made arbitrary and without any substantial basis. The impugned notification did not in express terms indicate the grounds on which this set of cases had been segregated from other sets of cases falling under the same sections of the Indian Penal Code. The classification as formulated by the High Court had no relation to the object in view, that is, the withdrawal of jury trial in these cases. The contention that the defect in the trial, if any, was cured by section 536 of the Code of Criminal Procedure as this objection was not taken in the trial Court, was without force as section 536 postulates irregularities at the trial after the commencement of the proceedings but it does not concern itself with a notification made under section 269(1) which travels beyond the limits of that section or which contravenes article 14 of the Constitution. This objection which goes to the very root of the jurisdiction of the Court can be taken notice of at any stage. The impugned notification issued in 1947 was on the lines of the Ordinance that was in question in Anwar Ali Sarkar 's case ; The State of West Bengal vs Anwar Ali Sarkar ([1952] S.C.R. 284), Queen Empress vs Ganapathi Vannianar and Others (I.L.R. , Syed Kasim Razvi vs The State, of Hyderabad ([1953] 29 226 S.C.R. 589), Habeeb Mahomed vs The State of Hyderabad ( ; , Lachmandas Kewalram Ahuja vs The State of Bombay ([1952] S.C.R. 710), Kathi Raning Rawat vs The State of Saurashtra ([19521 S.C.R. 435), Kedar Nath Bajoria vs The State of West Bengal ( (1954] S.C.R. 30) referred to.

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ivil Appeal No. 768 (NT) of 1975. From the Judgment and Order dated 3.1.1973 of the Allahabad High Court in Writ Petition No. 4225 of 1971. S.C. Manchanda and A.K. Srivastava for the Appellants. NEMO for the Respondents. The Judgment of the Court was delivered by 263 VENKATACHALIAH, J. This appeal by certificate, preferred by the State of U.P. against the Judgment, dated, 3.1.1973 of the Allahabad High Court in W.P. No. 4225/1971, raises a short question whether the Rule 25 A(5) of the U.P. Sales Tax Rules 1948 (Rules) in so far as it stipulates that a 'recognition certificate ' issued for purposes of Section 4 B of the U.P. Sales Tax Act 1948 (Act) "shall take effect from the date of its issue" is inconsistent with does not carry out the purposes of and, therefore, is ultra vires Section 4 B of the U.P. Sales Tax Act 1948 (Act). The full bench of the Allahabad High Court, by a majority, has, by the judgment under appeal, preferred this view. So far as the declaration on the law on the point is concerned, the matter loses much of its edge in view of the relevant amendment brought about by the U.P. Taxation Laws (Amendment & Validation) Act 1978, which now provides that such a recognition certificate shall take effect from the anterior date of the presentation of the application by the dealer. By the same amendment, the certificate is rendered valid, for three successive assessment years at a time and the renewals shall also be for like periods. The necessary and material facts are in a short compass and may briefly be stated: Respondent Haji Ismail Noor Mohammad & Co. a registered firm of partners was a "Dealer" registered under the Act. It, inter alia, carried on the business of manufacture of oils from groundnuts and other oil seeds. The oil so manufactured was sold by the Dealer both intra state; inter state and by way of export. Under Section 3 D of the Act, a dealer is liable to purchase tax on oil seeds at 3% ad valorem on the turnover of the purchases made by the dealer from the cultivators or other unregistered dealers. Section 4 B of the Act, however, contemplates special reliefs to certain manufactures of notified goods, the relief being in the form of concessional rate of purchase tax or exemption there from, as the case may be, as notified by the State Government if the "dealer holds a recognition certificate issued under sub section (2) in respect thereof. " On 10.2.1969, the State Government notified that oils of all kinds to be "notified goods" for purposes of Section 4 B and that the purchases by the dealer, liable to tax on the turnover of the firstpurchases shall be entitled to a concessional rate of tax at 2% on the 264 raw material required for the manufacture of notified goods. The present controversy relates to the Dealer 's entitlement to the concessional rate of purchase tax respecting the purchase turn over of its first purchases under the said notification. On 21.3.1969, Respondent applied under Section 4 B(2) to the prescribed authority, in the prescribed form for the grant of a recognition certificate. The recognition certificate, for certain reasons, was granted only on 5.2.1969. There appears no dispute that the turn over of the first purchases of the Respondent, respecting which the claim for reduced rate of tax was made, constituted raw material required for the manufacture of notified goods and, therefore, satisfied the requirement of the notification. However, the relief was confined to the turnover of such first purchases made only after 5.12.1969, i.e., the date of issue of the certificate and the relief in respect of the turnover prior to that date was refused on the basis of the condition in sub rule 5 of Rule 25 A which provided that "such certificate shall take effect from the date of its issue". Respondent, in its writ petition before the High Court contended that this clause in Sub Rule (5) of Rule 25 A is at cross purposes with and did not carry out the objects of Section 4 B and is ultra vires Section 4 B. The High Court, by majority opinion, has accepted this contention. The provisions of Section 4 B and Rule 25A(5) may now be noticed: "4 B. Special relief to certain manufacturers. (1) Notwithstanding anything contained in sections 3, 3 A, 3 AA and 3 D: (a) where any goods liable to tax under section 3 D are purchased by a dealer who is liable to tax on the turnover of his first purchases under that section and the dealer" holds a recognition certificate issued under subsection (2) in respect thereof," he shall be liable in respect of those goods to tax at such concessional rate, or be exempt from tax, as may be notified in the Gazette by the State Government in that behalf; 265 (b) where any goods liable to tax under any other section are sold by a dealer to another dealer and such other dealer furnishes to the selling dealer in the prescribed form and manner a certificate to the effect that he holds a recognition certificate issued under sub section (2) in respect thereof, the selling dealer shall be liable in respect of these goods to tax at such concessional rates, or be exempt from tax as may be notified in the Gazette by the State Government in that behalf. (2) A dealer who requires any goods referred to in sub section (1) for use as raw material for the purposes of manufacture in the State of Uttar Pradesh of any notified goods, and such notified goods are intended to be sold by him in the State or in the course of inter state trade or commerce or in the course of export out of India, may apply within such period, and in such form and manner, as may be prescribed, to the assessing authority for the grant of recognition certificate in respect thereof and if the applicant satisfied such requirements and conditions as may be prescribed, the assessing authority shall grant to the dealer in respect of such goods a recognition certificate in such form and subject to such conditions as may be prescribed." Sub Rule 5 of Rule 25 A provides: "25 A(5). The recognition certificate shall ordinarily be issued within 30 days of the presentation of the application to the Sales Tax Officer. If, however, it may not be possible to issue the certificate within the time specified above, the Sales Tax Officer shall obtain the approval of the Assistant Commissioner (Executive) of his range for an extension of time, after stating the reasons for which it is not possible to issue the certificate in time. Such certificate shall take effect from the date of its issue." (underlining supplied) In reaching such conclusion on the point as it did the reasoning that commended itself to the High Court was this: ". The efficacy of the recognition certificate under clause (a) aforesaid becomes material and relevant at the time of the quantification of the purchase tax, i.e., when 266 the assessment order is being drawn up. It is in the assessment proceedings that the liability to pay tax at a concessional rate is fructified. A dealer would be entitled to the concessional rate if he holds a recognition certificate. . " ". . The language of clause (b) does not make it a condition precedent or a necessary obligation that the purchasing dealer must at the time of the purchase produce the recognition certificate. If the purchasing dealer, subsequent to the transaction of purchase, furnishes to the selling dealer the certificate that he holds a recognition certificate, the requirements of clause (b) are fully satisfied. " The High Court also took into account that sub Rule 5 of Rule 25 A while rightly recognising the need for the issue of the certificate with due despatch and within a time bound schedule, could not, consistently with the scheme and purpose of Section 4 B, provide that the certificate shall take effect only from the date of its issue. Shri Manchanda, learned Senior Advocate appearing in support of the appeal, contended that the interpretation placed by the High Court runs in the teeth of the express statutory language which stipulates that "the dealers holds a recognition certificate" and the interpretation placed on it by the High Court, if accepted, would have the effect of adding something to the language of the section which is not in the Section. Learned Counsel said that the High Court had, by the judgment, virtually introduced a fiction that under certain circumstances where there had been a delay in issuing the certificate, the dealer must be deemed to have held the certificate. Shri Manchanda submitted that the clear intendment of the provision was that the dealer should hold the 'recognition certificate ' at the time of the purchases and that it would not be sufficient compliance with the statute if the dealer comes to hold it subsequently. He accordingly commended the view that found favour with the learned judge in the minority in the High Court. We did not have the benefit of the arguments from the side of the respondent, which has remained unrepresented. It is really a matter of construction of the language of Section 267 4 B; whether the dealer should hold a recognition certificate at the time the purchases were made or whether the requirements of the 'Section should be held to be satisfied if the dealer holds such a "recognition certificate" at the time of the assessment of the turnover in question. The High Court has held that the requirements of the Section are substantially complied with if the certificate is available to the dealer at the time the liability to tax of the turnover in question is sought to be determined, subject to the requirement that the turnover is after the date of the application filed by the dealer for issue of a certificate. According to the High Court, the date of actual issue of the certificate should not be held to be material and that the benefit for the concessional rate of tax should be available to the dealer if the dealer, at the time of the assessment, holds a recognition certificate "in respect thereof '. According to the High Court the language of Section 4 B does support the extreme construction that the recognition certificate should be held at the time of the purchases themselves. On a consideration of the matter we are persuaded to the view that the construction placed on the provision by the High Court is an eminently plausible one. There is nothing basically wrong in the approach of the High Court that the statutory language does not insist upon the contemporaneity of the holding of the certificate with the purchases and that it is sufficient if the dealer, subsequently, comes to hold certificate "in respect thereof". It seems possible to say that to insist upon a contemporaneity of the purchases and the certificate would also amount to qualifying the word 'holds ' in the section by adding the words "at the time of the purchases". It is true, the words "in respect thereof" as Lord Greene M.R. said are "colourless words", See Trustees vs IRC, but in Section 4 B, they are in their reference to the certificate, sufficiently, though non specifically wide enough to include a certificate obtained later but pertaining to the turnover in question. If this is the scheme of Section 4 B in that it does not exclude from its contemplation the efficacy and sufficiency, for its purpose of a certificate issued subsequently, then, the rule which compels only its prospective operation might, not unreasonably, be held to be inconsistent with and ultra vires of Section 4 B. We find therefore nothing unreasonable in this construction of Section 4 B. Indeed by the 1978 Amendment, this position has been made clear in the rule itself which, after the amendment, expressly provides that the certificate will take effect from the 268 date of the application made by the dealer and not merely from the date of the issue. In this view of the matter, the judgment of the High Court does not call for interference. The appeal is dismissed. However, there will be no order as to the cost. R.S.S. Appeal dismissed.

The respondent "dealer" registered under the U.P. Sales Tax Act, 1948 was carrying on the business of manufacture of oils from groundnuts and other oil seeds, and was under section 3 D of the Act, liable to purchase tax on oil seeds at 3% ad valorem on the turnover of its purchases from the cultivators or other unregistered dealers. Section 4 B of the Act contemplated special reliefs in purchase tax to certain manufacturers of 'notified goods ', if the "dealer holds a recognitioncertificate issued under sub section (2) in respect thereof". Sub rule (5) of Rule 25 A of the U.P. Sales Tax Rules, 1948, however, stipulated that a 'recognition certificate ' issued for purposes of Section 4 B of the Act "shall take effect from the date of its issue. " On 10.2.1969 the State Government notified oils of all kinds to be "notified goods" for purposes of section 4 B entitling the dealer to a concessional rate of purchase tax at 2% on the raw material required for the manufacture of the "notified goods". On 21.3.1969, respondent applied under section 4 B(2) for the grant of a recognition certificate, which was granted only on 5.12.1969. The relief to the respondent in the form of concessional rate of purchase tax was accordingly confined and limited to the turnover of such first purchases made only after 5.12.1969, the date of issue of the recognition certificate. In the writ petition filed by the respondent, the Full Bench of the Allahabad High Court, by majority, accepted its contention that the clause in sub rule (5) of Rule 25 A regarding the effective date of the recognition certificate was at cross purposes with and did not carry out the objects of Section 4 B and was therefore, ultra vires section 4 B. The High Court held that the requirements of section 4 B were substantially complied with if the dealer, at the time of assessment, held a recognition certificate, subject to the requirement that the turnover was after the date of the application. 262 Before this Court the Revenue contended that the interpretation placed by the High Court runs in the teeth of the express statutory language and the clear intendment of the provision that the dealer should hold the 'recognition certificate ' at the time of the purchases. Dismissing the appeal, it was, ^ HELD: (1) There is nothing basically wrong in the approach of the High Court that the statutory language does not insist upon the contemporaneity of the holding of the certificate with the purchases and that it was suffcient if the dealer, subsequently, came to hold a certificate "in respect thereof". [267D E] (2) To insist upon a contemporaneity would amount to qualifying the word 'holds ' in section 4 B by adding the words "at the time of the purchases". [267E] (3) The words "in respect thereof" are "colourless words", but in section 4 B they are, in their reference to the certificate, suffciently, though non specifically, wide enough to include a certificate obtained later but pertaining to the turnover in question. [267F G] (4) The rule which compels only its prospective operation might, not unreasonably, be held to be inconsistent with the ultra vires of section 4 B. There is nothing unreasonable in this construction of section 4 B. Indeed, by the 1978 Amendment, this position has been made clear in the rule itself, which after the amendment, expressly provides that the certificate will take effect from the date of the application made by the dealer and not merely from the date of the issue. [267G H; 268A] Trustees vs IRC. , , referred to.

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Appeal No. 39 of 1955. Appeal from the judgment and decree dated August 28, 1953, of the Calcutta High Court in Appeal from Original Decree No. 97 of 1950 arising out of the judgment and decree dated April 27, 1950, of the Court of Second Sub Judge of Zillah Hooghly in Rent Suit No. 3 of 1949. B. Bagchi and P. K. Chosh, for the appellant. N. C. Chatterjee and D. N. Mukherjee, for the respondents. March 24. The following Judgment of the Court Was delivered by SINHA J. The main controversy in this appeal on a certificate granted by the High Court of Calcutta, against the concurrent decisions of the courts below, centers round the true interpretation and effect of sections 15 and 16 of the Bengal Tenancy Act Act VIII of 1885 (hereinafter referred to as the Act). The courts below have substantially decreed the plaintiff 's suit for arrears of rent in respect of a se patni tenure. Hence, the appeal by the defendant. The plaintiffs ancestor, Nirmal Chandra Benerjee, was a durpatnidar under the patnidar in respect of the tenure in question. He died leaving him surviving, his three sons Satya Ranjan, Satya Jiban and Satya Kiron who became the durpatindars in respect of the tenure by succession, and there is no dispute that they were so mutated in the superior landlord 's office. There was a partition suit between them in the court of the 228 subordinate judge at Alipur, being Title Suit No. 128 of 1946. During the pendency of that suit, Promode Kumar Banerjee was appointed Receiver of the properties under partition. Satya Jiban died during the pendency of the partition suit. The exact date of his death does not appear in the record. His heirs are: his widow Tusharika Debi and his two sons, Uptal Kumar Banerjee who is of unsound mind, and Ujjal Kumar Banerjee, a minor. The Receiver aforesaid, instituted the suit out of which this appeal arises, for arrears of rent, against the first defendant, now appellant, in respect of the years 1352 to 1355 B. section He put the total claim inclusive of interest, at Rs. 40,000 and odd, which was subsequently reduced to Rs. 27,000 and odd. It is not necessary to go into the details of the claim, because the amount decreed is no more in controversy. To the suit for rent, being Rent Suit No. 3 of 1949, in the court of of Second Subordinate Judge, Hooghly, the heirs aforesaid of Satya Jiban were impleaded as proforma defendants Nos. 2, 2(a) and 2(b), and so were Satya Kiran and Satya Ranjan as defendants 3 and 4, respectively. During the pendency of the rent suit, the partition suit was compromised, with the result that the durpatni tenure in question was allotted to Satya Jiban 's branch of the family. Hence, the plaint was amended by an order of the court, dated July 25, 1949, by substituting the aforesaid heirs of Satya, Jiban as the plaintiffs in the place of the Receiver aforesaid, who was the original plaintiff and who was discharged from the record. The suit was contested on a number of grounds, but it is now necessary only to refer to the plea in bar of the suit, namely, that the plaintiffs substituted as aforesaid, and by transposition from the category of proforma defendants to that of plaintiffs, were not entitled to sue for rent on the ground that they had not got themselves mutated in the place of their predecessors in title in the landlord 's records and that, therefore, this suit was barred under section 16 of the Act. It is no more necessary to set out the facts bearing on the devolution of title to the property in question, 229 because that was not a controversy raised in the High Court, and the arguments in this Court were, therefore, confined to the technical plea aforesaid. After hearing the parties, the learned trial judge decreed the suit for Rs. 25,000 and odd. The first defendant preferred an appeal to the Calcutta High Court, and a Divisional Bench of that Court, after hearing the parties, directed a limited remand to the trial court, for taking additional evidence in proof of certain documents filed by the plaintiffs but not properly proved at the original trial. The trial court was also directed to submit its findings on the question of the right of the plaintiffs to maintain the suit in view of the provisions of sections 15 and 16 of the Act. After remand, the documents on proof were again, marked as exhibits I and 2, and the finding was returned by the trial court in due course. After the receipt of the finding, the High Court heard the appeal once again and dismissed it with costs. The appellant moved the High Court and obtained the necessary certificate. Hence this appeal. In this Court, it was argued on behalf of the appellant that the provisions of section 15 are mandatory; that those provisions not having been complied with, the bar imposed by section 16, operates against the plaintiffs, with the result that they are not entitled to recover the arrears of rent by suit. Sections 15 and 16 are in these terms: " 15. When a succession to a permanent tenure takes place, the person succeeding shall give notice of the succession to the landlord or his common agent, if any, in the prescribed form within six months from the date of succession, in addition to or substitution of any other mode of service, in the manner referred to in sub section (3) of section 12: Provided that where, at the instance of the person succeeding, mutation is made in the rent roll of the landlord within six months of the succession, the person succeeding shall not be required to give notice under this section." " 16. A person becoming entitled to a permanent tenure by succession shall not be entitled to recover by suit or other proceeding any rent payable to him as 230 the holder of the tenure, until the duties imposed upon him by section 15 have been performed. " It is common ground that the notice contemplated by section 15, was not given, but it was contended on behalf of the plaintiff respondents that the proviso to that section had been complied with inasmuch as evidence had been adduced by the plaintiffs and accepted by the courts below, that the superior landlords accepted rents from the plaintiffs and granted them rent receipts in respect of the tenure in question, after ordering mutation of their names in the rent ,roll. In order to bring the case within the proviso to section 15, quoted above, the plaintiffs served a requisition on the landlords (I) Maharajadhiraj of Burdwan, and (2) Sri Ramlal Bandopadhyaya, to produce all papers in respect of mutation of names regarding the tenure in question. Those documents were not produced, but the plaintiffs examined P. W. 2 an employee of the Burdwan Raj and P. W. 3 their own employee to prove the necessary mutation. P. W. 2 deposed that the plaintiffs paid Rs. 101 as fee for mutation of their names in the office of the Maharajadhiraj of Burdwan and that they were mutated in respect of the 8 annas ' interest. P. W. 3, similarly, proves mutation in the office of Ramlal Babu, in respect of the other 8 annas ' share. In pursuance of the mutation, rent was paid and accepted by the landlords. The necessary order of mutation and the rent receipt exhibits 2 and respectively were produced and placed on record after being duly proved Nothing has been brought out in the cross examination of these two witnesses to detract from the value of their evidence. Naturally. therefore. the courts below had no difficulty in accepting their evidence corroborated by those pieces of documentary evidence. But it was contended on behalf of the appellant that section 15 requires proof of mutation in the rent roll of the landlord, and the rent roll or its certified copy, should have been adduced in evidence, and in the absence of the primary evidence of mutation contained in the rent roll the plaintiffs have failed to prove the requisite mutation. In our opinion, there is no substance in this contention. The landlords rent roll 231 was not in the custody or control of the plaintiffs. They served requisition on their landlords to produce those documents. As those documents were not produced by the parties who would ordinarily be in possession of their rent rolls, the plaintiffs had no option but to adduce secondary evidence of the mutation, namely, the order sanctioning mutation and the payment of rent to the superior landlord, in pursuance of the sanction of mutation. Like any other disputed fact, the factum of mutation in the landlords rent roll can be proved by the production of the original rent roll or by its certified copy, if available, and failing those, by other secondary proof of mutation. In the circumstances, we are inclined to hold that in this case, the courts below were justified in coming to the conclusion that there was the necessary mutation of the plaintiffs in the landlords ' rent roll. It was next contended that there is no proof that the mutation, even if made, had been made " within six months of the succession ". It is true that the date of the death of Satya Jiban, plaintiffs predecessor in title, is not known, if that is the point of time with reference to which the six months ' period has to be calculated. If the starting point of time is the date of the allotment of the tenure in question to the plaintiffs ' share as a result of the partition, we know that June 20, 1949, is the date of the compromise, as appears from the list of dates supplied by the counsel for the appellant. The rent receipt, exhibit 1, is dated January 4, 1950, and the order of mutation passed by the Burdwan Raj, is dated January 20, 1950. Apparently, therefore, the mutation must have been effected within six months from the date of the compromise, as a result of which the entire tenure was allotted to the plaintiffs ' share. If was not argued be fore us that this was not a case of succession, as contemplated by section 15, namely, the death of the last holder on the happening of which event, the succession to the tenure opened in favour of the plaintiffs. Satya Jiban had only one third share in the entire tenure by inheritance from his father. The other two thirds shares had been inherited by his two brothers aforesaid. Hence, strictly speaking, succession to only 232 the one third share of Satya Jiban, could open on his death. But as this aspect of the case was not canvassed before us, we need not express any opinion on it. As already indicated, the date of the death of Satya Jiban not having been brought on record and if the six months ' period has to be counted from that date, it has got to be assumed in favour of the appellant that the mutation even if effected as found by the courts below, was not done within the prescribed time. It may also be mentioned that it was not argued before us that the rent suit having originally been filed by the Receiver pendente lite, who represented the entire 16 annas interest in the tenure, the suit had been properly instituted, and no question under sections 15 and 16 of the Act, would, therefore, arise if any devolution of interest took place during the pendency of the suit. For the purpose of determining the present controversy, we proceed on the assumption that the mutation had not been made within six months as prescribed by section 15, and that this defect affected the entire interest in the tenure in spite of the fact that the two thirds interest which originally belonged to Satya Jiban 's brothers, came to the plaintiffs as a result of the compromise in the partition suit. Section 16 as it stands after the amendment by the Bengal Act IV of 1928, does not impose an absolute bar on the recovery by suit of the arrears of rent. The bar is there only " until the duties imposed upon him (that is, the plaintiffs) by section 15, have been performed. " Now, section 16 does not speak of any time limit. It only speaks of the bar to the recovery of the arrears until the performance by the landlord of the duty of giving notice of the succession or getting mutation made on the succession. It was argued on behalf of the appellant that the performance of the duty aforesaid is inextricably bound up with the period of six months, and that the performance of the duty beyond that period, is no performance at all in the eye of law. We are not impressed by this argument, and there are several very good reasons for holding to the contrary. The provisions of section 15 are meant not only for the benefit of the landlord or of the inferior tenant, but of the intermediate landlords also, that is to say, the 233 provision for notice, or in the alternative, for mutation .of names in the landlord 's rent roll, is meant to protect the interest of the superior landlord in that it ensures payment of his dues by the intermediate landlord before the latter can realise the same from his tenant, in this case, the se pataidar. Those provisions also ensure that the rightful persons entitled to the durpatni interest, get themselves mutated in the superior landlord 's office, so that the inferior tenants may know who their new landlords are as a result of succession to their old landlords. The legislature,, by fixing the limit of six months, intended to indicate that the notice of the mutation should be effected within six months, that is to say, within a reasonable time from the date of the devolution of interest, even as there are similar provisions in respect of the mutation of proprietors in the Collectorate for the purpose of regular realization of public demands. But the legislature did not intend to make it mandatory in the sense that failing to observe the time limit, the landlord completely deprives himself of his right to receive rent from his tenant, even though otherwise due. That is the reason why, in section 16, there is no indication of time limit. On the other hand, there is an indication to the contrary in so far as the last clause quoted above, provides that the bar against the recovery by suit of any rent payable to the holder of the tenure, operates only until he performs the duties imposed upon him by section 15. Section 16, being in the nature of a penal provision, has to be strictly limited to the words contained in the penal clause, and the penalty should not be extended by implication. If the legislature had intended that the penalty should operate for all times if the duty were not performed within the time specified in section l5, the legislature would have used the words " within the prescribed time "; or some such words. Instead of laying down such a time limit, the legislature has, by the amendment aforesaid by Act IV of 1928, made it clear that the bar operates only so long as the duty has not been performed. No authority has been cited before us in support of the extreme proposition that 30 234 the failure on the part of the landlord to serve the requisite notice or to get the necessary mutation effected within six months, has . he effect of wiping out the landlord 's right to receive rent. There may be rulings to the contrary, but this Court has to resolve the controversy on the language of the relevant sections of the statute, quoted above. That language does not clearly indicate that the result contended for on behalf of the appellant, must necessarily ensue on his making a default to take those necessary steps within the time specified. The language of the statute is not so peremptory in express terms or by necessary implication. On the other hand, as already indicated the language easily lends itself to the construction that the prescribed time is not in the nature of a statutory bar to the exercise of the landlord 's right to recover rent. in this connection, it has to be remembered that patni tenure and all other subordinate tenures under the patnidar, are permanent tenures. Hence, the relationship of landlord and tenant, continues from generation to generation without there being any necessity of fresh attornment on the death of a durpatnidar or other grades of tenants in the process of sub infeudation. The relationship is all the time there, only the landlord 's record has to be kept up to date by making the necessary substitution in the rent roll or by giving notice of the change in the succession to the landlord 's interest. The legislature had to indicate a time by way of laying down the ordinary procedure for taking the steps indicated in section 15. Six months ' period was deemed by the legislature to be a sufficiently long period to enable those steps being taken in the ordinary course of business. But it is not difficult to imagine cases where such steps may not be feasible within the prescribed time. For example, where the landlord dies leaving him surviving only an infant heir without a proper guardian to protect the infant 's interest, it may take a considerably longer period than six months to have a proper guardian appointed, if necessary, through court. It may well be that the succession itself is disputed, and the controversy may take some years to get determined finally. It cannot be reasonably 235 suggested that because the requisite notice or the mutation has not been given or effected within the prescribed period of six months, the landlord 's right to recovery` of rent, disappears. That could not have been the intention of the legislature. Again, it may easily be supposed that an honest tenant goes to his new landlord and pays him rent hand to hand, even though there has been no such step taken within the time as contemplated by section 15. It cannot be said that such a payment of rent out of court, will not be recog nized by a court, if and when a controversy about such a payment were to arise. In this way instances maybe multiplied where the provisions of section 15 of the Act, have not been strictly complied with, but still the receipt and payment of rent as between the patnidar and his tenant, have continued for a sufficiently long period, to prove what was required to be done under that section. In our opinion, the inference is clear that the provision as regards the time limit, is not mandatory but only directory, and that transgression of that directory provision has the effect of only delaying the landlord 's remedy of recovery of arrears of rent by suit so long as the landlord has not done what he is required by law to do. But that provision has not the effect of absolutely depriving the landlord of his remedy by suit for all times; he may recover through court, of course, subject to the law of limitation. In our opinion, therefore, acceptance of the appellant 's arguments would be nothing more than " piling unreason upon technicality", which no, court of justice can countenance. In view of these considerations, it must be held that there is no merit in this appeal which is, accordingly dismissed with costs. Appeal dismissed.

The time limit of six months provided by section 5 of the Bengal Tenancy Act within which a tenure holder has to give notice of his succession to the landlord or have his name mutated in his rent roll is not mandatory but directory in character and the only effect which non observance of that time limit can have under section 16 of the Act, is to postpone his remedy to recover arrears of rent by way of suit till such time when he performs the duty cast upon him by section 5 Of the Act, but it cannot, by itself, bar the remedy for all time to come. Section 16 is a penal provision and must be subjected to its statutory limitation and the penalty it imposes cannot be extended by implication. Consequently, in a case where the sepatnidar resisted the durpatnidars ' suit for recovery of arrears of rent on the ground, inter alia, that they had not got themselves mutated in the landlord 's records under section 15 of the Bengal Tenancy Act and as such 227 the suit was barred under section 16 of the Act and the courts below found on the evidence adduced by the durpatnidars that the landlord had accepted rents from them and granted receipts after ordering mutation of their names in the rent roll: Held, that the courts below were right in holding in favour of the durpatnidars that there was the necessary mutation in the landlord 's rent roll. The factum of mutation in the landlord 's rent roll can be proved not only by the production of original rent roll or its certified copy but,failing these, also by other secondary proof of mutation.

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Civil Appeal Nos. 1286, 1287 and 2511 of 1969 From the Judgment and Order dated 20 8 1968 and 3 4 1969 of the Punjab and Haryana High Court in Civil Writ Nos.800/66, 2625/65 and LPA No 141 of 1969. Harbans Singh and R. N. Sachthey for the Appellant in all the appeals. E. C. Agarwala and M. L. Srivastava for the Respondent in C.A. 1286/69. 406 H.K. Puri for the Respondent in C. A. 1287/69 N. N. Keswani for the Respondent in C.A. 2511/69 The Judgment of the Court was delivered by SHINGHAL, J. These three appeals by certificates granted by the High Court of Punjab and Haryana are directed against two judgments of that court dated August 20? 1966, and another judgment of that court dated November 22, 1968. The High Court first decided the writ petition of constable Dwarka Das, which is the subject matter of appeal No.1286 of 1969, and disposed of the other two writ petitions, which are the subject matter of appeals Nos. 1287 and 2511 of 1969, on the basis of that judgment. These three appeals therefore Raise common questions of law and have been heard together at the request of learned counsel for the parties and will be disposed of by a common judgment The writ petitioners in all the three cases were recruited as constables in the police force of the Punjab State. It is not in dispute before us that (i) they were police officers of the State, (ii) they were enrolled as police officers, (iii) they had put in more than three years service after their recruitment and enrolment as police officers, and (iv) they were discharged under the provisions of rule 12.21 of the Punjab Police Rules, 1934, (hereinafter referred to as the Rules and not by way of punishment under the provisions of Chapter XVI of the Rules. No attempt has been made to distinguish one case from the others on facts. On the other hand learned counsel for the parties are in agreement that the facts of the three cases are quite similar and they raise the common question of law whether the orders of discharge were valid. The respondents challenged the validity of those orders by writ petitions which were allowed by the impugned judgments of the High Court and the three appeals are before us for that reason. It has been argued by Mr Harbans Singh, on behalf of the appellant State, that even though the respondents had put in more than three years service as police officers of the State Government, their appointments were temporary and could be terminated for that reason even if the termination could not strictly be said to fall within the purview of rule 12.21 of the Rules. that in fact is the only question II for consideration in these appeals and can easily be answered with reference to the provisions of the , hereinafter refer red to as the Act, and the Rules. 407 Section 1 of the Act defines "Police" to include all persons who A shall be enrolled under it. Section 2 provides that the entire police establishment under the State Government shall be deemed to be one police force, and shall be formally enrolled. It further provides that the conditions of service of the members of the subordinate ranks of the police force shall be such as may be determined by the State Government. Section 8 is also relevant, for it expressly provides that every police officer appointed to the police force of the State (other than an officer mentioned in section 4), shall receive on his appointment a certificate in the form annexed to the Act, by virtue of which he shall be vested with the powers, functions and privileges of a police officer. The certificate states that the police officer concerned has been appointed a member of the police force under the Act, and vested with the powers. functions and privileges of a police officer. The certificate is not therefore the order of appointment or enrolment, but is subsequent to the appointment and the enrolment, even though it is a part of the process of appointment and enrolment, in as much as it certifies that the police officer has been vested with the necessary powers, functions and privileges of a police officer. The certificate does not however have any bearing on the question whether its holder is a permanent or a temporary police officer, for that is a matter which has to be governed by the other conditions of his service. It is not in dispute before us that such certificates were issued to all the three respondents and that they functioned as police officers for more than three years. Chapter XII of the Rules deals with the appointment and enrolment of police officers. Clause (3) of rule 12.2. provides, inter alia, as follows, "(3) All appointments of enrolled police officers are on probation according to the rules in this chapter applicable to each rank. " It is therefore obvious that as the respondents were enrolled police officers, they were on probation. The period of probation has not been specified in the Rules, but rule 12.21 provides for the discharge of an inefficient police officer as follows "12.21. A constable who is found unlikely to prove an efficient police officer may be discharged by the Superintendent at any time within three years of enrolment. There shall be no appeal against an order of discharge under this rule. " 408 So if rules 12.2(3) and 12.21 are read together, it will appear that the maximum period of probation in the case of 3 police officer of the rank of constable is three, years, for the Superintendent OF Police concerned has the power to discharge him within that period. It follows that the power of discharge cannot be exercised under rule 12.21 after the expiry of the period of three years. If therefore it is proposed to deal with an inefficient police officer after the expiry of that period, it is necessary to do so in accordance with the rules of Chapter XVI of the Rules which makes provision for the imposition of various punishments including dismissal from the police force. It is not permissible to ignore those rules and make a simple order of discharge under rule 12.21 after the expiry of the period of three years for that will attract article 311 of the Constitution. The Superintendent of Police concerned could not have ignored that requirement of the law and terminated the services of the three respondents after the expiry of the period of three years from their enrolment in the police force of the State. The High Court therefore rightly set aside the orders of termination of the services of the three respondents and to that extent the impugned judgments are correct. But we are constrained to say that it was not justified in holding that "a constable who has obtained a certificate under rule 12.22 cannot be dealt with under rule 12.21", and that "if he is to be removed from service, procedure prescribed in Chapter XVI has to be followed. " The reason is that, as has been shown, the certificate prescribed under rule 12.22 is meant to serve the purpose of section 8 of the Act by vesting a police officer with the powers, functions and privileges of a police officer, and has to be issued on his appointment as such. The certificate is thus a letter of authority, and enables the police officer concerned to enter upon his duties as a police officer. It has to be granted almost from the inception, when a person is appointed and enrolled as police officer, and it is not correct to say that the mere issue of the certificate puts its holder beyond the reach of rule 12.21 even if it is found that he is unlikely to prove an efficient police officer and has not completed the period of three years after his enrolment. Except for this slight clarification, we find no merit in these appeals and they are dismissed with costs. M.R. Appeals dismissed.

The respondent writ petitioners were constables of the Punjab State Government, and had put in more than 3 years service, when they were discharged for inefficiency, under Rule 12.21 of the Punjab Police Rules, 1934. the High Court allowed their writ petitions challenging the validity of their discharge orders. It was contended by the State that although the respondents had put in more than three years service, their appointments were temporary and could be terminated for that reason, even if the termination could not strictly b said to fall within the purview of rule 12.21. Dismissing the appeal. the Court ^ HELD: If rules 12.2(3) and 12.21 are read together, it will appear that the maximum period of probation in the case of a police officer of the rank of constable is three years and the power of discharge cannot be exercised under rule 12.21 after expiry of that period. If it is proposed to deal with an inefficient police officer after the expiry of three years, it is necessary to do so in accordance with the rules of Chapter XVI of the Rules which makes provision for the imposition of various punishments including dismissal from the police force. [408A B] The High Court was not justified in holding that a constable who had obtained a certificate under rule 12.32 cannot be dealt with under rule 12.21 "I`hat certificate is meant to serve the purpose of section 8 of the Police Act. 1861, by vesting a public officer with the powers, functions and privileges of a police officer and has to be issued on his appointment as such. The certificate is a letter of authority and enables the police officer to enter upon his duties as a police officer. It has to be granted almost From the inception and it is not correct to say what the mere issue of the certificate puts its holder beyond the reach of rule 12.21 even if it is found that he is unlikely to prove an efficient police officer and has not completed the period of three years of his enrolment. [408D G]

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Civil Appeal No. 621 of 1973. From the Judgment and Order dated 13 3 1973 of the Allahabad High Court in Spl. Appeal No. 9/73). V. J. Francis for the Appellant. O. P. Rana for the Respondent. The Judgment of the Court was delivered by PATHAK, J. This appeal by special leave arises out of a writ petition filed by a police officer aggrieved by the termination of his services. The appellant was a temporary Sub Inspector of Police. He was posted at Shahajahanpur in 1969. The Superintendent of Police, 615 Shahjanpur commenced disciplinary proceedings against the appellant on the charge that he had violated Rule 29 of the U.P. Government Servants Conduct Rules, 1956 inasmuch as without prior permission of the Government he had contracted a second marriage in November, 1964, while his first wife was alive. The charge was denied by the appellant. The Superintendent of Police recorded evidence. But at this stage the Deputy Inspector General of Police Bareilly made an order on March 12, 1970 quashing the disciplinary proceedings on the ground that the offence had been committed at Pithoragarh, situated in a different police range, and therefore the proceedings taken against the appellant were incompetent. Meanwhile, on March 8, 1970, the Inspector General of Police, Uttar Pradesh, had issued a letter to all Superintendents of Police in the State directing them to submit a list of Sub Inspectors whose reputation and integrity were very low or who were generally involved in scandalous conduct, drinking, immorality or other acts injurious to the reputation of the Police service or who were involved in encouraging crime. The Superintendent of Police, Shahjahanpur included the name of the appellant in the list submitted by him. On April 27, 1970, the Deputy Inspector General of Police made an order terminating the services of the appellant. The order recites that the services of the appellant, "are no more required and that he will be considered to have ceased to be in service . ." The appellant filed a writ petition against the order terminating his services, and claimed that the order contravened Article 311(2) of the Constitution inasmuch as it was an order imposing the punishment of dismissal or removal from service without satisfying the conditions prescribed in that provision. It was also alleged that the order was passed mala fide. The writ petition was dismissed by a learned Single Judge of the Allahabad High Court. An appeal was dismissed by a Division Bench of the High Court on March 13, 1973. In the appeal before us, it is urged for the appellant that the High Court was wrong in holding that the order terminating the appellant 's services was not an order imposing a punishment. We are referred to the disciplinary proceedings instituted against the appellant in 1969 and it is submitted that although the order of termination does not refer to those proceedings and the charge on which they were commenced, the appellant 's services were terminated with a view to punish him for contracting a second marriage without prior permission of the Government. We are satisfied that the contention is without substance. It is now settled law that an order terminating the 616 services of a temporary Government servant and ex facie innocuous in that it does not cast my stigma on the Government servant or visits him with penal consequences must be regarded as effecting a termination simpliciter, but if it is discovered on the basis of material adduced that although innocent in its terms the order was passed in fact with a view to punishing the Government servant, it is a punitive order which can be passed only after complying with Article 311(2) of the Constitution. The scope of the enquiry called for in such a case has been outlined by one of us in State of Maharashtra vs Veerappa R. Saboji and another. But the question which calls for determination in all such cases is whether the facts satisfy the criterion repeatedly laid down by this Court that an order is not passed by way of punishment, and is merely an order of termination simpliciter, if the material against the Government servant on which the superior authority has acted constitutes the motive and not the foundation for the order. The application of the test is not always easy. In each case it is necessary to examine the entire range of facts carefully and consider whether in the light of those facts the superior authority intended to punish the Government servant or, having regard to his character, conduct and suitability in relation to the post held by him it was intended simply to terminate his services. The function of the court is to discover the nature of the order by attempting to ascertain what was the motivating consideration in the mind of the authority which prompted the order. In the present appeal, the appellant was a temporary Government servant. The question whether he should be retained in service was a matter which arose directly during the drive instituted by the Inspector General of Police in March, 1970 for weeding out police officers who were unsuitable or unfit to be continued in service. The Superintendent of Police prepared a list of Sub Inspectors functioning within his jurisdiction, and included the name of the appellant in that list. The material which he considered was sufficient to lead to the conclusion that the appellant, who was a temporary Government servant, was not suitable for being retained in service. His general character and conduct led to that impression. There is nothing to show that the impugned order was made by way of punishment. The circumstance that a disciplinary proceeding had been instituted against him earlier does not in itself lead to the inference that the impugned order was by way of punishment. As we have observed, that is a conclusion which must follow from the nature of the intent behind the order. That intention can be discovered and proved, like any other 617 fact, from the evidence on the record. In this case, it is not proved that the impugned order was intended by way of punishment. Learned counsel for the appellant relies on State of Bihar & Ors. vs Shiva Bhikshuk Mishra and State of Uttar Pradesh & Ors. vs Sugher Singh. Both were cases of permanent Government servants. And as regards Regional Manager & Anr. vs Pawan Kumar Dubey, to which also reference has been made, that was a case where on the facts the Court found that there were no administrative reasons for the impugned reversion. The appeal fails and is dismissed, but in the circumstances there is no order as to costs. section R. Appeal dismissed.

The appellant was a temporary sub inspector of Police. While he was posted at Shahjahanpur the Superintendent of Police, Shahjahanpur commenced disciplinary proceedings against him on the charge that he had violated Rule 29 of the U.P. Government Servants Conduct Rules, 1956 in as much as without prior permission of the Government he had contracted a second marriage in November, 1964, while his first wife was alive. At the stage of evidence, the Deputy Inspector General of Police, Bareilly made an order on March 12, 1970 quashing the disciplinary proceedings on the ground that the offence has been committed at Pithoragarh, situated in a different police range, and therefore, the proceedings taken against the appellant were incompetent. Meanwhile, on March 8, 1970, the Inspector General of Police, Uttar Pradesh, had issued a letter to all Superintendents of Police in the State directing them to submit a list of Sub inspectors whose reputation and integrity were very low or who were generally involved in scandalous conduct, drinking, immorality or other acts injurious to the reputation of the Police Service or who were involved encouraging crime. The Superintendent of Police, Shahjahanpur included the name of the appellant in the list submitted by him. On April 27, 1970, the Dy. Inspector General of Police made an order terminating the services of the appellant, reciting that the services of the appellant "are no more required and that he will be considered to have ceased to be in service. " The appellant filed a Writ Petition against the order terminating his services and claimed that the order contravened Article 311(2) of the Constitution inasmuch as it was an order imposing the punishment of dismissal or removal from service without satisfying the conditions prescribed therein. Allegations of malafide were also made. The Writ Petition was dismissed. An appeal to the Division Bench was also dismissed. Hence the appeal by special leave. Dismissing the appeal, the Court. ^ HELD: 1. It is now settled law that an order terminating the services of a temporary Government servant and ex facie innocuous in that it does not cast any stigma on the Government servant or visits him with penal consequences must be regarded as effecting a termination simpliciter, but if it is discovered on the basis of material adduced that although innocent in its 614 terms the order was passed in fact with a view to punishing the Government servant, it is a punitive order which can be passed only after complying with article 311(2) of the Constitution. [615H, 616A B] 2. The question which calls for determination in all such cases is whether the facts satisfy the criterion repeatedly laid down by this Court that an order is not passed by way of punishment, and is merely an order of termination simpliciter, if the material against the Government servant on which the superior authority has acted constitutes the motive and not the foundation for the order. The application of the test is not always easy. In each case it is necessary to examine the entire range of facts carefully and consider whether in the light of those facts the superior authority intended to punish the Government servant or, having regard to his character, conduct and suitability in relation to the post held by him it was intended simply to terminate his services. The function of the Court is to discover the nature of the order by attempting to ascertain what was the motivating consideration in the mind of the authority which prompted the order. [616B E] In the instant case: (a) the appellant was a temporary Government servant, and the question whether he should be retained in service was a matter which arose directly during the drive instituted by the Inspector General of Police in March 1970 for weeding out Police Officers who were unsuitable or unfit to be continued in service; (b) the material which the Superintendent of Police considered was sufficient to lead to the conclusion that the appellant, who was a temporary Government servant, was not suitable for being retained in service his general character and conduct led to that impression and there was nothing to show that the impugned order was made by way of punishment; (c) the circumstance that a disciplinary proceeding had been instituted against him earlier does not in itself lead to the inference that the impugned order was by way of punishment, and (d) the impugned order was not intended by way of punishment. [616E G] State of Maharashtra vs Veerappa R. Saboji and Anr. ; ; applied. State of Bihar and Ors. vs Shiva Bhikshuk Mishra, ; State of U.P. & Ors. vs Sughar Singh ; and Regional Manager & Anr. vs Pawan Kumar Dubey; ; ; distinguished.

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ivil Appeal Nos. 231.0 & 1826 of 1968. (From the Judgment and Decree dated the 30th August, 1967 of the Madhya Pradesh High Court in Misc. First Appeals Nos. 219 and 220 of 1965) and Civil Appeal No. 132 of 1969 (From the Judgment and Decree dated the 30th August, 1967 of the Madhya Pradesh. High Court in Misc. First Appeal No. 203 of 1965). G.L. Sanghi, Talat A nsari, R.K. Sanghi and K.J. John. In CAs. 132/69 & 1826/68 for the Appellant in 132 & in 1826/ 68. G.S. Chatterjee & D.P. Mukherjee. for Respondents 1 3. 1. N. Shroff & H.S. Parihar for Respondent No. 8. H.K. Puri and A.G. Ratnaparkhi. for Respondent No. 6 for Respondents 9 to 11. G.S. Chatterjee & D.P. Mukherjee, in CA No. 2310 of 1968 for the appellants. G.S. Sanghi, Talat Ansari, R.K. Sanghi and K.J.John for respondent No. 1. H.S. Parihar & 1. N. Shroff for respondent No. 3. H.K. Puri for respondent No. 4. The Judgment of the Court was delivered by FAZAL ALI, J. With the emergence of an ultra moderd age which has led to strides of progress in all spheres of tile, we have switched from fast to faster vehicular traffic which has come as a has boon to many, though some times in the case of some it has also 946 proved to be a misfortune. Such are the cased of the victims of motor accidents resulting from rash and negligent driving which take away quite a number of precious lives of the people of our Country. At a time when we are on the way to progress and prosperity, our country can iII afford to lose so 'many precious lives every year, for though the percentage of deaths caused by motor accidents in other countries is high, in our own country the same is not by any means negligible, but is a factor to be reckoned with. Our lawmakers being fully conscious of the expanding needs of our nation have passed laws and statutes to minimise motor accidents and to provide for adequate compensation to the families who face serious socio economic problems if the main bread earner loses his life in the motor accident. The time is ripe for serious consideration of creating no fault liability. Having regard to the directive principles of State policy, the poverty of the ordinary run of victims of automobile accidents, the compulsory nature of insurance of motor vehicles, the nationalisation of general insurance companies and the expanding trend towards nationalisation of bus transport, the law of torts based on no fault needs reform. While section 110 of the Motor Vehicles Act provides for the constitution of Claims Tribunals for determining the compensation payable, section 110 A provides for the procedure and circumstances under which the family of a victim of a motor accident can get compensation and lays down the var ious norms, though not as exhaustively as it should have. The Courts, however, have spelt out and enunciated valuable principles from time to time which guide the determination of compensation in a particular situation. Unfortunately, however, section 95(2)(d) of the Motor Vehicles Act limits the compensation to be paid by an Insurance Company to Rs. 2,000/ only in respect of death to any third party and this is one disconcerting aspect on which we shall have to say something in a later part of our judgment. With this little preface we now take up the facts in the appeals by certificate filed by B.L. Gupta and Smt. Manjus hri Raha in this ' Court, and which after being consolidated have been disposed of by one common judgment both by the Claims Tribunal as also by the High Court. Manjushri Raha, the main appellant in Civil Appeal No. 2310 of 1968 will, in short, be referred to hereafter aS "Raha", whereas respond ents Oriental Fire & General Insurance Company would be referred to as "Oriental Company" and the New India Insur ance Company as "New India Company". Manjula Devi Bhuta representing the owner of vehicle No. MPG 4615 will be referred to as "Bhuta", whereas B.L. Gupta the owner of vehicle No. MPG 4307 belonging to the M.P. Speedways Company would be referred to as "Gupta". Padmavati Shastri, the respondent in one of the appeals, would be referred to as "Shastri". The appeals arise in the following circum stances. Claim Case No. 6 of 1962 was filed by Raha along with her two minor children against Bhuta, Sushil Kumar driver of vehicle No. MPG 4615, Oriental Company, New India Company, Gupta owner of the M.P. Speedways Company and Ram Swaroop driver of vehicle No. MPG 4307. The applicant Raha claimed compensation for a 947 sum of Rs. 3,00,000/ against the respondents Under section 110 A of the Motor Vehicles Act. Similarly Shastri filed Claim Case No. 5 of 1962 against the respondents mentioned above claiming Rs. 1,20,000/ as compensation from the aforesaid respondents. Both these claims were consolidated and heard and decided by one common judgment by the Claims Tribunal, Gwalior. The facts giving rise to the claims of Raha and Shastri were that on April 10, 1962 Satyendra Nath Raha the husband of Raha and Uma Shanker Shastri the husband of Shastri were travelling in vehicle No. MPG 4397 (owned by Gupta of the M.P. Speedways Company) from Bhind to TM Gwali or. When the bus travelled a distance of about 26 miles on the Bhind Gwalior road another bus bearing No. MPG 4615 belonging to Bhuta was seen coming from the opposite direc tion. The driver of the M.P. Speedways Company was Ram Swaroop while that of the bus belonging to Bhuta was Sushil Kumar. When the two buses were approaching in opposite directions, both the drivers being negligent and having failed to take the necessary precautions of keeping to their left led to a head on collision of the two buses as a conse quence of which the two persons, namely, Satyendra Nath Raha and Uma Shanker Shastri sustained fatal injuries to which they succumbed on the 'same day in the Gohad Hospital. The facts and circumstances under which the accident took place have not been disputed by counsel for the parties, nor have the essential findings of fact given by the Claims Tribunal and the High Court been challenged before us. The appeal, therefore, lies within a very narrow compass. But before dealing with the appeals, it may be necessary to indicate the reliefs granted by the Claims Tribunal to the parties concerned. The Claims Tribunal decreed the claim of Raha to the extent of Rs. 60,000/ only against all the respondents holding that the drivers of both the buses were negligent. The claim of Shastri was decreed only to the extent of Rs. 40,000/ against Bhuta, Sushil Kumar driver and Oriental Company. No decree was passed against Ram Swaroop driver of the M.P. Speedways Company and New India Company because there was no allegation of negligence against these persons in the claim flied by Shastri. Against the decision the Claims Tribunal, Gupta field Miscellaneous First Appeal No. 203 of 1965 against Bhuta, Raha and others which was dismissed by the High Court. Civil Appeals Nos. 1826 of 1968 and 132 of 1969 in this Court arise out of the aforesaid appeal before the High Court. Miscellaneous First Appeal No. 219 of 1965 was filed by Bhuta against Raha, Gupta and others which was also dismissed by the High Court, but Bhuta has not filed any appeal to this Court against the decision of the Tribunal and the High Court in that appeal. But Bhuta had flied an appeal in the High Court being Miscellaneous First Appeal No. 220 of 1965 against Shastri which was allowed by the High Court to this extent that the decree against Gupta and Ram Swaroop was made joint and several along with the appel lant Bhuta. Miscellaneous First Appeal No. 222 of 1965 was flied before the High Court by Oriental Company against Shastri but that was also dismissed. Similarly Miscellane ous First. Appeal No. 223 of 1965 was flied before the High Court by Oriental Company against Raha which was also dis missed along with the cross objection 948 which was filed by Raha for enhancement of the compensation. The High Court, however, held in Miscellaneous First Appeal No. 223 of 1965 that Oriental Company was to pay a total compensation of Rs. 20,000/ out of which Rs. 8,000/ was to be paid to Shastri and Rs. 12,000/ to Raha. The present appeals in this Court have been filed by Gupta and Raha. Neither Shastri, nor Bhuta, nor any of the Insurance Companies have filed any appeal before this Court. The short point raised by Mr. Sanghi appearing for Gupta was that in the circumstances the compensation awarded by the Claims Tribunal to Raha was too high and at any rate the High Court ought not to have made the appellant Gupta liable jointly and severally with others. In the appeal filed by Raha it is claimed that the compensation granted by the Claims Tribunal was grossly inadequate and should be enhanced. It has been stated before us by Mr. Sanghi, though not admitted by the other side, that Gupta and the Insurance Companies have paid a total amount of Rs. 29,000/ (Rs. 15,000/ by Gupta and Rs. 14,000 by insurance Companies) in full and final settlement of the claim of Raha and, there fore, the appeal should be decreed in terms of the compro mise. It was further contended that even if the amount awarded by the Claims Tribunal to Raha is enhanced that should be payable by Bhuta alone and not by the appellant Gupta, who has settled the claim with the appellant Raha. There can be no doubt that if really a settlement has been reached between Gupta and Raha then no further decree can be passed as against Gupta. The appellant further undertook to pay Rs. 10,000/ to Shastri in fulfilment of her claim. As Rs. 10,000/ has already been paid to Shastri with the result that Bhuta has yet to pay Rs. 20,000/ being her share to Shastri. Finally, it was contended that as there was no allega tion of negligence against Ram Swaroop the driver of the M.P. Speedways Company the High Court ought not to have decreed the c1aim of Raha against the appellant Gupta. We have perused the plaint before the Claims Tribunal, which is rather loosely drafted, but it clearly contains the relief of compensation even against Gupta and Ram Swaroop driver. The High Court has pointed out that even though there is no clear plea of negligence in the claim of Raha, the facts alleged and proved in the case dearly show that Ram Swaroop the driver of the M.P. Speedways Company was both rash and negligent. Pleadings have to be interpreted not with forma listie rigour but with latitude or awareness of low legal literacy of poor people. We fully agree with the finding of the High Court and see no reason to disturb it. We also agree with the order of the High Court by which it makes Gupta and Bhuta jointly and severally liable. That was the only decree which could have been passed in the circum stances. Coming now to the 'appeal filed by Raha, counsel for the appellant submitted that the compensation awarded by the Claims Tribunal is grossly inadequate and certain important factors have not been taken into consideration. On a perus al of the judgment of the Claims Tribunal it would appear that the only basis on which the compensation has been awarded is the total salary which the deceased Satyen 949 dra Nath Raha would have got upto the age of 55 years which has been taken at Rs. 1,20,000/ and after deducting half which would normally have been spent, the actual income lost to the family was Rs. 60,000/ . It seems to us, however, that in making the calculation, the Claims Tribunal and the High Court overlooked two important and vital considera tions. In the first place, while the admitted position was that the deceased Satyendra Nath Raha was working in the grade of Rs 590 30 830 35 900 and was getting a salary of Rs. 620/ p.m. at the time of his death, the Courts below have not taken into account the salary which he would have earned while reaching the maximum of his grade long before his retirement. It is admitted that the deceased Satyendra Nath Raha was 37 years of age at the time of the accident and at this rate he would have reached the maximum of the grade of Rs. 900/ at the age of 46 years i.e. full 9 years before his superannuation. The claimant has produced a certificate Ext. P 4 from the office of the Accountant General, Madhya Pradesh, Gwalior, which shows that from April 11, 1962 (i.e. the date next to the date of the death of Satyendra Nath Raha) to October 15, 1980 which would be the last working day of the deceased Raha, the deceased Raha would have drawn Rs, 1,89,402 including the increments earned and the maximum grade drawn. This figure may be rounded off to Rs. 1,88,000/ . Even if half of this be deducted as being rightly taken to have been spent by the deceased to cover day to day domestic expenses, payment of incometax and other charges, the actual income lost to the family including the value of the estate and the loss to. the dependents would be Rs. 94,000/ . This will be a fair estimate which does not take into account the economic value of the deprivation to the wife of her husband 's company for ever and the shock felt by the children. It was suggested by the High Court that as the deceased Raha was not a perma nent employee, the amount taken into account by the Compen sation Tribunal was correct. This is, however, not a con sideration which could have weighed with the Claims Tribunal in making the assessment because it was purely contingent. On the other hand with the rise in price index it could well have been expected that there would be several revisions in the grade by the time the deceased Raha had attained the age of superannuation, which, if taken into account, would further enhance the amount. In these circumstances, there fore, we think that the amount of Rs. 90,000/ would represent the correct compensation so far as the salary part of the deceased Raha is concerned. The Courts below have also not considered the effect of the. pensionary benefits which the deceased Raha would undoubtedly have got after retirement, and in fact the Claims Tribunal has restricted the span of the life of the deceased only to the age of 55 years i.e. the age of super annuation, whereas in the present economic conditions the life of an average Indian has increased more than two fold. It is, therefore, reasonable to expect that if the deceased had not died due to accident, he would have lived up at least upto the age of 65 years, if not more, so as to earn the pensionary benefits for 10 years after retirement. According to the certificate Ext. P 4 the deceased Raha would have been entitled to a monthly pension of Rs. 337 50 which 950 would mean about Rs. 4,050/ per year. There can be no doubt that whole of this amount would have to be spent, there being no other source of income and, therefore, this amount cannot be said to be lost to the estate. The certif icate Ext. P 4 further shows that the deceased Raha would have got death cum retirement gratuity to the extent of Rs. 13,500/ calculated on the basis of the presumptive aver age emoluments and presumptive last emoluments. If the deceased had lived after superannuation, he might probably have got this amount. After adding this amount of Rs. 13,500/ to. Rs. 90,000 the total amount would come to Rs. 1,03,500/ which may be rounded off to roughly Rs. 1,00,000/ . In any view of the matter, therefore, the appellant Raha was entitled to a compensation of Rs. 1,00,000/ , and the Courts below erred in completely over looking these two important aspects which we have dis cussed. It appears that the appellants Raha as also Padmavati Shastri could have got heavier compensation from the Insur ance Companies, but unfortunately the Motor Vehicles Act has taken a very narrow view by limiting the liability of the Insurance Companies under section 95 (2) (d) to Rs. 2,000/ only in case of a third party. While our Legislature has made laws to cover every possi ble situation, yet it is well nigh impossible to make provi sions for all kinds of situations. Nevertheless where the social need of the hour requires that precious human lives lost in motor accidents leaving a trail of economic disas ter in the shape of their unprovided for families. call for special attention of the law makers to meet this social need by providing for heavy and adequate compensation par ticularly through Insurance Companies. It is true that while our law makers are the best judges of the requirements of the society, yet it is indeed surprising that such an important aspect of the matter has missed their attention. Our country can ill afford the loss of a precious life when we are building a progressive society and if any person engaged in industry, office, business or any other occupa tion dies, a void is created which is bound to result in a serious set back to the industry or occupation concerned. Apart from that the death of a worker creates a serious economic problem for the family which he leaves behind. In these circumstances it is only just and fair that the Legis lature should make a suitable provision so as to pay ade quate compensation by properly evaluating the. previous life of a citizen in its true perspective rather than deval uing human lives on the basis of an artificial mathematical formula. It is common knowledge that where a passenger travelling by a plane dies in an accident, he gets a com pensation of Rs. 1,00,000/. or like large sums, and yet when death comes to him not through a plane but through a motor vehicle he is entitled only to Rs. 2,000/ . Does it indicate that the life of a passenger travelling by plane becomes more, precious merely because he has chosen a par ticular conveyance and the value of his life is considerably reduced if happens to choose a conveyance of a lesser value like a motor vehicle ? Such an invidious distinction is absolutely shocking to any judicial or social conscience and yet section 95(2)(d) of the Motor Vehicles Act seems to. suggest such a distinction. We hope and trust that our law makers will give. serious attention to this aspect of the matter and remove this serious lacuna in section 95(2)(d) of the Motor 951 Vehicles Act. We would also like to. suggest that instead of limiting the liability of the Insurance Companies to a specified sum of money as representing the value of human life, the amount should be left to be determined by a Court in the special circumstances of each case. We further hope our suggestions will be duly implemented and the observa tions of the highest Court of the country do not become a mere pious wish. In M/s. Sheikhupura Transport Co. Ltd. vs Northern India Transporters Insurance Co. Ltd. (1) this Court has clearly held that an Insurance Company is not liable to pay any sum exceeding Rs. 2,000/upto a maximum of Rs. 20,000/ on the plain words of section 95 (2) (d) of the Motor Vehicles Act and the only remedy to provide for adequate compensation for a precious life of a human life is for the Legislature to take a practical view of the loss of human life in motor acci dents. In P.B. Kader & Ors. vs Thatcharoma and Ors.(2) a Division Bench of the Kerala High Court, while dwelling on this aspect observed as follows: "It is sad that an Indian life should be so devalued by an Indian law as to. cost only Rs. 2,000/ , apart from the fact that the value of the Indian rupee has been eroded and Indian life has become dearer since the time the statute was enacted, and the consciousness of the comforts and amenities of life in the Indian community has arisen, it would have been quite appropriate to revise this fossil figure of Rs. 2,000/ per individual, in volved in an accident, to make it more realis tic and humane, but that is a matter for the legislature; and the observation that I have made is calculated to remind the lawmakers that humanism is the basis of law and justice. " We find ourselves in complete agreement with the obser vations made by the Kerala High Court in the aforesaid case and we would like to remind the law makers that the time has come to take a more humane and practical view of things while passing statute like the Motor Vehicles Act in regu lating compensation payable by Insurance Companies to vic tims of motor accidents. We have not the slightest doubt that if the attention of the Government is drawn, the lacuna will be covered up in good time. The result is that Civil Appeals Nos. 1826 of 1968 and 132 of 1969 are dismissed and Civil Appeal No. 2310 of 1968 is allowed to this extent that the claim preferred by Raha is enhanced from Rs. 60,000/ to Rs. 1,00,000/ . As no authentic proof of any settlement between Gupta and Raha has been produced before us, the decree passed by us will be jointly and severally recoverable from Gupta and Bhuta after giving credit for the amounts received by Raha. It will, however, be open to the executing court on proof of any full and final settlement of the claims of Raha with Gupta or any other Judgment debtor to adjust the claims accordingly under 0.23 r. 3 of the Code of Civil Procedure. In the circum stances of the case, the parties will bear their own costs in this Court. P.H.P. C.A. 1826 of 1968 and 132 of 1969 dismissed. C.A. No. 2310 of 1968 allowed. (1) ; (2) A.I.R. 1970 Kerala 241.

Satindra Nath Raha and Uma Shankar Shastri were trav elling by a bus owned by Gupta of M.P. Speedways Company. They were travelling from Bhind to Gwalior. On the high way, a bus owned by Bhuta came from the opposite direc tion. On account of negligence of drivers of both the buses there was a head on collision of the two buses, as a conse quence of which Raha and Shastri sustained fatal injuries to which they succumbed on the same day in the hospital. Widow of Raha claimed a compensation of Rs. 3,00,000/ under section 110A of the Motor Vehicles Act and Mrs. Shastri claimed a sum of Rs. 1.20,000/ as compensation. The Claims Tribunal decreed the claim of Mrs. Raha to the extent of Rs. 60,000/ and of Mrs. Shastri to the extent of Rs. 40,000/ . The compensation awarded to Mrs. Raha is on the basis of the salary which Mr. Raha would have earned upto the age of 55 years after deducting half the salary. The quantum awarded by the Tribunal was upheld by the High Court. Gupta and Mrs. Raha field the present appeals in this Court. Gupta contended that the compensation awarded was very excessive and Mrs. Raha contended that the compensation granted was grossly inadequate and should be enhanced. Allowing the appeal filed by Mrs. Raha and dismissing the appeal filed by Gupta, HELD: 1. The contention of Gupta that he should not be made liable to pay the compensation since no negligence was alleged against the driver Ram Swarup negatived. Although the plaint is loosely drafted but it clearly contains the relief of compensation against Gupta and Ram Swarup, the driver. Pleadings have to be interpreted not with formalis tic rigour but with latitude or awareness of low legal literacy of poor people. The Claims Tribunal and the High Court overlooked two important and vital considerations. Firstly the increments which Mr. Raha would have earned while reaching the maximum of his grade long before his retirement and secondly the pensionary benefits which he would have obtained had he retired. It would be reasonable to expect that if the deceased had not died due to the accident he would have lived at least upto the age of 65 years. The Court, therefore, enhanced the compensation of Rs. 60,000/ to Rs. 1,00,000/ . [948 F, G, 949A B, 950A B] 2. It is unfortunate that section 95(2)(d) of the Motor Vehicles Act restricts the liability of the Insurance Compa nies to Rs. 2,000/ only in case of a third party. The court suggested that the Legislature should increase the liability of the Insurance company. The court observed that it was anamolous that if a passenger dies in a plane acci dent he gets the compensation of Rs. 1 lac and a person who dies in the road accident should get only Rs. 2,000/ . [946 D E] 3. Expressing its concern for the need for creating no fault liability by a suitable legislation, the Court ob served: The time is ripe for serious consideration of creating no fault liability. Having regard to the directive princi ples of State policy, the poverty of the ordinary run of victims of automobile accidents, the compulsory nature of insurance of motor vehicles, the nationalisation of general insurance companies and the expanding trend towards nation alisation of bus transport, the law of 945 torts based on no fault needs reforms. Where the social need of the hour requires that precious human lives lost in motor accidents leaving a trial of .economic disaster in the shape of their unprovided for families call for special attention of the law makers to meet this social need by providing for heavy and adequate compensation particularly through Insurance Companies. Our .country can iII afford the loss of a precious life when we are building a progres sive society and if any person engaged in industry, office, business or any other occupation dies, a void is created which is bound to result in a serious set back to the indus try or occupation concerned. Apart from that the death of a worker creates a serious economic problem for the family which he leaves behind. In these circumstances it is only just and fair that the Legislature should make a suitable provision so as to pay adequate compensation by property evaluating the precious life of a citizen in its true per spective rather than devaluating human lives on the basis of an artificial mathematical formula. [916 C 950 D F]

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ition No. 397 of 1981. (Under Article 32 of the Constitution) Mrs. Shyamala Pappu, M. section Mann, S Shukhar, Miss Raj Shree and Mrs. Indra Sawhney for the Petitioner. section K. Gambhir and Vijay Hansaria for the Respondent. 82 The Judgment of the Court was delivered by CHINNAPPA REDDY J. Shiv Prasad Bhatnagar is under preventive detention pursuant to an order made by the District Magistrate, Vidisha, Madhya Pradesh. The order and the grounds of detention were served on him on November 28, 1980. The District Magistrate made a report of the order to the State Government and the latter approved the detention order on December 2, 1980. The approval was communicated to the detenu on December 5, 1980. A representation was submitted by the detenu on December 13, 1980. The Advisory Board constituted by the State Government met on January 3, 1981, considered the material placed before it by the detaining authority as well as the representation and the written arguments submitted by the detenu. The detenu was also given a personal hearing. The Advisory Board submitted its report to the State Government on January 4, 1981. Thereafter the State Government confirmed the order of detention on February 3, 1981 under Sec. 12 (1) of the National Security Act. The period of detention was stipulated as one year from the date of the order of detention. The order confirming the detention was communicated to the detenu on February 12, 1981 and he was also informed that the Advisory Board had opined that there was sufficient cause for his detention. Shyamla Pappu, learned counsel for the detenu made a number of submissions. In the view that we are taking of one of the primary submissions, we do not think it necessary to consider the rest of the submissions. The primary submission that we have in mind is that the grounds of detention suffer from the vice of either vagueness or staleness. The first ground mentions that the detenu alongwith his friends, in the second week of November, 1980, indulged in filthy abuse of Muslims, threatened their lives and performed "mar pit ' '. Details of incidents were given to substantiate the ground. As many as six incidents were mentioned and in everyone of them it was said that the detenu alongwith his associates had indulged in this or that violent action. No mention was made of the name of even a single associate. The argument was that the reference to 'associates ' without naming even one rendered the ground vague and, therefore, vitiated it. Similarly, it was said the second ground also referred to the detenu and his accociates without naming even a single associate and for that reason the second ground also was vague. The further submission was that the incidents enumerated in second ground were of the years 1974, 1975, 1977 and 1978 and could by no means be said to be proximate 83 enough to sustain an order of preventive detention. The second ground was to the effect that the detenu and his associates had terrorized the common man in the Vidisha area by their various criminal acts which caused disturbance to public peace and public safety. Several incidents were narrated to substantiate this ground. The first incident was of the year 1974, the second incident was of the year 1975, the next three incidents were of the year 1977 and the rest of the incidents barring the last one were of the year 1978. A perusal of the incidents enumerated to substantiate the second ground show that apart from the vice of staleness from which they appear to suffer, the incidents are related to "law and order" and not to the maintenance of public order. The incidents appear to bear a striking resemblance to the grounds of detention which were considered In Re: Sushanta Goswami & Ors., (1) particularly in the cases of Debendra Nath Das, Abdul Wahab, Anil Das, Dilip Kumar Chakraborty and Ashoka Kumar Mukherjee. It is now well settled that grounds of detention must be pertinent and not irrelevant, proximate and not stale, precise and not vague. Irrelevance, staleness and vagueness are vices any single one of which is sufficient to vitiate a ground of detention. And, a single vicious ground is sufficient to vitiate an order of detention. In the present case we are satisfied that the second ground of detention suffers both from the vice of staleness, because of the passage of time since the happening of some of the incidents and the vice of irrelevance because they relate to 'law and order ' and not to 'the maintenance of public order '. The detenu is entitled to be released. He is directed to be released forthwith. The petition is allowed.

The petitioner was detained under section 12 (1) of the National Security Act on the grounds that he, alongwith his friends, in the second week of November, 1980 indulged in filthy abuse of Muslims, threatened their lives and performed "marpeet" and that he and his associates terrorised the common man in the area by their various criminal acts which caused disturbance to the public peace and public safety. In support of the petition it was contended on behalf of the petitioner that the reference to associates without naming even one rendered the ground vague and, therefore, vitiated the order of detention and (2) that the incidents enumerated in the second ground related to the years 1974, 1975, 1977 and 1978 which could not be said to be proximate enough to sustain the order of detention. Allowing the petition, ^ HELD: The detenu is entitled to be released. It is now well settled that grounds of detention must be pertinent and not irrelevant, proximate and not state, precise and not vague. Irrelevance, staleness and vagueness are vices any single one of which is sufficient to vitiate the order of detention. [83 D] In the instant case the incidents enumerated to substantiate the second ground show that apart from the vice of staleness from which they suffer, they were related to "law and order" and not to the maintenance of public order. They are stale because of the passage of time since the happening of some of the incidents; they are irrelevant because they related to law and order and not to maintenance of public order. [83 E] In Re: Sushanta Goswami and Ors., ; followed.

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Appeal No. 279 of 1959. Appeal by special leave from the judgment and order dated November 18, 1957, of the Kerala High Court in O. P. No. 87 of 1956. A. V. Sayed Muhammad, for the appellants. The respondents did not appear. 182 1960. December 12. The Judgment of the Court was delivered by HIDAYATULLAH, J. This is an appeal with the special leave of this Court against the judgment of the High Court of Kerala dated November 18, 1957, passed in a petition for writ of prohibition under article 226 of the Constitution. The State of Kerala and the Tahsildars of Kottayam and Kanjirappally Taluks are the appellants, and C.M. Francis & Co., a partnership firm, is the first respondent, and the partners of the firm are the remaining respondents. The respondents were doing business in hill produce like pepper, ginger, betelnuts etc., and were assessed to sales tax under the Travancore Cochin General Sales Tax Act XI of 1125 (referred to as the Act), for the years 1950 to 1954. The respondents have to pay a sum of Rs. 1,01,716 4 3 as tax. In 1954, proceedings were started against them under section 13 of the Act, which provides that if the tax is not paid as laid down in that section, the whole of the amount or such part thereof as remains due, may be recovered as if it were an arrears of land revenue. It appears that the pro ceedings were not fruitful, and a prosecution under section 19 of the Act was instituted against the partners in the Court of the First Class Magistrate, Ponkunnam. Respondents 2 to 5 pleaded guilty, and the Magistrate passed an order on October 18, 1955 as follows: "The sentence or other final order: A 1 to 4 sentenced to pay a fine of Rs. 50/ each and in default to undergo section 1. for one month each. A 1 to 4 admit that they failed to pay on demand by the competent authority, a sum of Rs. 1,01,716 4 3 due from them as sales tax for the years 1950 to 1954. This amount will be realised from A 1 to 4, jointly or severally, individually or collectively under the provisions of the Cr. P.C. for realisation of criminal fines, as if it were a fine imposed by this court on each accused individually and all of them together. Take steps for the realisation. " Warrants under section 386 (1) (b) of the Code of Criminal Procedure were issued to the Collector of Kottayam District for recovery of the arrears of sales tax. 183 The authorities, however, started proceedings again under section 13 of the Act read with the provisions of the Travancore Cochin Revenue Recovery Act, 1951 (VII of 1951), to recover the amount as arrears of land revenue, and attached some properties belonging to the respondents within the jurisdiction of the second and third appellants, the Tahsildars of Kottayam and Kanjirappally Taluks. The firm thereupon filed the petition under article 226 of the Constitution for a writ of prohibition or other order or direction to the effect that the proceedings for realisation of the arrears under the Revenue Recovery Act be quashed. In the petition, the respondents urged that inasmuch as they were prosecuted under section 19 of the Act and the Magistrate had issued warrants, the procedure for recovery under section 13 was not available. They contended that under section 386 of the Code of Criminal Procedure the warrant is to be deemed to be a decree and has to be executed according to civil process applicable to the execution of decrees under the Code of Civil Procedure. They, therefore, submitted that the procedure under section 19 of the Act was no longer open, and could not be proceeded with. Section 19 of the Act, so far as it is material, reads as follows: "Any person who. . . . (b) fails to pay within the time allowed, any tax assessed on him under this Act, or (d)fraudulently evades the payment of any tax assessed on him. . shall on conviction by a Magistrate of the first class, be liable to a fine which may extend to one thousand rupees and in the case of a conviction under clause (b), (d) the Magistrate shall specify in the order the tax which the person convicted has failed or evaded to pay and the tax so specified shall be recoverable as if it were a fine under the Code of Criminal Procedure for the timebeing in force. " In dealing with the question, the learned Judges of the High Court felt that section 13 of the Act was in the 184 nature of a general law, over which the special procedure prescribed by section 19 of the Act read with section 386 of the Code of Criminal Procedure was to prevail. They, however, thought that, since all the processes available under section 19 of the Act were also available under section 386 of the Code of Criminal Procedure, it was not necessary to decide what would happen if the proceedings under section 386 came to nothing. They observed that if the question arose, they would consider it. The writ of prohibition was granted by the High Court. The respondents did not appear in this Court. We have heard learned counsel for the appellants, who has drawn our attention to all the relevant provisions of the law. The question which arises is whether section 19 must be taken to prevail over section 13 of the Act. Both the sections lay down the mode for recovery of arrears of tax, and, as has already been noticed by the High Court, lead to the application of the process for recovery by attachment and sale of movable and immovable properties, belonging to the tax evader. It cannot be said that one proceeding is more general than the other, because there is much that is common between them, in so far as the mode of recovery is concerned. Section 19, in addition to recovery of the amount, gives the power to the Magistrate to convict and sentence the offender to fine or in default of payment of fine, to imprisonment. In our opinion, neither of the remedies for recovery is destructive of the other, because if two remedies are open, both can be resorted to, at the option of the authorities recovering the amount. It was observed by Mahmood, J. in Shankar Sahai vs Din Dial (1) that where the law provides two or more remedies, there is no reason to think that one debars the other and therefore both must be understood to remain open to him, who claims a remedy. Unless the statute in express words or by necessary implication laid down that one remedy was to the exclusion of the other, the observations of Mahmood, J. quoted above must apply. In our opinion, in the absence of any such provision in the (1) I.L.R. (1889) 12 All 409 (F.B.), 418. 185 Act,, both the remedies were open to the authorities, and they could resort to any one of them at their option. The appeal is allowed, and the judgment of the High Court set aside. Though the respondents did not appear, in the circumstances of the case we think we should make an order that the costs shall be paid by them both here and in the High Court. Appeal allowed.

The respondents were assessed to sales tax under the Travancore Cochin General Sales Tax Act and proceedings were started against them under section 13 of the Act for the recovery of the arrears of Sales Tax as if they were arrears of land revenue. The proceedings were not fruitful. Thereafter a prosecution under section 19 of the Act was instituted against the partners who pleaded guilty and the magistrate issued warrants under section 386(1)(b) of the Code of Criminal Procedure to the Collector of the District for the recovery of the arrears of sales tax as if they were a fine imposed by that court. The authorities again started proceedings under section 13 of the Act read with Travancore Cochin Revenue Recovery Act, 1951, and certain properties were attached. The respondents urged that in as much as they were prosecuted under section 19 of the Act and the magistrate had issued warrants, the procedure for recovery under section 13 of the Act was not available. The question was whether section 19 was to be taken to prevail over section 13 of the Act. Held, that neither of the remedies for recovery of arrears of tax as laid down by sections 13 and 19 of the Travancore Cochin General Sales Tax Act was destructive of each other and unless the statute laid down in express words or by necessary implication that one remedy was to the exclusion of the other, both the remedies were open to the authorities and they could resort to any one of them at their option. Shankar Sabai vs Din Dial, I.L.R. [1889] 12 All. 409 (F.B.), 418,approved.

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vil Appeal Nos. 80 & 81 of 1975. From the Judgment and Order dated 26/27.8.1974 of the Gujarat High Court in I.T. Reference Nos. 7 and 29 of 1973. S.C. Patel for the Appellant. Dr. V. Gauri Shanker and Ms. A. Subhashini for the Respondent. The Judgment of the Court was delivered by PATHAK, CJ. The appellant is an assessee who derives income 867 from various sources, including income from the Shrimati Arundhati Balkrishna Trust, Ahmedabad. In assessment pro ceedings for the assessment year 1964 65 the Income Tax Officer found that a sum of Rs. 10,880 had been debited to the interest account maintained in the books of the Ahmeda bad Trust as interest paid to the Harivallabhadas Kalidas Estate Account. Upon further scrutiny, he discovered that substantial debits totalling Rs.2,19,804 included withdraw als from the Estate Account by the Ahmedabad Trust on ac count of the personal expenses of the assessee. After taking into consideration earlier withdrawals from the Estate Account by the Ahmedabad Trust for the purpose of investment and making adjustments for deposits during the year, the Income Tax Officer concluded that the net withdrawals from the Estate Account for personal expenditure were Rs.3,10,806 He held that the proportionate interest of Rs.6,199 out of the total interest of Rs. 10,880 paid by the Ahmedabad Trust to the Estate Account was referable to such withdrawals, and. therefore constituted an inadmissible deduction. Similarly, for the assessment year 1966 67 the Income Tax Officer found that a sum of Rs.25,496 had been shown in the books of account of the Ahmedabad Trust for the relevant previous year as interest paid to the Estate Ac count. He held that of this sum, an amount of Rs.12,833 was referable to withdrawals for purposes other than investment, and accordingly he disallowed the claim of interest to that extent. The assessee appealed to the Appellate Assistant Com missioner of Income Tax, and failing there he proceeded in second appeal to the Income Tax Appellate Tribunal, claiming that the entire amount of interest should have been allowed as a deduction for each year. An additional question raised in respect of the assessment year 1964 65 related to the point whether the assessee was liable to tax on the net income only received by her from the Trust or the income determined in accordance with the provisions of the Income Tax Act in the case of the Trust. The Appellate Tribunal dismissed the appeals of the assessee. At the instance of the assessee the Appellate Tribunal referred the following questions of law to the High Court of Gujarat in respect of the assessment year 1964 65: "(1) Whether, on the facts and in the circumstances of the case, the Tribunal was fight in not holding that out of the interest payment of Rs.10,880, Rs.6,199 was not an admissible deduction against the income from other sources? 868 (2) Whether, on the facts and in the circumstances of the case, the income includible in the total income of the assessee is income determinable as per provisions of the Income Tax, 1961 in the case of the Trust or the income receivable by the assessee from the said trust?" The question referred to the High Court for assessment year 1966 67 was: "Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that out of the interest payment of Rs.25,496, Rs. 12,833 was not an admissible deduction against the income from other sources?" The High Court held that the question relating to the disallowance of part of the interest for the two assessment years was rightly decided against the assessee and in favour of the Revenue. On the second question in the reference for the assessment year 1964 65, the High Court held that the income includible in the total income of the assessee was income determinable in accordance with the provisions of the Income Tax Act in the case of the Trust and not the income actually received or receivable by the assessee from the Trust or according to the entries in the books of accounts of the Trust. In the result that question was also answered against the assessee and in favour of the Revenue. In regard to the question arising in each of the assess ment years 1964 65 and 1966 67 relating to the disallowance of part of the interest claimed as a deduction by the asses see, the High Court relied on the view taken by it earlier in Shrimati Padmavati Jaykrishna vs Commissioner of Income Tax., The judgment of the High Court was considered in appeal by this Court in Padmavati Jaikr ishna vs Addl. Commissioner of Income Tax, Gujarat, and this Court affirmed the view taken by the High Court. For the reasons which found favour with this Court in that case, we must answer the question in the two appeals before us against the assessee and in favour of the Revenue. Turning to the additional question referred to the High Court fo r the assessment year 1964 65, it seems to us clear that what is assessable in the hands of the assessee must be the income of the Trust received by it on behalf of the asses see. It is apparent from section 161(1) of the 869 Income Tax Act, 1961 that a representative assessee, that is to say a trustee, as regards the income in respect of which he is representative assessee, is subject to the same du ties, responsibilities and liabilities as if the income were income received by or accruing to or in favour of him bene ficially, and he is liable to assessment in his own name in respect of that income; but any such assessment is deemed to be made upon him in his representative capacity only, and the tax is levied upon and recovered from him in like manner and to the same extent as it would be leviable upon and recoverable from the person represented by him. And section 166 of the. Act clarifies that the provisions relating to the liability of a representative assessee will not prevent either the direct assessment of the person on whose behalf or for whose benefit income is receivable, or the recovery from such person of the tax payable in respect of such income. The Income Tax Officer has the option to proceed either against the trustee or against the beneficiary, but in either case the income to be assessed must be in the same figure. What the trustee receives as the income pertaining to the beneficiary is received by him under an obligation to pass on that income to the beneficiary. However, in most cases administration charges and expenses have to be met out of the Trust 's income and it is only the net income which reaches ' the beneficiary. If the income had to pass directly to the beneficiary and not under trust through a trustee the beneficiary would have equally to meet those outgoings, leaving a net income in his hands which for the purposes of the Income Tax Act would have been computed after reducing the gross income by the deductions admissible under the Act. It seems to us clear that it is not the income shown in the books of account of the Ahmedabad Trust actually paid to the assessee after deduction of the outgoings from the income received in the hands of the Ahmedabad Trust, but the real income of the Ahmedabad Trust has to be included in the total income of the assessee after taking into consideration the different items of permissible deductions in relation to that income. We are of opinion that the High Court is right in the view which it has taken. In the result, the appeals fail and are dismissed with costs. H.L.C. Appeals dismissed.

The appellant was an assessee who derived income from a Trust. For assessment years 1964 65 and 1966 67 the Income Tax Officer disallowed deduction of two mounts claimed as interest paid by the Trust for amounts withdrawn from an Estate Account for investment on the ground that a portion of the amounts withdrawn from the Estate Account had been utilized for personal expenditure by the assessee. The appellants appeals to the Assistant Commissioner having been rejected, she preferred second appeals to the Appellate Tribunal raising an additional question in respect of the assessment year 1964 65 that she was liable to tax on the net income only received by her from the Trust and not on income determined in accordance with the provisions of the Income Tax Act in the case of the Trust. The Tribunal dis missed the appeals but at the instance of the appellant referred the two questions of law arising therein to the High Court which answered both of them against the assessee. Dismissing the appeals, HELD: It is not the income shown in the books of account of the Trust actually paid to the assessee after deduction of the outgoings from the income received in the hands of the Trust, but the real income of the Trust has to be in cluded in the total income of the assessee after taking into consideration the different items of permissible deductions in relation to that income. [869E F] It is apparent from section 161(1) of the Income Tax Act, 1961 that a representative assessee, that is to say a trus tee, as regards the income In respect of which he is a representative assessee, is subject to the same duties, responsibilities and liabilities as if the income were income received by or accruing to or in favour of him bene ficially, and he is 866 liable to assessment in his own name in respect of that income; but any such assessment is deemed to be made upon him in his representative capacity only, and the tax is levied upon and recovered from him in like manner and to the same extent as it would be leviable upon and recoverable from the person represented by him. And section 166 of the Act clarifies that the provisions relating to the liability of a representative assessee will not prevent either the direct assessment of the person on whose behalf or for whose bene fit income is receivable, or the recovery from such person of the tax payable in respect of such income. The Income Tax Officer has the option to proceed either against the trustee or against the beneficiary, but in either case the income to be assessed must be in the same figure. What the trustee receives as the income pertaining to the beneficiary is received by him under an obligation to pass on that income to the beneficiary. However, in most cases administration charges and expenses have to be met out of the Trust 's income and it is only the net income which reaches the beneficiary. If the income had, to pass directly to the beneficiary and not under trust through a trustee, the beneficiary would have equally to meet those outgoings, leaving a net income in his hands which for the purposes of the Income Tax Act would have been computed after reducing the gross income by the deductions admissible under the Act. [868H; 869A E] (ii) The High Court was right in deciding the question relating to the disallowance of part of the interest claimed as a deduction against the assessee. [868F] Padmavati Jaikrishna vs Addl. Commissioner of Income Tax, Gujarat, , referred to.

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iminal Appeal No. 193 of 1967. Appeal by special leave from the judgment and order dated March 7, 1967 of the Bombay High Court, Nagpur Bench in Criminal Revision Application No. 306 of 1966. 271 G.N. Dikshit, S.K. Bisaria appellant.and R.N. Sachthey, for the appellant. H.R. Khanna and S.P. Nayar, for the respondent. The Judgment of the Court was delivered by Sikri, J. This Court granted special leave to appeal in this case limited to the following two points: (1 ) whether the confiscation of the foodgrains in the house of the appellant was legal; and (2) whether r. 141 (2) of the Defence of India Rules: 1962 is not ultra vires the: Defence of India Act. The facts relevant to the first point are as follows: Certain shpherds belonging to a wandering tribe were apprehended by the police one night while they were carrying 12 baggages containing juar on the backs of 12 horses. On being questioned they informed the police that they had purchased all this quantity of juar from the appellant at the rate of 78 paise per kg. On this information the police raided the houses of the appellant and further found 34 quintals and 63 kgs of juar. The appellant had two house.s at Janephal and in one house 3 quintals and 48 kgs while in the other house 31 quintals and 18 kgs. of juar was found, which was seized by the police. The last declaration of stock which had been given by the appellant was on June 5, 1965. The appellant was tried and convicted o.n three courts by the Judicial Magistrate, First Class, Mehkar. He was convicted under r. 125(9), Defence of India Rules, for contravening cl. 4(b) of the Maharashtra Jwar (Restrictions on purchases and sale and control of movement) Order, 1964, and sentenced to rigorous imprisonment for six months and fine of Rs. 500/ , in default further rigorous imprisonment for six months. He was further convicted for contravening Buldana District Price Control Order, 1965, and sentenced to rigorous imprisonment for six months and fine of Rs. 500/ , in default rigorous imprisonment for six months. He was also convicted for contravenvening section 3 of the Maharashtra Declaration of Stock Order, 1964, and sentenced to rigorous imprisonment for six months and fine of Rs. 500/ in default further rigorous imprisonment for six months. The sentences of imprisonment on each count were directed to run concurrently. The Magistrate further ordered that the maddemal before the Court be confiscated to the Government. The appellant appealed unsuccessfully to the Sessions Judge. He then filed a revision before the High Court. The High Court 272 set aside the conviction and sentence passed on the appellant in respect of contravention of cl. 3 of the Maharashtra Foodgrains (Declaration of Stocks) (Second) Order, 1964. But while maintaining the conviction for the other two charges the High Court modified the sentences passed on the appellant and instead of the sentences awarded by the lower courts sentenced the accused to imprisonment already undergone and fine of Rs. 1,000 on .each of the two. counts. The High Court observed: "The order regarding forfeiture of the juar seized from the house of the accused is maintained. The juar seized from the: house in the occupation of Ratanlal will however be released." The learned counsel contends that the High Court having set aside the conviction and sentence in respect of contravention of cl. 3 of the Maharashtra Foodgrains (Declaration of Stocks) (Second) Order, 1964, it was illegal to maintain the order regarding forfeiture of the Juar seized from the house of the appellant because, he says, the Maharashtra Jowar (Restriction .on Purchase and Sale and Control of Movement) Order, 1964, and the Buldana District Juar (Price Control) Order, 1965, did not contain any provision authorising the Court to forfeit the juar, the subject matter of the contravention of these two orders. Rule 125(9) provides: "(a) If any person contravenes any provision of this rule o.r any order made: under this rule, he shall be Punishable with imprisonment for a term which may extend to three years, or with fine, or with both: Provided (b) If any order made under this rule so provides, any court trying a contravention of the order may direct that any property in respect of which the Court is satisfied that the order has been contravened shall be forfeited to Government." The learned counsel for the State has not been able to point out any provision in the two orders mentioned above containing any provision contemplated in r. 125(9)(b). The only provision contained in the Maharashtra Jowar (Restriction on Purchase 'and Sale and Control of Movement) Order, 1964, is regarding forfeiture to the Government of packages, coverings or receptacles in which any stocks of jowar are found. This obviously does not enable the Court to order forfeiture of Juar. 273 The Buldana District Juar (Price Control) Order, 1965, it is true, authorises the Collector to seize stocks but does not enable the Court to. forfeit the juar. In the result we hold that the order of the High Court maintaining the order of forfeiture is allegal and liable to be set aside. On the second point the learned counsel for the appellant contends that r. 141(2) of the Defence of India Rules, 1962, is ultra vires because it lays down a rule of evidence contrary to. the law contained in section 114 of the Indian Evidence Act. Rule 141 (2) is in the following terms: "141 (2) If in the course of any judicial proceedings a question arises whether a person was duly informed of an order made in pursuance: of these Rules, compliance with sub rule (1 ), or where the order was notified, the notification of the order shall be conclusive proof that he was so. informed; but a failure to comply with sub rule ( 1 ) (i) shall not preclude proof by other means that he had information of the order, (ii) shall not affect the validity of the order. Section 3 of the Defence of India Act enables the Central Government, by notification in the Official Gazette, to make such rules as appear to be necessary,. or expedient for securing the defence of India and civil defence, the public safety, the maintenance of public order or the efficient conduct of military operations, or for maintaining supplies and services essential to the life of the community. Sub section (2) mentions various matters on which rules can be made, but this is without prejudice to the generality of the powers conferred by sub section It seems to us that r. 141 (2) is within the powers conferred by section 3 (1 ) of the. Defence of India Act. The .fact that the rule is contrary to an existing act does not matter because section 43 of the Defence of India Act provides that "the provisions of this Act or any rule made thereunder or any order made under any such rule shall have effect notwithstanding anything inconsistent therewith contained in any enactment other than this Act or in any instrument having effect by virtue of any enactment other than this Act. " The section contemplates that the rules may be: inconsistent with existing legislation but by virtue of section 43, if otherwise. valid, they would have effect notwithstanding that they are inconsistent with existing legislation. We use the words "if otherwise valid" because the rules must fall within the powers given under section 3 (1). Section 3 gives very wide powers. It seems to us that r. 141 (2) falls within section 3 because it is essential 274 to the scheme of the Defence of India Rules. The Rules must necessarily provide for the publication of orders made under the Rules and they must also provide for proof in judicial proceedings of the fact of publication. The learned counsel has not been able to show us any case in which a rule like r. 141(2) has been challenged, much less declared ultra vires, both in England and in India. In the result the appeal is partly allowed, the order of the High Court maintaining the forfeiture of the seized stock of juar set aside and the rest of the order of the High Court maintained. Y.P. Appeal partly allowed.

The appellant was convicted and sentenced under r. 125(a) Defence of India Rules for contravening el. 4(b) of the Maharashtra Jwar (Restriction on purchases and sale and control of movement) Order, 1964, for contravening Buldana District Price Control Order, 1965; and for contravening el. 3 of the Maharashtra Foodgrains (Declaration of Stock) (Second) Order, 1964. The Magistrate further ordered that the maddamal (Juar) before the court be confiscated by the Government. The .appellant appealed unsuccessfully to the Sessions Judge. But the High Court set aside the conviction and sentence under el. 3 of the Maharashtra Food Grains (Declaration of Stock) Order, and maintained the other convictions in an appeal to this Court the appellant contended that (i) the High Court having set aside the conviction under el. 3 of the Maharashtra Foodgrains (Declaration of Stocks) (Second) Order, 1964 the order for forfeiture could not be maintained because the Maharashtra Jwar (Restriction on Purchase 'and sale and control of movement) Order,/964, and the Buldana District Jwar (Price Control) Order 1965 did not contain any provision authorising the court to forfeit; and (ii) r. 141(2) of the Defence of India Rules, 1962 was ultra vires because it laid down a rule of evidence contrary to the law contained in section 114 of the Indian Evidence Act. HELD: (i) The order of forfeiture was illegal. The only provision contained in the Maharashtra Jwar (Restriction on Purchase and Sale and Control of Movement) Order, 1964, is regarding forfeiture of packages covering or receptacles in which any stocks of juar are found. This does not enable the Court to order forfeiture of juar. The Buldana District Juar (Price Control) Order authorises the Collector to seize stocks but does not enable the Court to forfeit juar. [274 H] (ii) r. 141(2) is within the powers conferred by section 3(1) of the Defence of India Act. The fact that the rule is contrary to an existing Act does not matter because section 43 of the Defence of India Act provides that "the provisions of this Act or any rule made thereunder or any order made under any such rule shall have effect notwithstanding anything inconsistent therewith contained in any enactment other than this Act or in any instrument having effect by virtue of any enactment other than this Act." [275 F G]

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Appeal No. 95 of 1953. On appeal from the Judgment and decree dated the 29th day of June 1951 of the Bombay High Court in Appeal No. 93 of 1949 arising out of the order dated the 16th September 1949 of the Court of Bombay City Civil Court at Bombay in Award No. 45 of 1949. M.C. Setalvad, Attorney General of India (H. J. Umrigar, Sri Narain Andley, Rameshwar Nath and Rajinder Narain, with him), for the appellant. H.R. Mehervaid and R. N. Sachthey, for the respondent. October 4. The Judgment of the Court was delivered by VENKATARAMA AYYAR J. The appellant is a share broker carrying on business in the City of Bombay, and a member of the Native Share and Stock Brokers ' Association, Bombay. The respondent, Mrs. Goolbai Hormusji, employed him for effecting sales and purchases of shares on her behalf, and on 6 8 1947 there was due from her to the appellant on account of these dealings a sum of Rs. 6,321 12 0. On that date, the respondent had outstanding for the next clearance, sales of 25 shares of Tata Deferred and 350 shares of Swadeshi Mills. On 11 8 1947, the appellant effected purchases of 25 shares of Tata Deferred and 350 shares of Swadeshi Mills to square the outstanding sales of the respondent, and sent the relative contract notes therefor Nos. 2438 and 2439 (Exhibit A) to her. She sent a reply repudiating the contracts on the ground that the appellant had not been authorised to close the transactions on 11 8 1947, and instructed him to square them on 14 8 1947. The appellant, however, declined to do so, maintaining that the transactions had been closed on 11 8 1947 under the 109 860 instructions of the respondent. After some correspondence which it is needless to refer to, the appellant applied on 21 8 1947 to the Native Share, and Stock Brokers Association, Bombay for arbitration in pursuance of a clause in the contract notes, which runs as follows: "In event of any dispute arising between you and me/us of this transaction the matter shall be referred to arbitration as provided by the Rules and Regulations of the Native Share and Stock Brokers ' Association". The Association gave notice of arbitration to the respondent, and called upon her to nominate her arbitrator, to which she replied that the contract notes were void, and that in consequence, no arbitration proceedings could be taken thereunder. The arbitrators, however, fixed a day for the hearing of the dispute, and gave notice thereof to her, but she declined to take any part in the proceedings. On 10 10 1947 they made an award in which, on the basis of the purchases made by the appellant on 11 8 1947 which were accepted by them, they gave credit to the respondent for Rs. 1,847, and directed her to pay him the balance of Rs. 4,474 12 0. The respondent then filed the application out of which the present appeal arises, for setting aside the award on the ground, inter alia, that the contracts in question were forward contracts which were void under section 6 of the Bombay Securities Contracts Control Act VIII of 1925, that consequently the arbitration clause was also void and inoperative, and that the proceedings before the arbitrators were accordingly without jurisdiction and the award a nullity. Section 6 of the Act is as follows: "Every contract for the purchase or sale of securities, other than a ready delivery contract, entered into after a date to be notified in this behalf by the Provincial Government shall be void, unless the same is made subject to and in accordance with the rules duly sanctioned under section 5 and every such contract shall be void unless the same is made between members or through a member of a recognised stock 861 exchange; and no claim shall be allowed in any Civil Court for the recovery of any commission, brokerage, fee or reward in respect of any such contract". Section 3(1) defines 'securities ' as including shares, and therefore, contracts for the sale or purchase of shares would be void under, section 6, unless they were made in accordance with the rules sanctioned by the Provincial Government under section 5. The appellant sought to avoid the application of section 6 on the ground that the contracts in question were 'ready delivery contracts ', and fell outside the operation of that section. Section 3(4) of Act VIII of 1925 defines 'ready delivery contract ' as meaning "a contract for the purchase or sale of securities for performance of which no time is specified and which is to be performed immediately or within a reasonable time", and there is an Explanation that "the question what is a reasonable time is in each particular case a question of fact". The contention of the appellant was that contracts Nos. 2438 and 2439 were ready delivery contracts as defined in section 3(4), as no time was specified therein for performance. The learned City Civil Judge, who heard the application agreed with this contention, and holding that the contracts were not void under section 6 of Act VIII of 1925, dismissed the application. The respondent took the matter in appeal to the High Court of Bombay, and that was beard by Chagla, C.J. and Tendolkar, J. They were of the opinion that the con ' tracts in question were not ready delivery contracts as defined in section 3(4) of the Act, because though no time for performance was specified therein, they had to be performed within the period specified in the Rules and Regulations of the Association, which were incorporated therein by reference, and not "immediately or within a reasonable time" as provided in section 3(4), that they were accordingly void under section 6, and that consequently, the arbitration clause and the proceedings taken thereunder culminating in the award were also void. They accordingly set aside the award as invalid and without jurisdiction. Against this judgment, the appellant has preferred this appeal 862 on a certificate under article 133(1) (c). It was argued by the learned Attorney General in support of the appeal that even apart from the question whether the contracts in question were for ready delivery or not, they would be outside the purview of section 6, because they were not contracts for sale and purchase of securities. This contention was not raised in the courts below, and learned counsel for the respondent objects to its being entertained for the first time in this Court, as that would involve investigation of facts, which has not been made. But in view of the terms of the contract notes and the admission of the respondent in her petition, we are of opinion that the point is open to the appellant, and having heard counsel on both sides, we think that the appeal should succeed on that point. The dispute between the parties is as to whether the appellant was acting within the scope of his authority when he purchased 25 shares of Tata Deferred and 350 shares of Swadeshi Mills on 11 8 1947. If he was acting within his authority, then the respondent was entitled only to a credit of Rs. 1,847 on the basis of the said purchases. ' But if these purchases were unauthorised, the appellant was liable to the respondent in damages. In either case, the dispute was one which arose out of the contract of employment of the Appellant by the respondent as broker and not out of any contract of sale or purchase of securities. The question of sale or purchase would arise between the respondent and the seller or purchaser, as the case may be, with reference to the contract brought about by the appellant. But the relationship between the respondent and the appellant was one of principal and agent and not that of seller and purchaser. The contract of employment is no doubt connected, and intimately, with sales and purchases of securities; but it is not itself a contract of sale or purchase. It is collateral to it, and does not become ipso facto void, even if the contract of purchase and sale with which it is connected is void. Vide the decision of this Court in Kishan Lal and another vs Bhanwar Lal(1) The legis (1) (1955] 1 S.C.R. 439. 863 lature might, of course, enact that not merely the contract of sale or purchase but even contracts collateral thereto shall be void, in which case the contracts of employment with reference to those contracts would also be void. But that is not what Act VIII of 1925 has done. Section 6 expressly provides that no claim shall be maintained in a civil court for the recovery of any commission, brokerage, fee or reward in respect of any contract for the purchase or sale of securities. That is to say, the bar is to the broker claiming remuneration in any form for having brought about the contract. But the contract of employment is not itself declared void, and a claim for indemnity will not be within the prohibition. The question whether contract notes sent by brokers to their constituents are contracts for the sale and purchase of securities within section 6 of Act VIII of 1925, came up for consideration before the Bombay High Court in Promatha Nath vs Batliwalla & Karani (1) and it was held therein that they were not themselves contracts for sale or purchase but only intimations by the broker to the constituent that such contracts had been entered into on his behalf. We agree with this decision. It may be argued that if the contract note is only intimation of a sale or purchase on behalf of the con stituent, then it is not a contract of employment, and that in consequence, there is no agreement in writing for arbitration as required by the Arbitration Act. But it is settled law that to constitute an arbitration agreement in writing it is not necessary that it should be signed by the parties, and that it is sufficient if the terms are reduced to writing and the agreement of the parties thereto is established. Though the respondent alleged in her petition that she had not accepted the contract notes, Exhibit A, she raised no contention based thereon either before the City Civil Judge or before the High Court, and even in this Court the position taken up by her counsel was that Exhibit A constituted the sole repository of the contracts, and as they were void, there was no arbi (1) I.L.R. [1942] Bom. 655; A.I.R. 1942 Bom. 864 tration clause in force between the parties. We accordingly hold that the contract notes contained an agreement in writing to refer disputes arising out of the employment of the appellant as broker to arbitration, and that they fell outside the scope of section 6 of Act VIII of 1925, that the arbitration proceedings are accordingly competent, and that the award made therein is not open to objection on the ground that Exhibit A is void. It was next contended for the respondent that the contract notes were void under Rule 167 of the Native Share and Stock Brokers ' Association, and that on that ground also, the arbitration proceedings and the award were void. Rule 167 so far as it is material is as follows: "167. (a) Members shall render contract notes to non Members in respect of every bargain made for such non Member 's account, stating the price at which the bargain has been made. Such contract notes shall contain a charge for brokerage at rates not less than the scale prescribed in Appendix G annexed to these Rules, or as modified by the provisions of rules 168 and 170(b). Such contract notes shall show brokerage separately and shall be in Form A prescribed in Appendix annexed to these Rules. . . . . . . . . (c) No contract note not in one of the printed Forms in Appendix H shall be deemed to be valid. . . . . . . . . (g) A contract note referred to in this rule or any other rule for the time being in force shall be deemed to mean and include a contract and shall have the same significance as a contract". Form A in Appendix H referred to in Rule 167(a) contains two columns, one showing the rate at which the securities are purchased or sold and the other, the brokerage. The contract notes sent to the respondent are not in this form. They are in accordance with Form A in Appendix A, and show the rates at which the securities are sold or purchased, the brokerage not being separately shown. At the foot of the document, there is the following note; 865 "This is net contract. Brokerage is included in the price". The contention of the respondent is that the contract notes are not in accordance with Form A in Appendix H, as the price and brokerage are not separately shown, and that therefore they are void under Rule 167(c). Now, Rule 167 applies only to forward contracts, and the basis of the contention of the respondent is that inasmuch as the contract notes, Exhibit A, have been held by the learned Judges of the High Court not to be ready delivery contracts but forward contracts, they would be void under Rule 167(c), even if they were not hit by section 6 of Act VIII of 1925. The assumption underlying this argument is that what is not a ready delivery contract under the definition in section 3(4) of Act VIII of 1925 must necessarily be a forward contract for purposes of Rule 167. But that is not correct. The definition of a ready delivery contract in section 3(4) is only for the purpose of the Act, and will apply only when the question is whether the contract is void under section 6 of that Act. But when the question is whether the contract is void under Rule 167, what has to be seen is whether it is a forward contract as defined or contemplated by the Rules. The definition in section 3(4) of Act VIII of 1925 would be wholly irrelevant for determining whether the contract is a forward contract for purposes of Rule 167, the decision of which question must depend entirely on the construction of the Rules. The relevant Rules are Nos. 359 to 363. Rule 359 provides that "contracts other than ready delivery contracts shall not be made or transacted within or without the ring". Rule 361 confers on the Board power to specify which securities shall be settled by the system of Clearance Sheets and which, by the process of Tickets. Rules 362 and 363 prescribe the modus operandi to be followed in effecting the settlement. It was with reference to these rules which under the contract notes were to be read as part of the con tract, that the learned Judges held that the contracts were not ready delivery contracts as defined in sec 866 tion 3(4) of Act VIII of 1925. But reading the above Rules with Rule 359, there can be no doubt that the contract notes, Exhibit A, would for the purpose of the Rules be ready delivery contracts. Indeed, the form of the contract notes, Exhibit A, is the one provided under the Rules for ready delivery contracts, whereas Form A in Appendix H is, as already stated, for forward contracts. Thus, contracts which are regulated by Rules 359 to 363 cannot be forward contracts contemplated by Rule 167, and they cannot be held to be void under that Rule. The error in the argument of the respondent is in mixing up two different provisions enacted by two different authorities and reading the one into the other. The rules framed by the Association form a code complete in itself, and any question arising with reference to those rules must be determined on their construction, and it would be a mistake to read into them the statutory provisions enacted in Act VIII of 1925. In this view, the contract notes, Exhibit A, cannot be held to be void under rule 167. In the result, we must hold, differing from the learned Judges of the court below, that the arbitration proceedings are not incompetent and that the award made therein is not void on the ground that the contracts containing the agreement are void. The respondent contested the validity of the award on several other grounds. They were rejected by the City Civil Judge and in the view taken by the learned Judges of the High Court that the contract notes were void under section 6 of Act VIII of 1925, they did not deal with them. Now that we have held that the contracts are not void, it is necessary that the appeal should be heard on those points. We accordingly set aside the order of the court below, and direct that the appeal be reheard in the light of the observations contained herein. As the appeal succeeds on a point not taken in the courts below, the parties will bear their own costs throughout. The costs of the further hearing after remand will be dealt with by the High Court.

The appellants share broker carrying on business in the City of Bombay and a member of the Native Share and Stock Brokers ' 858 Association was employed by the respondent for effecting sales and purchases of shares on her behalf. The appellant effected purchases of 25 shares of Tata Deferred and 350 shares of Swadeshi Mills to square the outstanding sales of the same number of shares standing in her name and sent the relative contract notes therefor to her. She repudiated the contracts on the ground that the appellant had not been authorised to close the transactions on the date mentioned by him and asked him to square them at a later date. The appellant maintained that the transactions had been closed in accordance with her instructions. The appellant referred the dispute for arbitration to the Native Share and Stock Brokers ' Association in pursuance of an arbitration clause in the contract notes. The respondent refused to submit to arbitration of the association on the ground that the contract notes were void and therefore no arbitration proceedings could be taken thereunder. The arbitrators made an award in favour of the appellant in the absence of the respondent who declined to take part in the proceedings. The respondent filed an application for setting aside the award. The Bombay High Court held that the contracts in question were not ready delivery contracts as defined in section 3(4) of the Bombay Securities Contracts Control Act VIII of 1925 and that they were accordingly void under section 6 of the Act and therefore the arbitration clause and the proceeding taken thereunder culminating in the award were also void. Held that apart from the question whether the contracts in question were for ready delivery or not, they were outside the purview of section 6 of Bombay Act VIII of 1925 because they were not contracts for sale and purchase of securities. The dispute between the parties was as to whether the appellant was acting within the scope of his authority when he purchased the shares. If he was acting within his authority, the respondent was liable to him. If those purchases were unauthorised, the appellant was liable to the respondent for damages. In either case the dispute was one which arose out of the contract of employment of the appellant by the respondent as a broker and not out of any contract of sale or purchase of securities. The relationship between the respondent and the appellant was that of principal and agent, and not that of seller and purchaser. The contract notes sent by brokers to their constituents are not themselves contracts for sale or purchase of securities within section 6 of the Bombay Act VIII of 1925 but only intimations by the broker to the constituent that such contracts had been entered into on his behalf. It is settled law that to constitute an arbitration agreement in writing it is not necessary that it should be signed by the parties, and that it is sufficient if the terms are reduced to writing and the agreement of the parties thereto is established. The Rules framed by the Native Share and Stock Brokers ' Association, Bombay form a code complete in itself and any question 859 arising with reference to those Rules must be determined on their construction and it would be a mistake to read into them the statutory provisions enacted in the Bombay Act VIII of 1925 and therefore the contract notes cannot be held to be void under Rule 167.

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ivil Appeal No. 4802 of 1989. From the Judgment and Order dated 7.9.1987 of the Bombay High Court in First Appeal No. 24 of 1986. Anil Dev Singh, C. Ramesh, C.V.S. Rao and P. Parmeshwa ran for the Appellants. S.K. Mehta, Dhruv Mehta, Aman Vachher, Atul Nanda and S.M. Satin for the Respondent. The Judgment of the Court was delivered by K. JAGANNATHA SHETrY, J. Special Leave granted. This case raises yet another variant of a vexed ques tion. Does Section 23(2) of the Land Acquisition Act, 1984 (as amended by Act 68 of 1984) providing for higher solatium proprio rigore apply to award made subsequent to 24 Septem ber 1984 even though the acquisition commenced prior to the said date. The appeal also raises another important question as to the applicability of section 23(IA) providing addi tional amount of compensation to award made in such acquisi tion proceedings. The facts are not in dispute and may be stated as follows: By notification under section 4 of the Land Acquisition Act, 1894 (the 'Act ') published in the Government Gazette on 26 October 1967, the State Government declared its intention to acquire the land belonging to the respondent for estab lishing Naval Air Station Dabolim. On 23 February 1968, notification under section 6 was published in the Gazette. On 5 March 1969 the Land Acquisition Officer declared award determining compensation at the rate of 40 paise per square meter with solatium at 15 per cent. The claimant had sought reference under section 18 of the Act and reference was duly made to the Civil Court (District Judge). On 339 28th May 1985, the Court after investigation of the claim awarded compensation at Rs.3 per square meter. The Court also awarded solatium at 15 per cent and interest at 6 per cent from the date of taking possession till payment of compensation. Not being satisfied, the claimant preferred an appeal to the High Court seeking further enhancement of compensation and also solatium at 30 per cent. This claim was apparently based on the new provisions introduced by the Amending Act 68 of 1984. The High Court accepted the appeal and granted the reliefs in the following terms: "The impugned award dated 28th May, 1986, is modified. The appellant is entitled to the added benefits. In that he shall be entitled to have the compensation at the rate of 12% of the market value from the date of section 4 notification till the date of possession or the date of award, whichever is earlier. The appellant is further entitled to interest at the rate of 9% for the first year from the date of taking over possession and thereafter at the rate of 15% per annum till the date of deposit or payment as the case may be. The appellant shall be entitled to further 15 per cent solatium in addition to the 15 per cent already granted to him. To the extent indicat ed above, the award shall stand modified. " The High Court has thus granted three more reliefs to the claimant: (i) Additional amount at the rate of 12 per cent of the market value from the date of notification under section 4 till the date of taking over possession; (ii) interest at the rare of 9% for the first year from the date of taking possession and 15 per cent for the subsequent years; and (iii) solatium at 30 per cent on the market value. There is no grievance made in this appeal as to the second of the reliefs granted to the claimant. The claimant is entitled to the interest under section 28 of the Act. The challenge is only against the first and the third of the said reliefs. They were evidently given under the amended sections 23(IA) and 23(2) of the Act. We will first take up the question of solatium. On 30 April 1982, the corresponding Bill of the Amending Act 68 of 1984, namely, Land Acquisition (Amendment) Bill 1982, was introduced in Parliament. On 24th September 1984 it became law as the Land Acquisition (Amendment) Act, 68 of 1984, when it received assent of the President. Before the amend ment, Section 23(2) provided solatium at 15 340 per cent on the market value. After amendment by Act 68 of 1984 solatium was raised to 30 per cent on the market val ued. Section 23(2) now reads: "23(2) In addition to the market value of the land, as above provided, the Court shall in every case award a sum of (thirty per centum) on such market value, in consideration of the compulsory nature of the acquisition." The question herein is whether the higher solatium is attracted to the present case. Section 23(2) has been given limited retrospectivity by supplying transitional provisions under section 30(2). Section 30(2) reads: "30. Transitional provisions: (1) xxxxxx xxxxxxx xxxxxxxx (2) The provisions of sub section (2) of Section 23 of the principal Act, as amended by clause (b) of Section 15 and Section 18 of this Act respectively, shall apply, and shall be deemed to have applied, also to, and in relation to, any award made by the Collector or Court or to any order passed by the High Court or Supreme Court in appeal against any such award under the provisions of the princi pal Act after the 30th day of April, 1982 (the date of introduction of the Land Acquisition (Amendment) Bill, 1984, in the House of the People) and before the commence ment of this Act." The scope of retrospective operation of Section 23(2) was first explained in Kamalajammaniavaru vs Special Land Acquisition Officer, A two Judge Bench held that the award of 30 per cent solatium will apply only where the award appealed against was made by the Collector of Court during the period between 30 April 1982 and 24 September 1984. This decision was rendered on 14 February 1985. Shortly thereafter there was another decision by a three Judge Bench in Bhag Singh vs Union Territory of Chand igarh; , There a contrary view was ex pressed. It was held that even if an award is made by the Collector or Court on or before 30 April, 1982, and an appeal against such award is pending before the High Court or the Supreme Court on 30 April 1982 or is filed subsequent to that date, 30 per cent solatium under section 23(2) should be 341 allowed. In taking that view, Bhag Singh overruled Kamala jammannavaru and approved of the opinion expressed in anoth er three Judge Bench in State of Punjab vs Mohinder Singh, But the recent Constitution Bench in Union of India vs Raghubir Singh, ; has overruled Bhag Singh and Mohinder Singh and reiterated the view ex pressed in Kamalajammanaivaru. Pathak, CJ., speaking for the Court in Raghubir Singh case rounded off his discussion thus (at 782): "We think that what Parliament intends to say is that the benefit of section 30(2) will be available to an award by the Collector or the Court made between the aforesaid two dates or to an appellate order of the High Court or of the Supreme Court which arises out of an award of the Collector or the Court made between the said two dates. The word 'or ' is used with reference to the stage at which the proceeding rests at the time when the benefit under section 30(2) is sought to be extended. If the proceeding has terminated with the award of the Collector or of the Court made between the aforesaid two dates, the benefit of section 30(2) will be applied to such award made between the aforesaid two dates. If the pro ceeding has passed to the stage of appeal before the High Court or Supreme Court, it is at that stage when the benefit of section 30(2) will be applied. But in every case, the award of the Collector or of the Court must have been made between April 30, 1982 and September 24, 1984." In stating thus, the decision has set at rest the con troversy as to entitlement of higher solatium to cases pending as on the date of commencement of the Amending Act. Section 23(2) was held to apply to awards made in between 30 April 1982 and 24 September 1984. Obviously they must be awards in acquisition commenced prior to the said dates. The award may be of the Collector or Court. One or the other must receive thirty per cent solatium on the market value of the land. More important, that the higher solatium could also be given by the High Court or the Supreme Court in appeals against such award. But these decisions do not solve the problem presented here. The award with which we are concerned does not fall within the interregnum i.e. between 30 April 1982 and 24 September 1984. To repeat the facts: The acquisition com menced on 26 October 1967 when the notification under sec tion 4(1) of the Act was published. On 5 March 342 1969 the Collector made the award and on 28 May 1985 the reference court made the award. Both the awards, thus appar ently fall outside the period prescribed under section 30(2). Counsel for the appellant on the aforesaid facts rules out the applicability of section 30(2) in the first place. Secondly, he also ruled out the applicability of section 23(2). The first contention was based on the plain terms of Section 30(2) and the second on the ground that section 23(2) with its isolated splendour is not retrospective in operation. He thus submitted that the claimant 's case could not be saved for higher solatium either under Transitional Provisions or by amended Section 23(2) of the Act and it was gone both ways. This submission reminds us of the words of Shakespeare in the Merchant of Venice, where Luncelot tells Jessica: "Truely then I fear you are damned both by father and mother. When I shun scylla your father, I fail into charybdis your mother. Well, you are gone both ways." (The Merchant of Venice 3.5). The submission that Section 23(2) by itself has no retrospective operation seems to be justified. It is signif icant to note that section 23(2) forms part of a scheme of determining compensation for land acquired under the Act. It provides 30 per cent solatium on the market value of the land in consideration of the compulsory nature of the acqui sition. It thus operates on the market value of the land acquired. The market value of the land is required to be determined at the date of publication of the notification under section 4(1). It cannot be determined with reference to any other date. That has been expressly provided for under section 23(1) of the Act. In the instant case, section 4(1) notification was published on 20 October 1967. The Amending Act 68 of 1984 came into force on 24 September 1984. The amended section 23(2) by itself is not retrospec tive in operation. It can not proprio vigore apply to awards in respect of acquisition proceedings commenced prior to 24 September 1984. If, therefore, section 30(2) does not cover the present case, then amended Section 23(2) has no part to play. This in effect is the result of the plain meaning rule of interpreting Section 30(2) of the Amending Act 68 of 1984. But then, it would seem very odd indeed and anomalous too to exclude the present case from the operation of sec tion 30(2). Section 30(2) is the Transitional 343 Provisions. The purpose of incorporating Transitional Provi sions in any Act or amendment is to clarify as to when and how the operative parts of the enactments are to take ef fect. The Transitional Provisions generally are intended to take care of the events during the period of transition. Mr. Francis Bennion in his book on Statutory Interpretation (14 Edition, p. 442) outlines the purpose of such provisions: "189. Transitional Provisions Where an Act contains substantive, amending or repealing enactments, it commonly also in cludes transitional provisions which regulates the coming into operation of those enactments and modify their effect during the period of transition. Where an Act fails to include such provisions expressly, the Court is required to draw such inferences as to the intended tran sitional arrangements as, in the light of the interpretative criteria, it considers Parlia ment to have intended. " The paramount object in statutory interpretation is to discover what the legislature intended. This intention is primarily to be ascertained from the text of enactment in question. That does not mean the text is to be construed merely as a piece of prose, without reference to its nature or purpose. A statute is neither a literary text nor a devine revelation "Words are certainly not crystals, trans parent and unchanged" as Mr. Justice Holmes has wisely and properly warned. (Town vs Eisher; , , 425, 1918). Learned Hand, J., was equally emphatic when he said. "Stat utes should be construed, not as theorems of Euclid, but with some imagination of the purposes which lie behind them." (Lenigh Valley Coal Co. vs Yensavage, 2 at 553.) Section 30(2) provides that amended provisions of Sec tion 23(2) shall apply, and shall be deemed to have applied, also to, and in relation to, any award made by the collector or Court between 30 April 1982 and 24 September 1984, or to an appellate order therefrom passed by the High Court or Supreme Court. The purpose of these provisions seems to be that the awards made in that interregnum must get higher solatium in as much as to awards made subsequent to 24 September 1984. Perhaps it was thought that awards made after the commencement of the Amending Act 68 of 1984 would be taken care of by the amended Section 23(2). The case like the present one seems to have escaped attention by innocent lack of due care in the drafting. 344 The result would be an obvious anomaly as will be indicated presently. If there is obvious anomaly in the application of law the Court could shape the law to remove the anomaly. If the strict grammatical interpretation gives rise to absurd ity or inconsistency, the Court could discard such interpre tation and adopt an interpretation which will give effect to the purpose of the legislature. That could be done, if necessary even by modification of the language used. [See: Mahadeolal Kanodia vs The Administrator General of West Bengal, The legislators do not always deal with specific controversies which the Court decide. They incorporate general purpose behind the statutory words and it is for the courts to decide specific cases. If a given case is well within the general purpose of the legis lature but not within the literal meaning of the statute, then the court must strike the balance. The criticism that the literal interpretation of Section 30(2), if adhered to would lead to unjust result seems to be justified. Take for example; two acquisition proceedings of two adjacent pieces of land, required for the same public purpose. Let us say that they were initiated on the same day a day sometime prior to 30 April 1982. In one of them the award of the Collector is made on 23 September 1984 and in the other on 25 September 1984. Under the terms of Sec tion 30(2) the benefit of higher solatium is available to the first award and not to the second. Take another example; the proceedings of acquisition initiated, say, in the year 1960 in which award was made on 1 May 1982. Then the amended Section 23(2) shall apply and higher solatium is entitled. But in an acquisition initiated on 23 September 1984, and award made in the year 1989 the higher solatium is ruled out. This is the intrinsic illogicality if the award made after 24 September 1984, is not given higher solatium. Such a construction of Section 30(2) would be vulnerable to attack under Article 14 of the Constitution and it should be avoided. We, therefore, hold that benefit of higher solatium under section 23(2) should be available also to the present case. This would be the only reasonable view to be taken in the circumstances of the case and in the light of the pur pose of Section 30(2). In this view of the matter, the higher solutium allowed by the High Court is kept undis turbed. This takes us to the second question which we have formulated at the beginning of the judgment: Whether the claimant is entitled to additional amount of compensation provided under Section 23(IA) of the Act? This is equally a fundamental question and seemingly not covered by any of the previous decisions of this Court. 345 Section 23(IA) reads as follows: "In addition to the market value of the land, as above provided, the court shall in every case award an amount calculated at the rate of twelve per centum per annum on such market value for the period commencing on and from the date of the publication of the notifica tion under Section 4, sub section (!), in respect of such land to the date of award of the Collector or the date of taking possession of the land, whichever is earlier. Explanation: In computing the period referred to in this sub section any period or periods during which the proceedings for the aquisition of the land were held up on account of any stay or injunction by the order of any court shall be excluded. " The objective words used in this sub section are similar to those that are used in Section 23(2). It enjoins a duty on the Court to award the additional amount at twelve per cent on the market value of the land for the period prescribed thereunder. But this again is a part of the scheme for determining compensation under Section 23(1) of the Act. It also operates on the market value of the land acquired. It is plainly and distinctly prospective in its operation since market value has to be determined as on the date of publica tion of notification under section 4(1). But the legislature has given new starting point for operation of section 23(IA) for certain cases. That will be found from Section 30 sub section l(a) and (b) of the Transitional Provisions. They read as follows: Section 30: Transitional Provisions: (1) The provision of sub section (IA) of Section 23 of the principal Act, as inserted clause (a) of section 15 of this Act, shall apply, and shall be deemed to have applied, also to, and in relation to: (a) every proceeding for the acquisition of any land under the principal Act pending on the 30th day of April 1982 the date of intro duction of the Land Acquisition (Amendment) Bill 1982 [in the House of the People] in which no award has been made by the Collector before that date. 346 (b) every proceeding for the acquisition of any land under the principal Act commenced after that date, whether or not an award has been made by the Collector before the date of commencement of this Act. " Entitlement of additional amount provided under Section 23(1A) depends upon pendency of acquisition proceedings as on 30 April 1982 or commencement of acquisition proceedings after that date. Section 30 sub section (1)(a) provides that additional amount provided under Section 23(IA) shall be applicable to acquisition proceedings pending before the Collector as on 30 April 1982 in which he has not made the award before that date. If the Collector has made the award before that date then, that additional amount cannot be awarded. Section 30 sub section (1)(b) provides that section 23(l A) shall be applicable to every acquisition proceedings commenced after 30 April 1982 irrespective of the fact whether the Collector has made an award or not before 24 September 1984. The final point to note is that Section 30 sub section (1) does not refer to Court award and the Court award is used only in section 30 sub section (2). In the case before us, on 26 October 1967, the notifica tion under section 4 was issued. On 5 March 1969 the Collec tor made the award. The result is that on 30 April 1982 there was no proceedings pending before the Collector. Therefore, section 30 sub section (1)(a) is not attracted to the case. Since the proceedings for acquisition commenced before 30 April 1982, section 30 sub section (1)(b) is also not applicable to the case. Here, the case is really gone by both ways. It cannot be saved from Scylla or Charybdis. The claimant is, therefore, not entitled to additional amount provided under Section 23( I A). Before we part with the case, it is important that we should refer to two authorities of the High Courts which have taken contrary view. As to the applicability of Section 23(IA) to pending cases, the Karnataka High Court in Special Land Acquisition Officer, Dandeli vs Soma Gopal Gowda, AIR 1986 Karnataka 179 at 183 (FB) has expressed the view that for giving an addi tional amount calculated at the rate of 12 per cent per annum on the market value of the land, no distinction could be made respecting lands acquired before or after the coming into force of the Amending Act. In all pending cases whether on reference or on appeal, the Court is required to apply the provisions of Section '23(1A) in determining compensa tion payable to claimants. For this conclusion the Court relied upon the judgment of this Court in 347 Bhag Singh case. The Bombay High Court in Jaiwant Laxman P. Sardesai etc. vs Government of Goa, Daman and Diu and Ant., AIR 1987 Bom 214 at 217 (FB) has also accepted a similar line of reasoning. In fact the reasons are so much similar, the cases look like twins. Both the High Courts have focussed attention on the terms and phraseology used in Section 30 sub section (1) namely," . . shall apply, and shall be deemed to have applied, also to, and in relation has also been proceedings for acquisition . . ". The conclusion has also been rested on the mandatory words of Section 23(lA). It was said that it enjoins a duty on the court to award the amount in every case and that mandate of the legislature could not be ignored. The decision of this Court in Bhag Singh appears to be the single motive force guiding the approach and reaching the conclusion. But it may be noted that the aforesaid phraseology used in Section 30 sub section (1) is quite similar to that used in Section 30 sub section (2). The scope of those words has already been examined and no more need to be stated in that regard since Bhag Singh has been overruled in Raghubir Singh. The view taken by the High Courts of Karnataka and Bombay therefore, could no longer be cosidered as good law and the said decisions are accordingly overruled. In the result, the appeal is allowed in part. The judg ment of the High Court is modified and the compensation award under Section 23(IA) is deleted. The judgment and decree in other respects are kept undisturbed. ' In the circumstances of the case, we make no order as to costs. Y. Lal Appeal allowed.

By a notification issued under Section 4 of the Land Acquisition Act and published in the Government Gazette on 26.10.1967, the State Government declared its intention to acquire the land of the Respondent on 23.2.1968. A notifica tion under section 6 of the Act was published in the Gazette and on 5.3.1969. The Land Acquisition Officer declared award, determining compensation at the rate of 4 paise per square meter with solatium at 15 per cent. At the instance of the respondent claimant, a reference under section 18 of the Act was made to the Distt. judge on May 28, 1985. The Civil Court awarded compensation at Rs.3 per square meter and also awarded solatium at 15 per cent and interest at 6 per cent from the date of taking possession of the land by the State till payment of compensation. Being dissatisfied, the Respondent preferred an appeal to the High Court seeking enhancement both of compensation and solatium at the rate of 30 per cent. The High Court allowed the appeal, and granted three reliefs viz; (1) Additional amount at the rate of 12 per cent of the market value from the date of the notification under section 4 till the date of taking over possession; (2) interest at the rate of 9 percent for the first year from the date of taking possession and 15 per cent for the subse quent. years and (3) Solatium at 30 per cent on the market value. The appellant has thus filed the instant appeal after obtaining Special Leave. There is no grievance as regards the interest awarded. The challenge relates to the grant of enhanced solatium and the additional amount of compensation. Appellants ' conten tion is that sections 30(2) and 23(2) are not at all at tracted and the claim of the Respondent on the said two counts is not sustainable. 337 Partly allowing the appeal, this Court, HELD: Section 30(2) provides that the amended provisions of section 23(2) shall apply, and shall be deemed to have applied, also to, and in relation to, any award made by the Collector or Court between 30th April 1982 and 24th Septem ber 1984, or to an appellate order therefrom passed by the High Court or Supreme Court. The purpose of these provisions seems to be that the awards made in that interregnum must get higher solatium in as much as to awards made subsequent thereto. [343G H] If there is obvious anamoly in the application of law, the Court could shape the law to remove the anamoly. The Legislatures do not always deal with specific controversies which the Court decide. They incorporate general purpose behind the statutory words and it is for the Courts to decide specific cases. If a given case is well within the general purpose of the legislature but not within the liter al meaning of the statute, then the Court must strike the balance. So construing the Court held that benefit of higher solatium under section 23(2) should be available also to the present case. [344A C] In the instant case, on October 26, 1967, the notifica tion under section 4 was issued. On March 5, 1969, the Collector made the award. The result is that on April 30, 1982 there was no proceeding pending before the Collector. Therefore Section 30, sub section (1)(a) is not attracted to the case. Since the proceedings for acquisition commenced before 30th April 1982 Section 30, sub section (1)(b) is also not applicable to the case. The case is therefore really gone by both ways. The claimant is therefore not entitled to additional amount provided under Section 23(IA). [346E F] The purpose of incorporating Transitional Provisions in any Act or amendment is to clarify as to when and how the operative parts of the enactments are to take effect. The transitional provisions generally are intended to take care of the events during the period of transition. [343A] Kamalajammaniavaru vs Special Land Acquisition Offi cer, ; Bhag Singh vs Union Territory of Chandigarh, ; ; State of Punjab vs Mohinder Singh, ; Union of India vs Raghubir Singh, ; ; Towne vs Eisher, ; ,425, 1918; Lenigh Valley Coal Co. vs Yensavage, at 553; Mahadeolal Kanodia vs The Administrator General of West Bengal, ; , referred to. 338 Special Land Acauisition Officer, Dandeli vs Soma Gopal Gowda, AIR 1986 Karnataka 179 at 183 (FB); Jaiwant Laxman P. Sardesai etc. vs Government of Goa Daman & Diu & Anr. , AIR 1987 Bom. 214 at 217 (FB), overruled.

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l Appeals Nos. 176 and 176 A of 1952. Appeals by Special Leave granted by the Supreme Court on the 20th February, 1952, and 23rd May, 1952, respectively, from the Judgment and Order dated the 6th December, 1951, of the High Court of Judicature in Assam at Gauhati in its Revenue Appellate Jurisdiction (Deka J.) in Revenue Appeal No. 65 (M) of 1951. C. K. Daphtary, Solicitor General for India (Nuruddin Ahmed, with him) for the appellant in Civil Appeal No. 176. B. B. Tawakley (K. B. Asthana, with him) for the respondent in Civil Appeal No. 176. R. K. Chaudhury (Jai Gopal Ghosh and R. N. Tikku, with him) for respondent No. 2. in Civil Appeal No. 176 and appellant in Civil Appeal No. 176 A. 1953. April 14. The Judgment of the Court was delivered by BOSE J. This is a curious case in which the State Government of Assam having granted the first respondent a lease later cancelled its grant and regranted it to another party and now contends that it is not bound by the laws and regulations which ordinarily govern such transactions. Assam is blest with fisheries which are under the control of and belong to the State Government. Periodically the fishing rights are ]eased out to licensees and the State derives considerable revenue from this source. So valuable are these rights that as long ago as 1886 it was considered undesirable to leave such a lucrative source of revenue, to the unfettered 867 discretion and control of either the Provincial Government or a single individual however eminent. Accordingly, legislation was enacted and Regulation I of 1886 (The Assam Land and Revenue Regulation, 1886) was passed into law. A Register of Fisheries had to be kept and the Deputy Commissioner was empowered, with the previous sanction of the Chief Commissioner (later Provincial Government), to declare any collection of water to be a fishery. Once a fishery was so declared no person could acquire fishing rights in it except as provided by rules drawn up under section 155. These rules, with alterations made from time to time, were still operative at all dates relevant and material to this case. Put shortly, the effect of these rules at the dates mentioned here, was to require the fishing rights to be sold periodically by public auction in accordance with a particular procedure which was prescribed. These sales were called " Settlements. " Among the conditions of sale were the following : (1)The officer conducting the sale does not bind himself to accept the highest bid or any bid. (2)The purchaser shall immediately after the acceptance of his bid furnish as security etc. (3)The annual sale of fisheries in a district should be reported to the Commissioner for sanction in Form No. 100. The Form shows that each individual settlement had to be sanctioned. But the rules in force at the dates relevant to this case permitted a departure in these words: " Rule 190 A. No fishery shall be settled otherwise than by sale as provided in the preceding instructions except with the previous sanction of the Provincial Government. " There is also the following rule: " 191. Fisheries should be settled to the best advantage but, subject to this condition, the agency of middlemen as lessees should be done away with as 868 far as possible. To effect this the fishery area should be broken up into blocks of such size that the actual fishers may be able to take the lease, which should be given, for preference, to the riparian land occupants or to the actual fishermen. The endeavour of the District Officer should be to do away with the middlemen by finding out who the sub lessees are and trying to come to terms with them. " The Rules also made provision for an appeal to the Revenue Tribunal (the High Court acted as such) in the following words : "190. All orders of a Deputy Commissioner or Sub Divisional Officer passed under these rules are appealable to the Revenue Tribunal. " The first respondent held previous leases of the fishery with which we are concerned for a number of years. The last of these was to expire on 31st March, 1951. Shortly before its expiry there was agitation by way of petitions and memorials by some of the local fishermen asking in effect that rule 191 be given effect to though the applications do not actually mention the rule. These applications, six in number, range in date from 27th October, 1950, to 13th March, 1951. They were addressed to various officials ranging from the Chief Minister and the Revenue Minister to the Secretary to Government and the Parliamentary Secretary and the Deputy Commissioner. Government therefore had all the facts fully before it. In view of these applications Government decided to settle the fishery direct and wrote the following letter to the Deputy Commissioner on 1st February, 1951: Government desire to settle the above mentioned fishery direct under rule 190 A. I am therefore directed to request you to put the fishery to auction and then to submit the bid list to Government with your recommendation for direct settlement. " By that date Government had four of the six applications to which we have referred before it. In addition, it had the recommendation of the Sub Deputy Collector 869 dated 4th January, 1951, in favour of these applications together with the Deputy Commissioner 's endorsement letter dated 5th January, 1951, confirming the facts set out in the Sub Deputy Collector 's endorsement and in the applications. The first respondent also made ail application to the Parliamentary Secretary on 13th March, 1951, before any final decision was reached. The Deputy Commissioner proceeded to auction the fishery on 24th February, 1951. , and on 26th February, 1951, forwarded the bid lists to the Government with a recommendation in the first respondent 's favour (his was the highest bid) in the following terms : The present lessee is managing the fishery well and there is nothing against him." After this, and before the final sanction, Government received still another petition from some of the local fishermen asking for a settlement in their favour. This was on 13th March, 1951. Therefore, by that date Government had six petitions from the local fishermen before it and one by the first respondent as well as the various recommendations made by the District officials. With all this material in its possession Government decided in favour of the first respondent and on 17th March, 1951, wrote to the Deputy Commissioner, with a copy to the Development Commissioner, as follows: " Government sanction settlement of the Chaiduar Brahmaputra and Kharoibeel fishery under rule 190 A with the existing lessee Shri Keshab Prosad Singh at an annual revenue of Rs. 17,700 for a term of three years with effect from the 1st April, 1951, on the usual terms and conditions. " The Deputy Commissioner conveyed this sanction to the first respondent on 21st March, 1951, and called on him to make the necessary deposits. The sanction is in the following terms: " You are hereby informed that Government have allowed settlement of Chaiduar Brahmaputra and Kharoibeel fishery with you at Rs. 17,700 per year 870 for 3 years with effect from 1st April, 1951. You are therefore directed to deposit the 1 /4 purchase money amounting to Rs. 4,425 on 28th March, 1951, and the balance of Rs. 13,275 in cash on 31st March, 195 1, failing which the settlement granted is liable to be cancelled. " According to all notions of contract current in civilised countries that would have constituted a binding engagement from which one of the parties to it could not resile at will, and had the first respondent tried to back out we have little doubt that the State Government of Assam would, and quite justifiably, have insisted on exacting its just dues. But the State Government did not feel itself hampered by any such old fashioned notions regarding the sanctity of engagements. On the very day on which it passed its orders in the first respondent 's favour, 17th March, 1951, it received two more petitions. They emanated from the same sources as before and said nothing new; but they asked for a reconsideration of the orders just passed. Had Government recalled its orders then and there, possibly no harm would have been done beyond exposing its vacillations to a limited official circle. But it allowed five davs to pass and then the Revenue Secretary wired the Deputy Commissioner not to recall the orders of Government, but to "stay delivery of possession" pending what the Revenue Secretary was pleased to call "further orders of Government on the revision petitions". But by then it was too late. The acceptance of the bid had already been communicated to the first respondent and by all ordinary notions the contract was complete. The State Government now says in effect, somewhat cynically, that it is not bound by the statutory rules and claims that that gives it the right to recall its previous orders and regrant the fishery to some other person or body more to its liking, or rather in whom it has discovered fresh virtueshidden from its view in its earlier anxious and mature deliberations. Acting on the telegraphic instructions received by him, the Deputy Commissioner conveyed the orders to the first respondent on 22nd March, 1951, and said; 871 "The under mentioned document is forwarded to Srijut Keshab Prosad Singh for information and necessary action. He is further informed that he is not to deposit the 1/4th purchase money and additional security. . till the decision of the revision petition mentioned in the telegram". Three weeks elapsed and then on 13th April, 1951, the State Government solemnly "reviewed" its former order and said: "It is reported by the Deputy Commissioner that the Gamiri Kharai Chaiduar Fishermen Society, Ltd., is constituted by bona fide fishermen. Accordingly, in view of the new circumstances brought forward by the above Society the review petition is allowed and the previous orders of Government dated the 17th March, 1951, is modified. The Chaiduar Brahmaputra and Kharaibeel fishery is accordingly settled with the Camiri kharaiChaiduar Fishermen Society Ltd. " The manager of this Fishermen 's Society is one Maniram Das. His name was put forward by 205 members who claimed to be bona fide Assamese fishermen in the petitions of 27th October, 1950, and 21st December, 1950, also by Manirani himself on behalf of this Society on 2nd January, 1951. Their claims were endorsed by the Sub Deputy Collector on 4th January, 1951, and by the Deputy Commissioner on 5th January, 1951. The same claims were again made by Manirani Das on behalf of the Society on 23rd January, 1951. The " new circumstances " said to have been discovered on review was the following statement made by the Deputy Commissioner on 3rd April, 1951: " Gamiri Kharai Chaiduar Society is formed by bona fide fishermen" The previous statement of the Sub Deputy Collector made on 4th January, 1951, was: "The applicants are all Kaibarta people in the district of Darrang whose sole business is to deal with 872 fish. . The applicants are Assamese people. In view of this and in view of the fact that these people have been recommended by respectable persons, I suggest that Kharai Chaiduar fishery" (the one in question here) " may be settled with them to encourage them to compete with the, other fishermen coming from outside Assam. " The Deputy Commissioner 's endorsement on this (the same Deputy Commissioner) dated 5th January, 1951, runs: " The petitioner (Maniram Das) is an actual fisherman as will appear from the report of the Sub Deputy Collector As observed by the Sub Deputy Collector. . it is a fact that the indigenous fishermen cannot compete with the upcountry people in open auction." To characterise the later statement of the Deputy Commissioner dated 3rd April, 1951, as disclosure of a new circumstance betrays a cynical disregard for accuracy on a par only with the Assam Government 's cynical disregard for its pledged word. The Deputy Commissioner was informed of the Government 's revised decision on 13th April, 1951, and on 16th April, 1951, the fishery was settled with Maniram Das and, according to the first respondent, the settlement in his name was cancelled. The first respondent 's reaction to this was to file an appeal to the High Court under rule 190 and at the same time to apply for a mandamus under article 226 of the Constitution. The relief sought was worded as follows : " The humble appellant, therefore, prays that your Lordships would be pleased to set aside the settlement of the fishery with the respondent and restore the settlement of the same with the humble appellant. " The High Court, not unsurprisingly on these facts. granted the prayer. It acted under rule 190 as an appellate tribunal and the only question for us to decide is whether it had jurisdiction to do so. The 873 mandamus petition is not before us. The appellant is the State of Assam. There is an ancient presumption under section 114, illustration (h), of the Evidence Act, dating from at least 1872, that official acts have been regularly performed. Strange as it may seem this applies to Governments as well as to lesser bodies and officials, and ancient though it is the rule is still in force. True, the presumption will have to be applied with caution in this case but however difficult the task it is our duty to try and find a lawful origin for as many of the acts of the appellant 's Government as we can. Now, as we have seen, prescribed fisheries in Assam were lifted out of the realm of matters which could be disposed of at the executive discretion of either Governments or officials and were placed under statutory regulation and control by sections 16 and 155 of the Assam Land. and Revenue Regulation of 1886 and we have already referred to the elaborate set of rules which were drawn up in pursuance of that Regulation. It follows that no fishery can be "settled" except in accordance with those Rules. It was not disputed that, apart from rule 190 A which we are now called upon to construe, the Deputy Commissioner alone could effect a "settlement" and, as we have shown, he was bound. to follow a prescribed procedure; also that his "settlement" was subject to the sanction of the Commissioner. Rule 190 A permits a departure but we do not consider it necessary in this case to determine the exact extent of the departure permitted because the Deputy Commissioner was directed to put the fishery to auction and he did so. The only departure from the rules was that instead of sending the result of the auction to the Commissioner for Settlement it was sent to the State Government direct. In our opinion, that was a permissible departure but it was for all that a departure within the Rules. In our judgment, the words " except with the previous sanction of the Provincial Government " are, 874 important. We do not consider that this permits the Provincial Government when it so wishes to lift the sales completely out of the statutory protection afforded by the Regulation and proceed to dispose of them by executive action. Such a construction would make rule 190 A run counter to section 16 of the Regulation which requires these sales to be made in accordance with rules framed under section 155, and of course a rule making authority cannot override the statute. Accordingly, the law requires the sale to be under and in accordance with the rules. It follows that the departure contemplated by rule 190 A is also a departure within the four corners of the rules read as a whole and is a part of the rules. It is true the departure need not conform to the " preceding instructions " contained in the earlier portion of the rules but the departure once sanctioned itself becomes part and parcel of the rules. This is important because one of the statutory safeguards against arbitrary executive action is the appeal to the Revenue Tribunal, which in this case is the High Court. We would be slow to bold that this safeguard can be circumvented by the simple expedient of lifting a sale out of the rules whenever Government finds that convenient. It seems to us that if the intention was to authorise Government to lift the matter out of the rules altogether and to proceed in an executive capacity the word " sanction " would be out of place, for Government would hardly require its own previous sanction to something which it is itself authorised to do. The sanction must therefore refer to something which some other person or body is authorised to do, and in the context we feel that it can only mean sanction to the Deputy Commissioner to proceed in a manner which is not quite in accordance with the instructions con tained in the rules. The next question is, to what extent was a departure sanctioned? This is to be found in the letter dated 1st February, 1951, addressed to the Deputy Commissioner : 875 Government desire to settle the above mentioned fishery direct under rule 190 A. I am therefore directed to request you to put the fishery to auction and then to submit the bid list to Government with your recommendation for direct settlement ". The State of Assam wishes to construe this to mean that the Government of Assam intended to flout the statute and disregard the Rules and proceed by executive action. The words " direct settlement " do lend themselves to that construction but that would be an act which, in our opinion, would not be warranted by the law and, as we are bound to presume until the contrary is shown that the official acts of the Assam Government were regularly performed, we must, if we can, lean against a construction which would put that Government more in the wrong than we can help especially as it self purported to act under rule 190 A. Now the only act which would be in consonance with rule 190 A and which would at the same time be in conformity with the letter of the first February would be for the Deputy Commissioner to sell by auction and then send the matter to Government direct for sanction instead of to the Commissioner. That, in our opinion, would be a permissible departure and would make the action of Government legal and would bring the matter under rule 190 A. In the cir cumstances, we are bound to construe this letter in that sense. Now what did the Deputy Commissioner do ? So far as the actual auction was concerned, he followed the Rules. He held a regular auction and recorded the bids in the usual way. Up to that point he not only complied with the letter of the 1st February but also with the regular rules. His only departure was to send his choice of a lessee to Government direct instead of to the Commissioner. This, according to us, was a permissible departure. Upon receipt of the Deputy Commissioner 's recommendation Government sanctioned the settlement with the first respondent and the Deputy Commissioner communicated the sanction. 876 It was argued on behalf of the State of Assam that this was not a settlement by the Deputy Commissioner but by the State Government and that the Deputy Commissioner was only acting as its mouthpiece when he conveyed the orders of Government to the first respondent. our opinion, that is a mere playing with words. The substance of the thing is there. It would be illegal for Government to settle the fishery direct by executive action because of the statute. It would be proper for it to sanction the settlement under rule 190 A in the way it did. Government said it was acting under rule 190 A. It said it had " sanctioned " the settlement. Whose act was it sanctioning? Certainly not its own, for one cannot sanction one 's own act. Sanction can only be accorded to the act of another and tile only other person concerned in this matter was the Deputy Commissioner. Accordingly, in spite of the efforts of Government to appear as a bold brave despot which knows no laws but its own, we are constrained to hold that it not only clothed itself with an aura of legality but that it actually acted within the confines of the laws by which it is bound. It follows that the settlement was the act of the Deputy Commissioner and fell within the four corners of the rules. That vested the first respondent with a good and legal title to the lease. Next followed a similar series of acts cancelling the settlement with the first respondent and resettling the fishery with the rival body. As the Deputy Commissioner was the only authority competent to settle these fisheries, subject of course to sanction, we are bound to hold that the act of cancellation and the act of resettlement were his acts however much lie may have acted under the direction and orders of a third party. That at once vested the High Court with jurisdiction to entertain the appeal against his actions under rule 190. When we say the Deputy Commissioner acted under the direction and orders of the State Government, we refer to the actual act of "settling" and not to his choice of a lessee. If this auction had proceeded in the normal 877 way, the Deputy Commissioner would have directed the auction and would have made a selection and would then have sent his selection on to a higher authority, the Commissioner, for sanction. He would then have "settled" the fishery. In the present case, he carried out every one of those steps except that the higher authority here was the State Government which had substituted itself under rule 190 A in place of the Commissioner. It was the Deputy Commissioner who made the initial choice. It was his choice which was " sanctioned " and it was he who in reality and in fact: " settled " the fishery with the first respondent. The mere fact that the State Government in addition to " sanctioning " his act also told him to " settle " the fishery could not alter or divest limit of his legal authority. This is not a case in which the Deputy Commissioner having been vested with a discretion failed to exercise it and acted as the mouthpiece of another. His discretion was to select a bidder and he did that without any outside pressure. There after his authority was to " settle " the fishery with the selected bidder once his act was sanctioned and the mere fact that lie was directed by another to do that which he would have been bound to do under the law in any event cannot divest the settlement of its legal and binding character. On the merits the High Court was abundantly right. We accordingly upheld its order and dismiss the appeal with costs payable to the first respondent. Civil Appeal No. 176 A of 1952. BOSE J. For the reasons given in our judgment in Civil Appeal No. 176 of 1952 pronounced to day, we dismiss the appeal without costs. Appeals dismissed. Agent for the appellant in Appeal No. 176: Naunit Lal. Agent for respondent No. 1 in Appeal No. 176 and respondent in Appeal No. 176 A: A. D. Mathur. Agent for respondent No. 2 in Appeal No. 176 and appellant in Appeal No. 176 A: K. R. Krishnaswamy.

The Government of Assam, desiring to settle a fishery direct under r. 190 A of the rules framed under the Assam Land and Revenue Regulation (1 of 1886), directed the Deputy Commis sioner concerned to put the fishery to auction and submit the bid list to Government with his recommendation for direct settlement. The Deputy Commissioner accordingly auctioned the fishery and submitted the bid list with a recommendation in the first respondent 's favour. Government sanctioned the settlement of the fishery with the first respondent and the latter was informed of the acceptance of the bid and directed to make the deposits. Government received two more petitions on the same day for re consideration of the orders passed and three weeks later Government reviewed its order and settled the fishery with another person. The first respondent preferred an appeal to the High Court under r. 190 which provided that all orders of a Deputy Commissioner passed under these rules were appealable to the High Court: Held, the words " except with the previous sanction of the Provincial Government " in r. 190 A do not permit the Provincial Government when it so wishes to lift the sales completely out of the statutory protection afforded by the Regulation and proceed to dispose of them by executive action. Such a construction would make r. 190 A run counter to section 16 of the Regulation which requires these sales to be made under and in accordance with the Rules. The departure contemplated by r. 190 A was a departure within the Rules. As the Deputy Commissioner was the only 112 866 authority competent to settle these fisheries, subject to sanction, the act of cancellation and the act of resettlement were his acts, however much he may have acted under the direction and orders of the Government, and the High Court had jurisdiction to entertain the appeal under r. 190. Judgment of the High Court of Assam affirmed.

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ivil Appeal No. 158 of 1954. Veda Vyas, (section K. Kapur and Ganpat Rai, with him), for the appellants. M. C. Setalvad, Attorney General for India (.ill. N. Phadke and Naunit Lal, with him), for respondent No. 1. 1955. May 2. The Judgment of the Court was delivered by JAGANNADHADAS J. This is an appeal by special leave against the Judgment and order of the Election Tribunal, Akola, Madhya Pradesh, dated the 1st May, 1953, dismissing the election petition filed by the appellants. It relates to the election for the Akola Constituency of the State Assembly of Madhya Pradesh which was held on the 13th December, 1951, and the result of which was notified in the Gazette on the 4th April, 1952. The two appellants are the electors of the said constituency. The first respondent was the successful candidate at the election. Respondents, Nos. 2, 3 and 4 were the other three candidates who, having been validly nominated went to the polls but were defeated. The appellants filed the election Petition under section 80 of the Representation of the People Act, 1951 (Act XLIII of 1951) (hereinafter referred to as the Act ' for setting aside the election on various allegations. The Election Commission admitted the petition after condoning the delay under the proviso to section 85 of the Act and thereupon constituted a Tribunal for the trial of the petition at Akola by notifications dated the 30th July, 1952, and 22nd September 1952. In due course respondent No. I appeared and filed his written statement on the 6th October, 1952, and the petitioners filed their reply thereto on the 16th October, 1952. With reference to these pleadings, the Tribunal was of the opinion that it was advisable to frame certain preliminary issues and to dispose of the same before entering on the 431 trial of the case on its merits. Accordingly, nine pre liminary issues were framed. (2) Whether there was sufficient cause for presentation of the petition one day out of time. (3) Whether the petition was defective for non joinder of certain parties as respondents. (4) Whether the petition is defective for want of proper verification. (5) Whether the petition was defective for vagueness of the particulars relating to the corrupt practices set out in Schedule A thereto. The Tribunal found only the first of the above points in favour of the petitioners by a majority. But in respect of the other four points, it held against the petitioners unanimously. It is against this dismissal that the appellants have now come up to this Court on obtaining special leave. Before dealing with the merits of the appeal, it may be mentioned that at an early stage of these proceedings before the Tribunal, an objection was taken to the composition of the Tribunal on the allegation that one of the Members, Shri A. section Athalye was not competent to be a Member thereof on account of his alleged bias in favour of the first respondent. The bias was sought to be made out by showing that shortly before the election, Shri Athalye had written a letter to the 1st respondent offering to assist him in his election campaign. On objection being taken, the Tribunal stayed its hands for a preliminary decision of that question. Meanwhile, the petitioners took proceedings in the High Court for the quashing of the constitution of the Tribunal on the above ground by means of an application under article 226 of the Constitution. That application was dismissed after hearing both sides. Thereupon the petitioners moved this Court for special leave against the order of the High Court. But this Court declined to grant leave. But this having been already determined against the petitioners in the previous proceedings, we declined to allow the matter to be reopened. On the other side, the learned Attorney General for the 1st respondent attempted to reopen before us the question as to whether the petition was presented to the Election Commission by an authorised person, which as stated above, was found against him by a majority of the Tribunal. The ground on which he attempted to reopen this question was that the finding was based on a wrong view as to the burden of proof. We were not prepared, however, to permit this finding of fact to be reopened in this appeal on special leave, irrespective of the question whether the burden of proof was rightly laid on the petitioners. The only points, therefore, that have been argued before us are whether the view taken by the Tribunal with reference to the following questions, viz. (1) limitation, (2) joinder of parties, (3) verification, and (4) specification of particulars of corrupt practices in Schedule A attached to the petition, is correct, and if so, whether the same entailed dismissal of the petition. The questions may be taken up one after the other. LIMITATION:As stated above, the petition was filed on the 19th April, 1952, admittedly one day beyond time. On the 28th April, 1952, the petitioners filed also an application for condonation of delay setting out the reasons for the same. In paragraphs 3, 4 and 5 thereof the circumstances under which the delay is said to have occurred were set out as follows: "3. The applicants were under the belief that Notice under Rule 113 of the Rules framed under the above Act was published on 5th April, 1952, in the official Gazette of the State of Madhya Pradesh. They felt therefore that their petition was duly presented within 14 days as prescribed by Rule 119. Applicants, however, learn that actually the Notice under Rule 113 was published in the Official Gazette of 4th April, 1952. It therefore appears that there was a delay of 433 one day in the representation of the election petition. This delay occurred under the following circumstances: 4. The applicants prepared their election petition on the 17th April, 1952. They sent the said petition with Shri P. B. Gole, Senior Advocate, Akola, with a written authority to present the petition through any person of his choice at Nagpur on the 18th April. They also sent with Shri Gole Rs. 1,000 for being deposited in the Government Treasury at Nagpur as required by section 117 of the Act and to obtain Treasury receipt for security of costs to be filed with the petition. The applicants were under the belief that an officer must have been appointed by the Election Commission under section 81 of the Act to whom election petitions could be represented for the State of Madhya Pradesh at Nagpur. Accordingly Shri Gole left Akola for Nagpur by the 1 Down Nagpur Mail, reaching Nagpur at about 9 30 A.M. on 18th April, 1952. Mr. Gole caused the deposit of Rs. 1,000 security for costs to be made in the Government Treasury at Nagpur through Mr. Sidhaye, Advocate, Nagpur, and obtained the necessary Government Treasury receipt on the 18th April, 1952. He then made enquiries about the officer who may have been appointed to receive the election petitions. He con sulted R. section Rangole, who was attached to the Election Office at Nagpur. On enquiries Shri Gole learnt that there was none at Nagpur, who was authorised to receive election petition under the Act. Under these circumstances Shri Gole booked a seat in the Night Plane for Delhi and flew to Delhi on the 18th and reached there on the morning on 19th April, 1952. On 19th April Shri Gole caused the petition to be presented to the Secretary to the Election Commission". The explanation thus furnished was accepted by the Election Commission as appears from the intimation to the petitioners by letter dated the 30th July, 1952. The Tribunal was of the opinion that notwithstanding the order of the Election Commission condoning the delay and admitting the petition, it was free to 434 reconsider the question by virtue of the powers vested in it under section 90(4) of the Act. In this view it went into the merits of the explanation furnished and came to the conclusion that the petitioners were negligent and that the delay, even of one day, could not be condoned. It accordingly held that the petition was liable to be dismissed as barred by time. Now, apart from the merits of the sufficiency of the cause for delay, the question as to whether, notwithstanding the condonation of the delay by the Election Commission., it was open to a Tribunal to reconsider the matter by virtue of section 90(4) of the Act, is now covered by the decision of this Court reported in Dinabandhu vs Jadumoni(1). It was therein held that it was not open to the Tribunal to reconsider the matter in such a case. The conclusion of the Tribunal, therefore, on this point cannot be maintained. The learned Attorney General attempted to argue that the decision of this Court referred to above was obiter as regards the legal point and required further consideration. But we were not prepared to permit that question to be reopened. We were also not satisfied that there was any adequate reason for the Tribunal to interfere with the view taken by the Election Commission condoning the delay of one day on the explanation furnished to it. This explanation has not been found, even by the Tribunal, to be JOINDER OF PARTIES: The objection as to joinder of parties arises as follows. Three persons by name Shri Sohoni, Shri Kulkarni, and Shri Kothkar were nominated as candidates at the election. Their nominations were found to be in order on scrutiny by the Returning Officer. But within the time allowed, these three withdrew from the elections under section 37 of the Act. The petitioners, while they impleaded as respondents the three unsuccessful candidates who went to the polls, did not implead these three persons. It has been argued before us that this view is erroneous and that persons who filed their nominations and who withdrew from the contest within the prescribed time in spite of their nominations having been found to be in order on scrutiny by the Returning Officer, cannot be said to fall within the category of "candidates duly nominated at the election". In support of this contention two decisions Sitaram vs Yograjsing(1) and Sheo Kumar vs V. G. Oak(2) have been cited. These three decisions have treated the decision of the question as depending on a construction of the phrase "at the election" in section 82 of the Act. The Bombay and Allahabad cases hold that this phrase confines the necessary parties under this section to those who were candidates for the actual poll, while the Patna High Court takes the view that the phrase "at the election" has no such limiting significance. It appears to us to be unnecessary and academic to go into this judicial controversy having regard to the decision of this Court in Jagan Nath vs Jaswant Singh(4). If we were called upon to settle this controversy, we would prefer to base the decision not on any meticulous construction of the phrase "at the election" but on a comprehensive consideration of the relevant provisions of the Act and of the rules framed thereunder and of the purpose, if any, of the requirement under section 82 as to the joinder of parties other than the returned candidate. We are, however, relieved from this, since it has been decided in Jagan Nath vs Jaswant Singh(4) that even if any of the necessary parties other than the returned candidate has not been (1) A.I.R. 1953 Bombay 293. (3) A.I.R. 1954 Patna 225. (2) A.I.R. 1953 All. 633. (4) ; 436 impleaded, the petition is not liable to be dismissed in limine on that sole ground but that it is a matter to be taken into consideration at the appropriate stage with reference to the final result of the case. In view of this ruling the decision of the Tribunal on this point also cannot be maintained. The relevant provision in the Civil Procedure Code referred to herein is Order VI, rule 15, clauses (2) and (3), which are as follows: "(2) The person verifying shall specify, by reference to the numbered paragraphs of the pleading, what he verifies of his own knowledge and what he verifies upon information received and believed to be true. (3) The verification shall be signed by the person making it and shall state the date on which and the place at which it was signed". In the present case the verification of the petition as well as the schedule of particulars of corrupt practices are each signed by both the petitioners and there is now no dispute about it. The verification clause in the petition is as follows: "The above named applicants hereby affirm that the contents of the above petition are true to information received from the press reports and several other electors and believed by them to be true. Signed and verified at Akola on The verification clause relating to the particulars of corrupt practices in Schedule A is as follows: "The above named applicants affirm that the contents in this schedule are true to information received and believed by us to be true. Signed and verified at Akolo, on 437 In the view of the Tribunal there were two defects in these verifications. They do not refer to any numbered paragraphs nor do they bear the dates on which they were signed. In the view of the Tribunal the petition was liable to dismissal for non compliance with the specific provision in the Act in this behalf. That the verification neither in the petition nor in the schedule of particulars bears any date is not disputed. But it is contended that the view taken by the Tribunal in so far as it was of the opinion that the verifications do not refer to any numbered para graphs is unsustainable. It is pointed out that the statements in the verification were clearly meant to convey that the various allegations in the petition and schedule were, in their entirety, based on information and belief. We agree with this contention. It is to be noticed that a verified pleading is different from an affidavit which., by virtue of Order XIX, rule 3, is specifically required to be confined to such facts as the deponent is able of his own knowledge to prove (except on interlocutory applications, on which statements of his belief may be admitted, provided that the grounds thereof are stated). But there is notand in the nature of things there cannot be any such limitation for pleadings. Hence it became necessary in the verification of a pleading to demarcate clearly between the two. The allegations in the petition in this case purport to be based only on informa tion. Since the verification clauses refer to the entirety of the petition and the attached schedule, absence of enumeration of the various paragraphs therein as having been based on information cannot be considered to be a defect. The verifications are accordingly defective only as regards the requirement of the dates thereof. The question is whether the petition is liable to dismissal on this ground. Though there may be cases where the date of the pleading and the verification may be relevant and important, it would be a wrong exercise of discretionary power to dismiss 438 an application on the sole ground of absence of date of verification. In such a case the applicants should normally be called upon to remove the lacuna by adding a supplementary verification indicating the date of the original verification and the reason for the earlier omission. PARTICULARS OF CORRUPT PRACTICES: The objection is based on section 83(2) of the Act which is as follows: "The petition shall be accompanied by a list signed and verified in like manner setting forth full particulars of any corrupt or illegal practice which the petitioner alleges, including as full a statement as possible as to the names of the parties alleged to have committed such corrupt or illegal practice and the date and place of the commission of each such practice". The objection is that the particulars of the instances furnished in Schedule A to the petition are all of them vague and not in compliance with the above provision. The list of particulars is as follows: " SCHEDULE "A". List of particulars of instances referred in the accompanying petition. That in the month of December, 1951, respondent No. 1 has been to the premises of Akola Shree Gurudwara, where the Local Sikh Community had assembled to listen to the recitation of the holy book 'Granth Saheb ' on the 7th day of the death of daughter of one Sardar. Suratsingb. At this meeting respondent No. 1 canvassed for votes for himself and paid Rs. 201/ , apparently as donation to the Gurudwara, but really as gift for inducing the Sikh Community in the Akola Constituency in general and the Sikhs assembled in particular to induce them to vote for himself at the ensuing election. Respondent No. 1 was guilty of bribery within the meaning of that term in section 123 of the Representation of the People Act. ' Similar instances of giving illegal gratifications for securing votes of respective groups are (a) Donation to Hkariharpeth Akhada; 439 (b) Payment to Panch bungalow Committee of Bhangis of Old City. (c) Donation to Bhaji Bazar Association. (d) Distribution of blankets and Saries and money to voters. At the instance of respondent No. I a meeting of workers in Berar Oil Industries a concern of Birla, was called by its manager on the eve of the election and they were threatened to vote for respondent No. 1 on pain of losing their service or suffer pecuniary loss, in case they did not vote for respondent No. 1. Respondent No. 1 caused groups and sections of castes and communities, such as Bohara, Lohars, Marwaries, Muslims, Rajasthanies, Bhangies, to issue appeals stating that resolutions were passed for voting for respondent No. 1, coercing the voters by threats, etc., to vote for respondent No. 1 and openly canvassing on communal and caste lines and using undue influence. Issuing pamphlets and handbills without names of printer or publisher. At the time of counting votes in Polling Station No. 53, several folded bundles amounting to about 20 in number, of ballot papers were found in the ballot box of respondent No. 1, when it was opened for counting votes. This was noted by the Returning Officer. Each bundle consisted three or more than three ballot papers, folded together. Obviously each of the bundle of these ballot papers were put in the ballot box by one person, as the ballot papers put in the ballot box by different voters could not automatically fold themselves into a compact bundle in the ballot box. The ballot papers issued to voters were not put in the box by the voters themselves, but were illegally brought back by the voters and handed over to persons working for and on behalf of respondent No. I on payment of illegal gratification. These ballot papers thus collected were bundled together 56 440 and put in the ballot box by persons working for and on behalf of respondent No. 1 by taking illegal gratifications. This was done on 31st December, 1951, at Chandur by persons with the connivance of respondent No. 1. 6. False personation of several dead voters and voters absent in Pakistan has taken place in Ward No. 12 and 15. 7. The respondent No. 1 resorted to false propaganda. His man announced on loud speakers from place to place that rival candidate Dr. Joglekar was of the caste and party of Godse, the murderer of M. Gandhi and a vote for him was a vote for Gandhi 's Murderer. Another false propaganda was that Dr. Joglekar was Mishra 's man, supported by Mishra 's money. Lectures for respondent No. 1 in public meetings, including respondent No. I have freely made these false defamatory and malicious statements against Dr. Joglekar, the rival candidate and thus prejudiced the prospects of Dr. Joglekar 's election. Personal character and conduct of Dr. Joglekar was also falsely attached, thus prejudicing his prospects of election. Voters were carried in hired carts at many polling stations, particularly at Kapshi Polling Station. This was arranged by persons working for and on behalf of respondent No. I at his expense and connivance. A written objection for police enquiry was given at Kapshi and one in Rifle Range area. Respondent No. 1 spent lacs of rupees over his election transgressing the prescribed limit of Rs. 6,000. He has given a totally untrue return of election expenses. This is in contravention of law. Mohota Mills released workers and paid them for canvassing work for respondent No. 1 on polling day. Substitutes for these workers were engaged by the mills and they were also paid. This was done at the instance of respondent No. I". There can be no doubt that almost all the instances herein above set out are extremely vague and lack sufficient particulars. Learned counsel for the appel 441 lants invited our attention to the fact that the Tribunal, while considering the question of vagueness dealt only with the instances of corrupt practices specified in paragraphs I (a),I (b), I (c), I (d), 2, 4, 5, 6, 7 and 8 and not others. He accordingly contended that, by implication, the Tribunal was not prepared to hold that items mentioned in paragraphs 1, 3, 9 and 10 were vague. He urged that at least these four items ' must be taken not to be vague and that there is no reason why the petitioners should not have been called upon to amend the schedule by furnishing better particulars as to the rest. He further urged that, at any rate, they were entitled to a trial in respect of those four items of corrupt practices. We cannot agree with learned counsel for the appellants that the items set out in paragraphs 3, 9 and 10 are not vague. There is no specification therein of the requisite details which the Act in terms requires. Section 83(2) requires not only what may reasonably be considered "full particulars" having regard to the nature of each allegation, but enjoins in terms that the following particulars should also be given. (2) The date of the commission of each such corrupt or illegal practice. (3) The place of commission of each such corrupt or illegal practice. There can be no reasonable doubt that the requirement of "full particulars" is one that has got to be complied with, with sufficient fullness and clarification so as to enable the opposite party fairly to meet them and that they must be such as not to turn the enquiry before the Tribunal into a rambling and roving inquisition. On a careful scrutiny of the list, in Schedule A we are satisfied that none of the items except that which is set out in paragraph I of item No. I can be said to comply with the requirements of section 83(2). In this view of the contents of Schedule A, the contention of the learned counsel for the appellants is that even so the Tribunal should have called upon the petitioners to furnish better particulars as regards all the other items, by virtue of the ,powers conferred on it under section 83(3), and in the 442 alternative, it should have at least called upon them to substantiate the allegation in paragraph 1 in item No. 1, which was sufficiently specific and which, if made out, might have resulted in the election being set aside. On the question whether or not the Tribunal should have called upon the petitioners to amend the schedule by furnishing better particulars, the learned Attorney General for the 1st respondent has invited our attention to the objection taken in the written statement as regards the vagueness of the particulars and to the various orders made by the Tribunal as appears from the order sheet of the case. In the written statement of the 1st respondent paragraph 9 is as follows: "9. (a) It is, further, submitted that the petition ought to be dismissed as it does not contain concise statement of material facts on which the petitioners rely. Similarly the list of particulars given in the schedule or in the petition are not in compliance with section 83(2). (b) Without prejudice to the generality of this objection, it is further submitted that para V of petition read with para VI(e) will show that the particulars given in Schedule relate to corrupt and illegal practices alleged to have been committed by respondent No. 1 and by his agents and persons working on. behalf of respondent No. I with his connivance. Such particulars are bad in law. The applicants are bound to state the names of the persons who are alleged to have actually committed the corrupt or illegal practice. (c) Paras 1 and 2 of the petition allege that there was no free election by reason of general bribery and undue influence exercised by and on behalf of respondent No. 1. Similarly the allegation in para 2 is that the coercion was the result of manipulation by ,or at the instance of respondent No. 1. Thus these allegations must be supported by giving the necessary particulars regarding the names, date and place of commission of corrupt or illegal practice alleged. The allegations in paras 1 and 2 of the petition are allegations of corrupt and illegal practice within the mean 443 ing of sections 123, 124 and 125 of the Act, and are not allegations of a general character which do not implicate the candidate personally. (d) Further by way of example, para I of the schedule, no names, date of the alleged practices are given. Same is the case with the allegations in paras 2, 3, 4, 5, 6, 7, 8, 9 & 10. This has not been done and the petition, therefore, ought to be dismissed on this ground". Now the order sheet of the proceedings before the Tribunal discloses the following. By order dated the 16th October, 1952, the Tribunal decided that the case was in the first instance to be taken up for decision on the preliminary issues. In the interests of justice the time is granted. . The application for amendment and for particulars to be filed five days before the date of hearing and copies thereof be given to the petitioners. The petitioners shall be ready with their replies on the date of hearing". The 444 latter has amended his application, to which there was no objection". In view of the specific objection taken in the written statement and the opportunities which the petitioners had for amending the petition which the above orders disclose, there is considerable force in the contention of the learned Attorney General that the petitioners, for some reasons best known to themselves, have come forward with a somewhat irresponsible petition and that while the Court has undoubtedly the power to permit amendment of the schedule of corrupt practices by permitting the furnishing of better particulars as regards the items therein specified, there was no duty cast upon the Tribunal to direct suo motu the furnishing of better particulars. It is true that the petitioners in the reply that they filed to the written statement of the 1st respondent and in answer to the objection that the particulars as to the alleged corrupt practices were vague, said as follows: "The petitioners are prepared to give further particulars if the Tribunal is pleased to permit under section 83(3) of the Representation of the People Act,. This reply was filed on the 16th October, 1952, which is the very date on which the first of the above orders extracted from the order sheet was passed. It is also, true that the order dated the 17th January, 1953, shows that the respondent No. 1 at one stage, indicated an intention himself to ask for particulars. But in a matter of this kind the primary responsibility for furnishing full particulars of the alleged corrupt practices and to file a petition in full compliance with section 83(2) of the Act was on the petitioners. While undoubtedly the Tribunal has, in our opinion, taken all too narrow a view of their function in dealing with the various alleged defects in the petition and in treating them as sufficient for dismissal, the petitioners are not absolved from their duty to 445 comply, of their own accord, with the requirements of section 83(2) of the Act and to remove the defects when opportunity was available. They cannot take shelter behind the fact that neither the Tribunal nor the respondent No. 1 has, in terms, called upon them to furnish better particulars. But all the rest were not only extremely vague but no amendment was applied for nor was an opportunity for amendment of pleadings in general, open on two occasions, availed of. Learned counsel for the appellants urges that however this may be, there was no justification for the Tribunal dismissing the petition in toto and that it was bound to have called upon the petitioners to substantiate the first allegation by evidence after striking out, if need be, the rest of the particulars, under the powers vested in it under Order VI, rule 16, Civil Procedure Code. On the other hand the learned Attorney General for the respondent No. 1 urges that in such a situation it was open to the Tribunal to consider whether, taking the petition as a whole and in its total effect, there was substantial compliance with the requirements of section 83. He contends that if, in exercise of its judgment, it thought that there was substantial non compliance, notwithstanding that one out of the various items may have been specific, it was not bound to exercise its discretion in favour of the petitioners by ordering a striking out of the various items and to direct the trial of the petition to be confined to one single item which may be in order. The learned Attorney General argues that this would be really making out for the petitioners a different petition from what they brought up before the Election Com mission and that in this class of cases the Tribunal had the right and the duty to exercise great strictness 446 in order that the machinery for setting aside elections might not be abused for the purpose of maligning the successful candidate by levelling vague and iriesponsible charges against him. While there is considerable force in this argument, we think that in a case of this kind the Tribunal when dealing with the matter in the early stages should not have dismissed the application. It should have exercised its powers and called for better particulars. On non compliance therewith, it should have ordered a striking out of such of the charges which remained vague and called upon the petitioners to substantiate the allegations in respect of those which were reasonably specific. We are, therefore, of the opinion that the order of the tribunal in dismissing the petition outright was clearly erroneous. Notwithstanding this opinion we would, in the normal course, not have felt called upon to interfere in this case under article 136 after this lapse of time and at the instance of persons like the appellants before us who are mere voters having no direct personal interest in the result of the election. But there is one other circumstance in this case which we have noticed and which we feel we ought not to overlook, though in the course of the arguments the same was not brought to our notice. Paragraphs 6(a), (b) and (c) of the application for setting aside the election sets out certain grounds of alleged disqualification of the returned candidate to stand for the election. It is also stated therein that objections in this behalf were taken at the time of scrutiny of the nomination papers but that they were summarily overruled by the Returning Officer without any enquiry and that accordingly the objections to the disqualification have been raised in the application. The objections are as follows: "6. The material facts in support of the grounds are as follows: (a) The election of candidate for the Madhya Pradesh State Assembly in the single member Akola Constituency was announced to be held on 31 12 1951. Nominations were to be filed on or before 15 11 1951, 447 and scrutiny of nomination was due on 17 11 1951. At this time of scrutiny objection was taken to the nomination paper of respondent No. 1 on several grounds but the material grounds were that respondent No. 1 was disqualified for being chosen as and for being a Member of Madhya Pradesh State Assembly under Chapter III, section 7 (d) of the Representation of the People Act, 1951 (Act XLIII of 1951). That the respondent No. 1 is disqualified to fill the seat under the Act., because he is the Managing Agent or Managing Director of Rajasthan Printing and Litho Works private limited company under the Indian Companies Act. He has, as a share holder and director, interest, in contracts for supply of goods, viz. stationery, paper and printing materials, etc., to the State Government of Madhya Pradesh. He has also interest in contracts for the execution of works or performance of services, such as printing, etc., under taken by the State Government of Madhya Pradesh. The respondent No. 1 gets a share by way of commission on sales effected by the Limited Company. He has, therefore, by himself interest in the contracts of the company with the State Government of Madhya Pradesh. (b)The respondent No. 1 is a partner in the firm Berar 'General Agency. The said firm has entered into a contract for the performance of cloth distribution on behalf of the State Government to retailers and holds a licence for the same. The respondent No. 1, therefore, has interest by himself in the said contract for the performance of services undertaken by the Government. (c)The respondent No. 1 is the proprietor of the monthly Journal "Prawaha" and a by weekly paper "Matru bhumi". These publications print Government advertisements on contract basis. The respondent No. 1 has, therefore, interest in the said contract for the performance of services undertaken by the State Government Madhya Pradesh. The sales and other details of the "Matru bhumi" concern are noted in the private accounts of the respondent No. 1. The 1st respondent in answer to these allegations states as follows: "It is denied that there was any improper acceptance of the nomination paper of respondent No. 1 and in particular it is denied that any of the allegations made in paragraph 6(a), (b) & (c) of the petition constitute in law a disqualifications of section 7 of the Representation of the People Act. Without prejudice to this it is submitted that the respondent No. 1 was not suffering from any of these disqualifications in fact on the date of the submission of the nomination paper". Having regard to the nature of the alleged disqualifi cation, which is substantially to the effect that the returned candidate had interest in contracts with the Government at the relevant dates, it was very necessary that the matters should have been cleared up in the enquiry before the Election Tribunal. It is not in the interest of purity of elections that such allegations of disqualification should be completely ignored without enquiry and it appears rather surprising that the Tribunal should have ignored them and exercised its power to dismiss the petition. However reluctant we might be to interfere in a matter like this after the lapse of three years and four months and with only an year and eight months before the general elections, we feel constrained to send this matter back for due enquiry. But before doing so and in view of the delay and other circumstances that have already happened, 449 we, in exercise of the powers which the Tribunal in the normal course might itself have exercised, direct the striking out of all the items of alleged corrupt practices set out in Schedule A excepting the one covered by paragraph I of item 1, i.e., as follows: "That in the month of December, 1951, respondent No. I had been to the premises of Akola Shree Gurdwara, where the Local Sikh Community had assembled to listen to the recitation of the holy book 'Granth Saheb ' on the 7th day of the death of daughter of one Sardar Suratsingh. At this meeting respondent No. 1 canvassed for votes for himself and paid Rs. 201, apparently as donation to the Gurudwara, but really as gift for inducing the Sikh Community in the Akola constituency in general and the Sikhs assembled in particular to induce them to vote for himself at the ensuing election. Respondent No. I was guilty of bribery within the meaning of that term in section 123 of the Representation of the People Act". The case will, therefore, go back for enquiry and trial with reference only to (1) the allegations in paragraphs 6(a), (b) and (c) of the application for setting aside the election, and (2) the allegations in paragraph 1 of item 1, in Schedule A attached to the application as set out above. The Election Commissioner will now reconstitute an appropriate Tribunal for the purpose. The Tribunal when constituted and before proceeding to trial will call upon the petitioners to rectify the lacuna as to dates in the verification clauses in the petition and the schedule. It is to be hoped that the fresh proceedings before the Tribunal will be disposed of at a very early date.

The appellants, two of the electors of the Akola Constituency of the Madhya Pradesh State Assembly, filed an Election Petition against Respondent No. 1, the successful candidate in the election held on December 13, 1951, and the three other respondents who having been validly nominated went to the polls but were defeated. The Election Petition, under Section 80 of the Representation of the People Act of 1951, was admittedly time barred by one day. The Election Commission condoned the delay under the proviso to Section 85 of the Act and constituted a Tribunal for the trial of the petition. On pleadings of the parties, nine issues were framed by the Tribunal which are covered by the following questions: (1) Whether the election petition was presented by a properly authorised person. (2) Whether there was sufficient cause for presentation of the petition one day out of time. (3) Whether the petition was defective for non joinder of certain parties as respondents. (4) Whether the petition was defective for want of proper verification. (5) Whether,the petition was defective for vagueness of the particulars relating to the corrupt practices set out in Schedule A thereto. The Tribunal found only the first of the above points in favour of the petitioners by a majority. But in respect of the other four points, it held against the petitioners unanimously. As a result of the adverse findings on these four points, the petition was dismissed without any trial on the merits. It is against this dismissal that the appellants have now come up to this Court on obtaining special leave. When the delay in submitting an election petition is condoned 429 by the Election Commission in exercise of its power under the proviso to Section 85 of the Representation of the People Act (Act XLIII of 1951), it is not open to the Election Tribunal, under Section 90(4) of the Act, to reconsider the question of limitation. Even if, according to the requirement of Section 82 of the Representation of the People Act, any of the necessary parties other than the returned candidate has not been impleaded, the petition is not liable to be dismissed in limin on that sole ground; but it is a matter to be taken into consideration at the appropriate stage with reference to the final result of the case. Section 83(1) of the Act provides that an election petition has to be verified in the manner provided for verification of pleadings under the Code of Civil Procedure. Clauses (2) and (3) of rule 15 in Order VI of the Code lay down the procedure for verification of pleadings. Apart from those cases where the date of the pleading and the verification may be relevant and important, it would be a wrong exercise of discretionary power to dismiss an application on the sole ground of the absence of the date of verification. In such a case the applicant should normally be called upon to remove the lacuna by adding a supplementary verification indicating the date of the original verification and the reason for the earlier omission. The requirement of "full particulars" of corrupt practices in Section 83(2) of the Act, is one that has got to be complied with, with sufficient fullness and clarification, so as to enable the opposite party to meet the allegations against him fairly, and so as to prevent the enquiry from being turned into a rambling and roving inquisition. The primary responsibility for furnishing full particulars of alleged currupt practices and for filing a petition in full compliance with Section 83 (2) of the Act is that of the petitioners. If they fail to do so initially it is their duty and responsibility to remove the defects when opportunity is available. Tribunals, however, should not take an all too narrow view of their function in dealing with the various alleged defects in the petition and dismiss it on the ground of want of particulars. They should call for better particulars and if that order was not complied with strike out such of the charges as are vague. The petitioners also alleged that the returned candidate was disqualified to stand because he had interest in contracts with the Government. But the Tribunal ignored these allegations and without enquiring into their truth dismissed the petition on the ground that the allegations relating to the charge of corrupt practices were vague, Held that it was not in the interest of purity of elections that such allegations of disqualification should be ignored and that it was a matter which called for enquiry. Case remitted for enquiry with reference to the allegations that the returned candidate was disqualified and the charge of corrupt practice, which was held to be not vague. Dinabandhu vs Jadumoni ( ; and Jagan Nath vs Joswant ([1954] S.C.R. 892), followed, 430

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ION: Criminal Appeals Nos. 100 to 105 and 124 to 129 of 1954. Appeals from the judgment and order dated August 2. 1954, of the Punjab High Court in Criminal Appeals Nos. 112 of 49, 333,382, 383 and 410 of 1950 and 241 of 1951, arising out of the judgment and order dated June 26, 1950, of the Punjab Special Tribunal. WITH Petition No. 31 of 1952. Petition under Article 32 of the Constitution of India for enforcement of Fundamental rights. Harnam Singh, Hardyal Hardy and P. C. Aggarwala, for the appellant in Cr. 100 to 105 of 1954, Petition No. 31 of 52 and Respondent in Cr. 124 to 129 of 1954. C. K. Daphtary, Solicitor General of India, Kartar Singh Chawla, T. M. Sen and D. Gupta, for the appellant in Cr. 100 to 105 of 1954 and Petition No. 31 of 1952 and Appellant in Cr. 124 to 129 of 1954. October 28. The judgment of Sinha, C.J., Imam, Wanchoo and Das Gupta, JJ., was delivered by Imam, J. Kapur, J., delivered a separate judgment. Imam J. IMAM J. These appeals are on a certificate granted by the Punjab High Court and they have been heard 93 together as they rise out of a single judgment of the High Court. In Criminal Appeals Nos. 100 to 105 of 1954 Satwant Singh is the appellant and in Criminal Appeals Nos. 124 to 129 of 1954 the State of Punjab is the appellant. Although in these appeals only questions of law have been urged it is necessary to set out briefly some of the facts which led to the prosecution and conviction of Satwant Singh. As a result of the Japanese invasion of Burma in 1942 the Government of Burma and the Allied forces stationed there were compelled to leave that country. In connection with the evacuation from Burma and the defence of that country, the Government of Burma and the army had to execute certain works such as the construction of roads, repairs and construction of bridges, strengthening and repairing of old tracks and converting railway lines into motor roads. Some of these works were executed by the army and some were entrusted to contractors. After evacuation of Burma its Government was located at Simla. In August, 1942, the Government of Burma advertised inviting claims from contractors who had executed works or had supplied materials in Burma and had not yet been paid. Satwant Singh had worked as a contractor in Burma. He at first submitted a claim for a sum of a little over Rs. 18,000. Later on, he put in further claims the total amount of which ran into several lakhs of rupees. These claims were sent by the Government of Burma to Major Henderson at Jhansi in March and May, 1943, for verification as he was the officer who had knowledge of these matters. This officer certified many of these claims to be correct and sent the papers back to Simla. He did not pass one claim because it was within the knowledge of another officer Mr. Nasa. On the certification of the claims by Henderson, the Finance Department of the Government of Burma sanctioned the same and the Controller of the Military Claims at Kolhapur was directed to pay the amounts sanctioned. On the request of Satwant Singh cheques drawn on the Imperial Bank of India at Lahore were posted to him from Kolhapur and these cheques were 94 encashed at Lahore. In all Satwant Singh was paid Rs. 7,44,865 12 0. Subsequently, suspicions of the Government of Burma were aroused concerning the many cliams made on it and it was discovered that many of them, including some of those of Satwant Singh, were false. A police investigation followed which revealed that a large number of claims made by various persons including Satwant Singh in respect of works done for the benefit of the army were false. Satwant Singh was arrested on the 12th of April, 1944, at Ambala and was taken to Lahore. He had also submitted a claim in the name of his wife Surjit who was also arrested. Henderson was arrested at lmphal and brought to Lahore for interrogation. According to the prosecution, Satwant Singh had committed the offence of cheating punishable under section 420, Indian Penal Code and Henderson had abetted him in the commission of that offence by falsely certifying Satwant Singh 's claims to be true, knowing that they were false and thereby had committed an offence punishable under section 420/109, Indian Penal Code. Satwant Singh having expressed a desire to make a confession, his confession was recorded by a First Class Magistrate on the 9th of May, 1944. There being many cases of acceptance of bribe and criminal breach of trust by public servants and cheating of Government by certain persons and cases similar to that of Satwant Singh, Ordinance No. XXIX of 1943, hereinafter referred to as the Ordinance, for trial of such cases was promulgated by the Governor General of India in 1943. Subsequently, this Ordinance was amended by Ordinance XII of 1945. By virtue of a notification issued under the Ordinance as amended the case of Satwant Singh was allotted to the Third Special Tribunal at Lahore for trial with Henderson as his co accused. After the partition, the trial by the Special Tribunal took place at Simla. Henderson had absconded to England and extradition proceedings had to be taken against him under the Fugitive Offender 's Act of 1881. He was brought 95 before the Special Tribunal in December, 1949. In the meantime, Satwant Singh 's case was separated and the trial against him alone continued. On Henderson 's return, the trial once again became a joint trial. Henderson applied for examination of certain witnesses on commission in England. His prayer was granted. Satwant Singh fearing that the trial of the cases against him would be delayed, requested that his cases be separated from the cases against Henderson. This prayer was allowed and his trials proceeded against him as the sole accused except in the trial of Cases Nos. 54, 55 and 56 in which Henderson was a coaccused with him. The Special Tribunal imposed sentences of imprisonment ranging from one year to three and a half years in the several trials. In addition, it imposed fines of various amounts. It divided the fines into "ordinary" and "compulsory", the latter by virtue of section 10 of the Ordinance. In default of payment of the " ordinary " fines it directed the appellant to undergo further imprisonment for certain periods. There was no such direction with respect to the " compulsory " fines. The High Court reduced the sentence of imprisonment to two years in all the trials where such sentence was in excess of that period. The sentences of imprisonment in all the trials were to run concurrently. The High Court maintained the sentence of " ordinary " fines imposed by the Special Tribunal but set aside the sentence of " compulsory " fines. The State had filed a petition before the High Court for the enhancement of the sentences of fine passed against Satwant Singh which was dismissed on the ground that the " compulsory " fines imposed were invalid in view of the decisions of this Court in the case of Rao Shiv Bahadur Singh and Another vs The State of Vindhya Pradesh (1) and the case of Kedar Nath Bajoria vs The State of West Bengal (2). In the opinion of the High Court, enhancement of sentences of fine would be a method by which the provisions of article 20 of the Constitution would be circumvented. (1) (2) ; 96 Satwant Singh has appealed against his conviction and sentence as ordered by the High Court. The State of Punjab has also appealed against the decision of the High Court that the "compulsory " fines imposed were illegal. The State also has made a prayer that the " ordinary " fines imposed upon Satwant Singh may be enhanced. On behalf of the appellant his conviction was challenged on several points of law. Firstly, it was urged that the provisions of section 188 of the Code of Criminal Procedure had not been complied with. The charge framed against the appellant stated that he had committed the offence of cheating at Simla and Kolhapur. Kolhapur was a place outside British India at the relevant time. In the present case there was neither a certificate of the Political Agent nor a sanction of the Provincial Government as required under section 188 of the Code of Criminal Procedure. The facts established that the offence of cheating was committed at Kolhapur and therefore it could not be inquired into in British India without such a certificate or such sanction. The trial of the appellant therefore was without jurisdiction. Secondly, it was urged that the appellant committed the offence at Kolhapur and Henderson at Jhansi. They could not be tried together in a single trial by the Special Tribunal at Simla as neither section 179 nor section 180 of the Code of Criminal Procedure applied to the facts of the case and in view of the provisions of section 188 of the Code. Thirdly, it was submitted that sections 233 to 239 of the Code of Criminal Procedure deal with joinder of charges and joinder of persons in a trial. Sections 234 and 239 of the Code could not be combined to try the appellant and Henderson in a single trial for 3 offenses of cheating by the former and 3 offenses of abetment thereof by the latter. Section 239 of the Code was a self contained provision and had to be read without bringing into aid the provisions of section 234. Fourthly, it was pointed out that as no sanction under section 197 of the Code by the proper authority had been given for the prosecution of Henderson, he could not be tried without such a sanction. Joint trial of Henderson and the 97 appellant without such a sanction vitiated the trial. Fifthly, it was submitted that as Burma was not a Dominion of His Majesty 's Government in 1943 the Ordinance did not apply. In the course of the argument the fifth submission was abandoned and, we think, rightly ' It would be convenient to deal together with the first and the fourth submissions regarding the noncompliance with the provisions of sections 188 and 197 of the Code of Criminal Procedure. Before the provisions of section 188 can apply it must be established that the offence for which the appellant was charged was committed outside British India. The appellant was charged with the offence of cheating. He had filed certain claims before the Government of Burma at Simla. Those claims were certified as true by Henderson at Jhansi. The claims of the appellant were found to be untrue. In fact, he was not entitled to any payment in respect of these claims. The misrepresentation by Satwant Singh was at Simla and the false certification of the claims as true by Henderson was at Jhansi. Simla and Jhansi were places in British India. As the result of the misrepresentation by the appellant and the false certification by Henderson the Government of Burma was induced thereby to make the payment of a large sum of money to the appellant at Lahore. The payment at Lahore to the appellant was made at his own request by cheques on the Imperial Bank of India at its Lahore Branch. Lahore was also a place at the relevant time in British India. It is true that in the charge framed Kolhapur was mentioned as one of the places where the cheating had taken place. In our opinion, it was an error in the charge, as framed, to have mentioned that any offence of cheating took place at Kolhapur. That error in the charge, however, was a mere irregularity on a misunderstanding of the facts which could not vitiate the trial. It was, however, urged that as the cheques in favour of the appellant were posted at Kolhapur, in law, the payment to the appellant had been made in Kolhapur and delivery of property, namely, the cheques, which must be regarded as 13 98 valuable security, was made at Kolhapur. The offence of cheating, therefore, was committed at Kolhapur and neither at Simla nor at Lahore. In our opinion, this submission is misconceived. The posting of the cheques at Kolhapur cannot be regarded as delivery of the cheques to the appellant at Kolhapur because the Post Office at that place could not be treated, in the circumstances of the present case, as the agent of the appellant to whom the delivery of the cheques bad been made. In fact, they were not delivered to the appellant at Kolhapur but were delivered to him at Lahore. As regards the place of payment it was urged that when the cheques were issued and posted at Kolhapur, the payment to the appellant must be regarded as having been made at Kolhapur. Reliance was placed on The Commissioner of Income Tax, Bombay South, Bombay vs Messrs. Ogale Glass Works Ltd., Ogale Wadi (1). That case was considered by this Court in the case of The Commissioner of Income Tax, Bihar & Orissa vs Messrs. Patney & Co.decided on the 5th of May, 1959, and it was held that the rule in the Ogale Glass Works ' case (1) was inapplicable to the facts of the case. In the latter case it was found by this Court that : "Whatever may be the position when there is an express or implied request for the cheque for the amount being sent by post or when it can be inferred from the course of conduct of the parties, the appellant in this case expressly required the amount of the commission to be paid at Secunderabad and the rule of Ogale Glass Works ' case (1)would be inapplicable." In the present case an inquiry was made from the appellant how he would like the payment to be made and he replied that cheques payable at the Imperial Bank of India, Lahore Branch, should be sent to him. Accordingly, cheques on the Imperial Bank of India, Lahore Branch, were sent to the appellant by post in Lahore and the appellant encashed them there. In these circumstances, the rule in Ogale Glass Works ' case (1) is inapplicable and it must be held that the payment was (1) (2) , 99 made to the appellant at Lahore and not at Kolhapur where the cheques had been posted. Furthermore, what may be relevant for consideration as to the place of payment for the purpose of the Income Tax Act may not necessarily be relevant for the purposes of a criminal case in which the Courts have to ascertain where the offence of cheating was committed. It seems to us, on the facts established in this case, that no part of the offence of cheating was committed by the appellant outside British India. His false repre sentation to the Government of Burma that money was due to him was at a place in British India which induced that Government to order payment of his claims. In fact, he was paid at Lahore at his own request by means of cheques on the Branch of the Imperial Bank of India at Lahore. The delivery of the property of the Government of Burma, namely, the money, was made at Lahore, a place in British India, and we cannot regard, in the circumstances of the present case, the posting of the cheques at Kolhapur either as delivery of property to the appellant at Kolhapur or payment of his claims at Kolhapur. The entire argument founded on the provisions of section 188 of the Code therefore, fails. As the offence committed by the appellant was not at a place beyond British India, there was no need for the existence of a certificate of a Political Agent or, in the absence of such a person, a sanction of the Provincial Government. Coming to the question whether the absence of a sanction under section 197 of the Code vitiated the trial, it has to be established that Henderson was a public servant removable by the Governor General in Councll or the Provincial Government. As no objection had been taken before the Special Tribunal by the appellant in this respect it was urged by the Solicitor General that the prosecution had no opportunity of establishing that Henderson, though a public servant, was a person not removable by the Governor General in Council or the Provincial Government. On the other hand, it was urged by Mr. Harnam Singh that in the High Court the objection had been taken but it had been overruled on the ground that there was in fact a 100 sanction in existence. The High Court was under a misapprehension. The sanction which was in existence was under section 270 of the Government of India Act, 1935, which is given by the Governor General himself, where as the sanction under section 197 of the Code is given by the Governor General in Council. The sanction under section 270 of the Government of India Act, 1935, could not therefore be treated as a sanction under section 197 of the Code. In the High Court, apparently, no submission was made that Henderson was not a public servant removable by the Governor General in Council or the Provincial Government. If it is being urged now that Henderson was not such a person then the appellant should be given an opportunity to show that he was a public servant so removable. It is unnecessary to deal with these submissions, which relate to a question of fact, in view of our conclusion as mentioned below with respect to the applicability of the provisions of section 197 of the Code in the present case. Under, section 197 no Court shall 'take cognizance of an offence committed by a public servant who is removable from his office by the Governor General in Council or a Provincial Government, save upon a sanction by one or the other as the case may be, when such offence is committed by him while acting or purporting to act in the discharge of his official duty. Henderson was charged with intentionally aiding the appellant in the commission of an offence punishable under section 420 of the Indian Penal Code by falsely stating as a fact, in his reports that the appellants claims were true and that statement bad been made knowing all the while that the claims in question were false and fraudulent and that he had accordingly committed an offence under section 420/109, Indian Penal Code. It appears to us to be clear that some offences cannot by their very nature be regarded as having been committed by public servants while acting or purporting to act in the discharge of their official duty. For instance, acceptance of a bribe, an offence punishable under section 161 of the Indian Penal Code, is one of them and offence of cheating or abetment thereof is another. We have no hesitation in saying that where a public 101 servant commits the offence of cheating or abets another so to cheat, the offence committed by him is not one while he is acting or purporting to act in the discharge of his official duty, as such offences have no necessary connection between them and the performance of the duties of a public servant, the official status furnishing only the occasion or opportunity for the commission of the offences (vide Amrik Singh 's case (1) ). The Act of cheating or abetment thereof has no reasonable connection with the discharge of official duty. The act must bear such relation to the duty that the public servant could lay a reasonable but not a pretended or fanciful claim, that he did it in the course of the performance of his duty (vide Matajog Dobey 's case (2) ). It was urged, however, that in the present case the act of Henderson in certifying the appellant 's claims as true was an official act because it was his duty either to certify or not to certify a claim as true and that if he falsely certified the claim as true he was acting or purporting to act in the discharge of his official duty. It is, however, to be remembered that Henderson was not prosecuted for any offence concerning his act of certification. He was prosecuted for abetting the appellant to cheat. We are firmly of the opinion that Henderson 's offence was not one committed by him while acting or purporting to act in the discharge of his official duty. Such being the position the provisions of section 197 of the Code are inapplicable even if Henderson be regarded as a public servant who was removable from his office by the Governor General in Council or a Provincial Government. Elaborate arguments were advanced in support of the contention that the provisions of section 197 of the Code were not inconsistent with the Ordinance and therefore had to be complied with before the Special Tribunal could try Henderson. It was pointed out that under section 6 of the Ordinance the Special Tribunal was specifically authorized to take cognizance of an offence without the accused being committed to it for trial and sub section (2) of that section stated that " Save (1) ; (2) ; 102 as provided in sub section (1) the Code of Criminal Procedure,1898 (V of 1898), except the provisions of section 196 A and of Chapter XXXIII, shall so far as they are not inconsistent with this Ordinance, apply to proceedings of a Special Tribunal ; and for the purposes of the said provisions the Special Tribunal shall be deemed to be a Court of Session, trying cases without a jury, and a person conducting a prosecution before a Special Tribunal shall be deemed to be a Public Prosecutor. "It was urged that by virtue of this sub section the provisions of the Code of Criminal Procedure would be applicable except the provisions of section 196 A and Chapter XXXIII which had been expressly excluded. If section 197 of the Code was intended to be excluded, the Ordinance would have said so. Having regard to the view we take that the provisions of section 197 of the Code do not apply to the facts of the present case as the offence of abetment of cheating by Henderson cannot be regarded as an offence committed by him while acting or purporting to act in the discharge of his official duty, it is unnecessary to consider the arguments advanced in this connection. Coming now to the 2nd and 3rd submissions made on behalf of the appellant we have to consider whether the appellant and Henderson could at all be jointly tried, having regard to the fact that they were jointly tried up to a certain stage in some of the trials and to the conclusion of the trial concerning cases Nos. 54,55 and 56. We have already held that no part of the offence of cheating was committed by the appellant outside British India and consequently the provisions of section 188 of the Code did not apply. The provisions of sections 179 and 180 are wide enough to enable cognizance to be taken either by a Court where anything was done within the local limits of its jurisdiction or a court where the consequences ensued. Illustration (c) to section 179 clearly states that if A is put in fear of injury within the local limits of the jurisdiction of Court X,and is thereby induced, within the local limits of the jurisdiction of Court Y, to deliver property to the person who put him in fear, the offence of extortion committed against A may be inquired into or tried 103 either by X or Y. The appellant could have been ' therefore tried either at Lahore or at Simla for the offence of cheating as the misrepresentation was at,Simla and the consequence was at Lahore as the Government of Burma was induced by the misrepresentation to deliver property (money) at Lahore. Under section 180 when an act is an offence by reason of its relation to any other act which is also an offence, a charge of the first mentioned offence may be inquired into or tried by a Court within the local limits of whose jurisdiction either act was done. Illustration (a) to this section states that a charge of abetment may be inquired into or tried either by the Court within the local limits of whose jurisdiction the abetment was committed or by the Court within the local limits of whose jurisdiction the offence abetted was committed. The offence of cheating by the appellant could have been tried either at Lahore or at Simla. Consequently, Henderson could also have been tried for the abetment of that offence either at Lahore or at Simla. The case of these accused was allotted to the Special Tribunal at Lahore and would have normally been tried there but for the partition of India. The trial under the authority of law, was concluded at Simla. There seems, therefore, to have been no illegality committed in trying the appellant and Henderson together at Simla. The other line of argument in support of the objection that the appellant and Henderson could not be tried together was based on the provisions of sections 233 and 239 of the Code. It was pointed out that under the provisions of section 233 of the Code for every distinct offence of which any person is accused there shall be a separate charge and every such charge shall be tried separately except in the cases mentioned in sections 234, 235, 236 and 239. Unless, therefore, the joinder of trial of the appellant and Henderson was permitted under section 239 of the Code they could not be tried together. It was: urged that in construing section 239 of the Code it was not permissible to take into consideration the provisions of section 234. The only provision by which a person accused of an offence and a person accused 104 of abetment of that offence can be tried together in a single trial is under section 239(b) which permits persons accused of an offence and persons accused of abetment to be charged and tried together. Under the terms of these provisions any number of persons accused of commuting a single offence could be tried together with any number of persons who had abetted that offence. But cl. (b) did not permit the trial of persons accused of several offences and persons accused of abetment of those offences in one trial and to try a person accused of three offences along with a person accused of abetment of those offences would be contrary to the provisions of cl. If the provisions of section 239(b) and section 234 were combined the result would be to create another exception to be added to the exceptions stated in section 233 of the Code. No Court had any authority to create a ' new exception to section 233. section 239 being an exception to section 233 its provisions had to be construed strictly. The plain words of section 239(b) make it quite clear that persons who had committed a single offence and those who abetted it only could be tried together. Since the appellant is said to have committed three offences of cheating and Henderson three offences of abetment thereof, the provisions of section 239(b) did not apply and their trial together was vitiated. It was further pointed out that if there had been misjoinder of trial in the present case it could not reasonably be said that the appellant had not been prejudiced. If the appellant bad been tried apart from Henderson. Henderson 's confession and all the evidence against him would have been excluded at the trial of the appellant. As the result of Henderson and the appellant being tried together all the evidence against Henderson and his confession must have necessarily adversely affected the case of the appellant. On the other hand, the Solicitor General submitted that the provisions of the Code of Criminal Procedure must be construed as they stand and reference to decided cases may be made to assist the court in the matter of construction if necessary. The Code itself nowhere stated that sections 234 and 239 of the Code 'were mutually exclusive. The entire scheme of joinder of 105 charges and joinder of persons in a single trial has been set out in the Code. Although section 233 of the Code is clear enough, it has expressly expected from the application of its provisions sections 234, 235, 236 and 239. Sections 234, 235, 236 and 239 are permissive sections. They are not compelling sections. That is to say, although these sections permit joinder of charges and joinder of persons a Court may well consider it desirable in the interest of justice and having regard to the circumstances of a particular case that the charges framed should be split up and separate trials should take place in respect of them and the accused be tried separately. It was to avoid multiplicity of trials, harassment to the accused and waste of time that the permissive sections 234, 235, 236 and 239 enable a court, within their terms, to join charges and persons in a single trial. Section 239 permitted joinder of charges and persons in a single trial in cases covered by cls. (a) to (g). These clauses permitted the joinder of persons as accused in one trial and they contemplated the various circumstances in which such persons could be tried together. Joinder of several persons in one trial necessarily involves the framing of more than one charge. If the joinder of charges was within the terms of the section, then the provisions of section 233 had no application. Although in cl. (b) of the section the words used are "persons accused of an offence and persons accused of abetment, or of an attempt to commit such offence ", a reasonable construction of these words could not lead to the conclusion that the words " an offence " meant a single offence because under section 13 of the General Clauses Act (Central Act X of 1897) words in the singular shall include the plural and vice versa. Under cl. (b), therefore, persons accused of several offences and persons accused of abetment thereof could be tried together in a single trial. The concluding words of section 239 " and the provisions contained in the former part of this Chapter shall, so far as it may be, apply to all such charges " permitted a court to apply that part of Chapter XIX which preceded section 239.S. 234 was one such provision and a court could resort to its provisions so far as they were applicable, 14 106 It was further pointed out by the Solicitor General that although the appellant was asked to specify the points of law upon which these appeals would be urged, he did not state that, in fact, he had been pre judiced by a joint trial of himself and Henderson. He also pointed out that as the result of the amendment of the Code of Criminal Procedure misjoinder of charges did not vitiate the trial unless the misjoinder had, in fact, occasioned failure of justice. we now proceed to consider some of the provisions of Chapter XIX of the Code which deal with the form of charges and the joinder of charges as well as joinder of persons. So far as the form of the charge is concerned, the provisions of sections 221 to 232 of the Code would apply in any event where a single accused was being tried on a single or several charges or where several accused were tried for various offences at one trial within the terms of section 239 of the Code. So far as joinder of charges is concerned, section 233 clearly required that for every distinct offence of which any person was accused there must be a separate charge and every such charge must be tried separately. The framers of the Code, however, realised that it would be impracticable to have for all circumstances such a rigid rule. The section, accordingly, excepted from its provisions cases which were covered by sections 234, 235, 236 and 239. section 234 accordingly permitted a single accused to be tried at one trial for more offences than one of the same kind committed within the space of 12 months provided they did not exceed three in number. section 235 went a step further. It permitted an accused person to be tried for more offences than one committed by him and the framing of a charge with respect to every such offence, provided that the series of acts were soconnected together as to from the same transaction. It also permitted that if the acts alleged constitute an offence falling within two or more separate definitions of any law in force for the time being by which offences are defined or punished, the person accused of them may be charged with, and tried at one trial for,each of such offences. It also provided that if several acts of which one or more than one would by or them selves constitute an offence, constitute when combined 107 a different offence, the person accused of them may be charged with, and tried at one trial for the offence constituted by such acts when combined, and for any offence constituted by any one, or more of such acts. section 236 permitted the framing of alternative charges where a single act or series of acts is of such a nature that it is doubtful which of several offences the facts which can be proved will constitute, the accused may be charged with having committed all or any of such offences and any number of such charges may be tried at once. By section 239 joinder of persons in a single trial is permitted in the circumstances mentioned in cls. (a) to (g). At the trial of such persons charges would have to be framed. Indeed, the section commences with the following words : " The following persons may be charged and tried together. " Leaving cl. (b) out for the moment the other clauses of the section clearly contemplate the framing of more than one charge against accused persons when tried together. Under cl. (a) persons accused of the same offence committed in the course of the same transaction can be tried together. Under cl. (c) persons accused of more than one offence of the same kind within the meaning of section 234 committed by them jointly within the period of 12 months can also be tried together. Under cl. (d) persons accused of different offences committed in the course of the same transaction can be tried together. Similar is the position in cases mentioned in cls. (e), (f) and It is clear, therefore, that the general rule that for every distinct offence of which any person is accused there shall be a separate charge, and every such charge shall be tried separately has no application to these clauses. Indeed section 233 contemplated that and expressly excluded the application of its provisions to section 239. The entire tenor of the provisions of section 239 indicates that several persons could be tried together for several offences committed in the circumstances mentioned therein. There is no apparent reason why cl. (b) should be construed in the way suggested by Mr. Harnam Singh, 108 according to whom, in one trial any number of persons could be tried for a single offence along with any number of persons accused of abetment of that offence. The argument was based on the words " an offence in that clause and the suggestion was that these words meant a single offence. Having regard to the providers of section 13 of the General Clauses Act, the singular includes the plural and it would not be straining the language of the clause if the same was construed also to mean that persons accused of several offences and persons accused of abetment thereof could be tried together at one trial. So construed framing of three charges under section 420, Indian Penal Code, against Satwant Singh and three charges of abetment against Henderson in the same trial did not infringe the provisions of cl. Furthermore, the concluding words of the section make it clear that the provisions contained in the former part of Chapter XIX, i.e., previous to section 239 as a far as may be shall apply to all charges framed at the trial. It was suggested that the words " the former part of this Chapter " referred to sections 221 to 232 as Chapter XIX is in two parts, the first part being the form of charges and the second part joinder of charges. Although such headings do appeal in the Chapter, it is to be noticed that Chapter X LX does not divide itself into several parts as is to be found in many of the Chapters of the Code, e.g., in Chapter XXIII the parts are headed A to L. It is further to be noticed that words similar to the concludingwords of section 239 do not appear in section 235 of the Code. The reason for these words appearing in section 239 of theCode appears to be that this section permits persons to be charged and tried together. The (lode obviously contemplated that when charges were being framed against each of the several accused in the cases contemplated in section 239, not only the provisions concerning the form of charges but also the provisions concerning the joinder of charges, as far as may be, should apply. In these appeals the appellant was charged in one trial for three offences of cheating and Henderson for abetment of the same. If the appellant had been tried alone he could have been tried for three charges of cheating 109 committed within 12 months and Henderson, in a separate trial, could have been tried for three offences of abetment of the same offences committed within 12 months. There is no good reason for thinking that when cl. (b) of section 239 permitted the joinder of the appellant and Henderson in a single trial for the commission of the offence of cheating and abetment thereof, the same was confined to one offence of cheating and one offence of abetment. In our opinion, the trial of the appellant and Henderson together on the charges as framed did not vitiate the trial. It is unnecessary to deal with the last submission of the Solicitor General that the appellant had taken no ground that he had been prejudiced by his joint trial with Henderson because such a question does not arise, having regard to the view we take that there was no misjoinder of trial. On behalf of the appellant, certain circumstances were urged in mitigation of the sentence. It was pointed out that Henderson 's sentence was reduced to 2 month 's imprisonment and a small fine, the proceedings against the appellant had been going oil since 1945, the appellant had already served some three months ' imprisonment and that there was also a substantial fine. Accordingly, it was prayed that the sentence of imprisonment may be reduced to the period already undergone while the sentence of " ordinary " fine may be maintained. The measure of punishment must be commensurate with the nature and the seriousness of the crime. The appellant had cheated the Government of Burma to the extent of something like 7 lakhs of rupees. It is impossible to say that the sentence of imprisonment as reduced by the High Court was in any way excessive. The fact that Henderson received a light punishment is not a relevant circumstance. The prayer for a further reduction of the sentence cannot be acceded to. The appeals filed by Satwant Singh are accordingly dismissed. Criminal Appeals Nos. 124 to 129 of 1954. In these appeals the State of Punjab has appealed against that part of the judgment of the High Court 110 which set aside the order of the Special Tribunal imposing what has been described as 'compulsory" fines. The High Court felt that it was bound by the decisions of this Court in the cases of Rao Shiv Bahadur Singh vs The State of Vindhya Pradesh and Kedar Nath Bajoria vs The State, of West Bengal (2). It was urged by the Solicitor General that the Special Tribunal was in error in describing the fines imposed by it as " ordinary " and " compulsory ".Section 10 of the Ordinance contemplated no such distinction. What it did direct was, whether or not a sentence of imprisonment was imposed by the Special Tribunal, that a sentence of fine must be imposed and that fine shall not be less in amount than the amount of money or value of other property found to have been procured by the offender by means of the offence. In other words, the section imposed a minimum fine, in any event, whether a sentence of imprisonment was or was not imposed. In the present case a sentence of imprisonment was, in fact,imposed and the total of fines imposed, whether described as " ordinary " or " compulsory ", was not less than the amount of money procured by, the appellant by means of his offence. Under section 42O of the Indian Penal Code an unlimited amount of fine could be imposed. Article 20(1) of the Constitution is in two parts. The first part prohibits a conviction of any person for any offence except for violation of law in force at the time of the commission of the act charged as an offence. The latter part of the Article prohibited the imposing of a penalty greater than that which might have been inflicted under the law in force at the time of the commission of the offence. The offence with which the appellant had been charged was cheating punishable under section 420 of the Indian Penal Code, which was certainly a law in force at the time of the commission of the offence. The sentence of imprisonment which was imposed upon the appellant was certainly not greater than that permitted by section 420, The sentence of fine (1) (2) ; 111 also was not greater than that which might have been inflicted under the law which had been in force at the time of the commission of the offence, as a fine unlimited in extent could be imposed under the section. It was further pointed out that at least Case No. 58, out of which arose Criminal Appeal No. 112 of 1949 in the High Court, was one to which the provisions of article 20 could not apply as the conviction in that case was recorded on the 24th of January, 1949, before the Constitution came into force. Mr. Harnam Singh, on the other hand, drew our attention to section 63 of the Indian Penal Code and submitted that a sentence of fine could at no time be excessive and therefore the, sentence of fine which could be imposed under section 420 was not entirely unlimited as it could not be excessive. In considering whether a fine would or would not be excessive various considerations had to be kept in mind including the seriousness of the offence and the means of the accused. Section 63 of the Indian Penal Code expressly states that where no sum is expressed to which a fine may extend the amount of fine to which the offender is liable is unlimited. Section 420 of the Indian Penal Code does not express a sum to which a fine may extend, as some of the sections of the Indian Penal Code do. As the section stands, therefore, the extent of fine which may be imposed by a Court under it is unlimited. Whether a fine imposed in a particular case is excessive would be a question of fact in each case. That consideration, however, is entirely irrelevant in considering whether article 20 of the Constitution has been contravened by the provisions of section 10 of the Ordinance as the extent of fine which can be imposed under section 420, by law, is unlimited. It cannot be said that section 10 of the Ordinance in imposing the minimum fine which a court shall inflict on a convicted person was a penalty greater than that which might have been inflicted on that person under the law in force at the time of the commission of the offence, where under such law the extent of fine which could be imposed is unlimited. 112 In the case of Rao Shiv Bahadur Singh (1), referred to above, this Court held that article 20 of the Constitution must be taken to prohibit a conviction or subjection to penalty after the Constitution in respect of ex post facto law whether the same was a pre Constitutional law or a post Constitutional law. The prohibition under the Article was not confined to the passing or the validity of the law but extended to the conviction or :the sentence and was based on its character as ex post facto law and therefore fullest effect must be given to the actual words used in the Article. It had been urged in that case that the Vindhya Pradesh Ordinance (No. XLVIII of 1949) was an ex post facto law. This Court, however, held that Ordinance was not ail ex post facto law. The contention that the provisions of article 20 of the Constitution had, been contravened was rejected and it was held that the criminal law relating to offences charged against the accused at the time of their commission was substantially the same as obtained at the time of the conviction and sentence under the Indian Penal Code. In Rao Shiv Bahadur Singh 's case (1) this Court had not to consider whether an ex post facto law imposing a minimum fine for an offence with respect to which an unlimited fine could be imposed by the law in existence at the time of the commission of the offence contravened the provisions of article 20. In Kedar Nath Bajoria 's case (2), in addition to the sentence imposed under the ordinary law, the first appellant was fined Rs. 50,000, including the sum of Rs. 47,550 received by him as required by section 9(1) of the West Bengal Criminal Law (Amendment) Act of 1949. Reference to the decision in Rao Shiv Bahadur Singh 's case(1)was made and this Court held that, in any event, the fine to the extent of Rs. 47,550 would be set aside. This Court, however, did not decide whether the total fine imposed was greater than what could be imposed under the law as it was at the commission of the offence. It assumed that Rao Shiv Bahadur Singh 's case (1) supported the contention of the first appellant in that case. It is significant that in directing that the appeal would be heard in due course on merits this Court stated that it would be open to the Court in case (1) (2) ; 113 the conviction was upheld to impose such appropriate fine as it thought fit in addition to the sentence of imprisonment. In the present case even if it be assumed that section 10 of the Ordinance as an ex post facto law ill that in the matter of penalty a minimum sentence of fine was directed to be imposed by a court whereas at the time that the appellant committed the offence section 420 contained no such provision, what is prohibited under article 20 of the Constitution is the imposition of a penalty greater than that which might have been inflicted under the law in force at the time of the commission of the offence. The total sentence of fine "ordinary " and " compulsory " in the present case cannot be said to be greater than that which might have been imposed upon the appellant under the law in force at the time of the commission of the offence, because the fine which could have been imposed upon him under section 420 was unlimited. A law which provides for a minimum sentence of fine on conviction cannot be read as one which imposes a greater penalty than that which might have been inflicted under the law at the time of the commission of the offence where for such an offence there was no limit as to the extent of fine which might be imposed. Whether a fine was excessive or not would be a question of fact in each particular case but no such question can arise in a case where the law imposes a minimum sentence of fine. Under article 20 of the Constitution all that has to be considered is whether the ex post facto law imposes a penalty greater than that which might be inflicted under the law in force at the time of the commission of the offence. For the reasons already stated it cannot be said that section 10 of the Ordinance imposed any such penalty and therefore was in contravention of the provisions of article 20. These appeals are accordingly allowed and the order of the High Court setting aside the "compulsory " fines imposed by the Special Tribunal is set aside and the orders of the Special Tribunal imposing the " compulsory " fines are restored. KAPUR J. I have read the judgment prepared by my learned brother Imam, J. I agree to the order 15 114 proposed and the reasons therefor except that I would base the inapplicability of section 197, Criminal Procedure Code, to the facts of the present case on different grounds. The legislature in India has considered it necessary to provide a large measure of protection for public officials from unnecessary harassment and for that purpose section 197 was enacted in the Criminal Procedure Code and this was recognised by Lord Simonds in the Privy Council case Gill vs The King(1). That this is the legislative policy may also be gathered from a subsequent enactment, the Prevention of Corruption Act where such provision was incorporated in regard to offences of bribery, corruption and also misapprehend privation. But the question still remains to what cases this protection is made applicable. The contention raised on behalf of the appellant was that his case was prejudiced because of a joint trial with Henderson, who it is contended, was a Major in the Indian Army and who was charged for abetting the offence of cheating committed by the appellants The argument raised was that Henderson having been commissioned to and in the Indian Army was not removable from his office except with the sanction of the Central Government, i.e., the then Governor General in Council and as there was no such sanction he could not validly be tried for the offence he was charged with. The case made before us in this Court was that the claims put forward by the appellant were sent to Henderson for verification and Henderson verified them to be correct and that he did this while acting or purporting to act in the discharge of his duty as public servant. The question then is whether the facts which are alleged to constitute the offence of abetment of cheating under section 420, read with section 109, Indian Penal Code,fall within section 197, Criminal Procedure Code. In Gill vs The King (1) the Privy Council laid down the following test as to when a public servant is said to or purports to act in the discharge of his official duty. Lord Simonds there said at p. 59: (1) 75 I.A. 41. 115 "A public servant can only be said to act or to purport to act in the discharge of his official duty. if his act is such as to lie within the scope of Is official duty. The test may well be whether the public servant, if challenged, can reasonably claim that, what he does, he does in virtue of his office." The same test was repeated in Meads ' case (1) and in Phenindra Chandra Neogy vs The King(2). Gill 's case(3) and Neogy 's case (2) dealt with an offence of bribery under section 161, but Meads ' case(1) was a case of a Courtmartial against an officer who was alleged to have misappropriated money entrusted to him and his defence was that while he was sleeping, the currency notes were burnt by the falling of a candle which was burning in his room. In Hori Rain Singh 's case (4) which was approved by the Privy Council and this Court in Amrik Singh 's case (5), Vardachariar, J., had accepted the correctness of that track of decision which had held that sanction was necessary when the act complained of attached to the official character of the person doing it. The test was thus stated by Venkatarama Aiyar, J., in Amrik Singh 's case (5) at p. 1307: " but if the act complained of is directly concerned with his official duties so that, if questioned, it could be claimed to have been done by virtue of the office, then sanction would be necessary; and that would be so, irrespective of whether it was, in fact, a proper discharge of his duties, because that would really be a matter of defence on the merits, which would have to be investigated at the trial, and could not arise at the stage of the grant of sanction, which must precede the institution of the prosecution. " Even in regard to cases of misappropriation, this Court in Amrik Singh 's case (5) was of the opinion that if the act complained of is so integrally connected with the duties attaching to the office as to be inseparable from them, then sanction would be necessary, but if there is no connection between them and the performance of those duties, the official status furnishing (1) 75 I.A. 185. (3) 75 I. A. 41. (2) 76 I.A. 10. (4) (5) ; 116 only the occasion or opportunity for the act, then no sanction would be necessary. There are two other cases reported in the same volume, Ronald Wood Mathams vs State of West Bengal (1) and Shree Kanthiah Ramayya Munipalli vs The State of Bombay(2 )which also relate to sanction under section 197, Criminal Procter Code. After reviewing all these various authorities Venkatarama Aiyar, J., held at p. 1310: "The result then is that whether sanction is necessary to prosecute a public servant on a charge of criminal misappropriation, will depend on whether the acts complained of hinge on his duties as a public servant. If they do, then sanction is requisite. But if they are unconnected with such duties, then no sanction is necessary. " In this view of the law we have to decide whether sanction was necessary or not and it is a matter for investigation as to whether an Army officer situated as Henderson was so removable even if there was evidence to show that he was attached to the Indian Army. Secondly, it will have to be decided oil evidence that the act complained of against Henderson, that is, verifying the claim of the appellant which is the basis for the allegation of abetment of the offence of cheating is directly concerned with his official duties or it was done in the discharge of his official duties and was so integrally connected with and attached to his office as to be inseparable from them. There is evidence neither in support of one, nor of the other. In this particular case if it was desired to raise such a question, that should have been done at the earliest moment in the trial Court when the facts could have been established by evidence. This is not the stage for asking the facts to be proved by additional evidence. In the grounds of appeal to the High Court the objection was to the form of the sanction. It also appears that no argument was raised in the High Court that the sanction under section 270 of the Constitution Act could not take the place of a sanction under section 197, Criminal Procedure Code, because the scope of the two (1) , (2) ; 117 provisions is different. But as I have said above the evidence to support the plea under section 197 and to establish the requisite nexus between the act done by Henderson and the scope and extent of his duties is lacking and therefore the applicability of section 197 to the facts of the present case cannot be held to have been proved. In my opinion the foundation has not been laid for holding that sanction under section 197 was necessary in the instant case. I therefore agree that the appeals be dismissed. By court. The petitioner 's Criminal Appeals Nos. 100 to 105 of 1954 having been dismissed and the conviction of the petitioner having been upheld, this petition is dismissed.

The appellant, who had been a contractor in Burma, in response to an advertisement issued in August, 1942, by the evacuee Government of Burma, then functioning at Simla, inviting claims from contractors for works of construction and repairs executed by them, submitted claims aggregating to several lacs of rupees. The Government of Burma sent these claims for verification to Major Henderson at Jhansi in March and May, 1943, as he was the officer who had knowledge of these matters. He certified many of these claims to be correct and on his certification the Government of Burma sanctioned the claims and directed the Controller of Military claims at Kolhapur to pay the amounts. On the request of the appellant cheques drawn on the Imperial Bank of India at Lahore were posted to him from Kolhapur and they were encashed at Lahore. The largeness of such claims aroused the suspicions of the Government and it was discovered that the claims made by the appellant were false. He was tried in several trials under section 420 of the Indian Penal Code along with Henderson, charged under section 420/109 of the Code for abetment of those offences, before a special Tribunal at Lahore, functioning 90 under Ordinance No. XXIX of 1943, as amended by ordinance No. XII of 1945. After the partition of India, the trials by the Special Tribunal took place at Simla. The appellant was convicted at these trials and sentenced to imprisonment ranging from Punjab one year to three years, and payment of fines of various amounts. The Tribunal divided the fines into 'ordinary ' and 'compulsory ', the latter by virtue of s, 10 of the Ordinance, which prescribed a minimum fine equal to the amount procured by the offence. In default of payment of the 'ordinary ' fines it directed the appellant to undergo further imprisonment for certain periods, but there was no such direction with respect to the 'compulsory ' fines. The High Court, on appeal, affirmed the convictions but varied the sentences by reducing the term of imprisonment and setting aside the 'compulsory ' fines. The appellant as also the State of Punjab appealed to this Court. It was contended on behalf of the appellant that (1) the offences having been committed at Kolhapur, then outside British India, the trial at Simla, in the absence of any certificate or sanction given under section 188 of the Code of Criminal Procedure, was illegal ; (2) the joint trial of the appellant and Henderson at Simla was also illegal : (3) SS. 234(1) and 239(b) of the Code could not be combined to try a person charged with three offences of cheating with another charged with abetment in respect thereof in a single trial and (4) sanction under section 197 of the Code was necessary for the prosecution of Henderson and the absence of such sanction vitiated the joint trial. The contention of the State in the appeals preferred by it was that the imposition of the 'compulsory ' fines by the Tribunal was perfectly valid in law and the High Court was in error in setting aside the same. Held, that before the provisions of section 188 of the Code of Criminal Procedure could apply to a case, it was necessary to establish that the crime was committed outside British India In the instant case the misrepresentation by the appellant, the false certification by Henderson and the resulting payment having been made respectively at Simla, Jhansi and Lahore, then in British India, no part of the offence could be said to have taken place outside British India. The contention that the posting of the cheques at Kolhapur was tantamount to delivery of them to the appellant at Kolhapur, the Post Office being the agent of the appellant, was wholly misconceived in the facts and circumstances of the case. Moreover, what might be a relevant consideration as to the place of payment for the purpose of the Income tax Act would not necessarily be relevant for the purposes of a criminal case. The Commissioner of Income tax, Bombay South, Bombay vs Messrs. Ogle Glass Works Ltd., Ogale Wadi, [1955] 1 S.CR. 185, held inapplicale. The Commissioner of Income tax, Bihar & Orissa vs Messrs. Patney & Co. , referred to. 91 The words " an offence " in section 239(b) of the Code which is singular, must, by virtue of section 13 of the General Clauses Act, 1879, include the plural and therefore, a person accused of several offences of the same kind can be tried in a single trial with another accused of abetment thereof, The concluding words of section 239 of the Code obviously mean that, in framing charges against each of the several persons mentioned in its different clauses, not only the provisions relating to the form of charges but also those in respect of joinder of charges should apply. Consequently, the joint trial of the appellant with the abettor on the charges as framed did not vitiate the trial The provisions of sections 179 and 180 of the Code are wide enough to enable either the court within whose territorial jurisdiction anything was done, or the court where the consequences ensued, to take cognisance of the matter. Under section 179 the appellant could be tried either at Lahore or Simla and under section 180 Henderson could be tried at either of the two places. There was, therefore, no illegality in trying the appellant and Henderson together at Simla. Section 420 of the Indian Penal Code, read with section 63 of the Code, prescribes a fine that is unlimited. It was not, therefore, correct to contend that section 10 of the Ordinance, in prescribing the minimum fine, imposed a penalty that was greater than what could be inflicted under the former so as to contravene article 20(1) of the Constitution. As section 10 of the Ordinance prescribed a minimum fine, no question as to its excessive character could arise and the order of the High Court setting aside the compulsory fines must, therefore, be set aside and the orders of the Special Tribunal restored. Rao Shiv Bahadur Singh and Another vs The State of Vindhya Pradesh, and Kedar Nath Bajoria vs The State of West Bengal, ; , explained and distinguished. Per Sinha, C.J., Imam, Wanchoo and Das Gupta, JJ.Offences such as bribery and cheating or abetment thereof cannot by their very nature be regarded as having been committed by public servants while acting or purporting to act in the discharge of their official duties. Such offences can have Do reasonable connection with the performance of their duties as such ; no sanction, therefore, is necessary under section 197 of the Code of Criminal Procedure for their prosecution. Amrik Singh vs The State of PEPSU, ; and Matajog Dobey vs H. C. Bhari, ; , referred to. Per Kapur, J. In order that the protection afforded by section 197 of the Code of Criminal Procedure might be available to Henderson, it was not enough to show that he was a Major in the Army but it must also be shown that he was an officer not removable from office except with the sanction of the Central Government and that in certifying the appellant 's claims, which was the crux of the offence charged against him he was acting or purporting to act in the discharge of his official duty. 92 The true test as to whether a public servant was acting or purporting to act in discharge of his duties would be whether the act complained of was directly connected with his official duties or it was done in the discharge of his official duties or it was so integrally connected with or attached to his office as to be inseparable from it. Gill vs The King, 75 I.A. 41; Albert West Meads vs The King, 75 I.A. 815, Phenindra Chandra Neogy vs The King, 76 I.A. 10, Hori Ram Singh vs The Crown, , Amrik Singh vs The State of PEPSU, ; , Ronald Wood Mathams vs State of West Bengal, and Shree Kanthiah Ramayya Munipalli vs The State of Bombay, , referred to. As there was no evidence, in the instant case, to show that Henderson was an officer as contemplated by section 197 of the Code and that in verifying the appellant 's claims he was discharging his official duty, section 197 could not apply.

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ivil Appeal No. 1031 of 1979 etc.etc. From the Judgment and Order dated 23/24.11.1977 of the Bombay High Court in Sales Tax Reference No. 92 of 1976. S.K. Dholakia, S.M. Jadhav and A.S. Bhasme for the Appellants. Vinod A. Bobde, Ms. A.K. Verma, U.A. Rana, P.G. Gokhale, Ms. Sangeeta Aggarwal and D.N. Mishra for the Respondents. The Judgement of the Court was delivered by RANGANATHAN,J. These are appeals by the Revenue arising out of proceedings under the Bombay Sales Tax Act, 1959 (hereinafter called `the Act '). The respondents, Bharat Petroleum Corporation Ltd. (in CA 1031 of 1979) and Phulgaon Cotton Mills Ltd. (in the four other appeals) are assessees to sales tax. They claimed a set off, against the sales tax payable by them for the years in question, of certain sums, invoking the provisions of rules 41 and 41 A framed under the Act, as they stood at the relevant time. As the wording of these rules, in so far as it is material for our present purposes, is identical and the basis of the claim was also common, it will be convenient to dispose of both sets of appeals by a common judgment and we proceed to do so. The set off claimed by the assessees was in terms of section 42 and rules 41 and 41A, which may now be referred to : (1) Section 42 reads thus : ``42.Draw back, set off, refund etc. The State Government may provide by rules that (a)in such circumstances and subject to such conditions as may be specified in the rules a draw back, set off or refund of the whole or any part of the tax (i) xx xx xx (ii) paid or levied or leviable in respect of any earlier sale or 812 purchase of goods under this Act or any earlier law, be granted to the purchasing dealer ; (b) xx xx xx The State Government has notified various rules from time to time in exercise of this power which are collected in Chapter VII of the Rules. Of these we are concerned with rules 41 and 41A. (2) Rule 41 (omitted w.e.f. 24.6.81) was a very long rule containing several clauses. In so far as is relevant for our present purposes, it was in the following terms: ``41. Drawback, set off etc. of tax paid by a manufacturer In assessing the amount of tax payable in respect of any period by a Registered dealer, who manufactures taxable goods for sale (hereinafter in this rule referred to as the ``Manufacturing dealer ' '), the Commissioner shall grant to him a draw back, set off or as the case may be a refund of the aggregate of the following sums, that is to say : (a) xx xx xx (aa) xx xx xx (b) xx xx xx (bb) xx xx xx (c) xx xx xx (cc) xx xx xx (d) xx xx xx (e) a sum recovered from the Manufacturing dealer by another registered dealer by way of sales tax or, general sales tax or both, as the case may be, on the purchase by him, of goods from such registered dealer, being goods specified in schedule C to the Act other than in entries 1 to 11(both inclusive) and 15 therein and in Schedule D other than in entries 1 to 4 (both inclusive) 813 therein and in Schedule E other than in entries 1 and 2 therein, when the purchasing dealer did not hold a recognition or when the dealer held a recognition but effected the purchase otherwise than against a certificate under section 12 of the Act provided that such goods are used by him in the manufacture of taxable goods for sale or in the packing of taxable goods manufactured by him for sale. Explanation : xx xx xx (Material portions Underlined) (3) The relevant portion of rule 41A, which has been invoked in the case of Phulgaon Cotton Mills Ltd., reads thus : "41A.(1) Drawback, set off etc. of tax paid by a manufacturer in respect of purchases made on or after the 15th July 1962 : In assessing the amount of tax payable in respect of any period by a Registered dealer who manufactures taxable goods for sale or export* (hereinafter in this rule referred to as the ``manufacturing dealer ' '), the Commissioner shall, in respect of the purchases made by such dealer on or after the 15th July, 1962 of any goods specified in Schedule B, C, D, or E and used by him within the State in the manufacture of taxable goods (**) which have in fact been sold by him (and not given away as samples or otherwise) or which have been exported by him or used by him in the packing of goods so manufactured grant him a draw back, set off or, as the case may be, a refund of the aggregate of the following sums, that is to say: (a) a sum recovered from the manufacturing dealer by other Registered Dealers by way of sales tax, or general sales tax, as the case may be, both, on the purchase by him from such registered dealers, when the manufacturing dealer did not hold a Recognition or when he held a recognition but effected the * The words ``or export ' 'were inserted by a notification dated 31.8.70. ** The words ``which have in fact. .so manufactured ' 'were substituted by a notification dated 15.1.1976 for the words ``for sale or export or in the packing of goods so manufactured for sale or export ' '. 814 purchase otherwise than against a certificate under section 11 of the Act; (b) xx xx xx (c) xx xx xx (d) xx xx xx (Material portions underlined) (4)There was also a claim under rule 43AB but we are not concerned with that in the present appeals. Now to turn to the facts which give rise to these appeals. A.Burmah Shell The Bharat Petroleum Corporation Ltd.is before us as the successor in interest of the Burmah Shell Refineries Ltd. which is the assessee with which we are concerned. We shall refer to it as the `refinery 'to distinguish it from the Burmah Shell Oil Storage and Distributing Company of India Ltd. which will be briefly referred to hereinafter as the `Marketing company '. We are concerned with the period from 1.1.1961 to 31.12.1961. The refinery registered itself as a `dealer ' under the Act and possessed a recognition certificate under section 25,after having failed in a plea, raised in earlier assessment years, that it was not a `dealer ' and was not required to be registered as such. It had entered into a contract with the marketing company under which it agreed to process and refine crude oil belonging to the marketing company and manufacture kerosene for it. This contract was in the nature of a bailment by the marketing company to the refinery, the refinery taking the crude oil and returning it after purification, as refined kerosene. For the performance of this task it received payments from the manufacturing company by way refining charges on the basis of the job work done from time to time. The refined kerosene was eventually sold by the marketing company and the refinery had nothing to do with the sales. It may be mentioned here that there was no sales tax payable on sales of kerosene till 31.3.1961 but it became liable to sales tax thereafter. For the above purification process, the refinery needed to use 815 sulphuric acid. During the calendar year 1961, it purchased 3048.760 MT of acid for Rs. 3,52,742 from Dharmsi Morarji Chemical Co. Ltd.(hereinafter referred to as ``Dharmsis ' ') under an agreement dated 9.6.1955 which was to remain in force for a period of ten years from 1.1.1966 (Sic). On the sulphuric acid it so purchased, a sales tax of Rs.13,421.15 (Rs.15,107.72, according to the High Court) was recovered from it by Dharmsis, as the refinery did not purchase it on the strength of the recognition certificate held by it as the certificate could have been utilised only if the goods purchased had been intended to be used by it in the manufacture of goods for sale by itself, whereas the manufactured kerosene was sold by the marketing company. When the sulphuric acid was used in the refining process, the crude oil got refined and purified but the impurities therein precipitated into the acid and yielded ``acid sludge ' '. The refinery 's contract with Dharmsis provided that the acid sludge should be sold by the refinery to the Dharmsis which, apparently, had its own uses for the sludge. Accordingly, the refinery sold 3541.985 MT of acid sludge, during the relevant period, for Rs.68,108 the correctness of this figure was unsuccessfully contested before the High Court and on this amount it paid sales tax. The record does not show the amount of sales tax paid by the refinery on this account, but, having regard to the nature of the commodity and turnover involved, it must, admittedly, have been a very small amount. Having done this, the refinery claimed that, as against the sales tax paid by it for the period in question (including the tax paid on the acid sludge), it was entitled to a set off(and a refund, if need be) of the amount of Rs. 13,421.15 paid by it as sales tax on its purchases of sulphuric acid. Its argument is that it is entitled to this refund as all the conditions set out in clause (e) rule 41 were fulfilled this wise : (a) It is a `manufacturer ', as the process of refining carried out by it falls within the wide definition of `manufacture ' contained in s.2(17) of the Act viz. : ``2(17) `manufacture ', with all its grammatical variations and cognate expressions, means producing, making, extracting, altering, ornamenting, finishing or otherwise treating, or adapting any goods; but does not include such manufactures or manufacturing processes as may be prescribed ' '. 816 It is also a Registered dealer. (b) It manufactured taxable goods for sale. The acid sludge manufactured by it was taxable throughout the year and the pure kerosene manufactured by it was taxable .w.e.f. 1 4 1961 onwards. (c) Tax had been recovered from it on its purchases of sulphuric acid from Dharmsis who are Registered dealers as the purchases had not been effected on the basis of a recognition certificate. The Sales Tax Officer allowed the set off only to the extent of Rs. 1,101.40 without giving any details as to the manner in which this figure had been arrived at. On appeal, the Appellate Assistant Commissioner held that the assessee was entitled to no set off at all under rule 41 as what was manufactured by the assessee was kerosene and not acid sludge and the kerosene was sold not by the assessee manufacturer but by some other company. The Appellate Tribunal, however, allowed the assessee 's claim in full and its view was upheld, on reference, by the High Court. Hence the present appeal. B.Phulgaon Cotton In the case of Phulgaon Cotton Mills, we are concerned with four accounting periods : 1 7 73 to 30 6 74, 1 7 74 to 30 6 75, 1 7 75 to 30 6 76 and 1 7 76 to 30 6 77. The issue as to the application of rule 41A arises in the following circumstances. The assessee purchased raw unginned cotton from agriculturists and unregistered dealers. The cotton was ginned, yielding ginned cotton and seeds. One of the issues raised in the assessments was as to whether purchase tax should be paid on the total value of the raw cotton purchased or on the said purchase price less the value of the cotton seeds obtained therefrom. This question was answered against the assessee and is no more in issue before us. The assessee manufactured yarn and cloth from the ginned cotton. Besides cotton and yarn, cotton waste and yarn waste were also obtained in the course of the manufacture and these were also sold by the assessee. Some quantity of the fabrics produced by the assessee were also exported. 817 During the periods 1 7 73 to 30 6 74 and 1 7 74 to 30 6 75, the assessee had paid sales tax on the purchase value of the entire raw cotton purchased by it. It, therefore, claimed a set off, under rule 41A, of the purchase tax so paid as it had to pay sales tax on the yarn and cotton waste sold by it. It also claimed set off under rule 43AB in respect of the three periods other than between 1 7 74 and 30 6 75 but we are not concerned with this claim. The Sales Tax Officer allowed only partial relief to the assessee under rule 41A. He permitted a set off not of the entire purchase tax paid by the assessee on the raw cotton purchased by it but only of a part thereof proportionate to the extent of yarn sales. The Appellate Tribunal however upheld the contention of the assessee. It allowed a set off of the entire purchase tax paid by the assessee on the raw cotton, machinery and other purchases which had been used in the process of manufacture of cotton waste. In doing so it followed the principle of the decision of the High Court in the case of Burmah Shell Refineries, (1978) 41 S.T.C. 337. It observed : ``21. .When the raw cotton is ginned or ginned cotton is used in the process of manufacturing yarn, there is bound to be cotton waste. In view of these facts, the appellant will also be entitled to full set off so far as the purchases of cotton are concerned, which have resulted in the production of taxable commodity i.e. cotton waste. Each and every ounce of cotton is used in the manufacture of cotton waste which is a taxable commodity. The question of, therefore, allowing proportionate set off so far as the purchases of cotton or machinery which are used in manufacturing of cotton waste does not arise. The appellant is entitled to full set off so far as purchases of cotton machinery and other purchases, which are used in the manufacture of cotton waste, a taxable commodity. There is no conflict in the decisions given by the Tribunal in earlier rulings given in the appellant 's own cases. No such argument of production of cotton waste by product simultaneously was canvassed. All that was canvassed was that yarn waste was a taxable by product. Hence, full set off on purchase of cotton be allowed. Tribunal negatived this contention by pointing out that there is no simultaneous production of yarn and cloth. First yarn is manufactured and then cloth. Thus question of referring this issue to larger Bench does not arise. The cases will have, 818 therefore, to go back to the Assistant Commissioner for deciding the quantum of set off admissible under Rule 41 A on these basis for all the periods." The Tribunal, however, directed that the deductions should be so allowed as not to result in a double deduction of the same amount of purchase tax. Aggrieved by the order of the Tribunal, the Commissioner of Sales Tax filed petitions for special leave to appeal to this Court therefrom as no useful purpose would be served by approaching the High Court on reference in view of the decision of that Court in the Burmah Shell Refineries case on the point at issue having gone against the Revenue. Leave was granted by this Court on 3 9 90 and hence the four civil appeals by the Revenue in the case of Phulgaon Cotton Mills Limited. Before dealing with issue on the interpretation of rules 41 and 41A which has been debated before us, we wish to point out the difficulties encountered by us as the facts in the case of Phulgaon Cotton Mills are not quite clear from the record. From the Tribunal 's order, it is seen that, during the periods 1 7 75 to 30 6 76 and 1 7 76 to 30 6 77, the assessee purchased no raw cotton from unregistered dealers and no purchase tax was levied thereon. Nevertheless, some relief under rule 41A was allowed by the Officer in the assessments for these periods as well. The basis on which a claim was made, and partially allowed, under rule 41A in respect of these periods is not known. Also, the Tribunal has allowed full relief on the basis that since cotton was used in the manufacture of cotton waste, the assessee was entitled to relief in respect of purchase tax paid on raw cotton though for these years there was no such tax. But the order of the Tribunal refers also to "set off so far as purchases of machinery and other purchases ' ' indicating that perhaps some purchase tax had been paid in respect of those purchases and set off had been sought in respect thereof. But, even assuming this, the discussion regarding cotton waste appears to be pointless since, admittedly, the yarn manufactured was liable to sales tax and, on the Tribunal 's reasoning, this was sufficient to enable the assessee to claim set off of the purchase tax paid on cotton, machinery and other materials used in the manufacture. But these aspects have not been touched upon before us. The arguments before us, as we shall refer presently, revolved round a very simple issue. We shall discuss this issue 819 and leave the other aspects touched upon above to be clarified, if need be, when the assessment is finally redone in the light of our judgment. Shri Dholakia, learned counsel for the State of Maharashtra, submits that the issue in these appeals is a very simple one. Rules 41 and 41A are intended to give relief to a dealer in respect of purchase of goods which are used in the manufacture of taxable goods for sale, the clear idea being that where the manufactured goods will also be liable to sales tax in the hands of the manufacturer there should be a relief of the taxes paid by him on the goods purchased by him for use in such manufacture, so as to avoid double taxation. In the Bharat Petroleum case, the manufactured goods viz. pure kerosene were neither sold by the respondent so as to attract sales tax in his hands nor, indeed, liable to sales tax at all for the first three months. So also, in the case of Phulgaon Cotton Mills, the cotton purchased on payment of tax was used for the manufacture of cloth which was not liable to sales tax. A set off cannot be allowed merely because a bye product or waste product (viz. the acid sludge in the one case and the cotton waste in the other) was sold for a nominal turnover which was subject to tax. Even assuming that the sulphuric acid or cotton purchased can be said to have been used for the manufacture of two commodities (viz. kerosene and acid sludge in the one case and cloth and cotton waste in the other), the set off under the rules relied upon should be split up proportionately and allowed only to a proportionate extent, the proportion being decided on the basis of the respective turnovers of the taxable and non taxable goods. He submits that though the rules do not specifically provide for such a bifurcation, an apportionment of such nature is almost invariably implicit in a tax law and is also consonant with the object and purpose of the rules. He, therefore, submits that the High Court and Tribunal ought to have restricted the relief only to a proportionate extent as done by the sales tax officer. He points out that the basis on which the apportionment was made by the officer had not been specifically challenged before the appellate authorities and is not in issue before us. On the other hand, Sri Bobde, learned counsel appearing for Bharat Petroleum laid stress on two aspects of the rule. First, he points out that, under the rule, it is not a requirement that the manufactured goods have to be sold by the manufacturing dealer himself. The fact is that the kerosene constituted taxable goods after 1.4.61 and was sold by the marketing company. The second aspect of the rule is that, admittedly, the 820 sulphuric acid purchased was wholly used in the manufacture of two items kerosene and acid sludge one of which viz. the sludge was taxable and also subjected to tax. Once this condition is fulfilled, the amount of set off is specified in the rule itself as the amount of purchase tax paid on the goods so used and cannot be scaled down proportionately merely because, according to the department, the turnover of the taxable goods is insignificant. Sri Rana, learned counsel appearing for the Phulgaon Cotton Mills, adopts this argument mutatis mutandis. We have given deep thought to these contentions and we have come to the conclusion that, plausible and attractive as the argument urged on behalf of the State is, the conclusion arrived at by the High Court and the Apellate Tribunal has to be upheld. But before dealing with this aspect, we may dispose of two minor questions. The first which arises in the Bharat Petroleum case is whether rule 41 contemplates that the goods purchased by the dealer should be used for manufacture of taxable goods for sale by him. The High Court has given good reasons, with which we are inclined to agree, for holding that no such restrictions can be read into this rule but this contention is of no significance in view of our conclusion that the assessee would be entitled to the set off claimed even on the basis of the taxable sales of acid sludge effected by it. The other point is whether the assesees can be said to manufacture ``acid sludge ' ' and ``cotton waste ' ' respectively. It is suggested for the State that the assessees are purchasing acid and cotton for the manufacture of kerosene and yarn/cloth respectively and it is ludicrous to suggest that the assessees are purchasing sulphuric acid and cotton for manufacturing acid sludge and cotton waste. Put like that the assessee 's contention seems a little artificial. But the contention is not really absurd. For, the assessees do purchase sulphuric acid and cotton for use in a manufacturing process which yields not only kerosene and yarn/cloth but also acid sludge and cotton waste. As pointed out in State of Gujarat vs Raipur Manufacturing Co. Ltd. ,(1967) 19 S.T.C.1, where a subsidiary product is turned out regularly and continuously in the course of a manufacturing business and is also sold regularly from time to time, an intention can be attributed to the manufacturer to manufacture and sell not merely the main item manufactured but also the subsidiary products. There is also no evidence on record to suggest, at least so far as acid sludge is concerned, that it is not a commercial commodity with a market but an item of waste. The contract with Dharmsis speaks to the contrary and moreover, as pointed out by the High Court, the assessee had been 821 practically compelled by the Department to apply for and obtain a recognition certificate for the manufacture of sludge and it had also paid tax as dealers in acid sludge. These two contentions have, therefore, to be rejected. Turning now to the main question, we are inclined to agree with respondents ' counsel that they are entitled to a set off of the entire tax paid by them on the purchases of sulphuric acid and cotton respectively. The only condition under the rule is that the goods purchased on payment of tax should have been used in the manufacture of taxable goods for sale. Their concurrent user for the manufacture of another item of goods which may or may not be taxable is immaterial though we may point out that in the Bharat Petroleum case, the kerosene was also taxable for nine months in the year and in the case of Phulgaon Cotton Mills, yarn was also manufactured and it was subject to tax. Sri Dholakia contends for an implicit principle of apportionment on the basis of turnovers of various items of goods manufactured and restriction of the quantum of set off to a proportion based on the turnover of taxable goods to the total turnover. He cited certain decisions under the Income tax and Sales Tax Acts in support of this contention : Anglo French Textiles vs C.I.T., , S.C.; Tata Iron & Steel Co. vs State, ; and Best & Co. vs C.I.T.,(1966) , S.C. We do not think these cases are of assistance. The first two cases dealt with the question as to when profits and gains can be said to accrue or arise in a manufacturing business and the third held that when a receipt is a composite one of capital and revenue nature, it is open to the Revenue to apportion the same and bring the latter to tax. These are situation in which the taxable element is severable. Under the rules presently under consideration also, situations are conceivable where such severance is implicit. For instance, suppose the cotton purchased is utilised partly for manufacture of cloth that is taxable and part for manufacture of cloth that is not taxable or partly for the manufacture of yarn which is taxable and is sold and partly for manufacture of cloth which is not taxable. In these instances, it is clear that only some of the cotton is utilised for the first purpose and some for the second purpose and so only the purchase tax paid in respect of the quantity utilised for the first purpose will be eligible for set off. But the type of user with which we are concerned is a composite one in which it is not possible to correlate any part of the purchased goods as having gone in for the purpose of manufacture of taxable goods. The position is picturesquely brought out in 822 the case of Bharat Petroleum. The entire sulphuric acid purchased has no doubt been used in the manufacture of kerosene though perhaps not a drop of acid clings to the kerosene manufactured. Equally, the entire sulphuric acid has gone into the composition of the acid sludge. The 3048.760 M.T. of acid have dissolved the impurities in the crude oil and conglomerated with them to constitute 3541.485 M.T. of acid sludge. Having regard to the nature of the interactions here, it is incontrovertible that the entire sulphuric acid purchased has gone into the manufacture of the sludge. The rules do not require that the purchased goods must have been used only for the manufacture of taxable goods for sale. In this situation, it is not possible to cut down the quantum of relief clearly outlined in the rule on the basis of some general principle claimed to underlie the provision. As Sri Bobde rightly pointed out, the basis for the relief provided is not very clear cut. Various reliefs have been provided in a group of rules which come in for application in various situations. The relief may be based on the principle that the manufactured product is taxed either in the hands of the same assessee or in someone else 's hands, or that the manufactured goods are exported which may yield no tax but earn foreign exchange, or even that the purchases are utilised for manufacture of goods in the State thus contributing to the industrial development of the State. It is, therefore, difficult to read into the provision a quantitative correlation of the goods resulting in a taxable turnover and the purchases of raw materials on which tax has been paid. In this background, the straight forward answer to the question raised lies in the literal interpretation of the language of the rules without straining to discover some doubtful principle for denying relief. For the above reasons, we agree with the view taken by the High Court and followed by the Tribunal and dismiss these appeals. We, however, make no order regarding costs.

The assessee Oil refinery, predecessor in interest to the respondent Corporation in one of the appeals had registered itself as a dealer under the Bombay Sales Tax Act, 1959. During the Calendar year 1961, it had purchased sulphuric acid from a chemical company for processing and refining crude oil and manufacturing kerosene for a marketing company. On the sulphuric acid so purchased sales tax was recovered from it by the chemical company. While the refined kerosene which was not taxable upto 31.3.1961 was sold by the marketing company, the acid sludge yielded in the purification process was sold by the refinery. The refinery paid sales tax on the acid sludge sold by it, and claimed a set off (and a refund, if need be) of the sales tax paid by it on its purchase of sulphuric acid, on the ground that all the conditions set out in clause (e) of Rule 41 of the Bombay Sales Tax Rules, 1959 were fulfilled, viz., it was manufacturer within the meaning of Section 2 (17) of the Act, that it was also a registered dealer, that it manufactured taxable goods for sale, that while acid sludge was taxable throughout the year, kerosene was taxable with effect from 1.4.1961 onwards and that tax was recovered on the raw material purchased by it by the chemical company. 808 The Sales Tax Officer allowed the set off only partly. On appeal, the Appellate Assistant Commissioner held that the assessee was entitled to no set off at all under Rule 41 since what was manufactured by the assessee was kerosene and not acid sludge, and the kerosene was sold not by the assessee manufacturer, but by some other company. The Appellate Tribunal, however, allowed the assessee 's claim in full and on reference this was upheld by the High Court. The respondent Cotton Mill in the other appeals purchased raw unginned cotton from agriculturists and unregistered dealers during periods 1.7.73 to 30.6.74 and 1.7.74 to 30.6.75 and paid sales tax on the raw cotton so purchased. The cotton was ginned yielding place to ginned cotton and cotton seed. The respondent manufactured yarn and cloth from the ginned cotton. The cotton waste and yarn waste obtained in the course of manufacture were also sold by the assessee. It paid sales tax on the yarn and cotton waste sold by it and claimed a set off, under 41 A of the Rules, of the sales tax paid on the purchase value of the entire raw cotton purchased by it. The Sales Tax Officer allowed a set off of only part of the purchase tax paid on the raw cotton purchased by the assessee proportionate to the extent of yarn sales. On appeal, the Appellate Tribunal allowed a set off of the entire purchase tax paid on the raw cotton, machinery and other purchases, which had been used in the process of manufacture of cotton waste. It, however, directed that the deductions should be so allowed as not to result in a double deduction of the same amount of purchase tax. In the appeals, by Special leave, before this Court, on behalf of the State Government, it was contended that Rules 41 and 41 A were intended to give relief to a dealer in respect of purchase of goods which were used in the manufacture of taxable goods for sale, that the manufactured goods, viz., pure kerosene was neither sold by the respondent so as to attract sales tax in his hands nor, was it liable to sales tax at all for the first three months, and the cotton purchased on payment of tax was used for the manufacture of cloth which was not liable to sales tax, and that a set off could not be allowed merely because a by product or waste product, viz., acid sludge and cotton waste was sold for a nominal turn over, which was subject to tax, and that the set off should be split up proportionately and allowed only to a proportionate extent, on the basis of the respective 809 turnover of the taxable and non taxable goods, and an apportionment of such nature was implicit in a tax law and was also in consonance with the object and purpose of the rules. On behalf of one of the respondents it was contended that under Rule 41 it was not a requirement that the manufactured goods had to be sold by the manufacturing dealer himself and that the sulphuric acid purchased was wholly used in the manufacture of two items kerosene and acid sludge one of which, viz., the sludge, was taxable and also subjected to tax, and the amount of set off was specified in the rule itself as the amount of purchase tax paid on the goods so used, and could not be scaled down proportionately merely because the turnover of the taxable goods was insignificant. The other respondent adopted these contentions. Dismissing the appeals, this Court, HELD: 1.1 The assessees are entitled to a set off of the entire tax paid by them on the purchases of sulphuric acid and cotton respectively. The only condition under the rule is that the goods purchased on payment of tax should have been used in the manufacture of taxable goods for sale. Their concurrent user for the manufacture of another item of goods which may or may not be taxable is immaterial though kerosene was also taxable for nine months in the year and yarn was also manufactured and it was subject to tax. Commissioner of Sales Tax vs Burmah Shell Refineries Limited, (1978) 41 S.T.C. 337, referred to. 1.2. The principle of apportionment on the basis of turnovers of various items of goods manufactured and restriction of the quantum of set off to a proportion based on the turnover of taxable goods to the total turnover cannot be accepted. No doubt under the rules, situations are conceivable where severance of taxable element is implicit, but the type of user in the instant case is a composite one, in which it is not possible to correlate any part of the purchased goods as having gone in for the purpose of manufacture of taxable goods. Anglo French Textiles vs C.I.T., , S.C.; Tata Iron & Steel Co. vs State ; and Best & Co. vs C.I.T. , S.C., distinguished. 810 1.3 In the instant case the entire sulphuric acid purchased has no doubt been used in the manufacture of kerosene though perhaps not a drop of acid clings to the kerosene manufactured. Equally, the entire sulphuric acid has gone into the composition of the acid sludge. Having regard to the nature of the interactions in the instant case,it is incontrovertible that the entire sulphuric acid purchased has gone into the manufacture of the sludge. The rules do not require that the purchased goods must have been used only for the manufacture of taxable goods for sale. Therefore, it is not possible to cut down the quantum of relief clearly outlined in the rule on the basis of some general principle claimed to underline the provision. 1.4 The basis for the relief provided is not very clear cut. Various reliefs have been provided in a group of rules which come in for application in various situations. The relief may be based on the principle that the manufactured product is taxed either in the hands of the same assessee or in someone else 's hands, or that the manufactured goods are exported which may yield no tax but earn foreign exchange, or even that the purchases are utilised for manufacture of goods in the State thus contributing to the industrial development of the State. It is, therefore, difficult to read into the provision a quantitative correlation of the goods resulting in a taxable turnover and the purchases of raw materials on which tax has been paid. 1.5 Rule 41 does not contemplate that the goods purchased by the dealer should be used for manufacture of taxable goods for sale by him. No such restriction can be read into this rule. 2.1 Where a subsidiary product is turned out regularly and continuously in the course of a manufacturing business and is also sold regularly from time to time, an intention can be attributed to the manufacturer to manufacture and sell the subsidiary product. State of Gujarat vs Raipur Manufacturing Co. Ltd., (1967) 19 S.T.C. 1, relied on. 2.2 The assessees in the instant case do purchase sulphuric acid and unginned cotton for use in a manufacturing process, which yield not only kerosene and yarn/cloth, but also acid sludge and cotton waste. There is also no evidence to suggest that acid sludge is not a commercial 811 commodity with a market but an item of waste.

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Appeal No. 17 of 1954. Appeal by Special Leave from the Judgment and Order dated the 11th day of June 1951 of the Punjab High Court in Civil Reference No. 2 of 1951. Hardyal Hardy and Sardar Singh, for the appellant. C. K. Daphtary, Solicitor General of India (G. N. Joshi and R. H. Dhebar, with him) for the 'respondent. February 21. The Judgment of the Court was delivered by VENKATARIAMA AYYAR J. The appellant is a firm carrying on business at Ludhiana in the Punjab. The Income tax Officer assessed its income for 1945 1946 at Rs. 71,186, and on 17 9 1947 a notice of demand was served on it for Rs. 29,857 6 0 on account of income tax and super tax. The appellant preferred an 168 appeal against the assessment, and it was actually received in the office of the Appellate Assistant Commissioner on 5 11 1947. It was then out of time by 19 days; but the appeal was registered as No. 86, and notice for hearing under section 31 was issued for 13 12 1947, and after undergoing several adjournments, it was actually heard on 1 10 1948. For the year 1946 1947, the Income tax Officer assessed the income of the firm at Rs. 1,09,883, and on 29 9 1947 a notice of demand was served on it for Rs. 51,313 14 0 on account of income tax and super tax. The appellant preferred an appeal against this assessment, and it was actually received in the office of the Appellate Assistant Commissioner on 5 11 1947, and it was then 7 days out of time. It was registered as No. 89, and notice for hearing under section 31 was issued for 24 6 1948. Eventually, it was heard along with Appeal No. 86 on 1 10 1948. At the hearing, the Department took the objection that the appeals were presented out of time, and were therefore liable to be dismissed. The appellant prayed for condonation of the delay on the ground that following on the partition of the country the conditions were very unsettled, that curfew order had been promulgated and was in force, and that the post office did not accept registered letters, and that the traffic on the Grand Trunk Road was closed., and that in view of these exceptional circumstances, it bad sufficient cause for not presenting the appeals in time. On 31 12 1948 the Appellate Assistant Commissioner passed orders in both the appeals, holding that there was not sufficient ground for condoning the delay, and rejecting them in limine. These orders were purported to be passed under section 31 read along with section 30(2). Against these orders, the appellant preferred appeals under section 33 of the Act to the Appellate Tribunal which by its order dated 4 4 1950 dismissed them on the ground that the orders of the Assistant Commissioner were in substance passed under section 30 (2) and not under section 31 and that no appeal lay against them under section 33, On the applica 169 tions of the appellant, the Tribunal referred under section 66(1) of the Income Tax Act the following question for the decision of the High Court of Punjab: "Whether in the circumstances of the case appeals lay to the Tribunal against orders of the Appellate Assistant Commissioner dismissing the appeals against the assessments for the years 19451946 and 1946 1947 in limine". The reference was beard by Khosla and Harnam Singh JJ., who held following an earlier decision of that court in Dewan Chand vs Commissioner of Incometax(1) that the orders of the Appellate Assistant Commissioner were under section 30(2) and not appealable under section 33. Certificate to appeal to this Court against this order having been refused by the High Court, the appellant applied for and obtained leave to appeal to this Court under article 136 of the Con stitution, and that is how the appeal comes before US. The provisions of the Act bearing on the question may now be referred to. Section 30(1) confers on the assessee a right of appeal against orders passed under the sections specified therein. Section 30(2) provides that the appeal shall ordinarily be presented within thirty days of the order of assessment, but the Appellate Assistant Commissioner may admit an appeal after the expiration of the period if he is satisfied that the appellant bad sufficient cause for not presenting it within that period. Section 30(3) provides that "the appeal shall be in the prescribed form and shall be verified in the prescribed manner". Section 31(1) enacts that "the Appellate Assistant Commis sioner shall fix a day and place for the hearing of the appeal, and may from time to time adjourn the hearing". Section 31(3) specifies the orders that may be passed in appeals according as they are directed against orders passed under the one or the other of the sections of the Act which are specified in section 30(1). When the appeal is against an order of assessment under section 23 and this is what we are con (1) (1951] 20 , 170 cerned with in this appeal it is provided in section 31(3), clauses (a) and (b) that in disposing of the appeal the Appellate Assistant Commissioner may (a) confirm, reduce, enhance or annul the assessment, or (b) set aside the assessment and direct the. Incometax Officer to make a fresh assessment after making such further enquiry as the Income tax Officer thinks fit. Section 33(1) enacts that, "Any assessee objecting to an order passed by an Appellate Assistant Commissioner under section 28 or section 31 may appeal to the Appellate Tribunal within sixty days of the date on which such order is communicated to him". Stated succinctly, section 30 confers a right of appeal on the assessee, section 31 provides for the hearing and disposal of the appeal, and section 33 confers a right of further appeal against orders passed under section 31, Now, on these provisions the question is whether an order dismissing an appeal presented under section 30 as out of time is one under section 30(2) or under section 31 of the Act. If it is the former, there is no appeal provided against it; if it is the latter, it is open to appeal under section 33. On this question, there has been a sharp conflict of opinion among different High Courts and even among different Benches of the same High Court. The Bombay High Court has held that when an appeal is presented out of time, and there is no order of condonation of delay under section 30(2), there is, in law, no appeal before the Appellate Assistant Commissioner, and that an order by him rejecting the appeal does not fall within section 31 and is not appealable: Commissioner of Income tax vs Mysore Iron and Steel Works(1) and K. K. Porbunderwalla vs Commissioner of Income tax(2); but that if the appeal is admitted after an order of condonation is made under section 30(2), an order subsequently passed dismissing it on the ground of limitation would be one under section 31 and would be appealable under section 33 and the result will be the same even when the appeal is admitted without (1) .[1949] , (2) 171 any order of condonation under section 30(2): Champalal A sharam vs Commissioner of Income tax(1). The High Court of Allahabad has also taken the same view, and held that an order refusing to condone delay and rejecting an appeal before it was admitted was not one under section 31 and was not appealable: Vide Shivnath Prasad vs Commissioner of Income tax, Central and U. P.(3) and Municipal Board, Agra vs Commissioner of Income tax, U. P.( 3 ); but that ail order dismissing the appeal as time barred after it had been admitted was one under section 31 and was appeable: Mohd. Nain Mohd. Alam vs Commissioner of Income tax(1). The High Court of Punjab has held following Shivnath Prasad vs Commissioner of Incometax, Central and U. P.(2) and Commissioner of Incometax vs Mysore Iron and Steel Works(5) that when the Appellate Assistant Commissioner declines to condone delay and rejects the appeal, it is one under section 30(2) and not appealable. It has further held that even if the appeal bad been admitted without an order of condonation and dismissed at the hearing on the ground of limitation, it would not be under section 31, because the scheme of the Act contemplated that an order to be passed under that section must relate to the merits of the assessment. It is on this decision that the judgment under appeal is based It may be mentioned that the decision in Dewan Chand vs Commissioner of Income tax(6) was dissented from in a recent decision of the Punjab High Court in General Agencies vs Income tax Commissioner(7) . In Commissioner of Income tax vs Shahzadi Begum the Madras High Court has held that an order declining to excuse delay and rejecting the appeal is one under section 31, whether it is made before the appeal is admitted or after, and that an appeal which is filed out of time is, nonetheless, an appeal for purposes of section 31, and that an order dismissing it would be appealable under section 33. In Gour Mohan (1) , (3) (5) (7) A.I R. 1956 Punjab 26. (2) (4) (6) (8) 172 Mullick vs Commissioner of Agricultural Income tax(1), the Calcutta High Court has, after a full discussion, come to the conclusion that an order of dismissal on the ground of limitation at whatever stage was one which fell under section 31. It is unnecessary to refer to the views expressed in decisions of other High Courts, as the point now under discussion did not directly arise for decision therein. The question is which of these views is the correct one to adopt. We start with this that under section 33 it is only orders under section 31 that are appealable. The question therefore narrows itself to this whether an order declining to condone delay and dismissing the appeal as barred by time is an order under section 31. It will be, if it is passed in appeal against an order of assessment, and is one which affirms it. Now, the conflicting views expressed by the several High Courts centre round two points: (1) when an appeal is presented out of time and there has been a refusal to condone delay under section 30(2), is an order rejecting it as time barred one passed in appeal; and (2) if it is, is such an order one confirming the assessment within section 31(3)(a)? On the first point, as already stated, it has been held by the Bombay High Court that while an order dismissing an appeal as time barred after it is admitted is one under section 31, a similar order passed before it is admitted is one under section 30(2). The ratio of this distinction is stated to be that in law there is no appeal unless it is presented in time, and if presented beyond time, unless the delay is excused. In Commissioner of Income tax vs Mysore Iron and Steel Works(2), Chagla, C.J. stated the position thus: "An asseesee has a statutory right to present an appeal within thirty days without any order being required from the Appellate Assistant Commissioner for admission of that appeal. But if the time prescribed expires, then that statutory right to present an appeal goes; and an appeal can only be entertained provided it is admitted by the Appellate Assistant Commissioner after condoning the delay. (1) (2) 173 Therefore before an appeal could be admitted in this case, an order from the Appellate Assistant Commissioner was requisite that the delay had been condoned and it was only on such an order being made that the appeal could be entertained by the Appellate Assistant Commissioner. Now section 31 deals only with such appeals which are presented within the prescribed period or admitted after the delay has been condoned, and the procedure laid down in section 31 with regard to the hearing of appeals only applies to such appeals. Therefore, in my opinion, when the Appellate Assistant Commissioner refused to condone the delay, there was no appeal before him which he could hear and dispose of as provided under section 31 of the Act. Section 33 then gives the right of appeal to the assessee from an order made by the Appellate Assistant Commissioner either under section 28 or under section 31. Therefore the Legislature did not give the right of appeal to the assessee against an order made by the Appellate Assistant Commissioner under section 30 of the Act". Learned counsel for the appellant disputes the correctness of the last observation that an order of the Appellate Assistant comissioner refusing to condone the delay is one under section 30(2), and contends that the only order that could be passed under that section was one excusing delay, and an order refusing to condone it will fall outside it, and that such an order could only be made under section 31. We find it difficult to accede to this contention. When power is granted to an authority to be exercised at his discretion, it is necessarily implicit in the grant that he may exercise it in such manner as the circumstances might warrant. And if the Appellate Assistant Commissioner has a discretion to excuse the delay, he has also a discretion in appropriate cases to decline to do so. We are therefore of opinion that the refusal to excuse delay is an order under section 30(2.). But the question still remains whether the view taken in Commissioner of Income tax vs Mysore Iron 23 174 and Steel Works(1) and K. K. Porbunderwalla v Commissioner of Income tax (2) that an appeal which is filed beyond the period of limitation is, in the eye of law, no appeal, unless and until there is a condonation of delay, and that, in consequence, an order passed thereon cannot be held to be passed in appeal so as to fall within section 31 is right. Now, a right of appeal is a substantive right, and is a creature of the statute. Section 30(1) confers on the assessee a right of appeal against certain orders, and an order of assessment under section 23 is one of them. The appellant therefore had a substantive right under section 30(1) to prefer appeals against orders of assessment made by the Income tax Officer. Then, we come to section 30(2), which enacts a period of limitation within which this right is to be exercised. If an appeal, is not presented within that time, does that cease to be an appeal as provided under section 30(1)? It is well established that rules of limitation, pertain to the domain of adjectival law, and that they operate only to bar the remedy but not to extinguish the right. An appeal preferred in accordance with section 30(1) must, therefore, be an appeal in the eye of law, though having been presented beyond the period mentioned in section 30(2) it is liable to be dismissed in limine. There might be a provision in the statute that at the end of the period of limitation prescribed, the right would be extinguished, as for example, section 28 of the Limitation Act; but there is none such here. On the other hand, in conferring a right of appeal under section 30(1) and prescribing a period of limitation for the exercise thereof separately under section 30 (2), the legislature has evinced an intention to maintain the distinction well recognised under the general law between what is a substantive right and what is a matter of procedural law. In Nagendranath Dey vs Suresh Chandra Dey(3) Sir Dinshaw Mulla construing the word ' appeal ' in the third column of article 182 of the Limitation Act observed: "There is no definition of appeal in the Civil Pro (1) (2) (3) 59 I.A. 283, 287. 175 cedure Code, but their Lordships have no doubt that any application by a party to an appellate, Court, asking it to set aside or revise a decision of a subordinate Court, is an appeal within the ordinary acceptation of the term, and that it is no less an appeal because it is irregular or incompetent". These observations were referred to with approval and adopted by this Court in Raja Kulkarni and others vs The State of Bombay(1). In Promotho Nath Roy vs W. A. Lee(2), an order dismissing an application as barred by limitation after rejecting an application under section 5 of the Limitation Act to excuse the delay in presentation was held to be one "passed on appeal" within the meaning of section 109 of the Civil Procedure Code. On the principles laid down in these decisions, it must be held that an appeal pre sented out of time is an appeal, and an order dismissing it as time barred is one passed in appeal. Then, the next question is whether it is an order passed under section 31 of the Act. That section is the only provision relating to the hearing and disposal of appeals, and if an order dismissing an appeal as barred by limitation is one passed in appeal, it must fall within section 31. And as section 33 confers a right of appeal against all orders passed under section 31, it must also be appealable. But then, it is contended that in an appeal against assessment the only order that could be passed under section 31 (3)(a) is one which confirms, reduces, enhances or annuls the assessment, that such an order could be made only on a consideration of the merits of the appeal, and that an order dismissing it on the ground of limitation is not within the section. That was the view taken in Dewan Chand vs Commissioner of Income tax(3). But there is practically a unanimity of opinion among all the other High Courts that to fall within the section it is not necessary that the order should expressly address itself to and decide on the merits of the assessment, and that it is sufficient that the effect of the order is to confirm the assessment (1) [1954] S.C.R. 384, 388. (2) A.I.R. 1921 Cal. (3) 176 as when the appeal is dismissed on a preliminary point. In Commissioner of Income tax vs Shahzadi Begum(1), Satyanarayana Rao, J. said: "If the appeal is dismissed as incompetent or is rejected as it was filed out of time and no sufficient cause was established, it results in an affirmation of the order appealed against". In Gour Mohan Mullick vs Commissioner of Agricultural Income tax(2), construing sections 34, 35 and 36 of the Bengal Agricultural Income Tax Act which are in terms identical with those of sections 30, 31 and 33 of the Indian Income Tax Act, Chakravarti, J. observed: "I would base that view on the ground that the order, in effect, confirmed the assessment or, at any rate, disposed of the appeal and was thus an order under section 35, because what that section really contemplates is a disposal or conclusion of the appeal and the forms of orders specified in it are not exhaustive. An appellate order may not, directly and by itself, confirm, or reduce or enhance or annul an assessment and may yet dispose of the appeal. If it does so, it is immaterial whether the ground is a finding that the appeal is barred by limitation or a finding that the case is not a fit one for extension of time or both". This reasoning is also the basis of the decisions of the Bombay and Allahabad High Courts which bold that an order rejecting an appeal on the ground of limitation after it had been admitted is one under section 31, though there is no consideration of the merits of the assessment. Thus, in K. K. Porbunderwalla vs Commissioner of Income tax(3), Chagla, C. J. observed: ``. although the Appellate Assistant Commis sioner did not hear the appeal on merits and held that the appeal was barred by limitation his order was under section 31 and the effect of that order was to confirm the assessment which bad been made by the Income tax Officer". In Special Manager of Court of Wards vs Commissioner (1) (2) (3) 177 of Income tax(1), the Allahabad High Court stated that the view was "possible that even though the period of limitation is prescribed under section 30 and the power to grant extension is also given in that section the power is really exercised under section 31 as the Appellate Assistant Commissioner when he decides not to extend the period of limitation may be said in a sense to have confirmed the assessment". The respondent relied on a later decision of the) 'Allahabad High Court in Mahabir Prasad Niranjanlal vs Commissioner of Income tax(2), wherein it was held by the learned Judges, departing from the previous course of authorities of that court, that an order of the Appellate Assistant Commissioner dismissing an appeal as time barred was one under section 30(2) and not under section 31, and was therefore not appealable. This conclusion they felt themselves bound to adopt by reason of certain observations of this Court in Commissioner of Income tax, Madras vs Mtt. section Ar. Arunachalam Chettiar(3). But when read in the context of the point that actually arose for decision in that case, those observations lend no support to the conclusion reached by the learned Judges. There, the facts were that an appeal was preferred by the assessee under section 30(1) against an order of the Income tax Officer, and that was dismissed by the Appellate Assistant Commissioner on 19 11 1945 as incompetent. No appeal was filed against this order, and it became final. But acting on a suggestion made in the order dated 19 11 1945, the assessee filed an original miscellaneous application before the Appellate Tribunal for relief, and by its order dated 20 2 1946 the Tribunal set aside the findings of the Income tax Officer, and directed him to make a fresh computation. Then, on the application of the Commissioner of Income tax, the Tribunal referred to the High Court under section 66(1) of the Income tax Act the following question: "Whether in the facts and circumstances of the case, the order of the Bench dated 20th February, (1) , 212. (2 ) (3) ; 474 475, 178 1946 in the miscellaneous application is an approoriate order and is legally valid and passed within the jurisdiction and binding on the Income tax Officer". The High Court declined to answer this reference on the ground that the order of the Tribunal was not one passed in an appeal under section 33(1), and that In consequence, the reference under section 66(1) was itself incompetent. The correctness of this decision was challenged on appeal to this Court, and in affirm ing it, this Court observed: . . when on 19th November 1945, the Appellate Assistant Commissioner declined to admit the appeal, the assessee did not prefer any appeal but only made a miscellaneous application before the Appellate Tribunal. There is no provision in the Act permitting such an application. Indeed, in the statement of the case the Appellate Tribunal states that in entertaining that application and correcting the error of the Income tax Officer it acted in exercise of what it regarded as its inherent powers. There being no appeal under section 33(1) and the order having been made in exercise of its supposed inherent jurisdiction, the order cannot possibly be regarded as one under section 33(4) and there being no order under section 33(4) there could be no reference under section 66(1) or (2), and the appellate Court properly refused to entertain it". There is, of course, nothing in the decision itself which bears on the point now under discussion. But certain observations occurring at pages 474 and 475 were referred to by the learned Judges as leading to the conclusion that an order dismissing an appeal as barred by time would fall undersection 3O(2). Now, those observations came to be made by way of answer to a new contention put forward by the learned, Attorney General in support of the appeal. That contention was that the miscellaneous application presented to the Tribunal might be treated as an appeal against the order dated 19 11 1945, in which case the order passed thereon on 20 2 1946 would fall under section 33(4) and the reference would be com 179 petent. 'In disagreeing with this contention, this Court observed that the appeal to the Appellate Assistant Commissioner was incompetent under section 30(1), that even if it was competent, the order dated 19 11 1945 was not one contemplated by section 31, and there could be no appeal against such an order under section 33(1). Now, it should be noticed that the question actually referred under section 66(1) was the correctness and legality of the order passed in a miscellaneous application and not of any order made in an appeal preferred under section 33(1). In this context, the point sought to be raised by the learned, Attorney General did not arise at all for decision, and the observations in answer thereto cannot be read as a pronouncement on the question of the maintainability of the appeal, much less as a decision that an order dismissing an appeal as barred by limitation is one under section 30(2). Accordingly, the question whether an order dismissing an appeal as barred by limitation falls under section 30(2) or section 31 remains unaffected by the observations in Commis sioner of Income tax, Madras vs Mtt. section Ar. Aruna chalam Chettiar(1). Then again, under the provisions of the Act, limitation is not the only preliminary ground on which an appeal could be disposed of without a consideration of the merits. Section 30(3) provides that an "appeal shall be in the prescribed form and shall be verified in the prescribed manner". If the Appellate Assistant Commissioner holds that the appeal does not comply with the requirements of this enactment and rejects it on that ground, the order must be one made under section 31, since section 30(3) makes no provision for such an order, as does section 30(2) in the case of limitation. All the orders under section 31 being appealable under section 33, the order of dismissal for noncompliance with section 30(3) must also be appealable, and it was so decided in Maharani Gyan Manjari Kuari vs Commissioner of Income tax(2) . How is this view to be reconciled with the contention that section 31 contemplates only orders on the (1) ; (2) 180 merits of the assessment and not on preliminary issues? Vide also the decision in Kunwarji Ananda vs Commissioner of Income tax(1), which was followed in Maharani Gyan Manjari Kuari vs Commissioner of Income tax(2), and in Ramnarayana Das Mandal vs Commissioner of Income tax(3). There is thus abundant authority for the position that section 31 should be liberally construed so as to include not only orders passed on a consideration of the merits of the assessment but also orders which dispose of the appeal on preliminary issues, such as limitation and the like. The learned Solicitor General sought to get over these decisions by taking up the position that section 31(3) (a) construed in its literal and ordinary sense, conferred jurisdiction on the Appellate Assistant Commissioner only to pass orders on the merits of the assessment, that it was not therefore open to him to entertain any question which did not directly relate to such merits, and that accordingly he could not hear or decide any issue of a preliminary nature such as limitation, and dispose of the appeal on the ,basis of the finding on that issue. He conceded that this contention would run counter to numerous authorities, but argued that they were all wrong. Having given due consideration to this contention, we are of opinion that it is not well founded. Taking the plea of limitation which is what we are concerned with in this appeal when there is a judgment or order against which the statute provides a right of appeal but none is preferred within the time prescribed therefor, the respondent acquires a valuable right, of which he cannot be deprived by an order condoning delay and admitting the appeal behind his back. And when such an order is passed ex partehe has a right to challenge its correctness at the bearing of the appeal. That is the position under the general law (vide Krishnasami . Panikondar vs Ramasami Chettiar(4), and there is nothing in the provisions of the Income Tax Act, which enacts a different principle. (1) I L.R. 11 Patna 187; A.I.R. 1931 Patna 306; 5 I.T.C. 417. (2) [1944]12 I.T.R. 59. (3) (4) Mad. 412; 45 I.A. 25. 181 Therefore, if an appeal is admitted without the fact of delay in presentation having been noticed, clearly it must be open to the Department to raise the objection at the time of the hearing of the appeal. That would also appear to be the practice obtaining before. the Income tax Tribunal, as appears from the decisions cited before us, and that, in our opinion, is right. Similar considerations would apply to other objections of a preliminary character, such as one based on section 30, sub section (3). We should be slow to adopt a construction which deprives parties of valuable rights. We are therefore of opinion that contentions relating to preliminary issues are open to consideration at the time of the hearing of the appeal, and that the jurisdiction of the Appellate Assistant Commissioner is not limited to the bearing of the appeal on the merits of the assessment only. In this view, the orders of the Appellate Assistant Commissioner holding that there were no sufficient reasons for excusing the delay and rejecting the appeals as time barred would be orders passed under section 31 and would be open to appeal, and it would make no difference in the position whether the order of dismissal is made before or after the appeal is admitted. The question referred must accordingly be answered in the affirmative. This appeal will therefore be allowed, and the order of the court below set aside. The appellant will have his costs here and in the court below.

The appellant firm filed appeals against orders assessing it to income tax and super tax for the years 1945 1946 and 1946 1947 beyond the time prescribed by section 30(2) of the Income tax Act. The appeals were numbered, and notices were issued for their hearing under section 31. At the hearing of the appeals before the Appellate Assistant Commissioner, the Department took the objection that the appeals were barred by time. The appellant prayed for condonation of delay, but that was refused, and the appeals were dismissed as time barred. The appellant then preferred appeals against the orders of dismissal to the Tribunal under section 33 of the Act, and the Tribunal dismissed them on the ground that the orders of the Assistant Commissioner were in substance passed under section 30(2) and not under section 31 of the Act and that no appeal lay against them under section 33 of the Act. On a reference under section 66(1) of the Act the High Court held that the orders of the Appellate Assistant Commissioner were made under section 30(2) and were not appealable under section 33 of the Act. On appeal by special leave to the Supreme Court the question for determination was whether an order dismissing an appeal presented under section 30 as out of time was one under section 30(2) or under section 31 of the Act because if it was the former there was no appeal provided against it; if it was the latter it was open to appeal under section 33. Held that the orders of the Appellate Assistant Commissioner fell within section 31. A right of appeal is a substantive right and is a creature of the statute. section 30(1) confers on the assessee a right of appeal against certain orders and an order of assessment under section 23 is one of them. The appellant had therefore a substantive right under section 30(1) to prefer appeals against orders of assessment made by the Income Tax Officer. 167 An appeal presented out of time is an appeal and an order dismissing it as time barred is one passed in appeal. Section 31 is the only provision relating to the hearing and disposal of appeals and if an order dismissing an appeal as barred by limitation as in the present case is one passed in appeal it must fall within section 31 and as section 33 confers a right of appeal against all orders passed under section 31, it must also be appealable. To fall within section 31 it is not necessary that the order should expressly address itself to and decide on the merits of the assessment and it is sufficient that the effect of the order is to confirm the assessment as when the appeal is dismissed on a preliminary point. An order rejecting an appeal on the, ground of limitation after it had been admitted is one under section 31, though there is no consideration of the merits of the assessment. Held therefore that the orders of the Appellate Assistant Commissioner holding that there were no sufficient reasons for excusing the delay and rejecting the appeals as time barred would be orders passed under section 31 and would be open to appeal, and it would make no difference in the position whether the orders of dismissal were made before or after the appeals were admitted. Commissioner of Income tax, Madras vs Mtt. `r. section Ar. Arunachalam Chettiar, ([1953] S.C.R. 463), explained. Case law discussed.

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Petitions Nos. 1854 60/81,2125, 2224, 2829, 3321, 3341, 3360, 3604, 4486, 3737, 3774, 4128, 4404, 4415, 4428, 4429, 4430, 4431, 4432, 4436, 4437, 6310, 7090 92, 7138, 7687, 9927, 8481 82, 6790 91182, 5356 64/83, 1868, 3929/81, 531 32, 533 534, 3957, 3975, 4574 4583, 8004, 8007 8008 and 8047/83, 5327, 5622 24, 7510 11, 8075/83, 7490 92/82, 2008, 2328/81, 2858, 2859, 4920 4923, 5616, 6065 73, 5818, 5193 5201/82, 8341 8343, 3149 50, 8381 8382, 9927/82, 377 378, 535/83, 8347 8348, 3560/83, 8003, 8005, 8006/83, 8787 8788/83 and 9011 13 of 1983. Under Article 32 of the Constitution of India WITH Special Leave Petition Nos. 11243 46 of 1983. From the Judgment and order dated the 8th July, 1983 of the Karanataka High Court in Writ Petition Nos. 11268 to 11271 of li: 1981, For The Appearing Petitioners Shanti Bhushan, Y.S. Chitale, K.K Venugopal KN. Bhat, V.K Verma, section Ravindra Bhat, N. Ganpathy, C.S. Vaidayanathan, N. Nattar, R.B. Datar, A.V. Rangam, V.G. Gupta, T.V.S.N. Chari A.T.M. Sampath, Vineet Knmar, D.P. Singh, Miss H. Wahi, B.N. Tawakley, section Srivinasan, P.R. Ramashesh, P.N. Ramlingam, S.R. Srivastava and Rathin Das For The Appearing Respondents R.P. Bhatt, V.S. Desai, Harbans Lal, Swaraj Kaushal, M.N., Shroff, G.V. Subba Rao, N.S. Das Bahl and R.N. Poddar The Judgment of the Court was delivered by CHINNAPPA REDDY, J. Prior to 1969 there was no concept of what may be termed as 'An All India ' permit which would be valid 627 for the whole of India and which would enable the holder of the permit to ply his contract carriage throughout India. Section 63 (1) of the , provides that, except as may be otherwise prescribed, a permit granted by the regional transport authority of any one region shall not be valid in any other region, unless the permit has been counter signed by the regional transport authority of that other region, and a permit granted in any one state shall not be valid in any other state unless counter signed by the State Transport Authority of that other state or by the regional transport authority concerned. The procedure prescribed for obtaining the counter signature of the transport authorities of other regions and states was cumbersome and was not conducive to the development of all India or inter state tourist traffic. In order to remedy the situation and promote all India and inter state tourist traffic, the Parliament amended the and introduced sec. 63 (7) by amending Act 56 of 1969. This new provision enables the State Transport Authority of every state to grant permits valid for the whole or any part of India, in respect of such number of tourist vehicles as the Central Government may, in respect of that state specify in that behalf. Preference is to be given, to applications for permits from the India Tourism Development Corporation, a State Tourism Development Corporation, a State Tourist Department and such operators and tourist cars or such travel agents as may be approved in that behalf by the Central Government. This was but . the first basic step towards encouraging all India or inter state tourist traffic. There were other hurdles to be cleared before any scheme for grant of all India permits could be effectively implemented. One of the hurdles was this: Under Entry 57 of List II of the Seventh Schedule to the Constitution, the State Legislature is empowered to levy "Taxes on vehicles, whether mechanically propelled or not, suitable for use on roads, including tramcars subject to the provisions of entry 35 of list III". Entry 35 of list III reads: "Mechanically propelled vehicles including the principles on which taxes on such vehicles are to be levied". A coherent reading of Entry 57 of list II and Entry 35 of list III makes it abundantly clear that the power to levy taxes on vehicles suitable for use on roads vests solely in the State Legislature though it may be open to the Parliament to lay down the principles on which taxes may be levied on mechanically propelled vehicles. In other words the Parliament may lay down the guide lines for the levy of taxes on mechanically propelled vehicles but the right to levy such taxes vests solely in the 628 State Legislature. Now there are twenty two States and nine Union Territories in India, specified in the first schedule to the Constitution. Each of the States has the right, within its territory. to levy a tax on motor vehicles. If a tourist vehicle holding an 'All India Permit ' under sec. 63 (7) of the chooses to visit half a dozen states in the course of a round trip from, say, Delhi to . Kanyakumari or Srinagar to Hyderabad tax will ordinarily have to be paid in all the half a dozen or so States. The burden will surely be intolerable and the whole object of sec. 63 (7), namely promotion of all India or inter state tourist traffic will be frustrated. The Central Government was alive to the problem and referred the matter to the Transport Development Council for its advice. The Transport Development Council is a non statutory body constituted by the Central Government and consists of the representatives of the Governments of all the States. The Transport Advisory Council advised the Central Government that there should be a single state taxation on tourist vehicles holding permits under sec. 63 (7), that is, tax should be paid in the 'home state ' and the vehicle should be exempted from payment of tax in states other than the home state. This could be done by the respective State Governments issuing notifications under their taxation legislation exempting tourist vehicles registered in other states from payment of tax, if tax has already been paid in the home state. The Government of India accepted the E suggestion and requested the State Governments and Union Administrations to issue necessary notifications. The suggestion ran into trouble right from the start. While the Governments of Andhra Pradesh, Bihar, Goa, Daman and Diu, Maharashtra, Nagaland and Uttar Pradesh readily agreed to issue such notifications on the basis of reciprocity, there was no such ready response from some other states. The Government of Karnataka was in particular opposed to the grant of any such exemption. Finally, the Government of Karnataka and the Governments of other states too were persuaded to agree to issue such notifications. In the meanwhile the Government of India, in exercise of its power under sec. 63 (7) of the , issued notifications specifying the number and class of tourist vehicles in respect of which each of the State Transport authorities of the States could grant All India permits. The last of the notifications specified that each State Transport authority could issue 50 permits for tourist omnibuses. Pursuant to the request of the Central Government to which all the State Governments finally agreed, notifications were issued 629 exempting tourist vehicles holding permits under sec. 63 (7) from payment of tax, if tax had been paid in the home state. We are particularly concerned in these cases with the notifications issued from time to time by the Government of Karnataka, since that is where the trouble started. The first of the notifications issued by the Government of Karnataka was on September 18, 1972 and it exempted, from payment of taxes payable under the Karnataka Motor Vehicles Taxation Act 1957, tourist motor Cabs and tourist omnibuses registered in the States other than the State of Karnataka and plying in the State of Karnataka under permits which were valid without counter signature in the state of Karnataka, provided that the tax payable in respect of such vehicles had been paid to the State in which the vehicles were registered and provided further that the said State granted similar exemption to tourist motor cabs and tourist omnibuses whose permits were endorsed in the State of Karnataka under Rule 123 A of the Karnataka Motor Vehicles Rules. On July IS, 1976, the Government of Karnataka issued a notification reducing the tax payable under the Motor Vehicles Taxation Act, 1957, in respect of tourist vehicles for which permits had been issued under sec. 63 (7) or endorsement granted under Rule 123 A of the Karnataka Motor Vehicles Rules. On December 20, 1976, a further notification was issued in partial modification of the earlier notification dated September 18, 1972. Exemption from payment of tax was given to tourist motor cabs and tourist omnibuses registered in States other than the State of Karnataka and plying in the State of Karnataka under the authority of a permit granted under sec. 63 (7), provided that the tax payable in respect of the vehicle to the State in which it was registered had already been paid and provided further that similar exemption from payment of tax was granted in respect of similar vehicles of the State of Karnataka. This scheme for the grant of 'All India Permits ', designed as it was to promote all India and inter state tourist traffic. soon fell into abuse at the hands of scheming transport operators. Within the scheme itself lay the seeds for abuse. The scheme enabled the State Transport Authority of each State, to issue fifty all India permits, uniformly, irrespective of the size of the State, its resources, its accessibility, its communications, its facilities, the availability of transport services and operators in the State with the necessary expertise, experience and finance to operate all India tourist services and a host of such other factors. Apparently it was thought undesirable to make a distinction between State and State on what were perhaps thought to be elusive criteria and possibly the scheme 630 was expected to give a boost to the transport business in the smaller and less advanced States. And, of course, it was necessary to obtain the agreement and cooperation of all the States. But, the result was that transport operators from, big and comparatively prosperous and advanced States, well versed in the intricacies of the transport business very soon flocked to small and comparatively poor and less advanced States like Manipur and Nagaland to apply for and obtain all India permits from the State Transport Authorities of these States. It is conceded before us that a large number of persons holding all India permits from some of these small States do not belong to these States at all, but are transport operators coming from far off States. Another factor which appears to have influenced the flocking of transport operators from other States to States like Nagaland and Manipur is the nationalization of contract carriage service in States like Karnataka. Once the permits were obtained and the vehicles were registered, these small States saw the last of the operators. Having obtained the permits, the operators with their vehicles flocked back to the parent State of the operators (not of the vehicles) or to a State like Karnataka where all contract carriages having been nationalized no private contract carriage was available and there was therefore a great opportunity to ply the vehicles as contract carriages within the State. States like Karnataka were swamped by tourist vehicles from all over the country, registered in other States. These tourist vehicles practically 'colonised ' Karnataka and like States and started operating more or less as stage carriages within the particular State, never and rarely if ever, moving out of the State. There was no thought or Question of undertaking all India or interstate tours, and out went the worthy object of sec. 63(7). Quick and easy money with the least trouble and in the shortest time, by whatever method, was the only object. In the counter affidavit filed on behalf of the State of Karnataka in some of the Writ Petitions, it is stated. "Though the vehicles were registered outside the State of Karnataka, they have been permanently stationed in the State of Karnataka and particularly at Bangalore, and the vehicles were all being plied as Stage Carriages. Though All India Tourist Permits were obtained by the residents of other states, the permits were used by taking the vehicles and keeping them in the State of Karnataka. The operators run their tourist buses at fixed timings 631 from particular place like the Stage carriages operated by the Karnataka State Road Transport Corporation (hereinafter called the K.S.R.T.C.) and other private state carriage/ operators. On checking of the vehicles and verification of the passengers, it was found that the passengers found in the vehicle were not genuine tourists and the drivers or the persons incharge of the vehicles were not in a position to produce the trip sheet, name list with whom they entered into contract. It was also found that the passengers found in the vehicles had boarded the buses from one point without any contract or otherwise and without they being tourists. The passengers found in the tourist buses are regular passengers going from one place to another for purposes other than tourism. These vehicles were found catering to the needs of general travellers who can make use of the Stage Carriages operated by the K.S.R.T.C., or other private stage carriage operators. The respondent produces herewith statements as ANNEXURF.S 1 to 9 showing the clandestine operation of the vehicles covered by All India Tourist Permits, the remarks and irregularities noticed by the Motor Vehicles Inspectors while checking the vehicles covered by All India Tourist permit, the frequent detection of these vehicles running as Stage Carriages by collecting individual fares and picking passengers from one point and setting down them at another point and bringing different passengers in the return journey. From the statements enclosed, it is clear that the operators of the tourist buses covered by All India Tourist permits have misused the Tourist Buses by running them as regular stage carriages, competing with the KSRTC buses and other private stage carriages within the State. As a result of indiscriminate misue of the Vehicles as Stage Carriages even though the permits were obtained under Section 63 (7) of the Central Act for Tourism, the State Government has suffered considerable loss in Revenue. These buses actually made use of the passengers which would have normally gone to the KSRTC buses and other private carriages. The very object of obtaining permits under section 63(7) of the Central Act, which intended to promote tourism has been misued by these operators of the Tourists buses by plying their vehicles regularly as stage carriages. Most of the 632 permits obtained under Section 63 (7) of the Central Act in the States other than the State of Karnataka are made use of for the purported use of running the tourist buses but actually the permits were misused to run the tourist vehicle either as stage carriages or as contract carriages". A survey made by the Transport Commissioner of Maharashtra revealed a similar state of affairs. The Transport Commissioner submitted a report to the Government of Maharashtra, a copy of which has been made available to us. It is stated in the report, "Our estimate is that out of these 1300 permits anything between 300 to 400 buses are operating in Maharashtra with Bombay as the main centre. Most of these buses for all practical purposes operate as stage carriage services masquerading as contract carriages. In Maharashtra the ordinary passenger transport by stage carriages and contract carriages has been completely nationalised. The All India Tourist Buses on the other hand are exploiting the loopholes available in the law and operate point to point passenger services on routes where the volume of traffic is heavy viz. routes like Bombay Kolhapur, Bombay Mangalore (Mangalore), Bombay Panaji, Bombay Belgaum, Bombay Ahmedabad and Bombay Indore . . . . . . . . . . . . . . . ". "On 9/10th April 1983, the Transport Commissioner had personally visited the Charoti Check Naka which is our border check post bordering Gujarat on the Bombay Ahmedabad road. From the records of the check post he found that as many as 115 All India Tourist Buses are regularly playing on this route. After making an analysis of these 115 All India Tourist Buses, ' he found that 41 permits had been issued by the State Transport Authority of Manipur. 17 had been issued by State Transport Authority Nagar Haveli, 8 by the State Transport Authority, Meghalaya and 5 by the State Transport Authority Nagaland. A large number of All India Tourist Buses operating with their base in Bombay appear to have been issued by Manipur Nagaland and the Union Territory of Dadra Nagar Haveli". 633 The petitioners, who are transport operators holding all India permits, deny that any of them was guilty of any malpractice or misuse of the permits held by them. But, notwithstanding the petitioners ' denial we do not have the slightest doubt that the allegations of misuse and malpractice made in the counter affidavit, filed on behalf of the Karnataka Government, are generally and substantially correct. Complaints about the abuse of the scheme appear to have been made to the Central Government and the Transport Advisory Council also. We are also told that the question of meeting the challenge posed by these abuses is receiving the attention of the Central Government. The Government of Karnataka, apparently the worst sufferer, reacted sharply. The concession given to the holders of all India permits by way of exempting the all India tourist Vehicles, registered in other States, from payment of the Karnataka Tax, if tax had already been paid in the home State was withdrawn by a notification dated 31st March, 81. It is this notification and the consequences of the notification that are in question in these several Writ Petitions. We are informed that the State of Andhra Pradesh has also issued a notification similar to that of the State of Karnataka withdrawing the exemption which it had granted earlier to vehicles operating on permits issued under sec. 63 (7) and registered in other States. Other states have not withdrawn the exemption previously granted by them to vehicles registered in other states and operating on permits issued under sec. 63(7). But as the exemption granted by most of them is on a reciprocal basis, the withdrawal of exemption by the States of Karnataka and Andhra Pradesh has the effect of making vehicles registered in Karnataka and Andhra Pradesh, immediately subject to payment of tax in every one of those States through which they pass. The collection of tax by the other States is also resisted in these writ petitions. The power of the State Legislature to levy the particular tax, the power of the State Government to grant exemption from payment of tax under the authority delegated to it by the Legislature and the implied power of the State Government to withdraw an exemption granted by it are conceded. Yet a number of ingenious and platitudinous submissions have been though we must confess that many of them have only to be stated to be rejected. Some of them served no better purpose than occupy the time of the Court, time which has become dear and precious because of the mountainous arrears of cases awaiting the decision of this Court. We do wish it is remembered that the Supreme Court is the highest Court in the land and its time is not to be frittered away in 634 listening to hopeless arguments advanced just for the sake of argument. The time has come for judges and lawyers to make a determined effort to chop certain arguments and prone certain others judgments following suit. In fairness to the counsel who appeared in the cases before us, we must say that everyone was brief and none over stated his case. It was submitted that see. 63 (7) of the was designed to promote All India and inter state tourist traffic and thus to advance trade, Commerce and inter course throughout the territory of India. It was implicit in sec. 63 (7) that the States would exercise their power of taxation in such a way as not to impose an additional burden on tourist Vehicles registered in other states and plying on permits issued under sec. 63(7), over and above the tax paid in the home State. In other words, it was implicit that all the States would exempt from taxation tourist vehicles registered in other States and plying on permits issued under sec. 67 (7) was withdrawing the exemption, the object of sec. 63 (7) was defeated and therefore, freedom of trade, Commerce and inter course throughout the territory of India, guaranteed by article 301 of the Constitution was impaired. The withdrawal of exemption was, therefore, unconstitutional and bad in law. The transport operators of Karnataka who were not directly hit by the withdrawal of the exemption by the Government of Karnataka advanced a subtler argument and suggested that they were in fact the worst hit. The argument was that though despite the withdrawal of the exemption, they were paying no more tax to the State of Karnataka than they were paying hitherto, the withdrawal of the exemption had created a situation which denied them the benefit of exemption granted by the Governments of all others States, since those exemptions were reciprocal in condition. The situation indirectly created by the action of the Government of Karnataka imposed an intolerable burden on them by compelling them to pay taxes in every State other than Karnataka through which their vehicles passed and thus virtually denied to them the freedom of trade, Commerce and inter course throughout the territory of India guaranteed by article 301 of the Constitution. We are wholly unable to see any force in these submissions, The learned counsel for the parties on either side invited our atten 635 tion to the Automobile Transport (Rajasthan) Ltd. vs The State of Rajasthan & Ors Bolani Ores Ltd. vs State of Orissa(2), G.K. Krishnan vs State of Tamil Nadu(9) International Tourist Corporation vs State of Haryana(4) and Malwa Bus Service Pvt. Ltd. vs State of Punjab(5) to explain the extent and the limits of the freedom of trade, commerce and intercourse throughout the territory of India proclaimed by article 301 of the Constitution. We do not propose to refer to any of these cases since the law appears to us to be well settled: Taxes of a compensatory and regulatory character are outside the expanse of article 301 of the Constitution. Regulatory measures and compensatory taxes far from impeding the free flow of trade and commerce, often promote such free flow of trade and commerce by creating agreeable conditions and providing appropriate services. All that is necessary to uphold a tax which purports to be or is claimed to be a compensatory tax is "the existence of a specific, identifiable object behind the levy and a nexus between subject and the object of a levy". ( ') "If the object behind the levy is identifiable and if there is sufficient nexus between the subject and the object of the levy, it is not necessary that the money realised by the levy should be put into a separate fund or that the levy should be proportionate to the expenditure. There can be no bar to an inter mingling of the revenue realised from regulatory and compensatory taxes and from the taxes of a general nature nor can there be any objection to more or less expenditure being incurred on the object behind the compensatory and regulatory levy than the realisation from the levy".(6) It should be patent that "it would ordinarily be well nigh impossible to identify and measure with any exactitude the benefits received and the expenditure incurred and levy the tax according to the benefits received and the expenditure incurred". Nor is the court to interpose itself by assuming the role of a cost accountant and attempt to balance meticulously the cost of the services, benefits and facilities against the realisation from the levy. And, if the levy as a whole is justified by the need generally, it does not have to be separately justified with reference to every group of persons claiming 636 to require and receive less service than others. Once the nexus between the levy and service is seen, the levy must be upheld unless the compensatory character is shown to be wholly or partly, a mere mockery and in truth a design which is destructive of the freedom of inter state trade, commerce and inter course. By virtue of the power given to them by Entries 56 and 57 of List II every one of the States has the right to make its own legislation to compensate it for the services, benefits and facilities provided by it for motor vehicles operating within the territory of the State. Taxes resulting from such legislative activity are by their very nativity and nature, cast and character, regulatory and compensatory and, are therefore, not within the vista of article 301, unless, as we said, the tax is a mere pretext designed to injure the freedom of interstate trade, commerce and intercourse. The nexus between the levy and the service is so patent in the case of such taxes that we need say no more about it. The Karnataka Motor Vehicles Taxation Act and the Motor Vehicles Taxation Acts of other States are without doubt regulatory and compensatory legislations outside the range of article 301 of the Constitution. It is true that the object of enacting sec. 63 (7) by the Parliament was to promote all India and inter state tourist traffic. But 'taxes on vehicles . suitable for use on roads ' is a State legislative subject and it is for the State Legislature to impose a levy and to exempt from the levy. True again, Entry 57 of the State List is subject to Entry 35 of the Concurrent List and, as explained by us at the outset, it is therefore open to the Parliament to lay down the 17 principles on which taxes may be levied on mechanically propelled vehicles. But the Parliament while enacting section 63 (7) of the refrained from indicating any such principles, either expressly or by necessary implication. The State 's power to tax and to exempt was left uninhibited. It may be that a a State legislation, plenary or subordinate, which exempts "non home state tourist vehicles" from tax would be advancing the object of sec. 63 (7) of the and accelerating inter state trade, commerce and intercourse. But merely by Parliament legislating sec. 63 (7), the State Legislatures are not obliged to fall in line and to so arrange their tax laws as to advance the object of sec. 63 (7), be it ever so desirable. The State is obliged neither to grant an exemption nor to perpetuate an exemption once granted. There is no question of impairing the freedom under article 301 by refusing to 637 exempt or by withdrawing an exemption. Not to pat on the back is not to stab in the back. True, straw by straw, the burden of taxation on tourist vehicles increases as each State adds its bit of straw, but, then, each State is concerned with its coffers and has the right to tax vehicles using its roads; and, the contribution which a tourist carriage is required to make to its treasury is no more than what other contract carriages are required to make. We are firmly of the view that there is no impairment of the freedom under article 301. The special submission on behalf of the 'Karnataka operators ' that the withdrawal by the Karnataka Government of the exemption granted to 'outsiders ' has resulted in the Karnataka operators having to pay tax in every State in the country and, therefore, the withdrawal has impaired the freedom under article 301 is but the same general sub mission, seen through glasses of a different tint. It does not even have the merit that the withdrawal of the Karnataka exemption affects them directly. The submission is rejected. One of the submissions made to us was that if there was a misuse of the all India permits, the remedy was to punish the wrong doers by taking appropriate action against the wrong doers by cancelling the permit, if necessary, but not to withdraw the benefit of the exemption altogether, even in the case of honest operators. That is a matter for the Legislature and its delegate to decide but not for the court. If the situation had become so malignant that drastic action was called for, it is not for the court to substitute its judgment to say that the object could perhaps be well achieved by adopting a less drastic procedure. It was submitted that all India tourist vehicles do not use the roads of the State as much as the contract carriages operating in the State and therefore, the State was wrong in treating them alike. It was said that treatment of unequals as equals had resulted in an infringement of article 14 of the Constitution. It was also submitted that vehicles holding inter State permits under inter state agreements were still exempt from tax and this was also a violation of article 14 of the Constitution. Another contention raised was that there was some sort of promissory estoppel which prevented the State Government from withdrawing the exemption. Yet another argument was that the withdrawal of the exemption was arbitrary and therefore, judicial review was necessary. These and other like submissions which were made to us in our opinion, fall in the category of arguments which. 638 we mentioned earlier, have only to be stated to be rejected. The answers are self evident. , The submissions are totally without merit and we see no justification for increasing the length of our judgment by further futile discussion. All the Writ petitions are dismissed with costs and the interim orders are vacated. H.S.K. Petitions dismissed.

In order to promote all India and inter state tourist traffic, the Parliament amended the by introducing in it sec. 63(7) which enabled the State Transport Authority of every State to grant permits valid for the whole or any part of India, in respect of such number of tourist vehicles as may be specified by the Central Government. Later the Central Government notified that each State Transport Authority could issue 50 all India permits for tourist omnibuses. As each State had the right, within its territory, to levy a tax on a motor vehicle, it was found that unless tourist vehicles with all India permits were exempted from tax by other States than their home state the object of sec. 63(7) would be frustrated. Therefore, the Central Government made a request in this behalf to all the State Governments. In pursuance of that request the Government of Karnataka exempted tourist vehicles holding permits under sec. 63(7) from payment of tax, provided the tax payable to the State in which the vehicle was registered had already been paid and provided further that similar exemption from payment of tax was granted in respect of similar vehicles to the State of Karnataka. Many transport operators from big and comparatively prosperous States flocked to some small and comparatively poor and less advanced States and after getting all India permits from them started plying their vehicles in other States like Karnataka and Maharashtra more or less as regular stage carriages. Having found that the transport operators were misusing the all India permits and indulging in certain malpractices, the Government of Karnataka withdrew the exemption from payment of tax granted earlier. The petitioners, who were transport operators holding all India permits, challenged the withdrawal cf exemption as unconstitutional and bad in law. The petitioners submitted that sec. 63(7) of the was designed to promote all India and inter state tourist traffic and thus to advance trade, 625 commerce and inter course throughout the territory . Of India. By withdrawing the exemption, the object of sec. 63(7) was defeated and therefore, freedom of trade. Commerce and inter course throughout the territory of India, guaranteed by article 301 of the Constitution was impaired. Dismissing the petitions, ^ HELD: By withdrawing the exemption there is no impairment of the freedom under article 301. [637 B] Taxes of a compensatory and regulatory character are outside the expanse of article 301 of the Constitution. Regulatory measures and compensatory taxes far from impeding the free flow of trade and commerce, often promote such free flow of trade and commerce by creating agreeable conditions and providing appropriate services. All that is necessary to uphold a tax which purports to be or is claimed to be a compensatory tax is, the existence of a specific, identifiable object behind the levy and a nexus between subject and the object of a levy. Once the nexus between the levy and service is seen, the levy must be upheld unless the compensatory character is shown to be wholly or partly a mere mockery and in truth a design which is destructive of the freedom of inter state trade, commerce and inter course. [635 C D, 636 A] International Tourist Corporation vs State of Haryana, ; referred to. By virtue of the power given to them by Entries 56 or 57 of List II every one of the States has the right to make its own legislation to compensate it for the services, benefits and facilities provided by it for motor vehicles operating within the territory of the State. Taxes resulting from such legislative activity are by their very nativity and nature, cast and character, regulatory and compensatory and, are therefore, not within the vista of article 301, unless the tax is a mere pretext designed to injure the freedom of inter state trade, commerce and inter course. The nexus between the levy and the service is so patent in the case of such taxes that one need say no more about it. The Karnataka Motor Vehicles Taxation Act and the Motor Vehicles Taxation Acts of other States are without doubt regulatory and compensatory legislation outside the range of article 301 of the Constitution. [635 B D] `Taxes on vehicles . suitable for use on roads ' is a State legislative subject and it is for the State Legislature to impose a levy and to exempt from the levy. Entry 57 of the State List is subject to Entry 35 of the Concurrent List and, it is therefore open to the Parliament to lay down the principles on which taxes may be levied on mechanically propelled vehicles. But the Parliament while enacting sec. 63(7) of the refrained from indicating any such principles, either expressly or by necessary implication. The State 's power to tax and to exempt was left uninhibited. It may be that a State Legislation, plenary or subordinate, which exempts "non home state tourist vehicles" from tax would be advancing the object of sec. 63(71, but 626 the State Legislature are not obliged to fall in line line and to so arrange their tax laws as to advance the object of sec. 63(7), be it ever so desirable. The State is obliged neither to grant an exemption nor to perpetuate an exemption once granted. There is no question of impairing the freedom under article 301 by refusing to exempt or by withdrawing an exemption. [636 E 637 A]

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: Writ Petition (Crimi nal) Nos. 757,759 & 760 of 1990 (Under Article 32 of the Constitution of India.) N. Devarajan and V. Krishnamurthy for the Petitioners. Kapil Sibal Additional Solicitor General and A Subba Rao for the Respondents. The Judgment of the Court was delivered by AHMADI, J. Three persons, namely, (1) M.M. Shahul Hameed @ Gani Asiam, (2) Haja Mohideen @ Shahul Hameed Asarudeen and (3) Naina Mohammed @ Raja Mohd. Zafar were intercepted by the officers of Department of Revenue Intelligence on 5th October, 1989 at the Sahar International Airport, Bombay, as they were suspected to be involved in smuggling activities. They were escorted to the office of Directorate of Revenue Intelligence, Waldorf, Colaba, Bombay, where they were interrogated. On interrogation it was found that M.M. Shahul Hameed was to board flight No. CX 750 to Hongkong while the other two were to proceed to Dubai by Emirate Flight No. E 5 10 on that day. The said three persons were searched. Two balloon covered rolls secreted in the rectum of M.M. Shahul Hameed were removed and were found to contain diamonds and precious stones weighing about 905.70 carats and 77.37 carats, respectively. The said diamonds and precious stones valued at about Rs.70 lacs were attached under a Panchnama. In addition to the same foreign currency of the value of Rs. 10,706 was also recovered and attached. His passport was also seized. The other two persons were found to have swallowed 100 capsules each containing foreign currency of the total value of Rs.6,99,930. The capsules were extracted from their persons and the currency was recovered and attached under a Panchnama. In addition thereto foreign currency of the value of Rs. 1,466.50 was also found on their person during their search and the same too was attached and seized. Their passports were also seized. 460 All the aforesaid three persons belonged to Village Namboothalai of District Ramnath, Tamilnadu. Their state ments were recorded on the same day i.e. 5th October, 1989. M.M. Shahul Hameed disclosed that his cousin Kasim, owner of a film company at Madras, had offered him a sum of Rs.4,000 for smuggling diamonds, etc., to Hongkong. On his agreeing, he was trained and was sent to Bombay with one Mohammad who was to introduce him to Mohideen and Rahim who were supposed to entrust him with the diamonds, etc., to be carried to Hongkong. Accordingly he came to Bombay with the said Moham mad and was duly introduced to the aforesaid two persons at a fiat in Chembur where he stayed. The said Mohideen and Rahim arranged for his passport and ticket and gave him two roll wrapped in balloons containing diamonds, etc., on the night of 4th October, 1989 for being carried to Hongkong. As per the training he had received, he concealed these bal loons in his rectum before leaving for the Airport to catch the flight to Hongkong. In addition to the same he was given a paper on which something was scribbled in Arabic. In the course of his interrogation he admitted the recovery and seizure of diamonds and precious stones and also gave the description of Kasim and Rahim. On 12th October, 1989 he wrote a letter retracting his statement made on 5th October, 1989. However, in his further statement recorded on 19th October, 1989 he admitted that his signature was obtained on the letter of 12th October, 1989 without disclosing the contents thereof to him and that his earlier statement of 5th October, 1989 was both voluntary and correct. Inciden tally the statement of retraction was rejected by the Deputy Director of Revenue Intelligence on 20th October, 1989. The other two persons whose statements were also record ed on 5th October, 1989 disclosed that they were both work ing at a Tea shop in Madras and knew Mohideen and Rahim who too were working with them. Rahim had suggested that they would be paid Rs.2,000 each if they were willing to smuggle foreign currency to Dubai by swallowing capsules containing the same. On their agreeing they too were trained and were then taken to Bombay where they were lodged in Vimi Lodge at Bhindi Bazar. On 4th October, 1989 they were given an tick ets for travel to Dubai and 100 capsules each containing foreign currency. They swallowed the capsules and left by taxi for the Airport in the early hours of 5th October, 1989. They too were given a paper containing some scribbling in Arabic by Mohideen and Rahim. While they were waiting to catch their flight, they were intercepted as stated earlier. Both of them also signed letters dated 12th October, 1989 retracting their statements made under Section 108 of the Customs on 5th October, 1989. However, in their subsequent statement of 19th October, 1989 they admitted that they were not aware of the contents of the letter of 12th October, 1989. They further admitted that what they had disclosed on 5th October, 1989 was both voluntary and correct. Their statements of retraction were also rejected by the Deputy Director of Revenue Intelligence on 20th October, 1989. All the three aforesaid persons were produced before the learned Additional Chief Metropolitan Magistrate, Esplanade. Bombay on 6th October, 1989. They were taken on remand by the police for investigation. Barring M.M. Shahul Hameed, the other two had preferred applications for bail which were kept for hearing initially on 27th October 1989 but the date was later extended upto 16th November, 1989. Their co accused, Kasim was arrested on 6th October. 1989 and was produced before the Additional Chief Metropolitan Magistrate, Egmore, Madras. He too was taken on remand. On 19th October, 1989 he too had preferred a bail application which was kept pending as the investigation was in progress. Since the period of remand was extended from rime to time in the case of all the aforesaid four persons finally upto 16th November, 1989, the bail applications were also fixed for hearing on that date. In the meantime on 10th November, 1989 the Joint Secretary to the Government of India in the Ministry of Finance, Department of Revenue, passed an order under sub section (1) of Section 3 of the (hereinafter called 'the Act ') directing the detention of all the three persons 'with a view to preventing him from smuggling goods '. They were directed to be detained in the Central Prison. Bombay. This order of detention, though passed on 10th November. 1989 was in fact served on the three detenus on 21st November, 1989. i.e., after a lapse of about 11 days. The grounds of detention dated 10th November, 1989 were also served on the three the same day. Thereafter the Additional Secretary to the Government of India in the Ministry of Finance, Department of Revenue made a declara tion concerning the three detenus dated 20th December 1989, under sub section (1) of section 9 of the Act after record ing a satisfaction that they were likely to smuggle goods out of and through Bombay Airport. an area highly vulnerable to smuggling within the meaning of Explanation 1 to that section. This declaration was served on the detenus within the time allowed by law. Thereupon. the wives of all the three detenus filed separate habeas corpus writ petitions under Article 226 of the Constitution in the High Court of 462 Bombay on 19th January. These writ petitions were numbered 66, 67 and 68 of 1990. Four contentions were raised before the High Court, namely, (1) since the detenus were in custody their detention was unwarranted; (2) the detaining authority had betrayed nonapplication of mind by describing the offence with which the detenus were charged as 'bail able '; (3) the representation of the detenus dated 18th December, 1989 had not been disposed of promptly and there was inordinate delay; and (4) the authorities had failed to supply certain crucial documents called for by the detenus thereby depriving them of the opportunity of making an effective representation. All the three petitions came up for hearing before a Division Bench of the High Court on 21st March, 1990. The High Court rejected all the four contentions and dismissed the writ petitions. The said dismissal has led to the filing of Special Leave Petitions (Criminal) Nos. 73 1,732 & 733 of 1990. Besides filing the said special leave petitions under Article 136 of the Con stitution, the wives of the detenus have also filed separate Writ Petitions (Criminal) Nos. 757,759 and 760 of 1990 under Article 32 of the Constitution. We have heard the three special leave petitions as well as the three writ petitions together and we proceed to dispose them of by this common judgment. The learned counsel for the petitioners raised several contentions including the contentions negatived by the High Court of Bombay. It was firstly contended that the detenus had made representations on 18th December, 1989 which were rejected by the communication dated 30th January, 1990 after an inordinate delay. The representations dated 18th Decem ber, 1989 were delivered to the Jail Authorities on 20th December, 1989. The Jail Authorities despatched them by registered post. 23rd, 24th and 25th of December, 1989 were non working days. The representations were received by the COFEPOSA Unit on 28th December, 1989. On the very next day i.e 29th December, 1989 they were forwarded to the sponsor ing authority for comments. 30th and 31st December, 1989 were non working days. Similarly 6th and 7th January, 1990 were non working days. The comments of the sponsoring au thority were forwarded to the COFEPOSA Unit on 9th January, 1990. Thus it is obvious that the sponsoring authority could not have received the representations before 1st January, 1990. Between 1st January, 1990 and 8th January, 1990 there were two non working days, namely, 6th and 7th January, 1990 and, therefore, the sponsoring authority can be said to have offered the comments within the four or five days available to it. It cannot, therefore, be said that the sponsoring authority was guilty of inordinate delay. The contention that the views of the sponsoring authority were 463 totally unnecessary and the time taken by that authority could have been saved does not appeal to us because consult ing the authority which initiated the proposal can never be said to be an unwarranted exercise. After the COFEPOSA Unit received the comments of the sponsoring authority it dealt with the representations and rejected them on 16th January, 1990. The comments were despatched on 9th January, 1990 and were received by the COFEPOSA Unit on 11th January, 1990. The file was promptly submitted to the Finance Minister on the 12th; 13th and 14th being non working days, he took the decision to reject the representations on 16th January, 1990. The file was received back in the COFEPOSA Unit on 17th January, 1990 and the Memo of rejection was despatched by the post on 18th January, 1990. It appears that there was postal delay in the receipt of the communication by the detenus but for that the detaining authority cannot be blamed. It is, therefore, obvious from the explanation given in the counter that there was no delay on the part of the detaining authority in dealing with the representations of the detenus. Our attention was drawn to the case law in this behalf but we do not consider it necessary to refer to the same as the question of delay has to be answered in the facts and circumstances of each case. Whether or not the delay, if any, is properly explained would depend on the facts of each case and in the present case we are satisfied that there was no delay at all as is apparent from the facts narrated above. We, therefore, do not find any merit in this submission. It was next submitted by the learned counsel for the petitioners that there was no compelling reason for the detaining authority to pass the impugned orders of detention as the detenus were already in custody on the date of the passing of the detention orders as well as the service thereof. Besides, he submitted. it is apparent from the averments in paragraph 15 of the grounds of detention that the concerned authority was labouring under a misconception that the detenus were charged with a 'bailable ' offence which betrays total non application of mind. He further submitted that the delay in the service of the detention orders discloses that there was no urgency about ordering detention. Taking the last limb of the argument first, we may refer to the counter filed in the writ petitions in this behalf. Therein it is stated that after the detention orders were signed on 10th November, 1989, it was realised that certain documents which were not in Tamil language would have to be translated. The services of a professional trans lator were requisitioned. Between 10th and 21st November, 1989 there were five holidays on 11th, 12th, 13th, 18th & 19th. As soon as the translations were ready and received by the Department, the police autho 464 rities were directed on 20th November, 1989 to execute the detention orders. This was done on 21st November, 1989, Thus the time taken between 10th and 21st November. exclud ing 5 holidays, was only of six days during which all the documents were got translated in Tamil language and were served on the detenus along with grounds of detention. These facts clearly show that the time taken in the service of the detention orders cannot be attributed to lack of sense of urgency on the part of the authorities but it was to get the documents translated in Tamil language before they were supplied to the detenus. Under the circumstances we do not see any delay which would vitiate the detention orders. It is indeed true that in paragraph 15 of the grounds of detention the detaining authority has averted that the detenus are charged with a bailable offence. After setting out the fact that two of the detenus had made an application for bail in the Bombay Court and their co accused Kasim had made a similar application in the Madras Court, the authori ty proceeds to state as under: "Though you are in judicial custody but can be released on bail any time as the offence with which you have been charged is bailable in which case you may indulge in similar prejudicial activities. It is necessary to bear in mind the context in which the expression bailable ' is used. In the counter filed by the Joint Secretary who passed the detention orders and prepared the grounds for detention it is stated that his past experi ence in such eases was that normally and almost as a matter of rule courts grant bail after the investigation is com pleted. It was in this background, says the officer, that he used the expression 'bailable '. We may reproduce his exact words from the counter: "It is also submitted that the word bailable which has not been used in the legal sense, it was intended to convey that normally in such cases one gets bail and in that context, the word 'bailable ' was used". Proceeding further it is averred in the counter that even in nonbailable offences the Sessions Court and the High Court are empowered to grant bail. He was, therefore, of the view that in such cases courts normally grant bail. It was in this background that he used the word bailable in the grounds of detention. 465 Mr. Sibbal the learned Additional Solicitor General, contended that the expression bailable was used in the backdrop of the fact that two of the detenus and Kasim had already applied for bail. The court had not rejected their applications but had adjourned them as the investigation was in progress. That gave rise to the belief that bail would be granted. His normal experience also was that in such cases courts ordinarily granted bail on the conclusion of the investigation. He, therefore, loosely described the offence as bailable and did not use that word in the technical sense of section 2(a) of the Code of Criminal Procedure. The High Court also pointed out that even in respect of non bailable offences it is generally open to the Sessions Court and the High Court to release the accused on bail. It further points out that it is equally open to the Magistrate to release the accused on bail after a period of two months. In the circum stances the High Court was of the opinion that the use of the expression 'bailable ' cannot lead one to the conclusion that there was no application of mind. We are inclined to think that having regard to the background in which this expression is used in paragraph 15 of the grounds of deten tion and bearing in mind the explanation and the fact that in such cases courts normally grant bail, it cannot be said that the use of the said expression discloses non applica tion of mind. It was then submitted that the detenu M.M. Shahul Hameed had not applied for bail and, therefore, there was no question of his being released on bail. We do not think that there is any merit in this submission for the simple reason that if the co accused are released on bail he too could seek enlargement on bail at any time. Therefore, the possibility of all the detenus being released on bail was a real one and not an imaginary one. This was based on past experience which is re inforced by the observations of the High Court that even in non bailable cases courts of Sessions and High Court do grant bail. The second limb of the contention is, therefore, clearly devoid of merit. Counsel for the detenus, however, vehemently argued that since the detenus were in custody, there was no compelling necessity to pass the detention orders for the obvious reason that while in custody they were not likely to indulge in any prejudicial activity such as smuggling. In support of this contention reliance was placed on a host of decisions 01 ' this Court beginning with the case of Vijay Narain Singh vs State of Bihar, and ending with the case of Dharmendra Suganchand Chelawat vs Union of India, ; It is necessary to bear in mind the fact that the grounds of detention clearly reveal that the detaining authority was aware of the fact that the detenus were appre hended while they were about to board the flights 466 to Hongkong and Dubai on 5th October, 1989. He was also aware that the detenu M.M. Shahul Hameed had secreted dia monds and precious stones in his rectum while the other two detenus had swallowed 100 capsules each containing foreign currency notes. He was also aware of the fact that all the three detenus were produced before the Additional Chief Metropolitan Magistrate, Espalande, Bombay and two of them had applied for bail. He was also conscious of the fact that the hearing of the bail applications was postponed because investigation was in progress. His past experience was also to the effect that in such cases courts ordinarily enlarge the accused on bail. He was also aware of the fact that the detenu M.M. Shahul Hameed had not applied for bail. Con scious of the fact that all the three detenus were in custo dy, he passed the impugned orders of detention on 10th November, 1989 as he had reason to believe that the detenus would in all probability secure bail and if they are at large, they would indulge in the same prejudicial activity. This inference of the concerned officer cannot be described as bald and not based on existing material since the manner in which the three detenus were in the process of smuggling diamonds and currency notes was itself indicative of they having received training in this behalf. Even the detenus in their statements recorded on 5th October, 1989 admitted that they had embarked on this activity after receiving training. The fact that one of them secreted diamonds and precious stones in two balloon rolls in his rectum speaks for itself. Similarly the fact that the other two detenus had created cavities for secreting as many as 100 capsules each in their bodies was indicative of the fact that this was not to be a solitary instance. All the three detenus had prepared them selves for indulging in smuggling by creating cavities in their bodies after receiving training. These were not ordi nary carriers. These were persons who had prepared them selves for a long term smuggling programme and, therefore, the officer passing the detention orders was justified in inferring that they would indulge in similar activity in future because they were otherwise incapable of earning such substantial amounts in ordinary life. Therefore, the criti cism that the officer had jumped to the conclusion that the detenus would indulge in similar prejudicial activity with out there being any material on record is not justified. It is in this backdrop of facts that we must consider the contention of the learned counsel for the detenus whether or not there existed compelling circumstances to pass the impugned orders of detention. We are inclined to think, keeping in view the manner in which these detenus received training before they indulged in the smuggling activity, this was not a solitary effort, they had in fact prepared themselves for a long term programme. The decisions of this Court to which our attention was drawn by the learned 467 counsel for the petitioners lay down in no uncertain terms that detention orders can validly be passed against detenus who are in jail, provided the officer passing the order is alive to the fact of the detenus being in custody and there is material on record to justify his conclusion that they would indulge in similar activity if set at*liberty. We will now consider the case law in brief. In Vijay Narain Singh (supra) this Court stated that the law of preventive detention being a drastic and hard law must be strictly construed and should not ordinarily be used for clipping the wings of an accused if criminal prosecution would suffice; So also in Ramesh Yadav vs District Magis trate ET, this Court stated that ordinarily a detention order should not be passed merely on the ground that the detenu who was carrying on smuggling activities was likely to be enlarged on bail. In such cases the proper course would be to oppose the bail application and if grant ed, challenge the order in the higher forum but not circum vent it by passing an order of detention merely to supersede the bail order. In Suraj Pal Sahu vs State of Maharashtra, ; the same principle was reiterated. In Binod Singh vs District Magistrate, Dhanbad, ; it was held that if a person is in custody and there is no imminent possibility of his being released therefrom, the power of detention should not ordinarily be exercised. There must be cogent material before the officer passing the detention order for inferring that the detenu was likely to be released on bail. This inference must be drawn from material on record and must not be the ipse dixit of the officer passing the detention order. Eternal vigilance on the part of the authority charged with the duty of maintain ing law and order and public order is the price which the democracy in this country extracts to protect the fundamen tal freedoms of the citizens. This Court, therefore, empha sized that before passing a detention order in respect of the person who is in jail the concerned authority must satisfy himself and that satisfaction must be reached on the basis of cogent material that there is a real possibility of the detenu being released on bail and further if released on bail the material on record reveals that he will indulge in prejudicial activity if not detained. That is why in Abdul Wahab Sheikh vs S.N. Sinha; , this Court held that there must be awareness in the mind of the detaining authority that the detenu is in custody at the time of actual detention and that cogent and relevant material disclosed the necessity for making an order of detention. In that case the detention order was quashed on the ground of non application of mind as it was found that the detaining authority was unaware that the detenu 's application for being released on bail was rejected by the 468 designated Court, In Meera Rant ' vs State of Tamil Nadu, ; the case law was examined in extension. This Court pointed out that the mere fact that the detenu was in custody was not sufficient to invalidate a detention order and the decision must depend on the facts of each case. Since the law of preventive detention was intended to prevent a detenu from acting in any manner considered preju dicial under the law. ordinarily it need not be resorted to if the detenu is in custody unless the detaining authority has reason to believe that the subsisting custody of the detenu may soon terminate by his being released on bail and having regard to his recent antecedents he is likely to indulge in similar prejudicial activity unless he is pre vented from doing so by an appropriate order of preventive detention. In Shashi Aggarwal vs State of Uttar Pradesh, ; it was emphasized that the possibility of the court granting bail is not sufficient nor is a bald state ment that the detenu would repeat his criminal activities enough to pass an order of detention unless there is credi ble information and cogent reason apparent on the record that the detenu, if enlarged on bail, would act prejudicial ly. The same view was reiterated in Anand Prakash vs State of Uttar Pradesh, ; and Dharmendra 's case (supra). In Sanjay Kurnar Aggarwal vs Union of India, ; the detenu who was in jail was served with a detention order as it was apprehended that he would indulge in prejudicial activities on being released on bail. The contention that the bail application could be opposed, if granted, the same could be questioned in a higher forum, etc., was negatived on the ground that it was not the law that no order of detention could validly be passed against a person in custody under any circumstances. From the catena of decisions referred to above it seems clear to us that even in the case of a person in custody a detention order can validly be passed (1) if the authority passing the order is aware of the fact that he is actually in custody; (2) if he has reason to believe on the basis of reliable material placed before him (a) that there is a real possibility of his being released on bail, and (b) that on being so released he would in all probability indulge in prejudicial activity and (3) if it is felt essential to detain him to prevent him from so doing. If the authority passes an order after recording his satisfaction in this behalf, such an order cannot be struck down on the ground that the proper course for the authority was to oppose the bail and if bail is granted notwithstanding such opposition, to question it before a higher court. What this court stated in the case of Ramesh Yadav (supra) was that ordinarily a detention order should not be passed merely to pre empt or circumvent enlargement on bail in cases which 469 are essentially criminal in nature and can be dealt with under the ordinary law. It seems to us well settled that even in a case where a person is in custody, if the facts and circumstances of the case so demand. resort can be had to the law of preventive detention. This seems to be quite clear from the case law discussed above and there is no need to refer to the High Court decisions to which our attention was drawn since they do not hold otherwise. We, therefore. find it difficult to accept the contention of the counsel for the petitioners that there was no valid and compelling reason for passing the impugned orders of detention because the, deronus were in custody. Counsel for the petitioners next submitted that while making the representation dated 18th December. 1989 the detenus had requested for the supply of copies of the decla rations made by them before the customs authorities at the Bombay Airport before boarding their respective flights and for copies of the search warrants mentioned in the grounds of detention. It was stated that the detenus needed these documents for the purpose of making a representation. While rejecting their representation by the memorandum of 18th January. 1989 the detenus were informed that the sponsoring authority was requested to supply the copies of search authorisations to the detenus. The petitioners complained that despite this communication the sponsoring authority did not supply copies of the search authorisations whereupon another letter dated 6th February, 1990 was written to the detaining authority asking for the said documents. By the memorandum of 14th February, 1990, the detenus were informed that the Deputy Director of Revenue Intelligence. Bombay, was requested to supply the documents asked for by the deronus. In response to the same the detenus were supplied copies of the search warrants but not copies of the declara tions made to the customs officers at the airport. It is further complained that this delay had resulted in depriving the detenus of their valuable right to make an effective representation against the impugned detention orders. The High Court while dealing with this contention came to the conclusion that the declarations made by the detenus at the airport were neither relied on nor referred to in the grounds of detention. As regards the search authorisations, it may be pointed out that although there is a mention of the premises searched in the grounds of detention, the incriminating material found has neither been used nor made the basis for formulating the grounds of detention. Mere reference to these searches by way of completing the narra tion cannot entitle the detenus to claim copies of the search authorisations. The High Court, therefore, rejected this contention by observing as under: 470 "We fail to understand how the Detaining Authority can be compelled to give documents which were not relied upon while arriving at the subjective satisfaction. We are also unable to appreciate how the declaration made by the detenu before proceedings to board the aircraft has any relevance while considering whether the order of detention should be passed to prevent the detenu from indulging in any prejudicial activities in future. In our judgment, the complaint that some documents which according to the detenu were relevant for making representation were not furnished by the Detain ing Authority and, therefore, the order or the continuation of the detention is bad, is without any substance. " In the counter it is specifically mentioned that 'these documents were not placed before the detaining authority nor the detaining authority has relied upon those documents while issuing the detention order '. The detenus would have been entitled to any document which was taken into consider ation while formulating the grounds of detention but mere mention of the fact that certain searches were carried our in the course of investigation, which have no relevance to the detention of the detenus, cannot cast an obligation on the detaining authority to supply copies of those documents. Much less can an obligation be cast on the detaining author ity to supply copies of those documents in Tamil language. In the peculiar circumstances of the present petitions we are of the opinion that the view taken by the High Court cannot be assailed. Reliance was, however, placed on a decision of the Delhi High Court in Gurdip Singh vs Union of India & Ors., Criminal Writ No. 257 of 1988 decided on 7th October, 1988 (1989 Crl. L.J. NOC 41 Delhi) wherein Malik Sharief ud din, J. observed that the settled legal position was that all the documents relied upon for the purpose of ordering detention ought to be supplied pari passu with the grounds of detention to the detenu and documents not relied upon but casually referred to for the purpose of narration of facts were also to be supplied to the detenu if demanded. Where documents of the latter category are supplied after the meeting of the Advisory Board is over it was held that that would seriously impair the detenu 's right to make an effective and purposeful representation which would vitiate the detention. Counsel for the petitioners, therefore, submitted that in the present case also since the search authorisations were supplied after the meeting of the Advi sory Board, the detention orders stood vitiated. But in order to succeed it must be shown that the search authorisa tions had a bearing on the detention orders. If, merely an incidental refe 471 rence is made to some part ' of the investigation concerning a coaccused in the grounds of detention which has no rele vance to the case set up against the detenu it is difficult to understand how the detenus could contend that they were denied the right to make an effective representation. It is not sufficient to say that the detenus were not supplied the copies of the documents in time on demand but it must fur ther be shown that the non supply has impaired the detenu 's right to make an effective and purposeful representation. Demand of any or every document, however irrelevant it may be for the concerned detenu, merely on the ground that there is a reference thereto in the grounds of detention, cannot vitiate an otherwise legal detention order. No hard and fast rule can be laid down in this behalf but what is essential is that the detenu must show that the failure to supply the documents before the meeting of the Advisory Board had impaired or prejudiced his right, however slight or insig nificant it may be. In the present case, except stating that the documents were not supplied before the meeting of the Advisory Board, there is no pleading that it had resulted in the impairment of his right nor could counsel for the peti tioners point out any such prejudice. We are, therefore, of the opinion that the view taken by the Bombay High Court in this behalf is unassailable. The declaration under section 9(1) dated 20th December, 1989 is challenged on the ground that the second respondent failed to forward the copies of the document on which he placed reliance for arriving at the subject to satisfaction that the detenu were likely to smuggle goods out of and through Bombay Airport, an area highly vulnerable to smug gling as defined in Explanation 1 to section 9(1) of the Act. Now if we turn to paragraph 2 of the declaration it becomes evident that the second respondent merely relied on the grounds of detention and the material in support thereto which had already been served on the detenu and nothing more. Counsel for the petitioners relying on a decision of the Bombay High Court in Nand Kishore Purohit vs Home Secre tary, Maharashtra, [2986]2 Bombay C.R. 25, however urged that it was obligatory for the second respondent to supply the grounds of detention and the accompanying documents 'afresh ' if the declaration 'was based thereon. We are afraid we cannot subscribe to this point of view. If the documents relied on for the purpose of framing a declaration under section 9(2) are the very same which were earlier supplied to the detenu along with the grounds of detention under section 3(1), we fail to see what purpose would be served by insisting that those very documents should be supplied afresh. Such a view would only result in wasteful. expenditure and avoidable duplication. We do not think that 472 we would be justified in quashing the declaration made under section 9(1) of the Act on such a hyper technical ground. We, therefore, do not see any merit in this contention. There are a few other minor grounds on which the deten tion orders are challenged. These may stated to be rejected. Firstly, it was contended that under section 3(1) of the Act a detention order can be passed on one or more of the five grounds set out in clauses (i) to (v) thereof. Since the impugned orders make no mention of the clause number on which they are rounded they are bad in law. The detention orders clearly state that the power is being exercised with a view to preventing the smuggling of goods referrable to clause (i) of the subsection. Merely because the number of that clause is not mentioned, it can make no difference whatsoever. So also we see no merit in the contention that the value of goods seized varies in the grounds of detention from that mentioned in the panchnama or appraisal report. How that has prejudiced the detenus is difficult to compre hend in the absence of any material on record. The submis sion that the declaration under section 9(1) was required to be communicated within five weeks from the date of its making is not specifically raised in the writ petitions nor was it argued before the High Court. We were, however, told that the declaration was communicated in the first week of January 1990, a statement which was not contested on behalf of the petitioners. In fact the submission was not pursued after this fact was disclosed. We also see no merit in it. Lastly, it was said that the authority had failed to take notice of the retraction of the statement recorded under section 108 of the . In fact there is a specific reference to the retraction letter dated 12th October, 1989 and the subsequent letter of 19th October, 1989, wherein the detenus stated that they had signed the letter of 12th October, 1989 without knowing the contents thereof and had in fact not disowned their earlier statement of 5th October, 1989. It is clear from the above that this challenge is also without substance. These were the only contentions urged at the hearing of the special leave petitions as well as the writ petitions. As we do not see any merit in any of these contentions we dismiss the special leave petitions as well as the writ petitions and discharge the rule in each case. R.N.J. SLPs and Writ Petition dismissed.

The petitioners are the wives of three detenus who had been detained under an order dated 10th November, 1989 passed under subsection (1) of section 3 of the against each of them with a view to preventing them from smuggling goods '. The order of detention as well as the grounds of detention dated November 10, 1989 were served on the three detenus on 21st November, 1989 while they were already in jail custody on remand following their arrest at the Sahar International Airport on October 5, 1989 when on suspicion they were searched which resulted in the recovery of diamonds, precious stones and foreign currency which they had planned to smuggle out. Thereafter on Decem ber 20, 1989 a declaration under section 9(1) of the Act was passed in respect of each detenu which was served on them within the time allowed by law. Thereupon the wives of all the three detenus filed separate habeas corpus writ peti tions in the High Court of Bombay. Four contentions were raised before the High Court namely, (1) since the detenus were in custody their detention was unwarranted; (2) the detaining authority had betrayed non application of mind by describing 458 the offence as 'bailable '; (3) the representation of the detenus dated 18th December, 1989 had not been disposed of promptly and there was inordinate delay; and (4) the author ities had failed to supply certain crucial documents called for by the detenus thereby depriving them of the opportunity of making an effective representation. The High Court nega tived all the contentions and dismissed the writ petitions. Against that the wives of the detenus have filed Special Leave Petitions and also separate writ petitions under Article 32 of the Constitution raising several contentions including those negatived by the High Court. Dismissing all the Special Leave Petitions and Writ Petitions and upholding the view taken by the High Court this, Court, HELD: Even in the case of a person in custody a deten tion order can validly be passed (1) if the authority pass ing the order is aware of the fact that he is actually in custody; (2) if he has reason to believe on the basis of reliable material placed before him (a) that there is a real possibility of his being released on bail, and (b) that on being so released he would in all probability indulge in prejudicial activity; and (3) if it is felt essential to detain him to prevent him from so doing. [278F G] It is not sufficient to say that the detenu was not supplied the copies of the documents in time on demand but it must further be shown that non supply has impaired the detenu 's right to make an effective and purposeful represen tation. [281B] Demand of any and every document, however irrelevant it may be, merely on the ground that there is a reference thereto in the grounds of detention, cannot vitiate an otherwise legal detention order. No hard and fast rule can be laid down in this behalf but what is essential is that the detenu must show that failure to supply the documents before the meeting of the Advisory Board had impaired or prejudiced his right, however slight or insignificant it may be. [281B C] Vijay Narain Singh vs State of Bihar, [1984] 3 S.C.C. 14; Dharmendra Suganchand Chelawat vs Union of India, ; ; Ramesh Yadav vs District Magistrate E.T., ; Suraj Pal Sahu vs State of Maharashtra, ; ; Binod Singh vs District Magistrate, Dhanbad, ; ; Abdul Wahab Sheikh vs S.N. Sinha; , ; Meera Rani vs State of Tamil Nadu, ; ; Shashi Aggarwal vs State of Uttar Pradesh, ; ; Anand Prakash vs State of Uttar Pradesh, ; ; Sanjay Kumar Aggarwal vs Union of 459 India; , ; Gurdip Singh vs Union of India & Ors., [1989] Crl. L.J. NOC 41 Delhi and Nand Kishore Purohit vs Home Secretary, Maharashtra, [1986] 2 Bombay C.R. 25 referred to.

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